So if Gold was the new money standard then how would you buy more gold, with GOLD?
invite response
2023 Mar 26, 10:59am 14,803 views 189 comments
by Tenpoundbass ➕follow (7) 💰tip ignore
Also with digital currency, if there wasn't any fiat money how would you acquire tokens?
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43
PeopleUnited
2023 Mar 28, 5:32am
PeopleUnited
2023 Mar 28, 5:32am
When we had sound money, before inflation took hold by removing the gold standard, the average person could pay off a home mortgage on one income in 5-10 years. Inflation insures that most people will remain faithful slaves of the banksters.
44
Misc
2023 Mar 28, 5:38am
PeopleUnited says
No, inflation is a way out for a borrower. It harms lenders and savers, but that is mitigated by the interest charged.
Also, home ownership was rare. Most people were forced to rent.
When we had sound money, before inflation took hold by removing the gold standard, the average person could pay off a home mortgage on one income in 5-10 years. Inflation insures that most people will remain faithful slaves of the banksters.
No, inflation is a way out for a borrower. It harms lenders and savers, but that is mitigated by the interest charged.
Also, home ownership was rare. Most people were forced to rent.
45
Reality
2023 Mar 28, 6:45am
Misc says
First of all, the biggest borrowers are not those taking out home loans, but the banks themselves: their action of taking deposit is borrowing.
More importantly, it's not inflation itself that helps borrowers (as lenders would charge higher interest rate when both sides expect higher inflation), but the difference between inflation rate during loan service vs. inflation expectations when the loan interest rate was set. That's where artificially manipulation of interest rates by monopolistic banksters really rip off the general population: just look at the millions of people who took out loans to buy houses at or near market peaks due to fear of run-away inflations (FOMO, "now or never"). There are always more people buying at the peaks than at the bottoms (that's how peaks and bottoms are formed). Left to a free market, the market should have peaked during the 2016-2018 time frame. The artificial manipulation during 2018-2021 to extend the bubble (pretending "inflation was only transitory") provided the opportunity for insiders to unload, while roping in the masses to overpay. The result is exacerbated booms and busts, and exacerbating wealth polarization.
inflation is a way out for a borrower.
First of all, the biggest borrowers are not those taking out home loans, but the banks themselves: their action of taking deposit is borrowing.
More importantly, it's not inflation itself that helps borrowers (as lenders would charge higher interest rate when both sides expect higher inflation), but the difference between inflation rate during loan service vs. inflation expectations when the loan interest rate was set. That's where artificially manipulation of interest rates by monopolistic banksters really rip off the general population: just look at the millions of people who took out loans to buy houses at or near market peaks due to fear of run-away inflations (FOMO, "now or never"). There are always more people buying at the peaks than at the bottoms (that's how peaks and bottoms are formed). Left to a free market, the market should have peaked during the 2016-2018 time frame. The artificial manipulation during 2018-2021 to extend the bubble (pretending "inflation was only transitory") provided the opportunity for insiders to unload, while roping in the masses to overpay. The result is exacerbated booms and busts, and exacerbating wealth polarization.
46
Reality
2023 Mar 28, 6:52am
Misc says
Not true. More commodities are dug up every day/week/month/year. Even for gold, 2/3 of all gold mined by humanity has been mined after circa 1950. Also, the commodity based money system specified at the time of the founding of the USA was Bimetalism: either silver or gold, which ever is slightly less expensive than the 1:16 ratio. Silver being usually a biproduct of industrial mining other metals such as zinc, lead and tin, the slight laxity between Bimetalism and industrial mining biproduct give plenty room for monetary expansion at pace approximating industrial output, while not giving anyone the power to manipulate money supply at the stroke of a pen (or a push of a button) after the masses and banksters have already placed their bet on inflation expectations (remember, it's the difference between previous expectation vs. subsequent reality that is at the root of extra profit and bankruptcies/foreclosures). What we have right now is like: after you buy a stock and the dealer short it to you then the dealer appoints a committee to decide what the price of the stock should be; and vice versa after you short a stock and the dealer buys it to squeeze you. In gambling analogy would be a loaded dice instead of a fair dice.
If you have a commodity based system which by nature would have to be deflationary.
Not true. More commodities are dug up every day/week/month/year. Even for gold, 2/3 of all gold mined by humanity has been mined after circa 1950. Also, the commodity based money system specified at the time of the founding of the USA was Bimetalism: either silver or gold, which ever is slightly less expensive than the 1:16 ratio. Silver being usually a biproduct of industrial mining other metals such as zinc, lead and tin, the slight laxity between Bimetalism and industrial mining biproduct give plenty room for monetary expansion at pace approximating industrial output, while not giving anyone the power to manipulate money supply at the stroke of a pen (or a push of a button) after the masses and banksters have already placed their bet on inflation expectations (remember, it's the difference between previous expectation vs. subsequent reality that is at the root of extra profit and bankruptcies/foreclosures). What we have right now is like: after you buy a stock and the dealer short it to you then the dealer appoints a committee to decide what the price of the stock should be; and vice versa after you short a stock and the dealer buys it to squeeze you. In gambling analogy would be a loaded dice instead of a fair dice.
47
Misc
2023 Mar 28, 7:16am
The amount of gold mined would not come close to the amount that would need to be "saved"..
Could you imagine what the deflationary effect would be if there was a modest 5% savings rate? Then factor in population growth??
Then there is the fallacy of being able to charge interest on a commodity based system.
Nope, fiat is far superior.
Could you imagine what the deflationary effect would be if there was a modest 5% savings rate? Then factor in population growth??
Then there is the fallacy of being able to charge interest on a commodity based system.
Nope, fiat is far superior.
48
Tenpoundbass
2023 Mar 28, 7:25am
Tenpoundbass
2023 Mar 28, 7:25am
Misc is right, nobody thinks about the logistical math involved with a Gold based economy.
You would be paid in company script like I have said. And only the business owners and producers would actually be paid in Gold.
You would be paid in company script like I have said. And only the business owners and producers would actually be paid in Gold.
49
Reality
2023 Mar 28, 7:38am
Misc says
You are engaging in strawman-tactic. The money defined at the time of the founding of the USA till 1873 was Bimetalism, not gold-only standard.
Why can't one charge interest for loans made to the opening of a silver mine or a gold mine? Literally more monetary metal would be produced after purchasing mining equipment and chemicals then putting them to use. By extension all the suppliers of food and energy to the mine operators can advance payments and collect interest; then likewise the secondary and tertiary suppliers to them. What will end is interest-bearing on-demand bank account, because interest-bearing on-demand bank account is a fraud! Just like a Ponzi Scam is a fraud: the operator is promising the mathematically impossible!
Superior only for the fraudsters, at the expense of everyone else.
The amount of gold mined would not come close to the amount that would need to be "saved"..
Could you imagine what the deflationary effect would be if there was a modest 5% savings rate? Then factor in population growth??
You are engaging in strawman-tactic. The money defined at the time of the founding of the USA till 1873 was Bimetalism, not gold-only standard.
Then there is the fallacy of being able to charge interest on a commodity based system.
Why can't one charge interest for loans made to the opening of a silver mine or a gold mine? Literally more monetary metal would be produced after purchasing mining equipment and chemicals then putting them to use. By extension all the suppliers of food and energy to the mine operators can advance payments and collect interest; then likewise the secondary and tertiary suppliers to them. What will end is interest-bearing on-demand bank account, because interest-bearing on-demand bank account is a fraud! Just like a Ponzi Scam is a fraud: the operator is promising the mathematically impossible!
Nope, fiat is far superior.
Superior only for the fraudsters, at the expense of everyone else.
50
Reality
2023 Mar 28, 7:43am
Tenpoundbass says
Strawman tactic. Gold-only standard is simply a prelude to gold-certificate standard (as you described) then fraud-stanard and fiat-money. That's why the monetary standard advocated by the Founding Fathers and responsible for the prosperity in the first nearly a century of the USA was Bimetalism, before the Civil War and "the theft of 1873" ushered in massive booms and busts, and the "American Empire" to impoverish Americans while enriching international banksters that have no loyalty to any country or community. Robbing the Helvetics and Gauls did not enrich Romans in the long run, but only brought the down fall of the Roman Republic; likewise, robbing food from Egypt at cheap prices did not enrich the Romans but bankrupted the Roman farmers and made them into dependents on the state and easily manipulated by the Emperor and his cronies (who then often killed the Emperors to become Emperors themselves).
Misc is right, nobody thinks about the logistical math involved with a Gold based economy.
You would be paid in company script like I have said. And only the business owners and producers would actually be paid in Gold.
Strawman tactic. Gold-only standard is simply a prelude to gold-certificate standard (as you described) then fraud-stanard and fiat-money. That's why the monetary standard advocated by the Founding Fathers and responsible for the prosperity in the first nearly a century of the USA was Bimetalism, before the Civil War and "the theft of 1873" ushered in massive booms and busts, and the "American Empire" to impoverish Americans while enriching international banksters that have no loyalty to any country or community. Robbing the Helvetics and Gauls did not enrich Romans in the long run, but only brought the down fall of the Roman Republic; likewise, robbing food from Egypt at cheap prices did not enrich the Romans but bankrupted the Roman farmers and made them into dependents on the state and easily manipulated by the Emperor and his cronies (who then often killed the Emperors to become Emperors themselves).
51
Misc
2023 Mar 28, 7:50am
Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years.
There is a reason that all the Great religious books forbid charging interest.
Fiat does away with this as the system can be expanded.
There is a reason that all the Great religious books forbid charging interest.
Fiat does away with this as the system can be expanded.
52
Reality
2023 Mar 28, 7:58am
Misc says
LOL! Whoever lends out a 2000-year loan deserves to lose his money, as he has completely shirked the responsibility for risk assessment. Who said interest rate has to be 3%? Those who want to make a living off lending out money should carry the risk of borrower defaulting, not shifting the risk to everyone else! Ever wonder why we have so many frauds and bubbles lately? How is a system set up to enable every fraud and fantasy by the insiders (or just bureaucrats in a government-run monopoly / public utility) any different from centrally planned economy?
So do you want to follow ancient wisdoms or not? Where do they say the solution is plantation scripts to rip off the slaves?
What Fiat does away is restraint on government power. Perhaps you think the Constitutional restrictions on the government should also be done away with.
Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years.
LOL! Whoever lends out a 2000-year loan deserves to lose his money, as he has completely shirked the responsibility for risk assessment. Who said interest rate has to be 3%? Those who want to make a living off lending out money should carry the risk of borrower defaulting, not shifting the risk to everyone else! Ever wonder why we have so many frauds and bubbles lately? How is a system set up to enable every fraud and fantasy by the insiders (or just bureaucrats in a government-run monopoly / public utility) any different from centrally planned economy?
There is a reason that all the Great religious books forbid charging interest.
So do you want to follow ancient wisdoms or not? Where do they say the solution is plantation scripts to rip off the slaves?
Fiat does away with this as the system can be expanded.
What Fiat does away is restraint on government power. Perhaps you think the Constitutional restrictions on the government should also be done away with.
53
richwicks
2023 Mar 28, 8:01am
richwicks
2023 Mar 28, 8:01am
Misc says
It eventually leads to default in a commodity based system, on and off. There are ALWAYS bankruptcies in a commodity based system.
With a fiat system, it ALWAYS leads to inflation. In a purely fiat system, if a Bank loans out $1,000 to 1000 people, and charges 1% interest on everybody and loans it for a year, how is it possible for everybody to pay back the loan at the end of the year? Everybody will own $1010 at the end of the year. So how do you prevent a default in this system? Well, the bank creates $10 for each person, and uses that to buy goods and services from everybody. There can STILL be defaults, but it's not guaranteed.
The reason the US target inflation rate is 2%, is that is how much more gold we mine every year, about. Inflation is a direct measure of the increase in money supply. The Fed lies about it, which is why we went bankrupt in 1933 and 1971, The Federal Reserve is just a criminal organization, it's mathematically provable that's all they are.
Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years.
It eventually leads to default in a commodity based system, on and off. There are ALWAYS bankruptcies in a commodity based system.
With a fiat system, it ALWAYS leads to inflation. In a purely fiat system, if a Bank loans out $1,000 to 1000 people, and charges 1% interest on everybody and loans it for a year, how is it possible for everybody to pay back the loan at the end of the year? Everybody will own $1010 at the end of the year. So how do you prevent a default in this system? Well, the bank creates $10 for each person, and uses that to buy goods and services from everybody. There can STILL be defaults, but it's not guaranteed.
The reason the US target inflation rate is 2%, is that is how much more gold we mine every year, about. Inflation is a direct measure of the increase in money supply. The Fed lies about it, which is why we went bankrupt in 1933 and 1971, The Federal Reserve is just a criminal organization, it's mathematically provable that's all they are.
54
Misc
2023 Mar 28, 8:04am
It's not that they lose their money. It's that they enslave everyone else.
Since there is no way for you to refute that charging interest on a commodity based system leads to anything but the systems collapse, I will consider this a win.
Since there is no way for you to refute that charging interest on a commodity based system leads to anything but the systems collapse, I will consider this a win.
55
Reality
2023 Mar 28, 8:09am
Misc says
Charging interest rate in a bimetallic money system does not lead to system collapse: bad loans would default individually, hence lenders are individually held responsible for their business acumen. Whereas a fiat money system indeed not only enslaves everyone in the economy (as fiat money is essentially a Plantation Script for the society at large) but also causes frequent synchronized system crises and collapses like we have been seeing.
Edit:
Comes to think of it, if we model Collective Farming as a collective farming of crop seeds, then Fiat Central Banking is essentially collective farming of seed money and seed capital. That's why we have been having money/capital famines! Individuals have to be held responsible for what they do with the seeds if we want to have the seeds grow into bumper crop and good harvest.
It's not that they lose their money. It's that they enslave everyone else.
Since there is no way for you to refute that charging interest on a commodity based system leads to anything but the systems collapse, I will consider this a win.
Charging interest rate in a bimetallic money system does not lead to system collapse: bad loans would default individually, hence lenders are individually held responsible for their business acumen. Whereas a fiat money system indeed not only enslaves everyone in the economy (as fiat money is essentially a Plantation Script for the society at large) but also causes frequent synchronized system crises and collapses like we have been seeing.
Edit:
Comes to think of it, if we model Collective Farming as a collective farming of crop seeds, then Fiat Central Banking is essentially collective farming of seed money and seed capital. That's why we have been having money/capital famines! Individuals have to be held responsible for what they do with the seeds if we want to have the seeds grow into bumper crop and good harvest.
56
Misc
2023 Mar 28, 8:13am
Yes, charging interest, which is a mathematical construct, overwhelms physical supply in a commodity based system.
57
Reality
2023 Mar 28, 8:19am
Misc says
What is the proper interest rate on a kernel of corn? What is the proper interest rate on a grain of rice or wheat? (those seeds yield 10x to 30x over a growing season before deducting labor cost and capital cost). What is the proper interest rate on an ounce of gold/silver as seed money to find and dig up more gold/silver? These are all dependent on the technology available at the time and the environment factors. Only through the negotiations of many lenders and many entrepreneurs can the proper interest rates be reached and changed. Some gamblers will have set backs. However, having a bunch of government bureaucrats set the yield by fiat command would only lead to corruption and inefficiency, and massive concurrent systematic collapses.
Yes, charging interest, which is a mathematical construct, overwhelms physical supply.
What is the proper interest rate on a kernel of corn? What is the proper interest rate on a grain of rice or wheat? (those seeds yield 10x to 30x over a growing season before deducting labor cost and capital cost). What is the proper interest rate on an ounce of gold/silver as seed money to find and dig up more gold/silver? These are all dependent on the technology available at the time and the environment factors. Only through the negotiations of many lenders and many entrepreneurs can the proper interest rates be reached and changed. Some gamblers will have set backs. However, having a bunch of government bureaucrats set the yield by fiat command would only lead to corruption and inefficiency, and massive concurrent systematic collapses.
58
RWSGFY
2023 Mar 28, 8:50am
RWSGFY
2023 Mar 28, 8:50am
People seem to be implying that there wouldn't be inflation if dollar was still linked to gold. I don't think history supports this notion.
59
Reality
2023 Mar 28, 8:58am
RWSGFY says
The legacy media has been promoting the confusion between monetary inflation (and at what rate) vs. price inflation. Price inflation (especially rapid) is what people dislike. Overall money supply can either keep up with societal real goods/service output or grow slower than it so prices deflate at relatively constant rate, so that people can save and give room to capital growth/accumulation (i.e. people giving up some consumption goods so that capital goods can be produced). Witness the rapid growth of the tech sector despite the steadily dropping price of tech goods. What is detrimental is constant rapid growth of prices, and that leads to capital destruction: can you imagine a world where router prices have been increasing constantly since 1992? People would be buying up and hoarding routers instead of buying as they need and give room to development of more advanced equipment.
2/3 of all gold that has been mined has been mined since around 1950. Silver is a byproduct of industrial mining of zinc, lead, tin, and etc.. The overall money supply would increase in a Bimetallic monetary system, more or less at pace with economic growth. What it would avoid is the systematic excerbation of monetary bubbles that the Fiat Money Central Banking system has been engaging between 1997-1999, 2005-2007, 2019-2021, grotesquely extending bubbles so that insiders could unload while roping in the masses to the slaughter. Let's also not forget the giant bubble extension of 1926-1928 thanks to the then relatively young founded FED, quickly leading to widespread global bankruptcy wave, the rise of Hitler and WWII.
People seem to be implying that there wouldn't be inflation if dollar was still linked to gold. I don't think history supports this notion.
The legacy media has been promoting the confusion between monetary inflation (and at what rate) vs. price inflation. Price inflation (especially rapid) is what people dislike. Overall money supply can either keep up with societal real goods/service output or grow slower than it so prices deflate at relatively constant rate, so that people can save and give room to capital growth/accumulation (i.e. people giving up some consumption goods so that capital goods can be produced). Witness the rapid growth of the tech sector despite the steadily dropping price of tech goods. What is detrimental is constant rapid growth of prices, and that leads to capital destruction: can you imagine a world where router prices have been increasing constantly since 1992? People would be buying up and hoarding routers instead of buying as they need and give room to development of more advanced equipment.
2/3 of all gold that has been mined has been mined since around 1950. Silver is a byproduct of industrial mining of zinc, lead, tin, and etc.. The overall money supply would increase in a Bimetallic monetary system, more or less at pace with economic growth. What it would avoid is the systematic excerbation of monetary bubbles that the Fiat Money Central Banking system has been engaging between 1997-1999, 2005-2007, 2019-2021, grotesquely extending bubbles so that insiders could unload while roping in the masses to the slaughter. Let's also not forget the giant bubble extension of 1926-1928 thanks to the then relatively young founded FED, quickly leading to widespread global bankruptcy wave, the rise of Hitler and WWII.
60
Tenpoundbass
2023 Mar 28, 9:37am
Tenpoundbass
2023 Mar 28, 9:37am
RWSGFY says
Rent would be $20 but you would have to suck a lot of ass to get that $20.
People seem to be implying that there wouldn't be inflation if dollar was still linked to gold.
Rent would be $20 but you would have to suck a lot of ass to get that $20.
61
HeadSet
2023 Mar 28, 1:49pm
HeadSet
2023 Mar 28, 1:49pm
Zak says
Your point is valid, but I have a picky detail. Gold is measured in troy weight, and a troy pound is 12 troy ounces, with a troy ounce being 1.097 standard ounces. That common 25lb troy gold bar would actually be 300 ounces, not 400, so only worth $600,000.
,
The kind of run I'm talking about is where 25lb bars (400 oz) are sitting in a vault, and the depositor comes calling. A 25# bar of gold is 400oz x $2000/oz = $800,000.
Your point is valid, but I have a picky detail. Gold is measured in troy weight, and a troy pound is 12 troy ounces, with a troy ounce being 1.097 standard ounces. That common 25lb troy gold bar would actually be 300 ounces, not 400, so only worth $600,000.
62
PeopleUnited
2023 Mar 28, 1:57pm
PeopleUnited
2023 Mar 28, 1:57pm
Misc says
Is that why the national debt has grown pretty much every year since world war2 we must need more inflation then!
No, inflation is a way out for a borrower.
Is that why the national debt has grown pretty much every year since world war2 we must need more inflation then!
64
Zak
2023 Mar 28, 7:31pm
HeadSet says
gah.. yup always forget troy vs standard. it's my weight math that is bad though.. the standard gold bar is 400 troy oz: https://en.wikipedia.org/wiki/Gold_bar, so still $800k
Zak says
,
The kind of run I'm talking about is where 25lb bars (400 oz) are sitting in a vault, and the depositor comes calling. A 25# bar of gold is 400oz x $2000/oz = $800,000.
Your point is valid, but I have a picky detail. Gold is measured in troy weight, and a troy pound is 12 troy ounces, with a troy ounce being 1.097 standard ounces. That common 25lb troy gold bar would actually be 300 ounces, not 400, so only worth $600,000.
gah.. yup always forget troy vs standard. it's my weight math that is bad though.. the standard gold bar is 400 troy oz: https://en.wikipedia.org/wiki/Gold_bar, so still $800k
65
PeopleUnited
2023 Mar 28, 7:35pm
PeopleUnited
2023 Mar 28, 7:35pm
I just think it is hilarious that sheeple actually believe that inflation is good.
But then again people still think wearing a face diaper is good, so....
But then again people still think wearing a face diaper is good, so....
66
Zak
2023 Mar 28, 7:44pm
Misc says
I think I've replied to this particular line of fouled thinking before, right? https://patrick.net/comment?comment_id=1899881
Also, interest is due from a person. It's one thing to have a number on a piece of paper. It's another thing to collect it.
What happens to loans that can't be paid back? They are not paid back!
Lets try it. Send me a 1 oz gold coin, and I will accept a note to pay you back at 3% interest in 2000 years. Or lets try this instead. Send me one gold coin and one platinum coin, both at 3% interest, sum total due in 2000 years, and we will see which metal generates you the better return as the prices fluctuate in dollars!
Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years
I think I've replied to this particular line of fouled thinking before, right? https://patrick.net/comment?comment_id=1899881
Also, interest is due from a person. It's one thing to have a number on a piece of paper. It's another thing to collect it.
What happens to loans that can't be paid back? They are not paid back!
Lets try it. Send me a 1 oz gold coin, and I will accept a note to pay you back at 3% interest in 2000 years. Or lets try this instead. Send me one gold coin and one platinum coin, both at 3% interest, sum total due in 2000 years, and we will see which metal generates you the better return as the prices fluctuate in dollars!
67
Zak
2023 Mar 28, 7:51pm
Reality says
Lol! I think you may be a little bit under the spell of modern economics. In 1971, an ounce of gold was about $40. 52 years later, those $40 buy you about 1/50th of an ounce of gold. Hope no one is stuffing dollars under their mattress to create a fund for their grandkid! I guess a good old fashioned ounce of gold would have been ok though.. huh?
Inflation of the money supply IS inflation of prices.
Price inflation (especially rapid) is what people dislike.
Lol! I think you may be a little bit under the spell of modern economics. In 1971, an ounce of gold was about $40. 52 years later, those $40 buy you about 1/50th of an ounce of gold. Hope no one is stuffing dollars under their mattress to create a fund for their grandkid! I guess a good old fashioned ounce of gold would have been ok though.. huh?
Inflation of the money supply IS inflation of prices.
68
HeadSet
2023 Mar 28, 7:59pm
HeadSet
2023 Mar 28, 7:59pm
PeopleUnited says
If you are high debt type with big mortgage and big car and credit card debt, inflation is good for you. It may turn out that the debt boys were the smart ones, if we do in fact have double digit inflation.
I just think it is hilarious that sheeple actually believe that inflation is good.
If you are high debt type with big mortgage and big car and credit card debt, inflation is good for you. It may turn out that the debt boys were the smart ones, if we do in fact have double digit inflation.
69
richwicks
2023 Mar 28, 9:49pm
richwicks
2023 Mar 28, 9:49pm
Misc says
This is not about lose or win, it's just entirely mathematical.
Look, let's say I'm a bank, and I only have 1 customer - you, and I loan 100 credits to you at 10% interest at year, and you are required to pay it back in 1 year. It can be paid back, if I give you an extra 10 credits to landscape my lawn over that year. This works with even a commodity standard of X which X cannot be mined or created.
The banking system is parasitic, it doesn't want to kill host but if the credits can be created at will, I don't even need you to pay me back.
If I'm a central bank, do I need to worry about taxation, or even work? I'll just dump "money" out of my printing machine.
That's fiat money. They have infinite wealth.
Since there is no way for you to refute that charging interest on a commodity based system leads to anything but the systems collapse, I will consider this a win.
This is not about lose or win, it's just entirely mathematical.
Look, let's say I'm a bank, and I only have 1 customer - you, and I loan 100 credits to you at 10% interest at year, and you are required to pay it back in 1 year. It can be paid back, if I give you an extra 10 credits to landscape my lawn over that year. This works with even a commodity standard of X which X cannot be mined or created.
The banking system is parasitic, it doesn't want to kill host but if the credits can be created at will, I don't even need you to pay me back.
If I'm a central bank, do I need to worry about taxation, or even work? I'll just dump "money" out of my printing machine.
That's fiat money. They have infinite wealth.
70
PeopleUnited
2023 Mar 29, 5:27am
PeopleUnited
2023 Mar 29, 5:27am
HeadSet says
If you work for a living, debt and inflation are your slave masters. They both crack the whip on your back and force you to work while the powers that be sit on their asses and reap the benefits of your labor.
If you are high debt type with big mortgage and big car and credit card debt, inflation is good for you.
If you work for a living, debt and inflation are your slave masters. They both crack the whip on your back and force you to work while the powers that be sit on their asses and reap the benefits of your labor.
71
Misc
2023 Mar 29, 8:40am
If you work for a living and are in debt, deflation would reduced your wages until you could not make payments and you would lose whatever you went into debt to obtain.
The people with the assets would sit back and collect it all.
The people with the assets would sit back and collect it all.
72
Misc
2023 Mar 29, 8:58am
Reality says
Property transactions today are at a generational low. By your logic this would be an ideal time to buy as this would signal a trough in prices. I would not recommend this course of action.
Misc says
inflation is a way out for a borrower.
First of all, the biggest borrowers are not those taking out home loans, but the banks themselves: their action of taking deposit is borrowing.
More importantly, it's not inflation itself that helps borrowers (as lenders would charge higher interest rate when both sides expect higher inflation), but the difference between inflation rate during loan service vs. inflation expectations when the loan interest rate was set. That's where artificially manipulation of interest rates by monopolistic banksters really rip off the general population: just look at the millions of people who took out loans to buy houses at or near market peaks due to fear of run-away inflations (FOMO, "now or never"). There are always more people buying at the peaks than at the bottoms (that's how peaks and bottoms are formed). Left to a free ma...
Property transactions today are at a generational low. By your logic this would be an ideal time to buy as this would signal a trough in prices. I would not recommend this course of action.
73
Misc
2023 Mar 29, 9:04am
Reality says
Property transactions today are at a generational low. By your logic this would be an ideal time to buy as this would signal a trough in prices. I would not recommend this course of action.richwicks says
I would prefer a situation of inflation rather than deflation. Especially when financing something like a house over 30 years. With inflation the rising wages would cause the payment as a percent of income to be lower and lower each year. Whereas, with deflation the payment becomes steadily more unbearable.
Misc says
inflation is a way out for a borrower.
First of all, the biggest borrowers are not those taking out home loans, but the banks themselves: their action of taking deposit is borrowing.
More importantly, it's not inflation itself that helps borrowers (as lenders would charge higher interest rate when both sides expect higher inflation), but the difference between inflation rate during loan service vs. inflation expectations when the loan interest rate was set. That's where artificially manipulation of interest rates by monopolistic banksters really rip off the general population: just look at the millions of people who took out loans to buy houses at or near market peaks due to fear of run-away inflations (FOMO, "now or never"). There are always more people buying at the peaks than at the bottoms (that's how peaks and bottoms are formed). Left to a free ma...
Property transactions today are at a generational low. By your logic this would be an ideal time to buy as this would signal a trough in prices. I would not recommend this course of action.richwicks says
Misc says
Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years.
It eventually leads to default in a commodity based system, on and off. There are ALWAYS bankruptcies in a commodity based system.
With a fiat system, it ALWAYS leads to inflation. In a purely fiat system, if a Bank loans out $1,000 to 1000 people, and charges 1% interest on everybody and loans it for a year, how is it possible for everybody to pay back the loan at the end of the year? Everybody will own $1010 at the end of the year. So how do you prevent a default in this system? Well, the bank creates $10 for each person, and uses that to buy goods and services from everybody. There can STILL be defaults, but it's not guaranteed.
The reason the US target inflation rate is 2%, is that ...
I would prefer a situation of inflation rather than deflation. Especially when financing something like a house over 30 years. With inflation the rising wages would cause the payment as a percent of income to be lower and lower each year. Whereas, with deflation the payment becomes steadily more unbearable.
74
Misc
2023 Mar 29, 9:08am
Reality says
Property transactions today are at a generational low. By your logic this would be an ideal time to buy as this would signal a trough in prices. I would not recommend this course of action.richwicks says
I would prefer a situation of inflation rather than deflation. Especially when financing something like a house over 30 years. With inflation the rising wages would cause the payment as a percent of income to be lower and lower each year. Whereas, with deflation the payment becomes steadily more unbearable.PeopleUnited says
Would you rather a default rather than more debt?
Misc says
inflation is a way out for a borrower.
First of all, the biggest borrowers are not those taking out home loans, but the banks themselves: their action of taking deposit is borrowing.
More importantly, it's not inflation itself that helps borrowers (as lenders would charge higher interest rate when both sides expect higher inflation), but the difference between inflation rate during loan service vs. inflation expectations when the loan interest rate was set. That's where artificially manipulation of interest rates by monopolistic banksters really rip off the general population: just look at the millions of people who took out loans to buy houses at or near market peaks due to fear of run-away inflations (FOMO, "now or never"). There are always more people buying at the peaks than at the bottoms (that's how peaks and bottoms are formed). Left to a free ma...
Property transactions today are at a generational low. By your logic this would be an ideal time to buy as this would signal a trough in prices. I would not recommend this course of action.richwicks says
Misc says
Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years.
It eventually leads to default in a commodity based system, on and off. There are ALWAYS bankruptcies in a commodity based system.
With a fiat system, it ALWAYS leads to inflation. In a purely fiat system, if a Bank loans out $1,000 to 1000 people, and charges 1% interest on everybody and loans it for a year, how is it possible for everybody to pay back the loan at the end of the year? Everybody will own $1010 at the end of the year. So how do you prevent a default in this system? Well, the bank creates $10 for each person, and uses that to buy goods and services from everybody. There can STILL be defaults, but it's not guaranteed.
The reason the US target inflation rate is 2%, is that ...
I would prefer a situation of inflation rather than deflation. Especially when financing something like a house over 30 years. With inflation the rising wages would cause the payment as a percent of income to be lower and lower each year. Whereas, with deflation the payment becomes steadily more unbearable.PeopleUnited says
Misc says
No, inflation is a way out for a borrower.
Is that why the national debt has grown pretty much every year since world war2 we must need more inflation then!
Would you rather a default rather than more debt?
75
RWSGFY
2023 Mar 29, 9:33am
RWSGFY
2023 Mar 29, 9:33am
Tenpoundbass says
There was inflation prior to getting off the gold standard.
RWSGFY says
People seem to be implying that there wouldn't be inflation if dollar was still linked to gold.
Rent would be $20 but you would have to suck a lot of ass to get that $20.
There was inflation prior to getting off the gold standard.
76
RWSGFY
2023 Mar 29, 10:02am
RWSGFY
2023 Mar 29, 10:02am
PeopleUnited says
Wasn't the Great Depression basically a bout of severe deflation? I don't remember accounts of people being very happy about it.
HeadSet says
If you are high debt type with big mortgage and big car and credit card debt, inflation is good for you.
If you work for a living, debt and inflation are your slave masters. They both crack the whip on your back and force you to work while the powers that be sit on their asses and reap the benefits of your labor.
Wasn't the Great Depression basically a bout of severe deflation? I don't remember accounts of people being very happy about it.
77
HeadSet
2023 Mar 29, 11:33am
HeadSet
2023 Mar 29, 11:33am
PeopleUnited says
Not for Joe Howmuchamonth. Joe stretches to buy a home on a 30 year mortgage. Then Joe stretches again to buy a car on a 7 year loan. Inflation kicks in. Now Joe sees his nominal wages rise along with the price of his house. The house and car are on fixed rate loans. In 10 years, Joe has a "cheap" monthly mortgage and a paid for car he can trade in to offset the inflation on new cars. I myself am a saver and have not had a residence mortgage since I paid off my first house early, but I recognize the situation of inflation helping the high debt folks.
HeadSet says
If you are high debt type with big mortgage and big car and credit card debt, inflation is good for you.
If you work for a living, debt and inflation are your slave masters. They both crack the whip on your back and force you to work while the powers that be sit on their asses and reap the benefits of your labor.
Not for Joe Howmuchamonth. Joe stretches to buy a home on a 30 year mortgage. Then Joe stretches again to buy a car on a 7 year loan. Inflation kicks in. Now Joe sees his nominal wages rise along with the price of his house. The house and car are on fixed rate loans. In 10 years, Joe has a "cheap" monthly mortgage and a paid for car he can trade in to offset the inflation on new cars. I myself am a saver and have not had a residence mortgage since I paid off my first house early, but I recognize the situation of inflation helping the high debt folks.
78
HeadSet
2023 Mar 29, 11:36am
HeadSet
2023 Mar 29, 11:36am
Misc says
What are "people with assets?" The savers who did not take on excessive debt? It would be good to see their savings actually worth something and not inflated away to bail out irresponsible borrowers.
If you work for a living and are in debt, deflation would reduced your wages until you could not make payments and you would lose whatever you went into debt to obtain.
The people with the assets would sit back and collect it all.
What are "people with assets?" The savers who did not take on excessive debt? It would be good to see their savings actually worth something and not inflated away to bail out irresponsible borrowers.
79
Misc
2023 Mar 29, 11:49am
HeadSet says
The people with assets would be those with inherited wealth. .
As many are finding out today, it is difficult to save when rent is 50% of your pay.
Misc says
If you work for a living and are in debt, deflation would reduced your wages until you could not make payments and you would lose whatever you went into debt to obtain.
The people with the assets would sit back and collect it all.
What are "people with assets?" The savers who did not take on excessive debt? It would be good to see their savings actually worth something and not inflated away to bail out irresponsible borrowers.
The people with assets would be those with inherited wealth. .
As many are finding out today, it is difficult to save when rent is 50% of your pay.
80
Reality
2023 Mar 29, 11:54am
HeadSet says
Debtors often need to roll over debts through refinancing. High inflation expectation would result in high interest at the time of debt roll-over, which is exactly why many ponzi businesses are in trouble now.
If you are high debt type with big mortgage and big car and credit card debt, inflation is good for you. It may turn out that the debt boys were the smart ones, if we do in fact have double digit inflation.
Debtors often need to roll over debts through refinancing. High inflation expectation would result in high interest at the time of debt roll-over, which is exactly why many ponzi businesses are in trouble now.
81
Reality
2023 Mar 29, 11:57am
Misc says
Correction: it's not the people with assets (often having to borrow to acquire the assets) but the people with banking privileges that can sit back and collect on money that they never had (i.e. created out of thin air). It is a fraud, arbitrarging political privileges pretending they had the money to lend to you (either for acquiring assets thereby driving asset prices sky high, or for consumption thereby driving up CPI).
If you work for a living and are in debt, deflation would reduced your wages until you could not make payments and you would lose whatever you went into debt to obtain.
The people with the assets would sit back and collect it all.
Correction: it's not the people with assets (often having to borrow to acquire the assets) but the people with banking privileges that can sit back and collect on money that they never had (i.e. created out of thin air). It is a fraud, arbitrarging political privileges pretending they had the money to lend to you (either for acquiring assets thereby driving asset prices sky high, or for consumption thereby driving up CPI).
82
Reality
2023 Mar 29, 12:01pm
Misc says
You are confusing volume vs. price. Volume peaks often coincide with turns in price direction, whereas volume troughs usually doesn't signal much of anything. Basic charting / technical analysis. Please do not put words in my mouth; thank you. It usually takes time for people to go through the 5 to 7 phases denial through acceptance. The first period of low volume is usually result of denial on the part of people who recently bought.
Property transactions today are at a generational low. By your logic this would be an ideal time to buy as this would signal a trough in prices. I would not recommend this course of action
You are confusing volume vs. price. Volume peaks often coincide with turns in price direction, whereas volume troughs usually doesn't signal much of anything. Basic charting / technical analysis. Please do not put words in my mouth; thank you. It usually takes time for people to go through the 5 to 7 phases denial through acceptance. The first period of low volume is usually result of denial on the part of people who recently bought.
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