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Old 14th October 2017, 05:13 AM   #361
JJM 777
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Originally Posted by Tippit View Post
Gold and silver served as money for thousands of years, and still can.
Then it would be the African gold miners who create money. Better hope that nobody invents a way to mass-produce gold.

What about bitcoin, is it a fair system?

Originally Posted by Tippit View Post
anyone taking out a 30 year mortgage at current rates is going to pay over 2x the value of the home over the duration. This is a sucker's deal.
=>
Originally Posted by JJM 777 View Post
Years ago, I meditated on the fairness of interest rates. My model to analyze was that two young adults own a gold ring each. At 20 years of age, one of them lends her gold ring to the other. 25 years later, the loantaker gives the ring back, and also another ring as interest. 25 years later, they both die (or get hospitalized long term) at the age of 70 years. Their lives have been equal, what comes to gold rings, as both of them have experienced a 25-year period of possessing two gold rings, and 25 years of possessing no gold ring at all.

With this model I persuaded myself to believe that an interest rate is perfectly just between the loantaker and loangiver, if it doubles the value of the loan in 25 years. If the interest rate is lower than that (as can happen in Islamic banking, or in housing loans where I live), the loan benefits the taker more than the giver. If the interest is higher (as it usually is), it benefits the giver more than the taker.

On top of this, we need statistical corrections for inflation and risk of the loantaker never paying back the loan.

All in all, I arrived to the conclusion that 7% interest rate is OK, and 10% is highish but still tolerable, but anything above that starts to be remarkably unfair. As laws take care of fairness in so many ways, they might as well take care of fairness between a loangiver and loantaker, by setting a legal upper limit for interest rates. Such as 10%, for example.
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Old 14th October 2017, 09:15 AM   #362
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Originally Posted by psionl0 View Post
That answer neither addresses the post that you quoted nor means that banks should be allowed to run amok. Banks are not the only institutions that offer credit (see post #353 above).
It addresses how banks increase wealth, which was the point. If you think there is another point in addition to that, I must have missed it so feel free to point it out.

I don't think banks should be allowed to "run amok". On the contrary, my own experiences in the industry have left me believing tighter regulations are necessary. At the same time, this conversation is more abstract.

Of course banks are not the only institutions that offer credit.
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Old 14th October 2017, 10:32 AM   #363
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Originally Posted by JJM 777 View Post
Then it would be the African gold miners who create money. Better hope that nobody invents a way to mass-produce gold.
Miners don't "create" money, mining is a very costly and time-consuming endeavour. They mine what is already valuable, at great cost.

Quote:

What about bitcoin, is it a fair system?
Bitcoin has a finite limit of 21 million, so it would work in theory. The problem is that all of the bitcoin is already concentrated in a few hands as it is, just as is much of the gold and silver.

In order to truly have a fair system based on gold and silver we would need to a) recognize the fraud that our banking system is and b) criminally prosecute the fraudsters and seize their assets in a "reset". In addition, there is nothing stopping central banks from monetizing, and eventually taking control of bitcoin. That's the power of limitless money, and why it has to end.
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Old 14th October 2017, 10:55 AM   #364
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Originally Posted by Mycroft View Post
It addresses how banks increase wealth, which was the point.
No it doesn't and I think you know that because the rest or your post directly contradicts that statement.
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Old 14th October 2017, 12:18 PM   #365
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Originally Posted by psionl0 View Post
No it doesn't and I think you know that because the rest or your post directly contradicts that statement.
There is no contradiction. Recognizing the benefit of the services rendered doesn't in any way mean the industry should not be regulated.

This is true for any type of business. Pharmacies, just for example, provide valuable services, but nobody would argue that means they shouldn't be regulated.
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Old 14th October 2017, 12:35 PM   #366
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Originally Posted by Tippit View Post
Miners don't "create" money, mining is a very costly and time-consuming endeavour. They mine what is already valuable, at great cost.
The elasticicty of the money supply of our current system is a feature and not a bug. You don't get that elasticity if you use precious metals as money.


Originally Posted by Tippit View Post
In order to truly have a fair system based on gold and silver we would need to a) recognize the fraud that our banking system is and b) criminally prosecute the fraudsters and seize their assets in a "reset". In addition, there is nothing stopping central banks from monetizing, and eventually taking control of bitcoin. That's the power of limitless money, and why it has to end.
You can't criminally prosecute that which is not criminal.
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Old 14th October 2017, 08:42 PM   #367
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Originally Posted by Mycroft View Post
The elasticicty of the money supply of our current system is a feature and not a bug. You don't get that elasticity if you use precious metals as money.




You can't criminally prosecute that which is not criminal.
Clearly, you're immune to logic and reason.
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Old 14th October 2017, 08:53 PM   #368
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Originally Posted by Tippit View Post
Clearly, you're immune to logic and reason.
Feel free to point out the flaws in my logic.

1) Elasticity in the money supply is a benefit. Agree or disagree? Why or why not?

2) You can't and shouldn't prosecute people who have not broken laws. Correct or incorrect?

If you think the system is wrong, you can work to change it or replace it, but you can't prosecute people who have followed the rules just because you disagree with the rules.
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Old 14th October 2017, 09:46 PM   #369
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Originally Posted by Mycroft View Post
Feel free to point out the flaws in my logic.

1) Elasticity in the money supply is a benefit. Agree or disagree? Why or why not?
Because "elasticity in the money supply" is equivalent to "fixing the price of money" which, in reality, means that some people, chosen by central bankers, get free money. A lot of free money. Like, more than you can conceive.

Quote:

2) You can't and shouldn't prosecute people who have not broken laws. Correct or incorrect?

If you think the system is wrong, you can work to change it or replace it, but you can't prosecute people who have followed the rules just because you disagree with the rules.
I mean, this is falling on deaf ears. If you don't even understand why fiat money and fractional reserve banking are immoral and unjust, then you aren't going to be convinced as to why they should be illegal, and the criminals responsible punished retroactively.
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Old 15th October 2017, 12:48 AM   #370
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Originally Posted by Mycroft View Post
The elasticicty of the money supply of our current system is a feature and not a bug.
When the supply of money is under the control of a regulatory agency operating under strict guidelines, it is a feature.

When it is subject to the whims of commercial banks operating purely for profit, it is a bug.
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Old 15th October 2017, 01:39 AM   #371
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Originally Posted by Tippit View Post
Miners don't "create" money, mining is a very costly and time-consuming endeavour.
But their activity adds money into circulation, just like a central bank now prints more money. So there would be some inflation in gold reserve banking too, at least worth the value of new gold minus the costs of mining it. If not indeed the value of new gold without any deductions.

I just opened a new thread on fractional reserve banking vs. gold reserve banking. This topic is interesting, but hardly belongs under the topic "Can a worker owned and managed economy work?"

Originally Posted by Tippit View Post
immoral and unjust (...) they should be illegal, and the criminals responsible punished retroactively.
=>
Originally Posted by Mycroft View Post
2) You can't and shouldn't prosecute people who have not broken laws.
I would like to maintain a clean due process of how laws are first written and then enforced:

1) What is immoral and injust, should be criminalized by legislation.

2) When such a law has been created, from that point onwards anyone who breaks the law should be prosecuted.

Retroactive punishments are not part of the process. And what comes to the "immoral and injust" part, that should be decided by a democratic decision-making process. Which is corrupt and biased like h*ll, unfortunately, in most countries.
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Old 15th October 2017, 12:09 PM   #372
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Originally Posted by Tippit View Post
Because "elasticity in the money supply" is equivalent to "fixing the price of money" which, in reality, means that some people, chosen by central bankers, get free money. A lot of free money. Like, more than you can conceive.
Can you cite an example where "free money" is generated this way?

Originally Posted by Tippit View Post
I mean, this is falling on deaf ears. If you don't even understand why fiat money and fractional reserve banking are immoral and unjust, then you aren't going to be convinced as to why they should be illegal, and the criminals responsible punished retroactively.
When considering what is immoral and unjust, I think you need to identify people who are harmed, and not just people who benifit more than you think they should.
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Old 15th October 2017, 12:12 PM   #373
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Originally Posted by JJM 777 View Post
But their activity adds money into circulation, just like a central bank now prints more money. So there would be some inflation in gold reserve banking too, at least worth the value of new gold minus the costs of mining it. If not indeed the value of new gold without any deductions.

I just opened a new thread on fractional reserve banking vs. gold reserve banking. This topic is interesting, but hardly belongs under the topic "Can a worker owned and managed economy work?"



=>


I would like to maintain a clean due process of how laws are first written and then enforced:

1) What is immoral and injust, should be criminalized by legislation.

2) When such a law has been created, from that point onwards anyone who breaks the law should be prosecuted.

Retroactive punishments are not part of the process. And what comes to the "immoral and injust" part, that should be decided by a democratic decision-making process. Which is corrupt and biased like h*ll, unfortunately, in most countries.
I'd change "immoral and unjust" to "unjust", but I think the rest in spot on.
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Old 16th October 2017, 10:47 AM   #374
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Originally Posted by JJM 777 View Post
But their activity adds money into circulation, just like a central bank now prints more money. So there would be some inflation in gold reserve banking too, at least worth the value of new gold minus the costs of mining it. If not indeed the value of new gold without any deductions.
Yes, there is gold inflation, It runs at about 3% per anum. There is also benign deflation that results from real economic growth (ie: real people producing real things that real people need in the real economy). Things getting cheaper is a good thing for everyone.

Quote:

I just opened a new thread on fractional reserve banking vs. gold reserve banking. This topic is interesting, but hardly belongs under the topic "Can a worker owned and managed economy work?"
There is no such thing as "gold reserve banking". There is commodity, fiduciary, and fiat money. Fractional Reserve banking can exist independently of what we call money, but its instability and subsequent crises generally create the premise that we also need fiat money as well.

Quote:

Retroactive punishments are not part of the process. And what comes to the "immoral and injust" part, that should be decided by a democratic decision-making process. Which is corrupt and biased like h*ll, unfortunately, in most countries.
If you understood how much wealth has been looted since the creation of the Bank of England, and the absolute power that these individuals wield due to their endless wealth, you might think twice. In fact, I am convinced there is no political or economic solution to the problems the world is currently facing, without criminal justice, and restitution.
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Old 16th October 2017, 11:21 AM   #375
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Originally Posted by Tippit View Post
There is no such thing as "gold reserve banking". There is commodity, fiduciary, and fiat money. Fractional Reserve banking can exist independently of what we call money, but its instability and subsequent crises generally create the premise that we also need fiat money as well.
Instability?

Originally Posted by Tippit View Post
...and restitution.
How would restitution work, in your world?
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Old 16th October 2017, 12:26 PM   #376
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Originally Posted by Tippit View Post
If you understood how much wealth has been looted since the creation of the Bank of England, and the absolute power that these individuals wield due to their endless wealth
I have heard about the Rothschilds etc. in the Conspiracy Theory section of this website. Wealthy people exist, that is undeniable. And they try to control politics as much as they possibly can, that is also undeniable.

Here is a quote from another thread, for Tippit's thought that central banking should be based on gold:

Originally Posted by Puppycow View Post
The Gross World Product per year is about $78 trillion dollars. The total value of all the gold in the world (including in jewelery, and all other forms, both publicly and privately held) is estimated at somewhere around $8 trillion.
In the other thread about fractional reserve banking, thoughts have arisen that fractional reserve banking makes loans more easily available and more affordable. If that is the case, fractional reserve banking seems to be very useful for productivity of the society.

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Old 16th October 2017, 01:55 PM   #377
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Originally Posted by JJM 777 View Post
In the other thread about fractional reserve banking, thoughts have arisen that fractional reserve banking makes loans more easily available and more affordable. If that is the case, fractional reserve banking seems to be very useful for productivity of the society.
Confirmation bias.
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Old 16th October 2017, 04:11 PM   #378
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Originally Posted by psionl0 View Post
Confirmation bias.
Is there evidence to the contrary?
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Old 16th October 2017, 08:55 PM   #379
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Originally Posted by Mycroft View Post
Is there evidence to the contrary?
Check out my posts in the thread that JJM 777 tried to divert this derail to and tell me what is wrong in them.
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Old 16th October 2017, 10:01 PM   #380
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Originally Posted by psionl0 View Post
Check out my posts in the thread that JJM 777 tried to divert this derail to and tell me what is wrong in them.
I'm sure which thread you're referring to is perfectly obvious to some, but I just took a few hits and need help.

Do you have a link?
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Old 16th October 2017, 10:06 PM   #381
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Fractional reserve vs. gold reserve banking
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Old Yesterday, 02:19 AM   #382
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Originally Posted by psionl0 View Post
Check out my posts in the thread that JJM 777 tried to divert this derail to and tell me what is wrong in them.
Well, there you choose to list critical aspects of fractional reserve banking, and you choose not to list any positive aspects of fractional reserve banking, such as suspectedly easier availability or affordability of loans. Then you you suggest that other discussers are biassed.
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Old Yesterday, 04:52 AM   #383
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I will answer this in the other thread.
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