Slaves to the banking industry.

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Thomas Hedin's picture
Thomas Hedin
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Slaves to the banking industry.

If it is true that the banks create all of our money by introducing it into circulation as interest bearing debts, and then once time and interest kick in, the debt grows but the money supply does not, we have the problem of the debt will always be larger than the money supply.

What would YOU do to reduce and in time eliminte the debt, without forecloseres?

Ready's picture
Ready
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Re: Slaves to the banking industry.

You cannot, it is a feature of the system.

Only way would be to scrap the current system for a new one, i.e. backed by gold so money cannot be created out of thin air. Fractional Reserve can still work as long as the constraints are in place to prevent the FED from printing as it sees fit. Too much power there.

There would still be bubbles and defaults, but the system as a whole would be constrained by a physical limitation that is related to the size of the earth, and would have some balance built in to it. History shows us that even population can be effected by lack of resources, and having the money supply pegged to a gold standard helps to limit the amount of credit and cash available, making people very careful about where they spend money.

That said, IMO it is too late for any real change to save us. Population is already here, as is peak oil and limits to the earth's bounty. It's catching up to us faster than we can correct for it.

Rog

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Juvysen
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Re: Slaves to the banking industry.

I suspect the way to not be a slave to the banking industry (well, as much as is possible) is to avoid carrying any debt yourself, and find ways to barter for your needs.  That said, we're still working on ditching our debt :(

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mpelchat
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Re: Slaves to the banking industry.
Ready wrote:

That said, IMO it is too late for any real change to save us. Population is already here, as is peak oil and limits to the earth's bounty. It's catching up to us faster than we can correct for it.

Hey Rog,

I do not completely agree with you on this one.  I agree under current constraints, it is too late, but the real change that can, must and most-likely will happen is the one thing people dance around a lot. 

Population needs to focus on regional/local communities and natural selection needs to happen when SHTF.  Those that do not want to transition smoothly when they can will be forced to in a catastrophic manor and we will have ... fallout.  Look at the Argentina situation, however I think we will fall a bit faster than them (it happened to Argentina over a 10 to 20 year period).

Heck, I still get laughed at by my family and my wife for growing vegetables.  Wonder what they are going to say when I start building a com-poster, start harvesting rain water, make a solar water distiller, make solar panels, make windmills and get the hand gun with ammo.  I may end up in a straight jacket in a padded cell coloring the walls with crayons between my toes.

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Juvysen
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Re: Slaves to the banking industry.

Ooh... a solar water distiller.... *off to look up how to do that*

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alcatwize
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Re: Slaves to the banking industry.

Ditching debt is always a good personal solution, but unfortunately, even without any debt you are still slave to the system because every penny you make loses purchasing power over time due to inflation (which is due to our debt based system).  So as Chris pointed out, our system forces us to invest our money (or risk) our money to avoid the eventual loss of it's value.  You can also think of investing as not a way to make money, but a way to keep from losing it.  Think about that for a while.

 

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Ready
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Re: Slaves to the banking industry.
mpelchat wrote:
Ready wrote:

That said, IMO it is too late for any real change to save us. Population is already here, as is peak oil and limits to the earth's bounty. It's catching up to us faster than we can correct for it.

Hey Rog,

I do not completely agree with you on this one.  I agree under current constraints, it is too late, but the real change that can, must and most-likely will happen is the one thing people dance around a lot. 

Population needs to focus on regional/local communities and natural selection needs to happen when SHTF.  Those that do not want to transition smoothly when they can will be forced to in a catastrophic manor and we will have ... fallout.  Look at the Argentina situation, however I think we will fall a bit faster than them (it happened to Argentina over a 10 to 20 year period).

Heck, I still get laughed at by my family and my wife for growing vegetables.  Wonder what they are going to say when I start building a com-poster, start harvesting rain water, make a solar water distiller, make solar panels, make windmills and get the hand gun with ammo.  I may end up in a straight jacket in a padded cell coloring the walls with crayons between my toes.

I agree with you that there are personal and community based plans for providing for a soft landing. I have mine in place as you have undoubtedly read if you have seen me around the forum. I was responding to the question of how to fix the banking system posed in the original post. For this, my friend, we are too little too late to make a real impact that will somehow put everything back on track to avoid this problem of debt and foreclosure.

Rog

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Ready
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Re: Slaves to the banking industry.
alcatwize wrote:

Ditching debt is always a good personal solution, but unfortunately, even without any debt you are still slave to the system because every penny you make loses purchasing power over time due to inflation (which is due to our debt based system).  So as Chris pointed out, our system forces us to invest our money (or risk) our money to avoid the eventual loss of it's value.  You can also think of investing as not a way to make money, but a way to keep from losing it.  Think about that for a while.

 

Investment can mean many things to many people. Are you referring to stock and bonds and typical investments as a way to store the value of your wealth?

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Re: Slaves to the banking industry.
Ready wrote:

I agree with you that there are personal and community based plans for providing for a soft landing. I have mine in place as you have undoubtedly read if you have seen me around the forum. I was responding to the question of how to fix the banking system posed in the original post. For this, my friend, we are too little too late to make a real impact that will somehow put everything back on track to avoid this problem of debt and foreclosure.

Rog

In that regard, yeah we are in for a big "adjustment" in the arena.  Thanks for the positive manor in which you responded.

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Re: Slaves to the banking industry.

The way to fix the banks is to just get the FED out of the scenario. The banks must only lend money they actually have on deposit. Even then they can only lend half of that money. That way they would always have a dollar in reserve for every dollar they lend out.

Of course, that would be a major shock to our debt based monetary system at the beginning. But I think it would soon stabilize and be much different and beneficial to the consumer in the long term.

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Why the FED?

Last night I was rewatching the sections of the Crash Course that dealt with money creation and debt. Since I sort of understand it now, I started thinking about other parts, sepcifically why do we have the FED? If I understand it right, the FED buys government bonds from banks with money it creates from nothing. And earns interest on that money?! Why wouldn't the government just print it's own money and avoid the whole charade? Of course the cynical answer (and maybe true) is then the owners of the FED lose a lucrative business. But there must be some pseudo-reason behind this strange setup?

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Ready
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Re: Why the FED?
SteveS wrote:

Last night I was rewatching the sections of the Crash Course that dealt with money creation and debt. Since I sort of understand it now, I started thinking about other parts, sepcifically why do we have the FED? If I understand it right, the FED buys government bonds from banks with money it creates from nothing. And earns interest on that money?! Why wouldn't the government just print it's own money and avoid the whole charade? Of course the cynical answer (and maybe true) is then the owners of the FED lose a lucrative business. But there must be some pseudo-reason behind this strange setup?

No, you pretty much hit it.

If you have not done so, read The Creature from Jekyll Island for the full story.

 

Rog

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mpelchat
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Re: Slaves to the banking industry.
Juvysen wrote:

Ooh... a solar water distiller.... *off to look up how to do that*

OFF TOPIC 

The water distiller is in the agricultural thread.

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mpelchat
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Re: Slaves to the banking industry.
Juvysen wrote:

Ooh... a solar water distiller.... *off to look up how to do that*

OFF TOPIC 

The water distiller is in the agricultural thread.

SteveS's picture
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Re: Why the FED?
Ready wrote:

 

No, you pretty much hit it.

If you have not done so, read The Creature from Jekyll Island for the full story.

 Rog

I have read it and that is why I realize why banks would like to have a FED and it did take a couple of tries to get it passed. All the info in that book was a bit overwhelming and maybe I missed some fundamental explanation. It just seems so bizarre that we allow some private company to print currency. Is it that the government is not allowed to print fiat money? Would this be how they get around it that 'problem'?

You know , this is some pretty basic stuff that never got taught in school.

Ready's picture
Ready
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Re: Why the FED?
SteveS wrote:

I have read it and that is why I realize why banks would like to have a FED and it did take a couple of tries to get it passed. All the info in that book was a bit overwhelming and maybe I missed some fundamental explanation. It just seems so bizarre that we allow some private company to print currency. Is it that the government is not allowed to print fiat money? Would this be how they get around it that 'problem'?

You know , this is some pretty basic stuff that never got taught in school.

I will attempt to respond without getting conspiratorial. That is difficult when addressing the existence of the FED.

The real power in America in the early 1900s was a wealthy few. Filthy rich might be a better way to describe. They coerced congress into giving up it's right to print currency and give it to them so they could steer the economy and avoid recessions / depressions. For better or worse, the majority in congress approved and moved the power to print to the Fed, which is neither Federal nor a Reserve.

This power is far too great, and is further a problem in that there is no legal way we can audit the Fed today. Think bailouts.

There is a great discontent stirring as people begin to understand just how outlandish this whole power grab was and is today. I hope that Larry and Michael Honne might weigh in on this as 2 of the site's biggest proponents of ending or at least auditing the Fed.

 

You are not alone in your reaction that there must be more to it than this. The mind is naturally abhorrent to the fact that we have this situation and it has been allowed to exist for 100 years. There is no good sense to it. The only possible defense is the mitigation of recession and depressions. We have all seen just how effective they are at that!

Rog

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Juvysen
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Re: Slaves to the banking industry.

The news today is talking about Bernanke making the fed more "transparent" with frequent talking to the press, etc.  Is this just for keeping up appearances or some sort of real change?

SteveS's picture
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Re: Why the FED?
Ready wrote:

 

You are not alone in your reaction that there must be more to it than this. The mind is naturally abhorrent to the fact that we have this situation and it has been allowed to exist for 100 years. There is no good sense to it. The only possible defense is the mitigation of recession and depressions. We have all seen just how effective they are at that!

Rog

I can see why letting the government print fiat money directly is not so good, but the FED hasn't really shown much restraint , and as you say, they haven't done such a good job at keeping things stable over the past 100 yaers.

Ready's picture
Ready
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Re: Slaves to the banking industry.
Juvysen wrote:

The news today is talking about Bernanke making the fed more "transparent" with frequent talking to the press, etc.  Is this just for keeping up appearances or some sort of real change?

I would submit it is all about appeances. There is a growing End The Fed movement, as well as Legislation that is putting a lot of heat on the FED right now. They typically do not like to be in the media, and it is unheard of that the Chairman would grant an interview like Bernake did with 60 minutes a few weeks ago.

It's a game to calm people down so they can continue looting.

Rog

Ready's picture
Ready
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Re: Why the FED?
SteveS wrote:
Ready wrote:

 

You are not alone in your reaction that there must be more to it than this. The mind is naturally abhorrent to the fact that we have this situation and it has been allowed to exist for 100 years. There is no good sense to it. The only possible defense is the mitigation of recession and depressions. We have all seen just how effective they are at that!

Rog

I can see why letting the government print fiat money directly is not so good, but the FED hasn't really shown much restraint , and as you say, they haven't done such a good job at keeping things stable over the past 100 yaers.

 

Yes, letting the Govt print is not the answer either. If they had any monitary restraint we would not be looking at Social Security collapsing right now.

It has to be tied to a standard, i.e. gold as in the Bretton Woods agreement for the government to be trusted with our ability to print. But then it would not be Fiat.

All fiat currencies eventually perish according to history.

Rog

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alcatwize
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Re: Why the FED?

The Creature from Jekyll Island can be viewed on YouTube.  The presentation is excellent and you can get it all in a couple of hours.  I recommend to anyone who hasn't seen this or read it to do yourself a favor and check it out.

 

... and yes, they don't teach this stuff in school.  They don't teach you stuff that they want to keep hidden.

 

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SagerXX
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Re: Slaves to the banking industry.
alcatwize wrote:

Ditching debt is always a good personal solution, but unfortunately, even without any debt you are still slave to the system because every penny you make loses purchasing power over time due to inflation (which is due to our debt based system).  So as Chris pointed out, our system forces us to invest our money (or risk) our money to avoid the eventual loss of it's value.  You can also think of investing as not a way to make money, but a way to keep from losing it.  Think about that for a while. 

My personal solution to this conundrum is to be an entrepreneur.  Instead of pitching money into other peoples' hands (i.e., buying stocks/bonds/whatever financial instrument) I keep it in my own and make a business.  Of course, it's a lot more work, and you might still fail (right now I'm 2-for-2 on money-making businesses but in this economy they could both still crash'n'burn...[wry grin]), but at least you're keeping control over things, relying on your own initiative/brains/sweat...AND you get to keep what you make (less taxes, naturally).

No doubt there are other ways to go.

Viva -- Sager

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