Why do we need private banks

[afx114]

It seems to me that if we (the public) are putting money into banks, they are already, by definition, nationalized. The whole point of capitalism is that the ones who put capital into a business are in effect the owners of said business.

If taxpayers are putting money into banks, taxpayers should own the banks. How is that not nationalization? I want my share of the banks. Do you?

[rnen]

[quote=TheBreeze][quote=rnen]Yep, thats the answer alright…. have the government control a single bank. That would solve all our problems, I mean look how successful the past administrations, BOTH Dem. and Rep., have been at running any programs. The astounding results of the Social Security program is all I need to see! How could we all have been so blind to the obvious answer to all of these problems… bigger and better government. Hey, we already have two people that could step in and run the bank so success would be assured and good times and prospierity for all would result… Barney Frank and Chuck Shumer!!

[/quote]

Not sure if you’ve been living under a rock or not, but pretty much all the big banks would be out of business if it weren’t for government/taxpayer dollars propping them up. The same fate would probably befall most of the small banks too. So what exactly is the point of your ridiculous rant?[/quote]

I guess under your rock the government had nothing to do with the whole lending fiasco? No legislation passed and pressure applied to banks to lend money to those who had no business getting loans? Frank, Shumer, Waters and the like did not further the problem by not only berating the regulators but blocking any type of reform. In case you did not have access to this gem from Frank under your rock I think you may find this interesting:
“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[rnen]

[quote=TheBreeze][quote=rnen]Yep, thats the answer alright…. have the government control a single bank. That would solve all our problems, I mean look how successful the past administrations, BOTH Dem. and Rep., have been at running any programs. The astounding results of the Social Security program is all I need to see! How could we all have been so blind to the obvious answer to all of these problems… bigger and better government. Hey, we already have two people that could step in and run the bank so success would be assured and good times and prospierity for all would result… Barney Frank and Chuck Shumer!!

[/quote]

Not sure if you’ve been living under a rock or not, but pretty much all the big banks would be out of business if it weren’t for government/taxpayer dollars propping them up. The same fate would probably befall most of the small banks too. So what exactly is the point of your ridiculous rant?[/quote]

I guess under your rock the government had nothing to do with the whole lending fiasco? No legislation passed and pressure applied to banks to lend money to those who had no business getting loans? Frank, Shumer, Waters and the like did not further the problem by not only berating the regulators but blocking any type of reform. In case you did not have access to this gem from Frank under your rock I think you may find this interesting:
“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[rnen]

[quote=TheBreeze][quote=rnen]Yep, thats the answer alright…. have the government control a single bank. That would solve all our problems, I mean look how successful the past administrations, BOTH Dem. and Rep., have been at running any programs. The astounding results of the Social Security program is all I need to see! How could we all have been so blind to the obvious answer to all of these problems… bigger and better government. Hey, we already have two people that could step in and run the bank so success would be assured and good times and prospierity for all would result… Barney Frank and Chuck Shumer!!

[/quote]

Not sure if you’ve been living under a rock or not, but pretty much all the big banks would be out of business if it weren’t for government/taxpayer dollars propping them up. The same fate would probably befall most of the small banks too. So what exactly is the point of your ridiculous rant?[/quote]

I guess under your rock the government had nothing to do with the whole lending fiasco? No legislation passed and pressure applied to banks to lend money to those who had no business getting loans? Frank, Shumer, Waters and the like did not further the problem by not only berating the regulators but blocking any type of reform. In case you did not have access to this gem from Frank under your rock I think you may find this interesting:
“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[rnen]

[quote=TheBreeze][quote=rnen]Yep, thats the answer alright…. have the government control a single bank. That would solve all our problems, I mean look how successful the past administrations, BOTH Dem. and Rep., have been at running any programs. The astounding results of the Social Security program is all I need to see! How could we all have been so blind to the obvious answer to all of these problems… bigger and better government. Hey, we already have two people that could step in and run the bank so success would be assured and good times and prospierity for all would result… Barney Frank and Chuck Shumer!!

[/quote]

Not sure if you’ve been living under a rock or not, but pretty much all the big banks would be out of business if it weren’t for government/taxpayer dollars propping them up. The same fate would probably befall most of the small banks too. So what exactly is the point of your ridiculous rant?[/quote]

I guess under your rock the government had nothing to do with the whole lending fiasco? No legislation passed and pressure applied to banks to lend money to those who had no business getting loans? Frank, Shumer, Waters and the like did not further the problem by not only berating the regulators but blocking any type of reform. In case you did not have access to this gem from Frank under your rock I think you may find this interesting:
“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[rnen]

[quote=TheBreeze][quote=rnen]Yep, thats the answer alright…. have the government control a single bank. That would solve all our problems, I mean look how successful the past administrations, BOTH Dem. and Rep., have been at running any programs. The astounding results of the Social Security program is all I need to see! How could we all have been so blind to the obvious answer to all of these problems… bigger and better government. Hey, we already have two people that could step in and run the bank so success would be assured and good times and prospierity for all would result… Barney Frank and Chuck Shumer!!

[/quote]

Not sure if you’ve been living under a rock or not, but pretty much all the big banks would be out of business if it weren’t for government/taxpayer dollars propping them up. The same fate would probably befall most of the small banks too. So what exactly is the point of your ridiculous rant?[/quote]

I guess under your rock the government had nothing to do with the whole lending fiasco? No legislation passed and pressure applied to banks to lend money to those who had no business getting loans? Frank, Shumer, Waters and the like did not further the problem by not only berating the regulators but blocking any type of reform. In case you did not have access to this gem from Frank under your rock I think you may find this interesting:
“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[TheBreeze]

[quote=rnen]

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[/quote]

Ring…ring…ring. “Hi, this is the cluephone. Who do you think is going to put ‘regulations and controls’ on the banking system? Ding! Ding! Ding! That’s right, it’ll have to be the government. Frank, Schumer, and Waters. Get a clue.”

So under your ‘private banks’ plan we have two corrupt systems – the government and the private banks. The private banksters then pay the government politicians to keep easing back on regs so that they can continue to rape America. If all the banks were controlled only by the government, there wouldn’t be any lobbying/payments to politicians from banks and maybe then the government would put in some reasonable regs. With private banks, there’s no chance of that happening.

How do you reconcile your view that banks need governmental ‘regulations and controls’ (presumably from the same government that Frank, Schumers, and Waters are a part of) with your view that we need private banks and that Frank, Schumers, and Waters shouldn’t dictate ‘lending policies’? So Frank, Schumers, and Waters are capable of crafting reasonable ‘regulations and controls’, but they aren’t capable of creating reasonable ‘lending policies’? There is a massive logical disconnect in your argument.

We’ve already tried ‘private banks’. They failed. Big time. Why do you want to go back there? What’s going to stop them from raping the system and failing again? A government led by Frank, Schumers, and Waters is going to stop the private banks from raping the system again? Please. Other than abolishing the Fed and the fractional reserve banking system, the only hope of having a banking system that won’t rape and pillage is to make it 100% owned by the government.

[TheBreeze]

[quote=rnen]

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[/quote]

Ring…ring…ring. “Hi, this is the cluephone. Who do you think is going to put ‘regulations and controls’ on the banking system? Ding! Ding! Ding! That’s right, it’ll have to be the government. Frank, Schumer, and Waters. Get a clue.”

So under your ‘private banks’ plan we have two corrupt systems – the government and the private banks. The private banksters then pay the government politicians to keep easing back on regs so that they can continue to rape America. If all the banks were controlled only by the government, there wouldn’t be any lobbying/payments to politicians from banks and maybe then the government would put in some reasonable regs. With private banks, there’s no chance of that happening.

How do you reconcile your view that banks need governmental ‘regulations and controls’ (presumably from the same government that Frank, Schumers, and Waters are a part of) with your view that we need private banks and that Frank, Schumers, and Waters shouldn’t dictate ‘lending policies’? So Frank, Schumers, and Waters are capable of crafting reasonable ‘regulations and controls’, but they aren’t capable of creating reasonable ‘lending policies’? There is a massive logical disconnect in your argument.

We’ve already tried ‘private banks’. They failed. Big time. Why do you want to go back there? What’s going to stop them from raping the system and failing again? A government led by Frank, Schumers, and Waters is going to stop the private banks from raping the system again? Please. Other than abolishing the Fed and the fractional reserve banking system, the only hope of having a banking system that won’t rape and pillage is to make it 100% owned by the government.

[TheBreeze]

[quote=rnen]

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[/quote]

Ring…ring…ring. “Hi, this is the cluephone. Who do you think is going to put ‘regulations and controls’ on the banking system? Ding! Ding! Ding! That’s right, it’ll have to be the government. Frank, Schumer, and Waters. Get a clue.”

So under your ‘private banks’ plan we have two corrupt systems – the government and the private banks. The private banksters then pay the government politicians to keep easing back on regs so that they can continue to rape America. If all the banks were controlled only by the government, there wouldn’t be any lobbying/payments to politicians from banks and maybe then the government would put in some reasonable regs. With private banks, there’s no chance of that happening.

How do you reconcile your view that banks need governmental ‘regulations and controls’ (presumably from the same government that Frank, Schumers, and Waters are a part of) with your view that we need private banks and that Frank, Schumers, and Waters shouldn’t dictate ‘lending policies’? So Frank, Schumers, and Waters are capable of crafting reasonable ‘regulations and controls’, but they aren’t capable of creating reasonable ‘lending policies’? There is a massive logical disconnect in your argument.

We’ve already tried ‘private banks’. They failed. Big time. Why do you want to go back there? What’s going to stop them from raping the system and failing again? A government led by Frank, Schumers, and Waters is going to stop the private banks from raping the system again? Please. Other than abolishing the Fed and the fractional reserve banking system, the only hope of having a banking system that won’t rape and pillage is to make it 100% owned by the government.

[TheBreeze]

[quote=rnen]

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[/quote]

Ring…ring…ring. “Hi, this is the cluephone. Who do you think is going to put ‘regulations and controls’ on the banking system? Ding! Ding! Ding! That’s right, it’ll have to be the government. Frank, Schumer, and Waters. Get a clue.”

So under your ‘private banks’ plan we have two corrupt systems – the government and the private banks. The private banksters then pay the government politicians to keep easing back on regs so that they can continue to rape America. If all the banks were controlled only by the government, there wouldn’t be any lobbying/payments to politicians from banks and maybe then the government would put in some reasonable regs. With private banks, there’s no chance of that happening.

How do you reconcile your view that banks need governmental ‘regulations and controls’ (presumably from the same government that Frank, Schumers, and Waters are a part of) with your view that we need private banks and that Frank, Schumers, and Waters shouldn’t dictate ‘lending policies’? So Frank, Schumers, and Waters are capable of crafting reasonable ‘regulations and controls’, but they aren’t capable of creating reasonable ‘lending policies’? There is a massive logical disconnect in your argument.

We’ve already tried ‘private banks’. They failed. Big time. Why do you want to go back there? What’s going to stop them from raping the system and failing again? A government led by Frank, Schumers, and Waters is going to stop the private banks from raping the system again? Please. Other than abolishing the Fed and the fractional reserve banking system, the only hope of having a banking system that won’t rape and pillage is to make it 100% owned by the government.

[TheBreeze]

[quote=rnen]

Do we need to rethink the banking system as a whole? Absolutely. Do we need to put regulations and controls on the banking system? With out a doubt. Do we want the government to decide who qaulifies for a loan? Gee, maybe not such a good idea.

Just imagine the shape we would be in if the likes of Frank, Shumer and Waters dictated lending policies.

[/quote]

Ring…ring…ring. “Hi, this is the cluephone. Who do you think is going to put ‘regulations and controls’ on the banking system? Ding! Ding! Ding! That’s right, it’ll have to be the government. Frank, Schumer, and Waters. Get a clue.”

So under your ‘private banks’ plan we have two corrupt systems – the government and the private banks. The private banksters then pay the government politicians to keep easing back on regs so that they can continue to rape America. If all the banks were controlled only by the government, there wouldn’t be any lobbying/payments to politicians from banks and maybe then the government would put in some reasonable regs. With private banks, there’s no chance of that happening.

How do you reconcile your view that banks need governmental ‘regulations and controls’ (presumably from the same government that Frank, Schumers, and Waters are a part of) with your view that we need private banks and that Frank, Schumers, and Waters shouldn’t dictate ‘lending policies’? So Frank, Schumers, and Waters are capable of crafting reasonable ‘regulations and controls’, but they aren’t capable of creating reasonable ‘lending policies’? There is a massive logical disconnect in your argument.

We’ve already tried ‘private banks’. They failed. Big time. Why do you want to go back there? What’s going to stop them from raping the system and failing again? A government led by Frank, Schumers, and Waters is going to stop the private banks from raping the system again? Please. Other than abolishing the Fed and the fractional reserve banking system, the only hope of having a banking system that won’t rape and pillage is to make it 100% owned by the government.

[Arraya]

Besides fractional reserve lending the way money works has a shelf life. Collapse is built into the system. It’s pretty obvious why it was essentially state mandated to give out as many loans as possible over the past few years. Because it has a definitive PONZI scheme structure that requires more and more suckers to keep in from collapsing. Madoff is small potatoes compared to the central banking system and the Fed.

http://www.chrismartenson.com/EssentialArticles
A debt-based monetary system has a lifespan-limiting Achilles heel: as debt is created through loan origination, an obligation above and beyond this sum is also created in the form of interest. As a result, there can never be enough money to repay principal and pay interest unless debt is continually expanded. Debt-based monetary systems do not work in reverse, nor can they stand still without a liquidity buffer in the form of savings or a current account surplus.

When interest charges exceed debt growth, debtors at the margin are unable to service their debt. They must begin liquidating.

Mr. Lachance reveals the mathematical limit as being the moment that new debt creation falls short of existing interest charges. When that day comes, a wave of defaults will sweep through the system. Which is why our fiscal and monetary authorities are doing everything they can to keep money/debt creation robust.

But it’s a losing game, and they are only buying time. How do I know? Because nothing can expand infinitely forever. The evidence clearly points to exponentially rising levels of money and credit creation. As the bacterium example shows, once an exponential function gets rolling along, its self-reinforcing nature quickly takes over, requiring larger and larger aggregate amounts, even as the percentage remains seemingly tame.

Similarly, our supremely wealthy suffer only from an inability to spend what they ‘earn’ on their capital (interest & dividend income), which means their principal is compounding. But, because each dollar is loaned into existence, it means that when Bill Gates ‘earns’ $2 billion on his holdings, a whole lot of people somewhere else had to borrow that $2 billion. Taken to its logical extreme, and without enforced redistribution, this system would ultimately conclude with one person owning all of the world’s wealth. Game over, time for a Jubilee, hit the reset button, and start again.

When we started our monetary system, nobody ever thought that we would fill up our empty bacterium bottle. Nobody really thought through what it would mean to society once wealthy people earned more in interest & dividends than they could possibly spend. Nobody considered whether it was wise to place 100% of our economic chips into a monolithic banking system that requires perpetual, endless growth in order to merely function.

So, we must ask ourselves: Does it seem possible that our money supply can continue to double every 6 years forever? How about another 100 years? How about another six? What will it feel like when we are adding another $1 trillion every month, week, day, and then, finally, every hour?

Just remember, money is supposed to be a store of value; or, said another way, a store of human effort. Currently it seems to be failing at meeting that characteristic and therefore is failing at being money.

Who ever thought that oil production would hit a limit? Who knew that every acre of arable land, and then some, would someday be put into production? How could we possibly fish the seas empty?

We have parabolic money on a spherical planet. The former demands perpetual growth while the latter has definitive boundaries. Which will win?

[Arraya]

Besides fractional reserve lending the way money works has a shelf life. Collapse is built into the system. It’s pretty obvious why it was essentially state mandated to give out as many loans as possible over the past few years. Because it has a definitive PONZI scheme structure that requires more and more suckers to keep in from collapsing. Madoff is small potatoes compared to the central banking system and the Fed.

http://www.chrismartenson.com/EssentialArticles
A debt-based monetary system has a lifespan-limiting Achilles heel: as debt is created through loan origination, an obligation above and beyond this sum is also created in the form of interest. As a result, there can never be enough money to repay principal and pay interest unless debt is continually expanded. Debt-based monetary systems do not work in reverse, nor can they stand still without a liquidity buffer in the form of savings or a current account surplus.

When interest charges exceed debt growth, debtors at the margin are unable to service their debt. They must begin liquidating.

Mr. Lachance reveals the mathematical limit as being the moment that new debt creation falls short of existing interest charges. When that day comes, a wave of defaults will sweep through the system. Which is why our fiscal and monetary authorities are doing everything they can to keep money/debt creation robust.

But it’s a losing game, and they are only buying time. How do I know? Because nothing can expand infinitely forever. The evidence clearly points to exponentially rising levels of money and credit creation. As the bacterium example shows, once an exponential function gets rolling along, its self-reinforcing nature quickly takes over, requiring larger and larger aggregate amounts, even as the percentage remains seemingly tame.

Similarly, our supremely wealthy suffer only from an inability to spend what they ‘earn’ on their capital (interest & dividend income), which means their principal is compounding. But, because each dollar is loaned into existence, it means that when Bill Gates ‘earns’ $2 billion on his holdings, a whole lot of people somewhere else had to borrow that $2 billion. Taken to its logical extreme, and without enforced redistribution, this system would ultimately conclude with one person owning all of the world’s wealth. Game over, time for a Jubilee, hit the reset button, and start again.

When we started our monetary system, nobody ever thought that we would fill up our empty bacterium bottle. Nobody really thought through what it would mean to society once wealthy people earned more in interest & dividends than they could possibly spend. Nobody considered whether it was wise to place 100% of our economic chips into a monolithic banking system that requires perpetual, endless growth in order to merely function.

So, we must ask ourselves: Does it seem possible that our money supply can continue to double every 6 years forever? How about another 100 years? How about another six? What will it feel like when we are adding another $1 trillion every month, week, day, and then, finally, every hour?

Just remember, money is supposed to be a store of value; or, said another way, a store of human effort. Currently it seems to be failing at meeting that characteristic and therefore is failing at being money.

Who ever thought that oil production would hit a limit? Who knew that every acre of arable land, and then some, would someday be put into production? How could we possibly fish the seas empty?

We have parabolic money on a spherical planet. The former demands perpetual growth while the latter has definitive boundaries. Which will win?

[Arraya]

Besides fractional reserve lending the way money works has a shelf life. Collapse is built into the system. It’s pretty obvious why it was essentially state mandated to give out as many loans as possible over the past few years. Because it has a definitive PONZI scheme structure that requires more and more suckers to keep in from collapsing. Madoff is small potatoes compared to the central banking system and the Fed.

http://www.chrismartenson.com/EssentialArticles
A debt-based monetary system has a lifespan-limiting Achilles heel: as debt is created through loan origination, an obligation above and beyond this sum is also created in the form of interest. As a result, there can never be enough money to repay principal and pay interest unless debt is continually expanded. Debt-based monetary systems do not work in reverse, nor can they stand still without a liquidity buffer in the form of savings or a current account surplus.

When interest charges exceed debt growth, debtors at the margin are unable to service their debt. They must begin liquidating.

Mr. Lachance reveals the mathematical limit as being the moment that new debt creation falls short of existing interest charges. When that day comes, a wave of defaults will sweep through the system. Which is why our fiscal and monetary authorities are doing everything they can to keep money/debt creation robust.

But it’s a losing game, and they are only buying time. How do I know? Because nothing can expand infinitely forever. The evidence clearly points to exponentially rising levels of money and credit creation. As the bacterium example shows, once an exponential function gets rolling along, its self-reinforcing nature quickly takes over, requiring larger and larger aggregate amounts, even as the percentage remains seemingly tame.

Similarly, our supremely wealthy suffer only from an inability to spend what they ‘earn’ on their capital (interest & dividend income), which means their principal is compounding. But, because each dollar is loaned into existence, it means that when Bill Gates ‘earns’ $2 billion on his holdings, a whole lot of people somewhere else had to borrow that $2 billion. Taken to its logical extreme, and without enforced redistribution, this system would ultimately conclude with one person owning all of the world’s wealth. Game over, time for a Jubilee, hit the reset button, and start again.

When we started our monetary system, nobody ever thought that we would fill up our empty bacterium bottle. Nobody really thought through what it would mean to society once wealthy people earned more in interest & dividends than they could possibly spend. Nobody considered whether it was wise to place 100% of our economic chips into a monolithic banking system that requires perpetual, endless growth in order to merely function.

So, we must ask ourselves: Does it seem possible that our money supply can continue to double every 6 years forever? How about another 100 years? How about another six? What will it feel like when we are adding another $1 trillion every month, week, day, and then, finally, every hour?

Just remember, money is supposed to be a store of value; or, said another way, a store of human effort. Currently it seems to be failing at meeting that characteristic and therefore is failing at being money.

Who ever thought that oil production would hit a limit? Who knew that every acre of arable land, and then some, would someday be put into production? How could we possibly fish the seas empty?

We have parabolic money on a spherical planet. The former demands perpetual growth while the latter has definitive boundaries. Which will win?

[Arraya]

Besides fractional reserve lending the way money works has a shelf life. Collapse is built into the system. It’s pretty obvious why it was essentially state mandated to give out as many loans as possible over the past few years. Because it has a definitive PONZI scheme structure that requires more and more suckers to keep in from collapsing. Madoff is small potatoes compared to the central banking system and the Fed.

http://www.chrismartenson.com/EssentialArticles
A debt-based monetary system has a lifespan-limiting Achilles heel: as debt is created through loan origination, an obligation above and beyond this sum is also created in the form of interest. As a result, there can never be enough money to repay principal and pay interest unless debt is continually expanded. Debt-based monetary systems do not work in reverse, nor can they stand still without a liquidity buffer in the form of savings or a current account surplus.

When interest charges exceed debt growth, debtors at the margin are unable to service their debt. They must begin liquidating.

Mr. Lachance reveals the mathematical limit as being the moment that new debt creation falls short of existing interest charges. When that day comes, a wave of defaults will sweep through the system. Which is why our fiscal and monetary authorities are doing everything they can to keep money/debt creation robust.

But it’s a losing game, and they are only buying time. How do I know? Because nothing can expand infinitely forever. The evidence clearly points to exponentially rising levels of money and credit creation. As the bacterium example shows, once an exponential function gets rolling along, its self-reinforcing nature quickly takes over, requiring larger and larger aggregate amounts, even as the percentage remains seemingly tame.

Similarly, our supremely wealthy suffer only from an inability to spend what they ‘earn’ on their capital (interest & dividend income), which means their principal is compounding. But, because each dollar is loaned into existence, it means that when Bill Gates ‘earns’ $2 billion on his holdings, a whole lot of people somewhere else had to borrow that $2 billion. Taken to its logical extreme, and without enforced redistribution, this system would ultimately conclude with one person owning all of the world’s wealth. Game over, time for a Jubilee, hit the reset button, and start again.

When we started our monetary system, nobody ever thought that we would fill up our empty bacterium bottle. Nobody really thought through what it would mean to society once wealthy people earned more in interest & dividends than they could possibly spend. Nobody considered whether it was wise to place 100% of our economic chips into a monolithic banking system that requires perpetual, endless growth in order to merely function.

So, we must ask ourselves: Does it seem possible that our money supply can continue to double every 6 years forever? How about another 100 years? How about another six? What will it feel like when we are adding another $1 trillion every month, week, day, and then, finally, every hour?

Just remember, money is supposed to be a store of value; or, said another way, a store of human effort. Currently it seems to be failing at meeting that characteristic and therefore is failing at being money.

Who ever thought that oil production would hit a limit? Who knew that every acre of arable land, and then some, would someday be put into production? How could we possibly fish the seas empty?

We have parabolic money on a spherical planet. The former demands perpetual growth while the latter has definitive boundaries. Which will win?

[Author]

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