Banks: Medieval slavery

[ar81]

It is immoral to make money with the work of others.
This is why copyright violations are wrong.

Feudal lords lend land to peasants who worked the land and faced all the risks, to finally pay the feudal lord unpayable taxes.

Loans work like that too.
You lend $100 and for the sole fact of moving the money from one hand to another, you are forced to pay $50 extra.
You spend $100 and you need to work to make $150 and pay the loan.
It means that you enjoyed $100 of your work, and you gave away $50 as a gift to the bank.

If I am a bank and I lend you $1 and ask $1 million in return, economy has $1 only, but my books show $1 million. My books show fake money I created. You will have to work in a job that adds value to back that $1 million.

That $1 I lend was like the land and you are the peasant.
Borrowers are slaves. They work to pay someone, they do not work to be paid.

If I was a bank, I only put $1 in your hand and you would have to work a lot to pay me, so you work, and I get the profit. It sounds like slavery or copyright violations.

[vMike]

If you know that you need money to expand your business and that you can safely get a 300% return on it, then you take a bank loan, pay them the 10% interest and pocket the remaining 190%, that's what loans are for.

[ThoughtAddict]

Total available value is increased over time. This occurs when people add work to raw materials, forming them from shapeless items into goods that can be used by others. This refining of raw materials occurs on most scales. The economy expands.

Loans provide someone who expects to increase the value an opportunity to obtain the raw materials necessary to effect that expansion. If the money is not used for the creation of value, the borrower has made a fundamental mistake regarding finances.

[schola]

ar81. You're freeing yourself from the psychological chains called "money." That's good.

What you've identified is fractional reserve banking and usury. Both are an evil tax on the productive population.

[ar81]

Originally Posted by schola

ar81. You're freeing yourself from the psychological chains called "money." That's good.

What you've identified is fractional reserve banking and usury. Both are an evil tax on the productive population.

Ways to make money, from easier to harder way:

1.Steal money: Get money without effort.
2.Make money with other people's work: Banking business (lending), banker bonuses for causing losses, copyright violations, slavery, feudal regime towards peasants. Effort implies to maintain a mechanism to enslave workers.
3.Have a job: Work for money. This is the less cost effective way to make money.

Money encourages action. Since the easier way is to steal or make money with other people's work, money is likely to encourage a society where workers have a hard time.

This is why in Afghanistan and Mexico druglords live better than workers, and this is why bankers live better than american workers who lose their jobs.

[vMike]

ar81, it looks like socialism might work well for you.

[ar81]

Originally Posted by vMike

ar81, it looks like socialism might work well for you.

Socialism is government based capitalism (USSR and China had it, they used ruble and yuan).
I prefer Amish no-money-system.

With goods trading with no money you can't fake money, you can't convince people you have assets you do not have.
The easier way to make money:
Madoff employee breaks silence | Reuters

The basic problem of how stealing is easier than working for money, is not solved by socialist system (government based capitalism). So socialism might not work well either.

As I have been digging more and more in the problem of economy, I discovered that leftism-rightism is a boolean value to describe a tridimensional reality. For people thinking 3D is hard, so everything needs to be reduced for dummies as "true/false" or "left/right". This is 1-bit understanding of the universe.

The basic problems of how it is easier to make money without effort instead of working, is not answered neither by capitalism or socialism.

[vMike]

Originally Posted by ar81

The basic problems of how it is easier to make money without effort instead of working, is not answered neither by capitalism or socialism.

It's not, unless you don't mind sitting in jail for the better part of your life, or ending up shot by a rival gangster.

[JSB]

Originally Posted by ar81

...
The easier way to make money:
Madoff employee breaks silence | Reuters

Madoff is a scumbag, but he's an extremely smart and talented scumbag.

It's not much easier to make lots of money criminally than it is to make lots of money legally --- look at gangs and mobsters of all sorts. One still needs to run a successful enterprise, and the risks include arrest and prosecution or murder by rival criminal organizations.

[Brutha]

This is why copyright violations are wrong.

I would rather think that copyright violations get wrong when they reduce the profits/incentives of the person who creates the content in the first place.

I prefer Amish no-money-system.

The Amish economy doesn't have to handle
production that requires a lot of people working together to produce something since they ban technology.

Favoring the Amish system which by design doesn't allow productions of items like computers is a bit hypocritical when you are using one to communicate your ideas.

It is immoral to make money with the work of others.

It only is when you believe in scarcity.

Organization has value.

[escapee]

If I am a bank and I lend you $1 and ask $1 million in return, economy has $1 only, but my books show $1 million. My books show fake money I created. You will have to work in a job that adds value to back that $1 million.

Or bank lends more fake money to businesses and investors by leveraging 30++ times to prolong the credit cycle until the inevitable implosion of debt.

This is Creditalism folks. There is no real capital or real money in the market, it's all debt (principal) + interest needs to be repaid back to the banks someday.

A normal economy should function just fine without much credit. Having all these funny banking elites telling us that the banks must resume lending even more money (to unqualified borrowers not yet in debt?) or the economy won't work conveys a strong message that the current 100%+ debt based economic system is flawed.

[schola]

The system is definitely flawed. Due to usury (interest), banking system must exponentially expand to service existing debt, or implode on itself. That's the real reason that the elites are so frantic to get lending going again. Because if the system even slows down slightly, the whole house of cards will collapse. Have you ever wondered why a slight slow-down in growth is considered a recession? The economy actually grew in all of 2008. Only it grew more slowly, which is bad for the banking system which needs exponential expansion to survive.

Check out Chris Martenson's Crash Course. He explains this subject much better than I ever could.

[ThoughtAddict]

Originally Posted by schola

The system is definitely flawed. Due to usury (interest), banking system must exponentially expand to service existing debt, or implode on itself. That's the real reason that the elites are so frantic to get lending going again. Because if the system even slows down slightly, the whole house of cards will collapse.

"Collapse"?

Collapse is a strange way of saying it. Contract is more appropriate. Contraction involves a re-evaluation of the assumptions, including business assumptions about how many people should be employed and at what rates. It involves a re-evaluation of what services can be provided and at what price. It involves a scaling back of the standard of living.

And yes, 25% unemployment can occur from a contraction.

It is correct that the "banking system" must expand to service debt (in the form of interest rates). It is also true that the economy's overall expansion is essential to service our nation's debt. This also holds true to some degree for virtually every country in the world. The great thing about this is that economies do expand. Value is being created. As Brutha said, a mindset of scarcity or limit (limited amount of value) leads to a conclusion that any interest rates are usurious. An abundance mindset leads to the conclusion that some interest rates are reasonable based on the ability of human beings to create value out of raw materials.
A question we will have to confront, eventually, is whether we're going to eventually face a "peak value" crisis, where raw materials simply no longer support refinement and the resultant creation of value. But that day is still a long way off, methinks. At least until the sun burns out .

None of the above encounters the problem of using loans to buy highly depreciable assets or risky investments rather than materials which can be used to create value. And none of it even touches on the leveraging that insurance companies and banks did based on radically flawed assumptions of economic growth.

[Brutha]

Collapse is a strange way of saying it. Contract is more appropriate. Contraction involves a re-evaluation of the assumptions, including business assumptions about how many people should be employed and at what rates.

The optimistic perspective is that we will have such a contraction and then all is fine.

[ThoughtAddict]

Originally Posted by Brutha

The optimistic perspective is that we will have such a contraction and then all is fine.

It is far from optimistic, my friend. I doubt we'll hit 25% unemployment in the States, but I expect there will be a great deal of suffering due to the economy. It is a serious challenge, but the world and business will continue rather than collapse.

[Brutha]

It is far from optimistic, my friend. I doubt we'll hit 25% unemployment in the States, but I expect there will be a great deal of suffering due to the economy. It is a serious challenge, but the world and business will continue rather than collapse.

Optimism depends on the alternative.
If the alternatives are a) a collapse and b) a contraction believing that b) will happen is optimistic.

[Fullcrum]

Keep in mind while reading my opinion that I do not have all the answers to life. I think a lot of us can forget that and become attached to our opinions. Then we defend them as if our own lives were in danger. They're not. But opinions lead to decisions which can impact the world. They are only important in that they impact the reality of the individual or the group. An open mind is best!

----------------------------------------

A bartering system would not work as well as a monetary system because different people assign different values to different products. What if the other person does not want my goods? This is a problem. Money works because it is a form of value that can be exchanged. It is what a nation as agreed upon as the form of exchanged value. If you have $1 million, it basically means you have that much value that, if used, society would give back to you. This is an oversimplification but true at its core.

With this in mind, our current system of loans and banking obviously does not work perfectly. I find it funny that the health of an economy is based on its "growth", which basically translates to the rate at which people can consume what it produces. People get sad and depressed when there is little economic growth, failing to realize money is only a small part of any individual's life.

Personally, I love capitalism. Personal development makes me love capitalism, because, as I see it, it's a ridiculously cool opportunity for me to produce and distribute the most value to society, hence "winning" in the external sense. It may not produce happiness, but, in my world, it's an opportunity to make the world a better place and exert greater direct influence. Money is, in a less exact sense, influence. We have social influence (social conditioning), we have economic influences (money) and many others (biological, physical, etc.).

Money is just one more method to exert influence. I do not ascribe it the singular importance the Western culture bestows it. There are more important values in this world, more important because they are independent of external circumstance or are required for existence. This includes basic physical needs as well as connection with others and peace.

The more I learn about the world, the more of a peace-loving hippy I become. Sickening .

[Kaspian]

I vote we return to gold and silver coins as our system of currency.

[vMike]

Originally Posted by Kaspian

I vote we return to gold and silver coins as our system of currency.

How would that work? First of all there is not enough gold to cover all the world's or even US financial system based on the current gold and silver prices and secondly the gold standard is impractical since it's can't sustain the expanding economy.

The problem with the society is people have poor financial education and discipline. The current financial system presents more opportunities than people ever had throughout history. Instead of complaining about the government, or misfortune, or greedy bankers, learn the basics of money management, hold yourself accountable for spendings, save and invest a regular portion of your income and you'll eventually create enough sources of passive income for achieving your financial freedom.

[escapee]

Russia backs return to Gold Standard to solve financial crisis - Telegraph

Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.

The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending (thanks to the banker's loan ?). It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.

It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.

The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.

Russia is a major gold producer with large untapped reserves of ore so it has a clear interest in promoting the idea. The Kremlin has already instructed the central bank of gradually raise the gold share of foreign reserves to 10pc.

China's government has floated a variant of this idea, suggesting a currency based on 30 commodities along the lines of the "Bancor" proposed by John Maynard Keynes in 1944.

[escapee]

All eyes on G20 meeting....

BBC NEWS | Business | G20 'make or break', Soros says

"The International financial system has collapsed and cannot be restored in its current form." George Soros.

I don't think we'll ever be back to where we came from. It should be recognised that the last 25 years were an aberration and we cannot go back there. We have to reconstruct the financial system from its foundations up

[bluedragon]

Let's substitute $1 million with $2, for more plausibility.

Originally Posted by ar81

If I am a bank and I lend you $1 and ask $2 in return, economy has $1 only, but my books show $2. My books show fake money I created. You will have to work in a job that adds value to back that $2

Yes, but then, with the $1 I received as a loan, I can write a book on personal development, and publish it in 2 copies - 50 cents each, and ask the owner of the bank to pay me $2 for my book. I only gave him 50 cents of material value, but I ask for $2, because I'm the man, I wrote the book. So now, the bank is my slave, right?
To me it looks like exchange. I received $3 - 1 as a loan, and 2 for my book, and I pay them only 2 back, and 1, I invest in 2 copies of my book. I sell the second copy to someone else, and I earned $2. All this, doing what I enjoy. Why am I a slave?
So the argument doesn't seem complete. There must be something else. What is it that makes this kind of exchange slavery?

[ns123]

ar81, if the banks are so evil and a form of slavery, then you can make a decision to not participate. The difference is, just because you believe it's slavery and evil, doesn't mean I believe so, so I will continue to use my checking and savings accounts.

For me, the best way to change my opinion is to become the change yourself, show me how not participating in the banks make your life better, and inspire me. The best way to cause dismissal in me is to tell me by having a checking account that I'm participating in evil and encouraging slavery.

I'm not saying what you are saying is wrong - I have no way to prove that. But I am saying that what you are saying will not convince many others and is most likely counter productive to inspiration and change.

[schola]

Originally Posted by bluedragon

Let's substitute $1 million with $2, for more plausibility.

Yes, but then, with the $1 I received as a loan, I can write a book on personal development, and publish it in 2 copies - 50 cents each, and ask the owner of the bank to pay me $2 for my book. I only gave him 50 cents of material value, but I ask for $2, because I'm the man, I wrote the book. So now, the bank is my slave, right?
To me it looks like exchange. I received $3 - 1 as a loan, and 2 for my book, and I pay them only 2 back, and 1, I invest in 2 copies of my book. I sell the second copy to someone else, and I earned $2. All this, doing what I enjoy. Why am I a slave?
So the argument doesn't seem complete. There must be something else. What is it that makes this kind of exchange slavery?

The slavery comes from the interest that was attached to your loan. Borrowing money at interest is a gamble and the odds are against you.

When people get in over their heads on a loan, it's always the interest that turns a loan from something manageable into something impossible to pay back. It's designed that way.

Usury is evil and illogical and there's a reason that cultures throughout history banned it.

[Plato]

Have you heard the expression "taking your pound of flesh"?

Before money was invented unpaid debts were settled by chopping off an agreed body part. That was called justice.

Your fun fact for the day.

[bluedragon]

First of all - is credits all banks do? People are free not to ask for credits. But banks also offer a means of receiving money over great distances - for example, I'm in Romania, but I can be payed for my Amazon.com affiliate fees directly into my US bank account. Then, I am free to withdraw the money immediately, turning it into real bills and coins, so that the bank can't profit at all from investing my money or loaning it to somebody else.

Originally Posted by schola

The slavery comes from the interest that was attached to your loan.

But a loan is a service, just like someone giving you a haircut or building a house for you is a service. Explain the difference.
The way I see it, the bank does some work for me - they "earn" the money somehow - even if through economic maneuvers, from other interest, etc. All that matters is that they were able to obtain the money before I did. So they have it, I don't - and they do me a service by giving it to me exactly when I need it the most.
What is the difference between doing someone a service of any kind?
For example, someone doesn't have the time to build their house for themselves, so they hire a construction company. The company has the time, while he doesn't. Plus, they have the tools and the expertise. So they do the work for him, which has a certain value (they loan him an amount of work), but they charge him a greater value of money, because they need to make a profit.
Maybe you just believe that the service a bank does do you is just not worth it. And that is why you don't agree with it. Maybe there is little value in loaning someone a sum of money, and it isn't justified to ask for so much interest. In which case, it's just like a bad service. You wouldn't hire someone who does a poor job - you just find a better service.

[bluedragon]

First of all - is credits all banks do? People are free not to ask for credits. But banks also offer a means of receiving money over great distances - for example, I'm in Romania, but I can be payed for my Amazon.com affiliate fees directly into my US bank account. Then, I am free to withdraw the money immediately, turning it into real bills and coins, so that the bank can't profit at all from investing my money or loaning it to somebody else.

Originally Posted by schola

The slavery comes from the interest that was attached to your loan.

But a loan is a service, just like someone giving you a haircut or building a house for you is a service. Explain the difference.
The way I see it, the bank does some work for me - they "earn" the money somehow - even if through economic maneuvers, from other interest, etc. All that matters is that they were able to obtain the money before I did. So they have it, I don't - and they do me a service by giving it to me exactly when I need it the most.
What is the difference between doing someone a service of any kind?
For example, someone doesn't have the time to build their house for themselves, so they hire a construction company. The company has the time, while he doesn't. Plus, they have the tools and the expertise. So they do the work for him, which has a certain value (they loan him an amount of work), but they charge him a greater value of money, because they need to make a profit.
Maybe you just believe that the service a bank does do you is just not worth it. And that is why you don't agree with it. Maybe there is little value in loaning someone a sum of money, and it isn't justified to ask for so much interest. In which case, it's just like a bad service. You wouldn't hire someone who does a poor job - you just find a better service.
Are you a slave if you pay for a low quality service? Or did you just make a poor choice?

[Acting Like Godot]

Originally Posted by schola

The slavery comes from the interest that was attached to your loan. Borrowing money at interest is a gamble and the odds are against you.

You probably didn't realise it, but you lend money to banks too.

When you place your money in a bank account and earn interest, the bank is taking a loan from you and paying you interest for it.

Tsk tsk. How evil you are.

[Acting Like Godot]

Originally Posted by bluedragon

First of all - is credits all banks do?

Nope. Here is a range of other services that banks provide:

1. Foreign exchange services. Eg you have USD but you need to convert it into Euro, for some personal matters related to Europe. The bank does this for you.

2. Remittance service. Eg you are in the USA, but you wish to send money to your company or family in Europe. The bank does this for you.

3. Trade finance. Eg you are in the USA, you are exporting your goods to a buyer in Europe, but you do not know whether the buyer is financially trustworthy, and the buyer does not know whether you are a cheat. Through the use of letters of credit, with one intermediary bank in Europe and another intermediary bank in the USA, this problem is solved.

4. Payment services. Through GIRO services, you can automatically make payment of your regular bills (eg medical insurance; utilities bill; income tax) from your bank account.

5. Credit card services. Through this service, you are able to travel overseas and pay for your overseas expenditure without carrying a large wad of cash in your wallet and running the risk of getting robbed.

And more ....

[Apollia]

If I am a bank and I lend you $1 and ask $2 in return, economy has $1 only, but my books show $2. My books show fake money I created. You will have to work in a job that adds value to back that $2

Originally Posted by bluedragon

So the argument doesn't seem complete. There must be something else. What is it that makes this kind of exchange slavery?

If there's only $1 in the entire economy, but you owe the banker $2 (or more, because of increasing interest over time), the debt is literally impossible to repay. Yet, the banker is given the right to keep harassing you and maybe even to seize your property unless you somehow do the impossible and repay.

In the real world, there's apparently more debt in existence than money. (I think I might've heard that in the documentary Money As Debt).

So, while it's not completely impossible for some people to repay their debts, there's just not enough money in existence for all people to repay their debts.

So, even if everyone in the world gave their all to pay off their debts, numerous unlucky people would be stuck getting their bank accounts and other property seized, wages garnished, etc.

Lenders give loans -> debtors create value -> numerous debtors can't pay back their loans -> lenders are given the right to forcibly seize value belonging to/created by the debtors who can't repay, such as by taking the debtors' property or garnishing their wages.

If debtors are unable to repay, debtors have no way to get rid of their "obligation" to the lenders except a costly bankruptcy (which they might not even be able to afford). And in the case of some loans (like student loans), the debt can't be removed even by bankruptcy, and the debtor is potentially permanently under the yoke of having to pay back the debt. Hence, slavery.

Please correct if me if I'm wrong, anyone.

Best wishes,
Apollia