Peak Oil News and Message Boards

BTW, here is proof you're making up crap about few people having to take out car loans in the 70's:

It's from 2007 but the important part is the historical info:
LINK

But, to some dealers’ chagrin, cash deals are up in 2007. Some 11.7 percent of buyers paid cash for cars in the first half of this year, versus about 8 percent over the last few years, according to a survey by CNW Marketing Research, which studies car buying habits.

In all, about 26 percent of buyers are bringing cash to the table, whether it is out of their bank accounts or in pre-arranged loans through their credit unions, banks or home lenders, according to the Power Information Network, the research arm of J. D. Power & Associates.

That overall figure is up slightly from last year, but still below the one-third of buyers who paid cash in the 1950s, when customers, many with lingering memories of the Great Depression, came to showrooms with their check books or stacks of bills.

It is in line, however, with the rate during the 1970s and 1980s, before car companies made widespread use of cut-rate loans and discount lease plans.

So even as far back as the 50's, 2/3 of people buying cars financed the purchase. How many more times am I going to catch you making up crap?

copious.abundance wrote:Except that it's not shady characters with questionable motives managing the money supply, it's The People Taking Out Loans.

That's interesting. So whatever the Fed does with QE, reserve requirements, open market operations, etc. has absolutely no effect? Then what do they exist for? Silly me, here I thought they were influencing the supply and price(you know, interest rate) of money, which, If I was awake in econ 101, impacts the amount of demand that can be met. I'm sure you've seen a chart like this, right?

You're changing the subject. You said demand for loans goes down when interest rates go up. This is false. BTW, real interest rates in the late 70's weren't actually much different from now, so your sarcasm at my mentioning that different period to today was misdirected.

OK, perhaps I should have said real interest rates. So a more accurate statement would be when real interest rates increase, loan demand goes down.

Actually, what they said was that it wasn't very useful. Perhaps they are right - it wouldn't be the first government statistic discontinued due to irrelevance. FWIW, there are people who reconstruct M3 such as this person here. Looking at the chart entitled "M3, longer term chart" about 1/4 down the page, you can see it's been bouncing up and down without any rhyme or reason for the past 3-4 years. So maybe they were right in declaring it useless. However, no doubt paranoid conspiracy theorist types will find any statistic the government ceases to publish as being part of some vast conspiracy to hide information from the public. Perhaps the fact they don't tablulate Switchboard Operators in the monthly job statistics anymore is part of some vast conspiracy!

Well, other people thought it was a useful measure, hence they attempt to continue to tabulate it as much as possible. And I think you misread your link. Looks to me like M3 is increasing (the green line).
And according to your link, it seems it is very useful, since they say just above: "Finally and to put M3 into proper perspective with inflation (as measured by CPPI), the M3 and M2 strong inflation link is virtually unquestionable."

Here we go yet again! I wonder how many more times I'm going to have to provide a link to this Wiki article.

From your wiki article: "Commercial bank lending then multiplies this base money through fractional reserve banking,"

What part of "fractional reserve banking is outlawed" don't you understand? Again, banks would function as loan brokers, only lending money trusted to them for a time period with the express expectation of interest income, less the bank brokerage fee. Very similar to today's crowd sourced funding. On the other hand, demand accounts would be fully funded (your money is actually in the bank) and a fee assessed for the safekeeping and check clearing functions the bank provides.

No "new money" required. Get it now?

OK, so no income tax would reduce the amount of time your average saver would finally save up enough money to buy a house 100% cash down (no loan) from about 10 years after they die, to about 10 years before they die.

No wait - I take that back. Since you've told us wages will be falling as well, it'll still take until 10 years after they die to save up for a house anyway!

In the meantime, when your fantasy money system turns out to need even merely half the amount of loans that the money system now requires, those 50% of today's borrowers are going to find your deflation making the real cost of their loans go up, and you're still gonna have a helluva lot of really pissed off people, which means your system will last ... oh, I'll give it maybe 3 years. Tops. I wonder how many more times I'm going to end up pointing out that your system contains the seeds of its own destruction?

Of course, you're only focusing on the very unlikely event that somehow, someway, the federal government didn't spend enough into the economy to cover their expenditures and delayed the money creation for that period of time. How likely do you think those particular congress critters would last in the next election cycle? I really think you misunderstand the whole concept because you're so locked in to the current, fraudulent monetary system as evidenced by your opinion that banks would need "new money" under a government created money system (be it fiat or commodity money) where fractional reserve banking is outlawed as the fraud it is.

Oh, and without mortgage money, housing prices would be much, much less. Just in 2007-09, banks tightened their lending requirements, which is what drove housing prices down like 50%. Of course, this was after they loosened them so much that a rock could get a 100% mortgage with no income verification, which drove the prices higher and higher for several years.

Nah, bank lending policies don't influence housing prices, at least not in your dreams.

I don't think you could actually get your head around this particular concept, but your own system solves absolutely nothing. All you've done is reverse the problem you described above: Instead of perpetual loans creating perpetual inflation (both prices and wages), your system proposes no loans (or few loans) creating perpetual deflation (both prices and wages). Maybe when wages fall to zero, prices have also fallen to zero, and we're thus reduced to a hunter-gatherer society, it will finally dawn on you how silly your system was.

What the hell are you talking about? The Federal government would be creating new money every year in the budget process. Other than you can't seem to shake the bank's fraudulent money creation as debt, what part of the government creating and spending new money into the economy escapes you? It's been done before, Lincoln issued greenbacks, Congress issued script during the revolution, states did too. It's actually been going on for centuries.

BTW, in spite of its problems, debt can be a very good motivating factor. I pay $400/month in student loans, and will do so until the year I turn 65. You can be sure I would not be as productive a member of society if I didn't have that and other debts to pay off. Being debt-free is a great excuse to live a slacker's life ... which is another reason your proposed money system would reduce us to hunters and gatherers.

Gee, you sound like those religious people who claim that without "Thou shalt not kill", they'd be out there committing murder! So you wouldn't have pursued your career and increased your earnings without the impetus of student loan payments? Perhaps you should have reconsidered college and just went and lived under a rock then.
Interesting how you justify your own debt slavery. Did you ever consider deferring some of those other purchases until you had saved up enough, instead of going into debt for them?

And here's another question for you. I assume once you pay off your debt and maybe put some away for retirement, isn't your goal to sit back and be a slacker anyway?
Here's a little story I'd like you to read...
http://financialmentor.com/true-wealth/ ... anker/2422

You're a bloody f-ing liar, dude. I'm 49 and remember the 70's quite well, thank you. Most people took out a loan for a car. Every car (all used) my father bought had had to take out a loan, and he had a good paying job. The real price of airline tickets was much greater than it is now, and if people didn't borrow money for a Christmas vacation to Aunt Selma, it's because airplane tickets were too expensive to even bother borrowing money for.

Look dude, you think I'm some young naif who doesn't remember what your supposed "good old days" were like, but that's probably because you're getting senile and don't remember anymore what those days were actually like yourself.

No, I actually have a pretty good memory. My father bought a new car with cash every three years. He sold each old one privately, for cash. The people across the street who had a much less income sometimes bought my dad's car, for cash. Sometimes they wanted the current car and asked my dad to wait another month to buy a new one so they'd have enough to buy the old one. He did. And personally, I worked at a minimum wage job one summer and saved enough to buy a 4 year old Cougar from my aunt (market price $800) for cash. And all my friends did the same.

And Aunt Selma lived down the block most of the time, anyway.

And I'm only 8 years older than you, and keep my mind flexible by constantly learning new things. So senility isn't on the menu for as long as I'm going to be alive, and if I do get Alzheimer's, I'm planning on doing some dangerously fatal things to hasten my body's death before my brain is too far gone.

How's this for memory: I recall you joined here as OilFinder in or around 2007. When there was an upgrade of the board, you were one of the clueless who couldn't sign onto their old ID and created OilFinder2. Since then, you managed to change your moniker to copious.abundance with the same posing history. And believe me, that information is a very, very, very small part of my life, so it's kind of amazing that I remember it.
BTW, How's those new discoveries going? I finally found that thread on back on page 4 of the PO discussion forum. Doesn't seem like you posted much. Is the abundance less than copious or what?

Just to put the kibosh on any more of your revisionist history, here's a chart of personal debt since 1948.


Please note that credit card debt (revolving debt) was virtually non-existent before 1970, and personal loans(non-revolving) were manageable. Per the chart, total debt went from less than $1000 per capita to today's over $10,000 (in 2010 dollars). But I guess to you that's a good thing. Can't have all those slackers enjoying life, we need to make them work harder and longer to pay off all that magically created bank debt!

"Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves" - Norm Franz

copious.abundance wrote:BTW, here is proof you're making up crap about few people having to take out car loans in the 70's:

It's from 2007 but the important part is the historical info:
LINK

But, to some dealers’ chagrin, cash deals are up in 2007. Some 11.7 percent of buyers paid cash for cars in the first half of this year, versus about 8 percent over the last few years, according to a survey by CNW Marketing Research, which studies car buying habits.

In all, about 26 percent of buyers are bringing cash to the table, whether it is out of their bank accounts or in pre-arranged loans through their credit unions, banks or home lenders, according to the Power Information Network, the research arm of J. D. Power & Associates.

That overall figure is up slightly from last year, but still below the one-third of buyers who paid cash in the 1950s, when customers, many with lingering memories of the Great Depression, came to showrooms with their check books or stacks of bills.

It is in line, however, with the rate during the 1970s and 1980s, before car companies made widespread use of cut-rate loans and discount lease plans.

So even as far back as the 50's, 2/3 of people buying cars financed the purchase. How many more times am I going to catch you making up crap?

Ok, so in my experience people were paying cash for new cars mostly. I wasn't aware that 2/3rds were purchased with debt. Still, it was 33% cash buyers in the fifties. And since the inflation rate in the 70s was quite high, people were probably better off buying new cars with debt that was being reduced in real value over time, especially if their interest rate was less than inflation of car prices. So you got me on a minor point. Wow, good for you.
Now you try to grok that money doesn't have to be created by banks as debt and maybe we'll get somewhere.

In relation to money creation,

"The myth of the money multiplier"

the-myth-of-the-money-multiplier-t67257.html

I'm going to finally get back to this part of the discussion. And to illustrate the complete futility, uselessness and waste of a discussion like this, I'm going to quote just two of Joe's comments, which together illustrate a classic example of the pointlessness of trying to debate someone like him.

To wit: In two replies, Joe was trying to explain his proposed system to me. In both replies he attempted to respond to my objection that the economy would need new money, even under his proposed system. Unfortunately, in doing so he completely contradicted himself (note the bolded passages): In one reply he told me his proposed system wouldn't need any new money. In the other reply, he told me that, "The Federal government would be creating new money every year."

So, which is it?

-- Has he fully thought out his own proposed system? No. In fact, the more I've pointed out the problems with his system, the more obvious it is he hasn't fully thought through the various ramifications of his proposal.
-- Has he fully thought out the various pros and cons of his own system? No. A predictable response here would be something like, the "cons" will be that bankers will be screwed under his system, or some other completely phony reply in which the "cons" to society are really "pros" to his own distorted worldview. Or some similarly twisted logic.

Now, in debates like this, the next predictable step would be to spend the next 4-5 pages, at least, discussing just this one aspect. He'll first accuse me of taking his quotes out of context (even though I haven't), or some other attempt to explain away his contradiction. Then, inevitably I'll bring up some hard-to-refute point which would force Joe to move some goalposts which he would try to get me to chase, and one reply or another would lead to yet another tangent, which would then go on for another 4-5 pages, completely and totally without resolution, etc., etc. Before you know it, we're each spending 10 hours per week just typing out replies to each other in this one thread. But between the goalpost-chasing, the lack of thought about the ramifications of his proposal, the inevitable long sidetracks debating definitions and other minutiae, and so on and so forth, neither of us will change each other's minds. In other words, as I've said, debates like this are a 100% complete waste of time.

So my one and last comment on this topic is thus: When the current fiat money system collapses and something resembling your system is enacted, and it stays intact for at least 20 years without any recessions or depressions, then you can come back to me and say, "I told ya so." LOL!!! Until then, I'm not going to waste any more time on this topic. Any time you want to say something to me, Joe, about the current monetary system, save yourself some time and simply re-read what I bolded in red right there; that is my reply to all your comments on this topic.

And speaking of wasting time, you'll be wasting your time replying to this post, because I'm going to give you a 100% guarantee I won't read it (I don't want to waste my time doing so, after all).

joewp wrote:What part of "fractional reserve banking is outlawed" don't you understand? Again, banks would function as loan brokers, only lending money trusted to them for a time period with the express expectation of interest income, less the bank brokerage fee. Very similar to today's crowd sourced funding. On the other hand, demand accounts would be fully funded (your money is actually in the bank) and a fee assessed for the safekeeping and check clearing functions the bank provides.

No "new money" required. Get it now?

Compare and contrast to:

joewp wrote:What the hell are you talking about? The Federal government would be creating new money every year in the budget process.

copious.abundance wrote:I'm going to finally get back to this part of the discussion. And to illustrate the complete futility, uselessness and waste of a discussion like this, I'm going to quote just two of Joe's comments, which together illustrate a classic example of the pointlessness of trying to debate someone like him.

To wit: In two replies, Joe was trying to explain his proposed system to me. In both replies he attempted to respond to my objection that the economy would need new money, even under his proposed system. Unfortunately, in doing so he completely contradicted himself (note the bolded passages): In one reply he told me his proposed system wouldn't need any new money. In the other reply, he told me that, "The Federal government would be creating new money every year."

So, which is it?

It's neither, dimwit. You need to read for meaning AND context. I'll illustrate below...

-- Has he fully thought out his own proposed system? No. In fact, the more I've pointed out the problems with his system, the more obvious it is he hasn't fully thought through the various ramifications of his proposal.

You don't even understand an honest money system, do you? And it doesn't need to be "thought out", there's plenty of history showing that prosperity and abundance are rife with honest money based on a commodity that takes human labor to procure.

-- Has he fully thought out the various pros and cons of his own system? No. A predictable response here would be something like, the "cons" will be that bankers will be screwed under his system, or some other completely phony reply in which the "cons" to society are really "pros" to his own distorted worldview. Or some similarly twisted logic.

Pros:
Money that keeps value
Money that lasts a long time
Money that is universally accepted
Cons:
I really can't think of any, sorry.

You seem like you want to defend this debt-money system. Why don't you give it a go right here?

Oh wait, I know why. Answer below...

Now, in debates like this, the next predictable step would be to spend the next 4-5 pages, at least, discussing just this one aspect. He'll first accuse me of taking his quotes out of context (even though I haven't),

Oh yes you have, and it's ether pretty stupid of you or a deliberate lie. See below...

or some other attempt to explain away his contradiction. Then, inevitably I'll bring up some hard-to-refute point which would force Joe to move some goalposts which he would try to get me to chase, and one reply or another would lead to yet another tangent, which would then go on for another 4-5 pages, completely and totally without resolution, etc., etc. Before you know it, we're each spending 10 hours per week just typing out replies to each other in this one thread. But between the goalpost-chasing, the lack of thought about the ramifications of his proposal, the inevitable long sidetracks debating definitions and other minutiae, and so on and so forth, neither of us will change each other's minds. In other words, as I've said, debates like this are a 100% complete waste of time.

What makes it a waste of time is you making stupid accusations of me "contradicting" myself, which I didn't, as illustrated below.

So my one and last comment on this topic is thus: When the current fiat money system collapses and something resembling your system is enacted, and it stays intact for at least 20 years without any recessions or depressions, then you can come back to me and say, "I told ya so." LOL!!! Until then, I'm not going to waste any more time on this topic. Any time you want to say something to me, Joe, about the current monetary system, save yourself some time and simply re-read what I bolded in red right there; that is my reply to all your comments on this topic.

Um, we don't need to do that experiment, history already has...
Gold coins known as solidus were issued by the Byzantine Empire for over 800 years, minted exactly the same weight of gold, and used throughout the ancient world, because they were known to be honestly minted. The result was Byzantium was the trading hub of the world, and rich beyond even Rome's dream. Outside of wars, the economy was stable and wealth widespread.

And speaking of wasting time, you'll be wasting your time replying to this post, because I'm going to give you a 100% guarantee I won't read it (I don't want to waste my time doing so, after all).

Yeah, cause obviously you're too dumb, or too disingenuous to get things straight and call two different things a "contradiction". Your defeat is duly noted.

Yep, out of context:

The following was in response to this exchange:

joewp wrote:Oh really? I'd really like to hear who else requires "new money". Oh, if you're gonna say "banks to make loans", I will again say you don't understand the concept. Banks only loan out money that people agreed to put at risk for a time (a CD or time deposit) for a higher return. And when they issue a credit card with a $1000 credit limit, they put $1000 in reserve from the money the time depositors invested.

Here we go yet again! I wonder how many more times I'm going to have to provide a link to this Wiki article.

joewp wrote:What part of "fractional reserve banking is outlawed" don't you understand? Again, banks would function as loan brokers, only lending money trusted to them for a time period with the express expectation of interest income, less the bank brokerage fee. Very similar to today's crowd sourced funding. On the other hand, demand accounts would be fully funded (your money is actually in the bank) and a fee assessed for the safekeeping and check clearing functions the bank provides.

No "new money" required. Get it now?

Explaining to you that banks don't need "new money" to make loans under a system in which fractional reserve banking is outlawed. "No 'new money' required" for banks to make loans, since they would have a pool of existing money lent to them for the purpose of lending by people willing to risk their money for a return.

Compare and contrast to:

joewp wrote:What the hell are you talking about? The Federal government would be creating new money every year in the budget process.

And of course, this is talking about the Federal government creating the money (either fiat or coining metals) and spending it into the economy.

Now, either you're too stupid to understand the difference in context, or you're deliberately lying.

Now since you're not posting in this thread any more, I'll let the readers decide.

I find there are very few folks, even intelligent ones, who really understand our current fiat system. The relationship between the Fed, the Government, and the banking Oligarchy is not understood by many. Its meant to be that way. It takes real effort, study, and TIME to grasp the reality of how we are all being played. Folks refuse to believe it. Put the blinders of normalcy on. Everything has been ok for a long time....why should I worry?

I have divested myself of the markets, and hope for the best. All I worry about now is protecting my pile as best i can. I pray the system will remain intact, but without some sort of truth and fiscal responsibility this all ends very badly and history will be your guide.

I live on the opposite end of the economic pyramid. I usually don't have two nickles to rub together, and I live entirely paycheque to paycheque with no savings whatsoever to preserve.

The existing fiat currency will keep going so long as average Joe's like myself can buy staple goods with it. With all of its flaws, and the corrupt system with which it it is administered by, fiat currency is still far superior to barter. The point at which I have to raise chickens in my back yard to exchange them for something else is the point of collapse of the fiat dollar.

I don't want to raise chickens, or stand out on a cold street corner bartering one thing for another. I'd much rather keep my day job, commute to and from my cubicle, and have a 100% corrupt fiat dollar system to buy stuff with. I think 99.9% of the population likes fiat money or it wouldn't exist.

The level of specialization in our civilization could not be supported with a barter system. How do you barter sitting in a cubicle dispatching trucks for food? How do you barter cleaning senior citizens apartment buildings for rent? How to you barter tending the green at a public golf course to equate with an 'X' amount of electricity at home? The majority of our highly specialized society would have to give up their careers, and return to agriculture, or to the provision of basic services just to survive; no one wants to do this.

Those at the bottom of the economic pyramid, who are more aware than those in the middle or those who are at the top, of the corruption, of the favoritism, and of the complete unfairness of the existing system, will let the system continue because we don't want to barter. We don't want to stand out in the cold selling crap, or give up our day jobs. Woe to those at the top or middle of the pyramid structure when it does go. The people at the bottom won't maintain the power structure if we can't buy staple goods, and we have to barter.

When the fiat dollar goes; the power structure that is, becomes the power structure that was. That's the real truth that those at the top are worried about. While those in the middle are merely trying to preserve their wealth, the sociopaths at the top of the structure are worried about keeping their heads attached to their bodies.

Repent, barter isn't the only alternative. Trading with a convenient commodity that keeps its value and is durable is the middle ground. It doesn't even have to be precious metals. In Colonial days in the US, tobacco was used as money.

AirlinePilot wrote:I find there are very few folks, even intelligent ones, who really understand our current fiat system. The relationship between the Fed, the Government, and the banking Oligarchy is not understood by many. Its meant to be that way. It takes real effort, study, and TIME to grasp the reality of how we are all being played. Folks refuse to believe it. Put the blinders of normalcy on. Everything has been ok for a long time....why should I worry?

+1 AP.

The point to take away here is that you and I dont get to choose. Fiat currencies fail usually because they reach the end of their "ponzi scheme". The end usually comes quickly with little warning except for those who are paying very close attention. When the paper you use..or even the 1's and 0's in the computer lose their value it doesnt matter anymore who is using it for whatever reason.

The larger problem comes from not only the reset of the value of a dollar, but the inability of the lower end economy to absorb the losses due to it. There are literally TONS of examples of fiat currencies failing throughout history. The shift after the failure is always painful. We could choose a more stable but still painful path, only the Oligarchy in charge doesnt want to wreck their scam while it still works for them. Its too profitable for them to give up!