/biz/ - Business & Finance

>>907804
In fact, in Modern Money Mechanics, an official document printed by the Fed itself, it clearly states this.

It also states they can create money out of thin air.

>>907822
Anyone read this yet? If you want a true horror book, look no further.

I'm honestly not very concerned about this. Without the gold standard, everything from our point of view is just a trust system. Most Americans will blindly accept this, and will probably go to the grave without being affected at all. But one day, people might wake up that they are valuing pieces of cloth like gold, and shit is gonna go down.

My idea, just keep going until that point. Have a fully stocked emergency kit (water, food, ect) in case that happens in my lifetime, otherwise, just live like normal. Obviously this idea only works if you plan on being a normie and sinking all your money into your house, family, and stuff, which I plan to do.

>>907804
Have you watched Zeitgeist recently?

You answered your own question with
>>907822

secondary money creation gives us the ability to keep up with the debt and inflation. Without it, the economy would collapse.

The only way for an economy to exist, is to have some limited amount of currency. If the interest rate didn't exist, inflation would skyrocket, and the amount of currency would not really matter. It would be like Zimbabwe where they have 1 trillion dollar bills, but can't buy anything with it. The interest rate makes sure that economic growth is NOT offset by inflation, which means that people in the economic system would experience actual growth in purchasing power = they can buy more useless shit.

Don't be mistaken, this DOES happen on the expense of someone else, because of the earlier mentioned limitied amount of currency. And someone else has to pay for your growth.

We are just lucky to be on the winning side in our lifetime, and experience this wealth.

If you look at history, the only rich man in a country was the king and his family.

>>907861
As he mentioned the economy is mainly a trust system. However the kind of economy we have, does also function as the distribution hub, for wealth. And to be fair, many people are probably better off in this system, than they would be in a system that uses commodities and livestock as currency.
Also, these goods are restricted and limited by nature, so the sheer amount of people on earth makes it impossible for such a system to exist.


On a side note:
In theory the Fed interest rate, works like any other interest rate, but in reality the interest rate is mainly used as an instrument, to control the behaviour of banks, and in extension of that, people.
So splitting the power of controlling peoples behaviour, between the fed and the gov, seems like a good idea, rather than giving all that power to one institution.

This interest is not supposed to be paid back ever.

And Federal Reserve doesn't have an army to enforce such demand.

>>907804
You go bankrupt and keep the 1 dollar.

>If all money is printed by the Federal Reserve
This is empirically wrong. Central banks don't really have direct control over the money supply and its growth. Most money in capitalist economies today is in fact credit money.

This is a pretty good run down: http://socialdemocracy21stcentury.blogspot.ca/2013/04/endogenous-money-101.html
>Normally money creation is credit-driven. This means that most money is created by private banks and its quantity is determined by the private demand for it.
...
>Let us summarise the ways money can be created:
>(1) creation of credit money by the banking and financial institutions;
>(2) creation of other credit money by means of negotiable debt instruments by private sector agents;
>(3) creation of high powered money by the central bank through open market operations or discount window lending, and occasionally by unconventional means such as monetising a budget deficit.
>But the crucial point is that the fundamental impetus, drive and cause of most money creation is demand from the private sector. The broad money stock of any capitalist nation is fundamentally driven by demand from bank clients for credit or demand deposits.

Here's Steve Keens on Endogenous Money :
https://www.youtube.com/watch?v=YKDicjsiHrY

>>907804
Easy OP.... you have something they want they can trade you the cash for it then you wouldnt have to pay that back.

>zeitgeist

retard

for one, the Fed repays all profits to the treasury

>>909545
second, the Fed is prohibit from lending money directly to the treasury

>>909547
It's a funny regulation considering they can just buy government bonds and achieve the same thing.

Your question is the answer.
The corporation is private, not the ownership. It's not owned by a few individuals for profit.
If you ever thought that the multi trillion dollar debts were payable, I've no comments to make.
At the end of the day, all money is worth the paper that it's printed on.

In the age where a bit coin is like $280 & there's a new breed of currency coming up, one must realise that it's a fucked up place.

Noone here really answered OP's question yet.

>>909548
They buy their assets from banks

>>909888
Indefinite debt is a good thing as long as you're creating economic value with it

If you don't want to be a debt slave don't take debt, no one is forcing you to

>>907804
Fed loans you $10000
After a year you pay $500 interest
Fed transfers $450 to the treasury.
$50 pays for expenses.
$450 spent on aircraft carriers and welfare checks for Laquisha

http://www.latimes.com/business/la-fi-federal-reserve-profit-20150109-story.html

>>908369

so for every unit of money created by the banks, the banks itself gets a piece of it.

It's the best businnes of the 21st century, the luckiest people of today's world are the ones who were born into families who own banks.

In 20-40 years those families will hold 90% of the world wealth.

and that's when the revolution begins, just like france.

>>909987

the whole planet earth is in a financial crisis, but the banks are still getting increases in profits.

it's a win-win business

>>907861
Gold is also a trust system. Outside of a few corner electronics uses it has no functional value. Literally all of gold's "value" is because it's shiny and only rare enough that everyone's seen it but not everyone has piles of it. You're just trusting that everyone won't wake up tomorrow and realize they've been fetishizing a useless metal for the last several millenia.

>>907804

easy.

by taking the next dollar i loan out to you.

goy.

Its really simple. It is based on a fractional reserve, thus lending power is based on whatever fraction they want, as in lending, vs depositors. Now that money also has debt attached to it because of that fraction.

If you cant figure out where that debt that is attached to the dollar, then i dont know what to say.

>>910674
O yea and cant forget about the silent tax, that no one talks about.

They are NEVER going to pay off the debt.

They have no intention to, they will print print print spend spend spend for as long as possible, pushing the happening further and further down the road for as long as they can until shit absolutely goes crazy.

>>907804
>>/pol

>>907804
This will be difficult to explain but when you pay back United States debt (obligations of the US Government) you are paying it back with more US obligations disguised a money. The Federal Reserve can create and destroy (leverage and deleverage) the obligations of the US Treasury by having conducting a variety of open market transactions. What is important the the US dollar is a trusted form of what money is 1. a unit of account, 2. a store of value, 3. a medium of exchange.

>>907804
>3 days later

I'll bite anyways.

First of all, all profit from the Federal Reserve, after paying the 6% per annum interest to the member banks on their securities stored at the Fed, goes straight to the Treasury.

Thus some of the money created from the purchase of US Treasury bonds is interest free.

But you weren't speaking about that, you were speaking about the money that is recently created and lent out by banks/investors. How is that going to ever be payed back if it requires more money in the system than there is now?

No shit, but guess what. That money is being put to use building new things: homes, commercial buildings, airplanes, hiring people, new inventions. All of those, will produce more than it will cost, in monetary terms.

You will always need more money in the system because the things that people make and do will continue to increase.

>>910645
How do I upvote comments?

>>908308

I don't think that's zeitgeist, I think he watched https://www.youtube.com/watch?v=ZPWH5TlbloU

>>910645
Yup you nailed it

>>909987
those people have to invest the money they earn on interest or it will depreciate in value, either that or they spend it on champagne and limos, the money finds its way back to the plebs who use it to take consumer loans and mortgages and pay interest

If you decide to stop acting like a pleb your capital will accumulate and soon you will be part of the moneyed class, but your grandchildren will waste their inheritance then someone else's family will get a chance

Also France was about as unequal as it was in the late 18th century as it was at any other time. The opposite in fact happened with the growing "bourgeois" middle classes beginning to usurp the ancient landed aristocracy.

>>907804
>If all money is printed by the Federal Reserve (which is a private company btw, no more Federal than federal express), and then loaned out to the USA at interest, how is the USA or a nation as a whole ever supposed to be able to pay back their debt?
>If only the principle is created, the money to pay back the loan LITERALLY doesn't exist does it? Does this mean that the debt is unplayable? Is the the master plan of the jews? Is this why our founding fathers avoid banks like it was the fucking plague?

OK, I own a printing press. I print as many anonbucks in whatever denomination I feel like.

I come to you and say "Will you let me pay you in anonbucks?" you say "Yes i will accept anonbucks as payment." I agree to make payments in anonbucks

remember, I own the printer and can print as many anonbucks as i want, whenever I want.

What are the odds I will not be able to pay you back?

think about it

then click below for the the answer to this question by a sitting head of the Federal Reserve:

https://www.youtube.com/watch?v=q6vi528gseA

>>910645

also the gvt can say 1oz gold is equal to 15 dollars or 28 dollars or a million dollars

if you can do that whats the difference between gold and fiat?

>>911268
Continuously printing word-backed loan money would eventually drive the value down, as seen with the US.

>>911297
At which point everyone stops accepting anonbucks. Not a desirable outcome for the printer-owner.

>>911297
>>911301
>>911297

obviously

but it's the answer to "does this mean the debt is unpayable?" question that OP is asking

the debt will always be paid, if you are the one owed money, you might not like it when they do

but it will always be paid

a debt cannot be "unpayable" if payment is in units which can be created ex nihilo by debtor

>>907804
>If all money is printed by the Federal Reserve
Money is printed by the US Mint you asshat.

Not even going to bother with the rest of your post if your first part is so ridiculously incorrect.

>>911321
>>>907804 (OP)
>>If all money is printed by the Federal Reserve
>Money is printed by the US Mint you asshat.

>>911321
>I don't know what the fedfunds rate is.

>>910844
In other words if people don't buy or build thing the federal reserve comes crashing down?

>>909987
>and that's when the revolution begins, just like france.
So which one of us Anons is tasked with stealing the bread?

>>911734
It's close to 0

>>908308
>Without it, the economy would collapse
the debt/credit economy.
>The only way for an economy to exist, is to have some limited amount of currency.
Yes.
>If the interest rate didn't exist, inflation would skyrocket,
can you even suggest why that makes sense?
>and the amount of currency would not really matter. It would be like Zimbabwe where they have 1 trillion dollar bills,
false equivalence.
>The interest rate makes sure that economic growth is NOT offset by inflation, which means that people in the economic system would experience actual growth in purchasing power = they can buy more useless shit.

Money is meant to be a bartering system. Like how old nazi Germany had it.

If you did 1 mark of work, you'll get 1 mark pay, which you can buy 1 mark worth of goods.
The price of goods is determined on how much work was needed to make it. You loan money from the government to have capital, ie, 100 marks to buy a loom, then you'll have to do 100 marks worth of work to pay back the loan, you have the loom, and now you can sell your stuff for 1 mark that other people have worked to earn. it becomes completely pointless for you to automate it and sit on marks because it means nothing, you're just taking people's working credits for no gain because you're not getting out of it. it's all just paper.

yes it's a simplified explanation but I dunno why there's an issue with it. I'm still learning about it though.

money nowadays are all literally just numbers. usury is the fucking devil I swear.

>>910911

you really believe that if you >stop playing plebs in a few years you will be part of the moneyed class?

im not talking about being rich, im talking about being a bank owner, about controlling the money, even the money from rich people.

the best business of the world is selling money.

So here's a thougth question:

Inflation is inevitable in the fractiona banking system, so in X years it will acumulate so much that the dollar value will be ridiculouslly small.

A can of soda will cost 500.000 dollars, and we will have to make 1.000.000 dollar coins to make up for it.

So what we will have to do? Just removing the 0s of the currency making U$S1.000.000 dollars turn back into U$S1 and move on with it?

Can we go on this way forever? Doesn't anyone taclkle this questions?

There are some countries that did that to their currencies, but even so, is this how society is supposed to be forever?

Inflating currencies and then deflating it, forever?

When more money is issued by the Fed there is an obvious increase in money supply. When supply increases there is a shift downward in the worth of it, the value. Due to all the currencies out there who have their currencies pegged to the US dollar, they adjust their currency accordingly to it. So when the value of the US dollar drops due to more it being out there the other currencies who don't increase their supply has their currency increase in value in relation to the US dollar. So now less of their currency buys the same amount of US currency.

>>911969
Inflation is inevitable in pretty much any economy. Consider this: Money is worth more now than it is in the future. One way to think about this is inflation.

Another way to think about it is to consider me giving you 1000 now compared to giving you 1000 in 20 years. Of course you'll take it now. After all, with a low return/low risk investment (say 2.5% yield in a 20 year bond), I could take the thousand now, put 616 into the bonds, and have 1000 in 20 years. Plus, I get 384 now to dick around with.

>>911969
Yes, this is exactly how it's supposed to play out. Even if the inflation rate were fairly high, it would still take multiple lifetimes to go from a $1 can of soda to a $1000 can of soda, giving everyone plenty of time to adjust and dump their cash into basically any other asset that will appreciate along with the inflation rate. Dropping the zeros isn't deflation, either, since the effects would be uniformly felt on the prices of everything and not just the value of money.

This is why inflation is good. It's really, really easy to plan for no matter what role you play in the economy, you just have to find something with a return that beats the expected inflation rate. Deflation, on the other hand, makes it completely pointless for anyone to invest or deposit their money because the safest thing to do would be just to sit on it, and it therefore becomes impossible for anyone who needs a loan to get one.

>>911985
Also note that, because the amount of gold in the world is fixed while the population and economy is growing unabated, the gold standard is more or less inherently deflationary, which contributed to a number of economic disasters in the 19th century since the price of gold wouldn't budge or even increase while the rest of the economy went to shit. Farmers and small businesses would wake up one day to find everything they owned had just halved in value while their pre-crash debt obligations had doubled. They'd push for the government to induce inflation somehow and the financial sector, who were benefiting from it all, would fight them every step of the way.

Just keep that in mind next time you think the gold standard would curb the power of the banks.