Along these lines, it could be argued that much of the hardships forced upon the people of Indonesia and other Asian countries after the Asian financial crisis were the result of excessive risks taken by Western financial institutions in search of large returns or profits. It turned out that if these institutions were to bear the full costs of the risks they took leading up to the crisis then the whole financial system may have faced collapse. Through the IMF bailouts they effectively passed these otherwise bankrupting costs to parts of society that would not threaten the financial system, because they are not costed in its accounts. This, as usual, meant the poor, workers and Mother Nature, who form the balancing item of the biases built into today's unfree and inefficient markets.
8) ANCIENT MONETARY WISDOM
What is surprising is that this knowledge is ancient wisdom and has been recorded in the primary texts of the world’s major religions. The Old Testament of the Bible speaks of the sin of usury and the concept of Jubilee, the period eradication of all debts. Most likely this is from very similar realizations thousands of years ago.
It is ironic that the Federal Reserve Note bearing the statement "In God we Trust" is the symbol of the system that so blatantly violates the key principles of this ancient wisdom claiming to be God’s word itself.
If money is so abstract and does not store value, nor correlate with social value, couldn't we change it to better satisfy our needs? This is what democratizing money really means - and like all movements to further democracy it will no doubt meet with serious resistance.
What is often overlooked about the monetary system, particularly by advocates of the "trickle down" hypothesis, is that it is a ZERO SUM GAME, because our money is entirely debt based. The more of a positive net money balance I have, the more of a negative balance someone else has. I can put my positive balance to work earning more money, while I either sit around and do nothing, or go and work for more money. So the most likely situation for a positive balance person is that their positive balance will keep growing. Also, in the zero sum game, this means that someone else’s balance gets more negative. The negative sum person would be unlikely to get a loan to start their own business, and so would have to go work for someone that already has money. Under current wage structures and interest rates for "high risk" customers it would be difficult for many negative balance people to ever get to a positive balance position no matter how hard they work. They have the added disadvantage that they can’t put a positive balance to work earning more money. Most likely their balances will get more negative, while the people that already have money will get more money to balance out the zero sum game.
With positive money balances always earning a positive return on capital, combined with no requirement for redistribution of wealth, which is implicitly prohibited by neo-liberal policy because it eases such governmental intervention, the results are clear. The rich will keep getting richer and the poor will keep getting poorer, and the more interest bearing debt-money you "invest" in developing nations the worse (not better) the situation gets. Those that believe that the "trickle down" effect will result from investment in poorer (more negative balance) countries and neighborhoods demonstrate a very poor understanding of the monetary system. In fact they believe in something that cannot possibly materialize, and is evidenced by the consequences of investment in developing nations.
This situation is compounded by the fact that the banking system must not fail. What this really means is that the major section of the world banking sector - namely the Western financial institutions - must not fail. This would actually be disastrous for rich and poor alike, as in the great depression. To reduce risk of banking system failure (which ultimately comes from sudden loss of confidence or trust in the system) institutions such as the IMF and World Bank have evolved into mechanisms for preventing banking system collapse. Unfortunately, however, what these mechanisms amount to is transferring the cost that could collapse the banking system outside of the banking system. And these costs end up being borne by those who have the least say in the financial system. This actually distorts free markets where, ideally, investors take personal responsibility for the risks they assume. Those that support so-called free market ideology and think that today's markets are actually consistent with this ideology are seriously misguided. They overlook the biases and distortions built into today's markets, making them very inefficient and highly volatile.
It is clear that origination of money at commercial banks is undemocratic and so encourages the creation of money (or loans) for many undesirable activities. But often overlooked is the unchecked power of the Fed, the creator of Base Money. One of the best reminders of this power is then Federal Reserve Governor Paul Volcker's hike in interest rates in 1979 that triggered the Latin America debt crisis. This came at tremendous cost to the people of Latin American countries. While the activities of OPEC, the commercial banks and various dictators, played a major role in laying the foundations of this crisis, the final push was decided at one committee meeting conducted behind closed doors. The FOMC meetings have never been open to public input or scrutiny. While summaries of meetings are posted almost immediately, the full transcripts of FOMC are not even available until 5 YEARS after the event!
It's important to be concerned that the money origination process is not subject to democratic accountability. Many of these problems could be remedied if the public had more input into the decisions surrounding the origination of money. This requires an entirely different paradigm for thinking about money than we have today. It is a very complex problem and there are no simple answers. But at the very least it should be high on the list of topics for public debate. In addition, once you understand the process for creating money out of thin air, you begin to see that what banks and the Federal Reserve do is not so difficult after all. Some hope for better money is starting to materialize from the local and alternative monetary systems such as LETS and Ithaca Hours.
6) Let's continue the discussion of unfairness in the banking system by exploring the undemocratic nature of it.
Much of the unfairness to the non-bank public of this magical money creating process – creating money out of thin air – really comes about because the general public has no input into decisions about money creation. It is only bank managers and the Open Markets Committee of the Federal Reserve Board that decide how much money gets created, and importantly, FOR WHAT PURPOSES MONEY SHOULD BE CREATED. These decisions are all entirely closed to public input. Decisions on making new money will be based on whether a lender can repay and how much interest the lender can bring in, which is what creates bank profits. This means most money will be created to lend to people that already have lots of previously created money, and lots of advantages in life. Disadvantaged people will often be denied access to the money creating process, except under exploitative circumstances which are likely to see high interest rates and/or ultimate possession of their assets and resources by the bank. Alternatively the more disadvantaged will have to seek money from non-bank entities that have already accumulated lots of money, and this often also leads to exploitation.
What this also means is that money is NOT created for things most desired by society as a whole. In fact it is often created for exactly the things that society does not want at all. This includes projects that involve excessive destruction of natural resources like logging, building power plants, mining, and so forth, because the bank realizes that such projects are likely to bring back the money that will pay off the loans. It is also interesting to note that money is almost NEVER created for the purpose of providing public goods, such as education and healthcare, for such services will not pay the bank back. Rather these services depend on recycled money through the tax system. Hence it is not surprising that we have reached a situation where monetary value and social value are inversely correlated. By this I mean that a good or service with a high monetary value in the private property markets generally has a low social value. Conversely high social value goods and services generally return a low monetary value. This is illustrated in the example where public goods providers such as teachers are some of the lowest paid workers, yet currency trading is perhaps the most lucrative profession there is, and has also become one of the most socially destructive. It is reasonable to expect that this situation would be largely reversed by taking social factors and public input into consideration at the point of money origination.
Misconception 3: Money is Created by the Government Printing it.
FALSE: Today almost NO money is created by the government. Most of the total money supply is created by banks making loans to the non-bank public. Almost all money (more than 95% at any time) is created by the creation of a corresponding amount of debt. Currency in circulation is just a very small proportion of the total money supply and it is created by the Federal Reserve System, not the government. In truth, money is actually created "out of thin air" by the commercial banks and their Federal Reserve System.
5) Exactly How Does Money Get Created?
Having gotten some of these misconceptions out of the way lets talk briefly about the actual mechanics of money creation. Money creation happens in two main ways; First the creation of base money, which is mostly physical currency notes, created by the Federal Reserve. The second money creation process involves checking account or deposit money created by the commercial banks, and which makes up most of the money supply.
Base money, also called high powered money, is created when the Federal Reserve performs what are known as Open Market Operations. In this process the Federal Reserve injects money by buying Government Securities, which then become debt owed by the government (that is the American Taxpayer) to the Federal Reserve. And where does the Federal Reserve get this money to buy the government securities? Well, it just makes it up "out of thin air". The Federal Reserve has no budget, quite simply because it doesn’t need one – it invents money whenever it needs it. In fact, almost all money we come by has its basis in high powered money that the Federal Reserve invented at some time in the past. Most of this base money is currency in the form of Federal Reserve Notes. The Federal Reserve then creates a spurious "liability" on its balance sheet called Federal Reserve Notes outstanding, and in return gets an asset in the form of government securities, which the public must repay through the efforts of real work. Every time the Federal Reserve creates or extinguishes base money the financial press and other mainstream media reports it as a Greenspan interest rate announcement. This is not technically correct but it does sound more palatable than saying that the Federal Reserve just made some money up or just made some money disappear.
Once this base money is created, banks can create around 10 times this amount in checking accounts and other deposits. They do this by making loans to the non-bank public. A corresponding amount of checking account money is created for each new loan. So most money is created just by bankers writing some new numbers on a piece of paper, or these days, entering some new bits and bytes in computers, since money is really now just a bunch of computer records. This means that when you go to borrow money to buy a house or car, the money is really being created "out of thin air" by the bank, and being credited to the checking account of the seller.
The bank has a distinct advantage in all this just by being a bank. For if you can’t pay the loan through your hard work, they automatically get the house, and all they did was write some numbers into the computer! From the bank’s perspective however, if you don’t pay off the loan, they would have to write down their asset (i.e. your loan) and this would effect the earnings they report. If lots of people did this the bank could go "belly up". So you can see why they want to keep the house if you don’t pay your loan – they are taking a financial risk too, albeit one created completely out of "thin air".
Misconception 1: You make money by going to work, or by selling something.
FALSE: Nobody can make money except commercial banks (also called depository institutions) and the Federal Reserve, which is owned by the commercial banking industry. When you get paid for work it is merely a transfer of money that already exists. It was, at some time in the past, created by the banking industry for a purpose for which they saw fit to create (or really lend) money. The main reason people get a job is to get a transfer of money from people who already have some.
When we talk about money here we mean money that can be used in all transactions and in the repayment of all debts. This is what we are calling bank-money. However many non-bank types of so-called "money" raising instruments are increasingly being used by non-bank corporations to avoid direct contact with the bank money creating process. This includes things like corporate bonds and shareholder equity, which expand on the bank money supply, but all are completely dependant on, and rely on the confidence that they can be liquidated for, "bank money". We might call this other stuff "near money". Since, in our society, it is really bank money people seem to need for the basics of life, and these other near monies are luxuries for people that have excess, we will focus just on bank money in this edition of Wizards.
Misconception 2: Money has something to do with gold and Fort Knox.
FALSE: The monetary system USED to be backed by the gold standard until President Nixon abolished the Gold Standard in 1971 during the Vietnam War. He did this because there was not enough gold at Fort Knox, KY to back all the money that needed to be created to fund the massive wartime expenditures. The axing of the gold standard backing the US dollar led to the "floating" of most national currencies, which were no longer pegged to a gold conversion standard.
This lead to phenomenal growth in speculation against international currencies, which later led to massive economic and social crises in various countries that were speculated against. Examples include the Mexican Peso crisis of 1994-95, the Asian financial crisis of the late 1990s, followed by the Russian ruble crisis. Since the death of the gold standard and the floating of most major currencies we have seen currency speculation increase to an astonishing 98% of all international transactions. This means that "real economic" transactions account for a mere 2% of international transactions, and we truly live in the midst of a global casino. This data on currency speculation is derived from data from by the Bank for International Settlements and summarized in the book "The Future of Money" by Bernard Lietaer, Century Press.
Money supply and debt have exploded in the absence of gold convertibility and it is hard to make sense of what money really means anymore. Money is no longer a store of value. It is only a measure, an electronic accounting system of credits and debits, that has come to be accepted world over as the only way of conducting trade. Each day several trillion dollars travels the globe trying to attract more electronic credits for its owners.
Today's money is not backed by gold. It is now backed by nothing at all, except our trust in the monetary system. This is ultimately a trust in those that create and control money – the commercial banking system, and its major shareholders. The statement on all Federal Reserve Notes "In God we Trust", is perhaps the most telling statement of this trust. For, who would not trust something that appears to be so close to God?
There was no nasty thread until Mr BlainX came along... But of course He is a Homophobe, and I'm not gay. I just happen to have a friend and my bro in the photo. But thats not good enough for him... He has to go all the way.
This information comes from Burke's Peerage, which is the Bible of aristocratic genealogy, based in London. Every presidential election in America, since and including George Washington in 1789 to Barack Obama, has been won by the candidate with the most British and French royal genes. It was disclosed last year that Obama was a descendant of the monarch who ruled Scotland from 1165 to 1214, and his background and upbringing spans the globe. He was born in Hawaii to an American mother and a Kenyan father, later living in Indonesia. A separate study into John McCain's ancestry has now found that the 71-year-old Arizona senator has the same royal lineage.
Of the 44 presidents, 33 have been related to two people: Alfred the Great, King of England, and Charlemagne, the most famous monarch of France. So it goes on: 19 of them are related to England's Edward III, who has 2000 blood connections to Prince Charles. The same goes with the banking families in America.
George Bush and Barbara Bush are from the same bloodline - the Pierce bloodline, which changed its name from Percy, when it crossed the Atlantic. Percy is one of the aristocratic families of Britain, to this day. They were involved in the Gunpowder Plot to blow up Parliament at the time of Guy Fawkes”
If America declared its Independence from the European monarchies in 1776, how is it possible that every single president has descended from European monarchs? If presidents are democratically elected as we are told, what are the odds that we would always choose members of British and French royal bloodlines to lead us?
The Americas have always been owned and governed by the same royal families of Britain and Europe that conventional history states as being among those defeated during the wars of so-called ‘Independence.
If it really is the Land of the Free and if, as is claimed, anyone really can become the president, you would fairly expect that the 44 presidents from George Washington to Barack Obama would express that genetic diversity.
You're having a laugh. The presidents of the United States are as much a royal dynasty as anything in Europe, from whence their bloodlines came.”
So my DumbBlaine, you see... You haven't handled your own since DOT. How can America be expected to deal Internationally? Your ruled by Imperialist Royal Scum, and have never had democracy.
Thats why you have the American Dream. You got to be asleep to believe it
a legal state created by a declaration of war and ended by official declaration during which the international rules of war apply
an active struggle between competing entities; "a price war"; "a war of wits"; "diplomatic warfare" To make or wage war.
In war - is it not true that one side will gain from another's loss?
These gains would range simply from - Gaining peace, due to lack of opposition. (therefore war cannot continue), to complete takeover of resources, land and or economy previously owned by the opposing force.
In any war, is it not true that to fight the opponent, some form of armament will be used? Yes
Is it not true that arms are not free? Yes - They cost lots of money.
Let us now observe a great truth. Banks Have the capital.
To the bank, CAPITAL = Assets available for use in the production of further assets. And therefore Interest = FURTHER ASSETS
They Loan Money. In fact, Vast amounts of money.
It is loaned out every year to cover your countries expenditure. It also helps to pay for any 'Conflict' which would normally be your countries biggest costs.
Of course, first the need to establish a conflict, which has been reliably carried out since banking interests began.
To engage in conflict you will need expendable assets - Arms, soldiers, bases, roaming infrastructures etc... Maybe even Navy or Air-Force.
Most of these modern expendable 'Assets' will be created by giant multi billion dollar corporations.
But wait.... There is a problem.
How can you have a conflict if the other side has no expendable assets?
Don't worry.... The banks can solve that. They have the solution
Capital is 'LOANED' to both parties for use in the production or for obtaining further expendable assets.
Unfortunately, these 'assets' do not generate 'capital' for the country. Only further debt, which equals more capital for the bank.
Of course, it matters not to the bank, which side wins. In fact, winning is not the object as far as the bank is concerned.
Continuation of a conflict for as long as possible makes more demand for 'Capital' - to create yet more expendable assets or to repair or reinforce existing assets that may have been damaged in 'conflict'.
You as a 'Person' (not human - these are not legally defined as the same thing - see 'blacks law dictionary') are a bonded amount of security based on the potential revenue you may generate, and taxes that you will potentially pay, that will result in the payment of 'Interest' on the 'Capital'. With this in mind - your 'person' can be used as security, so that your government may obtain further loans necessary to cover its current over spending (and also its need to buy more weapons, if engaged in 'Conflict'). You also represent a potential 'expendable asset'.
Conflict - Capital - Assets - Interest
Simple math can deduce that without banks, we could not find the 'Capital' for 'Conflict'. And yet with 'Conflict', we cannot afford to clear our debt to the bank that paid for all the 'Assets' that we expended, and thus the bank capitalises by charging disproportionately high interest payments, which in turn result in disproportionately high taxes. These payments may also include portions of infrastructure and/or land owned by 'you' and/or the government.
Yet the bank retains payments on the initial 'Capital' plus further investments due to the fact that governments will have a country to run at higher cost due to increased population, over spending, inflation and of course - making the payments on the initial 'Capital' it received from the bank.
Most countries therefore cannot afford to keep up 100% of its pledged interest payments on the initial 'Capital' outlay, and therefore must borrow more 'Capital' to create further 'Assets' be they expendable or not.
So... Out of interest, because I had not even thought about this (thank you for mentioning) what ever happened to the 205 million gallons of oil, plus 1.8 million gallons of dispersant? Supposedly vanished? Supposedly cleaned up? Supposedly wont have any effect the the ecosystem? What do you suppose?
LoveEvolves Forum Posts (54)
Do you think more people are killed by -
Along these lines, it could be argued that much of the hardships forced upon the people of Indonesia and other Asian countries after the Asian financial crisis were the result of excessive risks taken by Western financial institutions in search of large returns or profits. It turned out that if these institutions were to bear the full costs of the risks they took leading up to the crisis then the whole financial system may have faced collapse. Through the IMF bailouts they effectively passed these otherwise bankrupting costs to parts of society that would not threaten the financial system, because they are not costed in its accounts. This, as usual, meant the poor, workers and Mother Nature, who form the balancing item of the biases built into today's unfree and inefficient markets.8) ANCIENT MONETARY WISDOM
What is surprising is that this knowledge is ancient wisdom and has been recorded in the primary texts of the world’s major religions. The Old Testament of the Bible speaks of the sin of usury and the concept of Jubilee, the period eradication of all debts. Most likely this is from very similar realizations thousands of years ago.
It is ironic that the Federal Reserve Note bearing the statement "In God we Trust" is the symbol of the system that so blatantly violates the key principles of this ancient wisdom claiming to be God’s word itself.
If money is so abstract and does not store value, nor correlate with social value, couldn't we change it to better satisfy our needs? This is what democratizing money really means - and like all movements to further democracy it will no doubt meet with serious resistance.