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exton
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PostPosted: Mon Apr 02, 2007 10:24 pm    Post subject: Reply with quote
thelast007 wrote:

Interest charged by banks have no real wealth unless they are invested back in the system and therefore creating value in those interest dollars.


That's sort of true, and sort of not true.

First, it's true in that the same can be said of any money. The money in your pocket isn't worth anything if you never spend it.

Second, there is actual wealth creation even if the interest just evaporates. Do you know where the interest actually comes from, when people pay the bank back?

Quote:

I'll stop there for the sake of not getting too complex and over explaining.


Your complexity isn't the issue. Your lack of clarity is. This post that you just wrote is an example of one that is easily understandable.
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thelast007
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PostPosted: Tue Apr 03, 2007 12:51 am    Post subject: Reply with quote
exton wrote:


First, it's true in that the same can be said of any money. The money in your pocket isn't worth anything if you never spend it.



You still don't get it.

It would be not be a problem if the person never spent it. In fact that would be great. Inflation would never be a problem and we would not even be having this discussion.

The problem is the inflation it causes when it is spent the wrong way. It has to be reinvested evenly to benefit everyone equally or it will cause inflation.


exton wrote:


Second, there is actual wealth creation even if the interest just evaporates. Do you know where the interest actually comes from, when people pay the bank back?


You still don't get it.

When you pay interest back off of your labor it goes to the bank.

Your labor earnings are staying the same.

However,

prices are going up because of the new interest money put into the system.

So why are prices going up?

Production has not increased. Goods have not increased. Only the amount of money in circulation has increased.

That equals higher prices.

If the interest did just vaporate it would be no problem. However it doesn't.

------------------------------------------------
Remember this...

Get out of the money made from the citizen paying the bank back.

That's just a cirle within a larger circle.

Think to the bank paying the federal reserve back.

That interest money causes inflation if it does not go into infrastructure/even distribution/government.

When that money goes to private pockets it bids prices up.

It creates a constant cycle of inflation.

There enlies the entire problem.

Do you understand the problem now Question
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exton
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PostPosted: Tue Apr 03, 2007 1:16 am    Post subject: Reply with quote
thelast007 wrote:

When you pay interest back off of your labor it goes to the bank.

Your labor earnings are staying the same.
However,
prices are going up because of the new interest money put into the system.

So why are prices going up?

Production has not increased. Goods have not increased. Only the amount of money in circulation has increased.

That equals higher prices.

If the interest did just vaporate it would be no problem. However it doesn't.


You're only thinking of individual loans, such as those for buying cars and houses.

With business loans (assuming the business succeeds), production does, in fact, increase.

And actually, depending on what the individual does with his loan, production may also go up (although i suspect it's less inclined to, given the way americans borrow money).

Quote:

That interest money causes inflation if it does not go into infrastructure/even distribution/government.

When that money goes to private pockets it bids prices up.


Why?

I don't know that you're wrong there, but i don't see why that would be the case.

Are you assuming that, "in private pockets", it is never spent? If so, whose pockets are these, and why do you believe it is never spent?
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thelast007
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PostPosted: Tue Apr 03, 2007 2:57 am    Post subject: Reply with quote
exton wrote:


You're only thinking of individual loans, such as those for buying cars and houses.

With business loans (assuming the business succeeds), production does, in fact, increase.

And actually, depending on what the individual does with his loan, production may also go up (although i suspect it's less inclined to, given the way americans borrow money).


i have said this ten times and in all caps a few times "money should not increase unless production, goods and services increase". (a loan to increase goods and services is a good loan BUT the interest on the loan still goes to serve the same negative purpose in the end. it's only a matter of time before the interest inflation cycle catches up. why should we be in a race against inflation to stay economically alive? )

AND unfortunately...

you have to follow the money for ALL the loans. it would be nice if we could forget the rest did not exsist. I know Confused it sucks.

exton wrote:

That interest money causes inflation if it does not go into infrastructure/even distribution/government.

When that money goes to private pockets it bids prices up.

Why?

I don't know that you're wrong there, but i don't see why that would be the case.

Are you assuming that, "in private pockets", it is never spent? If so, whose pockets are these, and why do you believe it is never spent?


I know IT IS spent. if it were never spent it would not be a problem.

I will do my best to be simple.

imagine this:

- everyone in this blog earns one dollar and we buy and sell from each other.

- say we bid to buy every post from the intenet for 25 cents.

- now say the irish outlaw has a mint. so he says you can borrow dollars from me for 25 cents.

- say we all borrow dollars from the irish outlaw.

- he is pocketing 25cents on every dollar he loans us.

- now the outlaw can afford to buy post for 50 cents with his new profits

- we borrow more money from him to compete with his 50 cents bid and in return he makes more money on the loans.

- now he can afford to buy post for 75 cents.

- so we borrow more money from him to compete with his 75 cents bid and in return he makes more money on the loans.

- now he can afford to buy post for $1.00

- so we borrow more money from him to compete with his $1.00 bid and in return he makes more money on the loans.

- now he can afford to buy post for $1.50

- so we borrow more money...

and on and on and on and on. he loves the loan business.

If someone increased production and said i have a new internet. then cost would go back down becasue bids would spread.

but if production does not increase the inflation will keep going.

what would work better in that senario?.....

if the internet loaned the money and used all loan profits to enhance the internet for everyone it would work. it would also make things cheaper and better for us. maybe even Lower our fees to post. Cool

hey exton, i would love to hear your monetary theory on where inflation comes from in our economy.
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exton
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PostPosted: Tue Apr 03, 2007 3:26 am    Post subject: Reply with quote
Tell me if i'm understanding your example:

You claim that when people take out loans and repay them, interest included, the lenders now have more money than they started with, thus being able to pay more for goods and services. Since they spend it, this drives prices up.

Is that correct?

If so, would you say the same of people who rent equipment? Such as construction equipment? That is to say, renters lend the use of their equipment, which they later get back in addition to some money from the people who rent. Would you say that that is a force driving inflation, and is therefore an improper way to conduct business?
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thelast007
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PostPosted: Tue Apr 03, 2007 4:13 am    Post subject: Reply with quote
exton wrote:
Tell me if i'm understanding your example:

You claim that when people take out loans and repay them, interest included, the lenders now have more money than they started with, thus being able to pay more for goods and services. Since they spend it, this drives prices up.

Is that correct?

If so, would you say the same of people who rent equipment? Such as construction equipment? That is to say, renters lend the use of their equipment, which they later get back in addition to some money from the people who rent. Would you say that that is a force driving inflation, and is therefore an improper way to conduct business?


hilarious Laughing

that is NOT adding money into the system. that money is just circulating.

the fed feeds money into the system.

in the example i gave above if irish out law took his 25cents in the beginning and kept loaning it out with interest he would end up with everyone's money.

however he would have to never payout any money for any goods and services.

but No man is a city within himself.

if he spent any money it would be money for our labor,goods,or services and that would put us back in business.

the circle would continue and the prices would stay with in a set range.(or prices would even go lower as production, goods and services increased and became more efficient.)

but...
lets say he did keep all his money and almost starved to death. then he would not make anymore money in the end becasue no one would have any. he'd be just like us cuz the moment he used our services or goods we'd be back in business.

or we could even say screw him and start bartering and a whole new system and...blah blah blah(i won't get into that.)

but when he can print money as he wishes like the fed.

and if he is smart and greedy like the fed

he would just keep printing more money and keep charging for it. he will always be able to bid the highest anyway so he doesn't care if prices rise.

as long as he keeps carefully feeding in dollars we never really pay attention to what is going on.

so are you ready to come to the light yet? Smile

also my friends call me a goof ball for going back on forth on this all the time. So i want you to know i blame the fed for destroying the monetary system and i blame you for destroying my life Laughing

so hurry up and agree so i can stop this exton! Mad
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Lester
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PostPosted: Tue Apr 03, 2007 8:00 am    Post subject: Reply with quote
thelast007 wrote:
Lester wrote:
Just watch the first ten minutes or so, I watched it, but it was kinda umm, fallacious.


fallacious....umm what about it is fiction? What facts prove other wise? Do tell.

I hate to be deceived Evil or Very Mad


It's not that it's untrue, it was just presented strangely.
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exton
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PostPosted: Tue Apr 03, 2007 10:19 pm    Post subject: Reply with quote
thelast007 wrote:

that is NOT adding money into the system. that money is just circulating.


Yeah.

And the money created is the interest.

Like i asked before: where do you think that interest comes from?
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thelast007
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PostPosted: Tue Apr 03, 2007 11:37 pm    Post subject: Reply with quote
exton wrote:
thelast007 wrote:

that is NOT adding money into the system. that money is just circulating.


Yeah.

And the money created is the interest.

Like i asked before: where do you think that interest comes from?


NO NEW MONEY WAS CREATED IN THAT TRANSACTION! It is in one circle with no NEW MONEY being added.

That goes back to the "imagine if" example.
The result will be what i explianed in the "imagine if" example.

Read what happened when Irish Outlaw did not have the ability to create new money, and he kept loaning money and kept all the interest.

Then read what happened when he could add new money when he wished, and made loans and kept all the interest.

HUGE DIFFERENCE!!!!

Also where the interest went in both cases in the example showed to be a problem.

One way automatically leveled itself out.

The other just kept growing as a bigger and bigger problem.
----------------------------------------------
By the way... i heard it was illegal in some ancient societies to charge to lend money. I'll get the history on that for you.

I personally feel if a person wants to charge to loan money that is fine. In the end if no new money is added he will be in a sense just a poor as who he got the entire money supply from. That is because he would have to spend most of his money back into society to live. it is just like the example I made.

Also people can easily exercise the sense not to borrow.
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exton
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PostPosted: Wed Apr 04, 2007 2:20 am    Post subject: Reply with quote
thelast007 wrote:
exton wrote:

Yeah.

And the money created is the interest.

Like i asked before: where do you think that interest comes from?


NO NEW MONEY WAS CREATED IN THAT TRANSACTION! It is in one circle with no NEW MONEY being added.


No, i meant with bankers....the money created in lending from banks is the interest paid back to the banks.

Where do you think that interest comes from?
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thelast007
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PostPosted: Wed Apr 04, 2007 6:03 am    Post subject: Reply with quote
exton wrote:
thelast007 wrote:
exton wrote:

Yeah.

And the money created is the interest.

Like i asked before: where do you think that interest comes from?


NO NEW MONEY WAS CREATED IN THAT TRANSACTION! It is in one circle with no NEW MONEY being added.


No, i meant with bankers....the money created in lending from banks is the interest paid back to the banks.

Where do you think that interest comes from?


Again same response i just gave you.

The money created from the fed lending to the banks and where that profit from interest goes is the problem.

The money the bank loans to us is just a circle within a circle. That interest money comes from us VIA THE FED at the start of the larger circle.

If the fed does not feed in more money the fed can not get paid. Just like in the example.That's why prices go up or inflation happens.

it is just like the example.
read the example again.

(i can explain how it works with wages and earnings and prices if you need inorder for it to make more sense.)
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thelast007
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PostPosted: Wed Apr 04, 2007 3:32 pm    Post subject: Reply with quote
thelast007 wrote:
exton wrote:
thelast007 wrote:
exton wrote:

Yeah.

And the money created is the interest.

Like i asked before: where do you think that interest comes from?


NO NEW MONEY WAS CREATED IN THAT TRANSACTION! It is in one circle with no NEW MONEY being added.


No, i meant with bankers....the money created in lending from banks is the interest paid back to the banks.

Where do you think that interest comes from?


Again same response i just gave you.

The money created from the fed lending to the banks and where that profit from interest goes is the problem.

The money the bank loans to us is just a circle within a circle. That interest money comes from us VIA THE FED at the start of the larger circle.

if there is $100 in the system. The moment on person starts to charge interest on any of that money of two things will happen.

1)that one person will end up with all the money, and the circle will have to restart.

In this case prices will stay level.

or

2) he has to print more money and put it into the system inorder to keep things going. The inerest money has to be printed and add into the system.

in this case prices will keep rising and he will alwasy be at the top.

If the fed does not feed in more money the fed can not get paid. Just like in the example.That's why prices go up or inflation happens.

it is just like the example.
read the example again.

(i can explain how it works with wages and earnings and prices if you need inorder for it to make more sense.)
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exton
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PostPosted: Wed Apr 04, 2007 4:25 pm    Post subject: Reply with quote
Right.

And when the fed prints more money, what do you think that money represents?
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thelast007
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PostPosted: Wed Apr 04, 2007 4:54 pm    Post subject: Reply with quote
exton wrote:
Right.

And when the fed prints more money, what do you think that money represents?


I don't have to think about that one either.

It represents INFLATION
unless products, goods, and services have increased as well.

It is a theft on the buying power of your dollar.

I'm curious...Are you stating to get the picture of what the problem is and how it all works?
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exton
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PostPosted: Wed Apr 04, 2007 5:06 pm    Post subject: Reply with quote
I'm actually trying to assess the origins of your delusions.
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