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Karl Baba
Trad climber
Yosemite, Ca
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Topic Author's Reply - Oct 4, 2008 - 07:12pm PT
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Hi Raymond, you wrote in "" and I'll reply underneath that.
"Yes, my example showed a stupid way to do things due to interests but it still show the meaninglessness to talk about these extra money like something important."
It showed the importance of the multiplier (just so folks know how banks make money and why the leverage makes em more vulnerable to a run in times like this) I can't see how your example showed it's not important when you wound up paying he bank lot's extra just for your own money.
("Regarding "low" inflation. It's an illusion cooked by cheap imports from China and fraudulent accounting. (Energy and Food aren't considered)" )
"I don't know and I meant for maybe a couple of years ago."
Open to discussion.
("Gas is 3x what it cost 7 years go. A gallon of milk is how much? The dollar is worth 37% less versus the euro than it was 7 years ago, so we get lots of Euros coming here to bolster our economy instead of Americans vacationing. Inflation under %5? BS for anything I'm buying except because of the import scam." )
Maybe all those things don't have anything to do with banking and especially not the underlying system that most countries use. The oil price is probably not that dependent on the banking system.
The Oil price is totally linked to the central banking system because central banks are basically required to use US dollars to buy Oil. It's called petrodollar recycling as it feeds back to our Saudi Friends. If oil became unhinged from the dollar (as it is beginning to do in several countries, most of whom we threaten to destabilize) it threatens the dollar's value. (and the dollar is in trouble)
To get another simple rendition on the history of money and then how it relates to oil, I HIGHLY recommend this link. It's a REAL eye opener and got me started thinking in the first place
http://www.richardheinberg.com/archive/149.html
It also talks about the risk of the dollar getting much weaker. Since it was written in 2004, it called the huge drop since then very well. A weaker dollar is another way of saying "inflation." You think we have inflation now, just wait until we borrow another 700 billion we don't have.
Peace
Karl
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TradIsGood
Chalkless climber
the Gunks end of the country
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The Oil price is totally linked to the central banking system because central banks are basically required to use US dollars to buy Oil.
Wow, Central Banks buying oil. Wonder where the Fed hid that!
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Karl Baba
Trad climber
Yosemite, Ca
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Topic Author's Reply - Oct 4, 2008 - 07:36pm PT
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Way back TIG wrote
"2) No. Deposits are not part of the reserve. The reserves (equity) are the fraction of liabilities that must remain unencumbered."
Care to explain the above or retract it (didn't you already edit it?) Where do reserves come from if deposits don't count?
"Does the bank create money? Seems more like the transactions create money. Until the transactions occur, the bank is just sitting their with initial capital. "
This is someone saying, I don't have sex, my dick has sex when it gets a chance, I just sit around playing with my dick the rest of the time until it magically finds itself getting laid!
Come on!
Peace
Karl
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Karl Baba
Trad climber
Yosemite, Ca
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Topic Author's Reply - Oct 4, 2008 - 07:42pm PT
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TIG writes
(The Oil price is totally linked to the central banking system because central banks are basically required to use US dollars to buy Oil. )
"Wow, Central Banks buying oil. Wonder where the Fed hid that!"
I'm talking about foreign central banks (which you would know if read the link. Obviously we have US dollars in our central banks.
Why would foreign central banks buy US treasuries that pay a tiny bit of interest when their whole investment gets completely wrecked by the falling value of the dollar over the same time period. Something fishy there I'd say.
I did mistype in the sense that those foreign banks are buying oil in league with their respective governments. It's not like banks invest in oil....But wait, they do!
Peace
Karl
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Karl Baba
Trad climber
Yosemite, Ca
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Topic Author's Reply - Oct 4, 2008 - 09:10pm PT
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http://www.commondreams.org/view/2008/10/03-11
Kucinich mentions the monetary debt based system in his house speech dissing the bailout:
".....We should have created a mechanism for our government to take a controlling interest in mortgage-backed securities and use our power to work out a new deal for the homeowners. We could have done this. We should have done this. But we didn't.
Now millions of Americans will face the threat of foreclosure without any help. And the numbers will soon rise for a number of reasons. Not only because of the Alt-A, jumbo mortgages which will soon be reset at higher interest rates, but because the London Interbank Offered Rate (LIBOR) is pushing up rates on adjustable mortgages and more than half of the US adjustable mortgage rates are tied to LIBOR. Homeowner defaults will grow in significant numbers. Let's see if Congress will be as quick to help homeowners on Main Street as they were to help speculators on Wall Street.
Now the government will have to borrow $700 billion from banks, with interest, to give banks a $700 billion bailout, and in return the taxpayers get $700 billion in toxic debt. The Senate "improved" the bailout by giving tax breaks to people in foreclosure. People in foreclosure need help paying their mortgage, they do not seek tax breaks.
Across our Nation, foreclosures continue to devastate our communities, people are losing their jobs, and the prices of necessities are skyrocketing. This legislation, just like the one we defeated last week, will do nothing to solve the problems plaguing American families or help them to get out from underneath the oppressive debt they have been forced to take on.
Unfortunately, there has been no discussion of the underlying debt-based economy and the role of our monetary system in facilitating the redistribution of wealth upwards......"
Peace
Karl
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yossarian
climber
WA
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Redwood Quote:
"The entire economic system of the West (and probably the world) is going to collapse completely before too long, owing to the effect of declining oil production on the banking system. Many people naively believe that the economy can limp along in some fashion with 50% of the energy input it used to have, or 90%, or surely 99% or even 100%. It can't. The energy input has to be constantly increasing. It has stopped doing so and won't ever again."
How do you know “energy input” is no longer increasing?
Doesn't stating “energy” needs to perpetually increase assume efficiency remains the same?
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WBraun
climber
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They have now introduced more and more notes without any gold in their banks.
Very very dangerous and stupid.
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yossarian
climber
WA
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I don't think money is tied to productivity.
Do not confuse money with wealth. Money is a public utility that distributes wealth. It is the means for which you to use the wealth produced by someone else.
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John Moosie
climber
Beautiful California
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Lois, it should be that way, but is not. Its backwards. We create money with debt, then paddle like crazy to catch up with GNP. This is a losing battle which is why we are always behind and why the middle class is losing ground. Families now must work two jobs to support what once was handled by one.
You talk about good economics as being saving to buy. Well with the federal reserve, we loan in order to buy. Plus the really hinky thing is that the federal reserve buys T bills with money they do not have, then charges interest on that money, ie T bills pay interest. It is a scam and we need to change our system.
It is not a democrat thing or a republican thing. It is just a plain ol scam created by some very wealthy and powerful people.
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WBraun
climber
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Gold is the world standard of money.
Gold is all-attractive.
Instead of gold, now they use plastic.
What a bunch of dishonest crooked fools.
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WBraun
climber
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Because war means expenditure, the treasury is also finished.
Billions of dollars required daily to finance the running of the war.
They have no money, just paper, and the foolish govt. men print more paper.
Just see the cheating ......
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WBraun
climber
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But on some level war = productivity
No it creates un-productivity.
You kill and destroy everything, create miserable conditions of life, yeah .... very productive.
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WBraun
climber
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A sane person would never entertain such thoughts.
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Karl Baba
Trad climber
Yosemite, Ca
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Topic Author's Reply - Oct 5, 2008 - 03:36am PT
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"The machinery of war is good for the economy. It represents productivity for the nation - it is just, as I said previously, the products so created are very undesirable - but products they are. "
But why not just mass produce wind turbines or solar Panels? Why do we have to blow up the products we create with people at the other end?
War let's a lot of money disappear with no accountability (you're not allowed to question things in times of war) Billions are unaccounted for in Iraq and the defense department lost 2.3 trillion! That's a lot.
And that's supposed to be good for the economy? Sad.
peace
Karl
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Karl Baba
Trad climber
Yosemite, Ca
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Topic Author's Reply - Oct 5, 2008 - 03:41am PT
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LEB write
"We cannot pass judgments on others from our warm and comfy chairs while our bellies are filled."
nice, but earlier you wrote
"But, having said that, there is no excuse for bad financial management on a personal level."
I know you're head is stuck in LEBification so I'll try not to judge either
Still, our real moral character show when times are hard. What sort of killing and torture would you be willing to commit to keep your farm or feed yourself. You think there is a limit past which you'd sacrifice yourself rather than go the "dog eat dog" route?
peace
karl
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raymond phule
climber
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Karl Baba wrote
"It showed the importance of the multiplier (just so folks know how banks make money and why the leverage makes em more vulnerable to a run in times like this) I can't see how your example showed it's not important when you wound up paying he bank lot's extra just for your own money."
Of course it would be stupid if I did that.
A bank usually make quite a lot of money like other companies but the result of an open market should be competition.
A bank give loans and other services and the cost of these services is based on the competition with other banks.
You seem to think that a natural result gives a lot of extra money for free that the banks just take.
The interests is based on what the bank need to take to be able to go around.
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Chris Roderick
climber
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I find this financial illiteracy in the people of a country that worships money so much truly ironic.
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Karl Baba
Trad climber
Yosemite, Ca
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Topic Author's Reply - Oct 5, 2008 - 12:03pm PT
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Raymond wrote
"A bank give loans and other services and the cost of these services is based on the competition with other banks."
Yes and no, the Fed HEAVILY influences the cost of bank loans by setting a key interest rate and by other actions.
"You seem to think that a natural result gives a lot of extra money for free that the banks just take.
The interests is based on what the bank need to take to be able to go around."
The big bank CEOs are/were making dozens of millions of dollars a year and that's just salary, but i really wasn't taking shots at that. I'm just pointing out how the system works because people don't know, and even seem to be clinging to their assumed simple ideas of what's up."
Chris, I thought but could not articulate that. I'm not super literate myself. I think the system is deliberately obtuse as a bar to entry and also, so people don't call for reform
Peace
Karl
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WBraun
climber
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Lois is not even in the ball park with her analysis of productivity in relation to war.
Lois you are swimming out in the ocean, rudderless, without a life jacket.
War is not started by the common citizens, they are the ones that get caught in it and have to find means for survival.
We are talking about the clueless modern leaders, recent example, [Cheney, the great azzhole, and the monkey Bush), who drag the the common folks down into the hole.
A leader needs to protect and serve. These guys protect and serve themselves.
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