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The quickest way to rob a man..
Former Member
Posts: 1,876,323 The Mix Honorary Guru
Is to print more money.
Say there are 10,000 pounds in total in the economy. I add a thousand pounds. The value of the first 10,000 has just dropped.
Every "dial for a loan" customer, everyone who has taken equity from their home by getting the local bank to put a few imaginary pounds on the screen has stolen from everyone else in the economy.
Now imagine that there is 11,000 pounds in the economy, the bank wants 5% interest on it's loan of 1000. Where does this cash come from if it has never been printed or put on a screen?
By the way, does anyone know what is "Promised to pay" in the text on a Fiver, Tenner or twenty pound note?
Say there are 10,000 pounds in total in the economy. I add a thousand pounds. The value of the first 10,000 has just dropped.
Every "dial for a loan" customer, everyone who has taken equity from their home by getting the local bank to put a few imaginary pounds on the screen has stolen from everyone else in the economy.
Now imagine that there is 11,000 pounds in the economy, the bank wants 5% interest on it's loan of 1000. Where does this cash come from if it has never been printed or put on a screen?
By the way, does anyone know what is "Promised to pay" in the text on a Fiver, Tenner or twenty pound note?
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Comments
Interesting attack though. Any comments on this other than the vitriol?
You had time to waste on it too, btw.
Providing you are convincing enough he will go along with you, meek as a lamb.
And he can't resist even if he knows it's happening.
BTW I might have a problem raising inflation. In fact I think you have described the hardest way for me to rob a man.
The insurer doesn't have the cash either, because he looks at all the probabilities and, even though he plays it safe, always underwrites more than he has cash to cover, hoping that his acumen will predict circumstances in the future. It's a massive legal confidence trick.
The "Bank of England" is a company.
It costs about £2500 to print £1M and about 3pence to write down on a piece of paper that they have it, knowing that the name alone will carry it through.
I was looking for thinking men....I found sheep. Man of Kent, is that a Billy goat I see above your bridge? Read the post again, where does it say "you"? Nowhere. Your posts aren't constructive I suspect, because you don't read all the words.
Surely we'd be more sheep like if we followed your argument just because you said it, rather than unsheepishly point out its inconsistencies and lack of logic...
What on earth are you talking about?
In the real economy price rises are inevitably matched by wage rises (obviously) in the Short run there may be money illusion (people think there is real wage increase when it is only nominal) but in the LR there is likely to be little real effect, depends on lots of things.
People that lsoe form inflation are savers, people who gain are debtors, in this sense you were aiming in the right direction.........
Where? Not in this thread, that's for sure.
Please, if I have got something wrong and a logical argument has been put forward that refutes it (get a job etc not counting) could you tell me what it was.
You have underlying assumptions that I DO NOT SHARE AND AM NOT AWARE OF. Perhaps you should point some of them out for me so I can meet your position somehow.
Maybe we could start with that?
I could be horribly wrong but I'm sure I was told in primary school that paper money is the equivalent to gold, so if you have a five pound note then you could exchange it for five pounds of gold at the bank, etc...
Except they dont have the gold standard anymore, your £5 is probably backed up by some Euros or a few Yen.
Originally the pound was backed with gold - I promise to pay the bearer on demand the sum of twenty pounds of gold. Gold was used because it was limited in supply so held it's value well and was needed for men to marry
You went to the bank and had to take the valuable substance out by proving your claim on it. Over time the bank started to issue "checks" - marks signed by people at the bank stating that the gold was in the bank. You gave that check to another person, they could present it at the bank and get the gold.
The gold was what was valuable, not the paper. Now the banks realised (over time)that they could hold onto the gold and merely issue checks, because few people ever asked for the gold, they were content with the checks.
At this point they started to grant loans to others, using the gold in the vaults to back it, knowing full well that it was astronomically unlikely that they would have to give it back all at once. The actual ratio is about 10% and is called the credit asset ratio.
On the loans they asked for interest, which was going to be difficult to pay because while the total amount of gold in the economy was, let's say 100 checks worth, they actually wanted paying back (out of the economy as a whole) 105 checks worth if they wanted 5% interest.
This is patently impossible. Luckily for those who still owed the bank, they allowed further loans of "gold" attached to property (mortgages etc) again in check form. More time passed, and they pursuaded their friends in government to change the law so that the pound wasn't backed by any real world substance at all.
The bank does not have enough real world assets to cover all it's debts if they were presented all at once. Any time you ask for a loan, the bank merely adds the numbers to it's total column, and out of that total, keeps 10% of that new total available just in case.
If you go to the bank and ask for goods instead of paper, you know as well as I do that they wil laugh at you. Yet the law clearly states that legal tender is that which should not be normally refused in pursuit of a debt.
Any questions? I may have gone a little fast.
I would be interested to know what happened if you walked into a bank and asked to exchange say, a ten pound note for actual goods (be it gold or whatever it is they are supposed to give you?).
They won't write this down, funnily enough.
which would entitle themto a good beating
And this is one of the resons we are richer today than we have ever been.
You talk as if there is something wrong with this system or in fact that a gold based system was superior. This is bollocks........
A group of people slowly take control of all the wealth behind the scenes, unelected, unaccountable and get this, with OTHER PEOPLE'S money and we are "richer than we have ever been."
Unless you work for a bank.....this is bollocks.
Or ina country with no financial system, maybe Somalia?
I do not think so.
This is bollocks.
And if only we had adopted the idea 500 years ago, why we would be flying around in hover jets and living on the moon!!!
Get a grip man.
MoK, you are the only one here who has claimed to see the things that aren't there, although you did it in my other thread.
It looks like those printing presses will need a good oiling soon.Not to worry,we are all getting "richer" by the second.God bless America
seeker
You're bigging up Chomsky yet seem to be posting in favour of neo-liberal economics? Are you on crack?
Also.....you have to start babies on mush before they move to solids.
Why does everyone accuse me of using drugs? I find it very strange, considering I am the only one not hallucinating.
What the bearded ferk are Neo-liberal economics, and what do they have to do with a post about how banks factually operate?