Economics thread

Not OP, but some relevant content from /ck/ here.

Proof that banks destroy money

This is an article from the Quarterly Bulletin 2014 Q1 | Volume 54 No. 1, by the Bank of England

bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf#page=3

Just as taking out a new loan creates money, the repayment of bank loans destroys money. For example, suppose a consumer has spent money in the supermarket throughout the month by using a credit card. Each purchase made using the credit card will have increased the outstanding loans on the consumer’s balance sheet and the deposits on the supermarket’s balance sheet. … If the consumer were then to pay their credit card bill in full at the end of the month, its bank would reduce the amount of deposits in the consumer’s account by the value of the credit card bill, thus destroying all of the newly created money. Banks making loans and consumers repaying them are the most significant ways in which bank deposits are created and destroyed in the modern economy.

How is this legal?

positivemoney.org/how-money-works/how-did-we-end-up-here/

Summary of article:

-Banks invent paper that represents metal coins
-Banks loan out more of this paper than they have of actual coins in their vaults
-Banks just figured out a way to create money
- In 1844, the government of the day, led by Sir Robert Peel, realised that they had allowed the power to create money to slip into the hands of banks. They passed a law to take back control over the creation of bank notes. This law, the Bank Charter Act, prohibited the private sector from (literally) printing money, transferring this power to the Bank of England.
-This has now happened again with bank deposits. Banks have once again found a way to create money in a new form, and the law hasn’t caught up. And we all know it won’t catch up anytime soon.

The promissory note theory

The theory that what gives the bank the authority to issue money is your signature on a loan agreement, which then becomes a legal bill of exchange according to the decades old bills of exchange act, and therefore anyone can create money simply by issuing a promissory note. South African Michael Tellinger apparently payed off his mortgage with a promissory note.

youtube.com/watch?v=dbku5XULgIA

Obviously this is not a good monetary system, ordinary people should not be able to create their own money, and I highly doubt you would get away with this. But they got one thing right, banks need a signature to create credit.

Pic related from Web of Debt is insightful

P + i > P

This is an excerpt from The Creature from Jekyll Island, and relates to the picture above, by explaining that debts can technically be paid through the price of labour.

''One of the most perplexing questions associated with this process is “Where does the money come from to pay the interest?” If you borrow $10,000 from a bank at 9%, you owe $10,900. But the bank only manufactures $10,000 for the loan. It would seem, therefore, that there is no way that you – and all others with similar loans – can possibly pay off your indebtedness. The amount of money put into circulation just isn’t enough to cover the total debt, including interest. This has led some to the conclusion that it is necessary for you to borrow the $900 for interest, and that, in turn, leads to still more interest. The assumption is that, the more we borrow, the more we have to borrow, and that debt based on fiat money is a never ending spiral leading inexorably to more and more debt.

This is a partial truth. It is true that there is not enough money created to include the interest, but it is a fallacy that the only way to pay it back is to borrow still more. The assumption fails to take into account the exchange value of labor. Let us assume that you pay back your $10,000 loan at the rate of approximately $900 per month and that about $80 of that represents interest. You realize you are hard pressed to make your payments so you decide to take on a part-time job.''

P + i > P continued

''The bank, on the other hand, is now making $80 profit each month on your loan. Since this amount is classified as “interest,” it is not extinguished as is the larger portion which is a return of the loan itself. So this remains as spendable money in the account of the bank. The decision then is made to have the bank’s floors waxed once a week. You respond to the ad in the paper and are hired at $80 per month to do the job.

The result is that you earn the money to pay the interest on your loan, and – this is the point – the money you receive is the same money which you previously had paid. As long as you perform labor for the bank each month, the same dollars go into the bank as interest, then out of the revolving door as your wages, and then back into the bank as loan repayment.

It is not necessary that you work directly for the bank. No matter where you earn the money, its origin was a bank and its ultimate destination is a bank. The loop through which it travels can be large or small, but the fact remains all interest is paid eventually by human effort. And the significance of that fact is even more startling than the assumption that not enough money is created to pay back the interest. It is that the total of this human effort ultimately is for the benefit of those who create fiat money.

It is a form of modern serfdom in which the great mass of society works as indentured servants to a ruling class of financial nobility.''

Gold Standard, Fiat money, and inflation

Money today is treated as if we are still on the gold standard. When Trump says he will get Mexico to pay for the wall, that just doesn’t make any sense. Are they going to pay American workers with Mexican currency? They could pay the workers with Dollars they have in their reserves. But the USA could just as easily pay the workers since they can just create the money. There is no real problem.

A typical argument at this point is inflation. You can’t just print money you’ll end up like Zimbabwe etc etc. The fact is, there is nothing inherently wrong with inflation. Inflation is a general increase in prices and fall in the purchasing value of money. This is caused purely by an increase in money supply. When bread used to cost 4 cents a loaf, and now it costs $4, that’s inflation. This happened because over a few decades the money supply increased 100 times, not because the demand for bread increased 10 000%. There is nothing inherently wrong with inflation, it’s just inefficient because prices must be constantly adjusted.

Similarly there is nothing inherently wrong with fiat money either. Fiat money is generally backed by taxes that are payable only in that particular currency. Fiat money can definitely work, it allows for flexibility and more control over the economy. Inflation is tied in to a nations floating exchange rate - the more money created then the less $1 will be worth in your own country and also outside of it – on the foreign exchange market.

Historically nations suspend their gold standards in times of war, when they need their economies to function to the max. If a gold standard was so good for an economy, why suspend it when you need max economic performance? Obviously because it is not conducive of maximum real output.

Crypto-currencies can work, but like gold, Bitcoin is limited to a finite amount of units

Trade deficits

This is mentioned in 7 Deadly Frauds. Mosler explains that a trade deficit is really just an exchange between electronic digits and real world goods. We get Chinese goods, and China gets American reserves. The only way for China to get rid of those dollars is to spend it back into the American economy for other goods, or to pass it on to other countries who may do the same.

Mosler neglects to mention that the Chinese are sub-human barbarians and cannot produce any quality goods and there is no point buying their stuff at all.

Quantitative easing

Quantitative easing in America has not been what many think it is. They have not been printing money and just putting it into circulation. Instead what they did was create new bank reserves in the hope that this will lead to increased lending because of the way they believe lending actually works (the money multiplier). So we had huge increases in BASE money, and obviously it had little to no effect on lending because that’s just not how it works.

In UK QE is slightly different I think but similar in that it does not simply add more money into circulation.

Interest rates – the price of money

It is thought that lowering interest rates should stimulate the economy, and raising them will slow it down if it gets too ‘hot’. Werner shows us that interest rates follow the economy, not the other way around. Pic related. This is why all interest rates around the world are basically at their minimum, because economies worldwide are stretched to their limit-due to unpayable levels of interest bearing private debt.

Negative interest rates

Werner describes what they are and what they mean and the connection with the goal to eliminate cash.

professorwerner.wordpress.com/2016/02/09/negative-interest-rates-and-the-war-on-cash/

Summary of article:
-Negative rates are imposed by the central bank on the banks – not the borrowing public
-Negative rates raise banks costs of doing business
-Deposit rates already minimal, therefore banks raise lending rates
-Simply an agenda to drive small community banks (there are many of these in Germany) out of business and increase control of the banking industry in the hands of a few.

Money supply vs share market vs GDP

Now this is a very interesting area. It seemed to me that these areas may all be related, and in fact dependent on each other. It kind of relates to this Monetarism approach to economics.

en.wikipedia.org/wiki/Monetarism

I believe that the Share market follows the money supply, in most if not all countries. Pic of DJIA. Im not so sure about whether GDP follows the money supply.

Financially, if somebody gets richer, then someone else has to get poorer. That’s how money works. Similarly, for one company to get more profits, another company must forego profits or potential; profits. It seems intuitive to me that the only way for all companies profits to be recorded as increasing (higher share price), is for the money supply to be increasing.

I haven’t found a paper that shows me that GDP is dependent on the money supply, however, when measuring the data of these areas from the Reserve Bank of Australia, I find that these 3 areas all line up pretty well, just like bank loans did.

I think that these areas generally do line up, but they are not necessarily dependent on each other.

It would be great if other anons could look at their own countries GDP and money supply relationships.

House prices vs immigration

House prices are a significant problem for many, especially here in Sydney. It is a major problem when looking to have a family when you are relatively young, or just having a family at all. Never before have prices been this high compared to annual salaries. It is unprecedented and totally ridiculous. A year ago the average Sydney house price was 12 times the average annual wage, and they have been increasing since then. Apartments are somewhat lower at 650-700K. Apartment approvals in Sydney and Melbourne sky high and investors are hoping it continues to go up. You see news reports where they liken a drop in the housing market to a drop in ‘growth’. Yes they actually consider these preposterously unaffordable houses as stable economic growth.

One reason prices are so high is immigration, which creates demand. I would love to see line graphs of total immigration and total house prices, but of course they don’t release much info on how many immigrants are flooding in.

Another reason is home loans. The only way people could actually afford these homes is to get a home loan, they simply cannot get a home without one. Furthermore, the only way banks could get the money needed to loan out ever increasing amounts for ever increasing prices would be to create the damn loan out of thin air, which is what they do. This means that sellers can charge higher because there is no shortage of loanable money.

The reasons people actually accept these loans is because they are either expecting the market to keep rising and plan on selling the house in a few years, or because they are really sick of their parents and are happy to cop the huge interest rates and years of mortgage debt for some shitty 2 bedroom apartment in the middle of 5 asian families.

Usury

So should usury be banned altogether? One downside to banning usury may be on a local level, people may be less likely to help someone out in need of money perhaps. But overall it seems prudent. The system of creating credit through loans is actually quite beneficial for an entrepreneurial inventive society. Loans can be given to help start new businesses. Perhaps interest can still be charged on these loans, as long as the interest is also destroyed along with the principle paid back, so no one gets rich off loan-sharking which is essentially what banks do atm. This would perhaps still limit the amount of loans taken to a reasonable amount to prevent excessive inflation and exploitation.

Jewish Austrian economics

realcurrencies.wordpress.com/2012/01/04/austrian-economics-still-is-jewish-economics/

I feel like this article is bang on the money, so to speak, and I just had to add it in here.

''As we know, the Illuminati Jewish Money Power likes playing the Hegelian Dialectic game and controlling both sides of the conflict. Clearly, they will have their answer ready when their Fiat Empire comes to its end. That answer may be Austrian Economics.

Here’s why:

Murray Rothbard was a son of poor Jewish immigrants from Poland. Ludwig von Mises was a son of a wealthy Jewish financier family from what is now the Ukraine. When von Mises came to the US, he was set up with a grant from the Rockefellers.

Austrian Economics correctly identifies the manipulation of the money supply as the cause of the boom/bust, a.k.a business cycle. This is the little bit of truth necessary for the rest of the disinformation to have credibility.

However, they completely ignore the wealth transfer through interest, which is of much greater significance.''

Im tempted to list more Jews who occupy and have occupied banking and economics professions, but I wouldn’t know where to stop. The whole field is just completely filled with slimy Jewish serpents.

Recession

Perpetual expansion is a requirement of modern banking. In fact we can make a rule: Each year, new credit (loans) must be made that at least equal the amount of all the outstanding interest payments that year. Without a continuous expansion of the money supply, past debts would not be able to be serviced, and defaults would ripple through, and possibly destroy, the entire system. Defaults are the Achilles heel of a debt-based money system. – Chris Martenson.

Excellent video with Steve Keen:

youtube.com/watch?v=4HnGNnBQr6Y

Keen believes that 2017 will be the start of a recession, at least in Australia, with Canada, Korea, China, Sweden and Norway on the verge of a credit crunch. Will we see a collapse? Will the stock market crash and unemployment skyrocket? I don’t know. Ive heard that during the Great Depression, many people didn’t really know they were in a recession until they came out of it. It’s a bit like that now. People can’t afford houses, unemployment is always under-measured… it’s definitely not an economic golden age. But it can and will get worse unless something drastic changes in the form of fiscal and monetary economic policy. There may not be a huge collapse but at minimum we will see a ‘wasted decade’ of complete stagnation.

This is how I see things unfolding. At some point, defaults start to happen. People just begin missing mortgage payments. Banks see this and tighten up their lending, realising people can’t pay loans back so easily (yes this is retarded considering banks don’t lose any money anyway). Less lending means even more people start to default, (remember, paying back loans destroys money, so total supply drops, as well as rate of circulation, and outstanding compound interest-bearing debt is more apparent). It starts to snowball. People take their money out of stocks to help pay mortgages, and stocks fall, people notice, and they fall even harder.

The government tries to intervene, doesn’t understand the situation well enough, and it doesn’t get us out of the hole. The economy slows down and people lose their jobs. I don’t know if we go off the dollar and start using a different currency or not. I have no idea. I can’t see people just waiting around for 15 years until debt levels are finally reduced to manageable levels thanks to government spending or whatever. A hard recession could spell great political upheaval. I don’t know exactly what will happen, or if there are ways for us to make some money off a recession by shorting some real-estate market shares or something… People are expecting house prices to fall at some point, but they don’t realise that huge house prices are a symptom of a bigger problem.

A few of the good economists use measures like private debt as a % of GDP in order to predict when a credit crunch takes place. I don’t know if this works or not, but if GDP follows the money supply, and the money supply follows the level of private debt, it seems kind of redundant.

Anyway the actual solution would be to hand everybody a lot of money, say 1 million each. Those in debt still have to pay down their debt, which gets destroyed (and the interest should as well rather than going to bankers), and those not in debt are rewarded for not being stupid and going into huge debt.

Troubleshooting

There are many things that still do not make sense to me. Here are some.

If banks make loans from nothing, why are they so careful with their loans if they dont risk anything?

If banks make loans from nothing, how do they go insolvent?

If banks make loans from nothing, then what do they actually do with our deposits instead of loan them out?

If the interest rate is a rate charged on buying reserves from the central bank, why do countries with no reserve ratio (like Australia or England) still have interest rates at all?

Why do inter-bank transactions not increase possible bank reserves?

Why does the IMF even exist?

Where does all the interest actually go?

Anyway thats me done
I appreciate the input

He also neglects to mention that those dollars can just as easily be hoarded, or worse, used to purchase US securities so instead of increasing demand for US goods it just increases our debt, not to mention the issues with foreign currency manipulation which makes the differential between real goods and fiat numbers incredibly lucrative for countries like China while fucking us over entirely. The idea that every US dollar used to buy foreign goods will make its way back into our economy is simplistic at best, and really just downright stupid and subversive. Fuck that. The biggest way USD from China/US trade makes its way back to our economy is chinks buying up as much real estate they can in our towns to hide assets from their kleptocratic government and volatile economy, which drives up housing prices because hundreds of purchased homes are empty. China is completely fucking us.

Quick question. If Banks don't charge interest on thier loans how do they make a profit? I know Muslim banks don't do this, so they've gotta be making money somehow else…is it just speculating with depositor's money?

Sure, Im not a fan of it, the western world really doesn't need anything at all from China

they do charge interest on their loans, my point is that the loans come out of thin air, so their excuse for charging interest interest goes out the window.

Muslims forbid interest on loans, but have no problem with buying a stake in someones enterprise, since the stakeholder shares in both risk and profit and it is more fair. It is also generally expected in Islamic cultures that if someone lends you money and you end up succeeding, that you have an informal debt of gratitude which is repaid usually with a gift of some sort, or if they ask a favor of any kind you have to do it. Muslim banks don't make any money on loans, so they make money through bank fees and speculating.

Fees or a stake in the company/property being purchased/developed with the loan.
The main problem is that they loan out people's money stored with them but don't take away that money, basically just cloning it out of thin air. There's no risk in lending money this way because you're not actually lending anything.

Why sir that picture is right purdee. I'd sit and chill with them cows any day.

To loan shark developing nations and conveniently introduce a world currency when the next financial crisis comes.

The shareholders for the Federal Reserve, which are private, but it is speculated they have links with a bank in Switzerland, basically someone you don't even know is siphoning 2-3 percent of the US GDP every year in real wealth and hiding it in offshore accounts of using it for nefarious purposes. Its fucked.

Convenience and optimization, the most credit worthy borrowers are people most likely to have a lucrative enterprise and pay it back, and even if there is no risk a promising startup which will make them money with interest is preferable to a useless bum who is just going to waste time. If the banks can package their outstanding loans into derivatives it is a different story, during the housing bubble a fucking crackhead could get a half million dollar mortgage and instead of the bank being liable for it it was used as collateral in bonds. Predictably the banks went crazy since in addition to there being no risk and investment banker would almost certainly buy up any shitty mortgage by the end of the day for a large sum, so every schmuck who walked through the door was a $250,000+ bonus for the bank manager.

Is C.H. Douglas and the Social Credit theory something worthwhile to look into? I don't even know where to start with economics half of the time.

socred.org/index.php/

Fractional reserve lending is based on the assumption that no more than 10 percent of customers will be withdrawing large sums at a time, which is almost always true, the exceptions are if there is a run on the bank, or if the bank makes enough risky investments that they have to use deposits and there aren't enough.

OP. Please do a piece on Campound Interest and how to utilize it for yourself.

Deposits are cash, when a bank makes a loan it is just numbers on a screen until you actually take out cash from an ATM or a branch, deposits are used to handle withdrawals that involve cash, when people only write checks or wire money it is just numbers being added or subtracted between banks and doesn't effect deposits.

If there are X number of dollars in circulation and the Central bank has an interest rate of 3 percent, then they need to print X+0.3 dollars to pay that debt, and then your money has inflated 3 percent and is worth less. Fed insiders, Wall Street people, etc. get the money while it is freshly printed and invest it or buy solid assets such as real estate, gold, etc. This differential means that they siphon 2-3 percent of the economy every year in terms of real dollars from Cantillion effects. If the interest rate is zero, the banksters are not making any money. In 2008 they had to resort to zero interest to boost liquidity and prevent the global economy from collapsing, but they would certainly prefer higher interests as the entire purpose of our current banking system is to siphon as much time, energy, and resources out of an economy before it collapses. Collapse is inevitable, and for the elites collapse or economic crisis is just a massive wealth transfer to them.

Interbank transactions are usually done through checks or wire transfer, which only adds to a balance sheet at one bank and subtracts at another, reserves are only depleted when people take out cash from an ATM.

You bring up a good point about the Cantillon effect which i hadnt heard of. When a new loan is made, and the credit is created out of nothing, its really coming from everyone in the community around you, as their dollars decrease in value.

I covered FRB, its a myth, banks dont loan out other peoples deposits

I dont know man, like i said im not an expert. Im trying to figure out whats going to happen next year when the inevitable credit crunch happens.

I dunno, he seems to be aware of how monetary economics works, but honestly a fiat money system is fine, as long as usury is abolished or kept to a minimum and you dont have kikes running the place

Thats not even how it works. It literally has nothing to do with other peoples money. it comes out of thin air, and disappears back into the air when you pay it back. Except for the interest which they keep.

Top shit OP.

At the recent meeting of central bankers at Jackson Hole negative interest rates were widely discussed. Current theory and recent history suggests that in a recession the Fed needs to cut interest rates by 4-6%. With rates still under 1% the question is should they go negative if their is a recession? They seem to be leaning that way. The trouble is that people pull their money out of the banks in that scenario and stay in cash. Cash makes negative interest rates harder to implement. Many people have heard of banning cash, but another scenario was presented at Jackson Hole: a deposit-cash exchange rate. If you have $100 in the bank and you want to withdraw to cash you only get $98 (for example), then when you go to deposit cash your $98 only leads to $96 of deposit. You can still transfer all your cash digitally or with cheques but use of cash would be penalized. Many businesses would simply stop accepting cash payment. This effectively means that cash is no longer an escape from negative interest rates. This may be the exact method that is implemented as a stepping stone to cashless society.

kansascityfed.org/~/media/files/publicat/sympos/2016/econsymposium-goodfriend-paper.pdf?la=en

Very interesting, ingenious how they keep coming up with new ideas to fuck us over.

It wont get to negative interest rates in the sense that they pay us to to take out a loan though

No that will never happen. The cheaper credit is the harder it is for banks to make money generally, they're never going to pay you to take a loan. In places where they have negative interest rates the banks are scared to pass the negative rates onto depositors knowing they will run to another bank. So banks have been adding the cost of negative rates to captive markets, making mortgages more expensive rather than cheaper. Central bankers have literally painted themselves into a corner with their theories, it's only a matter of time until people snap.

Holy shit, (((they))) are literally going to steal cash when you pull cash from the teller, in order to dissuade goyim from using cash?

How can we fucking get around this? Gold?

This kikery of massive proportions.

bump

nice job OP

this says it all

Thanks

The economy in many countries will slow down simply as a result of the internal mechanics, the only way they can stop it is by changing the system.

The next recession may go someway towards getting better parties into power once people get angry or scared.

Gold is a Kike dream too.

They have so much stored away, they control the price.

Needs something new. And based on something with a foreskin.

The already own gold

I have done my fair share of studying the monetary system. But one thing that always seem to fail to understand is; how does it manage to stay a float? It seams to me like this "boat" should have sunk years ago.

Anyways good thread OP.

Gold and Bitcoin I'd suggest.

A lot of people seem to think Gold is a Jewish plot because Jews own a lot of it. That doesn't make sense. It's like saying guns are bad because Jews own Uzis and Galils.

Jews run central banks and central banks own a lot of gold, but if you hadn't noticed a gold standard isn't really what they're selling. Central bankers desperately want you to accept their paper as valuable. The gold they have is only there as backup when there paper plans turn to shit.

If a gold standard is really so bad, such a dirty Jewish trick, why did Hitler and Schacht re-implement a gold standard (Reichsmark) which lead to the re-emergence of the most powerful state in Europe?

Gold is the single greatest preserver of wealth the world has EVER seen. Everyone should own some.

...

Why not use your brain, user, and buy resources you can actually USE. Oil, steel, copper, etc. Put your money in places that have intrinsic usefullness.

What are our chances at making Trump nationalize banks?

Austrian economics is based on the economic system of the late holy roman empire and the austro-hungarian empire. It is a free-market school in the classical tradition and its founders (Menger & Bohm-Bawerk) and early benefactors all had ties to the austrian aristocracy.

Most economic argument against marxism and socialism and for a free market have their origins in the austrian school. Some of its prominent members were jewish, but that's true for all other schools of economics and is a statistical inevitability, given the number of jews in the profession. The truth is truth no matter who says it and having read austrian economists such as menger, hayek and (((mises))) will give you a good understanding of economics as well as the common fallacies that are peddled by court economists everywhere.

Austrians are famous for debunking and destroying left-wing economic fallacies such as the socialist calculation problem, the socialist incentive problem, business cycle theory, the broken window fallacy, etc. You can downloads thousands of free pdfs/epubs on the the federal reserve, business cycle theory, banking, monetary theory, economic history etc. including the most most popular economic books of all time "Economics in one lesson" and the collected works for Frederic Bastiat @ mises.org

mises.org/system/tdf/Henry Hazlitt Economics in One Lesson.pdf?file=1&type=document
mises.org/system/tdf/The Bastiat Collection_4.pdf?file=1&type=document

There's a limited amount of bitcoins, but there is an unlimited amount bitcoin fractions, since it is possible to divide bitcoins indefinitely, which gives you an unlimited amount of units.

...

Both silver and gold are industrial commodities (silver moreso than gold)
Gold can found in every single cell phone and most high-end electronics.

1+1=2
t. Schlomo Schekelberg

Economics isn't a natural science.

True, with the age of electronics, gold and silver finally got their intrinsic values. Sadly, both metals have their value massively inflated by the astronimical amounts of undocumented tonnes of gold and silver.

For example; 1kg of gold is "worth" 42 grand (dollars). It's actual worth (when taking the undocumented amounts in calculation) should be around perhaps 5 grand. (this isn't an accurate number by any stretch of the imagination, but it should give you an indication of how much fraud there is).

You're missing the point. You can recognize a true statement without having to conduct a dna test on the person who said it.

youtube.com/watch?v=X8_J3pvBTTc

nice dub dubs, checked.

Inflation is the key to all of this.

inflation defined as the increase of money in existence in a given one year period. For us this is fiat currency, which is another way of saying fake or counterfeit money.

Reserve banks will tell you that they estimate spending my measuring receipts in the economy (ie your tax returns and other consumer surveys, the standard basket of good price increase).

Price x Quantity = Money supply x Velocity of money

P Q = M V

Inflation = (Money supply now - Money supply then)/Money supply then

of course if you are the entity printing all the money the easy way to calculated the inflation is to see how much more money you printed compared to how much money there was in existence.

because reserve banks have access to all bank transactions as all banks are interconnected and act as a single bank a reserve bank can get a good estimate of the velocity of money ( the average number of time each single dollar is spent)

the reason the P Q and V are important is to make sure the amount of money in circulation is not too high as to cause hyper inflation and destroy the value of the currency.

The story of inflation that is always told is greedy individuals put up their prices and create inflation so the banks always have a scapegoat. the reality is when the new money is printed (1-3% of all money in the economy) is spent into the economy by the banks as their own private fund the level of the bankers spending drive up the prices because the value of money is driven down as money have become less scarce.

Inflation rate is the counterfeiting rate.

Inflation is counterfeiting by the banks, but is must be done in a careful way as to not kill the host.

Imagine the economy is cow and you feed of it by drinking it blood. If you drink too much blood at once the cow dies and then you must find another cow. if you take too little blood the cow becomes too strong and healthy to contain in the fences and then runs away.

The way the economy is studied (the health of the economy ) is making sure you cow has been bled as much as it can bear and still be feed on again next time.

So with all the money the bankers are spending into the economy, they have to find ways to take it all bank because they cannot control the economy if all the people have all the money.

1) Inflation means if you aren't earning interest or dividend you are losing value. So you are encouraged to put money in the bank and earn interest or buy stocks/shares investments / retirement savings. either way the banks now have your money.

2) Taxes, the banks use their control over government to make you pay taxes for a huge array of things, income tax, sales tax, city taxes. end result is money out of you pockets and bank the banks pockets.

3) Mortgages: typically a mortgage is where you pay about 3x the price of the house. Interest is where you have paid extra. so really you pay for 3 houses and get just one. more money back to the bank.

4) Licenses and permits: if you want to do anything there is a license for it, drive a car, hunting, fishing, professional certification, building houses, there is always some one ready to take your money away for doing something you want to do.

5) penalties and courts: dint have the right license or permit, doesn't matter if you didn't know you needed one. the court/sheriff/ bailiff will demand money with threats of force of imprisonment if you don't pay.

All this is in order to keep the prices down so they can get things even cheaper. The process is about concentrating all money and power in the hands of bankers. This ends up with the economy that the bankers want a play ground for the ultra rich who have leisure time and want legions of servants and entertainment. entertainment is also a way of distracting people from learning too much and finding out how they are being robbed and by whom.

Because the bankers are utterly useless they simply cannot survive without this scam and will lie cheat, spy, kill, censor and steal to protect their scam.
More and more people are becoming aware of this. When exposed they kill the whistle blower or start a massive war. JFK wanted to go back to a silver standard for money and stop the fiat currency scam of the federal reserve system with Executive order 11110 , so the bankers ordered him to be killed.

video related.

Take a wild guess who the bankers are and what they have in common. Do you believe in coincidences?

At 3% inflation a reserve bank will have printed one counterfeit dollar for every real dollar in existence in just 25 years. this means after 25 years the reserve bank has enough money to buy everything in the economy.

TL:DNR the bankers are very careful to monitor their cash cow which is all the non-bankers.

No, you are missing the point.

What is a satoshi?
The satoshi is currently the smallest unit of the bitcoin currency recorded on the block chain. It is a one hundred millionth of a single bitcoin (0.00000001 BTC). The unit has been named in collective homage to the original creator of Bitcoin, Satoshi Nakamoto.

You need a rope around your neck.

Well, they're not allowed to spend the money freely and if they were, they'd only be able to (theoretically) buy half of everything that is purchasable and since the economy grows, it'd be even less.

Tip top kek. I would get a major in redpill economics if my professor lectured like this.

Emphasis on currently. Should the need arise a satoshi could be divided even further.

What do you think about Evola's "economic tyrant" ?

Economics is a natural science. A Queen ant will produce nanitics (dwarf ants) in order to reduce risk of initial brood losses (predation) in harvesting the first food for the queen to produce full size ants to establish a colony.

make more smaller ants to have greater chance of colony success. nanitics are also produced in times of colony starvation. economics is burnt into the DNA of many animals and can be seen in their behavior.

Economics is the rational reaction to the intersection of, need, preference and scarcity.

the 'economics' we hear about is often propaganda and perversion of real economics, just like flat-earthers are a perversion of science and logic.

...

Get into the oven, chaim. Your price manipulation industry will soon follow you in hell.

Economics is as far from a natural science as possible.

checked

You do realize that the jews at the Fed are manipulating prices DOWN because rising gold and silver prices would signal the failure of their policies right?

I'm sure you do, because you are a CTR shill. Your employment records will lead you to the hangman's noose.

Is there an economic term for currency per person? That seems better than inflation for gauging buying power.

Read his last sentence, fix that reading comprehension

juliusevola.net/excerpts/Tyranny_of_the_Economy_&_Pseudo-Antithesis_between_Capitalism_&_Marxism.html
This?

once you are buying and selling politicians there are no rules.
Just buy all the land and then you own the country , just make it look like the government owns it as national parks and military bases, remember you own the government so its actually all yours. Oh that's right you own the military now, no one is going to tell you what to do.

One day your children will born slaves on a continent you once conquered.

I didn't even read past the first sentence. Claming that economics is a natural science is just laughable and ridiculous.

I think you are talking about disposable income, but you also have to take into account wealth levels also.

For example Sweden has very low differences in disposable income, but very high differences in individual wealth, with some people owning almost nothing and other owning huge tracts of land.

so its a bit hard to measure exactly what you are describing.

If all house flies flew around completely at random, all flies would die out. Even a lowly housefly has to modify its behavior in order to match the constraints of nature.
needs food to fly, need to use some food to feed its brain in order to seek out food. needs a principle/program in order to maximze its chances of survival and reproduction.

I'm not going to defend what is being said about economics in MSM, as most of it is BS and several key elements of economics as taught as university are clearly false, but real economics does exist.

t. professional economist and has a foreskin

Basically I want to compare total currency/ populationmaybe limit this to working age population in a country/area and compare that to inflation rates over time.

It still doesn't mean that economics is a natural science. It's a social science.

t. degree in theoretical physics

What is game theory?

total currency would be the money supply. M0, M1? M2?
Reserve bank might have a figure like that
DOL might have working age population and its histories.

Which economy , which region and which time period?

Never heard of it.

come back and talk more when you know about it.
I think you might be surprised at the mathematical rigor underpinning economics.

The austrian school isn't "run" by anyone. Anyone can write essays and books in defense of free market economics.
You imply that the jewish kleptocracy would somehow benefit from having to compete in the free market. They don't.
They thrive on rigged systems where competition is artificially limited by laws and regulations.
David Rockefeller famously said "Competition is a sin" and proponents of austrians economics seek to unleash the power of the free market, which is open to anyone, not just people with political connections and lobbyists at their disposal.

So a math model that describes social relations.

You can use maths to make art too but that doesn't mean art is a natural science.

You definitely use maths in demography but that doesn't make it a natural science.

You use biology in anthropology but that doesn't make it a natural science.

TODAY OP WAS NOT A FAGGOT

Good work OP, this is one of the most important topics all anons should be versed in. A good intro or refresher thread like this is needed every once and a while to keep the newfags up to speed.

bump

Archived your work for you, OP
archive.is/QpUCi

populations breeding and dying is not natural?

Lotka-Volterra population model, natural science.
demographics based on Lotka-Volterra not natural science.

pick one.

Let me put it this way, no one is teaching economics to house flies, but they are clearly optimizing their behavior according to economic principles.

If they didn't they would have gone extinct. but somehow that is not a natural science. Its hard coded behavior forged by nature but according to you its not a natural science. the same way the physiology of a house fly is forged by nature, so is the behavior. but according to you that is somehow not natural.

K selection, r selection its all there, but according to you, not natural in some way.

define natural.

you would probably need to do demographics on the working age population. as you can imagine a developing economy with mostly young men is going to have a very different spending/saving profile to a developed economy with significantly older workers.

A typical worker has maximum wealth and disposable income at about 47.

its very interesting idea for an analysis especially if demographics is taken into account.

So close to quints… Kek did not smile upon him.

no quints
didn't disguise his power level
RIP

Are you retarded? Do you even know what a natural science is. Well obviously you don't, or else we would be talking about this.

If that happened the bitcoin holders could simply move to another crypto currency, its not that hard to make a new one.
Just like how halfpol was ruined we all moved here.
Huffakers mite experiment.

Here's some "spreadsheet porn" for you guys. The numbers don't account for inflation at all and I couldn't find exact numbers for M0
2006 jan labor force 150,214,000 total population 298,000,000 M1 $1,380,000,000,000 M2 $6,693,900,000,000
2016 jan labor force 158,335,000 total population 324,000,000 M1 $30,919,000,000,000 M2 $12,418,300,000,000
Total inflation from 2006-2016 is 19.5%

2006 $PP labor force M1 $9,186.8933 M2 $44,562.4243 total population M1 $4,630.8725 M2 $22,462.7517
2016 $PP labor force M1 $195,275.8392 M2 $78,430.5428 total population M1 $95,614.1975 M2 $38,328.0864

Yes. I was reading Man among the Ruins and Evola's economic system seems very interesting to me ( quality over quantity and a system of small roman "factories" which produce instead of large concerns

Natural science. The sciences collectively that are involved in the study of the physical world and its phenomena, including biology, physics, chemistry, and geology, but excluding social sciences, abstract or theoretical sciences, such as mathematics, and applied sciences.
(I wouldn't call geology a natrual science though. That's an earth science)
Social science. The study of society and of the relationship of individual members within society, including economics, history, political science, psychology, anthropology, and sociology.

Even maths isn't even a natural science.

Mathematics is essential in many fields, including natural science, engineering, medicine, finance and the social sciences. Applied mathematics has led to entirely new mathematical disciplines, such as statistics and game theory.

Austrian economics is a purple pill tbh, it correctly refutes socialism, Keynsianism, and points out many of the scams that a central bank runs but then shills out on the goldbugging thing and stops short of explaining the biggest problem of interest slavery via central banks and so on. I am of the opinion that it is a limited hangout psyop, same as Alex Jones, Jared Taylor, etc. they entice curious skeptical people with good critiques and explanations of business cycles, failure of socialism, etc. and then misdirect or obfuscate them on the most important issues. A lot of people write off Austrian economics entirely because of this but it is legitimately good as an entry level redpill as long as you keep in mind how central banks and interest slavery really works, and recognize it as a psyop.

yes inflation is a problem but i think the bigger problem is the fact that we have outsourced money creation to commerical banks who earn interest on no-risk credit.

also

Pic related, the order had nothing to do with notes, JFK was killed because he didn't allow Israel to have a nuclear program

I hope to answer a bunch posts tomorrow

Schumpeter is really good.

In particular, Schumpeter's "History of Economic Analysis" is excellent for getting a historical overview of the field.

Dubs confirm. You are correct. But these are a few sticky bits of Holla Forums lore that are hard to dispel.

This is solved by having the government control lending as well. Just eliminate private banking entirely.

So now you are telling me the earth is not natural.
So you give a definition for what is a natural science and then contradict it.

that's SJW tier logic

geology is not a science, you are starting to sound like sheldon cooper.

Inflation is pure counterfeit, zero risk pure fraud.
Commercial banks risk a bank run if they lend too much.

Reserve banks just print more money in a bank run.

Ad homs and dis info, looking, like a shill.

It's not my definition. That why i said
But i guess you could say that geology is natural science. But i feel like it's so big and unique that i would class it as a specific group. But thats just my opinion, and not part of the definition.

No it isn't. The government defines what is and what is not money, so they cannot possibly counterfeit.

It might make more sense to take data yearly. and measure inflation each each year. the trouble is inflation and employment figures are routinely 'cooked'.

ie
year labor pop m1 m2 inflation
2006 150m 289m 1.3T 6.6T %

so after checking the only relationship i found without demographic data was this:

inflation spikes lead to unemployment spike which make sense as it is where the bankers strip money out of the economy.

after teh 2007 -2008 spike they drop the inflation and even go negative to help reduce un employment as the took to much blood out and effectivley need to put some back in.

the economy is now appears to be beginning to recover so they start squeezing it again.

it hasn't really recovered, but the chart says all good and they do it.
you'll notice the inflation (theft rate) is a rather crude and sensitive lever so it over and under corrects and has a bit of lag in it . so federal reserve counterfeiting has an art to it.

Plato defined what money is and has 5 properties:
portable
durable
valuable
fungible
recognizable

fiat currency has no value, so it is not money.

confusing money and currency.
in the current year.

No you don't understand, there is no hard defined limit that declares that BTC is only divisible to the point of a satoshi. If you wanted to, you could send yourself a payment of one ten billionth of a satoshi and it could happen just fine, and that would be the "new satoshi" amount, as the newest smallest amount on the blockchain.

There is literally no difference. Just lolbertardians splitting hairs. If the government says it is money and requires you to pay your taxes in it and use it as legal tender, then it is money.

Funny how libertarians will say on one hand that value is subjective, and then without even blinking say that gold or whatever other commodity has inherent value as money. I thought lolbertarians were supposed to be logical.

Yeah that mess I posted was just everything I found and threw into notepad to do the math. Do you know anywhere where I could find yearly M0,1, and 2? M0 seems the best to calculate currency per person.

heard about this one, got a source?

sounds fair

gold isn't valuable?

why not?

it's pretty rare, doesn't tarnish, looks nice, people like it

hurrr lolbertarians, you a natsoctardian? hurr hitler was great, you should all bow down to the leader!

how can yo barter if one party has worthless paper only made valuable by decree? isn't that fraud? giving something for nothing or vice versa?

bcuz

Fractional reserve may be a myth nowadays, but in the mercantilist period when money was required to be gold backed it was true.

7chan.org/lit/src/Feder-InterestSlavery-trans_Hadding_Scott.pdf

Is a payment of less than 1 satoshi currently possible? Screenshot please.
If what you are saying is true, I would be concerned, because then the 21 million bitcoin limit is meaningless. I was under the impression the 1 satoshi minimum was a technical barrier. I think a lot of people may also assume this. Worthy of its own thread user.

Money is defined as plato stated it. currency is a state decreed quasi proxy for it. the difference is 1 ounce of gold is always 1 ounce of gold. no government decree changes that. the value of fiat currency can change in a heartbeat. I actually have 150 billion dollars in Zimbabwe (2008) money and its no longer currency and only has collectors value. the Zimbabwe government decreed it was no longer currency and its value was effective destroyed. 150B Zim dollars right now is barely worth a coffee. ironically that's probably more than it was worth in 20008 as it has gained value to to being more scarce than it was right then.

every fiat currency has failed because thats intrinsic to fiat currency. gold silver and other precious metals retain their value. the value of a house, a hooker and a fine suit of clothes in gold coin value has not greatly changed in two thousand years. My gold coin is recognized everywhere as being valuable and always will be.

fred.stlouisfed.org/categories/24
cant find M0 there, maybe the fed?

M2 or M3 would be a better measure of money in the economy.

you might need the average salary over the time period to. value creation of the population is the factor to follow as inflation is about extracting value.

Good thread, should have economics/finance board, Typically go to cuck /biz/ for coin,stock,forex etc… Money is Power. Imagine Holla Forums was wealthy elite we would be living in the 4th Reich kek

I find myself agreeing with you on many things, but history would disagree with you on this one. You're using the logic rulers used to bring the Jews back into countries after they had previously expelled them, they preferred to have the Jews lend the poor money rather than pay them a decent livable wage.

When people realize they can make interest off holding money/loaning it out they are far less likely to be charitable to those in need.

This video is probably EMJ's most important. It deals with the destructive power of usury. At 25:00 he gives the reason why the Jews were kicked out of countries all across Europe, and at 29:00 he coorelates countries bringing Jews back in with the introduction of the credit card.

Excellent work OP. I've been trying to get get people out of the lolbertarian economics and into real world or nationalist economics.

The biggest issue isn't "national debt" like OP correctly stated but what the new debt/ new money is being used for aka real and local production versus "gibs me dat/ imported nigger tech".

The kikes want us dependent on Chinese goods rather investing in our own national productive capacity because that keeps their debt machines going whereas real capital investment would force higher wages for the white working class and thus would give whites an greater ability to create self sufficient communities which they don't own.

The issue has always been (((globalism))) versus nationalism aka national self-determination.

Trump understands the economy better than any else in politics because he is a master on debt. He understands that we have the unlimited ability to fund the wall but in order to keep the dollar stable we have to slowly reduce foreign reserves and bring those dollars back into our in way that increases wages and production rather than creating inflation.

The Wall is isn't just to get Mexicans out but to keep Chinese banks in check. 4D chess people.

indebting your children and people is good now?

I love you guys, but jesus you don't know shit about economics. Pic related. Are you doing your reading, Holla Forums? I suggest starting with "Economics in One Lesson" but "Man, Economy, and State" is the best book I've ever read.

...

are you retarded

That's a pretty good proverb, actually. I mean, I wouldn't have phrased it like that, I'd be much more negative, but it makes complete sense.

Good post, I wonder whether we will see a new currency pop up.

Honestly I think Trump is kosher.

-loves israel
-converting by marrying his blood into Jewish families
-rose to eminence on the back of Jewish sponsorship (pic related from The New Jerusalem by MCP)

I just dont buy the 4d chess line, Pence was the last straw for me. I think Jews will happily co-opt the new nationalism wave as long as Jews continue to go unnoticed and Israel is safe. Perhaps Trump will rescue the economic situation somewhat, and that will give him the appearance of fixing things, so people will happily go to war with Iran for him.. I dunno. Things do seem to be coming to a head as the election dawns closer, but I dont think there will be a major economic hit until next year.

fair enough, but i don't think Austrian economists understand that banks create money and that budget deficits are generally good and necessary. For those looking into the real nitty gritty intellectual/philosophical branches of economics then Post-Keynesian imo is the right one.

I think Bitcoin may be a way to get around jew-controlled money, but its not the best system objectively. It also needs to get passed the phase where people buy it just for speculative investment, wait for it to go up and sell it again.

top webm

wow, thanks boys, honestly appreciate it a lot

At the risk of sounding arrogant, I think that most of Holla Forums has never really known exactly how it works, but they are experts in the history of banking. Just as says, while FRB may be a fucked system, it is not the system we currently use, ours is even worse.

I still see concerns over national debt, and the assumption that taxes are actually spent, when they just get written off.

youre probably right, i thought i had an arugment for why usury can be useful but i forgot it lel

The Fed just acknowledged that there's a bubble so it may hit early 2017

The banker lending at interest with collateral is utterly indifferent as to whether the borrower is able to pay back the loan, and sometimes hopes for default as the collateral is much more than the loan.

A fairer system would be:
(assuming a true friend lending at zero interest cant be found)

Seeking a shareholder (stock holder) to supply capital, a shareholder is incentivized for you to succeed and may actually bring valuable knowledge to the venture. The shareholder is you could later buy out the shareholder with your profits.

the only logical reason for 'interest' in a loan is the opportunity cost to the lender.

Why lend you a gold coin so you could buy a bag of wheat and grow wheat, when I could do the same myself?
Sowing a bag of wheat and harvesting successfully produces much more than one bag of wheat in return. considering that a bag of wheat is one gold coin in this example you can begin to see the justification for 'interest'.

But at the same time after the harvest wheat become locally plentiful and the exchange rate for gold to wheat changes at least locally with gold becoming more valuable wrt to wheat.

but I much prefer to the shareholder/venture capitalist model as the provides the right set of incentive vectors.

I'd like to reply to all posts but theres too many.

The things that i wanted Holla Forums to take out of this thread are these:

-Governments create money every time they run a deficit, national debts are are fictional.

-Banks create money every time they make a loan, and they destroy it every time you pay it back

-GDP and the stock market have a strong relationship with money supply.

-When all your money comes from bank loans, it means you are constantly getting exploited through the 'exchange value of labor'

-There will be a recession next year, don't buy property until then, buy guns

If you are looking for the perfect economic system, well, empires only last 250 years apparently, before the age of decadence sets.

Hard men make strong nations, make soft men, make weak nations, which make strong men. It is a cyclical, nihilistic argument but it seems to fit.

Sometimes? No, The lender has incentive to make you default and/or delay your ability to pay off the loan. It keeps your collateral, and the payments plus interest that you've already made. It's legalized theft.

If you wanted to do the same you would. But you'd rather justify putting all the risk on the farmer instead. His labor is not guaranteed to be productive (there could be a drought that year for example), nor is the market price guaranteed to stay the same. This is what happened in the American south during the Reconstruction era, The crop-lien system kept farmers in debt slavery who oftentimes had interest rates over 100% thanks to Capitalism and Holla Forums's favourite ethnic group.

tomdispatch.com/post/175643/tomgram:_steve_fraser,_another_day_older_and_deeper_in_debt
americanjewisharchives.org/publications/journal/PDF/1991_43_01_00_ashkenazi.pdf

Economics is a branch of philosophy that is in the sphere of ethics/morality since economic transactions deal with other people. The world has forgotten that and we've adopted a system where the strong dictate terms to the weak.

One thing I forgot about my example, If you wanted to go into the business of growing wheat with concern for morals, you would share the risk. You would supply the materials, he would supply the labor, and you'd split the yield whichever way you agreed upon.

His good friend Mark Glenn (who he was living with up until he passed last year) supports Trump and is convinced that Piper would have as well.

radicalpress.com/?p=9154
(from the comments section)

In order for this place to be of any value, people have to understand the folly of Austrianism / Libertarianism, which is essentially the hebraic ideology of gold worship and rationalization for why interest rates must be high.

Here are a few libertarian positions (and their fallacies) on economy:

-Low interest rates spur the business cycle, therefore high interest rates are mandatory
(The effect of interest rates on the money supply is unclear and may be a mistaken cart-before-the-horse assessment. Additionally Hayekian business cycle theory is masterfully crafted in its form but preposterous in its content; prices are not pure information, business decisions are not made purely off of interest rates, underestimation of the market to absorb "unwanted" goods, regards all boom-constructed industry as worthy of liquidation, including labor)

-Government currency creation is inflationary / cannot be trusted, therefore banks must create credit
(Banks are equally inflationary and untrustworthy. This is pure ideology. The only difference is that in the latter case, we accept interest slavery)

-Markets (including labor) everywhere and always clear, therefore countercyclical pro-employment policy is government overreach
(Observably untrue for myriad reasons. Again pure ideology)

-Governments are always inefficient, therefore utilities should be owned privately even if they're natural monopolies
(Efficiency is one of many desirable traits in an economy, among which is robustness which is often efficiency's opposite. Additionally, handing off natural monopolies to private parties is idiotic for obvious reasons)

-Trade deficits don't matter, therefore trade restrictions are government overreach
(Too complicated to explain why it's wrong in one post)

-Regulations only make markets more favorable to big companies, as only they can bear the cost of processing them
(Idiotic. Big companies are inherently more competitive than small ones due to the intrinsic advantage of economies of scale. If anything, regulations present an opportunity for small businesses to catch up by preventing anti-competitive practices. This is not to say that small businesses don't suffer from some regulations, but only that the idea of a leveled-out market in the absence of regulations is idiotic and counter to well-documented and obvious historical experience.)

To any libertarians in the thread:

I implore you to broaden your consumption of economic literature beyond a single arcane school of imperial gold-worshipping jews whose answer to every economic question is for wages to sink to minimum and for the money supply to drop to minimum, thus driving the burden of pre-existing debt on the economy to its maximum.

Somehow libertarianism gained credibility in the counter-culture, probably because of its obsession with central banks, but it's important to understand economics well enough to see that ""an" explanation is not ""the"" explanation. Libertarians give plenty of explanations for plenty of things. All too often people see that libertarian ideology addresses their concerns by giving them explanations and they're satisfied enough with this that they don't confirm the validity of the logic. It's unfortunate because economics is the study of highly complex systems and requires probably a half-decade of sober study and contemplation before anything approaching "wisdom" can be attained.

I used to be a libertarian and what first shook my confidence in this ideology was reading the works of American populists and labor-activists who were as thoroughly against proletarian communism as they were against high finance and money manipulation. Their work is still relevant today and they still hold lots of applicable solutions. The thing is: everything that they were fighting for, that the experience of the day showed them to be true, is everything Murray Rothbard and his ilk fabricate cheap tinny rebuttals to. The great period of American economic analysis yielded these recommendations: end privately created money, nationalize utilities, put up trade barriers and give the laborers and farmers of the country some kind of bargaining power against middlemen and mass-employers. And what's the libertarian program? The exact opposite of that. Which means that it alligns exactly with the interests of the Morgans, Warburgs, Astors, Rothschilds and Rockefellers of the time, who were precisely the target of the American labor movement.

Do your own research, stay curious and for god's sake please broaden your sphere of knowledge outside of a single autistic sphere of misled fanatics who worship labor liquidation.

Reading recommendations: Princes of the Yen - Richard Werner, Credit-Power and Democracy - C.H. Douglas, The Role of Money - Frederick Soddy, Harmony of Interests - Henry Carey, Free Trade Doesn't Work - Ian Fletcher, in addition to the OPs recs which are all good as well. All available online.

Bumping because I have yet to go through this.

Elites on suicide watch. Even the fucking UN is saying our shit is fucked.
telegraph.co.uk/business/2016/09/21/un-fears-third-leg-of-the-global-financial-crisis-with-epic-debt/

I don't think any Austrian ever said that interests must be high, only observed that interest rates are currently very low than they should otherwise be. It's strange that anyone can possibly think differently right now. What Austrians do say is that interest rates should be defined by the market.

Right and wrong. Both government and banks cannot be trusted to have a monopoly over money, and that's why we shouldn't give them.

I don't really understand what you mean by robustness, or how those two adjectives don't come together. As for "natural monopolies", there's something for you to read too mises.org/library/myth-natural-monopoly-0

Not everything is about economies of scale and even when it matters it isn't everything that matters. In fact, it's precisely reducing everything to "economies os scale" is treating humans like cogs, and you probably accuse libertarians of being materialists. What about entrepreneurship? Furthermore, you only need to have observed the hoops that small business have to jump through to understand how onerous regulations are for them. Big business owners aren't the ones skipping sleep to do the accounting themselves because they have to install some new equipment that became mandatory last week, or other such situations. The link that I posted is also relevant to this topic.

bump

Pick one, crisis is another word for wealth transfer almost invariably leads to further economic centralization and elites buying up assets at fire sale prices during the crash.

You seem like a thoughtful person so here goes:

It's hard to know where to begin in responding to something like this but just the simple-mindedness of the phrase "let the market figure it out" betrays a misunderstanding of how economic reality expresses itself. Take the stock market, for example: if most people think that the [XXX] company is a winning pick and they all buy tons of stocks, then guess what? It is a winning pick. There are many such cases throughout economics where the reality is not defined by underlying fundamentals but rather the mass perception of what is lying above these fundamentals. This principle can apply to many things, including countries at the bottom of a recession / depression and countries being emptied out by international capital flows; if capital pulls out of the country, then many of its firms become unable to finance their operations or possible expansions even, and thus more capital is liable to pull out, thus making the initial suspicions of the capital abandoners the ultimate reality via sapping of investment funds thus output and profitability and thus attractiveness for investors. The marginalism of neoclassical economics would have us believe that the market is defined more by its negative feedback loops (self-balancing mechanisms), but in reality and on a macro scale, it is very much defined by positive feedback loops (mechanisms which need to be balanced lest they gain momentum and totally unbalance).

As for interest rates, whether there is any such thing as a "natural interest rate" and whether it is the result of the market process rather than the causal factor in the market process is still very much up for debate, to put it charitably. If you want to see what interest rates look like under neoliberal execution of policy, then just take a look at any of the countries that were subjected to neoliberal regimes: usury and lending laws are outlawed and interest rates go back to the rates of the 19th century. This is a cost not only to the consumer but to the businesses of the country, a cost which need not be paid at all if there's a government in power with the balls to stand up and issue its own low-interest loans to the large industrial complexes rather than letting them have to pay high interest to international banks, which is, assuredly, a massive impediment to growth and development.

And who then creates money? Mining companies? What kind of power would a state have over its own affairs in such a case? How would the money supply be expanded during recessions if the incentives for the mining companies issuing the currency would be to exploit the heightened demand for currency at the time? Why shouldn't the state do it when it can put the currency into circulation interest-free as tax breaks for everyone?

Robustness and efficiency are at odds with each other. An extremely efficient field of industry is one that is totally vertically and horizontally integrated in a single firm. This is efficient because the firm, being monopsonistic, pays the lowest cost for its capital and labor inputs. This is however very non-robust (weak) because the health of the entire industry is dependent on the monolithic decisions of the executives. In a field of industry which is perhaps less efficient because of a greater number of firms which have bid up the price of inputs and are perhaps too small to achieve the economies of scale of the former scenario, it is much more robust because the risk of total industrial failure is spread out among many lines of decision-making. This is why an intelligent state takes an interest in ensuring a competitive and relatively horizontal distribution of firms: it's resilient, robust and bids up demand for factors and labor, which is always a plus (as an Austrian you may not be conscious of this being a plus due to neglecting the income side of economic equations and the consequent realization that all economies are at risk for demand deficiency).

>As for "natural monopolies", there's something for you to read too mises.org/library/myth-natural-monopoly-0
I skimmed through it. Wish I didn't. He doesn't even get the definition of natural monopoly right in the first paragraph so I had little faith that the rest of it would be solid; it isn't, but I'm not going to write a piece-by-piece rebuttal of DiLorenzo's article for free. Though look at his sources; all the thinktanks of American plutocracy, Cato, AEI, Heritage, etc.

This is tragic irony. A libertarian saying that economies of scale aren't everything….

Yes. Obviously they aren't everything and I didn't say that they were, only that they allow large firms to outcompete small firms without the assistance of state regulations or whatever. I'm not telling you what I want, I'm telling you how it is. I'm not even of the opinion that they ought to, if you read my whole post. But the point is that without state regulations dictating the terms of competitive behavior, they most certainly will, as history has shown time and time again.

No serious economists think that entrepreneurial activity is able to bridge the gap between the small and the large for a given industry. Schumpeter's theory was that only entrepreneurial activity in small ""new"" industries could replace managerialism in big ""old"" industries by making them obsolete via innovation / technology, etc. The only possible way that small businesses could compete with large ones is in a political economy constructed by the state which places limitations on large businesses while guaranteeing access to credit, markets and technology to smaller businesses, which would amount to huge amounts of state subsidy and intervention, which is obviously not libertarian. Any other conception of market competition is fantasy.

Ok so AEI and Heritage aren't there, but there you see Yale, Hazlett, the Privatization Review, etc.

Have you heard the case for making natural monopolies publicly owned as advocated by one of its proponents rather than detractors? It's quite simple and solid rationale. Are you aware of the many cases in which utilities have been privatized and the results have been disastrous for both consumers and businesses?

I agree. the business venture is the fairest with both partners sharing risk and possibly developing synergy, perhaps you investor is a meteorologist who can predict droughts.

Exactly where economics fits in relation to other branches of study is a little confusing. In many universities it is attached to a business school, sometimes arts and social sciences, sometimes even STEM due to is math content.

In recent times I think it has been a cross between a science ( devoid of morality) and politics ( its original home, political economy) a way to control people. The science of control.

If people, do start thinking along the lines of a form of morality, as you do it would probably be for the best , but as it stands real philosophical thought is rare.

Economics is about scarcity and its rules apply more, the more scarcity there is. The people who control economies always seek to increase scarcity as it increases their control.

This is what I mean by the 'science of control'.
bots are cheaper than shills, per unit derail.

people who work for the government should not be allowed to vote in its elections. why? because they are biased and have a conflict of interest. For example a nationalized monopoly is being inefficient run by a large government agency, who is going to run for office with the platform of slashing jobs there? no-one, because the agency has too much power, so once theses agencies form their are protected form scrutiny and become a make-work place for nepotists who will ruthlessly protect their position.
A perfect example is the federal reserve, which controls the monopoly on US currency printing. JFK wanted to shut it down look at what happened.

Generally the process with government assets is this.
1 govt builds it with tax money.
2 runs it badly.
3 sell off right to operate it to private biz
4 biz will run it profitably and not maintain it
5 operation falters on maintenance issues and prices rise.
6 public angry
7 govt cancels contract
8 govt gets big crisis maintenance bill
9 govt pays with tax dollars
10 goto step 2

so really the asset just turns into a cash cow for private business at step 4, with public money pumped in at steps 1 and 9.

The Fed does not have a monopoly on currency printing. The Fed swaps cash for bonds with the "Member Banks" (JPM, Citi, etc.) of the US Treasury, essentially enabling the USG to print money at will while providing reserves for banks. It is in fact the private banks that produce the vast majority of currency in our economy. Look at any US Money Supply metric. The most popular one, M3, has base money (that is, money created by the government) at 3% of the money supply. The rest of the money supply (that is, privately created credit-monies) is of course 97%. The whole thing with JFK… that's not really an accurate picture.

There's some wisdom in this but also some neoliberal memery which has passed itself off as common sense for the sake of its own interests. Yes a lot of government run things end up failing miserably, but some of them end up succeeding and benefiting everyone quite well. For example, Sarah Palin's bridge to no-where was a good example of government abuse. On the other hand, the Chilean Development Corporation (CORFO), built up during the Allende years, was a good example of a government agency which evaluated what it would take to get an industry up and running and then provided a handful of firms with the information, credit, and technical skills it required to be successful. This helped lots of Chilean businesses to expand and be successful. Or look at the Chinese banking system, in which many banks are owned by the state and extend low-interest credit to their large industrial combines helping them to grow more than they would in a pure market environment.

Some things are unsuited to governmental agency but some things are well suited. There are 'bureaucratic' type businesses and there are 'entrepreneurial' type businesses. The former are defined by their need for formality, regularity and low-growth horizons and the latter are defined by their need for creativity, nimbleness and so on. It just so happens that some of the most reality-defining types of businesses are bureaucratic, such as banking. Banking is essentially accounting, which is something that takes no creativity or inventiveness to do, but despite that, it is an unbelievably powerful force of human invention. Putting it into the hands of the state (in the best case scenario) would allow businesses to grow much faster than normal (0% interest) while holding them to favorable environmental and labor conditions (the terms attached to the loan). Lots of governments have used this model to good effect in the past, and not just in banking.

What it takes for this to succeed is a sizable pool of civic-minded people to draw upon for bureaucracy and powerful state resolved to execute its plans. Unfortunately due to the US' fundamental commitment to mammonistic values this is a greater challenge.

It's purely "science". Modern economy is nothing more than tyranny of the strong over the weak. Now, I didn't come up with this (I'm paraphrasing EMJ as best I can), but our whole worldview has been changed to suit this. Before the Middle Ages, through the Aristotelian concept of motion, we viewed the natural state of objects in the world that weren't moving as something at rest, and only moved when something acted on it. Since Newton came up with his theory of gravitation, we believe the inverse, things are never at rest, and they constantly have forces acting on them in every direction. Nevermind the fact that science cannot explain why we have gravity, or where it comes from. You'll never find a "scientific" explanation for that.

Same goes with the origin of the world, before the Middle ages, we had creationism, the world was seen as relatively stable, now, we have theories about evolution, and the view is basically "survival of the fittest"

In both instances, our "science" has been changed to conform to the capitalist worldview. The major event in history which seems to have started this was the Protestant Reformation. John Calvin was the first man to say that usury was not immoral, and we have to deal with the ramifications of that thought today.

Labor is the source of all value, and the legacy of modern thought has been the abuse of labor.

Human labor can only grow in a linear fashion whereas compound interest grows exponentially. If that doesn't give you an idea of how completely immoral that is, extrapolate that to society at large. What do you think would happen if all of society stopped working, and decided to live off interest? The society would cease to function as soon as it ran out of resources. Money is to the economy as blood is to the body.

Usury is completely parasitical behaviour, and is the theft of labor. It is the source of Jewish power, and is the reason why they've been booted out of countries over 100 times in history.

archive.is/9k0n6

The Tor poster is correct as far as I understand.

That made no sense whatsoever. It's precisely because we don't have money that is backed by a solid commodity such as gold,silver and/or platinium, that bankers were allowed to make higher risk lends and the FED to print way more money to essentially give away on terrible investments, to which we, the american taxpayer, were of course forced to pay the debt of.

we haven't "adopted" a system where the strong dictate terms to the weak - nature has imposed this fact upon us. The strong always rise to dominate the weak.

bumping

What he said is right. Fractional reserve banking no longer exists today because that concept is based on banks lending on top of reserves. But nowadays, where credit money is indistinguishable from base money, bank lending eventually creates its own reserves; Banks make a loan to someone who then spends it, and then the recipient of that spending deposits it in a bank (or eventually spends it on someone who does), which then goes toward the reserves and thus lending activities of that bank. In the days of the gold standard, depositing a credit-money at a bank would not mean an increase in reserves there, because only gold could be used as reserves. But now when a bank makes a loan to someone, it just shows up as some kind of money, which is then spent, and deposited, and thus recycled as reserves back in to the banking system. In the medium-term, credit expansion creates its own reserves. Thus, the Feds actions only serve to supply reserves to the banking sector in the short term to smooth out liquidity / solvency issues.

This is not an endorsement of the gold standard. It fucking sucks, it's a usurious and fraudulent standard, but one of its upsides is that credit creation can not self-referentially spiral upwards in a positive feedback loop.

…and yet we don't live in mud huts.

Spergpasting until thread picks up again:

Fractional Reserve banking basically means that banks are permitted to lend at a ratio of capital to credit less than 1:1. Each dollar they lend is only partially backed by an asset. The rest of the dollar, they create. If one should put $10 into the bank, and the Federal Reserve has set the reserve ratio at 10% (it used to be higher in earlier times of American banking), then that bank will lend out $9. There will now be $19 in the economy. The recipients of that credit will put some of the notes in their banks, meaning $9 of deposits and thus $8.1 more of credit, then $7.2 more of credit, until the economy is fully “loaned-up”. This means that the economy and banking system has worked through to the maximum of credit expansion which the reserve ratio will permit. This scenario is commonly known as the money multiplier, and it is a rule of thumb among economists that the money multiplier will be 100 over X, X being the reserve ratio. Meaning if they reserve ratio is 10, the multiplier is ten. If the ratio is 5, the multiplier is 20. And so on. A lower reserve ratio means a higher money multiplier. It should be noted that although currently the federally required reserve ratio is 10%, only 3% of the total monetary aggregate (using M3) is base money. The remaining 97% is credit money. This leads many to believe that the money multiplier is a bogus concept. The ability of private banks to create credit, which is what this fractional reserve banking provides for, gives banks a power to transcend the limit on credit creation which deposits supposedly impose.

This is a very difficult concept to grasp but it is of the most utmost importance. Only 3% of the current money supply is indestructible (10% if we are wearing rose-tinted glasses). This means that any sufficiently impactful financial event can be, simply put, a catastrophe. This is the main reason why capitalism’s busts and booms have been such a characteristic feature of its history: systemic risk is inescapable. It is a built-in feature.

The ability of private banks to create the currency we use in the economy has important broader implications. Because banks are permitted to issue their own notes and those notes function as money within the economy, the money supply does not serve a purely monetary function. It is almost as if money and credit were fighting each other for space on a single coin. 97% of dollars out there are simply loans or credit arrangements. If those loans go bad, then 97% of the money supply disappears overnight. So we see then that this system of debt-money is incredibly fragile. The danger of the banking sector means the danger for all, because if the banking sector goes under, not only does the credit supply dry up, but the money supply vanishes. This inherent peril easily lends itself to a built-in financial protectionism. One can begin to make sense of the incredible prevalence of specie suspensions, financial insurances, politically inspired asset purchases, protections and even the recent TARP program. Politicians scrabble, and almost correctly so, to keep the banks running healthily and smoothly (recall Tim Geithner’s claim that the sole purpose of the Federal Mortgage Assistance Program was to “foam the runways” for the banks), because they know that bankruptcy in the financial sector, under the system of debt-money, means the ruin of the country.

Not only is it destructible and fragile, which makes us and our livelihoods fragile, but in its confusion of the functions of money and credit, the privately-created money supply has a cost attached, the interest rate. If the money supply were not credit, but simply debt-free token money, there would not be an imposed cost on the money supply, there would just be a cost on credit. It’s difficult to wrap one’s mind around this reality, but private banking has wrapped an interest-rate-tax around the entire economy. Harder yet to imagine is what the effects of a money supply released from its current private credit function would be.

Thirdly, as we mentioned earlier in the section on Hamilton, money creation redistributes purchasing power from the last recipients of the money to the creators and the first recipients, as prices require transactions and time to process the new money. The printing of money in and of itself does not increase prices. If one printed 10 tln. dollars and then burned them all, there would be no 10 tln. dollar price fluctuation. The money must be spent on goods in order that the price level adjust. It is due to this fact that the first recipients benefit the most from new money: they are spending money in an economy adjusted to money supply X, but the money supply is actually X + p, and they are holding the p increment.

Fourthly, from the same logic as above, when credit and money are one, lending will drive up the prices of some of the things that the debtors take out loans to buy. Think of it as highly specific inflation. Instead of inflation percolating through the economy from the aggregate spending habits of all involved, this specific inflation can occur in one economic sector simply from a large bout of credit expansion. The most useful example for this point is real estate. Because real estate has a very inflexible supply chain, due to land’s supply chain, in turn, being almost absolutely inflexible, it is extremely sensitive to the specific inflation of credit expansion for the purpose of mortgages. Thus, a large bout of mortgages floated will mean an artificial increase in the value of real estate. Since real estate is, in reality, more a cost of living than an asset, it is easy to perceive this as a negative effect. Real estate specific credit expansion artificially increases the cost of living by making housing less affordable, with each passing loan. The same was easily observed with the student loan program. Before the student loan program, students could work their way through college debt-free. Now because of the student loan program which has artificially inflated the value of a college education, it is impossible to work one’s way through college debt-free.

We see from the outset of any basic analysis of this fractional reserve system, wherein credit creation morphed into money creation almost by historical accident, there are four immediately shocking aspects: collapsibility of the money supply, tax on the money supply, expropriation of purchasing power, and specific inflation (see things like: real estate, college tuition, and asset prices in the stock market). The significance of the above points mostly lies in their relevance to the profitability of the banking sector. Finance is always profitable because it A) is guaranteed protection, B) gets a cut on the money supply and C) confirms the profitability of its own investments by inflating their values with new money (almost like a self-fulfilling prophecy).

There are, however, other implications to the economy effected by fractional reserve banking with broader significance, not just the narrower significance of banking’s profitability. Foremost among these is the inherent imperative toward infinite growth. It seems strange that a minor change in what amounts to accounting practice can have such enormous implications for the economy at large, the difference between a feasible steady-state economy and one thirsting for infinite growth. In the fractional reserve system, money creation is tied to credit creation. Credit cannot be created without correspondent money. Money can be created without private debt, but not without debt par debt. Either it is created with public debt, as in the case of treasury notes, or it is created with private debt, as in the case with credit money. As we see by the M3 statistics, the private credit-money issue is far more pertinent (it comprises 97% of the money supply). If credit is intrinsically tied with money, the money supply is not allowed to expand free of an interest burden.

First let us establish that the money supply must expand. The degree to which it must expand is debatable. In fact, it is the main debate of our monetary economists of this day. The money supply must expand for a variety of reasons. The most popularly cited among them is that prices are sticky downwards, and for good reason. Basically, no one wants to take a cut, whether it’s in their revenues, in their wages, or in whatever. If all prices were instantaneously and equally halved overnight, there would be no problem with price stickiness. The problem is that, in order to reach an equilibrium at a lower money supply, the market and its participants must higgle their way down the ladder to accommodate the lower supply. This is troublesome because there is competition amongst these participants and no one wants to be the first sacrificial lamb in discovering new equilibrium. If I am a cobbler among cobblers and the money supply begins to shrink, I will not want to accordingly shrink my revenues in the hope that the new equilibrium will be discovered in a short while and that my competitors will do the same. I have neither the knowledge of the future monetary situation and I am in competition with the other cobblers; I cannot afford to do this. Another point that might be made is that the greater population is largely ignorant of the fact that the money supply, in an evenly rotating economy in the Misesian sense, does not matter. It can be $1 or it can be $100tln, so long as the currency is easily divisible and convenient. Because they do not know this, they will be even less willing to accept nominal cuts in their revenues or wages, because they associate the fixed dollar value with its attendant value in real wealth in real goods. If there should be any debate over downward price stickiness, economic history should serve to corroborate this theory, to convince the opponent of its good sense. Wherever there have been shrinkages in the money supply, changes in price action, specifically in the price of labor, have not been quick enough to accommodate the change and large gluts of labor swell up; unemployment results. The Great Depression is a usual example of this, but it need not be the only one. In all cases that the money supply has suddenly and sharply turned downward, unemployment has resulted. There is no exception to this to be found in economic history.

Secondly let us establish that the capitalistic system of production, over time, naturally depresses the price level. Capitalism’s system of mass production allows for population growth. If we assume a fixed money supply in addition to ‘Capitalism’, we will observe population growth alongside zero money growth. This means the expansion in supply of services and goods, but with zero money growth. Money will be able to buy more and more services and goods, thus the price level will have dropped. If population does not increase, but the stock of consumable goods increases simply from increased productivity or new technology, the price level will also fall, from the same logic as above. Capitalism’s expansive nature thus tends to constantly depress the price level with its tendency to expand production and population. This means that the money supply must also expand alongside the whole process, in order that rigidities in the labor market are smoothed over.

Irving Fisher the father of proto-monetarism first conceived of a deflation far more destructive than the simple shrinkage of money. He realized the magnitude of the leverage of the banking system in its normal state and he realized that deflation made debts more expensive. He combined those two realizations to conceive of the theory of debt-deflation which goes basically thus: if there is a credit event in the banking system (a default, for example), then a bank goes under and that banks share of the money supply also goes under. The base money remains, but the private credit money which that bank contributed to the money supply suddenly disappears. At the new money supply, wage-earners and businesses are reluctant to accept prices correlated at the new money supply. They want prices at the old money supply. Thus, they don’t change their prices and unemployment and unsold goods result (this is generally coined as ‘aggregate demand’). Aggregate demand dries, less loans perform and more banks go under. The money supply shrinks further. The whole time throughout this period of drying aggregate demand, bank failure and monetary shrinkage, debts become more expensive. Because the payment of debts are agreed upon at a certain time at the money supply, changes in the money supply indicate changes in the total debtload that will be paid off. For example: if I borrow $100 at 5% compound interest when there’s $1000 money supply and the money supply then shrinks to $500, the cost of that debt has just vastly increased. I must now pay back the debt with doubly more expensive dollars. In this way, deflation makes debt more expensive. So throughout the period of drying aggregate demand and monetary shrinkage, more costly debt is the attendant effect, exacerbating all of these problems, making banks less and less solvent, making them more likely to fail and making the money supply even more likely to shrink, perpetuating the cycle in a vicious cycle, in a positive feedback loop. This theory of debt-deflation is good theory and generally accepted, which is why economists nowadays hold deflation to be the greater of two evils, inflation being the lesser.

So hopefully we’ve established that the money supply has to grow, at least somewhat, to some degree, in order to accommodate the needs of increased commerce, production and population or else price rigidities will occur, unemployment occurs, aggregate demand falls, and the whole highly-leveraged economy is thrown into jeopardy because of the banking system’s inherent fragility. So, onwards.

The current banking system does allow money to expand, but at a price. That price is interest. As the money supply expands, so too does the debt. The problem here is that the debt grows faster than the money supply. There is more debt in the world than there are assets. Let that sink in for a moment. What are the implications? If there is more debt in the world than there are assets, it goes without saying that liquidation of all assets will not be enough to pay the debt. But debt can be paid off gradually, by working, saving the proceeds and dedicating them towards debt service. Even though the money supply isn’t great enough to extinguish the debt in one go, the debt can be extinguished by a cycle in which debtors pay back creditors and creditors spend the money back into the economy, allowing debtors to make more debt payments. Many anti-debt pamphleteers or demagoguites claim that there does not exist enough money to pay back debts and that paying back debts is thus impossible. This is incorrect. The problem with this is that, saving up to make debt payments has an opportunity cost. As a business, for example, if you wanted to save up and extinguish your debts, this would come at the expense of your other operations. You would have to lay some people off, you would have to sell some of your machinery, sell some of your assets. As a company in a competitive state, this is unthinkable. To do so means reducing your productive capabilities and your ability to sell your product at the price given in a competitive marketplace. Again, you would not want to be the first one in the room to be the sacrificial lamb for a reduced gross debt-load; it is business suicide. So businesses will not do so. In a world where debts are greater than assets and they must be paid off by scaling down other activities or by fresh debts, they will be paid by fresh debts. Competition demands it. So we see that businesses will opt for credit over solvency, especially in an inflationary scenario where debt is devalued and it doesn’t matter so much that you are incredibly indebted because at least the interest payments are actually quite cheap. Are households in a competitive marketplace? Certainly households comprise a major section of total debt, but they are not necessarily in the competition which businesses find themselves in. They are however in a kind of psychological one. What does the wife say to the husband who wants to sell the car, move to a cheaper city and put the kids through public school rather than private? Who is actually willing to do this? Some people, certainly. But are they statistically the majority of household debtors? This seems incredibly unlikely. More likely it seems is that people will do what they have to in order to maintain their current (or a greater) standard of living, even if it means staying in debt. So it seems that the aforementioned anti-debt pamphleteers, while incorrect, are correctly touching on a more subtle point.

So we see that, where money is tied to credit, in order for debt to be extinguished, general economic activity, consumption and production, must be reduced. But they do not naturally intend to reduce themselves. They tend instead to maintain themselves through indebtedness. There is, however, an alternative way for debts to be extinguished, and that is in the Fisherian debt-deflation which was described earlier. It is a catastrophic scenario, but the only one in which debts are likely to extinguished on a large scale.

One might see the tendency now emerging from the woodwork, so I’ll say it as brazenly as possible: in the system of credit-money, which we inhabit, the two macroeconomic tendencies permitted are credit expansion and debt deflation. There are no feasible alternatives compatible with a competitive system in which no one wants to be the first in the room to sacrifice himself. This is what is meant by the imperative towards infinite growth. Credit expansion and growth or bust. No alternatives. It’s that or mass unemployment. In this way, the pigs are plumped for the slaughter in every financial catastrophe which succeeds each period of rampant credit growth. People take on relatively inexpensive debts during booms and during busts they are ruined: their properties become the banks’ during the debt settlements of the depression. This was on full-display in the events after the 2008 financial crisis when banks were found guilty of fraudulently robo-signing the foreclosure agreements on their insolvent debtors and claiming their properties illegally.

So we see that the business cycle, booms and busts, are an inherent feature of the fractional reserve system. The imperative to growth is an imperative to debt, and when the ability to take on more debt is jeopardized by either a lack of demand for credit, reluctance of the monetary authority to backstop further inflationary loans, pervasive Austrian malinvestment, or simply systemic instability from enormous leverage, that imperative to debt leads the economy to ruin. There is a limit to credit expansion, whatever it is, and when it is found, the trend is sharply reversed. The growing necessity for debt service is no longer outpaced by growth in new technology, new markets, new methods of production or otherwise, but still it must have its pound of flesh. When that happens, when growth slows, and debt service becomes a greater share of GDP, costs keep mounting as new credit is unable to find a venture profitable enough to satisfy accumulated debts, then there is invariably a credit event and a panic and the rest is history.

So that’s about all I have to say on this matter. In summary, not only is fractional reserve banking a systemic subsidy to the financial sector, but it changes the nature of our economy. It makes banks the gatekeepers to economic prosperity and it makes the economy constantly expand to meet the needs of the credit-money supply. Historically, it never came about because of its expediency. It came about because goldsmiths began to exchange receipts for gold and the sovereign was not interested in prosecuting those that issued multiple incompatible claims to singular resources. Fractional reserve banking was something that slid by, that snuck under, until it was so powerful that nations discovered it could be a weapon used against each other. On this precedent, fractional reserve banking grew even further entrenched until now, where it seems it has transcended the nation-state completely and no longer requires the permission of the sovereign to exist. It has inverted the power relations so that now the sovereign must ask of it the permission to exist. A different state of affairs is easily imagined. Although it has been called for on countless times throughout history, in varying manifestations, it was called for most potently and clearly during the Great Depression and it is being called for with similar vigor and accuracy now.

I appreciate the bumps but if you read the fucking thread you would have seen that I debunked Fractional Reserve Banking, its a myth

no, the government makes its own money, your tax money goes into the shredder

read the thread

I like this post but I think that governments can be efficient, very efficient sometimes.

Centralised power is done for better organisation, if you have a good leader like Hitler then governments can be very efficient.

Great thread.
Bumping because more Holla Forumsacks need to see this and understand the world around them.

Limiting the economy based on what you have rather than what you can create is a retarded idea. If we followed your idea, how could we have ever created wealth in the first place? The only thing that makes sense to me is to base your money off of your labor potential. Labor was the initial cost to create all of the material wealth in the world, and is what continues to create all wealth in the world.

Perhaps, I should have worded that better, the strong has been freed from morality, and when the strong is freed from morality, the end result is tyranny.

Yeah my bad it's an old pasta.

Though at this point, "Fractional Reserve Banking" is an operable shorthand for "Privately created currency" or "Credit-money" or however you want to call it.

Out of curiousity, was the paper showing that banks create money without regard to deposits limited to Anglo countries? I wonder if European and East Asian banks behave in a similar manner? Would be interested to find out.

Its worldwide at the moment.

China could change this policy at the drop of a hat since they dont give a fuck, but western nations have so many armchair economists who really dont know anything and will oppose drastic change, its going to be a clusterfuck.

China has one of the highest private debt levels and is fighting Australia for first in line for the recession.

bumpp

bumping this great thread. l have almost nothing to contribute.

thats ok

that screencap is good, we are going to go through a 'Japan' period of complete stagnation, unless fiscal policy changes or the banking system changes.

Japan has been trying to stimulate their economy using mainstream methods like interest rate manipulation, they just dont understand how things work

What's the best (((Milton Friedman))) book to read?

The Money Masters Documentary

youtube.com/watch?v=B4wU9ZnAKAw

Not a lolberg, but Chinese govt banking is rife with fraud and nepotism that works make a Jew blush

None. Instead read Chile's Free-Market Miracle: A Second Look, and see what happens when people in government listen to gold-worshipping jews

Economics is a practical science, part of what Kant called practical reason, which means that it's purpose is to achieve the good, rather than the truth, which is the goal of pure reason. Practical reason begins with ethics, which is the science of how the individual achieves the good. The science of how the household (or city state or national economy) achieves the good is economics, a term which derives from "nomos", meaning "law" and "oikos", the Greek word for household. The ultimate goal of economics is the good of the whole nation. Each person should benefit from the economy according to his own participation in it, but that renumeration finds its lower limit in the living wage

The "economic principle" (minimum imput with maximum output) consists simply in the exchange of goods and services. Since it is part of practical reason, economics cannot contradict ethics. Actions which are immoral are ultimately self-defeating from an economic point of view, because in cheating a fellow member of the national economy, the exploiter may enrich himself but he does so at the expense of the economy as a whole.

-E. Michael Jones, (Barren Metal, pg 63)

If you would like me to continue with that page I will.
He later goes on to define the living wage in a different chapter

I dunno, but Milton Friedman a shit, his economic theory of (((monetarism))) is not the same as free market economics, it basically shills for private central banks and says the main indicator of economic growth is monetary policy, and supports private central banks with deregulated industry, not free banking and free markets as most austrians propose. A good book to read is Man, Economy, and State though.

bump

lisamharrison.com/pdf/Web of Debt By Ellen Hodgson Brown.pdf

Chapter 24
Sneering at Doom:
Germany Finances a War Without Money
(it's only 6 pages)

...

Milton Friedman's economics are the economics of pure plutocracy and violent shoving-down of workers and producers in favor of creditors and rentiers (as is Austrian economics), but at the very least, his economics favors a steady price-level in the face of shrinking money supply. Meaning he would not allow mass debt-deflation to proceed unanswered, whereas Austrians positively invite debt-deflation upon their countries, claiming that the bankruptcy of all and subsequent property transfer unto the creditor class is the rightful destiny of the economy as declared by the will of the market, above which nothing may exist either logically or morally.

I implore you to broaden your horizons beyond Austrian economics. There is a vast wealth of economic history to draw upon in this regard, of which Austrians are mostly ignorant or purposefully obtuse towards. Capitalism might be new, but the struggle between creditors and debtors is almost as old as prostitution. I'd recommend starting with the post-Keynesians who predicted the 2008 GFC, like Steve Keen and Michael Hudson.

video.cnbc.com/gallery/?video=3000555447

...

Bump

Any reading material on Reaganomics?

Milton Friedman was influenced by monetarism, not Austrian. It's clear you don't know what you're talking about.

private banks, not one (((central (in america's case, privately owned) bank))) which is what ol' Andrew Jackson and Thomas Jefferson were against in the first place.

money madness and free to choose are both really good.
People on Holla Forums don't like MF because he's a jew, but at the same time, they don't recognize that Thomas Sowell and Walter Williams were influenced by him AND that a Irishman influenced Friedman.

No, Friedman never insinuated that a gold-standard was preferable to anything else.

youtube-dl works pretty fine with a lot of websites (and not just youtube)
Try it first, it will be your first step at using tech.

Vid is 38MB, I can't be bothered to recompress it, and there might be a glitch at the beginning.
my.mixtape.moe/jhyger.mp4

i shouldn't be here. but i am. i'm sure i've pissed you all off one time or another. i'm still working on caring about grammar, just look past it. so, take this on faith: i keep alot of companies connected, their machines and productions running, and their employees from going full retard (when possible). and do all this for the purpose of not falling into poverty, and destroying any filth / degeneracy i can steer people out of (since the network effects drag me down too).

so i see alot. and i see what you (
) speak of, but allow me to repaint it into real terms: all i see is nigger tech slowly forgetting every last thing ever given to it, sending it all into ashes. intel 6gen, win10, nexus6p, iphone7, etc. services too: google is fucking horrid code and getting worse, and microsoft has the better services code by simply being too inept to actually write code. on the german side, we have tool quality plummeting because they're under affirmative-action / sjw / rapefugee / merkel, and it encompasses all of europa. japan's been out for a while now, and no other countries have visible products or services back to where i see / sit. banks - jpmorgan, jpmchase, boa, etc - and their merchant networks (principally firstdata), are all falling apart. again, for all the same affirmatives / sjw / rapefugees, along with all the minwage shits, osha, retirefag, compliance nested iterations, all growing larger.

raw materials are also shit, food is reaching new epic levels in fakery with dwindling sources for actual food, and of course women are reveling in all of it as they make themselves without point as much as they can. all more lies growing larger and preventing anything from being done-and-move-on.

sand castles. sand castles could not even be built in this.

so here's my question to the aether: real production must win. where the fuck are you building? because where i'm building, it's more of a forced castle in the sky, always falling, and me (and only a small handful of others) running around with my head cut off to build on the top before the next piece falls to the abyss. if you can picture this… then you'll begin to understand what i move, and how i keep where i can, but god fucking damn it, it's not quite the national vs globalist cock sucker picture. a bit too reductionist.

but i digress. take niggertech: i need laptops that aren't shit, but i don't have a factory and can't build it anywhere and can get the materials and can't even make get machine parts without endless doubt. i'll need silica lightfabs to start making chips at this rate. got any ideas? does any one here have a clue of the sense of scale the slide is? more people are dosing sleep pills than ever, and the nogs have taken over my city in less than 5yrs… so where is this 'alt' (fuck that word, whatever) investment area that you see?

i think michael jones is a dumbass, after reading that.

economics is a practical. valid economics begins with valid sources, not ethics or notions of science. the principal principle is the right of first trade/exchange, which is everywhere, and the defeating comes from accepting equivalence where there is only masquerading validity. exploiters are liars, who lie to steal, who steal to eat, and eat what isn't theirs nor can be made by them.

expanded: economics is closer to an engineer doing engineering, not science of I-beams or mathematics of academics. it begins, unfortunately, with each 'economeer': each 'individual' that does 'trade', which is everyone. and like everyone, their validity is based on the source, not the action. the principal is actually three: first-trade, network, and finance. the right of first trade is of greatest focus, as it is the source, exchanged for the substitute, declared equivalence to the substitute, and given access to the network of substitution. if the network of accounting units is a lie, first trades leave the network. if the finance/creation is a lie, the network inflates account units, and first trades leave the network.

noted: ethic trickery of first trades is producer lies: ex: the first trade absent all together (vaporware), the first trade being not enough of the promise (time: planned obsolescence, scope: under-build shortcutting), etc. trickery of consumption out of the network can also be used as a first trade: masquerading as a product produced for a substitution, or a service, or compulsion; an inversion of the convenience-for-X direction sold as a convenience. all manner of violations impossible to catalog, and that's just on the produce-side of the first-most principle. but the note is that all of it must still start with a presumption of validity, which lies then degrade. ex: no one trades with animals except cat keeping spinsters. ex: you don't trust nogs to make cars. ex: you don't give 2yo toddlers guns – the trust, the validity, isn't even there in the first place, so there can't be a trade period.

aside: most today who self-entitle as economics professionals do not profess first loyalty to the profession and thus are not their title regardless of their claim or entitlement by others. this is an —effect—. it is an effect of their selves: —they— are invalids; their total nth-dimensional space of ability and realizable potential is smaller than economics itself – and this is the best case scenario for invalids. more often than not, their nth-dimensional ableness space is chocked full of holes, leading to sheer insanity and word salad. the relevance should be clear: economic professionals are a micro- example of the same macro- generalizable source validity problem: impostors are not ethical, nor can they ever be no matter how much they larp or role play ethics. the same for first trade, network, and finance.

repeated: again, economics is a practical. all practicals require validity and proceed with the presumption thereof. when that presumption is violated, it leads to 'muh ethics' courses, lectures, laws, regulations, books, movies, and all manner of slights from… the exact same invalidity, now selling their linguistic wares as the solutions to the problems their insistence on speaking creates. they have no right to speak, they are invalid speakers.

pointless derision: your image is pure crazy. christianity is a desert saga fiction, the science pictorially implied as an opposite dichotomy is itself to a fiction, members of both leave both undefined at insistence, magically claim to be different, and cannot grasp anything by themselves, let alone with each lying back and forth to the other with hands fondling crystal balls.

thank you.

If you re-read my post correctly and in the context of the post I was responding to, it will be clear to you that nothing I wrote implies that Friedman was influenced by Austrianism. I used to be austro-libertarian; I read Human Action (all 3 volumes), as well as Prices and Production. It's likely I understand ABCT better than you do. I hate to burst your bubble but Austrianism is, at its heart, a wonderfully woven tapestry built off of the narrowest possible foundation of economics. It's just a tragically pointless (due to the painstaking effort of constructing it) exercise in intellectualism due to the fact that it has no input nodes for variations in things like income, demand, investment, the inter-relations of different industries within the economy, and so on. It ends up being the over-dressed story of supply chains and re-applied fanatically to every facet of economy until full faith in "pricing as pure information" is reached.

Ignorant people on Holla Forums don't like MF because he's a jew… because they're not intelligent or educated enough to understand anything more complicated than rassenkampf. MF's theories have been tested out in reality and confronted in theory. If you can't take the time to read the refutations of monetarism / neoclassical economics, then you can at least take the time to look at the results of it put into practice; the results are the same everywhere: crash, unemployment, liquidation of the non-financial economy, low wages, property bubbles, and subsequent polarization of society into owners and non-owners, as ownership rather than quality labor becomes the definitive marker of success. Free to Choose is shit. Free Market economics is literally the economics of ballooning the Finance / Real Estate sector by liquidating the productive economy of manufacturing, agriculture, mining, etc.

Free Market people call their experiments on powerless nations "successes", even when plagued with low home-ownership, low wages and unemployment on a fucking permanent basis. That is the neoliberal / libertarian idea of a good strong economy, an economy with nothing left to cut away from it.

Just remember that all good things in this world are fragile. High-functioning economies with high-wages and dignity for the worker are fragile yes, because they depend both on strong political will against interest groups and the success of the businesses which constitute the economy. A good economic policy is then, not one which puts worker interests over managerial ones (proletarian communism) or one which puts owner interests over non-owner ones (free-market capitalism) but one which favors the interests of the economy of production over the financial economy. That is the true struggle; not workers versus bosses, but banks against the economy of work and production; that's what America used to understand in the 19th c. Low-functioning free market financial economies are not fragile because they've already bottomed out.

In Canada you can "set off" student loans by filing paper.

It works, so we'll in fact that the only media stories seem to focus on one or two crazy "freemen" rather than the thousands that do it every year. Apparently a few judges have been disbarred by people simply writing to the queen and asking questions. Again, never reported on in the (((media))) at all.

Islamic 'lending' is essentially a DIP loan.

Not sure if I have that one.

Really, We'll lets look at the rest of your post.

Of course, Economics was first started when one person saw something he wanted that another had, and they decided to make a trade.

Of course, the economy is based around relations to one another, this is why EMJ states it's rooted in ethics.

So if trust and validity cannot be there, there can be no trade? Seems to me that involves ethics.

Wat.

Like your post.

Science is completely amoral, it only is concerned with what is and can be. Christianity covers the ethics of how we should act in relation to others inside this universe. Either we follow the Christian path, love one another and attempt to do what's best for each other, and treat others how we expect to be treated; or, following the Jewish path, we reduce man to a machine, become vicious and brutal with one another, and the strongest person devoid of morals will rule.

Triggered, jude?

stop speaking.

GIVE ME BOOKS TO READ user BESIDES FRIEDMAN AND HAYEK

Start with Michael Hudson's Killing the Host or The Bubble and Beyond.

If you're still interested, move on to:

The Role of Money - Frederick Soddy
Credit-Power and Democracy - CH Douglas
A Fraudulent Standard - Arthur Kitson
The Money Creators - Gertrude Coogan
Princes of the Yen - Richard Werner
Free Trade Doesn't Work - Ian Fletcher
National System of Economy - Friedrich List
A Harmony of Interests - Henry Carey
Debt-Deflation Theory of Depressions - Irving Fisher

also read:

The Political Aspects of Full Employment - Michal Kalecki
Financial Instability Hypothesis - Hyman Minsky

These books / essays should cover the topics of money / finance and international trade. These are old but all still extremely relevant. There's much more to learn, but this is a decent starting point.

Also, it really is important to understand Keynes. You don't have to read his book because it's fucking impossible to read, but find some way to get an understanding of him, via lectures or youtube clips or what have you. I think once you get through all of this, you'll know what to read next. Good luck!

lulled at omissions of sub-human chinkdom

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Bump for visibility, all pol users need basic economic knowledge. For when you understand economics, you will understand why homosexuality is promoted in the current cultu