Conspiracy Theory Banking and how it actually works ...

[clogged]

You use the term 'faith', I prefer the terms 'supply' and 'demand'.

People continue to demand fiat notes where they expect there will continue to be demand.

That demand is guaranteed by a government with guns and the propensity to use said guns.

Guaranteed because one must pay the state their taxes in the fiat notes (or digital equivalent) of the state's choosing.

Fiat notes are easy to use and to store, and they have no competition in this regard thanks to the same guys with the guns.

I think framing this reality as a matter of 'faith' reveals something of your motives in these discussions.

Wut. What does it reveal?

Faith underlies every transaction. You go to the shop and buy a sandwich for $5. You hand over that money with the faith that the sandwich will 1) not poison you, and 2) be the most optimum value for your $5. At a basic level the person receiving that $5 from you has faith that he can use it in turn.

Currency is intrinsically worthless and only has worth because the parties using it believe it does. On what level does money come into creation other than the belief of humans?

 

[Smiling Buddha]

Faith underlies every transaction.

And with such a broad definition of the word 'faith', its use becomes meaningless (at best) when discussing things like currency and money.

 

[clogged]

And with such a broad definition of the word 'faith', its use becomes meaningless (at best) when discussing things like currency and money.

What's the broad definition?

Think of what makes diamonds so expensive when in actual fact they are bullshit pieces of rock. It's a confidence trick, much like money.

 

[Smiling Buddha]

Except that diamonds have been valued for thousands of years.

They have been treasured for their aesthetic qualities and their strength (some suggest that the ancient Greek word for diamond meant 'unbreakable').

Green pieces of fiat paper have been valued for about four decades, and even then, only because their value was enforced by men with guns and cages.

Pretty big difference. Like chalk and cheese.

 

[clogged]

Promissory notes have been valued for thousands of years.

 

[Smiling Buddha]

Promissory notes have been valued for thousands of years.

Which ones?

 

[clogged]

Which diamonds have been valued for thousands of years? When have they ever been used as currency?

 

[Smiling Buddha]

Which diamonds have been valued for thousands of years?

All of them.

Which is the whole point.

A diamond today would have been seen as precious thousands of years ago, and will be seen as precious by humans (if they are still around) in a thousand years time. Different values will be placed on the diamond by different people in different times, but you can rest assured that a diamond will still have demand in the future.

A US fiat dollar will not be seen as valuable (except perhaps by a handful of fiat currency collectors/historians, and if things get really bad, as a means to start fires).

The only reason why a dollar is seen as valuable now is because of the men with guns and cages who back it right now.

And you know all of this, which is why I question your motives in threads like these. It is almost as though you want to champion the status quo, and are happy to do so even with sloppy logic.

 

[clogged]

All of them.

Which is the whole point.

A diamond today would have been seen as precious thousands of years ago, and will be seen as precious by humans (if they are still around) in a thousand years time. Different values will be placed on the diamond by different people in different times, but you can rest assured that a diamond will still have demand in the future.

Sorry but which ones were used as currency? Gemstones have never been used as currency except in possibly extremely primitive societies. Meanwhile, paper currency has been used as long, if not longer than metal coinage.

There's no defence of the status quo, I just want you to perhaps read a bit more broadly than the paranoid world view that has recently become your hobby.

A US fiat dollar will not be seen as valuable (except perhaps by a handful of fiat currency collectors/historians, and if things get really bad, as a means to start fires).

The only reason why a dollar is seen as valuable now is because of the men with guns and cages who back it right now.

So it has ever been and ever will be. It is odd that you have only seemingly half woken up to reality.

 

[Showbags]

The problem is schools teach the 'Money Multiplier' Theory of money creation where the Central bank first injects reserves into the private banks, which then lends these reserves onto its debtors. This has been admitted to be incorrect.

The real system is where banks first make the loans and worry about the reserve requirements later.

This is a complete subversion of what should be a democratic money creation system. Private institutions now basically have a 'magic wand' that can whisk into existence money, with the only limit being the amount we are willing to borrow from them.

 

[Smiling Buddha]

Sorry but which ones were used as currency?

It was you who brought up diamonds, I merely explained their ongoing value (ergo the difference between precious items and fiat currency).

There has never been any debate that notes are inherently worthless.

It is odd that you have only seemingly half woken up to reality.

See, this nonsensical kind of jibe lowers your colours. There's no need for it.

 

[Showbags]

Much of human history so far has been the story of "The People" v "The Money Changers".

Usury (or the charging of interest on loans) has been considered illegal throughout much of human history. The Jews were actually forbidden to conduct usury to their own people, but they were allowed to loan money at interest to anyone else (which has helped feed the negative perception of Jews, despite only a tiny portion of Jews actually engaging in this).

People 100-200 years ago and throughout history treated the issue of banking and money creation with a lot more seriousness than we do today. No one questions the way money is created these days, no one questions the role of the Central Bank in acting like a private cartel for the private banking firms. Everyone just assumes the system is there because it is something that has evolved naturally. Quite the contrary actually, the system has been carefully engineered and concealed to assume the illusion of having the public's best interests at heart, but in reality is there to ensure that private banking elite can siphon off absorbent interest from the public for the creation of their own money.

Booms and busts are now scientifically engineered. In schools they talk about the "business cycle" which is said to be a natural part of a free market economy. But in reality, basically all major economic downturns in the 20th century and beyond have been due to the fact that private banks tighten lending (called a credit crunch) after a period of "easy credit" (the roaring 20's was a period where easy credit was abundant, same with the pre-2007 sub prime mortgage bubble that was created).

If you had the power to create booms and busts at will like this, it would be easy to consolidate more and more wealth in your own private hands. All you would have to do is buy at the bottom of the market, inflate the bubble, sell up your positions before the next crisis comes, and then buy up everything at the bottom of the market again.

 

[clogged]

It was you who brought up diamonds, I merely explained their ongoing value (ergo the difference between precious items and fiat currency).

There has never been any debate that notes are inherently worthless.

Diamonds are as inherently worthless as paper.

See, this nonsensical kind of jibe lowers your colours. There's no need for it.

You are the one who questions peoples motives. It is odd that you complain about ad hominem when it is your first defence.

 

[Smiling Buddha]

Diamonds are as inherently worthless as paper.

Diamonds are not inherently worthless (what a laughable suggestion), and dollars are not merely paper.

That you are suggesting otherwise reveals just how disinterested you are in constructive conversation on this topic.

 

[clogged]

Diamonds are not inherently worthless (what a laughable suggestion), and dollars are not merely paper.

That you are suggesting otherwise reveals just how disinterested you are in constructive conversation on this topic.

Of course they are. You are showing yourself completely unable to think outside your pre-determined beliefs.

Nothing has value outside of what people agree that value is. Diamonds can be manufactured as easily as paper. The value of the diamond is its marginal cost of production. A manufactured diamond can be made to be more flawless than the natural kind, with better clarity and colour. What keeps diamonds price high is due to the collusion and control of the diamond industry by a few self interested parties, as well as the belief that is sold that natural diamonds are better.

A contract that two parties enter into that state one owes the other $1000 has more intrinsic value than a $1000 diamond. The fact you can't see this is bewildering.

 

[Smiling Buddha]

Diamonds can be manufactured as easily as paper.

 

[clogged]

Have you never heard of synthetic diamonds?

 

[Showbags]

Have you never heard of synthetic diamonds?

What has this got to do with the topic of the thread? Who cares about the paper money which makes up only a tiny % of the total money supply. Or diamonds or whatever.

The topic is about 'computer screen' money which has been monopolized by private institutions for their own private benefit.

What is your opinion on this? (from other threads you have been for it from memory).

 

[Bunk Moreland]

Banks, banksters, central banks, privately owned central banks, fiat money, gold standards, manipulation of the money "supply" et al are a common theme on this board.

This is good article on some of this, could be a fitting kick off for a thread dedicated to this kind:



http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerity

Good article that breaks it down well, but I'm not sure why it attempts to present it as some sort of revelation... it's the way it works, and if any half intelligent person who didn't know spent a bit of time thinking about it, they'd see it.

What the piece somewhat falsely states, I think, is that there are zero controls on the supply of capital to ultimate borrowers. Were this actually the case, yes, we'd have economic bedlam. See subprime mortgages and the GFC.

Effectively all the government does is outsource it's control and distribution of money to the central bank, which in turn outsources it to private banks.

But of course to prevent said bedlam, there's also market controls for the supply of the money - if ya don't pay it back, the bank won't lend you more, and the bank won't pay it back, and won't get lent more (ie they'll be out of business quicksticks). It's just a (basically) free market at work.

If any Joe Public could literally walk into a bank and procure large sums with zero insurance or plan (as per sub prime), we'd have an issue. We don't in Australia due to the regulation of our banks.

 

[TheMase]

Bunk Moreland I can safely say that that is one of the most uneducated posts on this topic I have seen on this forum in my seven plus years visiting this site. You need to do some reading. Check my sig.

Good links and good thread. Think we are on the same wavelength. I have come to similar conclusions.

I don't normally see signatures on tapatalk.

 

[Ripper]

Bunk Moreland I can safely say that that is one of the most uneducated posts on this topic I have seen on this forum in my seven plus years visiting this site. You need to do some reading. Check my sig.

Didn't see that, good link , shows that if the housing bubble bursts our banks are in big trouble. Next time you see a new housing development , remember that 4 in 10 of them are being built with money sourced (possibly printed) from out side Australia.

 

[clogged]

The topic is about 'computer screen' money which has been monopolized by private institutions for their own private benefit.

What is your opinion on this? (from other threads you have been for it from memory).

Money has forever been 'virtualised' as a form of credit. Physical currency is nothing more than representation of the debts that have to be paid. If you sell me a cow and I write you in return 'I owe you one cow' that is how currency is created. Then eventually we mediate it to have this concept called a dollar and set the price of our goods relative to that. But it is still a 'please pay the bearer to the value of' kind of deal.

Read this:

http://www.unwelcomeguests.net/archive/audiobooks/Debt, The First 5000 Years/David Graeber - Debt, The First 5000 Years.pdf

 

[Ripper]

Money has forever been 'virtualised' as a form of credit. Physical currency is nothing more than representation of the debts that have to be paid. If you sell me a cow and I write you in return 'I owe you one cow' that is how currency is created. Then eventually we mediate it to have this concept called a dollar and set the price of our goods relative to that. But it is still a 'please pay the bearer to the value of' kind of deal.

http://www.unwelcomeguests.net/archive/audiobooks/Debt, The First 5000 Years/David Graeber - Debt, The First 5000 Years.pdf

I sell the same cow ten times and keep one on hand if someone want actual delivery.

 

[clogged]

I sell the same cow ten times and keep one on hand if someone want actual delivery.

Erm, yeah. Ok. The transaction shifts the cow from the creditor to the debtor, not the other way round.

 

[Ripper]

Erm, yeah. Ok. The transaction shifts the cow from the creditor to the debtor, not the other way round.

You do realise that there is 100 times more paper gold than real stuff? So that means the same ounce has been sold 100 times.