|
| Thread: I want the earth + 5% |  This thread is pages long: 1 2 3 4 · «PREV / NEXT» |
|
TheDeath
Responsible
Undefeatable Hero
with serious business
|
posted December 14, 2008 07:36 PM |
|
|
Quote:
Firstly, who said anything about gold? 
Did you read the link in the first post? 
____________
The above post is subject to SIRIOUSness.
No jokes were harmed during the making of this signature.
|
|
mvassilev
Responsible
Undefeatable Hero
|
|
posted December 14, 2008 07:43 PM |
|
|
No, I hadn't. I only read the part in Moonlith's post. But now I looked at it, and here's the flaw in that example:Quote:
Fabian let them argue for a while and finally he said, "Since none of you can agree, I suggest you obtain the number you require from me. There will be no limit, except for your ability to repay. The more you obtain, the more you must repay in one year's time. "And what will you receive?" the people asked.
"Since I am providing a service, that is, the money supply, I am entitled to payment for my work. Let us say that for every 100 pieces you obtain, you repay me 105 for every year that you owe the debt. The 5 will be my charge, and I shall call this charge interest."
At this point, the people say, "lol no. Money isn't a service but a medium of exchange." For it is so. Money arose out of barter, and the market in general settled on a currency, not through the work and suggestions of any individual who got to control the money supply. Why would they pay to use his money when they can come up with their own?
____________
Eccentric Opinion
|
|
del_diablo
Legendary Hero
Manifest
|
|
posted December 14, 2008 07:43 PM |
|
|
Quote:
I don't think you understood what I meant. The farmer borrows $100 at 5%. Then he produces $110 worth of potatoes. Then he gives $105 worth of potatoes to the banker, and thus pays off his debt.
But there is only 100 per citizen whom each will have to pay 105.
And Fabian only accepted coin back in.
As said: The calculation would only reach 1/1 if Fabian used entire 5% of the eqonomi himself.
Note: this is a tale of fiction, of a system. Read the story and you will understand. Here Fabian invents money, and before he invented money people traded instead.
____________
|
|
TheDeath
Responsible
Undefeatable Hero
with serious business
|
|
posted December 14, 2008 08:10 PM |
|
|
Quote:
At this point, the people say, "lol no. Money isn't a service but a medium of exchange." For it is so. Money arose out of barter, and the market in general settled on a currency, not through the work and suggestions of any individual who got to control the money supply. Why would they pay to use his money when they can come up with their own?
You can't come up with your own money because it won't be recognized/accepted at all! That's the POINT.
He may give them money, but the TRUE GOLD that the money represents is the same and is STILL in Fabian's vault. It may be a medium of exchange but it doesn't appear out of thin air.
____________
The above post is subject to SIRIOUSness.
No jokes were harmed during the making of this signature.
|
|
mvassilev
Responsible
Undefeatable Hero
|
|
posted December 14, 2008 08:14 PM |
|
|
The thing is, market processes come up with money - not any individual. That's the whole point! Why would people pay to use Fabian's money? Wouldn't it be easier for them to use something that they already have?
____________
Eccentric Opinion
|
|
del_diablo
Legendary Hero
Manifest
|
|
posted December 14, 2008 08:15 PM |
|
|
Quote:
You can't come up with your own money because it won't be recognized/accepted at all! That's the POINT.
But the point is that it happened in this story. If you make enogh people go on with the start attempt to solve the problem(someting needs to happen, otherwise its kind of non-plausable that it will make it).
____________
|
|
TheDeath
Responsible
Undefeatable Hero
with serious business
|
|
posted December 14, 2008 09:12 PM |
|
|
Quote:
Why would people pay to use Fabian's money? Wouldn't it be easier for them to use something that they already have?
That's what they used prior. It was called trading I believe
But they can't just use some arbitrary papers -- those won't be recognized.
Of course nothing is stopping me from trading with you goods-to-goods rather than using money.
Wasn't that the whole point of this?
____________
The above post is subject to SIRIOUSness.
No jokes were harmed during the making of this signature.
|
|
friendofgunnar
Honorable
Legendary Hero
able to speed up time
|
|
posted December 14, 2008 09:17 PM |
|
|
The idea that loaning out money for interest equals slavery is well founded in history, but it doesn't represent the modern economy. This is for two reasons. The first, as I've mentioned, is the bankruptcy laws. I'm going to go back to Fabian here to illustrate this.
The next year Zed comes to Fabian. Zed wants to borrow 90 dollars because he's got a scheme to train pigeons to harvest his wheat. Fabian is doubtful. "Won't the birds just eat the wheat? I don't see how this will be profitable" He says. Zed says "Nope, I've done the calculations. Come to my farm and see." So Fabian goes to Zed's farm and looks at his trained pigeon, looks at Zed's spreadsheet, and looks at the farm. All of a sudden Fabian realizes something, all the extra work that the pigeons will be doing will require more calories, which will require more wheat. Fabian looks at Zed's calculations with this new information and realizes that Zed is not going to make any money. Fabian realizes how smart it was to come to Zed's farm and see things for himself because he would have completely lost his money if he hadn't. The research that Fabian did, the time that he spent, is work. And he's got to do this every time somebody comes up and asks him for money, because thanks to the bankruptcy laws, if he doesn't do this work, he could end up losing it all.
For most of mankinds history moneylending did resemble slavery. Usurers kept the rate so high that borrowers were locked into a cycle of continually paying off their debt. If somebody didn't pay back their loans they become indentured servants/slaves/serfs to the moneylender. But then came the bankruptcy laws, which introduced a large element of risk in loaning money. From that point on, loaners had to do research on the borrowers to find out if the borrowers could really pay back the loan. The image of fat capitalists sitting back and reaping the rewards of somebody else's labor is a depiction of an old-timey capitalism that doesn't really exist in the modern economy, except in limited circumstances like the credit card industry.
The second reason that moneylending for profit isn't slavery has to do with the rates. In olden days, money was in such short supply that the money-owners could charge extortionate rates: 30 percent a year and higher. They had a word for it: "Usury". Judaism and Islam both banned it, and Jesus Christ condemned it. The modern capitalist system has been so successful at creating material wealth, and so much extra capital his been made available, that credit rates have dropped down to the single digits for almost any case where you borrow money.(college loans 2%, business loans 5% - 9%, credit card purchases 9%, home mortgages 4-6% etc...) Modern usurers know this, and they know that the only way that they can do their evil is if they dupe the borrower into accepting a low initial rate that transforms into a usurous rate later on. The credit card rate switching scheme and the "interest only" home mortgage are prime examples of this. There is a constant battle going on between the usurers and the government regulators who try to protect the portion of the public that is easily dupable.
Personal anecdote:
Several years ago I borrowed about 10,000 dollars for a project that I hope would launch me into a higher income bracket. It was a failure, and only recently was I able to pay it back from my day job. Oh well. If I had had to wait all that time to save up money though, only recently would I have gotten the chance to move into a higher income bracket.
The point is that if you only look at certain circumstances (stoopid/weak people getting suckered by usurers at high rates) capitalism will look like slavery. For a great majority of people though, such as myself, capitalism can be (could have been  ) a great liberating force. The difference between those that are liberated and those that are enslaved is that stoopid/weak people borrow money to indulge themselves or because they are living higher than their salary. Smart people borrow money to make more money.
You'll notice that in this post I was addressing the basic issue of loaning out money at interest rates. Loaning out money you don't own is the other side of the coin. Let's talk about The Dollar.
It is not a tool. It is a call to action. When you give a dollar to the store clerk, you're calling him to stock the shelves with products, to keep track of what products the customers want, and to sit in the shop all day at the cash register. When he gives that dollar to the brewery, he is calling the brewers to mix the ingredients, keep the temperature at the right level, and to make sure it's not contaminated. When the brewer gives the dollar to the farmer, he is calling the farmer to plant the seeds, to water them, and to keep the pests from eating the crops. And on and on it goes. A dollar is motion. It is action.
Except when its not changing hands.
When business is booming, everybody is spending their money nearly as fast as they make it, and sometimes faster, and all those dollars circulate through the economy rapidly. Stores get built, trucks get made, barley gets planted, beer gets drunk. Life is fulfilling, exciting, and joyous. Conversely, you can view the recession as the opposite, when everybody sits on their money and the only money that gets spent is what people take off their own personal bankroll. All of the rest of the money that is sitting in the mattress could be calling people to build houses, drive trucks, or make beer. But it's not, it is in fact doing nothing. Hops are not harvested, trucks are not driven, taverns aren't staffed , beer is not drunk. In both cases its the same amount of money, the difference is the speed with which the dollars change hands.
Personal anecdote #2:
I'm going to concoct a hypothetical scenario here. I now have 10,000 in cash in my house and I'm trying to decide what to do with it. My sister wants to borrow the money, interest free, to add a new wing on her coffee shop in California. "What?!" I say, "There's a recession going on and California already has a 3:1 person to coffee shop ratio." I can see already that I may never get the money back. "But" she says,"The Starbucks across the street just closed its doors, I'm primed to make a killing now." So now it's a serious idea. However, if I loan her the money, not only do I not get to use that 10,000 for a year, I'm still a bit leery of the risk that goes into expanding a coffee shop in a recession. But I do eventually, because its my sister. If it wasn't my sister there's no way I'd hand over my cash, especially for a coffee shop. This is the crux of the matter, there is no incentive to loan out money to strangers if there isn't any kind of reward.
A comment was made that inflation is kind of a hidden tax on anybody that makes money. This is true. However if inflation gets out of control, the people who are in control begin to lose political power. In a democracy they just get flat voted out of power (ask Jimmy Carter about that). Which is why people in power tend to try to keep inflation low, from 2 to 4 percent. Also, when too much money is dumped on the economy, the currency depreciates against other currencies and purchasing power goes down. These two forces create a fine balancing force against the process whereby banks borrow money from the federal reserve ( "creating money out of thin air").
The entire system of loaning out money that doesn't exist, creeping inflation, and charging modest rates of interest, it all works to make money do what it's supposed to, which is to make it travel from person to person as quickly as possible and make people do things.
|
|
mvassilev
Responsible
Undefeatable Hero
|
|
posted December 14, 2008 09:21 PM |
|
|
TheDeath:
Quote:
But they can't just use some arbitrary papers -- those won't be recognized.
Maybe not arbitrary papers, but gold, certainly.
FoG:
Actually, nobody was ever forced to take a loan, so if people decided to take out a loan with a high interest rate, and then couldn't pay it back, they should be forced to work to pay it back over a longer period of time. Bankruptcy should be abolished.
____________
Eccentric Opinion
|
|
friendofgunnar
Honorable
Legendary Hero
able to speed up time
|
|
posted December 14, 2008 09:27 PM |
|
|
Quote:
Actually, nobody was ever forced to take a loan, so if people decided to take out a loan with a high interest rate, and then couldn't pay it back, they should be forced to work to pay it back over a longer period of time. Bankruptcy should be abolished.
Hmmm, open a new thread and mebbe I'll post in it
|
|
TheDeath
Responsible
Undefeatable Hero
with serious business
|
|
posted December 14, 2008 09:27 PM |
|
Edited by TheDeath at 21:29, 14 Dec 2008.
|
I think you're overlooking the fact that there is a LIMITED amount of money in circulation. Printing more money does NOT help it -- there is a reason money is called soft-currency. It needs to be backed up by something.
What's the value of a computer? It depends, it varies. You can't use products like this to back it up. That's why gold is used.
Quote:
For a great majority of people though, such as myself, capitalism can be (could have been ) a great liberating force.
While you are liberating yourself others lose money and are in debt, because there is limited amount of money in circulation. So yeah, capitalism "appears" good when you are succcesful but it's zero-sum game UNLESS more money is printed.
And money can't just be printed by itself without any backup whatsoever. That would lead to inflation. And it can't be backed up by products such as computers (see above).
Here is a quote from a response in Yahoo answers:Quote:
Money is a substitute for gold for that reason it is called soft currency. It is supposed to be backed by gold which is called hard currency. Instead of having to carry around a pocket full of gold to purchase things with you carry the paper money. While gold which it represents is kept in GOVERNMENT VAULTS. The main one being Fort Knox..
The reason the government does not print a bunch of money like you asked is because they have to have the gold to back the money up, It is like this:
If you have 1 oz. of gold and you have the exchange rate set up at $35.00 for 1oz. of gold. That means each time you spend $35.00 what you are really doing is spending 1 oz. of gold.
Now if the government decides to print up a whole bunch of money but still only has just that 1 oz of gold, then all that money is going to worth just 1 oz. of gold.
An example of that could be something like this. Let's say you just bought a new blow dryer and it cost you $35.00. Which means you paid 1 oz. of gold for your new blow dryer. So you can say your blow dryer is worth 1 oz. of gold.
Then the government decided it needed more paper money in circulation so it printed up $35.00 more dollars. But it still had only that 1 oz. of gold to back it with.
Then just when your 90 day warranty was up your new blow dryer burned up because lighting hit your house. You have to go buy a new blow dryer.
When you go to the store you almost have a fit because now the same blow dryer is going to cost you $70.00. You grit your teeth and pay for it wondering why the price doubled.
The price did not double. Your blow dryer is still costing you 1 oz, of gold. But because the government printed up more paper money than it had gold to cover it, the paper money is worth less. in hard currency or gold. Now it is taking $70.00 in paper money to represent that 1 oz of gold instead of just the $35.00 in paper money when you bought the first blow dryer since they printed up twice as many dollar bills to be coverd by that 1 oz. of gold, you money paper money was worth only half as much.
The is a term for that It is called inflation. Which means the more money a government prints up without having the hard money namely gold to back it up the less the paper money is worth and the more things are going to cost in paper money.
the money paper money the government prints up the less the paper money will be worth in hard currency namely gold. And if the government just keeps on printing more and more paper money without the gold to back it up the whole economy of the country will collapse. Which is what happened in Germany between World War I and World War II. The German money actually got so worthless the Germans were having to take a wheel borrow full of money just to buy a loff of bread. which in turn led to the collapse of the government and the rise of Hitler.
@mvassilev:Quote:
Maybe not arbitrary papers, but gold, certainly.
Gold? Isn't that the whole point of money to not have to carry gold around?
I mean, that's the whole point!
____________
The above post is subject to SIRIOUSness.
No jokes were harmed during the making of this signature.
|
|
Moonlith
Bad-mannered
Supreme Hero
If all else fails, use Fiyah!
|
|
posted December 16, 2008 08:19 PM |
|
Edited by Moonlith at 20:28, 16 Dec 2008.
|
Quote:
Overlooking this problem, though, I would assume that the farmer would sell his increased yield to the banker, and then use that money to pay the banker back.
You still haven't responded to my accusation that this means the farmer ends up doing all the work. And in order to pay off the extra 5$, he needs to loan more money from Fabian in order to pay his debt; which in turn, creates more debt due to the interest (In this example, obviously, taking that Fabian is the Banker(s) and the farmer is the society as a whole).
Again my question: Who makes the bankers the original "owners" of the money?
Why the HELL does a society need to pay INTEREST over its OWN money ? Please explain me that.
Quote:
Actually, nobody was ever forced to take a loan
I would love to see you buy your own home.
Quote:
The German money actually got so worthless the Germans were having to take a wheel borrow full of money just to buy a loff of bread. which in turn led to the collapse of the government and the rise of Hitler.
 I find it kind of funny in the USA it is kind of exactly reversed.
____________
|
|
mvassilev
Responsible
Undefeatable Hero
|
|
posted December 16, 2008 10:46 PM |
|
|
TheDeath:
Quote:
Gold? Isn't that the whole point of money to not have to carry gold around?
In theory, under a gold standard, money represents a fixed amount of gold, so there can't be inflation and the money is basically equivalent to gold. In practice, though, it doesn't work that way.
Moonlith:
The flaw is with your example, because money is not the product of a Fabian but of a group of farmers. Since there is a barrier to entry to actually using his currency, it is extremely unlikely that it would be adopted. The thing is, that's not how it works. Slowly, as a result of market processes, society developed currency. In some agricultural societies, the cow was a form of currency. Eventually, though, most settled on some precious metal. But it was not because one single individual wanted it to be that way. Bankers are not the original owners of money - individuals are. Bankers just keep money and lend it out.
Let me tell you a more accurate example.
The people found that barter was too cumbersome to maintain their society, which was becoming increasingly more complicated, so some of them started carrying gold around, since it was relatively easily transportable and subdividable, and was thus easier to exchange for some other product. At any rate, it was easier than carrying around a table or a cow. The shopkeepers noticed this, and decided to make it easier for their customers (and thus attract more business) if they were to accept gold. Since this made them more successful, others emulated their example until we had a gold standard. (Of course, then it started running into problems, but that's a different topic.)
The difference between this example and the one you posted is that the people did not borrow gold from the people with it, but exchanged their own stuff for it - it wasn't a loan, but a trade.
Quote:
I would love to see you buy your own home.
Nobody is forcing you to buy a house. You can rent one, or rent an apartment - which may be significantly cheaper than buying.
____________
Eccentric Opinion
|
|
TheDeath
Responsible
Undefeatable Hero
with serious business
|
|
posted December 16, 2008 10:58 PM |
|
|
Quote:
In theory, under a gold standard, money represents a fixed amount of gold, so there can't be inflation and the money is basically equivalent to gold. In practice, though, it doesn't work that way.
Money is printed. Yes it represents a fixed amount, but if you have 100$ in circulation, but people need more because of loans (say 105$), then you'll have to PRINT an extra 5$ for the same amount of gold. That's inflation for you.
The thing here is that while a farmer may be more productive with the 100$, he isn't productive in gold per se -- but money represents gold. Say there is a computer programmer who loans 100$. He needs to return 105$, extra 5$ in circulation right? That means extra gold, if you don't want inflation.
But a computer programmer, of course, doesn't mine gold. That's the catch
and a software has variable price -- you can't use it as backup.
____________
The above post is subject to SIRIOUSness.
No jokes were harmed during the making of this signature.
|
|
mvassilev
Responsible
Undefeatable Hero
|
|
posted December 16, 2008 11:07 PM |
|
|
Actually, what ends up happening is that since he is more productive, he can sell more of his crops, so he has more money, and thus is able to pay the loan back.
____________
Eccentric Opinion
|
|
TheDeath
Responsible
Undefeatable Hero
with serious business
|
|
posted December 17, 2008 01:56 PM |
|
|
Such money doesn't appear out of the blue, it comes from the other citizens. Were they to take loans as well, they would be in major debt now. That's exactly what it is about: a zero-sum game, so if you're paying the interest, someone else suffers (not literally) because of it.
Of course, the government can print more money (and Fabian gets more of it) but there are two problems. First it is the inflation problem, because the gold amount stays the same. Second, is the problem that Fabian, as you can see, does absolutely nothing -- he just pays the gov to print money, and his gold IS STILL IN HIS VAULT at all times -- he doesn't lose anything, but he is entitled to getting more in return? (interest)
why? what entitles him to the gold/money?
____________
The above post is subject to SIRIOUSness.
No jokes were harmed during the making of this signature.
|
|
JollyJoker
Honorable
Undefeatable Hero
|
|
posted December 17, 2008 02:23 PM |
|
|
I can't understand your problem here.
Obviously the "worth" of everything in the world that can be bought and sold is getting higher each second. This is not true for gold. The only back-up for money is trust in the working economy.
That said, money has to be kept in relation to the worth floating around, so new money is printed permanently due to the fact that the worth of things gets higher each moment, for example due to people working.
|
|
TheDeath
Responsible
Undefeatable Hero
with serious business
|
|
posted December 17, 2008 02:25 PM |
|
|
Money without backup = useless, no value whatsoever.
100$ representing 1 oz of gold is the same as 1000$, if the amount of gold didn't change. It's called inflation I believe.
____________
The above post is subject to SIRIOUSness.
No jokes were harmed during the making of this signature.
|
|
JollyJoker
Honorable
Undefeatable Hero
|
|
posted December 17, 2008 02:49 PM |
|
|
That's just not true, Death.
Gold has no value at all. It's just a quite heavy metal. But what can you do to survive on it? You'll have to find people who trust in its worth, the same way that you trust in paper money.
Inflation isn't the process of printing more money. Inflation is the process of printing more money than the gross national or gross world product justifies which is dependent on the amount of debt people and nations are in to finance their needs. A debt means, that things are paid basically by selling parts of the future gnp which is a big problem at the amount it is done nowadays.
Anyway, the backing is basically the trust in the ability of a nation's or community's economy or the GNP - what people and production facilities can do, because that is the only thing that has any worth at all. In case of a desaster - which would be what could ruin an economy - you won't get far with gold (or money).
|
|
executor
Famous Hero
Otherworldly Ambassador
|
|
posted December 17, 2008 07:37 PM |
|
Edited by executor at 19:39, 17 Dec 2008.
|
Quote:
Gold has no value at all.
That statement is very far from being true. Gold can be used to produce jewellery and various decorations, and as such it always had real value. High one, since it was rare. Now it is has even more uses, it is a raw material in production of electronic devices for spaceships and satellites.
____________
Understanding is a three-edged sword.
|
| |
|
|
