Somebody prove this wrong please.
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26-04-2013, 01:55 PM
RE: Somebody prove this wrong please.
(26-04-2013 01:03 PM)Dark Light Wrote:  bemore and el jefe,

I feel both of you'ns are right from idealists perspective. However men are greedy. People with power will always use that power to retain or increase their power, or at least do their best to. I am all for abolishing the Federal Reserve though, by whatever means.

Seeing as neither of those two will answer the question I extend it to you too.

How is adding interest to a loan by a bank any different to a shop owner adding 50c to a bottle of coke?

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26-04-2013, 03:32 PM
RE: Somebody prove this wrong please.
(26-04-2013 01:55 PM)earmuffs Wrote:  How is adding interest to a loan by a bank any different to a shop owner adding 50c to a bottle of coke?

One applies to a bank loan and the other to a bottle of coke ? Tongue

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26-04-2013, 05:58 PM
RE: Somebody prove this wrong please.
(26-04-2013 01:55 PM)earmuffs Wrote:  
(26-04-2013 01:03 PM)Dark Light Wrote:  bemore and el jefe,

I feel both of you'ns are right from idealists perspective. However men are greedy. People with power will always use that power to retain or increase their power, or at least do their best to. I am all for abolishing the Federal Reserve though, by whatever means.

Seeing as neither of those two will answer the question I extend it to you too.

How is adding interest to a loan by a bank any different to a shop owner adding 50c to a bottle of coke?

When you leave the shop with the bottle of coke it will always be a bottle of coke (if left intact and untouched), it is a material possession, an actual object.

All the "wealth" in banks (excluding fiat currency... notes/pieces of paper... coins/metals... material objects you can hold in your hand) is nothing but a balance sheet either on paper or a series of 1 and 0s in a binary code in a computer system.

Held together by faith.... God Version 2.

I hear what you are saying Muffs but you fail to even give the respect to look at the material I have provided, you in fact decide to judge it based upon the bullshit you are learning in your economy degree.

Explain to me where the money exists to pay off the interest on these "loans", is in currently in the system? Does it actually exist right now?

For no matter how much I use these symbols, to describe symptoms of my existence.
You are your own emphasis.
So I say nothing.

-Bemore.
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26-04-2013, 10:46 PM
RE: Somebody prove this wrong please.
I actually am a senior economics major right now, and I'll post a relatively straightforward answer and if y'all want more detail just ask. I don't want to bore everyone with a long didactic rant, so I'll keep it short.

In essence, the reason that we have the system we have is because it's the only one that works on such a large scale as the United States financial system. If there were no interest charges, there would be no incentive for those with money to loan money to those without. This is basic capitalism, and I'm sorry if it seems obvious, but I don't want to get into a long recitation of economic theory. Based in a free market economy as the United States, everything is driven by incentive and reward. No other financial system has come close to the success achieved by capitalism, despite its many flaws.

The primary disagreements between democrats and republicans in the United States in regards to fiscal policy is the efficiency of the market. In general, most fiscal conservatives make the argument that the "invisible hand" of supply and demand will fix any problems and ills within the system itself, thereby eliminating the need for government intervention, e.g. with regulatory measures, creating the idea of small government. The other end of the spectrum, that I believe is by far supported by the strongest body of evidence, is that the system is broken. Money tends to accumulate in some corners that are thereby bloated and less efficient, and never reaches the more efficient other parties. Banking practices are another prime example, such as the free lending practices that led to the housing bubble, the bursting of which is felt by us all. The Democratic Party's official stance is that government intervention is needed to fix these "hiccups" in the machinery of our economy. Hence the big government, with emphasis on government investments and regulatory fiscal policy.

So, the answer to your question in the most reductionistic way is that yeah, it's unfair, and it sucks. But it's the best we have. And, like anything else, we can always work to make it better with new ideas, new analysis, and more data. And the data economists have to work with is exploding in size and detail. The actual science of economics has really only been around for about 50 years in any empirical sense.

There are no cut and dried answers to these questions at all. The amount of variables in an economy is inconceivable, and controlled, properly blinded testing is impossible. It's imperfect. And that's why the answer to your second question, at least in the foreseeable future, is simply "we don't know yet, but we're working on it."
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26-04-2013, 10:56 PM
RE: Somebody prove this wrong please.
(26-04-2013 12:37 PM)earmuffs Wrote:  
(26-04-2013 09:57 AM)bbeljefe Wrote:  I never said banks are unfair.

2 points.

1) You didn't answer my question.

2) yes you did. "The banking system as we know it is unfair". Line 1.
You can say "no I said the system not the actual bank" but cut the word play, the "banking system" is what banks are. They operate and make up "the banking system".

I don't know how much more clear I can be with my explanation of my position but I'll give one more effort.

I have no problem with banks or banking. I am an anarcho-capitalist... that means that I support anyone taking a good or service, adding any amount of profit they like to it and selling it to any willing individual. That includes banks selling money for profit as well. The only thing about any of that that I don't support is fraud and coercion. Beyond that, if Fred's bank wants to lend money at 9000% and they have willing, informed borrowers who want to borrow at 9000%... then they have made a voluntary agreement and if they're all happy with that arrangement, I'm happy with it.

I also have no problem with fractional reserve banking or fractional reserve lending practices. Again, buyer be ware... if a bank offers to pay above market interest on deposits, that means they're making risky loans and investment and they're leveraging very high. Again... if everyone's happy and informed, I'm happy.

The problem I have with the banking industry in its current state is the intervention of nation states in areas of interest, et al and the monopoly nation states hold on the creation of currency. That's it. Nothing else. And to be fair, I should probably have used the term financial industry rather than banking industry, although I suspect that wouldn't have provided any needed clarity in this case.

And with all that said, if you continue to mischaracterize my positions, I'll at least know not to attempt to engage you in any sort of productive discussion in the future. Because from what I've read so far, it appears as though you browse comments/articles until you find something you think you disagree with and summarily dismiss the rest. I understand that inclination but frankly, it causes just the sort of problems you are having with this conversation and the one Bemore is attempting to have with you.

The beginning of wisdom is to call things by their right names. - Chinese Proverb
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26-04-2013, 11:32 PM
RE: Somebody prove this wrong please.
(26-04-2013 01:55 PM)earmuffs Wrote:  
(26-04-2013 01:03 PM)Dark Light Wrote:  bemore and el jefe,

I feel both of you'ns are right from idealists perspective. However men are greedy. People with power will always use that power to retain or increase their power, or at least do their best to. I am all for abolishing the Federal Reserve though, by whatever means.

Seeing as neither of those two will answer the question I extend it to you too.

How is adding interest to a loan by a bank any different to a shop owner adding 50c to a bottle of coke?


I'm not against the idea of loans with interest. If a person risks their money by loaning it then they should be rewarded. Gigantic super-banks are still evil though. Pawn Shops are a better way of doing a loan in a lot of cases. Anyhow their is quite a big difference between a retailer and a bank, or any loan giver. One acts as a middle-man between a manufacturer and a consumer, the other makes an investment in a person. Another way of putting it is loan givers place a bet on the credibility of a person.

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26-04-2013, 11:49 PM
RE: Somebody prove this wrong please.
(26-04-2013 03:32 PM)morondog Wrote:  
(26-04-2013 01:55 PM)earmuffs Wrote:  How is adding interest to a loan by a bank any different to a shop owner adding 50c to a bottle of coke?

One applies to a bank loan and the other to a bottle of coke ? Tongue

Bechased

Troll.. Dodgy
But trolling based on truth...
At least in people's perception.

Quote:When you leave the shop with the bottle of coke it will always be a bottle of coke (if left intact and untouched), it is a material possession, an actual object.

All the "wealth" in banks (excluding fiat currency... notes/pieces of paper... coins/metals... material objects you can hold in your hand) is nothing but a balance sheet either on paper or a series of 1 and 0s in a binary code in a computer system.

Held together by faith.... God Version 2.

I hear what you are saying Muffs but you fail to even give the respect to look at the material I have provided, you in fact decide to judge it based upon the bullshit you are learning in your economy degree.

Explain to me where the money exists to pay off the interest on these "loans", is in currently in the system? Does it actually exist right now?

And if I go to an ATM and withdrawal that money? is it then not physical?
Just because someone choices to leave it as a number on a balance sheet doesn't mean it doesn't exist.

And that's what I've been saying, if you bothered to read what I've been saying instead of having a cry because I don't want to waste my time reading your no doubt bs link. Yes, that money is real.

Does all money in the world physically exist in money form? No. But that's because it doesn't need too. We re-use bank notes etc..
ie: I take $100 note to the bank. I hand it over and they record it as a number on a computer screen in my bank account.
Someone then comes along and withdrawals $100 and so the banker gives that person my $100 note. But they then subtract $100 out of that persons bank account.

As money gets bigger there is even less need for physical money because electronic transaction is just a shit load simpler (and safer).
But yes, all money in a bank originated from a physical form.

ie:
I work at a corner shop. My boss receives physical money for goods. He collects that money and takes it to the bank. The bank then takes that physical money and records it electronically on his bank account.
He then pays my salary electronically. This subtracts money from his account and adds it to mine.
The money in my bank account originated from him handing over physical money.

Say I then withdraw my salary from an ATM. The bank then gives me the physical money he gave them.

At no stage was money "created from thin air".
This is a basic example of exactly how it works.
As money gets bigger it's more likely to be electronic.
ie: You don't pay for a car with physical cash. You make an electronic transaction from your bank account to the dealers bank account (at least that's how I did it when I brought my bike). As such a dealer may never actually handle physical money. BUT that money did enter the bank at some stage via physical money (ie: my boss, the shop owner, emptying the cash register into his bank account).

Because not all money is in physical form all the time there is no need to have the physical form of every cent on earth. Instead we simply "recycle" money. ie: I give the bank money, they give it to someone else. I get $5 change from a store, 5minutes prior someone paid with a $5 note...

You can play the "god" "faith" card all you want, doesn't mean you're right.

Quote:I hear what you are saying Muffs

You hear but you are not listening.

Quote: it causes just the sort of problems you are having with this conversation and the one Bemore is attempting to have with you.

With you, yes. With him? no, he's just being stupid.

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26-04-2013, 11:51 PM
RE: Somebody prove this wrong please.
(26-04-2013 11:32 PM)Dark Light Wrote:  
(26-04-2013 01:55 PM)earmuffs Wrote:  Seeing as neither of those two will answer the question I extend it to you too.

How is adding interest to a loan by a bank any different to a shop owner adding 50c to a bottle of coke?


I'm not against the idea of loans with interest. If a person risks their money by loaning it then they should be rewarded. Gigantic super-banks are still evil though. Pawn Shops are a better way of doing a loan in a lot of cases. Anyhow their is quite a big difference between a retailer and a bank, or any loan giver. One acts as a middle-man between a manufacturer and a consumer, the other makes an investment in a person. Another way of putting it is loan givers place a bet on the credibility of a person.

Do DVD rental places also not place bets on the credibility of a person? They trust (or distrust) that you will return the DVD, and in good condition.

And banks too act as middlemen.
The person putting money into the bank is the supplier, and the person that requires the service of borrowing money is the customer.

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27-04-2013, 12:02 AM
RE: Somebody prove this wrong please.
(26-04-2013 01:03 PM)Dark Light Wrote:  bemore and el jefe,

I feel both of you'ns are right from idealists perspective. However men are greedy. People with power will always use that power to retain or increase their power, or at least do their best to. I am all for abolishing the Federal Reserve though, by whatever means.

I'm sorry, I meant to address your comment earlier.

I agree that some people are greedy. Not just men and not all people. I too would like to see an end to the Federal Reserve, although there are limits to the means I support.

On the subject of power and considering that we seem to be in agreement... why focus on the Federal Reserve? The Fed is a symptom of the abuse of power that is the state. It's only just 100 years old this year, while the institution that it was borne of is ~250 years old just in this country. If we look further past and outside the constraints of the US, it is a 6000 year old power grab that birthed the Fed.

As the saying goes, power corrupts and absolute power corrupts absolutely. But that's a truism. The reality is that the uncorrupted don't seek power over others, while the already corrupt do. Power doesn't make people evil... it merely expands the reach of the already evil.

The beginning of wisdom is to call things by their right names. - Chinese Proverb
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27-04-2013, 12:12 AM
RE: Somebody prove this wrong please.
(26-04-2013 11:51 PM)earmuffs Wrote:  
(26-04-2013 11:32 PM)Dark Light Wrote:  I'm not against the idea of loans with interest. If a person risks their money by loaning it then they should be rewarded. Gigantic super-banks are still evil though. Pawn Shops are a better way of doing a loan in a lot of cases. Anyhow their is quite a big difference between a retailer and a bank, or any loan giver. One acts as a middle-man between a manufacturer and a consumer, the other makes an investment in a person. Another way of putting it is loan givers place a bet on the credibility of a person.

Do DVD rental places also not place bets on the credibility of a person? They trust (or distrust) that you will return the DVD, and in good condition.

And banks too act as middlemen.
The person putting money into the bank is the supplier, and the person that requires the service of borrowing money is the customer.

I'm going to disregard rentals since that isn't what I responded to at all. That's more like a reverse pawn.

Your second paragraph is correct, but incomplete. There is no company that supplies the bank with money, it's a series of people with no connection at all aside form the fact that they choose the same bank, and coincidental connections. Generally speaking people don't put money into banks to make money, they do so to have their money protected. There are obvious and multiple exceptions such as buying CD's and the like. Private banks (as opposed to Federal Banks or Credit Unions) do invest via various loans, they do this to make a profit, but also so they have the ability to afford the security to protect the investment that others have made to remain viable (in addition to self-preservation).

I could go on, but I think it's obvious that a bank loaning money is not the same thing as selling a coke. It's much more complicated. Whether or not you agree it is a stupid thing to argue as it has no bearing (that I can see) on this topic. Eh, whatever.

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