Usury

[schola]

Originally Posted by jaamkie

The fact that money isn't real IS THE WHOLE POINT!!! If it were a real physical thing, yes I could understand why one would complain that there's only a limited amount of "gold coins"; but since it is a representation of value to society, there is no theoretical limit on the total amount of money that can or should exist.

The limit is the money supply. That is real. Whatever we designate as money, there is always only a finite amount of it in an economy. What you can theoretically owe (debit) or be owed (credit) is unlimited, but the money supply is definitely finite.

Interest doesn't increase the money supply.

Before the Federal Reserve and fiat money, silver and gold were money in the United States. The amount of money was directly connected to the production capacity of mines. I think it increased at something like 2% per year.

When the United States demonetized silver in 1873, it launched the whole country into a depression that lasted 5+ years.

It had nothing to do with the production capacity of the economy. The Powers that Be simply decided that silver wasn't "money" anymore.

[jaamkie]

Originally Posted by schola

The limit is the money supply. That is real. Whatever we designate as money, there is always only a finite amount of it in an economy. What you can theoretically owe (debit) or be owed (credit) is unlimited, but the money supply is definitely finite.

Interest doesn't increase the money supply.

Before the Federal Reserve and fiat money, silver and gold were money in the United States. The amount of money was directly connected to the production capacity of mines. I think it increased at something like 2% per year.

When the United States demonetized silver in 1873, it launched the whole country into a depression that lasted 5+ years.

It had nothing to do with the production capacity of the economy. The Powers that Be simply decided that silver wasn't "money" anymore.

I'm curious- does it make any sense to you to tie monetary policy to the amount of a few particular metals dug out of the ground in a given year??? I don't know if the current system is optimal, but I certainly wouldn't want to go back to money creation driven by the mining industry!

[escapee]

I'm curious- does it make any sense to you to tie monetary policy to the amount of a few particular metals dug out of the ground in a given year??

Of course it makes sense. We want our money to have a great store value, We want our money to be almost non destructible. We want our money to also serve as a precious commodity used in industry and jewelry worldwide. We want our money to be tough and costly to produce so nobody can create money at will to fix the interest of "special group". We also want our money to serve as a tool to stop government massive deficit spending ( inflation ).

Gold and Silver seem to fit that requirements well, that's why our money used to redeemable with precious metal, but then someone decided to say "Hey , why don't we just buy up the oil of Saudi with a stack of paper that's non redeemable with anything precious". The world accepted the deal graciously as the almighty America, clearly had the biggest gun in 60-70s that nobody dared to challenge. Gold and silver is honest money, where as the dollar system is based on the power of the issuer of money ( a better words for hegemony ). When that faith & power is gone ( ex, the Saudi no longer accepts cheap and easy dollars for their oil ). You will have a run on currency so fast your eye will spin.

YouTube - Rich Dad 2008 Predictions - Part 4

Gold is God's made money , paper money is man's made money ...

Take my post with a grain of salt ya ?

[schola]

Originally Posted by jaamkie

I'm curious- does it make any sense to you to tie monetary policy to the amount of a few particular metals dug out of the ground in a given year??? I don't know if the current system is optimal, but I certainly wouldn't want to go back to money creation driven by the mining industry!

There were drawbacks but at least it was dependable, predictable and harder to manipulate.

It's hard to counterfeit gold money. It has real value directly connected to the physical labor it took to dig it out of the ground. It's harder, but not impossible, to control the supply of it.

On the other hand, the current system of fiat money is easily manipulated by greedy bankers and power hungry politicians.

The bankers get to charge everyone interest to use their paper money, and the politicians can keep their constituents happy by enacting welfare programs and paying for them with the extra paper money, instead of increasing taxes. This is called inflation. It's also known as the "hidden tax" because the people end up paying for it in the long run in the form of loss of value of their savings.

[fountainAtlas]

Originally Posted by schola

There were drawbacks but at least it was dependable, predictable and harder to manipulate.

It's hard to counterfeit gold money. It has real value directly connected to the physical labor it took to dig it out of the ground. It's harder, but not impossible, to control the supply of it.

Dependable? Inflation and deflation still occurred. Gold or metal money was constantly manipulated by filing down the edges of a gold coin you were able to "create money". I believe that at times this got to be so bad that all financial transactions would be done with a scale.

How could you possibly control the discover of gold? You can't, if there is ever a huge discover there would be massive inflation. Lastly, gold is currently traded around $850 an ounce, total amount of gold mined in the history of the world is estimated at 142,000 tons according to wikipedia. Thus, there isn't enough gold to replace paper money. This world is ever growing in abundance and I suspect that for a gold standard to make sense you would need to increase the gold quantity by the same percentage as population growth.

Look at wikipedia, read a few books. I am not saying fiat currency is great, but many of the problems you think it solves, it doesn't.

[escapee]

Thus, there isn't enough gold to replace paper money. This world is ever growing in abundance and I suspect that for a gold standard to make sense you would need to increase the gold quantity by the same percentage as population growth.

There are other precious metals ( Silver, copper ) that can also be used as money if there isn't enough gold. When all the production precious metals no longer able to match the growth rate of population, we better think of population control or populate another earth like planet to continue our parasitic behavior as the world would most probably run into limitation on other resources like fresh water, energy and etc

With paper system, the public will continue to use the paper until it becomes worthless ( hyperinflation ) due to supply/demand imbalance of money vs commodities and goods . Our beloved banks and special elites would still hold most of the public's real money which are gold, silver and other PMs. They maintain their purchasing power whereas the public lose everything when a new currency is introduced at a certain rate (eg 1 XX = 1000000000000 YY ) after a couple of global resource war or famine .. ..



Worldwide Gold ( the real money ) reserve
Official gold reserves - Wikipedia, the free encyclopedia


Hyperinflation - Wikipedia, the free encyclopedia

Hyperinflation is generally associated with paper money because the means to increasing the money supply with paper money is the simplest: add more zeroes to the plates and print, or even stamp old notes with new numbers. There have been numerous episodes of hyperinflation, followed by a return to "hard money". Older economies would revert to hard currency and barter when the circulating medium became excessively devalued, generally following a "run" on the store of value.

[schola]

Originally Posted by fountainAtlas

Dependable? Inflation and deflation still occurred. Gold or metal money was constantly manipulated by filing down the edges of a gold coin you were able to "create money". I believe that at times this got to be so bad that all financial transactions would be done with a scale.

Are you describing the 19th century gold standard or gold coins in general? You're right that gold money was debased throughout history. The Roman Caesars were notorious for this. They would clip coins, mix them with impure alloys, all kinds of tricky stuff.

That was easy to do when minting technology made crude oval stamped blobs of metal. But it is pretty easy to tell whether modern coins like the gold eagle has been filed or clipped. That's why coins have ridges on them.

And during the gold standard, the currency was still mostly paper. Silver or gold certificates. Most of the gold sat in the banks.

Nevertheless there are flaws with all forms of money, so point taken.

How could you possibly control the discover of gold? You can't, if there is ever a huge discover there would be massive inflation.

Exactly. In a gold standard the money supply can't be easily manipulated by bankers.

You talk about massive inflation. We are feeling the effects of massive monetary inflation right now in the form of a popped housing bubble and rising commodity prices. These all resulted from an increase in credit and an expansion of the money supply by the central banks.

I think you need to do some research of your own. You can start here: The Case for Genuine Gold Dollar

On average the gold supply increases at about 2% per year. In the past there were some large discoveries that caused inflationary shocks (1849 for example) but these price shocks were relatively short term.

Ultimately one must know what money really is. Even the gold standard has its flaws when the majority of the people allow themselves to be manipulated.

[Brutha]

Lastly, gold is currently traded around $850 an ounce, total amount of gold mined in the history of the world is estimated at 142,000 tons according to wikipedia.

If you would make Gold the offical currency the Gold price would rise till it meets the demand.

[schola]

Gold & Silver Forum - View Single Post - Usury

"If you stop and think - the current economic crisis is entirely due to usury.

The ratcheting upward of housing prices hit a ceiling, where the finite money tokens could no longer act as a medium of exchange. Despite prodigious "velocity of money" (passing cash at the speed of light), the imbalance in the marketplace value and the finite sum of money tokens have combined into a depression.

Unfortunately, boom and bust are the cyclic aspects of usury. Since aggregate usury is impossible to pay, each cycle generates an obligation (principle and interest) that far exceeds available money tokens. Thus a proportion of debtors cannot pay, regardless of their ability, simply because the money does not exist. As the marketplace accumulates goods and services, priced to account for hidden inflationary forces of usury and shiftable taxation, there is an accumulation of demand for more and more money tokens to satisfy all debt.

Due to the fact that the exponential equation for calculating interest imposes a mathematical anomaly (a debt far greater than the money supply), usury cannot operate indefinitely. Eventually, the marketplace has to crash, and reset the proportionality of available money tokens and available goods and services.

However, such "system resets" result in panic, economic collapse, pain and suffering of investors who are wiped out, debtors who lose their pledged collateral, and enterprises that are driven into ruin. As laborers are thrown out of jobs, they have less money to buy the labor of others, which drives more businesses into ruin. A domino effect drives the market into a bottomless pit. That is not a good way to advance civilization.

In fact, I suspect that every war humanity has suffered, has its roots in usury. And no protracted war can be prosecuted without the extension of credit (war loans) of the usurer. Usurers are predators, who use our ignorance of the true nature of money, to cheat us. And to increase demand for their "product", they incite trouble, and they foment wars. It's no surprise that the Bible condemns usurers to death.

We, who live in the 21st century, often assume that we're the pinnacle of human knowledge and wisdom. But it appears we are more gullible and ignorant, and easily fooled.

And the next step will be a wholesale surrender to the State, which will offer us "jobs" (access to money), making more and more of us employed by the Collectivists (Socialists / Communists). And still, the usurers will be waiting in the wings, skimming their profit, confiscating collateral, inflicting pain, and rebuilding the crooked house that will collapse around us or our descendants.

But the worst thing - they want us to be grateful to them. After skinning us alive, they graciously let us regrow our skins... before skinning us again."

[schola]

The salvation island story: why charging interest on money creates impossible debts. Money Myth