Stupid World

[Brian d marge]

Are you seriously suggesting it's simply printed and given to the bank's mates? That's not quite right, though, is it? The government controls new funds availability, the banks are just their agents in that regard.

And over 85% of it goes into the mortgage market. So it doesn't simply represent fresh air, it represents the value of kiwi homes, and without it most kiwis wouldn't have the properties they now enjoy, they'd have to front up with rather closer to 100% of the value before moving in.

I'd be fairly happy with that state of affairs, because I think it's worth some significant compromise to reduce private debt. But in the long run it's the private individual's decision. Which is why you'll find their signature on the loan agreement.

Last time I checked the bank was independent of the government ( 1985? reserve bank act ) and yes it prints money out of thin air , that’s what Fiat money is
Banke moon has said this on many occasions

As for representing the value of Kiwi homes, I think you are confusing purchasing power with perceived value

and no the unemployed are not the cause of all evil

Stephen

[husaberg]

Are you seriously suggesting it's simply printed and given to the bank's mates? That's not quite right, though, is it? The government controls new funds availability, the banks are just their agents in that regard.

And over 85% of it goes into the mortgage market. So it doesn't simply represent fresh air, it represents the value of kiwi homes, and without it most kiwis wouldn't have the properties they now enjoy, they'd have to front up with rather closer to 100% of the value before moving in.

the money is not printed per say...... but it is indeed plucked from thin air though, No it isn't given to their mates though it is lent out as you say.
The banks are able to lend out far more money (at least 10 times more than they have the funds to cover) and this plucked money costs them nothing, yet is still charged out in same interest to the borrowers..........
I think it was Roosevelt that tried to change the system to a fairer one where the interest rates reflected a fairer measure of interest but he died before he could make the changes...

Fractional reserve banking
Fractional-reserve banking is the practice whereby a bank retains reserves in an amount equal to only a portion of the amount of its customers' deposits to satisfy potential demands for withdrawals. Reserves are held at the bank as currency, or as deposits reflected in the bank's accounts at the central bank. The remainder of customer-deposited funds is used to fund investments or loans that the bank makes to other customers.[citation needed] Most of these loaned funds are later redeposited into other banks, allowing further lending. Because bank deposits are usually considered money in their own right, fractional-reserve banking permits the money supply to grow to a multiple (called the money multiplier) of the underlying reserves of base money originally created by the central bank

[Ocean1]

Last time I checked the bank was independent of the government ( 1985? reserve bank act ) and yes it prints money out of thin air , that’s what Fiat money is
Banke moon has said this on many occasions

And it's availability is controled by the RBNZ using a big knob called the OCR.

As for representing the value of Kiwi homes, I think you are confusing purchasing power with perceived value

Read it again Stephen, most of that fiat money is lent in the mortgage market, it pays for housed to be built, it therefore represents the value of those houses.

I know you feel it’s unfair that the evel banks can print money and you can’t, but whereas it’s unlikely anyone else would benefit from your sudden acquisition of vast wads of cash, banks actually use it to allow kiwis access to loans they simply wouldn’t get any other way. Remove that mechanism and yer average bloke would have to stump up with around 80% of the value of his property.

Like I said, it’d suit me fine, the value of my investments would double overnight, but in the long run fiat money fills a market that’s as free as it’s possible to be, nobody legally forces anyone to borrow money, and only a fool does so and then bleats about the cost involved.

[Ocean1]

the money is not printed per say...... but it is indeed plucked from thin air though, No it isn't given to their mates though it is lent out as you say.
The banks are able to lend out far more money (at least 10 times more than they have the funds to cover) and this plucked money costs them nothing, yet is still charged out in same interest to the borrowers..........
I think it was Roosevelt that tried to change the system to a fairer one where the interest rates reflected a fairer measure of interest but he died before he could make the changes...

Fairer for who? What, exactly is unfair about the system?

Anyone so upset about the practice always has to option of borrowing money from another source, there's a few co-ops still around, the mafia will gladly help you out... Or your distaste for the system might even lead you to the conclusion that if it's unethical to loan fiat money in particular then it's at least as unethical to borrow it.

I'd suggest that any agreement between two party's understanding the costs and benefits on both sides and damaging nobody else should probably be left to their business.

[husaberg]

Fairer for who? What, exactly is unfair about the system?

Anyone so upset about the practice always has to option of borrowing money from another source, there's a few co-ops still around, the mafia will gladly help you out... Or your distaste for the system might even lead you to the conclusion that if it's unethical to loan fiat money in particular then it's at least as unethical to borrow it.

I'd suggest that any agreement between two party's understanding the costs and benefits on both sides and damaging nobody else should probably be left to their business.

Whoa back Ocean and dismount from your high horse for a second.



The system is slanted far far to much to the lender there is far to much profit being made out of nothing. (you will say demand, but it is artificially created and non competitively driven)This artificially raises the price of the assets being lent on mainly houses to a level which totally out strips their actual worth in comparison to the earning capacity of the borrower.


Should people pay mortages their entire lives to put a roof over their heads....the next generation will live their entire lives in perpetual debt.
For you is it a case of let them eat cake?

[mashman]

I'm responsible for my own actions, it's not possible to be responsible for anyone else's actions. I assume you mean I'm supposed to support whoever wants support no matter their own efforts to that end?

In which case I don't need divine guidance, my help is mine to give or otherwise, and as there's only so much I can do I reserve the right to give it to whoever I think needs it most. And yes, I'm somewhat less likely to help anyone that wants help simply because it's easier than doing it themselves.

And as your book is based on some rather novel and unlikely beliefs I'm fairly relaxed if it's take on personal responsibility differs substantially from mine. But, as usual, feel free to give your own help to whoever you want.

Oh I'm sure you are a rsponsible person, within the law and likely morally too... but not recognising that your actions, be they responsible or not, affects the actions of others would lead me to think that you only do good things to make yourself feel good, irrespective of the consequences of those actions. For example, if a supermarket chain can buy in bulk and undercut the local competition, it will cause a reaction (one of many possibilities, but it will affect other people). You have just been responsible for someone else's actions. NOW extrapolate that to a global economic level and you may start to glean where I'm coming from.

So my beliefs are now unlikely, but not factually incorrect. My my, you have come a long way.

I ignore nothing. I dismiss overtly contrived rationale, and no, you don't have any issue with that.

I made no reference to any "hay day", and I've never at any time said that I agree that the current economic controls are adequate. So any suggestion that I might be fooling myself can only be a bit of contrived theatre, otherwise known as bullshit.

And your whole economic premise requires an extraordinarily extensive series of pretences, nothing less would support the fantastic claims you continue to make regarding the economy, money and it's generally accepted uses and conventions.

As do I.

You keep saying the problem is that X is happening therefore Y can't happen... and usually your X's are some form of change that has occured to upset your market. So once upon a time the market must have been working more properer, so I used the term "hay day" and coupling that with your belief that economic controls of any form would return us to any given point in time when the market was betterer or would even make the current market betterer, then I will most carry on believing that you are fooling yourself. If it still isn't working after several thousand years, it ain't ever gonna work.

And your whole economic premise requires an extraordinarily extensive series of pretences to instill confidence in a population (that's global btw) that the economy, money and it's generally accepted uses and conventions still hold true... despite that very same population coming to their senses and calling bullshit. I don't need support when the truth is but a read of a paper or a watch of a news channel away... which only serves to confirm that the bullshit that is propagated by those who refer to generally accepted uses and conventions as the right way, is anything but generaly accepted.

It's not a fact, it's demonstrably untrue. In fact in order to make such a claim you depend heavily on the farcical pretence that money is pulled from some bankers arse and distributed in a patently unfair manner that you struggle to understand.

Whereas any kid with a paper round knows it's the result of supplying something someone else wants. An observation that recognises that unproductive behaviour by it's very definition is not only not worth anyone's support but actually detracts from the economy's value.

So let's try turning that little piece of bullshit around: Let's explore how improving economic productivity might supply the resources necessary to look after those that can't do so themselves, rather than crippling it by bleeding productive enterprise in order to buy votes from those more than capable of taking care of themselves.

And if you feel up to it you'll find that a bit of research will demonstrate that my assertions bear somewhat more resemblance to facts than those you like to shape around your hard-held beliefs.

It is pulled out of a bankers arse. Even in QE format not only is the money pulled from their arse, but the bonds that are generated (that the tax payer pays for and pays interest on) are also pulled out of someone's arse. So I will maintain that looking after people properly will see the economy right. Don't look after them and your economy will colaps, because, as we established what seems like minutes ago, the people are the economy. Make your mind up... or at least join a few of your own dots together and keep to your story.

How does it detract from the economy's value?

Define can't look after oneself. And explain why they can't look after themselves. My starter for 10 is, give everyone a free education whenever they want one... then as people are ready to be productive, they will have every tool at their disposal to become so.

My beliefs aren't hard-held and you have every chance of changing my mind... however you have yet to produce anything to challenge them with.

[Brian d marge]

And it's availability is controled by the RBNZ using a big knob called the OCR.


The RBNZ is independent from the government , aka the reserve ban act

the money is released into the economy to control the inflation rate ie keep it under 2 or 3 % whatever it is now

Inflation is what eats away at the "value " or purchasing power of that money ( snip;
noun
noun: inflation

• 2.
  Economics
  a general increase in prices and fall in the purchasing value of money.
  
  
  
  
  
  
  
  

Now maybe you can see why people are bent out of shape about the whole idea
It gets even worse when you consider Why we use a fractional/ fiat system . ( dont bother reading Stuff.co.nz the answer wont be there)

And no it, isnt used to fund mortgages. Private banks use different instruments for that. ( and it is just a number on a computer screen , sorry but it is . 2/3 of the money is digital money the rest is paper etc, yes its backed by assets; bank bonds etc inter bank lending.. But when u sit down in front of the bank manager , its a number on a computer screen .

the Mafia if actually the better bet .

Read it again Stephen, most of that fiat money is lent in the mortgage market, it pays for housed to be built, it therefore represents the value of those houses.

I know you feel it’s unfair that the evel banks can print money and you can’t, but whereas it’s unlikely anyone else would benefit from your sudden acquisition of vast wads of cash, banks actually use it to allow kiwis access to loans they simply wouldn’t get any other way. Remove that mechanism and yer average bloke would have to stump up with around 80% of the value of his property.

Rubbish complete and utter.

Like I said, it’d suit me fine, the value of my investments would double overnight, but in the long run fiat money fills a market that’s as free as it’s possible to be, nobody legally forces anyone to borrow money, and only a fool does so and then bleats about the cost involved.

You could pay of the debt quicker if inflation went nuts ( fiat money means its not backed by anything gold etc)
This is what happened in Germany , people with cash, ie those not on a fixed income , bought stuff at fire sale prices.( converting cash into assets)
but the value of your money ( its purchasing power ) will drop .

You are going to have a shock soon , all I can say is I hope you are freehold and debt free .

Stephen

[Ocean1]

Whoa back Ocean and dismount from your high horse for a second.


The system is slanted far far to much to the lender there is far to much profit being made out of nothing. (you will say demand, but it is artificially created and non competitively driven)This artificially raises the price of the assets being lent on mainly houses to a level which totally out strips their actual worth in comparison to the earning capacity of the borrower.

Should people pay mortages their entire lives to put a roof over their heads....the next generation will live their entire lives in perpetual debt.
For you is it a case of let them eat cake?

No high horse here mate, not a scrap of blame or moral hill-climbing, it was a simple question about how the system is unfair.

And it may be that competition isn't as rabidly competitive as you'd like. I'd certainly like my options to include cheaper loans. Yet, yet as I said there are alternatives, and the ultimate price-check is always available: don't deal with them. You know full well that would drive the prices down too.

And I don't see the profit as made from nothing at all, inflation alone accounts for over half of it, tax accounts for most of the rest. And let's not pretend the debt's somehow different because the money wasn't part of some old codgers savings, the guys who built he house certainly didn't make the distinction and the property's worth the same either way.

Our parents might have had fewer debts than us, our grandparents certainly did, but their properties and their lifestyles were a damned sight less spendy too. In fact the size of their mortgages was probably about as proportionate to the size and quality of their homes as ours are. We're already seeing the back end of a generation that's spent most of it's working life paying off debt, but if this generation borrows more than previous ones to support a taste for cake when their income couldn't support it I struggle to see how they can blame anyone other than themselves.

[husaberg]

No high horse here mate, not a scrap of blame or moral hill-climbing, it was a simple question about how the system is unfair.

And it may be that competition isn't as rabidly competitive as you'd like. I'd certainly like my options to include cheaper loans. Yet, yet as I said there are alternatives, and the ultimate price-check is always available: don't deal with them. You know full well that would drive the prices down too.

And I don't see the profit as made from nothing at all,

inflation alone accounts for over half of it, tax accounts for most of the rest. And let's not pretend the debt's somehow different because the money wasn't part of some old codgers savings, the guys who built he house certainly didn't make the distinction and the property's worth the same either way.

Fractional lending is creating something out of nothing. Fact
Bank has reserves to cover 1 million can lend 10 million out of thin air.... the extra 9 million dollar lent accumulates revenue as interest.
Banks also pay f-all tax cause they can afford excellent shelters........
The red hearing with the other options is that their are no other option all the lenders operate the same systems.
Why wouldn't they its an excellent money spinner, it needs to be managed cause it is a massive drain of money out of the middle classes to the extreme rich minority.......

Our parents might have had fewer debts than us, our grandparents certainly did, but their properties and their lifestyles were a damned sight less spendy too. In fact the size of their mortgages was probably about as proportionate to the size and quality of their homes as ours are. We're already seeing the back end of a generation that's spent most of it's working life paying off debt, but if this generation borrows more than previous ones to support a taste for cake when their income couldn't support it I struggle to see how they can blame anyone other than themselves.

Granted lots of people live beyond their means no argument from me.....
Although bank profits then were not as high as they are now............

[Ocean1]

Fractional lending is creating something out of nothing. Fact
Bank has reserves to cover 1 million can lend 10 million out of thin air.... the extra 9 million dollar lent accumulates revenue as interest.

Yup, I know the basic numbers.

Should they just pay for the asset using the same money and forget all about who owns it? How long do you think that wee lolly scramble would last?

Isn't it at least as valid to say fiat money is created in response to demand from borrowers? And charged at such a rate as to minimise inflation? The other way around is what the health industry call a provider driven market. They tend to occur in the absence of a genuine free market.

Banks also pay f-all tax cause they can afford excellent shelters........

Show me.

The red hearing with the other options is that their are no other option all the lenders operate the same systems.
Why wouldn't they its an excellent money spinner, it needs to be managed cause it is a massive drain of money out of the middle classes to the extreme rich minority.......

So, the organisations that lend real savings don't have as much money to lend as larger banks under RBNZ control. Go figure. What if the big banks couldn't access all that fiat money either? What would slashing available loan funds by 85% do for interest rates? What would it do to the economy?

And who are these rich pricks, and how are they getting their hands on all that money?

Granted lots of people live beyond their means no argument from me.....
Although bank profits then were not as high as they are now............

Wouldn't it be nice if they were more responsible, it'd certainly have beneficial effects on economic performance across the board. Think of what you could do tomorrow with the money you had to pay today for shit you bought yesterday.

Which is pretty much what you'd expect with private debt at record levels, innit?.

[husaberg]

Yup, I know the basic numbers.

If you know the number why then claim it doesn't exist and they don't then?

Show me.

Remember the wine box? Have a look at how much tax say Westpac pays and then what there income is then yourself
take esp notice of the asset write-downs.......

So, the organisations that lend real savings don't have as much money to lend as larger banks under RBNZ control. Go figure. What if the big banks couldn't access all that fiat money either? What would slashing available loan funds by 85% do for interest rates? What would it do to the economy?

And who are these rich pricks, and how are they getting their hands on all that money?

Redistribution of wealth the Rockefeller the Vanderbelts etc they are pretty good at not attracting attention yet every year get richer and richer the redistribution of wreath from the middle class is accelerating at a phenomenal rate.......
Google it yourself ocean you have google.

Wouldn't it be nice if they were more responsible, it'd certainly have beneficial effects on economic performance across the board. Think of what you could do tomorrow with the money you had to pay today for shit you bought yesterday.

Which is pretty much what you'd expect with private debt at record levels, innit?.

[Ocean1]

Oh I'm sure you are a rsponsible person, within the law and likely morally too... but not recognising that your actions, be they responsible or not, affects the actions of others would lead me to think that you only do good things to make yourself feel good, irrespective of the consequences of those actions. For example, if a supermarket chain can buy in bulk and undercut the local competition, it will cause a reaction (one of many possibilities, but it will affect other people). You have just been responsible for someone else's actions. NOW extrapolate that to a global economic level and you may start to glean where I'm coming from.

Nope. You're going to have to explain how I'm responsible for someone else's behaviour better that that, it makes no sense.

You keep saying the problem is that X is happening therefore Y can't happen... and usually your X's are some form of change that has occured to upset your market. So once upon a time the market must have been working more properer, so I used the term "hay day" and coupling that with your belief that economic controls of any form would return us to any given point in time when the market was betterer or would even make the current market betterer, then I will most carry on believing that you are fooling yourself. If it still isn't working after several thousand years, it ain't ever gonna work.

Don't recall ever complaining about any particular change, it's not "my" market, and I'm hardly unique in believing that a different set of controls on the economy would produce betterer results, pretty much everyone want it's shape different to what it currently is. Are they all fooling themselves? Have we tried my flavours any time recently?

Sounds like you've been leaping to conclusions again.

And your whole economic premise requires an extraordinarily extensive series of pretences to instill confidence in a population (that's global btw) that the economy, money and it's generally accepted uses and conventions still hold true... despite that very same population coming to their senses and calling bullshit. I don't need support when the truth is but a read of a paper or a watch of a news channel away... which only serves to confirm that the bullshit that is propagated by those who refer to generally accepted uses and conventions as the right way, is anything but generaly accepted.

And yet the vast majority of people do accept those uses and conventions. That's what defines conventions, innit? And the fact that the system behaves pretty much as people expect sorta proves them right.

It is pulled out of a bankers arse. Even in QE format not only is the money pulled from their arse, but the bonds that are generated (that the tax payer pays for and pays interest on) are also pulled out of someone's arse. So I will maintain that looking after people properly will see the economy right. Don't look after them and your economy will colaps, because, as we established what seems like minutes ago, the people are the economy. Make your mind up... or at least join a few of your own dots together and keep to your story.

It's a mechanism to allow borrowers access to more money than is currently available. Why should the money be treaded any differently to the bank's deposits? It's used to buy goods worth exactly the same and the debt is exactly as real.

And as I've told you before nobody's forcing you to borrow the money from fractional reserve servers. Anything you willingly agree to is a bit difficult to later argue is some sort of ripoff.

Sigh. The economy is the sum total of the value produced by it's people. Not the people themselves. Money = value, not people. No quantity of "people" will cause money to be created without they produce something of value.

So claiming that looking after people will automatically cause an economy's value to increase is nonsense. Whereas it's pretty obvious that an economy that's people are producing more value has more to spend on welfare.

Dots all straight?

How does it detract from the economy's value?

Is self evident, Shirley. Non-productive behaviour? Failure to produce anything of value to the economy?

Define can't look after oneself. And explain why they can't look after themselves. My starter for 10 is, give everyone a free education whenever they want one... then as people are ready to be productive, they will have every tool at their disposal to become so.

Maintain a standard of living commensurate with their income.

Poor management or unrealistic lifestyle expectations.

Good start. At least to tertiary level. Specialisation can pay for itself, it don't need society's help.

My beliefs aren't hard-held and you have every chance of changing my mind... however you have yet to produce anything to challenge them with.

And given the extent of your investment in them it's unlikely anyone ever will.

[Ocean1]

If you know the number why then claim it doesn't exist and they don't then?

I didn't. My contention was that the money is loaned against an asset. Try borrowing money without collateral. So as soon as the loan's made the money represents that asset. Pretty straight forward innit?

So yes, the money is generated as debt, at the agreement of a borrower, but it's accounted against a tangible asset.

Remember the wine box? Have a look at how much tax say Westpac pays and then what there income is then yourself
take esp notice of the asset write-downs.......

I have done, albeit some years ago. It didn't unduly alarm me then, any observation involving huge numbers generates further huge numbers, and I don't see their profit necessarily has to be in the same order of magnitude as mine. I may look again if I get time.

Redistribution of wealth the Rockefeller the Vanderbelts etc they are pretty good at not attracting attention yet every year get richer and richer the redistribution of wreath from the middle class is accelerating at a phenomenal rate.......
Google it yourself ocean you have google.

Not this middle class member it isn't. I'm nowhere near silly enough to borrow money against a depreciating asset.

And the funny thing about compound interest is it's exponential growth. Isn't that what you'd expect to see in wealthy people's investments? Maybe that's not fair, but I'm not convinced that growth is at the unwarranted expense of the middle classes simply because they're the ones borrowing all the money.

[avgas]

Iceland has a new national currency........and its a crypto-currency.
http://auroracoin.org/

"A nation breaks the shackles of a fiat currencyIcelanders will be awarded f 31.8 each from March 25th 2014"

I had wondered when this would happen. Before any of you ask - here is the reason why the ISK lost its money...

"Five years ago, the government of Iceland imposed capital controls, following the collapse of a Ponzi inspired financial system that had issued far more Icelandic kronas than the nation could ever back up through its real economy. These controls were supposed to be “temporary”, but as with so many government actions, they remain in place to this day."

Interesting times ahead.

[BoristheBiter]

lets show the dirty fuckers, stop using banks.