The Capitalist Conspiracy?

[dr_sinister1001]

THE CAPITALIST CONSPIRACY

Conspiracy, the very mention of the word invokes skepticism in most people. But what is the root of this way of approaching the concept of conspiracy. It was a conspiracy that led Benedict Arnold to betray West Point to the British, it was a conspiracy that led John Wilkes Booth to the assassination of Abraham Lincoln. Conspiracy is a word with much darkness surrounding it, but there is much evidence to support the claim that conspiracy has been the driving force in historical events. But in spite of this clear record, an amazing number of people have come to scoff at the mere mention of the word, and view the facts as a “Conspiratorial” view of history. It is the purpose of this topic to show that the “Conspiratorial” view of history is the correct view of history, and that there is a secret combine at work today, and it can be properly identified as the Capitalist Conspiracy.

No matter how organized a crime syndicate is, there will always be someone who will expose the inner workings to the authorities. The same is true for political conspiracies. Over the years there have been many defectors from the communist apparatus, and much has been published about the inner workings of the communist machine. One piece of the puzzle however still remains, there is much evidence to support that rich Americans have funded the communist cause from the background. These men seemingly have nothing to gain from the rise of communism, in fact many people would call these men Capitalist. So why then have these men invested money and influence on something that does not work to their advantage?

If there is such a conspiracy at play why hasn’t anyone defected and exposed it? The answer is, someone has. Dr. Carroll Quigley (1910 – 1977), a former Georgetown professor of history and a member of the Anglo-American elite had exposed the workings of the conspiracy and it’s ultimate goal in his book "Tragedy and Hope: A History of the World in Our Time". This long-winded dry dictation of recent history was intended for the intellectual elite, amidst the dry history were the secrets of the Capitalist Conspiracy. In his book Quigley outlines the goal of global government, although Quigley himself was sympathetic to this cause, he disagreed with the issue of secrecy.

At the end of the age of the monarchies, at time where the people were winning back some of their rights and freedoms, the International banking combines started to create their own dynasties, only this time they would operate from behind the scenes. They operated by influencing politics by controlling the finances of countries, in this way they could pull strings regardless of the power system in place in the country. Both monarchs and democratically elected governments required money in times of emergency. It was the International bankers that came to the rescue, offering loans, with strings attached of course.

Who are these International bankers? The International Banking Combine consists of many families with a long history in finance. It is important to be familiar with the names of these families, Rothschild, Warburg, and Morgan are the three major players. It should be noted that while many Jewish families have contributed to the conspiracy, it is by no means a Jewish monopoly. Many men of various faiths and nationalities have joined the ranks, the linking factors being, greed and the need to control other human beings. The International Bankers have been influencing world politics for quite some time. In fact it is very possible that the emergence of the United States itself is a product of International Banking interests.

The International Bankers are not quite the same as the commercial banks with which we deal in everyday life, the International Banking combine deal not with the individual but with the mega-corporations of the world, other men of finance, and especially governments. The trick is to control the finance of a government but to make it appear that it is the government that is truly in control. In America the application of this idea is the Federal reserve.

What is the federal reserve? The federal reserve is the lender of last resort. When there is a sudden bank run and the commercial banks have no where to turn, the federal reserve will lend the banks the required money. This seems like a sound principle, but is very deceiving, the reserve is the official bank of the United States and has a monopoly over the printing and issuing of legal tender. The reserve is a private entity under the government. Although under the government, the members that sit on the federal reserve board are not appointed by the American people. The president appoints new members of the board for a term of 14 years. Every member appointed thus far has been friendly to International Banking interests. The power of the reserve lies in its ability to print money arbitrarily, the board decides how much money is to be printed and circulated. The currency in the U.S. is only partially backed by gold, meaning that all the money in circulation is not in a 1 to 1 ratio with the amount of gold that resides in Fort Knox. The reserve is only responsible for 10% of the actual gold and the commercial banks are only responsible for 10% of what comes from the reserve. So thus forms an inverted triangle where you have $100 worth of gold at the bottom and $10 000 in cash at the top. This type of banking called fractional reserve banking gives the reserve the power to sway the economy. If they wish to cause a recession they simply increase interest rates, and reduce the flow of available cash. If they wish to inflate the economy they simply print more money. This type of power not only allows the International Bankers to control the finance of a country, but also the influence to a great extent its politics.

In the 1870s a wealthy British socialist by the name of John Ruskin was appointed as professor of fine arts at Oxford University in England. He preached the philosophy that the state must take control of production. He also believed in a dictatorial system of government and advocated the superiority of some men to others, these ideals were absorbed by a young student named Cecil Rhodes. Rhodes would one day amass a huge fortune, with the help of International Bankers he would acquire a monopoly on the diamonds and most of the gold that would come out of Africa. Rhodes would spend much of his fortune to promote Ruskin’s ideas. Many are familiar of the famous Rhodes scholarship, but few are familiar with Rhode’s more controversial legacy. In his will he instructed the formation of a secret society which would be called the round table group. He left in the care of his friend Lord Milner the institution of such a group. Rhodes intended to be at the top, Milner and certain others were to form the inner circle, various others would form a circle of initiates and an outer circle was to be formed known as the association of helpers. Herein lies the classic pattern of political conspiracy. A society of various shells, each being controlled from the inside.

The ultimate goal of the capitalist conspiracy is the establishment of a world government, which the inner circle would control from the background. The destruction of religion and the control of the population is necessary for the capitalist plan to succeed.

The unseen government has without a doubt, infiltrated the mind of the average citizen through it’s control of the education system and popular mediums of press and other news media. The human mind is like a computer, it is only as good as the input it receives, no matter how intelligent a person may be he or she will be completely oblivious of a conspiracy if they are constantly distracted or fed misinformation. Control of the human mind is one way the unseen government gains control of the population. The system of pressure from above and pressure from below is the intentional creation of societal emergency (pressure from below) and an immediate solution offered by the government (pressure from above) always with one result which is to give the government more power.

What then is our response? Conspiracy as it operates today rests upon two foundations, and is sheltered by a cloak of secrecy. No conspiracy can stand the light shed on it, and no conspiracy can stand without its foundations in this case, big government and control of finance. We must endeavor to reduce the powers we grant our federal governments and we must take back control of the monetary system. We must shed light on and remove the cloak of Conspiracy. Only then will we be able to enjoy the freedoms that are rightfully ours as citizens of the world.

[brij]

Something i worte -


US economic collapse, It’s the economy stupid?


A Little history –

The recession of 2001 had four causes. First, there was the technology boom of the 1990s, which got carried to unsustainable speculative heights. Second, there was a gush of money created by the Federal Reserve Fund which became channelled into higher asset prices (stocks and real estate) rather than the price of consumer goods. Third was the fraud and abuse of corporations, stock brokers, mutual fund companies, and stock exchanges, a systematic corruption of the financial markets rather than merely isolated cases (Enron, WorldCom). Fourth was the September 11 attack, with its devastating losses, followed by the costly War on Terror. The American dream is over! No one knew about the pervious economic crashes until it happened, no one will know about this, the biggest economic crash until it happens.


Trade and fiscal deficit –

There trade deficit is at 5% of GDP ($500billion). No nation in history has a 5% deficit that keeps growing every year, the U.S is a dependent economy that requires the world to feed its thirst. The dollar is finished; major investors can see the long-term fall and are already poring money into different currencies and stocks.
The fiscal deficit is also huge 4% of GDP ($400billion) and rising, the national debt has just hit $7 trillion, 70% of GDP. The IMF finally had the nerve to criticise its master and announce that America is facing a debt crisis.

These deficits are unsustainable; the trade deficit is practically impossible to fix due to Americas over consumption. What makes these deficits worst is the fact they are funded by the world’s savings, foreigners are pouring money into America’s debt to keep the economy afloat. America is not a creditor nation, they are a debtor nation of $3 trillion, 30% of GDP, and rising by 5% per year, in 2 years that will be 40%, a crisis on its own, America is trading there wealth away. America needs $2 billion per day from foreigners to keep it afloat (Asia has now $2 trillion of dollars), how long are foreigners going to pour money into risky American debts, the external debt can only get so high.

Where’s the savings? America has no savings. The national savings rate has been dropping for decades and is now at 1.3% of GDP, that’s why the U.S requires foreigners to buy there debt, they have depleted all there savings, now the U.S is using other countries savings, but as said before how long are foreigners going to pour there money into riskier American debt.



Economic stimulus –

Since the 2001 market crush, America is running on stimulus which is fast running out. Low interest rates, high fiscal deficits, tax cuts, raising the debt limit, ect. After 3 years indicators are poor, everything is in historic highs. During 2005 the stimulus will run out, no more tax rebates, no more low interest rates, ect .


Super-cycle of debt –

With low interest rates, credit has sky rocketed, consumer debt on its own is $2 trillion, 20% of GDP, Americans are spending money they don’t have, spending accounts for 70% of GDP, America is stuck in debt, if they stop spending the economy will sink, debt will keep going and going until there is a credit crunch. The entire economy is dependant on the housing market, mortgages are at $7 trillion 70% of GDP.

America is in turmoil, politicians will lie about the situation, then there’s poor media attention, all you get is Christmas sales up 6%, great for retailers, but they won’t say that the money spent was just debt that must be paid off in the future.

Excessive monetary expansion creates long-term distortions (inflated house prices), that lead to bad investments and higher prices that later choke the economy and cause it to crash. Borrowers default on loans, leading to bank failures and a financial crisis. Less investment and financial failures result in layoffs that then reduce overall demand and lead to more contraction, and down they go.


It’s all housing now –

There has been one industry that has kept the economy growing, the housing market, the massive debts from re-financing have given consumers one last splurge in spending, the record low interest rates have made sure houses inflate in price. House prices are rising as rent prices are falling, house prices are overtaking income by more then 10% per year, the housing bubble is getting bigger and bigger.


World trapped –

The world is creating a bubble never been seen before. The U.S consumer is world demand, they are the buyer of last resort, they suck up goods from nearly every country. Lets take china for example, china is a massive export led economy, it requires the U.S to continuously buy there goods, this in turn allows Chinese to continue its expansion, increasing revenues, opening of new factories, provide mass jobs, ect. With an American economy in crisis, demand will fall; this will cause massive ripples throughout the world, who will buy Chinese goods? Who will keep the millions of Chinese in there jobs? Where will the Chinese get there revenue from? Every nation knows this, that’s why Americas external debt is so high and rising, the surpluses made from these countries such as china is recycled into U.S debt (bonds, treasures, ect), foreigners now own nearly half of the U.S bonds, this then allows America to continue its binge spending. China now has a massive investment bubble, a poor banking system, huge consumer debt (170% GDP), if china economy falls, they will be forced to sell there American bonds causing a panic in the market forcing other foreigners to sell there bonds. China now has a massive economic bubble tied in with the U.S; they are now both dependant on each other, if one falls, the other falls. The world economies are now dependant on each other; free trade has made us more venerable. An American fall is the worlds fall.


Employment, who will prosper -

America’s employment is 10.5%, not the 6% the media reports, Americas employment numbers are complex, it does not include all the people who can work but have given up. Unemployment is raising, hi-tech jobs, specialist jobs, ect will be shipped abroad where its cheaper. When the crash hits demand will fall, unemployment will soar. Only the rich and clever investor will prosper when the next crash hits, people with no debts and a surplus of cash to invest will be richer, they have resources to survive a inflation or deflation scenario, but the poor will be poorer, the middle class will merge with the poor as they are the ones holding the majority of the debts and require jobs to survive.


Great depression –

(Could not upload chart)

The great depression is one of the worse crashes in history that left its effects for decades. The current total debt now as of 2004 is 315% of GDP. I don’t have to explain this chart to anyone, it speaks for itself. The debt bubble will burst! The economy will crash!



Economic reality –

The war was not about terrorism, weapons of mass destruction, rouge regimes, it was all economics, the economics forced the drive for war. The war on terror has given an excuse for the fed to increase stimulus and to secure future energy supplies, the military is now being used to keep the economy rolling over. From a fear of economic collapse to war.

If America was any other nation they would have been criticised by every rating agency in the world, there finances are at danger levels, but no one will say anything because they are America. Economies must correct (balance, equilibrium), they can not be held back forever, and America is not beyond the economic cycle as they think they are, the longer they hold it back the bigger the fall. America is not building any surpluses for the ageing population that start retiring in a few years, this will cripple America further. The entire liabilities of the U.S are now £33 trillion (314% of GDP). The Fed now knows the game is coming to a close, the markets will force a correction, the years to come are going to be hard, 4 years of lies and intervention has failed. The military is bankrupt, the government is bankrupt, businesses are bankrupt, the public is bankrupt, the entire nation is now bankrupt, the system everyday is becoming more and more bankrupt, but politicians inform no one, the question is how bankrupt can the U.S get? How far can the U.S go before a total economic collapse?

People need to open there eyes, speculation that America can keep on running is a dream, the American empire is going to fall in front of us and no one will be spared, but no one will see it because not one person in a hundred has any clue about the economic realities. The greatest economic bubble has been created. The politicians can save some of the countries wealth by busting the bubble now, but they won’t because it would be political suicide, the public is not demanding it, they are dancing on the Titanic. The economic ship is now full steam ahead. Few see the waterfall beyond the immediate horizon. Even most economists are clueless. You have now been warned, but most who read this will not really believe it. Most of those who believe it will do nothing about it. That’s why the cycle will run its course, and that’s why it will be the worse economic disaster in history.
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[methodman535]

Interesting. However the US still has the worlds largest economy and produces the most wealth per year than any other country. I think thats part of the reason it can afford to do all this because it is the healthiest and most diverse economy around. Maybe needs to tighten the belt a bit, but I dont think the downward spiral is unpreventable at all. But yeah, having said that, the dollar is almost like the gold of foreign exchange. Whoever holds it, is basically loaning money to the federal reserve interest free. Most trade in oil and minerals and comoddities is done using floating dollar reserves also.

Maybe someone can make a few pie charts showing world economies and debts and trade balances in relation to each other? I can picture most of it but it will still be interesting to look at.

[dr_sinister1001]

All these numbers and statistics are great, but what does it really have to do with the capitalist conspiracy? You're missing the point, economic control is only a means to an end, and the current state of the U.S. economy is not an accident that America has neglected, this is a deliberate act by the reserve and other elitist institutions to cause a recession. The real danger lies not in the recession, but in what powers we will grant our governments when they offer us the "solution". I think most people who are properly informed expect an immanent recession, but you have offered no solution. When the recession does hit, the American economy will most likely enter a state similar to the German economy immediately after WWI.

Steps to ensure that you can survive the recession.

Pay of debts – Get out of debt if you can even if it means lowering your standard of living, or you stand to lose everything that is debt financed.

Get Liquid – Reduce your wealth to more liquid forms, if you own your house out right then good for you, if you don’t sell off other assets to pay it off

Invest in precious coins – Invest in old silver coins, silver coins before 1965 are more than 70% pure silver, but from 1965 on they are not. It is said that during a time of recession one silver coin can buy you enough to feed your family for a week. Silver coins are a good investment because most people are aware of it as a standard form of exchange. The coins are cut to specific weights and are of an assured purity so it is a good standard.

Invest in gold and other precious metals – A good way to protect your savings is by buying gold and other precious metals, while the value of the dollar may drop to nothing the value of your gold will not change.

Open accounts in foreign banks – Consider opening a Swiss bank account, putting your savings in another currency will save you from a localized recession in the United States, or North America. But it is most likely that the recession that will happen will be world wide due to the global economy of today.

Educate your friends – Our system needs to be changed, and we need a solid group of individuals that know how the money system is manipulated. When the depression comes, there will be those who are puppets of the International Bankers who will come forward offering “solutions”, people must be informed of their deception.

[dr_sinister1001]

This was a duplicate of the post above my sincere apologies.

[methodman535]

Are you alive? Considering making any posts in this thread besides the copy and paste job?

[dr_sinister1001]

I'm sorry I don't understand what you mean, by am I alive. Yes I'm alive, and sorry for the duplicate post I believe I refreshed the page as I was posting.

[methodman535]

It just looks like you are pasting a lot of info from somewhere else into your posts. Like the stuff about investing in swiss banks and buying bullion....nobody asked you that it just seems totally out of place here in this thread since most people are barely starting out in the working world

[dr_sinister1001]

No it definitely is relevant information, you don't need to be in the working world to invest in foreign banks, you simply need money. Also I'm steering the thread back on track, the other post was misleading. My objective is to outline the conspiracy, and it's goals and offer a way to combat it. As to my source of information, I'm somewhat of a student of this particular conspiracy, and this information is legitimate and backed (but not copied and pasted) by credible sources. If my word is not enough, I do invite you to find the original source.

[methodman535]

Ok I do sense a pulse in you now.

[brij]

Interesting. However the US still has the worlds largest economy and produces the most wealth per year than any other country. I think thats part of the reason it can afford to do all this because it is the healthiest and most diverse economy around. Maybe needs to tighten the belt a bit, but I dont think the downward spiral is unpreventable at all. But yeah, having said that, the dollar is almost like the gold of foreign exchange. Whoever holds it, is basically loaning money to the federal reserve interest free. Most trade in oil and minerals and comoddities is done using floating dollar reserves also.

Maybe someone can make a few pie charts showing world economies and debts and trade balances in relation to each other? I can picture most of it but it will still be interesting to look at.




Most people are blind when it comes to economics, the U.S economy is not healthy, it is being held up by debt, real unemployment is raising, bankruptcies have hit recode highs of 1.6million and is expected to beat that this year, history the U.S economy is not diverse, if it was diverse it would not need so much imports while running the largest trade deficit in history and industries would be expanding rather then contracting for years. The dollar will collapse, already people are plunging into gold and diversifying in to other currencies, gold has hit a 15 year high of $400-420. Gold will hit $1000, mark my words. The world has the U.S by the throat how long are foreigners going to keep a depreciating dollar, what happens if Asia with its 2.1 trillion of holdings decides enough is enough and dumps it? Want to know what keeps the fed up at night, it’s the fact that the greatest money supply is being created, but the velocity of money though the economy is dropping, you know what that indicates, it shows that the American public is going to do something that hasn’t been seen in generations, increase savings and reduce consumption. The fact is most people do not know what’s happening, they see it as business as usual, one economic shock is enough to cause a financial meltdown. Remember for every dollar now being created in incremental GDP, $6 is created as debt.

Well this is an estimate, but the world debt is around $100 trillion, with the U.S holding $37-40 trillion now, heres a summary of the U.S debt tables -


http://www.financialsense.com/editorials/hodges/2004/0317.html

http://www.comstockfunds.com/html/2b.gif

http://www.financialsense.com/editorials/daily/2004/0318.htm


Q All these numbers and statistics are great, but what does it really have to do with the capitalist conspiracy? Q

Sorry I just wanted to post what I wrote.

[methodman535]

Since its the largers economy in the world, its only natural to expect it has the largest debt in the world. The US has a per capita income thats extremely high. And much of this "debt" is just older, richer people lending money to younger, poorer people. Its nothing unusual. Income distribution is not all that bad in the US considering its a dog eat dog capitalist economy.

But all this is in comparison to other economies around the world. If someone at the top is messing with things, playing a dirty game thats another story. Im just relaying how healthy and dynamic the american economy is by the nature of the workforce, mechanization, education level etc of the populace.

And you say that word debt is 100 trillion? The US holds about 1/3 of it? Ok...isnt the US about 25% to 30% of the world economy too?

Who is this "debt" owed by and who is it owed too? Is it just rich old retirees that hold shares and stocks in companies that employe poor, just out of school debt riddled youngsters who will turn themselves from being 120,000 in debt to zero debt in 15 years and positive in 25+ years?

Or is it owed to foreigners? The US owns a lot of assets too. Its not that simple.

[brij]

Since its the largers economy in the world, its only natural to expect it has the largest debt in the world. The US has a per capita income thats extremely high. And much of this "debt" is just older, richer people lending money to younger, poorer people. Its nothing unusual. Income distribution is not all that bad in the US considering its a dog eat dog capitalist economy.





No, its not about debt size, you have to put the debt into context of the economy, the U.S has something like $37 trillion in debt, that means nothing unless you look at its GDP, its debt to GDP is one of the worlds highest comparable to third world countries at around 315%, that’s the problem, and growing by more then 10% per year.



And you say that word debt is 100 trillion? The US holds about 1/3 of it? Ok...isnt the US about 25% to 30% of the world economy too?



More like 40% now i would think. But, this is where it gets tricky, it is nominated in dollars, GDP is more realisic if looked upon as purchasing power, something most people do not know about or even understand, as every economy has different values of worth.



The world book website gives a more accurate account of the economy using PPP -

http://www.cia.gov/cia/publications/factbook/geos/ch.html#Econ

US purchasing power parity - $10.45 trillion
China alone has a purchasing power of $5.989 trillion

There is much to an economy, may economist use data just to fool people, economics is not a exact science.



Who is this "debt" owed by and who is it owed too? Is it just rich old retirees that hold shares and stocks in companies that employe poor, just out of school debt riddled youngsters who will turn themselves from being 120,000 in debt to zero debt in 15 years and positive in 25+ years?

Or is it owed to foreigners? The US owns a lot of assets too. Its not that simple




Who is the debt owed to, why YOU, the public, hard working people, people who save, the money is owed to people who have bank accounts, people who have bonds, savings, ect. Every dollar the banks get they invest 90% of it, the 10% is held for liquidity for people who are drawing, this is where top economists think the problem can start, as the banking system has lent far to much to quickly.

You are being very very optimistic with the old and young, what makes you think the young are evening hold most of the debt, the old and mature are holding the majority of the debt, they have the mortgages, most of the credit cards, overdraft. Second is what’s going to happen when 70million baby boomers during 2008-2025 fully retiree, who will pay there pensions? That will increase the debt loads (I expect the pension system to collapse by then).

Second is the young generation in the U.S have the worst economic discipline ever seen, they already are looked upon as a generation that will fail, they are ready to take on even bigger debt loads just to live the American dream. Most rather be hip hop stars, dancers, dj’s and pop stars, they have more knowledge about fast cars, games, hip hop culture then science, how does a society rely on these people.

You need to think logically about it, Ive spoken to many economists and investors about it, its disturbing that they know what is to come, but the average person is blind, even Alan green span (fed dictator) has officially admitted the debt loads that have been created may not be paid in the future.

Foreigners own $3 trillion of the U.S 30% of GDP, now where not talking about tangible assets (houses, cars, ect), where talking about debt, they hold trillions of dollars of bonds, securities, treasuries, ect. They are plunging $2 billion per day to fund Americas debt, the day they stop, is the day the U.S defaults.

http://www.brillig.com/debt_clock/


Remember -

Total liabilities of the U.S (minus Medicare social security) $37 trillion growing by 10% + per year

GDP growing by 4%

Most people know the game is nearly over, the U.S has best 2-3 years if there lucky, you can find from top investor articles that the world has gone mad with the U.S, the U.S is now running on its brand name, becoming more and more indebted. It’s a debt trap really if America stops its debt expansion, it will crash, it rather crash later then sooner even if the crush will be bigger, this way the current politions dont get the blame.

I think people need to be more educated on how the system works and whats currently happening.

[dr_sinister1001]

You need your own thread, this is getting way off track. But the debt can be resolved if the U.S. leaves the gold back standard as Lincoln did in the civil war. Lincoln ordered the issuing of "green backs" which were backed solely by the good will of America. This would loosen the strong hold that the Fed has on the economy, many believe that a fully gold backed standard is what we should return to, but unfortunately that is a very dangerous proposal. The gold of the American people has been stolen (bought from the American people and sold to European investors for a higher price) by the International Bankers. No one knows how much gold remains in Fort Knox, a full audit hasn't been done since sometime during the beginning of the cold war. So to return to a gold back standard would be impossible. But to settle the debt, I'm sure it can be done, but does the Establishment want a prosperous economy? No. The problem is when you propose these problems you look at the system as if it works. The system is broken and has been broken for quite sometime. The average citizen is not in control of his life anymore, which is truly sad indeed.

[brij]

Yeah sorry for going off topic, but i agree with going back to the gold standard, at least that backed up the value of the dollar. The fed cant prodce gold, while it can produce money, the fed has no control over gold in the market.

[dr_sinister1001]

A gold backed standard is impossible to return to, no one is certain how much gold is left in Fort Knox, because there just hasn't been a recent audit. I wouldn't be surprised if the gold is gone, like a scene straight out of Goldfinger. The International Banking combine may have pulled off the greatest gold heist ever.

The solution is to take back control of the money system, dissolve the Fed and print money that is backed by nothing. There is no need for the currency to be backed by gold or another precious metal, whatever the people accept as legal tender is sufficient. In medieval England the accepted form of currency for centuries were long sticks of wood with wedges cut down the middle, the king would keep one half of the stick and the other half was circulated amongst the population. These "tally sticks" as they were called had no real backing. They were only backed by the good faith of the king. A similar idea can be applied to the legal tender of today.

[brij]

Heres a good website that discusses the gold standard and how it works with inflation and deflation.

http://www.gold-eagle.com/

[dr_sinister1001]

I don't see much on that site, either way of course they would be promoting a gold standard, the people who run that site trade gold or deal with gold in someway (Vronsky and Westerman). It would be profitable for them to see a gold-backed currency succeed.

But all of that aside no matter your reasons for supporting a gold backed currency it's just not going to work there just isn't enough American gold to revert to a 1:1 gold-backed currency. I'm not sure you're reading my posts because, I've stated that fact above and you still persist with the gold standard.

[brij]

I don't see much on that site, either way of course they would be promoting a gold standard, the people who run that site trade gold or deal with gold in someway (Vronsky and Westerman). It would be profitable for them to see a gold-backed currency succeed.

But all of that aside no matter your reasons for supporting a gold backed currency it's just not going to work there just isn't enough American gold to revert to a 1:1 gold-backed currency. I'm not sure you're reading my posts because, I've stated that fact above and you still persist with the gold standard.

Of course it cant go back onto the 1:1 basis, to many dollars are in circulation. The dollar has lost far to much purchasing power over the years.

http://www.moneyfiles.org/usapower.jpg

To back this up with gold would be impossible, i understand this. But it can go to a ratio that is realistic, e.g 100:1. The reason to why gold might be good is due to the fact it can be backed up with value, production if you will. Currently the greatest monetary expansion is history is taken place, this in has created the greatest credit expansion, this current expansion will cause a major collapse of the dollar in the near future as production can not back up the extra dollars being printed, this excess dollars being printed then funds its way into debts, e.g asset inflation, credit card debts, other debts.... Gold can at least give some discipline back, control the mass growth of debts that are being undertaken.

[dr_sinister1001]

I think that's misleading, there is really no need to back the currency by anything. All that really matters is control of the American monetary system, which is right now under the control of the Fed. Gold only has value because people over thousands of years have given it value. The same can be done for anything. Simply restricting how much money is printed can control inflation. Backing the currency by gold is dangerous, if something were to happen to the gold, which is a physical commodity then the economy would crumble.

[brij]

I think that's misleading, there is really no need to back the currency by anything. All that really matters is control of the American monetary system, which is right now under the control of the Fed. Gold only has value because people over thousands of years have given it value. The same can be done for anything. Simply restricting how much money is printed can control inflation. Backing the currency by gold is dangerous, if something were to happen to the gold, which is a physical commodity then the economy would crumble.

Yes it is true that the people can control the monetary system, but that too can have its problems, people can become corrupt, people can defraud the system. Yes gold can be dangerous, but as long as gold has its value then it is safe, gold has past the test of time for value, in nearly every place on earth for years gold has been valued, and as you said gold is a PHYSICAL commodity, it actually exists, even if it is depleted from the earth the rest still can be used as reserves. Any economy can crumble in any circumstance, there is no real golden rule to economics, it is not a exact science. But you do make a great point about people taking over the monetary system, i have never really looked at it from that perspective, i think that could work if it weren’t for human greed and power.

[dr_sinister1001]

Believe me I'm quite aware of the corruption of the system (read the very 1st post on this thread), but no matter how gold has been used in the past, it won’t work in the present.

1st. The economy is too large to back everything by gold 1:1, and if it's not backed 1:1 then you might as well not bother, anything other than 1:1 is basically fractional reserve banking and that's what got America in the mess it is today. Well actually the Establishment (International Banking combine) is to blame for all of that but it was they who introduced fractional reserve banking to the world.

2nd. It’s silly if you really think about it, to back your currency with another form of currency? A nation's good will should be enough.

Finally, the reason that gold still holds value today is because the Establishment sustains it's value, the gold industry is a profitable business, also it is the elite that owns most of the refined gold that exist in the world today. As for gold's practical uses, while there are some, that industry is much smaller.

[brij]

Believe me I'm quite aware of the corruption of the system (read the very 1st post on this thread), but no matter how gold has been used in the past, it won’t work in the present.

1st. The economy is too large to back everything by gold 1:1, and if it's not backed 1:1 then you might as well not bother, anything other than 1:1 is basically fractional reserve banking and that's what got America in the mess it is today. Well actually the Establishment (International Banking combine) is to blame for all of that but it was they who introduced fractional reserve banking to the world.

2nd. It’s silly if you really think about it, to back your currency with another form of currency? A nation's good will should be enough.

Finally, the reason that gold still holds value today is because the Establishment sustains it's value, the gold industry is a profitable business, also it is the elite that owns most of the refined gold that exist in the world today. As for gold's practical uses, while there are some, that industry is much smaller.

Currency must be backed by value, thats how currencies work, currencies are backed by production, good will means nothing in the real world. Just having currency gives it no value without production, if we are talkiing about the current situation i believe a gold standard like method should be used as it is better then the system we are using, it gives some control, but the best system of course would be simply meeting dollars with production, nothing else, but this of course wont happen.

[brij]

Well iam off for now, nice discussing about economics with people my own age instead of old grey haired people. Economics is like a religion, no one is right or wrong, different theories, different methods, different concepts.


Maybe we should start a thread discussing where the economy is going right now for our generation or how it will effect us in the future, or wither free trade, globalisation is good for the world.

[dr_sinister1001]

Currency does not have to be backed by production...

Currency is just an accepted form of exchange for goods and services, whatever a community decides to use as currency is arbitrary and does not need to be backed by anything.

And your system of partially backed currency by gold is already in place today... I don't think you read the whole post but simply reply to the 1st line.

Production only plays a role when you want to convert your currency into another currency.

Countries do not trade in gold (unless you’re a country of pirates), they trade goods and services. But this trade has nothing to do with the accepted currency in the country, I can start a country that uses party confetti as currency and as long as everyone agrees to honor it, it'll work.

(The game is on and I'm here posting a reply, shame on me, GO LEAFS!)

[brij]

Currency does not have to be backed by production...

Currency is just an accepted form of exchange for goods and services, whatever a community decides to use as currency is arbitrary and does not need to be backed by anything.

And your system of partially backed currency by gold is already in place today... I don't think you read the whole post but simply reply to the 1st line.

Production only plays a role when you want to convert your currency into another currency.

Countries do not trade in gold (unless you’re a country of pirates), they trade goods and services. But this trade has nothing to do with the accepted currency in the country, I can start a country that uses party confetti as currency and as long as everyone agrees to honor it, it'll work.

(The game is on and I'm here posting a reply, shame on me, GO LEAFS!)

Yes currency is just an economic tool for trading. Most people believe economies are based on currency, which is incorrect, they are based on production. If you just have currency you can do nothing with it, it is worthless, it cant do anything, you can not trade anything as nothing exists but the currency.

If we use a simple economic model such as 2 farms trading potatoes and tomatoes, no currency is needed, one of the farmers decides to trade 2 tomatoes for one potato and the other agrees, this is a simply trading model.

Lets expand this to the world today, a farmer cannot go and buy a TV with a bag of tomatoes or potatoes, instead all production is traded with a economic tool, currency, a currency everyone agrees to, the farmer can sale his production to a customer for the production he/she has created with currency, once the farmer has this currency he/she can then trade this production for a TV.

Currency that is backed up by nothing does nothing. That’s the main problem with the fed they are printing money that is not backed up by anything, due to this the excess money must go somewhere, it goes into inflation, rises prices, corrodes the value of the currency as there is more then is needed. Why do you think house prices have risen to fast, its due to increasing the money supply higher then what is needed to meet production, this money must go somewhere, right now it is finding its way into asset inflation.

Currency backed up by nothing is useless, it can not work, it is nothing but a economic tool for trading, its value without production is nothing, something must be produced for it to be used, if it didn’t then the world should simply go and print all the money that is possible and make us all into millionaires and billionaires. Economies are based on production not currency, it must be backed up by something.

[dr_sinister1001]

What do you mean that if you have a currency you can do nothing with it? Of course you can do something with it, spend it. An accepted form of currency is accepted for a reason, so people can exchange it for goods and services. I think you're missing the point, as long as there is a currency and it is accepted in that country then production plays absolutely no role. I don't understand why you used the farm example.. I understand why a farmer cannot trade potatoes for a TV.. That is why there is an accepted currency. You can't argue your point by stating basic economics. (I’m not formally trained in economics but it’s merely a hobby)

I'm not talking about the Fed, the Fed is a corrupt institution (YOU ABSOLUTELY DO NOT READ THE POSTS, or you simply just read selectively). I'm talking about controlling the money system in a fair and just way, and this is possible there are people of good character that we can appoint to oversee the economy.

Inflation is not a result of un-backed currency, in fact the U.S. dollar is backed partially by gold even today so you cannot say that backing the currency with value will reduce corruption.

And why would any sane civilization just print money arbitrarily? That is exactly what devalues the currency, not the fact that it is not backed but because it would simply be in excess. I'm certainly not talking about printing money till we all have a million George Washingtons.

[LuCkY GuNz]

you all argueing over paper economies? :lol:

[methodman535]

I think what brij was trying to say was that currency is just a token of exchange. It just makes bartering simpler. Real wealth comes from the production of goods and services. At leasts thats how new wealth is created. Inflation is something that simply happens when too much currency is printed for too little wealth, the paper becomes of less value as a TOKEN of exchnage today than it was last month or last year simply because there is too much of it now and too little of actual wealth...compared to a year ago. So...its worth in relation to everything that it is used to buy and sell....changes...it becomes worth less. If the government/fed wanted to they could keep a fixed supply or even a reducing supply of paper money. Then we would have negative inflation.

[methodman535]

Since its the largers economy in the world, its only natural to expect it has the largest debt in the world. The US has a per capita income thats extremely high. And much of this "debt" is just older, richer people lending money to younger, poorer people. Its nothing unusual. Income distribution is not all that bad in the US considering its a dog eat dog capitalist economy.





No, its not about debt size, you have to put the debt into context of the economy, the U.S has something like $37 trillion in debt, that means nothing unless you look at its GDP, its debt to GDP is one of the worlds highest comparable to third world countries at around 315%, that’s the problem, and growing by more then 10% per year.



You havent indicated who owes who 37 trillion. Is it the Japanese and British that own US savings bonds and T-bills? Is it rich old grandmothers that have multi million dollar deposits in banks that also lend subsidised student loans to starving students and small business startups? Maybe this debt...is normal and has been normal for centuries?


And you say that word debt is 100 trillion? The US holds about 1/3 of it? Ok...isnt the US about 25% to 30% of the world economy too?



More like 40% now i would think. But, this is where it gets tricky, it is nominated in dollars, GDP is more realisic if looked upon as purchasing power, something most people do not know about or even understand, as every economy has different values of worth.



The world book website gives a more accurate account of the economy using PPP -

http://www.cia.gov/cia/publications/factbook/geos/ch.html#Econ

US purchasing power parity - $10.45 trillion
China alone has a purchasing power of $5.989 trillion

There is much to an economy, may economist use data just to fool people, economics is not a exact science.



I know about PPP. The thing is, places like china and india have had high PPP for ages but the fact of the matter is that the reason they are behind in per capita income, per capita GDP is because they dont have human resources as highly developed as the US does...they dont have the technological infrastructure in place in manufacturing and services. Take a look at the PPP adjusted per capita GDP of the US compared to the other large world economies of Japan, China, India, Britian, Germany. You will notice the Us has about 8,000 a year more in anual income per head. Pretty much the same for GDP per capita. The reason is that when it comes to trade, the US can compete very well in areas where the value added by manufacture and the value added by rendering service has very high margins. Such as jetliners, computer chips, machine tools, advanced weapons systems. The point of me saying that is, because the top performing companies in the US can be so competitive, the whole country can afford to take on humungous debt compared to pretty much any other nation simply because its more capeable of recovering from a state like that both long term and short term. Theres very high production and very high productivity in the US compared to pretty much any other major economy. The main ways china and india etc can beat the US is by sacrificing wages in hi tech jobs.


Who is this "debt" owed by and who is it owed too? Is it just rich old retirees that hold shares and stocks in companies that employe poor, just out of school debt riddled youngsters who will turn themselves from being 120,000 in debt to zero debt in 15 years and positive in 25+ years?

Or is it owed to foreigners? The US owns a lot of assets too. Its not that simple




Who is the debt owed to, why YOU, the public, hard working people, people who save, the money is owed to people who have bank accounts, people who have bonds, savings, ect. Every dollar the banks get they invest 90% of it, the 10% is held for liquidity for people who are drawing, this is where top economists think the problem can start, as the banking system has lent far to much to quickly.

You are being very very optimistic with the old and young, what makes you think the young are evening hold most of the debt, the old and mature are holding the majority of the debt, they have the mortgages, most of the credit cards, overdraft. Second is what’s going to happen when 70million baby boomers during 2008-2025 fully retiree, who will pay there pensions? That will increase the debt loads (I expect the pension system to collapse by then).



The thing is, social security was never meant to be a retirement fund. All it was meant to do was to make sure that if anyone lived after age 65 then they didnt have to work themselves to death. Now that people are living into their 80s...well...yeah it could go bankrupt. But SS going bankrupt just means that people will get 90% of what they thought they will be getting....which wasnt much to begin with so that will never cause an economic collapse. Pension funds? People are already working two or three jobs to make ends meet. That doesnt wreck the economy either. Pensions are nice if you have them but if you dont...well you just work for your money...and that wont hurt the economy or productivity per capita.



Second is the young generation in the U.S have the worst economic discipline ever seen, they already are looked upon as a generation that will fail, they are ready to take on even bigger debt loads just to live the American dream. Most rather be hip hop stars, dancers, dj’s and pop stars, they have more knowledge about fast cars, games, hip hop culture then science, how does a society rely on these people.

You need to think logically about it, Ive spoken to many economists and investors about it, its disturbing that they know what is to come, but the average person is blind, even Alan green span (fed dictator) has officially admitted the debt loads that have been created may not be paid in the future.

Foreigners own $3 trillion of the U.S 30% of GDP, now where not talking about tangible assets (houses, cars, ect), where talking about debt, they hold trillions of dollars of bonds, securities, treasuries, ect. They are plunging $2 billion per day to fund Americas debt, the day they stop, is the day the U.S defaults.

http://www.brillig.com/debt_clock/


Remember -

Total liabilities of the U.S (minus Medicare social security) $37 trillion growing by 10% + per year

GDP growing by 4%

Most people know the game is nearly over, the U.S has best 2-3 years if there lucky, you can find from top investor articles that the world has gone mad with the U.S, the U.S is now running on its brand name, becoming more and more indebted. It’s a debt trap really if America stops its debt expansion, it will crash, it rather crash later then sooner even if the crush will be bigger, this way the current politions dont get the blame.

I think people need to be more educated on how the system works and whats currently happening.

You are only giving half of the story here. If foreigners own 3 trillion....dont americans own about 2 trillian abroad also, or even 4 trillion? Theres so many international companies that are US owned in other countries that send back dividends and revenue and profit each year to their parents in the US. Its like foreign trade. If you suddenly stated that the US imports 30 billion a month in goods and thats killing the economy well...you are leaving out the fact that its exporting something like 28 billion a month too.

[dr_sinister1001]

I think what brij was trying to say was that currency is just a token of exchange. It just makes bartering simpler. Real wealth comes from the production of goods and services. At leasts thats how new wealth is created. Inflation is something that simply happens when too much currency is printed for too little wealth, the paper becomes of less value as a TOKEN of exchnage today than it was last month or last year simply because there is too much of it now and too little of actual wealth...compared to a year ago. So...its worth in relation to everything that it is used to buy and sell....changes...it becomes worth less. If the government/fed wanted to they could keep a fixed supply or even a reducing supply of paper money. Then we would have negative inflation.

Well, that's pretty much what I said (If you read the posts on the previous pages.), and no I don't think that's what brij meant. Nevertheless this is something completely different from the original topic of this thread. Why can't people reply to the actual topic? Economics is so very boring, not to mention the catalyst for endless debate on something so unimportant as currency. There are more pressing concerns, such as how the world is moving towards a global dictatorship. The Establishment is slowing taking our freedoms from us, and the mindless masses are ready to hand it over.

[brij]

dr_sinister1001 I have read your post, you are looking at just currency that’s the problem, currency is based on production, iam looking it at a point of production.


What do you mean that if you have a currency you can do nothing with it? Of course you can do something with it, spend it. An accepted form of currency is accepted for a reason, so people can exchange it for goods and services. I think you're missing the point, as long as there is a currency and it is accepted in that country then production plays absolutely no role. I don't understand why you used the farm example.. I understand why a farmer cannot trade potatoes for a TV.. That is why there is an accepted currency. You can't argue your point by stating basic economics. (I’m not formally trained in economics but it’s merely a hobby)


You are making no sense at all to me anymore, I gave you the benefit of the doubt that you knew how economics work, this is not economics. You cannot spend currency if there is no PRODUCTION. An accepted currency is accepted for a reason, to trade PRODUCTION for PRODUCTION (Goods and Services). Production is economics, it is based on economics, it plays the most vital role in economics, to state that production plays absolutely no role in currencies defies economics. I used the farm example to explain how production and currency works. (I study economics as a hobbie as well)


I'm not talking about the Fed, the Fed is a corrupt institution (YOU ABSOLUTELY DO NOT READ THE POSTS, or you simply just read selectively). I'm talking about controlling the money system in a fair and just way, and this is possible there are people of good character that we can appoint to oversee the economy.


Yes but how do we control it in a fair and just way. I stated the gold standard like method could be used, as I see this method as production, or better simply printing money to meet production, you have disagreed with -

Currency does not have to be backed by production...

You have earlier posts like this, where you state currency does not need to be backed up by anything, that a nation’s good will is enough. I do not understand where you are coming from, this makes absolutely no sense. Please give an example of how any of this could possibly work or exist.


Inflation is not a result of un-backed currency, in fact the U.S. dollar is backed partially by gold even today so you cannot say that backing the currency with value will reduce corruption.

Yes I know this, that’s why I stated excess money, the excess money that is un-backed causes inflation, to much money channelling into few goods. Of course backing it can reduce some corruption, it brings some discipline, e.g no one has power to print unless production is increased. Why else does printing excess money create inflation?

And why would any sane civilization just print money arbitrarily? That is exactly what devalues the currency, not the fact that it is not backed but because it would simply be in excess. I'm certainly not talking about printing money till we all have a million George Washingtons.


This makes no sense again, what is excess, excess of what? Excess Of PRODUCTION of value. There are reasons to everything, would a country ever devalue its currency? Of course it would, its about trading. Why is the U.S printing money like no tomorrow, it is’s a monetary expansion to stimulate the economy, in the short run GDP will explode as trillions are being pumped into the economy, in the medium long run this will cause a crash. Why would a country devalue its currency, well lets look at today’s situation, America has one of the biggest trade deficits in history, to narrow this the method the fed is adopting it to print excess money and devalue the currency, this in turn makes imports more expensive and exports cheaper, in theory this would decrease the trade deficit.


I assumed you understood how an economy works and how currencies work. You seem to believe an economy works with currency and nothing else. I do not understand where you are coming from, can you explain in your view how a currency works?

[brij]

You havent indicated who owes who 37 trillion. Is it the Japanese and British that own US savings bonds and T-bills? Is it rich old grandmothers that have multi million dollar deposits in banks that also lend subsidised student loans to starving students and small business startups? Maybe this debt...is normal and has been normal for centuries?

Ok I have given this website in the pervious post. The debt levels are not normal, they are at historic highs, the debts have never been bigger.

Here is a debt summery of who owes it –

http://www.financialsense.com/editorials/hodges/2004/0317.html


Here is the total market debt over 100years –

http://www.comstockfunds.com/html/2b.gif



I know about PPP. The thing is, places like china and india have had high PPP for ages but the fact of the matter is that the reason they are behind in per capita income, per capita GDP is because they dont have human resources as highly developed as the US does...they dont have the technological infrastructure in place in manufacturing and services. Take a look at the PPP adjusted per capita GDP of the US compared to the other large world economies of Japan, China, India, Britian, Germany. You will notice the Us has about 8,000 a year more in anual income per head. Pretty much the same for GDP per capita. The reason is that when it comes to trade, the US can compete very well in areas where the value added by manufacture and the value added by rendering service has very high margins. Such as jetliners, computer chips, machine tools, advanced weapons systems. The point of me saying that is, because the top performing companies in the US can be so competitive, the whole country can afford to take on humungous debt compared to pretty much any other nation simply because its more capeable of recovering from a state like that both long term and short term. Theres very high production and very high productivity in the US compared to pretty much any other major economy. The main ways china and india etc can beat the US is by sacrificing wages in hi tech jobs.

This is all pretty American companies are the best, but iam talking about debt, right now all first world nations have massive debts now, the website above gives the debt of corporations and the private sector. You seem to believe the debt loads we have today is sustainable, the debts are more then 3 times the U,S economy at 315%, if you were to look at the U.S as a business the U.S is 3 times bankrupt, soon it will be 4 times, then 5 times, the question is how bankrupt can it get, the great depression showed us what would happen when debt loads are this huge.


The thing is, social security was never meant to be a retirement fund. All it was meant to do was to make sure that if anyone lived after age 65 then they didnt have to work themselves to death. Now that people are living into their 80s...well...yeah it could go bankrupt. But SS going bankrupt just means that people will get 90% of what they thought they will be getting....which wasnt much to begin with so that will never cause an economic collapse. Pension funds? People are already working two or three jobs to make ends meet. That doesnt wreck the economy either. Pensions are nice if you have them but if you dont...well you just work for your money...and that wont hurt the economy or productivity per capita

Are you kidding me, not only will it cause a economic crisis, but a social crisis, imagine putting $250,000 over the course of your life and being told you will never get this money back due to bankruptcy, now times this by the millions of baby boomers ready to retiree. Did you know that there is no social sercuity money right now, every penny gain is spent, it is a pay as you go system, there are no reserves for the baby boomers, most believe the money they have given are sitting somewhere for them, when the mass find out that it has been spent big trouble will come our way. The website i have given even gives the debt to per cap, at around $129,560, while the income per cap is around what lets say $60,000, is this debt load sustainable, remember the debt loads are growing every day.


You are only giving half of the story here. If foreigners own 3 trillion....dont americans own about 2 trillian abroad also, or even 4 trillion? Theres so many international companies that are US owned in other countries that send back dividends and revenue and profit each year to their parents in the US. Its like foreign trade. If you suddenly stated that the US imports 30 billion a month in goods and thats killing the economy well...you are leaving out the fact that its exporting something like 28 billion a month too


You are talking about FDI, foreign direct investment, this does not matter in this case, this assets are not important in this case of debts. It does not matter if U.S companies send back money, as I have said the U.S trade defcict, the current account is $500 billion, this includes all imports and exports even profit and interest payments. The U.S has no surplus.

[methodman535]

Im not quite understanding how a debt crisis will cause a depression. Supposing you have 3 trillion dollars in bad debt in the USA come 2010....ok....so bankers, S&Ls, finance companies, credit cards...are gunna go on a run...trying to collect as much of their bad debts as possible but whats really happening is that everyone who was OWED $100 will end up collecting about $60 on average.

Now thats what happened with the stock market crash a lil bit ago isnt it? Its not really gunna cause a recession it might actually jumpstart the economy!

Let me explain....whenever someone works their butt off for 25 years and makes a surplus of say....4 million dollars...guess what they do most of the time? They sit on their asses. They no longer produce but just sit and CONSUME CONSUME CONSUME.

They also love to dump their cash in risky ventures. These are the people who will lose...as well as some currently hard working ones.

Now....collectively...will people in general produce MORE or LESS when they lose money in stocks? More of course. If someone wins the lottery they stop being productive most of the time.

So basically if there is a major debt crisis and even a panic...its not gunna hamper productivity that much if things go well. It will make investors more cautious but overall people will just PRODUCE as much or even more and fewer people will be involved in risky ventures or unprofitable ventures.


As far as the great depression...what particular type of "debt" is supposed to be a major cause of it? Im not up on my history or economics.

[brij]

Im not quite understanding how a debt crisis will cause a depression. Supposing you have 3 trillion dollars in bad debt in the USA come 2010....ok....so bankers, S&Ls, finance companies, credit cards...are gunna go on a run...trying to collect as much of their bad debts as possible but whats really happening is that everyone who was OWED $100 will end up collecting about $60 on average.

Now thats what happened with the stock market crash a lil bit ago isnt it? Its not really gunna cause a recession it might actually jumpstart the economy!

Let me explain....whenever someone works their butt off for 25 years and makes a surplus of say....4 million dollars...guess what they do most of the time? They sit on their asses. They no longer produce but just sit and CONSUME CONSUME CONSUME.

They also love to dump their cash in risky ventures. These are the people who will lose...as well as some currently hard working ones.

Now....collectively...will people in general produce MORE or LESS when they lose money in stocks? More of course. If someone wins the lottery they stop being productive most of the time.

So basically if there is a major debt crisis and even a panic...its not gunna hamper productivity that much if things go well. It will make investors more cautious but overall people will just PRODUCE as much or even more and fewer people will be involved in risky ventures or unprofitable ventures.


As far as the great depression...what particular type of "debt" is supposed to be a major cause of it? Im not up on my history or economics.


Now remember if the U.S considered $3 trillion to be bad debt, the public will go on a bender, no one is going to watch there savings being wiped out.

You see in the 21st century we have a massive cultural problem, we as a generation really don’t want to work anymore. There are 2 kinds of wealth, real wealth and the wealth effect.

Real wealth is were we work hard to generate income, its derived from savings and investments, we save, we invest, we save, we invest. That’s real wealth, that’s the way you expand, this is sustainable, this is how we grow.

But in today’s world we no longer have this, we have the wealth effect, we have debts to carry on the American dream, to over consume, to live beyond our means, we are no longer rational, we take out debts and buy unproductive materials, such as flashy cars, expensive clothes, ect. We now base our wealth in the stock market, in housing, this is not real wealth, it is only paper. Today we take out debt, invest, more debt, invest, even more debt, invest. The problem is that most of the debts we are using is not on capital investment, we waste it on nothing but crap, now you find places that allows you to take a car out on credit and pay 2 years down the line, I don’t need to explain how irrational this is. Right now the governments huge debts are now crowding out investments which will make things worst. (if you don’t know what crowding out is I can explain it too you)

Now debts must be serviced, if you cannot service your debt you officially bankrupt, the total debt of the U.S is $37 trillion, real interest rates are at 1%, which means I would give an average of 4% in the market. 4% of this debt is $1.5 trillion, service this debt would cost 15% of GDP, all of the $37 trillion will mature very soon, it is clear that the U.S cannot service this debt. And remember the debt is still expanding.

Now you ask about the great depression, it is exactly what is happening now, but 10 times as worst, back then at least they has the rational to stop there credit expansion. The debt chart I have given shows that debts got out of control and the stock market crashed due to this, unemployment soared and DEFLATION hit. Right now the biggest fear is deflation, deflation will wipe the economy out totally, the FED are shit scared of this.

The problem with this debt is once the bankruptcies increases incomes will contract unemployment will rise, revenues will fall, a deflation or inflation scenario will make things worst. It’s a domino effect.

[dr_sinister1001]

dr_sinister1001 I have read your post, you are looking at just currency that’s the problem, currency is based on production, iam looking it at a point of production.


What do you mean that if you have a currency you can do nothing with it? Of course you can do something with it, spend it. An accepted form of currency is accepted for a reason, so people can exchange it for goods and services. I think you're missing the point, as long as there is a currency and it is accepted in that country then production plays absolutely no role. I don't understand why you used the farm example.. I understand why a farmer cannot trade potatoes for a TV.. That is why there is an accepted currency. You can't argue your point by stating basic economics. (I’m not formally trained in economics but it’s merely a hobby)


You are making no sense at all to me anymore, I gave you the benefit of the doubt that you knew how economics work, this is not economics. You cannot spend currency if there is no PRODUCTION. An accepted currency is accepted for a reason, to trade PRODUCTION for PRODUCTION (Goods and Services). Production is economics, it is based on economics, it plays the most vital role in economics, to state that production plays absolutely no role in currencies defies economics. I used the farm example to explain how production and currency works. (I study economics as a hobbie as well)


I'm not talking about the Fed, the Fed is a corrupt institution (YOU ABSOLUTELY DO NOT READ THE POSTS, or you simply just read selectively). I'm talking about controlling the money system in a fair and just way, and this is possible there are people of good character that we can appoint to oversee the economy.


Yes but how do we control it in a fair and just way. I stated the gold standard like method could be used, as I see this method as production, or better simply printing money to meet production, you have disagreed with -

Currency does not have to be backed by production...

You have earlier posts like this, where you state currency does not need to be backed up by anything, that a nation’s good will is enough. I do not understand where you are coming from, this makes absolutely no sense. Please give an example of how any of this could possibly work or exist.


Inflation is not a result of un-backed currency, in fact the U.S. dollar is backed partially by gold even today so you cannot say that backing the currency with value will reduce corruption.

Yes I know this, that’s why I stated excess money, the excess money that is un-backed causes inflation, to much money channelling into few goods. Of course backing it can reduce some corruption, it brings some discipline, e.g no one has power to print unless production is increased. Why else does printing excess money create inflation?

And why would any sane civilization just print money arbitrarily? That is exactly what devalues the currency, not the fact that it is not backed but because it would simply be in excess. I'm certainly not talking about printing money till we all have a million George Washingtons.


This makes no sense again, what is excess, excess of what? Excess Of PRODUCTION of value. There are reasons to everything, would a country ever devalue its currency? Of course it would, its about trading. Why is the U.S printing money like no tomorrow, it is’s a monetary expansion to stimulate the economy, in the short run GDP will explode as trillions are being pumped into the economy, in the medium long run this will cause a crash. Why would a country devalue its currency, well lets look at today’s situation, America has one of the biggest trade deficits in history, to narrow this the method the fed is adopting it to print excess money and devalue the currency, this in turn makes imports more expensive and exports cheaper, in theory this would decrease the trade deficit.


I assumed you understood how an economy works and how currencies work. You seem to believe an economy works with currency and nothing else. I do not understand where you are coming from, can you explain in your view how a currency works?


1stly, don't assume things. Just because you can't understand my arguments, that it is I who has a poor understanding of Economics. It's more likely the reverse if you can't understand my plain English arguments (no statistics or numbers.. while many of your posts contain these things, you simply believe some world fact book page.)

2ndly You're obviously reading selectively, and missing the point as well. You went from advocating the gold standard to going on and on about production.. WE'RE TALKING ABOUT CURRENCY.. Production determines prices, not the value of a currency (this is arbitrary if you are only looking at one country!), are you familiar with Supply and Demand? If you can give me the story about the farmer and his magic potatoes I'm sure you know this. The only time production plays a role in currency value is if you wish to interchange your currency with another currency, then you have to compare many things one of them being production, this is decided by the markets.

You keep saying production is economics? So what? We're talking about CURRENCY!

How do we control the monetary system in a fair and just way? This is how I know you read selectively, because I gave you an answer, appoint people of good character to oversee the economy, these people do exist. And if the proper steps are taken and a yearly audit is done then there should be no problem.

Currency does not have to be backed by anything, you obviously aren't a student of history or you'd know that this type of system has been instituted in the past and has worked, and that's exactly why we no longer have that system. Recent examples include, the period during the civil war when Lincoln printed "green backs" that were not backed by anything, in fact during anytime of war this system has been instituted (WWI, WWII, Vietnam) (because the economy has to work during a war).

I've already explained how the gold standard does not work..

Do you really believe that the Fed is printing money to cause a stimulus? I mean honestly...

The Fed is trying to cause a recession and that is why they are inflating the money system. No sane country would print their currency in excess.

Finally, make your own damn thread if you wish to continue to go on and on about this.

[brij]

You're obviously reading selectively, and missing the point as well. You went from advocating the gold standard to going on and on about production.. WE'RE TALKING ABOUT CURRENCY.. Production determines prices, not the value of a currency (this is arbitrary if you are only looking at one country!), are you familiar with Supply and Demand? If you can give me the story about the farmer and his magic potatoes I'm sure you know this. The only time production plays a role in currency value is if you wish to interchange your currency with another currency, then you have to compare many things one of them being production, this is decided by the markets.


OK one more time, production is necessary for a currency. We can both have $100, but if there are no production (Goods and services) then it has no value, it is worthless. Supply and demand, if production is increased the value of that production drops, if production decreases the value of that production rises, clearly in the supply and demand model a currency is affect by production as more or less money would be required. Yes the market decides what production we want, and the price is the value of that production which requires currency for it to be traded.


How do we control the monetary system in a fair and just way? This is how I know you read selectively, because I gave you an answer, appoint people of good character to oversee the economy, these people do exist. And if the proper steps are taken and a yearly audit is done then there should be no problem.

I disagree, I agree that this is an excellent idea if it could work, people are corruptible as I said before. Something always goes wrong somewhere.


Currency does not have to be backed by anything, you obviously aren't a student of history or you'd know that this type of system has been instituted in the past and has worked, and that's exactly why we no longer have that system. Recent examples include, the period during the civil war when Lincoln printed "green backs" that were not backed by anything, in fact during anytime of war this system has been instituted (WWI, WWII, Vietnam) (because the economy has to work during a war).


Ok again you don’t seem to understand currency requires production. I believe you are mistaken with this fact of history. The green backs by Lincoln created the first national banking system which made the new paper money.

‘‘13. The Legal Tender Act of 1862 effectively outlawed privately minted gold and silver coins, and authorized the Federal Government to issue paper currency. It was printed with green ink on the back and thus became known as greenbacks. They were un-backed by gold and silver.
Senate Finance Committee chairman John Sherman said, The policy of this country ought to be to make everything national as far as possible; to nationalize our country so that we shall love our country. If we are dependent on the United States for currency and a medium of exchange, we shall have a broader and more generous nationality. Stevens. ’’


Now this system was I think the first FIAT type system of issuing money, the system as we live in today is not backed up by gold or anything but the government’s promises and handshakes that the value of this currency will be accepted just like this system, it is the only kind of money acceptable in payment of taxes and for settling private debts in court.


Now we know what happened during this time when printing money –
‘‘9. During the Civil War (1861-1865) the cost of goods and services increased by 80% for the Northern states.
10. During the Civil War (1861-1865) the cost of goods and services increased by 60-70 times for the Southern states. ’’

This was one of the worst inflation crises for America, now I have a question for you, you say currency does not need to be backed up by production, what caused this inflation?


Do you really believe that the Fed is printing money to cause a stimulus? I mean honestly...

Of course, many nations today are printing money to stimulate there economy, it is a tool of economics to expand the economy, just like fiscal expansion.


The Fed is trying to cause a recession and that is why they are inflating the money system. No sane country would print their currency in excess.

Yes there are reasons to why a country prints currency in excess, I have given one example such as the trade deficit, another is to pay of debt though hyperinflation, this way a country does not need to declare bankruptcy even if it increases mass poverty and inflates away savings.

I still don’t understand you views, please provide me with a economic model where a currency is used with no production and still has value, I believe this model does not exist, yet you are in a sense claming this, you even claim that history has shown that currency does not need to be backed up by production, yet I have heard of no such thing.




If you are interested heres a article of a economic modelto make my point again as I did in my other post where I used the farm example.


A Means of Production-

The generic landshare provides its owners with the material to build their family home, their food, water and energy needs. It also provides them with space for recreation and enterprise. They need no mortgage. No weekly food bill. No electricity or gas bills. No water rates. In fact, they do not actually need to buy to survive. Therefore the dispassionate forces of a free market could never hold them to ransom. Nevertheless, their standard of living could benefit significantly from certain specialist products and services offered by others through a truly free market system.

As an economic unit the ideal generic landshare has two functions.

3. To utilise the owner's general human abilities to obtain the basic needs of life for his family.

4. To utilise his specialist talents to produce specialist goods and services not only for his own use but also for sale to others in exchange for their different specialist goods and services.

So as far as the outside world is concerned, each landshare-based economic unit is a specialist producer. It provides products and services to which the landshare-owner's natural talents lend themselves. On the other hand, as far as each landshare-based economic unit is concerned, the outside world is a generalist producer. It makes available to each landshare-owner the full range of all the specialist products and services from all the other landshare units in the world. Each thus benefits from the specialist talents of all.



Means of Exchange-

A landshare-owner may therefore increase his quality of life by exchanging a large amount of his single specialist product for a small amount each of a wide range of different products and services provided by others. This requires a system of trading. It could be a barter system. It could be a money-based system. It could be a charity-based system of simply giving what one produces to whoever may have a need or desire for it. It could be a composite of all three. But however it is done, its function is simply to let all benefit from the special skills and abilities of each.

[brij]

Well i think were just going to go in circles on this, so lets just agree to disagree.

[dr_sinister1001]

Indeed.

[methodman535]

No I think if we butt heads a bit longer we might be able to understand where each person is coming from and what they are trying to say.

[brij]

No I think if we butt heads a bit longer we might be able to understand where each person is coming from and what they are trying to say.

Nah this topic is getting boring now, iam too tired explaining my posts over and over again, were iam sure he feels the same about his. We should start another topic.

[dr_sinister1001]

This post is wide open for discussion... I'm surprised none of you have any opinions, views and thoughts on the level of corruption in the global politics of today.

[brij]

Theres way to much corruption everywhere, but the only corruption that really matters is guess are the ones that will make massive impacts on peoples lives. Ive read everywhere about how big companies are taxed, how they are allowed to commit massive fraud with noting being done to them. I was reading an article a few months back about how we can never really know how big the debts are as most of the accounting system is flawed, window dressed and hidden.

I read one article about the Enron and WorldCom can be just the tip of the ice burg. I have recently been reading many articles about Fannie Mae and Freddie Mac. Now these companies make Enron and WorldCom look like a corner shop, they are the biggest companies in the world, they are so big that the FED has recently tightened security around them, Green span has even admitted that they alone pose massive financial threats. These 2 companies have given over $2 trillion in mortgage debt, 20% of GDP, most of the public get there mortgage from these 2 companies. I think the CEO of these companies believes they are so big that the FED would bail them out if there was ever a crisis, so continue there expansion. Recently they have been caught losing nearly $20 billion in the derivatives market (yahoo article). The Fed are very likely hiding the real state of these companies from the public.