Staggering World Debt Points toward Crisis

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Staggering World Debt Points toward Crisis

Post by goodasgold » Sun Mar 06, 2016 2:32 pm

As all sailors know, it is a bad sign when you suddenly notice rats scurrying around the deck while wearing life vests.

Huge and ever-growing national debts, unfunded liabilities rising to the height of the Tower of Babel, ZIRP, NIRP, the dubious effectiveness of additional QE binging, a generalized refusal to consider reforms even as the global house of cards trembles, etc., all point to bad news. Hang onto your gold, brothers and sisters. It will be an especially bad sign when the portraits of PPers begin appearing on the "wanted" posters in your local post office, accused of being "Plutocratic, Gold-Hoarding Enemies of the People:"

http://www.telegraph.co.uk/business/201 ... dit-binge/

I hate to sound this theme too often, but I can't help worrying that the world's collective Krugmanian frenzy and disdain for basic arithmetic will soon catch up with us, with disastrous results.
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Re: Staggering World Debt Points toward Crisis

Post by jason » Wed Mar 09, 2016 1:16 pm

goodasgold wrote: As all sailors know, it is a bad sign when you suddenly notice rats scurrying around the deck while wearing life vests.

Huge and ever-growing national debts, unfunded liabilities rising to the height of the Tower of Babel, ZIRP, NIRP, the dubious effectiveness of additional QE binging, a generalized refusal to consider reforms even as the global house of cards trembles, etc., all point to bad news. Hang onto your gold, brothers and sisters. It will be an especially bad sign when the portraits of PPers begin appearing on the "wanted" posters in your local post office, accused of being "Plutocratic, Gold-Hoarding Enemies of the People:"

http://www.telegraph.co.uk/business/201 ... dit-binge/

I hate to sound this theme too often, but I can't help worrying that the world's collective Krugmanian frenzy and disdain for basic arithmetic will soon catch up with us, with disastrous results.
All true, but it's impossible to time it.  People have been saying this since the early 70s when the US went off the gold standard.  Ron Paul has been talking about the impending collapse for decades.  It does look like things are stepping up and possibly coming to a head, but there is no way to know if the big crash is truly right around the corner, or not.  This is why the PP is so amazing and so valuable - you are covered either way.
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Re: Staggering World Debt Points toward Crisis

Post by Jack Jones » Thu Mar 10, 2016 12:00 pm

jason wrote: All true, but it's impossible to time it.  People have been saying this since the early 70s when the US went off the gold standard.  Ron Paul has been talking about the impending collapse for decades.  It does look like things are stepping up and possibly coming to a head, but there is no way to know if the big crash is truly right around the corner, or not.  This is why the PP is so amazing and so valuable - you are covered either way.
Harry devoted one of his radio shows to this topic and had the same conclusion. I think it was this one, but I'm not certain:

https://web.archive.org/web/20160324133 ... -12-12.mp3
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Re: Staggering World Debt Points toward Crisis

Post by barrett » Thu Mar 10, 2016 7:28 pm

Jack Jones wrote:
jason wrote: All true, but it's impossible to time it.  People have been saying this since the early 70s when the US went off the gold standard.  Ron Paul has been talking about the impending collapse for decades.  It does look like things are stepping up and possibly coming to a head, but there is no way to know if the big crash is truly right around the corner, or not.  This is why the PP is so amazing and so valuable - you are covered either way.
Harry devoted one of his radio shows to this topic and had the same conclusion. I think it was this one, but I'm not certain:

https://web.archive.org/web/20160324133 ... -12-12.mp3
Thanks for sharing that link. That's a great show. To sum up, US debt is a major problem but it may not manifest itself as such along any kind of predictable timeline. HB talks about how people were sounding the debt alarm as far back as the 1960s. So, while goodasgold's advice to hang onto your gold is sound, Harry Browne would probably add, "And while your at it, hang onto your stocks, bonds and cash as well."
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Re: Staggering World Debt Points toward Crisis

Post by rickb » Thu Mar 10, 2016 10:07 pm

The modern monetary system is truly bizarre.  Modern money is not backed by a tangible resource like gold.  It's backed by debt.  What the levels of world wide debt increasing means is that people (overall) have more money.  It's like the gold supply increasing over time.  This is not necessarily as bad as it might seem.  Over time, you probably want the money supply (and, therefore, debt levels) to increase.  However, you probably don't want debt levels to increase at a faster rate than productive capacity. 

Staggering world debt means there's a staggering amount of wealth (money) in the world.

Does staggering wealth sound like a problem?

This is, of course, ultimately a Ponzi scheme.  The debt (which backs money now) is actually a claim on future earnings.  By increasing the debt faster than earnings increase (which is what we've been doing for a long time), we're making claims on earnings farther and farther into the future.  In some sense, the future is infinite, so there's no obvious limit to how much future earnings we can claim now.

The forcing function will be when people, and governments, start defaulting on debt.  This will cause a loss of confidence in "money".  The very good thing about backing money by, specifically, gold is that it's very hard to make gold go away.  Debt, on the other hand ...
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Re: Staggering World Debt Points toward Crisis

Post by Pointedstick » Thu Mar 10, 2016 10:14 pm

Well said, rickb. "Truly bizarre" is the right way to put it.
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Re: Staggering World Debt Points toward Crisis

Post by BearBones » Fri Mar 11, 2016 5:31 pm

rickb wrote: The debt (which backs money now) is actually a claim on future earnings.  By increasing the debt faster than earnings increase (which is what we've been doing for a long time), we're making claims on earnings farther and farther into the future.  In some sense, the future is infinite, so there's no obvious limit to how much future earnings we can claim now.

The forcing function will be when people, and governments, start defaulting on debt.  This will cause a loss of confidence in "money".  The very good thing about backing money by, specifically, gold is that it's very hard to make gold go away.  Debt, on the other hand ...
Great explanation! We can all make our own guesses as to whether or not the 21st century will be as prosperous as the 20th. Judging by past posts on Overshoot, seems PS might say yes, and MT no.
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Re: Staggering World Debt Points toward Crisis

Post by MachineGhost » Sat Mar 26, 2016 3:41 pm

jason wrote:
goodasgold wrote: As all sailors know, it is a bad sign when you suddenly notice rats scurrying around the deck while wearing life vests.

Huge and ever-growing national debts, unfunded liabilities rising to the height of the Tower of Babel, ZIRP, NIRP, the dubious effectiveness of additional QE binging, a generalized refusal to consider reforms even as the global house of cards trembles, etc., all point to bad news. Hang onto your gold, brothers and sisters. It will be an especially bad sign when the portraits of PPers begin appearing on the "wanted" posters in your local post office, accused of being "Plutocratic, Gold-Hoarding Enemies of the People:"

http://www.telegraph.co.uk/business/201 ... dit-binge/

I hate to sound this theme too often, but I can't help worrying that the world's collective Krugmanian frenzy and disdain for basic arithmetic will soon catch up with us, with disastrous results.
All true, but it's impossible to time it.  People have been saying this since the early 70s when the US went off the gold standard.  Ron Paul has been talking about the impending collapse for decades.  It does look like things are stepping up and possibly coming to a head, but there is no way to know if the big crash is truly right around the corner, or not.  This is why the PP is so amazing and so valuable - you are covered either way.
Nothing to see here.  I'm going back to bed.  Wake me up when its all over.

P.S.  The debt isn't the bad news; the bad news precedes the debt.  Doh!
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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Re: Staggering World Debt Points toward Crisis

Post by jason » Tue Mar 29, 2016 3:20 pm

TennPaGa wrote:
rickb wrote: The debt (which backs money now) is actually a claim on future earnings.
The same is true of stocks!  That is, a share of stock is simply a claim on the company's future earnings stream.

In October 2014, U.S. Stock market capitalization was $22 trillion (link), while GDP was $17.5 trillion (see page 3).
I think owning a share of stock is a bit different.  If you own a share of stock, and the company does not pay dividends, then you are not a debt burden/creditor to the company.  That share of stock might have been issued 30 years ago, and just keeps changing hands, with no negative impact on the company. 

With national debt, each country is paying interest on the debt.  Aren't the interest payments on this debt what the fuss is all about?  If you could just roll over the debt anytime you wanted by selling Treasuries, without paying any interest, there would be no downside to having massive debt.  But the interest payments are currently pretty big, and will become huge if interest rates rise, and that will become a big burden on the budgets of many nations, who will be forced to raise taxes and/or print even more money to pay the interest.  Ultimately, this could lead to very high taxes combined with very high inflation.  Based on what I have read, I think all of this is accelerating lately, and has become somewhat exponential, and is not sustainable on the current trajectory.  The money supply tripled over just a few years.  The only reason why we haven't seen massive inflation is because very little of this new money is circulating.  Last time I looked into this, the bulk of it was parked at the Fed, collecting interest for the banks.  If this money starts circulating at some point (that is a big if), there is a good chance we will see big-time inflation.  And the Fed will probably want to raise interest rates to get the inflation under control, which in turn would increase the interest payments on our national debt, which in turn would force us to print more money to pay the higher interest payments, which in turn adds to the inflation, and so on, creating a downward spiral.
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Re: Staggering World Debt Points toward Crisis

Post by Libertarian666 » Tue Mar 29, 2016 3:50 pm

jason wrote:
TennPaGa wrote:
rickb wrote: The debt (which backs money now) is actually a claim on future earnings.
The same is true of stocks!  That is, a share of stock is simply a claim on the company's future earnings stream.

In October 2014, U.S. Stock market capitalization was $22 trillion (link), while GDP was $17.5 trillion (see page 3).
I think owning a share of stock is a bit different.  If you own a share of stock, and the company does not pay dividends, then you are not a debt burden/creditor to the company.  That share of stock might have been issued 30 years ago, and just keeps changing hands, with no negative impact on the company. 

With national debt, each country is paying interest on the debt.  Aren't the interest payments on this debt what the fuss is all about?  If you could just roll over the debt anytime you wanted by selling Treasuries, without paying any interest, there would be no downside to having massive debt.  But the interest payments are currently pretty big, and will become huge if interest rates rise, and that will become a big burden on the budgets of many nations, who will be forced to raise taxes and/or print even more money to pay the interest.  Ultimately, this could lead to very high taxes combined with very high inflation.  Based on what I have read, I think all of this is accelerating lately, and has become somewhat exponential, and is not sustainable on the current trajectory.  The money supply tripled over just a few years.  The only reason why we haven't seen massive inflation is because very little of this new money is circulating.  Last time I looked into this, the bulk of it was parked at the Fed, collecting interest for the banks.  If this money starts circulating at some point (that is a big if), there is a good chance we will see big-time inflation.  And the Fed will probably want to raise interest rates to get the inflation under control, which in turn would increase the interest payments on our national debt, which in turn would force us to print more money to pay the higher interest payments, which in turn adds to the inflation, and so on, creating a downward spiral.
This is why the Fed is in a box.

They can't announce that they will never let rates go to a market-clearing level, because if they did, the dollar would go to zero.

They can't announce that they will raise rates to a market-clearing level, because that would trigger the spiral you refer to.

So they have to keep temporizing about "raising rates very slowly some day", while not actually doing anything.

Some day that will fail too, as we reach a tipping point where enough people realize this conundrum that there is no market for Treasury debt other than the Fed itself. At that point the game is over.
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Re: Staggering World Debt Points toward Crisis

Post by MachineGhost » Wed Mar 30, 2016 12:11 am

Banks don't need reserves to create loans.  They find it after the fact to fufill regulatory requirements...  several Western countries have no bank reserve requirements at all.  So the false idea that all the bank reserves are "not circulating in the economy" is merely a conflation of the fact that there is currently little demand and little borrowing from banks.  Money is created on demand when a borrower applies and is approved for a loan, not by the Fed with bank reserves.  That is, there's a deflation in confidence by borrowers, so inflation and yields are currently low.  Banks cannot force people to borrow unless negative interest rates force them to give loans to creditworthy people that don't need it.  We'll see if that happens.

In theory, with so much unneeded bank reserves on the balance sheets, banks could create gigantuan amounts of loans and engage in a massive malinvestment scheme if for some strange reason everyone went manic and starting borrowing en masse and credit and documentation requirements were lax...  oh wait, been there done that, it was called the subprime crisis.  With the strict Frank-Dodd regulations in place and 40-page mortgage applications, it'll never happen again.  And better yet, the Fed at any time can take back all those bank reserves if it so chooses.

Debt is not bad if it is issued for productive purposes.  You have to make a convincing argument that both private sector and government debt has been massively malinvested to support a doomsday scenario where economic confidence is lost and there's no bid at auction for safe assets.  That's easy to do in Red China with endless empty cities, corruption and human rights abuses.  But the USA?  We've got decaying infrastructure, a joke of an education system, means testing for all kinds of transfer payments, stingy banks that have strict credit criteria, lack of any fiscal spending due to political polarization and total assets several times more than all total liabilities, including the unfunded.  That's a huge smorgasbord of productive opportunities just waiting to be filled.  So I think we'll do just fine for another decade or two, especially if we get a recession soon to clear out all the zombie companies.

BTW, government debt is never paid off.  It's always rolled over and inflation always reduces the burden over time, and now without an austerity-imposing "gold standard", the USD is free to devalue to let off the inflationary steam without extreme soccially dislocating economic shocks like 1929, 1942 or 1971.

Basically, "sound finance" adherents don't understand anything that I just said above.  They are stuck in the pre-1971 era operational reality of fixed exchange rates, warehouse receipts redeemable in silver or gold, inflation being the result of rising real wages, endless banking panics and runs, and an inelastic money supply.
Simonjester wrote:
unfortunately government malinvestment is difficult to measure or chart out its movements relative to debt numbers, is our corruption index or bureaucratic incompetence up or down? (it seems way up to me ) how about the amount of waste and spending on projects that only result in unintended consequence and further spending? (also seems high to me) i wont offer any predictions, but it seems that until government investment gets feedback from the type of self correcting mechanisms that are built into free markets, a collapse is inevitable (but still very difficult to impossible to put a time line on)
Last edited by MachineGhost on Wed Mar 30, 2016 12:20 am, edited 1 time in total.
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Re: Staggering World Debt Points toward Crisis

Post by jafs » Wed Mar 30, 2016 9:37 am

And, banks are more cautious now than before about lending.

When we got our most recent mortgage, we were surprised at the rate, which was a bit higher than we expected, even though we have excellent credit.

The meltdown scared everybody, I think.  So people are more cautious about borrowing, and banks are more cautious about lending.
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Re: Staggering World Debt Points toward Crisis

Post by MachineGhost » Wed Mar 30, 2016 11:13 pm

Lets look at all this debt in real world terms...  via the debt to income ratio:

[img width=800]http://i64.tinypic.com/6pt34i.png[/img]

[img width=800]http://z822j1x8tde3wuovlgo7ue15.wpengin ... 2_debt.png[/img]

Federales: taking into consideration total tax revenues, total national debt and total unfunded liabities...  36% debt to income ratio.

Now, the Federales (as opposed to the private sector) do have more liabilities than assets, but that is irrelevant to debt service.  A huge portion of those liabilities is private sector "savings accounts" (Treasuries) and student loans anyway; i.e. it facilitates economic growth.
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Re: Staggering World Debt Points toward Crisis

Post by Libertarian666 » Thu Mar 31, 2016 9:08 am

Simonjester wrote:
MachineGhost wrote:
Debt is not bad if it is issued for productive purposes.  You have to make a convincing argument that both private sector and government debt has been massively malinvested to support a doomsday scenario where economic confidence is lost and there's no bid at auction for safe assets.  That's easy to do in Red China with endless empty cities, corruption and human rights abuses.  But the USA?  We've got decaying infrastructure, a joke of an education system, means testing for all kinds of transfer payments, stingy banks that have strict credit criteria, lack of any fiscal spending due to political polarization and total assets several times more than all total liabilities, including the unfunded.  That's a huge smorgasbord of productive opportunities just waiting to be filled.  So I think we'll do just fine for another decade or two, especially if we get a recession soon to clear out all the zombie companies.
unfortunately government malinvestment is difficult to measure or chart out its movements relative to  debt numbers, is our corruption index or bureaucratic incompetence up or down? (it seems way up to me ) how about the amount of waste and spending on projects that only result in unintended consequence and further spending? (also seems high to me) i wont offer any predictions, but it seems that until government investment gets feedback from the type of self correcting mechanisms that are built into free markets pigs fly, a collapse is inevitable (but still very difficult to impossible to put a time line on)
Supplied a shorter description of when that is likely to happen.  :P
Simonjester wrote:roflmao :D
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Re: Staggering World Debt Points toward Crisis

Post by jason » Thu Mar 31, 2016 3:57 pm

TennPaGa wrote:
jason wrote:
TennPaGa wrote: The same is true of stocks!  That is, a share of stock is simply a claim on the company's future earnings stream.

In October 2014, U.S. Stock market capitalization was $22 trillion (link), while GDP was $17.5 trillion (see page 3).
I think owning a share of stock is a bit different.  If you own a share of stock, and the company does not pay dividends, then you are not a debt burden/creditor to the company.  That share of stock might have been issued 30 years ago, and just keeps changing hands, with no negative impact on the company. 
Fair enough.  My main point was that all this "money" stuff is simply a confidence game, even with stocks.  A doomsayer would worry that people could never cash in their stocks, as it is equal to more than 100% of U.S. output.
The only reason why we haven't seen massive inflation is because very little of this new money is circulating.  Last time I looked into this, the bulk of it was parked at the Fed, collecting interest for the banks.  If this money starts circulating at some point (that is a big if), there is a good chance we will see big-time inflation.  And the Fed will probably want to raise interest rates to get the inflation under control, which in turn would increase the interest payments on our national debt, which in turn would force us to print more money to pay the higher interest payments, which in turn adds to the inflation, and so on, creating a downward spiral.
MG covered this pretty well.  Money isn't "parked" at the Fed any more than it usually is.  More accurately, reserves don't circulate in the economy, but merely serve as buffer in the interbank payment system (the Fed is a bank for the banks).

The reason why interest rates and inflation are low is that the demand for money (loans) is low.
I believe I read that, as of late, excess reserves, which are reserves above what banks are required to have, are near record levels. So, this means banks don't want to lend, people don't want to borrow, or some combination of both. How do you know that this is being caused by demand for loans being low? My impression is that there are plenty of people who want to borrow, but banks are being ultra-picky about who they lend to.
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Re: Staggering World Debt Points toward Crisis

Post by jason » Thu Mar 31, 2016 9:30 pm

TennPaGa wrote:
jason wrote: I believe I read that, as of late, excess reserves, which are reserves above what banks are required to have, are near record levels. So, this means banks don't want to lend, people don't want to borrow, or some combination of both.
Banks don't lend reserves into the economy.
How do you know that this is being caused by demand for loans being low? My impression is that there are plenty of people who want to borrow, but banks are being ultra-picky about who they lend to.
This is certainly a possibility (jafs mentioned this as well).

But, again, this has nothing to do with excess reserves.  Banks don't lend out reserves.

And so there isn't a store of money somewhere waiting to enter the economy and inflate prices.
I don't think I follow.  My understanding is that banks in the US are required to hold reserves of 10%.  This means, for example, if a bank has $10 million in reserves, it can lend out $90 million.  If a bank has excess reserves, that means that the bank is holding more than 10% in reserves.  For example, a bank that has $30 million in reserves and that has lent out $90 million is holding excess reserves of $20 million.  That $20 million is money that they could lend out if they wanted to, but have decided not to lend out, as a business decision.  So, if the bank changes its mind and decides it wants to lend out that $20 million, then $20 million in new loans will be issued, and that $20 million will start circulating in the economy.  So, if many banks are holding excess reserves, and they all decide to increase lending at once, then this could contribute to inflation.  Am I mistaken about any of this?
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Re: Staggering World Debt Points toward Crisis

Post by MachineGhost » Thu Mar 31, 2016 11:26 pm

jason wrote: I don't think I follow.  My understanding is that banks in the US are required to hold reserves of 10%.  This means, for example, if a bank has $10 million in reserves, it can lend out $90 million.  If a bank has excess reserves, that means that the bank is holding more than 10% in reserves.  For example, a bank that has $30 million in reserves and that has lent out $90 million is holding excess reserves of $20 million.  That $20 million is money that they could lend out if they wanted to, but have decided not to lend out, as a business decision.  So, if the bank changes its mind and decides it wants to lend out that $20 million, then $20 million in new loans will be issued, and that $20 million will start circulating in the economy.  So, if many banks are holding excess reserves, and they all decide to increase lending at once, then this could contribute to inflation.  Am I mistaken about any of this?
That's the money multiplier theory which is purely hypothetical, but it may have even been true at some point pre-1971 under fixed exchange rates, but it is certainly no longer the case today.  Banks find the reserves to meet the regulatory requirement after they create new money at the POS.  That's what the Federal Funds Rate is for.
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Re: Staggering World Debt Points toward Crisis

Post by jafs » Fri Apr 01, 2016 9:25 am

I thought we covered this a while back.

Banks could do as you suggest, but most often in practice they use deposits or borrow money to make loans.

The idea that a bank can create money is completely counter-intuitive (doesn't mean it's wrong, but it seems implausible).
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Re: Staggering World Debt Points toward Crisis

Post by Pointedstick » Fri Apr 01, 2016 9:30 am

jafs wrote: The idea that a bank can create money is completely counter-intuitive (doesn't mean it's wrong, but it seems implausible).
And yet it's true! The whole monetary system is "counter-intuitive." That's why it's so widely misunderstood.

To a certain extent, it doesn't really matter to people like us whether banks lend out of thin air or from reserves. It's a pretty wonky, technical thing that mostly concerns Fed technocrats trying to keep the whole thing from grinding to a halt. The TL;DR version is, "our system has some inherent fragilities that would seem to recommend hedging, which is one of the reasons why the PP includes gold."
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Re: Staggering World Debt Points toward Crisis

Post by jafs » Fri Apr 01, 2016 9:38 am

Right, it's not a real world practical concern for most people.

I still don't buy it, though, even conceptually.  Banks have to have more money coming in than going out, since they're in business to make money, not to lose it or just break even.  And, for example, with a mortgage loan, money goes out of one bank immediately to a seller.  With other loans, like home equity loans, the money doesn't necessarily go out immediately, but may go out over time.

And, yes, money is an abstraction, but it takes the concrete form of dollar bills/coins that we use in a variety of ways.

Banks can't print dollar bills or mint coins, so at that level the money has to exist already.  As we move farther away from concrete forms of money, this may be less true, but as long as I can go to a bank and withdraw concrete dollar bills/coins, they have to come from somewhere.
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Re: Staggering World Debt Points toward Crisis

Post by jafs » Fri Apr 01, 2016 9:40 am

I did a bit of research and found what I posted is the case.

You even agreed at the time, if I remember correctly.
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Re: Staggering World Debt Points toward Crisis

Post by Pointedstick » Fri Apr 01, 2016 9:58 am

Jafs, I find that having a discussion about this sort of thing with you is very frustrating because it usually just goes like this:

Us: Here's something interesting
You: Well, I don't believe that
Us: here's an enormous amount of compelling and so far un-refuted evidence supporting it
You: That doesn't make sense to me, and here is some flimsy or discredited evidence against it
Us: You are behind the times; your information is widely understood by the experts to be inaccurate or inapplicable, and nothing you have said contradicts our point
You: Well, I still don't believe that

This seems to happen a lot. If you could be a little less closed-minded, you might learn something hanging around here.
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Re: Staggering World Debt Points toward Crisis

Post by mukramesh » Fri Apr 01, 2016 12:02 pm

jafs wrote: I still don't buy it, though, even conceptually.  Banks have to have more money coming in than going out, since they're in business to make money, not to lose it or just break even.
You should read this: http://www.relfe.com/wp/money/want-earth-plus-5/
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Re: Staggering World Debt Points toward Crisis

Post by MachineGhost » Fri Apr 01, 2016 12:58 pm

jafs wrote: I thought we covered this a while back.

Banks could do as you suggest, but most often in practice they use deposits or borrow money to make loans.

The idea that a bank can create money is completely counter-intuitive (doesn't mean it's wrong, but it seems implausible).
Savings and loans, community banks and credit unions may still operate on that model, but not commercial banks.  I don't rightly know when the divide happened.
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Re: Staggering World Debt Points toward Crisis

Post by MachineGhost » Fri Apr 01, 2016 1:02 pm

jafs wrote: Banks can't print dollar bills or mint coins, so at that level the money has to exist already.  As we move farther away from concrete forms of money, this may be less true, but as long as I can go to a bank and withdraw concrete dollar bills/coins, they have to come from somewhere.
Well, then the bank just asks of the Fed for the dollar bills or coins needed to satisfy the withdrawer (from which the Fed directs the Bureau of Engraving and Printing to print up or coin).  It's a way of making the "internal" credit money that banks create at POS tangible and "external".  Hence the current drive by the transnational elites to outlaw such external cash so that there is no loophole to escape negative interest rates.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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