I agree completely. I used to watch all those zeitgeist films, but when i actually started educating myself, I accepted the fact that I knew very little. Reading Rothbard and Hazlitt was probably the best thing I ever did for my understanding of money and basic economic principles. Tomopoze would do himself well to sit down and study some Austrian literature.
lol same here [B]
There is NO MONEY traded into circulation today. 100% of it is loaned into circulation. The actual creation of money ALWAYS involves an extention of credit by a private commericial bank. It’s also very relavant to the point, because if a person doesn’t understand how money is created and put into circulation that how can he understand anything else about it? How can a person ever understand money if they don’t even understand the principles under which it functions?
Right now there is people going without in the “richest country in the world” because of a shortage of money. The author of this statement really needs to think about what he is saying. They clearly are not going without because they have enough or too much money.
What the author also fails to include in the orange growers cost of doing business (interest and taxes). At some point in time the orange grower simply has to charge enough money to pay his interest and taxes. Lets be honest here, how much can businesses keep lowering their prices till they go out of business. Clearly the author has never ran a business. Also the author clearly fails to understand that the govnernment creates no money in our system.
Sure. By the authors logic the problem in America is too much money. The also by his logic the solution to our economic mess is to pull all the money out of our wallets and tear it up and destroy it because that is what will fix our economy. If that’s the solution lets do it and get on with our lives.
It shows again, and again, and again. How about you try calling some businesses and ask them if their problem is to much money or too much debt and taxes. If you tried telling any business owner his problem is to much money they would laugh at you.
The author seems that he just can’t deal with the reality of today.
Food, Ipods, tires, cars, fuel, all come into exsistance by combining the raw resources of the earth, with mans knowledge and labor. That is how all wealth is created. All of these things do not circulate as money.
Money only comes into exsistance by an extention of credit by a private commercial bank. Money is not traded into circulation, it is only loaned. The FED agrees, the U.S. Congressional research service agrees, and the U.S. Treasury agrees, but none of them agree with you.
Because the country is desperatly short on money because of the laws of compound interest. When all money is loaned into exsistance as an interest bearing loan, as soon as time and interest kick in the debt grows but the money supply does not. Without some money being put into circulation that is debt free the debt has to grow every year until it become so large that society cannot sustain it, and we may be at that point in time right now, if not we are just a few short years away.
I’m sorry but it’s true. Whenever there is a lot of new money comming into circulation production has always increased and when the money was taken out of circulation production grinded to a halt. Anyone remember the “great depression” when the banking system dried up the money supply? I’m not telling anyone the moon is made of cheese, what I’m saying is that in order to be prosperous there has to be enough money in the system for people to meet the buying and selling needs.
Again, I’m not talking about theory, I’m talking about the facts about how our current monetary system works. Lets live in reality for a moment.
I didn’t quote a book and it’s been years. Since when did I put any calculus questions up here? I don’t read economics books anymore, I read books about how our monetary system actually works. Most economics books only teach a half truth, and a half truth is the damnest of all lies.
Banks are private commercial businesses and they DO create money, matter of fact, they are the only ones who do it in our system, and they only create that new money as interest bearing loans.
What is the Austrians opinion of the root cause of America’s financial problem? Please tell me.
I don’t hate gold or silver, I’ve just done the math. There isn’t enough of it on the plant to make it work as a general medium of exchange.
The principles of gold and silver was to combine mans labor, with the raw resources of the earth, along with his knowledge (monetization) and create money debt free under the 1792 free coinage act. All that money came into exsistance as an asset to the people instead of a liability. That’s the only reason gold/silver worked as money. The only problem with it was there wasn’t enough of it to work as a general medium of exchange.
From everything I’ve read, there has only been 158,000 tons of gold ever mined in the history of the world, and 40 billion ounces of silver ever mined. If you even had all the gold and silver in all the world and put it in Coin form and spent it into circulation in the USA it wouldn’t even dent the U.S. Debt. Even if we had no debt, and besides, if people really wanted to use coins, the would just use the ones we have now, or would have used the gold/silver coins back then. People have always preffered the check book money over the coin money. It’s easier, safer, and more convienient.
http://www.youtube.com/watch?v=9E0UPBtmTb0
After reading his newest book, I really don’t think Byron is a gold hater or gold lover, he’s just someone who has actually done the math.
What are you talking about?
I’m not here talking about calculus, I’m talking about how our monetary system functions.
Tom you are wrong. We are right.
Zimbabwe
What the author fails to realize is that business’s don’t establish the price of goods nor do the production costs necessarily establish the price of goods. Consumers themselves establish the price of goods. Econ 101.
P.S.
Tom, I know more about business than yo****u. Your an idiot. It’s actually HARD to remain in the state of ignorance your in right now.
Are you trying to tell me that businesses don’t have to include the cost of interest and taxes in the prices of their products?
What business do you own?
Last time I went shopping every business I went into had a price marked on all their items. Clearly those businesses established the prices of those goods. The consumers have to pay what the businesses ask or they don’t get the products. I never once seen customers walking into the stores setting prices.
What country are you from? Maybe you’re not living in America. Do you live in a country where everything is purchased at auction? How does money move into circulation in your country?
http://moneyaswealth.blogspot.com/2009/03/answering-propaganda.html
http://moneyaswealth.blogspot.com/2009/01/hyperinflation-zimbabwe-myth-and.html
Enjoy.
I’ve been following this thread for quite a while. Tomozope, please stop, it’s embarrassing. You are obviously entirely unfamiliar with basic Austrian ideas about almost everything you have talked about whether it be the business cycle, what money is, how it comes about, why there is no magic amount needed in any economy, the costs of business, etc. I beg you, read some literature on this site before you make any more posts. Stop assuming you know what money is and take the time to read Rothbard.
filc is right when he is telling you that you are trying to learn calculus before the order of operations. Just because calculus has higher applications and is more advanced doesn’t mean you can skip the fundamentals. In physics, you don’t start throwing friction and air resistance into the equation until well after you’ve analyzed a nonexistent and impossible frictionless world that resides in a vacuum. That doesn’t mean you are wasting your time by setting up a situation in that world. It is necessary to start basic before you add more complicated concepts and variables.
Maybe you think basic economics is beneath you. Trust me, a lot of professional economists would do well to go back to the basics.
Of course businesses have to include how much debt they owe and their tax obligations in their costs, but you said that the costs of business are “interest and taxes” which is not true. There are far more costs than just these.
You don’t have to hold an auction for prices to be set competitively or for consumers to affect the market. Sure the store owner physically sets the price, but he does so in such a way as to maximize profits. If consumers don’t buy his product at prevailing prices, he must lower them to sell the presently unsold units. That is how consumers influence the market (one way, that is). To say that consumers have no effect on price is to reject practically all economic thought. It’s completely nonsensical.
I said the costs of doing business.
Then can you tell me what money is?
But we aren’t talking about calculus, and i’m not trying to solve any calculus problems. All we are talking about is what do we actually use for money in America, who manufactures it, and how does it get into circulation, and none of those questions he can answer correctly.
And lets get down to the basics. What is the fuel that drives an economy? What fuel do we use to drive our economy? What are the consequences of using that fuel, good and bad?
The cost of doing business is interest and taxes. Businesses have other costs, that’s true, i won’t argue that. If you run a business and have to service a tax and interest load of 20k a month no matter weather you sell any of your products that is your cost of doing business.
Auctions are the only time prices get driven up by the market, and rarely if ever does anyone purchase anything at auction. When is the last time you went to target or wal mart and bid up the prices? When is the last time you ever seen anyone bid up prices at a store? Last time I checked with any stores out there they are all trying to undercut their competition and still remain profitable. (offer the lowest price possible while still remaining in business).
And where are these consumers going to get this money to purchase all these items? Where is that money created?
If it’s so great then you should be able to answer these next three questions flawlessly.
What is it that we use for money in America?
Who manufactures that money?
How is that money put into circulation?
Federal Reserve Notes are issued by the 12 Federal Reserve banks and liabilities of the Federal Reserve Banks, but the U.S. has agreed to make them good (obligation).
The Federal Reserve banks are not required to make good on their liabilities under current U.S. Law. AKA Federal Reserve Notes are not a legal promise to pay because they do not have a promise to pay written on their face. Good luck getting any court in the land to do anything about it though. But that really isn’t where the problem lies.
The obligation of the government was to make federal reserve notes as good as gold dollar for dollar because they are backed by the full faith (exactly as it sounds) and credit (backed by all the property of the USA) of the United States government but as a mortgage to the banking system who didn’t have anything to begin with.
Citing my quote in a chain of events related to Tom:
Fallacy: confusing cause and effect.
I do not know Tom and the only question I posed was how money qua the current federal reserve system that has been discussed in this entire thread does not represent debt.
I AM NOT TALKING ABOUT FRNs
Fallacy: red herring
The entire thread has been a discussion of private credit and frn’s.
Please stop with the lies. I’ve never said anything like that.
I’ll say it again.
I want debt free, wealth money spent into circulation so that the interest can be paid, allowing the people to get out of debt and still have a functioning medium of exchange.
I’ve got more literature to back up what I say that your theory. Wouldn’t matter what the facts are, it looks like you’re only interested in theory.
The treasury does not print new money and lend it to banks. The bereau of engraving and printing prints those federal reserve notes and sells them to the federal reserve banks for the cost of printing. Those federal reserve notes are not money though until they have been monetized by the banking Fed. Those notes are monetized when a banks purchase those notes at face value and sell them to you at face value by having you draw down on your checking account. FRN’s are only an evidence of the debt and do not bear interest, but the debt they represent does.
Banks to come clean on their loans? This is impossible because once time and interest kick in the debt grows (principle plus interest) but the money supply does not (principle). Currently America has a money supply of around 7.7 trillion and a total debt of 57 trillion. One thing you must understand is that then the principle is paid back, the money is destroyed. It’s clearly impossible to pay a 57 trillion dollar debt with only 7.7 trillion.
FRN’s are not the true money in America and they have a life cycle which varies on the value of the note (100’s last longer than 20’s because they are circulated less). When notes are worn out they are destroyed, or notes are returned to the federal reserve banks when banks want to reduce their reserves.
I’ll say it again, I’ve never watched these zeiteist films nor do I care to.
Our money is not being the federal reserve system. Our money is bank credit.
FRN’s (as with any monetary note) are an evidence of debt (credit).
The author clearly cannot accept the fact that all of the money we use comes into exsistance by an extention of credit by a private commerical bank. The process is so simple that most peoples minds simply cannot handle it.
Money as being Money is something that is used to pay a debt, and if you really want to get into it, we have no actual money in the system. What we use for money is interst bearing debt created by an extention of credit by the banking system. You cannot pay a debt with a debt and expect to get out of debt. Without some final payment (what money at the very least ought to be) the debt load on america will continue to increase until it becomes unsustainable. At that point in time i cannot tell you what will happen because I cannot predict the future but what i can say is that if we don’t impliment some radical change to the very foundation of how our money is put into circulation it’s not going to be a pleasurable experience for the many.
I noticed you did not cite a specific law. Therefore I consider your argument full of poop.
Stealing pancakes is the government obligation. The government does not possess title to all of the property in the U.S.A. It does have the power to tax. Seriously… shift gears. Your argument is dead unless you can produce a law that gives government title to all of the property within the borders of the U.S. Produce some tangible law or sit down and accept taxation is what makes the obligation good.
Answer this Tom. I am going to sell something this weekend. The product costs me $Z.xx. I want to make $Y.xx profit. I want volume so I am going to offer the following methods of consumer acquisition.
They can pay me $Z.xx + $Y.xx in FRN’s
They can pay me $Z.xx + $Y.xx + Fee in Private Credit
They can pay me $Z.xx in FRN’s + P payments of ($Y.xx with Interest / P)
They can pay me $Z.xx + Fee in Private Credit + P payments of ($Y.xx with interest / P)
If they choose to finance through me for did I create money?
If I created money is it debt based or does the money represent the goods they took possession of?
If I did not create money how do you account for the customer selling or trading the goods they took possession of and still owe me for to acquire something else?
http://www.law.cornell.edu/uscode/12/411.html
12 U.S.C. 411
Are you happy now? Do i have to research everything for you?
But the banking system has a mortgage on all the property of the USA. You do understand that the banking system is not part of the govnerment right?
You have not accepted the fact in a fractional reserve system all money comes into existence by converting a small amount of something to a larger amount of nothing. Once it is in existence only government intervention can make it a monopoly and eliminate the need for the original something of value.
I have little disagreement with your assessment of the Federal Reserve system 1) you rail against the Federal Reserve system but the railing should be against government, 2) presently government spending is what drives the fed to monetize debt, and 3) real property is not the obligation, the power to tax is.
You appear to be irking some more established forum members by arguing 1) there is not enough gold and silver which just invites criticism because it is a silly argument and 2) some disagreements with the validity of the austrian school of defining money.
Seeing this thread evolve I wish I hadn’t even posted in it. If someone would have made a distinction several pages ago when they said money != debt they were not referring to FRN’s or credit I would have dropped out of this thread long ago.
Here is a place to start.
And what is this small amount of something you reffer too?
Government monopolies can exsist without government help. Government is supposed to break up monopolies.
But I think govenrment does not create any money, and govenrment is the solution, either at the state level or federal. How else are we going to fix this other than to start passing laws to break up these monopolies and also pass laws that put the benifit of the money system back into the peoples control?
Do you realize that the government creates no money and that the Fed is 100% controlled by the private banking system? Any amount of reading will tell you that the fed operates independent of the government.
Property is what is of real value in America. Taxes are mearly collected to pay interest to private corporations known as banks because 100% of this money is all owed to private commercial banks who own all the money all the time.
Do the math, it’s really simple.
Please define money for me if it’s so clear and simple from what they teach here.
Then don’t post here.