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Old 30th October 2017, 04:21 AM   #281
JJM 777
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Originally Posted by Tippit View Post
The Bank of England was created in 1694. How much could you buy with unlimited money over more than three centuries?
With unlimited money, hmmm, the first thought that comes in mind is: I could buy everything what exists on the planet, and the Mars and Moon too. Bank of England obviosuly does not has so much money, so your repeated use of the term "unlimited" is unforgivably misleading, and should be replaced with a more informative and correct term.

On second thought, I am not sure how much I would be able to buy with unlimited funds. Not everything is for sale, and the more I would buy, the more the prices would start rising, and people would refuse selling because they perceive that what they have will soon no longer be available for buying at any price whatsoever (and certainly not for the price that they would get now), as some looney is buying all of it. So the inflation caused by such a buy-out process would discourage people from selling, as they would realize that keeping what you have is what makes you richer day by day, but as soon as you sell it and convert it into cash, the mega-inflation will impoverish you in no time. People would stop selling, they would indeed stop acknowledging that the money in my pocket has any value at all, and my unlimited money would become unlimitedly worthless.

Originally Posted by Tippit View Post
Then there is this:
...
Revealed – the capitalist network that runs the world
...
there is scientific proof of concentrated power.
Originally Posted by Tippit View Post
I notice everyone just glossed over The Capitalist Network that Runs the World!
Money is power, and money is concentrated, to some extent. But you constantly exaggerate the extent to which money is concentrated (the Bank of England with its "unlimited" funds apparently owns only a fraction of the listed largest companies). How many individual humans would there be as owners of all those major companies? How large group of people would this global shadow government be? The article does not say that any proof exists for the owners of the said companies actually making unexpected deals with each others and acting in unison, as if willing to "rule the world".

Originally Posted by Tippit View Post
Marx and Engels were financed by western "capitalist" bankers who saw communism as the "ultimate" monopoly.
This claim does not make any sense, because a state monopoly is not monopoly of the bankers. Rather, it would dispossess the bankers of their private wealth. For which reason the economic elite made USA to fight like h*ll against Communism in every possible corner of the world, from Vietnam to Cuba to Argentina and whatnot. The economic elite is exactly as phobic about a Communist state monopoly as they can logically be expected to be.

Neither does Wikipedia or any other reputable source echo this already illogical claim. The Wikipedia pages on Marx and Engels give less sensational explanations for their source of income. Such as working in simple ordinary jobs to finance their philosophical ambitions.

Last edited by JJM 777; 30th October 2017 at 04:24 AM.
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Old 7th November 2017, 02:25 AM   #282
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Tippit fails to defend his claims from the above-mentioned critical closer look. Was that a surprise? The art of hit-and-run wild claims without offering proof even when asked afterwards -- while that the scientific standard is to offer proof when offering claims. In science, claims without proof are unfounded and worthless.
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Old 7th November 2017, 09:54 AM   #283
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Originally Posted by JJM 777 View Post
Tippit fails to defend his claims from the above-mentioned critical closer look. Was that a surprise? The art of hit-and-run wild claims without offering proof even when asked afterwards -- while that the scientific standard is to offer proof when offering claims. In science, claims without proof are unfounded and worthless.
Your replies belie the fact that you either didn't read, or didn't understand the points I was trying to make, and it's tedious for me to try and re-make them in every subsequent response. Lets just agree to disagree, I guess.
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Old 10th November 2017, 01:33 AM   #284
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Originally Posted by Tippit View Post
Lets just agree to disagree, I guess.
We agree about many things, but disagree at least on these:

- Central banking should be state-owned. But should it be based on gold standard or fractional reserve? You say gold, I say fractional.

- Do such bankers currently exist, who are able to create "unlimited" amounts of money for their own benefit? You say yes, I say no.

- To what extent do bankers control the world economy? You say they dictate it, I say their influence is significant but far from dictatorial.
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Old 10th November 2017, 01:42 AM   #285
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Originally Posted by JJM 777 View Post
- Central banking should be state-owned. But should it be based on gold standard or fractional reserve? You say gold, I say fractional.
Central banks don't have any reserves (they create them for banks) so the term "fractional reserve" is meaningless with regard to central banks.

"Fractional reserve" for ordinary banks is bad for the reasons given previously.
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Old 10th November 2017, 07:46 AM   #286
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Originally Posted by JJM 777 View Post
We agree about many things, but disagree at least on these:

- Central banking should be state-owned. But should it be based on gold standard or fractional reserve? You say gold, I say fractional.
"Gold vs. fractional" is not a thing. This was explained to you already in this thread, but either you didn't understand or you forgot. Fractional reserve systems and gold standards aren't mutually exclusive. The entire premise of this thread is wrong.

Quote:

- Do such bankers currently exist, who are able to create "unlimited" amounts of money for their own benefit? You say yes, I say no.
You're ignorant.

Quote:

- To what extent do bankers control the world economy? You say they dictate it, I say their influence is significant but far from dictatorial.
Money represents one-half of virtually every economic transaction on earth, sans barter. I am confident that you have absolutely no idea of the scope of the corruption of money.
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Old 15th November 2017, 07:34 PM   #287
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Money = Debt

Another problem with the banks is that most of the money creation is through loans. The US government cannot actually print its own money; it borrows it from the Federal Reserve (which has no reserves and is not federal), and then it must pay it back with interest. But the money to pay the interest on that loan does not yet exist, so they must take out another loan in order to pay for the old one. This is why it is impossible to pay off the debt. There is more debt in the world than there are monetary assets to pay them, by design. Virtually every dollar in existence is the principle on a debt, and there is no money to pay the interest on them. So most of the people in the world are debt slaves. And US bonds are basically a ponzi scheme.
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Old 15th November 2017, 09:24 PM   #288
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Originally Posted by ShamelessGit View Post
Another problem with the banks is that most of the money creation is through loans. The US government cannot actually print its own money; it borrows it from the Federal Reserve (which has no reserves and is not federal), and then it must pay it back with interest. But the money to pay the interest on that loan does not yet exist, so they must take out another loan in order to pay for the old one. This is why it is impossible to pay off the debt. There is more debt in the world than there are monetary assets to pay them, by design. Virtually every dollar in existence is the principle on a debt, and there is no money to pay the interest on them. So most of the people in the world are debt slaves. And US bonds are basically a ponzi scheme.
Welcome to the forum.

Just to update your education, it is not the money that the government borrows (indirectly) from the fed that is the problem because any interest that the government pays the fed gets returned to the Treasury.

The real problem is money borrowed from overseas sources and commercial banks (the government can't control who buys its bonds). Money borrowed from Social Security is also bad since they won't have enough funds to pay all upcoming retirees.
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Old 15th November 2017, 10:42 PM   #289
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Originally Posted by psionl0 View Post
Welcome to the forum.

Just to update your education, it is not the money that the government borrows (indirectly) from the fed that is the problem because any interest that the government pays the fed gets returned to the Treasury.
Through what mechanism does this occur?

The Treasury is the bond issuer, their payments don't go to themselves. In exchange for those bonds, they get Federal Reserve Notes.

Quote:
The real problem is money borrowed from overseas sources and commercial banks (the government can't control who buys its bonds). Money borrowed from Social Security is also bad since they won't have enough funds to pay all upcoming retirees.
Money is borrowed from the Social Security Trust Fund via Special Issue Treasury Bonds. This instrument is the only investment instrument the SSTF may use. The interest paid on those bonds is part of how SSTF grows.

If SSTF didn't use bonds, it would be even more insolvent. We don't want the SSTF going out on the open bonds market for obvious reasons.

Basically, if the SITBs defaulted and ruined the SSTF, there would either already be a massive worldwide currency crisis or it would spark one and at that point, the solvency of Social Security would be a rather minor point of concern, what with the massive famine, breakdown of society and such.

Last edited by Delphic Oracle; 15th November 2017 at 10:44 PM.
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Old 15th November 2017, 11:00 PM   #290
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Originally Posted by Delphic Oracle View Post
Through what mechanism does this occur?
The mechanism is called "interest of federal reserve notes". Through this mechanism, all Fed profits are returned to Treasury.

Originally Posted by Delphic Oracle View Post
The Treasury is the bond issuer, their payments don't go to themselves. In exchange for those bonds, they get Federal Reserve Notes.
That is not quite right. The government sells the bonds on the open market. The Treasury prints Federal reserve Notes. They "loan" these notes to the Fed (who supplies them as needed to the banks). The Fed buys government bonds on the same open market.

Originally Posted by Delphic Oracle View Post
Money is borrowed from the Social Security Trust Fund via Special Issue Treasury Bonds. [ ... ]
As long as the government can service its debt everything is ok. Once the cost of servicing this debt becomes too much, Social Security is the first entity that will suffer. The fact that Social Security uses a "special issue" makes it easier for the government to distinguish debts between Social Security and international creditors.
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Old 15th November 2017, 11:20 PM   #291
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Originally Posted by psionl0 View Post
The mechanism is called "interest of federal reserve notes". Through this mechanism, all Fed profits are returned to Treasury.
The interest they pay on the bonds they issue ends up back in their own pockets?

Quote:
That is not quite right. The government sells the bonds on the open market. The Treasury prints Federal reserve Notes. They "loan" these notes to the Fed (who supplies them as needed to the banks). The Fed buys government bonds on the same open market.
Yes, the Bureau of Engraving and Printing within the Treasury is the entity that literally prints them, but it's a good thing you put "loan" in quotes because it's what happens on the books that matters.

Quote:
As long as the government can service its debt everything is ok. Once the cost of servicing this debt becomes too much, Social Security is the first entity that will suffer. The fact that Social Security uses a "special issue" makes it easier for the government to distinguish debts between Social Security and international creditors.
Why would SSTF be "the first entity that will suffer?"

The purpose of the SITB is to prevent market manipulations. This is the only instrument SSTF can invest in and they are only available to SSTF. It is a locked entity between because when they used normal TBs, the yields and redemption values could be impacted by market forces. So now the yield is stable and they can claim face value redemption at any time since there's no external variables at play.

Again, if the government defaults on debts it can't service, then we've got waaaaaay bigger problems than a retirement safety net to worry about.
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Old 15th November 2017, 11:29 PM   #292
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Originally Posted by Delphic Oracle View Post
The interest they pay on the bonds they issue ends up back in their own pockets?
Yes (at least for Fed held securities).

Originally Posted by Delphic Oracle View Post
Yes, the Bureau of Engraving and Printing within the Treasury is the entity that literally prints them, but it's a good thing you put "loan" in quotes because it's what happens on the books that matters.
I put "loan" in quotes because this is exactly how the Fed describes it. Check out the Fed reports (put out by the Fed) if you don't believe me.

Originally Posted by Delphic Oracle View Post
Why would SSTF be "the first entity that will suffer?"
Because defaulting in internationally held loans would be far more disastrous.

Of course, it wont be something as blatantly as "we are defaulting on Social Security loans". Instead, we will see a tightening up of eligibility requirements for a pension or a significant reduction in pension entitlements for retirees.
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Old 15th November 2017, 11:57 PM   #293
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Originally Posted by psionl0 View Post
Yes (at least for Fed held securities).


I put "loan" in quotes because this is exactly how the Fed describes it. Check out the Fed reports (put out by the Fed) if you don't believe me.
It's ok, nobody will ever convince me this system makes sense. The Treasury issues T-Bonds (denominated in Fed Notes, which it also prints but is technically issued by the Fed at the discretion of the Board of Govs), trades them for Fed Notes, the Fed uses the T-Bonds (and other assets) as the basis for the value of the Fed Notes, which the Treasury uses to pay interest on the T-Bonds, the profit from which ends up back in its own pockets(?).


Quote:
Because defaulting in internationally held loans would be far more disastrous.

Of course, it wont be something as blatantly as "we are defaulting on Social Security loans". Instead, we will see a tightening up of eligibility requirements for a pension or a significant reduction in pension entitlements for retirees.
Which has already happened.

But it was hardly the first thing that got cut in terms of public spending.

ETA: regardless, your original contention was: "Money borrowed from Social Security is also bad since they won't have enough funds to pay all upcoming retirees."

I consider that statement quite exploded. Being able to pay retirees or not will not be contingent upon the SSTF investing or not (at least not SITBs), in fact not investing in SITBs would be less sustainable.

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Old 16th November 2017, 12:05 AM   #294
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Originally Posted by Delphic Oracle View Post
It's ok, nobody will ever convince me this system makes sense. The Treasury issues T-Bonds (denominated in Fed Notes, which it also prints but is technically issued by the Fed at the discretion of the Board of Govs), trades them for Fed Notes, the Fed uses the T-Bonds (and other assets) as the basis for the value of the Fed Notes, which the Treasury uses to pay interest on the T-Bonds, the profit from which ends up back in its own pockets(?).
You can obfuscate it as much as you like but this is basically how it works.

Remember that the government and the Fed do not trade bonds directly. Instead they create an illusion that there is an "arms length" process in place where the bonds are sold in the market place and the Fed buys bonds in the market place ("Government? What government?").

Originally Posted by Delphic Oracle View Post
Which has already happened.
And this is only the beginning. An army of retirees is about to descend upon this country and nobody has given a single thought as to how we will pay them all.
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Old 16th November 2017, 12:13 AM   #295
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Originally Posted by psionl0 View Post
You can obfuscate it as much as you like but this is basically how it works.

Remember that the government and the Fed do not trade bonds directly. Instead they create an illusion that there is an "arms length" process in place where the bonds are sold in the market place and the Fed buys bonds in the market place ("Government? What government?").
We are at least in agreement that it is obfuscated, though I would object to my being the one to have done so.

Quote:
And this is only the beginning. An army of retirees is about to descend upon this country and nobody has given a single thought as to how we will pay them all.
Lots of people have thought about it.

Smart ones say "raise the FICA cap and the problem is solved."
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Old 16th November 2017, 12:42 AM   #296
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Originally Posted by Delphic Oracle View Post
We are at least in agreement that it is obfuscated, though I would object to my being the one to have done so.
I wouldn't call it obfuscation. It's a matter of following a very simple principle: For Federal Reserve Notes in circulation (Fed liabilities), it's decided that they are backed by Treasury securities (Fed assets).

I.e., the Fed's balance sheet:
  • ASSETS = Treasury securities
  • LIABILITIES = Federal Reserve Notes in circulation
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Old 16th November 2017, 01:04 AM   #297
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Originally Posted by psionl0 View Post

That is not quite right. The government sells the bonds on the open market. The Treasury prints Federal reserve Notes. They "loan" these notes to the Fed (who supplies them as needed to the banks). The Fed buys government bonds on the same open market.
That's not correct either. The Treasury (via the Bureau of Engraving and Printing) prints Fed notes only as necessary, and by request from banks. This process has nothing to do with bond transactions, and everything to do with the actual demand for cash.

Bonds are sold by the government to "primary dealers", who are an anointed group of Fed cronies (think, the largest banks on Wall Street) who make a market in US Government bonds, and have exclusive authorization from the Fed. The bonds are resold to the public, and the Fed buys the surplus. When the Fed purchases the bonds, it simply creates an electronic bookkeeping entry in the primary dealer's account for the amount of the bond, ex nihilo. There are no tangible Federal Reserve Notes involved.
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Old 16th November 2017, 01:12 AM   #298
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Originally Posted by Delphic Oracle View Post
It's ok, nobody will ever convince me this system makes sense.
Have you seen my thread on why the government doesn't need to issue any debt at all?
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Old 16th November 2017, 01:19 AM   #299
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Originally Posted by Tippit View Post
When the Fed purchases the bonds, it simply creates an electronic bookkeeping entry in the primary dealer's account for the amount of the bond, ex nihilo. There are no tangible Federal Reserve Notes involved.
You are right about that. "Interest on federal reserve notes" has nothing to do with the number of notes in circulation (or in bank vaults) and everything to do with how much profit the Fed made.

It is just a label given to the monetary transfer. "Gift of profits to Treasury" doesn't sound as legitimate.
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Old 16th November 2017, 09:10 AM   #300
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Originally Posted by psionl0 View Post
You are right about that. "Interest on federal reserve notes" has nothing to do with the number of notes in circulation (or in bank vaults) and everything to do with how much profit the Fed made.

It is just a label given to the monetary transfer. "Gift of profits to Treasury" doesn't sound as legitimate.
What interest is their on Fed Notes? I own and have owned many Fed Notes in my time, none have generated interest. In fact, the longer I hold them, the more worthless they seem to get!

Did you mean T-Bonds?

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Old 16th November 2017, 09:13 AM   #301
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Originally Posted by lupus_in_fabula View Post
I wouldn't call it obfuscation. It's a matter of following a very simple principle: For Federal Reserve Notes in circulation (Fed liabilities), it's decided that they are backed by Treasury securities (Fed assets).

I.e., the Fed's balance sheet:
  • ASSETS = Treasury securities
  • LIABILITIES = Federal Reserve Notes in circulation
There's more assets than just the paper. But yes, that the bulk of our perception of the value of our currency is based on two pieces of paper (printed from the same entity) being exchanged is just maddening.

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Old 16th November 2017, 10:10 AM   #302
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Originally Posted by Delphic Oracle View Post
What interest is their on Fed Notes? I own and have owned many Fed Notes in my time, none have generated interest. In fact, the longer I hold them, the more worthless they seem to get!

Did you mean T-Bonds?
The Fed remits its net income back to the US Treasury, that is, income less expenses. This includes such things as interest and capital gains, versus expenses like paying interest on reserves, capital losses, and paying Old Yeller's salary.
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Old 16th November 2017, 10:58 AM   #303
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Originally Posted by Delphic Oracle View Post
What interest is their on Fed Notes? I own and have owned many Fed Notes in my time, none have generated interest. In fact, the longer I hold them, the more worthless they seem to get!

Did you mean T-Bonds?
Didn't you pay any attention to the post you quoted? "Interest on federal reserve notes" is just an accounting fiction.
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Old 17th November 2017, 12:58 AM   #304
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Originally Posted by Delphic Oracle View Post
There's more assets than just the paper. But yes, that the bulk of our perception of the value of our currency is based on two pieces of paper (printed from the same entity) being exchanged is just maddening.
Why is it maddening?
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Old 17th November 2017, 01:36 AM   #305
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Originally Posted by psionl0 View Post
"Fractional reserve" for ordinary banks is bad for the reasons given previously.
The difference between us is that you say that there is a disadvantage, so the whole thing should not exist, end of topic. I believe that there are some disadvantages, but also some advantages, and the advantages outweigh the disadvantages, so the thing should exist.

Originally Posted by Tippit View Post
You're ignorant.
Quite much so, and these discussions have been disorganized enough, and so many claims have been made by various discussers, which contradict each other and lack any presented evidence, that the situation has not been helped much, if at all.

Theoretically, if we were lucky enough that the Truth(tm) has been mentioned in this thread, lack or obscurity of presented evidence would have made it disappear into the mass of other unfounded claims.

Last edited by JJM 777; 17th November 2017 at 01:38 AM.
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Old 17th November 2017, 02:06 AM   #306
psionl0
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Originally Posted by JJM 777 View Post
The difference between us is that you say that there is a disadvantage, so the whole thing should not exist, end of topic. I believe that there are some disadvantages, but also some advantages, and the advantages outweigh the disadvantages, so the thing should exist.
The difference is that I list the problems with fractional reserve banking and possible remedies to these problems and you say, "I believe ...".
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