How money is created

[maple_leafs182]

dpwozney - I am familiar with one of the professors and he was a bit of a crackpot.

It seems like on this thread we've figured out that the system makes certain people rich but nobody has suggested something better on this thread or anywhere.

We could switch to a resource based economy.

[Michael Hardner]

We could switch to a resource based economy.

Aren't we a resource based economy ?

[M.Dancer]

Aren't we a resource based economy ?

We are a resource based economy.

[Michael Hardner]

A resource based economy are we, are we, Mexico America and us... friends three.

They provide the labour...

We provide the trees...

The oil, the fish, and the bees...

[maple_leafs182]

we use resources in our economy but we are not a resource based economy.

[M.Dancer]

we use resources in our economy but we are not a resource based economy.

Facts disagree with you. Over 50% of the companies listed with the TMX are resource companies. The relative value of the $ is tied to the prioce of oil..

[Jack Weber]

Facts disagree with you. Over 50% of the companies listed with the TMX are resource companies. The relative value of the $ is tied to the prioce of oil..

...or gold,or silver,or potash,or platinum,or natural gas,or copper,or zinc,or coal,or uranium...

[maple_leafs182]

...or gold,or silver,or potash,or platinum,or natural gas,or copper,or zinc,or coal,or uranium...

Our economy is based on money and servitude, not resources.

Current problems that plague our society like poverty aren't profitable so they go unresolved.

Edited May 31, 2010 by maple_leafs182

[Jack Weber]

Our economy is based on money and servitude, not resources.

Current problems that plague our society like poverty aren't profitable so they go unresolved.

True,however I meant that as it relates to employment in this country and the downfall of the manufacturing base in Central Canada.

[M.Dancer]

Our economy is based on money and servitude, not resources.

Current problems that plague our society like poverty aren't profitable so they go unresolved.

So....you thik if poverty was profitable there would be solutions?

Our economy, something you seem to be painfully unaware of, is resource heavy. Our dollar and it's value is idrectly linked to our GDP...our GDP is heavily based on resources.

[maple_leafs182]

So....you thik if poverty was profitable there would be solutions?

Yes. I know the solution, give the poor food and shelter. Easy as that, the problem is there is no return in doing that. Helping people isn't a reward in itself anymore. People want the dollar bills.

Our economy, something you seem to be painfully unaware of, is resource heavy. Our dollar and it's value is idrectly linked to our GDP...our GDP is heavily based on resources.

I know we trade resources in the economy, that still doesn't make it a resource based economy.

A resource-based economy would utilize existing resources from the land and sea, physical equipment, industrial plants, etc. to enhance the lives of the total population. In an economy based on resources rather than money, we could easily produce all of the necessities of life and provide a high standard of living for all.

[M.Dancer]

Yes. I know the solution, give the poor food and shelter.

That isn't a solution, that is a band aid. 99.9% of Canada's poor have adequate resources for food and shleter, yet they are still poor.

I know we trade resources in the economy, that still doesn't make it a resource based economy.

Ummm....actually, it does.

[dpwozney]

“... Under the present debt-driven system, the only way we can increase the money supply is by borrowing it into existence from the private banks, thereby increasing our indebtedness to them. ...”

Under a different money system with coins valued by intrinsic metal value content, there is no debt associated with the coins, as there is with paper money and coins in “the present debt-driven system”.

[Michael Hardner]

Under a different money system with coins valued by intrinsic metal value content, there is no debt associated with the coins, as there is with paper money and coins in “the present debt-driven system”.

On its own, that would do nothing from what I can see.

The government would have to spend a lot more money to create physical money but unless you changed the banking laws, then you're just changing paper for coin.

If the dollar collapses, your coins are valued at the price of the metal but that price also fluctuates.

[dpwozney]

On its own, that would do nothing from what I can see.

Coins valued by intrinsic metal value content, in a different money system, can be used in conjunction with paper money. While there would be no debt associated with the coins, there would be debt associated with the paper money.

The government would have to spend a lot more money to create physical money but unless you changed the banking laws, then you're just changing paper for coin.

Banking laws most likely would be different in a different money system.

[maple_leafs182]

That isn't a solution, that is a band aid. 99.9% of Canada's poor have adequate resources for food and shleter, yet they are still poor.

So giving poor people food and shelter isn't a solution to them not having food and shelter.

What do you consider wealth?

Ummm....actually, it does.

No it doesn't.

Under a resource based economy there would be no wall street or Exon Mobil.

There wouldn't be money, the resources of the planet would belong to all of us as apposed to a select few. We would then utilize those resources, our knowledge, skills, and technology to benefit the total population.

This would get rid of upper, middle and lower class and make us all equal. It would also solve many social problems that we have.

When millions go on suffering day after day with no end in sight it is time we try a new strategy.

[bush_cheney2004]

...This would get rid of upper, middle and lower class and make us all equal. It would also solve many social problems that we have.

Oh great...we can all be equally miserable in your commie paradise!

When millions go on suffering day after day with no end in sight it is time we try a new strategy.

Why?

[M.Dancer]

So giving poor people food and shelter isn't a solution to them not having food and shelter.

What do you consider wealth?

It is not a solution to poverty

No it doesn't.

Under a resource based economy there would be no wall street or Exon Mobil.

There wouldn't be money, the resources of the planet would belong to all of us as apposed to a select few. We would then utilize those resources, our knowledge, skills, and technology to benefit the total population.

I didn't realize this topic had fallen into the realm of phantasy....we have a resource based economy and we still have exxon, bay street ...we utilize the resources and the taxes go to put food on welfare receipients tables...

This would get rid of upper, middle and lower class and make us all equal. It would also solve many social problems that we have.

Dream on beautiful dreamer...

When millions go on suffering day after day with no end in sight it is time we try a new strategy.

Why have millions when you and your fruitcakenes could have billions...

[Michael Hardner]

Coins valued by intrinsic metal value content, in a different money system, can be used in conjunction with paper money. While there would be no debt associated with the coins, there would be debt associated with the paper money.

Why not ? If the bank lends out money, it's all numbers on a computer. What does it matter if paper or coins are used ?

Banking laws most likely would be different in a different money system.

Then why aren't you focusing on that - and instead are focusing on the physical material used to represent cash money ?

[maple_leafs182]

Oh great...we can all be equally miserable in your commie paradise!

I knew someone would say something like that.

I don't believe in communism but I do see the benefits of us all being treated equally.

Why?

Why not

It is not a solution to poverty

Well if we continue to live life the way we do where we bound ourselves to the laws of economics then it isn't a solution. Lot's of people would just become Dependant on the system and it would drain the system dry.

I didn't realize this topic had fallen into the realm of phantasy....we have a resource based economy and we still have exxon, bay street ...we utilize the resources and the taxes go to put food on welfare receipients tables...

It isn't a Resource Based Economy.

Resource Based Economy is the name of an idea.

Dream on beautiful dreamer...

I'm living for my dying dream.

Why have millions when you and your fruitcakenes could have billions...

I don't think you can tell heaven from hell.

[dpwozney]

Why not ? If the bank lends out money, it's all numbers on a computer. What does it matter if paper or coins are used ?

There is debt associated with all paper money because without debt, paper money does not have value. Money without debt can exist in the form of coins valued by instrinsic metal content.

When a bank lends out money in the “present debt-driven system”, more than just “numbers on a computer” is involved. Non-central banks do not simply create money out of thin air because some real asset is required as collateral. Money is created against the collateral, as a debt claim on some real asset. Non-central banks do not create M0 money (coins and central bank notes) but they do create M1, M2, and M3 money.

Then why aren't you focusing on that - and instead are focusing on the physical material used to represent cash money ?

The “present debt-driven system” does not require any particular “physical material used to represent cash money”. The different money system using different banking laws would require some specific “physical material" for at least some coins. Do you know of any money system presently in use that requires some specific “physical material” for at least some coins?

[Michael Hardner]

There is debt associated with all paper money because without debt, paper money does not have value. Money without debt can exist in the form of coins valued by instrinsic metal content.

But that value is only really invoked if the paper value isn't there.

When a bank lends out money in the “present debt-driven system”, more than just “numbers on a computer” is involved. Non-central banks do not simply create money out of thin air because some real asset is required as collateral. Money is created against the collateral, as a debt claim on some real asset. Non-central banks do not create M0 money (coins and central bank notes) but they do create M1, M2, and M3 money.

You would reduce the amount of money in circulation.

[dpwozney]

But that value is only really invoked if the paper value isn't there.

The value associated with paper money is invoked whenever paper money is spent.

You would reduce the amount of money in circulation.

When a bank lends out money in the “present debt-driven system”, the money supply increases.

[Yesterday]

Hi, I have a question...I am trying to understand the effect of fractional banking when the interest is applied on every fraction. Ie: the bank can multiply the collateral backed money created for loans to a multiple of 10-12 I believe (somewhere in there anyway) and charge interest on every level too. So does this mean for every say 100 dollars created they get 12 times the interest plus 12 100 dollars, all removed from circulation? Do I understand this even reasonably? Didn't Mulroney remove the need for banks to have any collateral backed money other than debt? If this is true, our problems regarding all funding, taxes and the like will never be resolved. I welcome all explanations with great appreciation.

Edited June 3, 2010 by Yesterday

[maple_leafs182]

Hi, I have a question...I am trying to understand the effect of fractional banking when the interest is applied on every fraction. Ie: the bank can multiply the collateral backed money created for loans to a multiple of 10-12 I believe (somewhere in there anyway) and charge interest on every level too. So does this mean for every say 100 dollars created they get 12 times the interest plus 12 100 dollars, all removed from circulation? Do I understand this even reasonably? Didn't Mulroney remove the need for banks to have any collateral backed money other than debt? If this is true, our problems regarding all funding, taxes and the like will never be resolved. I welcome all explanations with great appreciation.

Your right.

I don't know what you mean by removed by circulation, the money isn't removed out of circulation.