Revolution is coming

[alloytoo]

What about working high up in AIG, playing wallstreet with bets AGAINST AIG, and then start running AIG into the ground with "Risky Investments?"
-If the investment turns out good, you make money from AIG.
-If the investments go bad and AIG loses, you again make money (as you were playing the stock market)

This is how a few companies go down -it's because some people have incentive when that company goes down.
1000's of people lose their jobs, and others walk away very wealthy.

Somebody always wins when a company goes under. It's stupid to think otherwise. In the battle for limited economic resources there will be winners and losers. (It's called the free market system)

You are also not seeing the "Big Picture" when it comes to lending.

I borrow $10 from you. you ask $12 back. it's interest...fine.
(You are now $2 up)
2 Days after, you borrow $10 from me, and I ask $12 back. you're ok with that, and pay me $12.
(We are now square again...none of us really paid $2)

But each of you had the potential buying of twenty dollars for two days, the opportunity to buy and sell goods beyond your initial means.

If you're borrowing money and don't use it then you're stupid. You payment 'rent' or opportunity cost for the capital in order to use it to achieve some end.

A company has the capital to make 10 widgets and sell them.

If the company borrows capital it can afford to make 100 widgets and sell them.

If the profit on 90 widgets is greater than the borrowing costs then the bank will lend them the money.

Still with me? Ok.

Now, what do you think would happen if every person in America borrowed $10? they all owe $12....correct?
My question to you now is, Where is all those millions of $2 of extra debt going to come from?

What would happen if everyone in America hired a truck, now they need to return the truck and pay the hire fee.
My question to you now is, Where is all those millions of $2 of extra [-]debt[/-] hire fee going to come from?

 

[crackersa]

What about working high up in AIG, playing wallstreet with bets AGAINST AIG, and then start running AIG into the ground with "Risky Investments?"
-If the investment turns out good, you make money from AIG.
-If the investments go bad and AIG loses, you again make money (as you were playing the stock market)

This is how a few companies go down -it's because some people have incentive when that company goes down.
1000's of people lose their jobs, and others walk away very wealthy.




You are also not seeing the "Big Picture" when it comes to lending.

I borrow $10 from you. you ask $12 back. it's interest...fine.
(You are now $2 up)
2 Days after, you borrow $10 from me, and I ask $12 back. you're ok with that, and pay me $12.
(We are now square again...none of us really paid $2)

Still with me? Ok.

Now, what do you think would happen if every person in America borrowed $10? they all owe $12....correct?
My question to you now is, Where is all those millions of $2 of extra debt going to come from?

so, if i invest a million dollars (as it is a commodity), i should just invest it for free? i shouldn't get nothing back in return for lending my company to an institution and carrying the risk of losing it all?

 

[Keeper]

I do not think money, or even debt, should be traded as a commodity.

Imagine this concept (It might sound strange to you though):
Banks are not for-profit companies. the Government is the bank.
So you walk down to your ATM. you have $0, and draw $100. your balance is now at -$100.
so next time, when you get your $1000 salary, they take away $100. your balance is $900.

Why should there be companies that make money, from simply moving money around?

That is what the bitcoin system was trying to fix....a fixed amount of money. no new coins, no charges when sending money, nothing.



The simplest way to say it is:
If every person in the world borrowed money from every person on their left, and paid it back, nobody would owe anyone anything.
but because we borrow from the bank, debt is created out of thin air, that must be repayed.

it's like musical chairs.


i'll see if i can find a graphic, else i will make one.

 

[PostmanPot]

[video=youtube;u6rSBifsvwg]http://www.youtube.com/watch?v=u6rSBifsvwg[/video]

 

[alloytoo]

I do not think money, or even debt, should be traded as a commodity.

Imagine this concept (It might sound strange to you though):
Banks are not for-profit companies. the Government is the bank.
So you walk down to your ATM. you have $0, and draw $100. your balance is now at -$100.
so next time, when you get your $1000 salary, they take away $100. your balance is $900.

Why should there be companies that make money, from simply moving money around?

Why should car hire companies make money from simply moving cars around?

Who bought the cars, why should they get a return on their investment in cars?

The simplest way to say it is:
If every person in the world borrowed money from every person on their left, and paid it back, nobody would owe anyone anything.
but because we borrow from the bank, debt is created out of thin air, that must be repayed.

it's like musical chairs.

Instead of giving it to the fellow next to us, we all give it to the bank. The bank then lends it to someone who wants to build a factory.

I don't want to build a factory, but by lending money I ultimately earn a percentage of the return on the factory.

 

[Arthur]

I do not think money, or even debt, should be traded as a commodity.

Imagine this concept (It might sound strange to you though):
Banks are not for-profit companies. the Government is the bank.
So you walk down to your ATM. you have $0, and draw $100. your balance is now at -$100.
so next time, when you get your $1000 salary, they take away $100. your balance is $900.

Why should there be companies that make money, from simply moving money around?

So who pays the staff working at the banks? Who pays for the ATMs and the people who make them, install them, maintain them? And the computers and networks and offices for "moving" money? Etcetera. Or should their salaries be deducted from customer accounts? Either way, your example above is a fantasy and the sure way to bankruptcy and death.

Remember, governments have no money except what they take from working people.

The basic rule of sustainable life is that you need to produce more than you consume. This is called profit. Profit is essential to pay for replacements, and also for new developments that only produce in the future (investment). Things wear out and need to be replaced. Kids and old people cannot work and produce profit. There are always dependents. A mine takes 10 years to come on stream. If you do not produce profit, the only way to survive is to use money earned by someone else - now either they give it to you freely out of charity, or you borrow it, or you take it by force or fraud (ie steal). The latter, whether done by individuals, groups or governments, is always immoral.

Oh, by the way -- in the example you quote further up about a millionaire getting $10k/month from his $1m investment: do you know what US interest rates are? More like $1.5k/month. And he's not doing "nothing" - the money represents 'crytalised' labour at marginal utility value, which is why it can be lent and used by others, in exchange by free and uncoerced contract; by lending it to another it means in effect that the owner's 'crystalised labour' is producing wealth for someone else. Surely the owner is entitled to a portion - this is really all that interest is. By the way, inflation means that borrowing R100 today and paying R100 back next year means the lender gets back less than he lent - we might call it R100 but in fact it buys what R90 buys today, so you need to pay him back R110 just to repay equivalent value. And then there's interest.

Also, Anarchism doesn't necessarily mean lawless or chaos.

 

[klasvaakie]

What all sensible people are failing to see...and I hope that changes...is that humanity is at the brink of something huge. They are so scared of change that they have entered a state of negative panic and refuses to see that the iceberg is coming. There is NOTHING to stop it purely because no one who can stop it is willing to and I am so glad for that. Change on a huge magnitute is coming and everything we think is important will vanish and I hope gets replaced by something better. Humanity can be so ugly, vile and evil at times...but from the same people who did those vile and ugly things something beautiful can come. These people OWS arent going to be the reason for the change that is coming, they are merely a symtom of what is truly wrong. And what is truly wrong is us...all of us, me included. A change is coming and I am merely hoping it wont be too hard to handle.

 

[Alan]

meh hurry it up already

 

[zippy]

So.. Where is this revolution then?
/yawn

 

[wrathex]

The Pickled Jar Effect

No matter what happens my friends, we're all in it together.

So how many of us ~7 billion are inventors, scientists and highly intelligent and innovative humans ?

Yes, it has taken our specie a long time and an immense amount of resources to get humanity this far.

Now that we teeter on the edge of real progression and change, call it a species singularity event, if you want, paradigm shift, here we are, a bunch of barbarians with technology more advanced than ourselves.

A world where the majority of the people are delusional, refusing to take responsibility for their existence, and a society naively clinging to psychotic beliefs in gods who rule from above.

We are a collective, one little humanity stuck in a gas band on this planet, with nothing between us and certain death by fire or incoming rocks, or nasty aliens or wrathful gods.

There is, however, no greater enemy to our civilisation and our long term survival, than ignorance !

 

[Keeper]

I don't blame people for not being able to see another system, because the current system has been engraved into us for so long.

it's okay to make a profit for providing a service - like renting a car, for example. cars need repairs, you need to keep them somewhere and pay for land, staff, etc.
If you borrow a car, and return it, there are damages,etc....when you borrow money and give it back, nothing has really changed.

so what im saying is, in the future (hopefully), everyone will have "credits". computers handle all the transactions, no charges for drawing money, no charges for borrowing some temporarily.
you might think this sounds "crazy", but look at bitcoin. it's possible.

there is NO REASON when you borrow money, that you have to give more back - you are creating the money because when you borrow, you create debt.
debt = money creation.

If only the government would create a system like bitcoin / "virtual wallet" it can be done - but they wont, because there is so much money to be made in this system.

 

[unskinnybob]

there is NO REASON when you borrow money, that you have to give more back - you are creating the money because when you borrow, you create debt.
debt = money creation.

Infinite creation of money? What would be the basis of currency control? Money should be finite. The reward for money being put into the system should be interest earned. The penalty for taking money out of the system should be interest paid.

The free market system fails in that there is no longer a body ensuring price is realistic and profit is rational/reasonable. In traditional macroeconomics the government assumed the role. This is no longer the case. Just look at the outcry internationally when governments try to interfere in price negotiation. Not saying the ANC government would be doing anybody favors if they got more involved in SA's economics.

What all sensible people are failing to see...and I hope that changes...is that humanity is at the brink of something huge. They are so scared of change that they have entered a state of negative panic and refuses to see that the iceberg is coming. There is NOTHING to stop it purely because no one who can stop it is willing to and I am so glad for that. Change on a huge magnitute is coming and everything we think is important will vanish and I hope gets replaced by something better. Humanity can be so ugly, vile and evil at times...but from the same people who did those vile and ugly things something beautiful can come. These people OWS arent going to be the reason for the change that is coming, they are merely a symtom of what is truly wrong. And what is truly wrong is us...all of us, me included. A change is coming and I am merely hoping it wont be too hard to handle.

Agree. IMHO things holding us back:
1. Religion (social conditioning)
2. Ignorance - racism, cultural-ism, etc. (social conditioning)
3. Corporations (Greed)
4. Corruption (Greed)

I'll try and think of some more.

 

[Keeper]

Infinite creation of money? What would be the basis of currency control? Money should be finite.

well sadly that's not the case.

 

[Arthur]

The free market system fails in that there is no longer a body ensuring price is realistic and profit is rational/reasonable. In traditional macroeconomics the government assumed the role. This is no longer the case. Just look at the outcry internationally when governments try to interfere in price negotiation. Not saying the ANC government would be doing anybody favors if they got more involved in SA's economics.

{snip}

IMHO things holding us back:
1. Religion (social conditioning)
2. Ignorance - racism, cultural-ism, etc. (social conditioning)
3. Corporations (Greed)
4. Corruption (Greed)

I'll try and think of some more.

If you're saying that religion is responsible for the free market, then I for one will gladly take the rap. Justice and freedom are also secular values (and rightly so), but they have their foundation in the metaphysics of transcendence.

Capitalism = liberation.

 

[unskinnybob]

Remember, governments have no money except what they take from working people.

Governments have pretty much free reign to set taxes to whatever they want.

The basic rule of sustainable life is that you need to produce more than you consume. This is called profit.

That is incorrect. Production over consumption is called surplus. Profit is the difference between production cost and sales price.

If you're saying that religion is responsible for the free market

Not at all.

Capitalism = liberation.

Liberation from what?

As a species, should we:
a.) Strive to further our knowledge and improve ourselves and our surroundings
b.) Accumulate as much wealth as possible at any expense

Point b only favors the few. Point a is to the advantage of all.

No one effectively regulates point b.

 

[Alan]

The free market system fails in that there is no longer a body ensuring price is realistic and profit is rational/reasonable. In traditional macroeconomics the government assumed the role. This is no longer the case. Just look at the outcry internationally when governments try to interfere in price negotiation. Not saying the ANC government would be doing anybody favors if they got more involved in SA's economics.

So you contradict yourself. It's government, in our case the ANC, keeping those nasty capitalist corporations in check with this country's extensive regulations

 

[Arthur]

Governments have pretty much free reign to set taxes to whatever they want.

Er, yes. So? Once taxes go over about 10% or so they become evil.

Production over consumption is called surplus. Profit is the difference between production cost and sales price.

In the context used above, a distinction without a difference. Or do you want a sidebar on the six meanings of "surplus"? A refutation of Mr Marx's "surplus value" theories of profit, which produced 100 million corpses? Where shall we start - Hegel? Feuerbach? The end is always the same: death and destruction.

Liberation from what?

As a species, should we:
a.) Strive to further our knowledge and improve ourselves and our surroundings
b.) Accumulate as much wealth as possible at any expense

Point b only favors the few. Point a is to the advantage of all.

Fallacy of the False Choices. Note the sly epistemic embedding with the phrase "at any expense", which really begs the question. Besides, in the real world "furthering knowledge, improving ourselves & surroundings" and "accumulate as much wealth as possible" are not mutually exclusive. The naughty false qualifier "at any expense" can be tacked onto any either-or you care to produce and you still end up with a fatally polluted choice. Nice try but it won't fly.

No one effectively regulates point b.

That's the merit of a free market. The last thing we need is ONE regulator, as you suggest (or is your wording merely sloppy English or sloppy thinking?). And the worst regulator of all is the State. Evidence: The World As It Is Today.

 

[unskinnybob]

So you contradict yourself. It's government, in our case the ANC, keeping those nasty capitalist corporations in check with this country's extensive regulations

I was talking in general - perfect world scenario. I then referred to our shining success story of a government. Not like SA is the corporate capital of the world.

In the context used above, a distinction without a difference. Or do you want a sidebar on the six meanings of "surplus"? A refutation of Mr Marx's "surplus value" theories of profit, which produced 100 million corpses? Where shall we start - Hegel? Feuerbach? The end is always the same: death and destruction.

The discussion was on economics not philosophy. Look up the difference between surplus and profit. Economics 101. Death and destruction? Not following you there chap. I'm talking free market system as taught in varsity to this day - not Carl Marx's pie in the sky.

Fallacy of the False Choices. Note the sly epistemic embedding with the phrase "at any expense", which really begs the question. Besides, in the real world "furthering knowledge, improving ourselves & surroundings" and "accumulate as much wealth as possible" are not mutually exclusive.

They are when they come with a price tag. Was Louis Pasteur chasing profit, or seeking to save lives. Do the big drug companies try to save lives today, or are they merely chasing profit. What do nobel prize hopefuls bank balances look like? Are they in it for the money?

The naughty false qualifier "at any expense" can be tacked onto any either-or you care to produce and you still end up with a fatally polluted choice. Nice try but it won't fly.

Really? Mass production and industrialization to the point where goods are dumped in order to kill competition and create monopolies are in the interest of our future?

That's the merit of a free market. The last thing we need is ONE regulator, as you suggest (or is your wording merely sloppy English or sloppy thinking?). And the worst regulator of all is the State. Evidence: The World As It Is Today.

China, as examples go, begs to differ.

Sloppy English? If you say so. Not everyone tries to hide lack of content behind posh English.

 

[alloytoo]

I don't blame people for not being able to see another system, because the current system has been engraved into us for so long.

it's okay to make a profit for providing a service - like renting a car, for example. cars need repairs, you need to keep them somewhere and pay for land, staff, etc.
If you borrow a car, and return it, there are damages,etc....when you borrow money and give it back, nothing has really changed.

Are you really this naive?

A car represents capital, it is money that could have been used to buy (and sell) stock and make a profit. The car rental place needs to have a return, a profit about the same as if he had bought stock and sold it and made a profit. Instead of stock he sells the Time Value of his car/truck.

Likewise a bank sells the use of money for a period for a return. The bank could buy and sell stock and make a profit, instead it lends to someone who can do that, and he pays a portion of his profit to them.

so what im saying is, in the future (hopefully), everyone will have "credits". computers handle all the transactions, no charges for drawing money, no charges for borrowing some temporarily.
you might think this sounds "crazy", but look at bitcoin. it's possible.

There is always a time value to money, and if you borrow you should acknowledge that.

there is NO REASON when you borrow money, that you have to give more back - you are creating the money because when you borrow, you create debt.
debt = money creation.

If money had no time value then nobody would invest in and lend money to banks, then the banks would be unable to lend money to others.


The result is a liquidity crisis, more commonly known as a economic depression, specifically the Great Depression and more recently the GEC.

If only the government would create a system like bitcoin / "virtual wallet" it can be done - but they wont, because there is so much money to be made in this system.

Thankfully the government's advisors are marginally better economists than you.

 

[alloytoo]

Infinite creation of money? What would be the basis of currency control? Money should be finite. The reward for money being put into the system should be interest earned. The penalty for taking money out of the system should be interest paid.

Money supply reflects the total value of goods and services in a economy so the money supply should increase. Because the money supply can't increase at "exactly" the same pace as the economy most central banks try to manage it so it grows just a little quicker. This results in low inflation which the central banks are usually mandated to contain.

The free market system fails in that there is no longer a body ensuring price is realistic and profit is rational/reasonable. In traditional macroeconomics the government assumed the role. This is no longer the case. Just look at the outcry internationally when governments try to interfere in price negotiation. Not saying the ANC government would be doing anybody favors if they got more involved in SA's economics.

The free market doesn't fail, it ultimately corrects, however the corrections tend to have undesirable social consequences. Incidently regulated free market economies appeared to weather the economic crisis better than the so called free markets of the US.

Agree. IMHO things holding us back:
1. Religion (social conditioning)
2. Ignorance - racism, cultural-ism, etc. (social conditioning)
3. Corporations (Greed)
4. Corruption (Greed)

I'll try and think of some more.

I disagree on greed, certainly greed needs to be contained, but it should be harnessed rather than shackled.