
Originally Posted by
Brian d marge
Yes indeed , only 2 or three % of the money in circulation is physical money , and applying the home owner , home budget , traditional way of thinking about finance , just doesnt work ,
in a nut shell , government prints money , and sells it to commertial banks at face value, = ten dollars - production cost = tax take of say 9.50 , this is what they used to build the welfare state back in the day
so if the tax take is simply not there ............you cant afford the welfare system
Next the banks take that ten dollars and loan it out ....but they "create the new loan " and charge interest , when the loan is repaid the original loan amount is destroyed and the interest you pay is kept ,
So to grow , ie NZ has a growth off 3% , you must increase the size of the debt by 3 %...( you see where Im going with this ,,,)
if you imagine the economy as a tin can with stones in side , rattling the can , moving the stones is economic activity ....to "grow " , you must add stones , exports , etc but those export were eventually created by someones debt.......( get back to work Africans and you lazy chineese)
So we have huge amounts of money , created from debt , including pensions all looking to speculate ....( ever wondered why the housing market is exempt from speculative regulation???? because banks can have their assets
So by using your house to grow your asset base is just making it harder for your children to get a house in the future ...... ( 1950 you needed one income, now its two)
Im not sure what pecentage of the tax take is invested in the pension , but I do know most modern countries are on the back foot ( Yubari here in japan has just anounced bankruptcy , 50 odd % pensioners and too much debt due to failed reforms ( IMF well done ) but it sure as hell aint covering the bill , ( I will look into this ) If the pensions were from private wealth , then we wouldnt be having this debate, but as most are state funded , and baby boomers have just peaked or are about to AND live longer , the tax, and investment take just isnt enough , thats why you hear governments crying ( I remember seeing the report back in 1994 ...)
Nope
The sooner we remove the speculative banks from essentials , and Jail a few bankers (aka) iceland , it will only get worse and these types of conversations will get more and more frequent which will lower the prices of the essentials such as housing and electricity,,,,,the better we all will be
Now lets get back to demonizing old people !!!!.......
Stephen
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