One man's profit is another man's debt

Discussion in 'Politics' started by Leweman, Aug 15, 2011.

  1. Leweman
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    Leweman Gold Member

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    Do people understand that under the current banking system in the United States it's impossible for some people to not be in debt? It would be impossible for the entire country to break even because of the addition of interest to all money loaned into existence. Therefore, there will always be "have nots" in this country because there is more money owed than money that exists. This is a direct result of the Federal Reserve monetary policy. Time to end the Fed.

    [ame=http://www.youtube.com/watch?v=99DYh8Zpkpw]Money - How it gets created out of thin air - YouTube[/ame]
     
  2. martybegan
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    martybegan Gold Member

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    You do realize that in a fiat money system wealth can be created and therefore money created by increases in GDP? Wealth is not a zero sum game in fiat monetary systems, as you imply in your post.
     
  3. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Look dude, when the market crashes 500 points there is maybe a trillion dollars or so of wealth that goes up in smoke. Almost all of it is the rich guys losing electronic money in the value of their portfolios. It's not as though a buncha middle class or lower income people get that money, it's just poof, gone. And there is nobody at the fed or anywhere else actually burning a trillion dollars of paper money either.

    And the reverse is true too. Since about 1980 the stock market has gone up from around 800 points to over 12,000 before the latest pullback. That's a lot of wealth, and despite what liberal pundits may say, it didn't come to the rich guys who had investments in the market from everyone else. As Marty says, it ain't a zero sum game.
     
  4. Leweman
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    Leweman Gold Member

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    Money can be created, sure, but it is only loaned out into circulation (With interest), so there is always more money owed then there is out there no matter how much money is created.
     
  5. Leweman
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    Leweman Gold Member

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    "If it were not for the elasticity of bank credit … a boom in security values could not last for any length of time. In the absence of inflationary credit the funds available for lending to the public for security purchases would soon be exhausted, since even a large supply is ultimately limited. The supply of funds derived solely from current new savings and current amortization allowances is fairly inelastic.… Only if the credit organization of the banks (by means of inflationary credit) or large-scale dishoarding by the public make the supply of loanable funds highly elastic, can a lasting boom develop.… A rise on the securities market cannot last any length of time unless the public is both willing and able to make increased purchases."

    http://mises.org/daily/4654
     
  6. The T
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    The T George S. Patton Party Supporting Member

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    The only way out of it is to get people working ...producing assets, Downsizing government and getting RID of the Federal Reserve.
     
  7. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    I suspect you do not have the slightest idea of what you just posted really means.

    BTW, your link didn't work.
     
  8. Leweman
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    Leweman Gold Member

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    hmmmmmmm ... I'm pretty sure you don't have the slightest. And the link works fine
     
  9. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Finally got the link to work, thanks for posting it. It's an interesting article from the Austrian School of Economics, which doesn't make it right or wrong, just a theory. Far as I can tell, it has nothing to do with what I said, you just pulled a paragraph out of this piece and did not tie it to what we were talking about. Posting clips from somebody else's writings instead of presenting your own tends to make people wonder if you know what you're talking about.
     
  10. Leweman
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    Leweman Gold Member

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    Glad it worked for you. Basically it has to do with the stock market being based on supply and demand. Just like anything in our economy. The more people that buy a stock the more valuable it becomes because the less available it is. A stock becomes less valuable because peoople sell it. A trillion dollars wasnt lost in the stock market it was just sold off. That trillion dollars is somewhere just not with the people that still own the stock.
     

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