If we assume that there are four people in this world - A, B, C, D.
A Cooks food.
B Makes clothes.
C Washes clothes.
D Makes shoes.
For a long time society has lived happily doing just the basic things bartering each other services.
Then came coins, then came gold coins. Lets suppose A, B, C, D each has 10 gold coins each and they exchange 10 gold coins for each service. Ultimately, each one is left with 10 gold coins.
There is no more gold in the world, so gold cannot be mined. Hence the govt. takes the 40 gold coins and prints 40 dollar bills and gives 10 each to A, B, C and D. Instead of exchanging gold, they now exchange dollar bills.
Now, Henry Ford comes along and makes the automobile. That is real economic output and everyone wants to buy a car. The government increases the Money Supply commensurate with economic output (gdp growth). As there is no more gold that can be mined, the govt creates new notes for the economic output.
That part is clear to me.
I don't understand how it is done!
The treasury issues bonds, and the fed buys the bonds and gives the treasury the green notes, and the government distributes the green notes to its contractors/suppliers and they wound up in bank accounts and due to fractional reserve banking the supply increases?
So, as economic output increases, government issues T-bonds to increase money supply? Is that it in its simplest form? If so, the government will always be in debt. Obviously, I am not getting something!
No the Fed doesn't give the Treasury green notes. It gives Treasury electronic digits in its account. Those digits are then also in the Fed's "reserve" upon which the entire banking system gets the power to inflate the money, i.e. based on fractional reserve banking create electronic digits in corporate and personal accounts (make loans, i.e. create digits, and collect deposits, i.e. create digits, over and over again). The green notes are only pumped out of the banking system when somebody asks for them...from a person or an ATM and they typically are quickly sucked back into the banking system as soon as a person uses the bills to buy something. They are printed by the Fed, not the Treasury.
Sorta and sorta not. The problem is you're assuming real economic output, i.e. all growth is coming from a bunch of Henry Fords generating ROI. That would be a production-based economy. However, we have a consumption economy where faux growth comes (at least before the crash) mostly from inflated credit, i.e. purchasing power generated by the banking system's ability to keep inflating (give people more purchasing power) based on expanded reserves at the Fed. The reserves are based largely on Treasury debt, and therefore, yes, you're correct in this type of economy the government will always be in debt.
Our economic "growth" is no longer driven by companies like Ford as much as it is generated by companies like JPMChase, Bank of America, Citigroup, Goldman, Morgan, AIG, Merrill, Countrywide, Fannie, Freddie, etc. as they continue finding ways to further inflate credit and shift money back and forth which makes it look like "growth." As of Sep 08, we know that "growth" was largely an illusion. And if the finance industry wasn't in bed with government, it would be called fraud. And in response our government has stolen even more trillions from the productive economy to hand it over to these fake "growth" financiers. Twilight Zone...na na na na...na na na na...na na na na...
Since most debt is to the banking industry, what if the government and everybody else suddenly declared that they refused to pay any further on any debt owed the banking system. Wouldn't that correct a lot of problems for a lot of folks, and put the banks back where they belong......broke.
For too long, the banking industry has scammed us with their creation of debt against us out of thin air, and we've all suffered for far too long, making the bankers filthy rich, paying them interest on money that they never had in the first place.
Statistics now show that a lot more of us are beginning to save. If savings keep growing, there will eventually be enough cash to fund expansions of legitimate businesses, etc. And we can buy what we need with our savings. Even if a neighbor needs something they don't have enough money to pay for, it will be our privilege to assist them however we can.
Does that mean an end to capitalism? Not necessarily. Just an end to runaway capitalism and runaway consumerism.
Does that mean we all won't have as much stuff ? Probably so, but we should have a lot more of what is really important and satisfying to our lives......time with family and friends, and good feelings about ourselves. In short, we may find something to make us feel good besides buying and consuming a bunch of stuff with built-in obsolescence.
And, what about the extremely wealthy banking cartel? What will happen to them? They'll have a whole lot of worthless money, and they'll have to figure out another way to get their kicks, beside ponzi schemes.
Ben, I love the vision you paint of a possible future based on what's really important and satisfying. Unfortunately I don't hold much hope in seeing that in my lifetime. Why? In relation to your hypothetical, it's not really hypothetical:
The last president that tried that was killed after signing executive order 1110 which gave the Treasury the ability to create its own currency and would have started the process of no longer paying the bankers. Lincoln too was killed after giving the Treasury the same power.
Why don't the people do it en masse? Don't know, but some ideas... The power of mass media. The power of fear..."what if I'm the only one?" The power of guilt...many on this site claim you're a scoundrel if you suggest not paying banker debt.
Thanks strabes. I sure know what you mean, and I can't disagree. Pretty scary huh? We're probably impossibly under their thumb forever. Sad!
I was just making it known that 5:16 sec into the video on chapter nine it says that it took however many years to earn are first trillion dollars and the chart says 1 Billion. Thanks
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We managed to hold the Nokia Lumia 820 a good inch off the charging plate and for it to still be getting a charge through, which shows how efficient the charging plate is. wireless charging pad for qi-enabled phones
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Well! I've not included this on Maxtropin as a guide. This is a fairly new way for making what you can from it. You could have the time to do this
imagine that's not Maxtropin, Don't worry, it is as if there are a few things respecting Maxtropin that you are going to have to be aware of.