[radon1]

Don't pretend there is any form of market-forces self-regulation if banks can be allowed to take huge risks and then get bailed out. It's a one way street. They make money, we get into debt. They take risks, we pay. The free market does not apply when banks are the primary source of money creation of the economy.

I don't mind these banks be bankrupted. This would, however, make suffering everyone, unless you are living on another planet. But some would be happy to accept it as long as they see the banksters suffering too. You know how AgentR calls this kind of attitude? - "Russian attitude".

By bailing out the banks they made an orderly deleveraging out of a potentially disorderly deleveraging. Kicking the can down the road, etc., but anyway.

Frankly I'd rather take the word of renowned economists than yours.

I wouldn't, but I don't mind.

Seems like "the renowned economists" have nothing to offer to explain the events other than some evil conspiracy. Very analytical.

Both articles I linked to above go into detail about how to transition from the current economic system to the new one in detail. And for you to be credible you'd need to be arguing against their conclusions rather than just making up your own.

Think that reading them would be pretty much waste of time, but I don't mind.

[davep]

Don't pretend there is any form of market-forces self-regulation if banks can be allowed to take huge risks and then get bailed out. It's a one way street. They make money, we get into debt. They take risks, we pay. The free market does not apply when banks are the primary source of money creation of the economy.

I don't mind these banks be bankrupted. This would, however, make suffering everyone, unless you are living on another planet. But some would be happy to accept it as long as they see the banksters suffering too. You know how AgentR calls this kind of attitude? - "Russian attitude".

By bailing out the banks they made an orderly deleveraging out of a potentially disorderly deleveraging. Kicking the can down the road, etc., but anyway.

Frankly I'd rather take the word of renowned economists than yours.

I wouldn't, but I don't mind.

Seems like "the renowned economists" have nothing to offer to explain the events other than some evil conspiracy. Very analytical.

Both articles I linked to above go into detail about how to transition from the current economic system to the new one in detail. And for you to be credible you'd need to be arguing against their conclusions rather than just making up your own.

Think that reading them would be pretty much waste of time, but I don't mind.

So you've been attacking them as anti-capitalist without even reading them.

Seriously, give the IMF report a read. It's interesting and goes into some depth on the issues with the current debt-and growth-mandated system as well as the possibility to transition to an equity-based system.

[ennui2]

A time when mankind finds fulfillment from creative and entertaining activities and simple harmony and peace rather then acquisition and ephemeral and base pleasures.

You do realize where you're posting, right?

You know, limits to growth, overshoot, mutant zombie bikers fighting over the last grain of rice. How does that fantasy you just spin work? Seems like this thread is devoid of rational thought, as it swings between trying to externalize a boogeyman (NWO) and envisioning an unattainable fantasy (your above cumbaya).

[Pops]

A time when mankind finds fulfillment from creative and entertaining activities and simple harmony and peace rather then acquisition and ephemeral and base pleasures.

You do realize where you're posting, right?

LOL, PO.com is no longer about "what can I do" about MZBs With Siphon Hoses.

I was reading from page 1 of the Planning Forum yesterday and every thread was personal and almost every one was about individual action. Look at the list today, not in the planning - no one posts there, just the recent posts search; almost every thread is about the evils of society and none are about individual action.

.

[onlooker]

ummm, I will respond to both the above posts. First in reference to my "fantasy", I figure the start of maybe someday making it a reality is imagining it. Did not someone once say if you can imagine it , it can happen. Second, Pops observations about posting tendencies is telling, in so much as it seems we here on this site currently are how shall you say more the "intellectual" kind, rather then someone out in the boondocks hunkering down to await doomsday. It could be initially this site attracted some of that type of folk. Now it appeals to those who like to rant about the evils of society with pizazz or eloquence . Also, those here now I think by and large realize that what is coming our way cannot be dealt with individually, either we all unite in common purpose or we are sitting ducks for the Overshoot Predator.

[Pops]

Now it appeals to those who like to rant about the evils of society with pizazz or eloquence . Also, those here now I think by and large realize that what is coming our way cannot be dealt with individually, either we all unite in common purpose or we are sitting ducks for the Overshoot Predator.

LOL, I like it!

I think talking is just less work than doing. Besides, one can rant online while still partaking in RL:
Preaching with our mouths full


ETA: the "Overshoot Predator" is just a construct to convince ourselves consequences will happen to someone else, somewhere else, sometime else.

[radon1]

So you've been attacking them as anti-capitalist without even reading them.

I am not attacking them, not saying they are anti-capitalist, and I have nothing against anti-capitalists or pro-capitalists.

Seriously, give the IMF report a read.

https://www.imf.org/external/pubs/ft/wp ... p12202.pdf

I've read through page 20, the rest is a quantitative modelling inconsequential for our purposes.

Interestingly, couple pages from page 12 on are a good read on the nature of money. Would recommend it, very instructive, even though irrelevant to this thread.

Otherwise, as I've previously suggested, their proposal is a Gosplan vulnerable to various "structuring" abuse, well-summarized in the paragraph that I previously quoted. Further reading does not add much - they probably had to be quite wordy in order to substantiate their salaries over the past few weeks/months. Definitely non-capitalist stuff, with all the "fixed growth rate model etc.". Not saying that this must fail, may be this is a way forward, but wouldn't fantasize too much about the happy world of "productive investments".

Another interesting excerpt on page 19:

This is because credit is no longer needed to create the economy’s money supply, with both households and firms replacing debt-based private money with debt-free government-issued money.

Not totally sure what it means, but at the face value it essentially spells a forgiveness of the household debt. No surprise that this plan may elicit quite a bit of enthusiasm from various corners. But potentially harmful stuff.

Also, the plan is suspiciously silent on the international holders of the dollar assets. They would probably be quite uneasy about this.

[ralfy]

Fractional reserve systems aren't self-regulating because banks operate through competition and price mechanisms.

In the context, the self-regulation via objective markets forces was meant, not an organizational self-regulation.

That's my point: self-regulation cannot take place because the same markets have as their objective profit, which in turn is driven by competition and price mechanisms.

[davep]

Another interesting excerpt on page 19:

This is because credit is no longer needed to create the economy’s money supply, with both households and firms replacing debt-based private money with debt-free government-issued money.

Not totally sure what it means, but at the face value it essentially spells a forgiveness of the household debt. No surprise that this plan may elicit quite a bit of enthusiasm from various corners. But potentially harmful stuff.

Also, the plan is suspiciously silent on the international holders of the dollar assets. They would probably be quite uneasy about this.

Don't worry, my house is paid for. But it's the nature of the transition that requires some sort of debt relief. And I agree that unless some solid formula (as proposed by the moneymasters link) except in times of war would be needed to avoid political manipulation. But we're now talking about implementation details rather than the feasibility of the idea (which is progress).

Treasury control of the money supply via a formula isn't inherently anti-capitalist. If correctly applied it just irons out the "business cycle" inherent in the bank-provided debt-based money system. And as I said, I'm open to other non-Chicago School-style approaches, but have yet to see anything feasible. One thing is sure, the current system is extremely short-termist and needs reforming as it is only in the interests of the banks.

[radon1]

This plan is nightmarishly difficult to implement technically. They are banning interbank lending. How are the banks going to manage their short-term liquidity? Essentially, the only tool available would be the overnight borrowing from the government. The Soviet Gosplan's dealings were limited to two or three state banks, but in case of the US the government would have to deal with a throng of private ones. And make sure in the process that the aggregate money supply follows some formula. Essentially, contradictory requirements. And there are tons of such issues.

More inclined to think that imf produced this paper more for entertainment purposes rather than practical ones.

[davep]

This plan is nightmarishly difficult to implement technically. They are banning interbank lending. How are the banks going to manage their short-term liquidity? Essentially, the only tool available would be the overnight borrowing from the government. The Soviet Gosplan's dealings were limited to two or three state banks, but in case of the US the government would have to deal with a throng of private ones. And make sure in the process that the aggregate money supply follows some formula. Essentially, contradictory requirements. And there are tons of such issues.

More inclined to think that imf produced this paper more for entertainment purposes rather than practical ones.

Because banks will become what they were meant to be historically, holders of other people's equity.

Check out the Money Masters Monetary Reform Act for a more succinct approach http://www.themoneymasters.com/monetary-reform-act/

Sec. 9. FULL RESERVE BANKS. After the transition period, institutions using the word bank in their name or title, may not engage in lending, except that the capital of the owners may be invested or loaned on the open market, but may charge fees for their services and may invest deposits in Treasury Department Deposit accounts. These: full reserve; one hundred percent (100%) reserve; deposit; check or narrow; banks, as they, exclusively, may also be titled, must treat deposits received as trust-funds of money held for depositors. By the end of the transition period, for every dollar deposited, banks must have a dollar of United States Notes on hand or invested in a Treasury Department Deposit account. All bank deposits shall be in demand accounts. Banks shall be free to pay any rate of interest on accounts. Only bank deposits may be transferable by check, credit card, electronic transfer or any substitute therefor. At the beginning of the transition period, entry into such one hundred percent (100%) reserve banking shall be open to all persons having no criminal record, subject to minimal bonding requirements to be established by the Secretary of the Treasury.6

...

Sec. 12. LENDING INSTITUTIONS. Banks or any other persons may establish separate associations, with or without joint ownership or management, not to be titled banks, such as investment trusts, mutual funds, brokerage or lending houses, to sell stock, to receive, borrow, lend or invest money at interest, but by the end of the transition period only from existing funds (i.e. United States Notes and Treasury Deposits). Contractual provisions must be made by such institutions upon the receipt of any funds with their owners, investors or depositors, that at no time may more funds be subject to demand than are presently idle and one hundred per cent (100%) available on demand. For any funds deposited with such associations payable on demand there must be a dollar of United States Notes on hand or deposited in a Treasury Deposit. No such association may denominate any account a demand account, nor promise immediate availability of any funds which may be invested, deposited or otherwise placed by such association without notice in any instrument or account other than Treasury Deposits. No funds deposited or invested with such associations may be transferred by check, credit card, electronic transfer or any substitute therefor. Owners, investors, lenders and depositors must be advised of the use of their funds, fairly appraised of the risks including the risk of total loss, of the maximum term of the use and of the potential and actual lack of availability of their funds, and the agreed or expected interest rate or the rate of return.

[radon1]

Because banks will become what they were meant to be historically, holders of other people's equity.

Banks' function is not holding of equity. Nor is it intermediation between depositors and investee companies, or destruction or creation of money, as the imf's article claims. Banks' function is risk management resulting in an effective resource allocation. Initially (historically), banks' function was pure safekeeping of money.

[davep]

Because banks will become what they were meant to be historically, holders of other people's equity.

Banks' function is not holding of equity. Nor is it intermediation between depositors and investee companies, or destruction or creation of money, as the imf's article claims. Banks' function is risk management resulting in an effective resource allocation. Initially (historically), banks' function was pure safekeeping of money.

Quite. And they have usurped the power of money creation via credit. Who voted for that then? And as I said, it would put banks back to the role they played historically before they found ways of making money while the rest of use get into debt.

If you want a good understanding of how they took these powers over time, check out the Money Masters video https://www.youtube.com/watch?v=iDtBSiI13fE

The Money Masters is a 1996 three and a half hour non-fiction, historical documentary film that discusses the concepts of money, debt, taxes, and describes their development from biblical times onward. It also covers the history of fractional-reserve banking, central banking, monetary policy, the bond market, and the Federal Reserve System in the United States.

It's long but very much worth the effort.

[radon1]

Quite. And they have usurped the power of money creation via credit. Who voted for that then? And as I said, it would put banks back to the role they played historically before they found ways of making money while the rest of use get into debt.

Money safekeeping is risk management too.

Someone came in, gave some money and asked to keep them safe until he comes back and take them. They put those money into a safe box because they had one (being jewelers). Then some d'artagnan popped in and wanted to borrow. They lent him a portion of the money from the safe box. D'artagnan deposited these money with somebody else. Those somebody else lent the money to another one. And so on and so forth. This is how fractional banking emerged. No usurpation or conspiracy involved.

Possibly, some tricksters usurped something later on. But removal of the usurpation will not, in itself, remove fractional banking.

[davep]

Quite. And they have usurped the power of money creation via credit. Who voted for that then? And as I said, it would put banks back to the role they played historically before they found ways of making money while the rest of use get into debt.

Money safekeeping is risk management too.

Someone came in, gave some money and asked to keep them safe until he comes back and take them. They put those money into a safe box because they had one (being jewelers). Then some d'artagnan popped in and wanted to borrow. They lent him a portion of the money from the safe box. D'artagnan deposited these money with somebody else. Those somebody else lent the money to another one. And so on and so forth. This is how fractional banking emerged. No usurpation or conspiracy involved.

Possibly, some tricksters usurped something later on. But removal of the usurpation will not, in itself, remove fractional banking.

Seriously, watch the video when you get the time. It explains the behind-the-scenes battles to impose fractional banking and various other banking tricks throughout history.

[onlooker]

thanks for the link Dave, though I already was aware of the sinister behind the scenes workings of banks and monied interests. The only difference then as opposed to now is banks doing the robbing before it was Religions, Kings and ruling governing bodies who still are today

[davep]

thanks for the link Dave, though I already was aware of the sinister behind the scenes workings of banks and monied interests. The only difference then as opposed to now is banks doing the robbing before it was Religions, Kings and ruling governing bodies who still are today

The funny thing is that we have come to generally accept banks have some God-given right to create money as if it were the bedrock of functioning Capitalism. Shifting baseline syndrome applies to economics as well as ecology.

[onlooker]

yes and also that their is no other way for the economy to function then with lending. That is just plain wrong.

[davep]

Blimey, it looks like Iceland are going to be the first to take away money creation from commercial banks.

http://www.zerohedge.com/news/2015-04-01/iceland-stuns-banks-plans-take-back-power-create-money

Who knew that the revolution would start with those radical Icelanders? It does, though. One Frosti Sigurjonsson, a lawmaker from the ruling Progress Party, issued a report today that suggests taking the power to create money away from commercial banks, and hand it to the central bank and, ultimately, Parliament.

Can’t see commercial banks in the western world be too happy with this. They must be contemplating wiping the island nation off the map. If accepted in the Iceland parliament , the plan would change the game in a very radical way. It would be successful too, because there is no bigger scourge on our economies than commercial banks creating money and then securitizing and selling off the loans they just created the money (credit) with.

I thought it was an April Fool's joke at first, but The Telegraph referenced AFP on 31st March too http://www.telegraph.co.uk/finance/economics/11507810/Iceland-looks-at-ending-boom-and-bust-with-radical-money-plan.html

Good luck to them. Here's hoping they're not the next pariah state.

[onlooker]

Bold move, good luck to them indeed.