"Social Investing"

[Michael Hardner]

The US helped to rebuild Japan in its own image after WW2...was that "offshoring" too?

Yet another plug for government helping create jobs - thank you.

It has always been thus...why would it ever change?

It will get worse... and we will have to learn to spread the economic benefits of technology if they don't spread on their own, IMO.

[bush_cheney2004]

Yet another plug for government helping create jobs - thank you.

The job was called the Cold War.

It will get worse... and we will have to learn to spread the economic benefits of technology if they don't spread on their own, IMO.

Again....so what? Are you afraid to experience even a portion of what others have before in the way of having less...personally or collectively? What is this really about for you?

[jacee]

No problem... we'll go back to exporting our resources to industrialized nations then.

Governments can and do change things, and that's why we are where we are - they set the rules to the game and protesters know this.

And Harper is doing so ... segue back to current Canadian topic, which is not hypothetical but important to "businesses and citizens" who are to take over government's (former) portion of funding of nonprofits and charities ...

From the OP link,

Ottawa is conducting a sweeping overhaul of the way it finances charities and non-profit organizations, pledging a new era of accountability n which businesses and citizens shoulder more of the cost of giving.

[Michael Hardner]

Again....so what? Are you afraid to experience even a portion of what others have before in the way of having less...personally or collectively? What is this really about for you?

You erroneously make this personal as you did above. I am not afraid of anything - my industry was already downsized and I went through 2 new careers before ending where I am now.

This is about us talking about larger issues, not is what is better for us personally. Nothing would be more boring to me than finding out what would benefit BC_2004 in terms of policy.

[Michael Hardner]

And Harper is doing so ... segue back to current Canadian topic, which is not hypothetical but important to "businesses and citizens" who are to take over government's (former) portion of funding of nonprofits and charities ...

From the OP link,

Ottawa is conducting a sweeping overhaul of the way it finances charities and non-profit organizations, pledging a new era of accountability n which businesses and citizens shoulder more of the cost of giving.

To me, the devil is in the details. I think it's more important to see that services are provided consistently and at an acceptable level. We don't do that today with public services.

[blueblood]

Yet another plug for government helping create jobs - thank you.

It will get worse... and we will have to learn to spread the economic benefits of technology if they don't spread on their own, IMO.

You don't think USA private sector dollars didn't prime Japan's pump to propel it to economy number two for 40 plus years?

It was supposed to get worse in 1920-21, the gov't did nothing and the market reallocated. What if Keynes was wrong?

[bush_cheney2004]

You erroneously make this personal as you did above. I am not afraid of anything - my industry was already downsized and I went through 2 new careers before ending where I am now.

No more personal than your crusade for "open government". That's your angle....OK...I have one too...no big deal.

This is about us talking about larger issues, not is what is better for us personally. Nothing would be more boring to me than finding out what would benefit BC_2004 in terms of policy.

I'm in charge of what's what's best for me....not the collective. That is the difference between you and I. You are...the Borg!

Edited October 30, 2011 by bush_cheney2004

[bush_cheney2004]

...Ottawa is conducting a sweeping overhaul of the way it finances charities and non-profit organizations, pledging a new era of accountability n which businesses and citizens shoulder more of the cost of giving.

Huh? "Cost of giving" is an oxymoron.

[blueblood]

Huh? "Cost of giving" is an oxymoron.

Here's a bankers synopsis of OWS...

My link

Apparently people need to understand the economy better.

[dre]

Doesn't matter...they can pitch a political fit all they want but that will not change the global calculus. I began working with India and China as a "novelty" over 15 years ago....now it is routine and expected.

The paradigm WILL shift though, and much as you might thing that globalism is the future, what we are currently seeing now with so much production being offshored to China is TEMPORARY. Its only possible as long as energy is still relatively cheap, and as long as countries like China keep their production costs artificially low by treating workers like cattle, and manipulating the value of their currency. It will also only happen for as long as western countries currencies hold up.

Eventually we will end up where we were before. In fact western economies will probably even be MORE localized than before.

[dre]

Here's a bankers synopsis of OWS...

My link

Apparently people need to understand the economy better.

Hahahahahahahah!

The purpose was to understand what was motivating these protesters and try to educate them about what caused the financial crisis.

A BANKER educating people on what caused the financial crisis :lol:

[blueblood]

Hahahahahahahah!

A BANKER educating people on what caused the financial crisis :lol:

The same banker who predicted it back in 05 and how severe it would be. I'd say he has some credibility on the subject.

[bush_cheney2004]

The paradigm WILL shift though, and much as you might thing that globalism is the future, what we are currently seeing now with so much production being offshored to China is TEMPORARY....

Everything is TEMPORARY in the end, so it doesn't matter. Onshore, nearshore, offshore, or interplanetary space...it doesn't really matter at all in the long term. When I was a kid we used to take our shoes to a cobbler to get renewed...that is coming back too.

[dre]

To me, the devil is in the details. I think it's more important to see that services are provided consistently and at an acceptable level. We don't do that today with public services.

The problem I think is mostly inflation. Its WAY higher than people are telling you. The government can build way less roads with their dollars, purchase way less healthcare, etc. And theyve made promises to their corporate paymasters to reduce taxes not raise them. So services have to get cut. The government is in the same boat as your average strapped family in that way.

I dont think this is something you can just go and fix with a few tweaks to tax rates or the delivery of services. I think a pretty massive change to our economic system will be required for us to still enjoy a good standard of life with less economic growth. The reality is that its mathematically impossible for our current economic model to work without strong consistant economic growth.

So the choices...

1. New money/banking/economic system.

2. Way higher taxes.

3. Way less services.

Eventually we will go with number 1. Thats an utter certainty based on simple mathematics. But we are going to have to CRASH before we do it. The whole meltdown we recently had was a symptom of that. Our approach? Throw a bunch of magic money at it that doesnt exist. That helps, and its really the only thing the government CAN do... but thats the exact same thing that every failing empire in history has tried to do, and all that does is delay the inevitable.

Iv been thinking about something lately. An idea on a different way we could run things. Ill flesh it out for you a bit... let me know what you think.

I would eliminate the layer of private banks that act as the middle man between the government (that issues currency) and the participants in the economy use that money by borrowing it from the banks. Right now the government issues currency by allowing those banks to loan out money that doesnt exist. A lot of people dont know this but almost all of the money lent out by banks does not exist.

When you meet with your banker to negotiate a loan, the bank is bringing absolutely nothing to the table. They dont have in their posession the money that you want to borrow. All the two of you are doing is exchanges promises to pay. The banks promise to pay you the money... and you promise to pay it back. Two parties with absolutely no skin in the game. After the loan is signed the government has to capitalize the deal by allowing the bank to lend out money they dont have.

So now youre thinking... "Thats obviously bullshit! Because after I get a loan, I can take out the cash and buy real stuff!". But the purchasing power you now have did not come from the bank. It was surrendered to you by ALL OTHER HOLDERS OF DOLLARS. Because when they conjured that money into existance they made ever other dollar in circulation worth a tiny bit less.

Basically what that means is that the usury charged by these banks is wholly and completely unwarranted. They have no skin in the game, and they bring nothing to the table. All they do is loan out new money that the government creates and gives them for free. Trillions of dollars escapes from the system through this useless hole.

So since its the government that has to back all these loans, and insure the deposits in these banks, whey not just have the government issue credit and collect the interest, and make that the principle way that government funds itself. Then they wouldnt need to collect taxes, or they could collect much much less. At that point taxation would probably have a totally different purpose... it would be used to control price stability. If the government had issued too much currency that year then it would use taxation to pull some of those dollars back out of the economy and keep purchasing power at par. If there was deflation and the government had not issued enough currency, then could keep purchasing power at par by giving you a check at tax time instead of a bill.

This system would promote economic growth but it could also run stably with flat growth, and the same money that gets milked out of the system by a tiny group of men that do nothing to earn it, would be used to fund government services etc.

In our existing system the government uses commercial banks to put new money into the economy. In the system Im describing the government would put money into the economy by issuing it to someone that needs it, or it would spend it into the economy by building a bridge or a road.

[jacee]

To me, the devil is in the details. I think it's more important to see that services are provided consistently and at an acceptable level. We don't do that today with public services.

These are not public services.

They're private charities and non-profits that currently get some gov funding.

Harper is planning on pulling the public funding and expecting the private sector to pick up the slack.

I'm wondering what people think of that, whether they're willing to provide - as charity - the stable funding that (eg) women's and men's shelters need.

[Bonam]

Hiring whom ? Investing in what ? The higher paying jobs are gone... they're not getting replaced by anything else that I can see.

Gone? I wonder what I've been doing all day all this time then?

[Bonam]

When you meet with your banker to negotiate a loan, the bank is bringing absolutely nothing to the table. They dont have in their posession the money that you want to borrow. All the two of you are doing is exchanges promises to pay. The banks promise to pay you the money... and you promise to pay it back. Two parties with absolutely no skin in the game. After the loan is signed the government has to capitalize the deal by allowing the bank to lend out money they dont have.

So now youre thinking... "Thats obviously bullshit! Because after I get a loan, I can take out the cash and buy real stuff!". But the purchasing power you now have did not come from the bank. It was surrendered to you by ALL OTHER HOLDERS OF DOLLARS. Because when they conjured that money into existance they made ever other dollar in circulation worth a tiny bit less.

Basically what that means is that the usury charged by these banks is wholly and completely unwarranted. They have no skin in the game, and they bring nothing to the table. All they do is loan out new money that the government creates and gives them for free. Trillions of dollars escapes from the system through this useless hole.

I think you aren't completely understanding something. Let's say a bank makes a billion dollars in these mortgage loans. Let's say that was their only business activity for the whole year, and the bank has no other expenses. Let's say every single one of those loans gets defaulted on. At the end of the year, what is the bank's net profit/loss? Your claim is that it is zero. I find that unlikely.

The money doesn't come out of thin air. It comes out of the bank's operating budget. If the loans are defaulted on, the bank's financial reports will clearly show the loss. The reported revenues will be lower. The EPS will be lower. The stock price will decline accordingly. In the end, it is the shareholders of the bank that lose the money.

[dre]

I think you aren't completely understanding something. Let's say a bank makes a billion dollars in these mortgage loans. Let's say that was their only business activity for the whole year, and the bank has no other expenses. Let's say every single one of those loans gets defaulted on. At the end of the year, what is the bank's net profit/loss? Your claim is that it is zero. I find that unlikely.

The money doesn't come out of thin air. It comes out of the bank's operating budget. If the loans are defaulted on, the bank's financial reports will clearly show the loss. The reported revenues will be lower. The EPS will be lower. The stock price will decline accordingly. In the end, it is the shareholders of the bank that lose the money.

Absolutely. Based on your average persons understanding of what banks are thats exactly what you would think. I MUST be wrong! Misunderstanding something.... But Im not. Modern commercial banks are completely different. They create almost all the money completely out of thin air.

Let's say every single one of those loans gets defaulted on. At the end of the year, what is the bank's net profit/loss? Your claim is that it is zero. I find that unlikely.

In your scenario they would make a PROFIT of about 600 million dollars. They would sieze all the realestate from the billion dollars worth of fake money lent out and sell it at a bit below market value. Its not possible for them to lose money because they never had any skin in the game in the first place (well... very little)

Every time these banks lend money it is an act of monetary expansion. New money is created from nothing. In fact despite the claim you often here about governments "printing money", almost 95% of the total currency in cirulation was created from thin air by banks simply writing it into their customers account. This is how almost all monetary expansion happens.

Heres an example...

You earn $100 and put it in the bank. And then…

The bank keeps $10 in its Federal Reserve account …

The bank loans Susie $90, at interest.

Susie deposits the $90 in her bank.

That bank keeps 10% ($9) in reserve and loans Joe $81, at interest.

There’s now $271 total in accounts that you and Susie and Joe can spend, and it all came from your $100 deposit. The banks have created an additional $171 by loaning it into existence.

Repeat the cycle 50 more times and the bank has written 885.25 dollars worth of loans into existance. Completely new money that never existed before and they are collecting interest on all of it. If all the borrowers of that 885.25 default then the most the bank can lose is $90, but it wont because its now in posession of all the cars/stuff/realestate that those borrowers defaulted, and they get to have a firesale.

[Bonam]

So then how was it possible for any of these banks to go bankrupt, or even go anywhere near to losing money, during the financial crisis?

[dre]

So then how was it possible for any of these banks to go bankrupt, or even go anywhere near to losing money, during the financial crisis?

Well you can see in my example how a bank could fail. If Suzie, and Joe defaulted on their loans then the Bank would not have your hundred dollars when you showed up to withdraw it.

My origional point though is that the banks collect all that usury without really having any skin in the game. They dont actually capitalize any of these loans they just write the money into existance. Its actually the tax payers / government that capitalize all the loans, and we are the ones left holding the bag anyways. So what justifies them charge interest on the same imaginary money over and over again. What I proposed was that the government should skip that intermediary which adds little value, and collect that usury themselves, and use it to fund their day to day operations instead of taxing participants in the economy.

[bush_cheney2004]

... What I proposed was that the government should skip that intermediary which adds little value, and collect that usury themselves, and use it to fund their day to day operations instead of taxing participants in the economy.

What you propose sounds like the Social Credit movement born in the UK, and actually attempted in Alberta, only to fail because of religious and political entanglements. Good luck with that....

[blueblood]

What you propose sounds like the Social Credit movement born in the UK, and actually attempted in Alberta, only to fail because of religious and political entanglements. Good luck with that....

Not to mention the even larger moral hazard than some beaureaucrat arbitrarily setting interest rates, loan requirements, etc.

Banks have been around and worked for over 500 years. They work.

[Rocky Road]

I understand what Dre is saying, the cycle of debt is gross to consider based on the actual wealth.

Fractional Reserve Banking is a bit of a ponzi scheme at heart, because it depends on the fact that

people will not withdraw all their money at once, noone ever does, so it is "functional".

In the US, the bank policies are much worse and the Toxic Assets and derivatives are creating a black hole of debt that is threatening the stability of the global Natural economy.

I have wondered what the world would have looked like if the Gold Standard would have been kept in place

by Nixon, and we would have an intrisically valuable commodity backed currency.

Less fear? More condfidence.

More security.

[blueblood]

I understand what Dre is saying, the cycle of debt is gross to consider based on the actual wealth.

Fractional Reserve Banking is a bit of a ponzi scheme at heart, because it depends on the fact that

people will not withdraw all their money at once, noone ever does, so it is "functional".

In the US, the bank policies are much worse and the Toxic Assets and derivatives are creating a black hole of debt that is threatening the stability of the global Natural economy.

I have wondered what the world would have looked like if the Gold Standard would have been kept in place

by Nixon, and we would have an intrisically valuable commodity backed currency.

Less fear? More condfidence.

More security.

It would have slowed growth down. The federal reserve is very powerful and can make or break the economy. That means there has to be proper guys running it. We had the federal reserve in 1920-21 and double digit unemployment and nothing happened. If a bonehead runs it, we get the situation we're in today.

[bush_cheney2004]

...I have wondered what the world would have looked like if the Gold Standard would have been kept in place

by Nixon, and we would have an intrisically valuable commodity backed currency.

This is a false notion....Nixon only removed convertibility for US dollars, not all currencies. Bretton Woods was killed on purpose.

Edited October 30, 2011 by bush_cheney2004