Anatomy of casino capitalism Pt6 - democratize or replace The Fed

[asphyxiafeeling]

maybe one day we'll try to create a public bank. One side of the isle will fight for a weak version of it, or maybe a "trigger public bank" in case the Fed fixes it's act... and the other side will decry it as "Socialism" at it's worst.

America. <3

[crnogoracz]

very good

[bbburton]

End the Fed, not reform the Fed. We don't need a central bank, we need real money back by gold and silver.

[brainstewn]

a precious metal backed currency is romantic thinking that offers no solution. If we back our currency with a rare commodity we create another avenue for power mongers to exploit.

[bbburton]

Try burying a million dollars in paper currency and a million dollars in gold. Come back in a hundred years and see which holds its value. That's not romantic. Fraud is fraud, and people will use whatever the current species is to gain an advantage using fraudulent methods. It's not the form of the currency that creates the avenue for fraud to be committed.

[Wrath0fKhan]

Try thinking about it differently. Bury your gold and invest (not so much speculation, real serious stuff) your paper money. Lets see what happens in a hundred years...

Ca 100 years ago you needed about 4-5 "units" of gold to buy a share in the "Dow". Currently you need about 10 "units" of gold to buy the same share. Ooops...

[bbburton]

Tell that to the investors who went broke in 1929 and in the current fiasco. The stock market is no measure of the value of currency, it the measure of risk. Look at the current value of gold compared to the current value of paper currency. Ooops...

[Wrath0fKhan]

Oooops, now you are applying a false analogy, pal. You were talking about a hundred years interval and not about one specific moment in time. Those who were bold in 1929 (if they were alive) are still doing well today despite the crisis.

Sure, if your intention is to compare "gold to paper money" alone, like in your example, paper will degrade. Yet look at look at the DOW/Gold Index once again. Gold doesnt "produce" any values. It conserves them better than the "useless pot of paper".

[bbburton]

Ooops, pal, your sense of history is skewed. Thousands of investors went flat broke in 1929. Those who were bold were the Rockefellers, the Morgans, etc., were the few who benefited. Now try measuring the value of gold in 1913 to its value today. Compare the value of paper currency in 1913 to it's value today. How you say? By looking at paper's purchasing power then and now. Gold has gone up dramatically, and paper has plummeted.

[Wrath0fKhan]

Wrong again, bbburton. You are failing your self-imposed criteria. Btw, that (thousands of) investors went broke is not a secret. That however has nothing to do with those already mentioned criteria. Period.

Exactly, try to measure. What have Ive been talking about all the time? Looks like you have not been paying attention, pal...

So what follows? If you have participated in the economy, your "paper" is currently (and we are in the middle of a crisis) worth 2x than your "burried gold"...

[bbburton]

Keep making it up as you go along is not very interesting or worth commenting on. Your facts are wrong, and your analysis of what is said is wrong, pal. The dollar is collapsing while gold is soaring, and that's a fact you continue to deny. Inflation is climbing all the time, another fact you don't even address. Keep your paper money, pal, I'll take gold any day of the week, pal.

[Wrath0fKhan]

Im not making up anything. Just "google" it. I think its you who cant digest reality, bbburton. It doesnt matter what you call soaring, collapsing and so on. What counts, thats the relative numbers and those indicate what Ive been talking about all the time. You were obviously badly exposed...

Gold might work out for you when the "reptilians" push for the final phase... LOL

Seriously, converting more than 5-10% personal assests into gold doesnt make any sense at all...

[bbburton]

Google what? The DOW? The price of gold? The buying power of dollars? Google what? Here is what you're saying: it would take more gold to buy stocks now then it did in the 1920's, and that the same amount of dollars in 1920 would buy more shares today, and that is because if you invested your dollars in 1920, that investment would have grown, thus having greater value than gold. What an assumption.

[Wrath0fKhan]

Sure... The so called Dow/Gold index. There you will find exactly what Ive been saying all day long.

Btw, why are you responding with a stra man? Ive never claimed that with the 1920 amount of dollars you would buy more shares today. Thats what youve invented ad hoc...

No assumptions. Facts. Facts based on generally accepted data. What remains thats all about applying very simple mathematical rules.

You are again double wrong...

[Wrath0fKhan]

*Dow/Gold Ratio

[bbburton]

Then what are you claiming? What kind of comparison are you making: between the value of gold/dollar in 1920 and the gold/dollar value today? You've never explained that at all. Your facts are no facts at all, and applying simple math rules is no explanation, either.

[Wrath0fKhan]

You are simply wrong, bbburton. I explained everything that had to be explained. You just kept ingoring it. You even ignored your self-proposed criteria and started exercising in escapism. Facts... Ive repeatedly alluded to them. They are verifiable. Just a few clicks away. Math is a tool in this game and indeed it helps us to understand/express specific logical concepts/contexts. You have completely missed the point.

Bottom line, the invested paper is more worth than your burried pot.

[Wrath0fKhan]

Inflation is irrelevant in this equation. Ive already told you... The "Dow points" you were (hypothetically) able to buy 100 years ago require a doubled amount of gold nowadays. In other words, the "burried pot" is worth the half... Wake up... LOL

(and yes, you can google it)

[bbburton]

Keep believing inflation is irrelevant. Gold in 1920 was valued around $25 an oz. If you bought 100 oz then, it would have cost approximately $2500. 100 oz today is worth approx. $110,000, without taking any risk. Like I said, you bury your paper, and I'll bury my gold, and see who comes out on top. LOL

[Wrath0fKhan]

Nah... I dont claim that inflation is irrelevant. I claimed that in this particular equation it was irrelevant. Thats a big difference.

In 1920 the Dow/Gold ratio was 3.2. Nowadays its about 10. You would need 3x the gold you bought back then if you desired to buy the same share in the present. Indeed, the famous "burried pot of gold" doesnt multiply (unless its all about a fairy tale). Busted again...

[bbburton]

LOL... the value of gold or dollars is relevant, as I've already told you... The value of gold today isn't hypothetical, and the value of the dollar today isn't hypothetical either. The only hypothetical is the DOW; it's value is, and always has been manipulated. You've been asleep at the wheel too long...LOL

[Wrath0fKhan]

LOL Every value is "hypothetical". Its all about how much people are willing to value something. You are a joke, sahib...

[bbburton]

LOL. your comment shows just how little you know about 'something' which explains you lack of understanding this or any other subject of value. The joke is in your hand.

[Wrath0fKhan]

Lack of understanding? I see plenty of that especially on your side. Yet thats all irrelevant. What counts, thats exactly that your pot of gold is less worth than the invested paper. Ignoring facts (that can be easily checked) is simply foolish. Period.

[bbburton]

Your analysis consistently misses the point of what is of value, how it is valued, and how that value is maintained over time. Those are the facts you elide over so foolishly. Period, end of argument.

[Wrath0fKhan]

HAHAHAHA... You are saying it like youve solved issues that top notch economist and sociologist havent been able to do in decades of research. Congrats to your invisible, immaterial "Nobel prize", bbburton.

End of argument is here: your "burried pot" isnt enough to buy an actual, equivalent share. All your other claims are utterly irrelevant. Period.

[sirellyn]

Did I hear her right? Did she not explain fractional reserve banking correctly? She said with a reserve rate of 10% the bank would take in 100 dollars and lend only 90.

Thats not how it works. It creates the money when it lends. If it takes in 100 dollars it can now lend $900 dollars. And it still retains the 100 dollars in it's vault.

Banks can lend MULTIPLES of the money they collect, not fractions.

[MankindCartoons]

isn't it called fractional reserve banking? I remember from zeitgeist.

[sirellyn]

Yes it's called fractional reserve banking. I was explaining the bank doesn't lend out a portion of the money it receives (the way she explained it, it sounded like that.) It can and does create the money out of thin air up to 9 times the amount it obtained from you.

Fractional reserve banking is now used everywhere except for Islamic banks.

[broli1111]

That's what I've heard too. That's why the US is in the mess it's in now. Banks can loan MORE then what they actually have, and put MORE people in debt.

Fix the system, and banks are forced to make LESS loans, puting LESS people in debt.

We also need to limit how much a Creditor can increase interest rates, charge in late fee's, ect. This would allow people to get out of debt faster, and even avoid debt all together!

[GohanMH1]

Just to add.

The money is multiplied, but not necessarily by the same bank. It depends where the consequent deposits are made.

[savit]

Idea is that not all people will withdraw all their money at once. If they do, as in when run on the banks happen, its a domino effect when the lenders start calling in the loans.