What is Money?
- Thread starter Jefferson
- Start date
Not necessarily.lain:
:chuckle:
In what way is a bank raising or lowering prices different from a supermarket doing the same?
I don't think money loaned is created out of thin air. The bank has to hand over something in order to make the loan. They lose whatever they hand over in the hope that they will get it back (with interest).
elohiym
Well-known member
It is self-evident that it is different in several ways. Regardless, the only point relevant to Bob's claim that the Federal Reserve Bank doesn't regulate the value of money is the one we've already addressed. We agree they do regulate the value of money.
I'd like to avoid rabbit trails.
elohiym
Well-known member
The Federal Reserve Bank's own published bookkeeping entries prove they don't create money out of thin air.
Even if you give me a promissory note (cash equivalent) it's not creating money out of thin air. You are monetizing your property by monetizing your labor and collateral. It is money, even by Bob's definition of money. And when you give me a promissory note you are giving me money backed by your wealth. I can sell that promissory for cash; and if you default on the loan I get the collateral.
The Graphite
New member
I don't think money loaned is created out of thin air. The bank has to hand over something in order to make the loan. They lose whatever they hand over in the hope that they will get it back (with interest).
Okay, I think here is where some of the confusion lies. Some here seem to be confusing money with wealth. Money is not wealth. Money is a symbolic representation of wealth which you can trade it to get actual wealth (furniture, car, food, hire a maid, etc.)
If you trade a coconut for a fish, that's barter. If Bob gives Fred a coconut and Fred gives Bob a piece of paper that their miniature free market determines to be worth a fish, then Bob can "cash in" that promissory note later for some actual wealth - a fish, perhaps a fish that Fred hasn't caught yet. There is no increase in wealth in the transaction, but they did create money. They created it to symbolize the relative value of the wealth in their transaction. Money was created. Wealth was not created.
Elo, you said something very confusing:
Erhhh... the promissory note is money, but you can sell that money for... cash, which is just another promissory note, just money? It's just one symbol for another symbol of the same time, apples to apples.
elohiym
Well-known member
Nobody has expressed that confusion. Nobody has said money is wealth, though I'm sure you include your cash assets when you describe your wealth. The banks are stealing wealth via the money they take from alleged "borrowers."
If I trade you an IOU for your IOU, is that a loan or an exchange?
Yes. It's called money changing. What's confusing about that?
In significance? A bank changing interest rates will have far more impact than a supermarket raising the price of tomatoes.
What other self-evident ways are there?
Right. Supermarkets and banks - people - can regulate money.
OK.
Who? :idunno:
OK.
Have I added to this confusion?
elohiym
Well-known member
Are governments people, too?
Substitute the name of the central bank where you live. Their bookkeeping entries should be the same. We're talking Generally Accepted Accounting Principles here.
elohiym
Well-known member
Barely.
Then explain how banks are people but governments are "barely" people. Forget for a moment that the credit monopoly controls the government.
elohiym
Well-known member
Only the banks are directly regulating the value of money by their actions. Consumers are not even attempting to affect the value of money by their actions.
Now let's hop off that trail for good.
The Berean
Well-known member
By "value of money" are people referring to the purchasing power of money? :idunno:
GuySmiley
Well-known member
A liability is a debt. You have a liability if you owe something to someone.
The bank has a liability because they have a responsiblity to pay back (exponge) the money they created when the borrower pays the loan back.
Dont start arguing that this isn't correct since I got it from your post above! You'll really start confusing me!
No. But I'd be lending you money that I had, it would be simply a deduction from my account balance. If that was a loan, I'd have an asset in your promise to pay it back. My balance sheet would still balance.
Yes.
Almost all I know about the topic is from Bob's show. So yes, it sounds like thats not true. They lend out a fraction of depositor's money and create the rest by fiat.
So what is money? From the OP: "But rather...] money is more like a transferable IOU. Most accurately, money is the accounting of transferable incomplete transactions. That is what money actually is."
Money is just a transferable IOU. That can certainly be created out of thin air. I dont think I'm qualified to prove anything. I just dont see what's wrong. (maybe yet, as you claim)
elohiym
Well-known member
Correct.
How could they owe the money to someone if they created it? They couldn't. If they actually loan depositor's money, as they claim they do in their publication I provided the link to, do you agree that they owe the money back to the depositors? And if they owe the money back to the depositors, why would that money be "expunged" instead of repaid to the depositor?
I should point out here that money cannot be in two places at once. If a bank truly was lending out your savings your account would have to reflect that with money leaving your account to be loaned out to borrowers.
It is the banks who are trying to confuse everyone because the people who control the credit monopoly are running a massive scam that results in economic slavery. It's hard not to appear confusing when one is trying to clear up the confusion.
Correct. And you wouldn't have a liability. But the banks have a liability when they claim to make a "loan."
If a single transaction increased your assets and liabilities it would have to mean you received a loan, not that you made a loan. Do you agree?
Could it mean anything other than that you owe the value of that asset?
If they "create" the rest by fiat, then why do they have a liability? Do you see the problem yet?
An IOU is not money out of this air. It is the monetization of your property--your labor and the collateral. Is your labor thin air? No. Is your collateral thin air? No. They are your property that you can sell.
For a bank to actually create money out of thin air, it would have to be able to increase its assets with a pen stroke and without obligation. But we see that when banks claim to make a "loan," that single transaction increases their assets and liabilities, proving that they are not creating money, but actually receiving a loan of money from the "borrower."
Compare that transaction to when you deposit your paycheck. When you deposit your paycheck the banks assets and liabilities increase from that single transaction. The asset is the money they received from you, and the liability is their IOU for that money. When you draw from your account, the banks assets decrease and their liability decreases.
I'm sure you agree that when you spend money from your checking account that you are not taking a loan from the bank, but rather you are taking repayment of the loan you made to the bank. Right?
elected4ever
New member
In the United States debt is money. If there is no debt then there is no money.
When a person pays off their obligations such as a mortgage, car loan and credit cards and such and becomes debt free, so to speak, and begins to save money what is actually being saved? It is someone else's debt. In our case federal debt. There is no such thing as being debt free in the United States.
The last thing on earth the Federal Government wonts to see is a reduction in Federal debt. Why? Because less debt by the government means less money in the economic system.
Why do we have a depression or contraction in the economy? Simple, people stopped becoming obligated for more personal dept having the result of less money available in the market place thereby further reducing demand for goods and services.
Vice President Joe Bidden was right when he said that the government had to spend more money (increase the debt) to pull us out of the depression. Under our present monetary system the government had to spend more debt (money) to replace the debt that the American consumer was not spending and the debt lost by the reduction of credit obligations by the public at large. That is why the Federal Reserve is printing more money to flood the system even more. To keep interest rates down by making the Federal Reserve Note more plentiful than water.
Uncle Joe is trying to save a bankrupt system of debt basted finance. Why? Because with out it the socialist state cannot exist. If the money was basted on actual wealth instead of government and privet debt the power of the Federal Government to manipulate people's lives and control business Enterprise would evaporate. That is why in 1933 FDR stole the wealth by demanding that the banks ship all the gold in their vaults to the Federal Reserve Bank and built Fort Knox. That is why private ownership of gold became illegal and owner ship of gold coin and bullion subjected the person having such to a $10,000 dollar fine and a prison sentence.
A debt basted economy was never envisioned by the founders and certainly not by the constitution.
When a person pays off their obligations such as a mortgage, car loan and credit cards and such and becomes debt free, so to speak, and begins to save money what is actually being saved? It is someone else's debt. In our case federal debt. There is no such thing as being debt free in the United States.
The last thing on earth the Federal Government wonts to see is a reduction in Federal debt. Why? Because less debt by the government means less money in the economic system.
Why do we have a depression or contraction in the economy? Simple, people stopped becoming obligated for more personal dept having the result of less money available in the market place thereby further reducing demand for goods and services.
Vice President Joe Bidden was right when he said that the government had to spend more money (increase the debt) to pull us out of the depression. Under our present monetary system the government had to spend more debt (money) to replace the debt that the American consumer was not spending and the debt lost by the reduction of credit obligations by the public at large. That is why the Federal Reserve is printing more money to flood the system even more. To keep interest rates down by making the Federal Reserve Note more plentiful than water.
Uncle Joe is trying to save a bankrupt system of debt basted finance. Why? Because with out it the socialist state cannot exist. If the money was basted on actual wealth instead of government and privet debt the power of the Federal Government to manipulate people's lives and control business Enterprise would evaporate. That is why in 1933 FDR stole the wealth by demanding that the banks ship all the gold in their vaults to the Federal Reserve Bank and built Fort Knox. That is why private ownership of gold became illegal and owner ship of gold coin and bullion subjected the person having such to a $10,000 dollar fine and a prison sentence.
A debt basted economy was never envisioned by the founders and certainly not by the constitution.
:doh:
Governments are people.
Of course.
They don't need motivation in order to have an effect.
elohiym
Well-known member
Bob will need to answer that question since he is the one claiming that governments shouldn't be allowed to regulate the value of money and that the Federal Reserve Bank doesn't regulate the value of money.
Banks regulate the value of money through interest rates and credit expansion and contraction. I'm not disputing that the value of money is affected by other factors, too, such as inflation.
elected4ever
New member
Elohiym,, would you answer this for me? Is inflation the actual rise in the value of goods and services or is inflation the actual increase in the money supply having the effect of the devaluation of the currency?
elohiym
Well-known member
A combination of both, in my opinion.