How private equity firms make money

[Pliny]

I don't think most people would say that things are rosy today, me included.

But you do agree we have a workable system. So it's just a rough time right now.

My contention is that the economy is on thin ice and is getting thinner. The best of times were only creations of government that eventually collapsed and changing the fundamentals of money and banking were errors that are the sole factors in building such a flimsy foundation.

Due to politics, governments are unwilling to remove entitlements or to increase taxes. What would you do ?

We need to be told the truth behind the economy and it requires a correct education in economics. Of course, it will take time and I don't think there is a lot of time. But a good understanding, not an indoctrination as one has a tendency to receive in his formal education, of economics will allow the election of better political representatives.

As an aside, Barack Obama was on Jay Leno a few days ago and said, "Once I got to grade seven math became bit of a problem." How truthful. He doesn't ever consider economics in his policies. I bet he can hardly keep his eyes open when he has a meeting about finances. He takes advice from only well-Indoctrinated economists with the best credentials. They are all versed on how to work with the established fundamental government tools to heat up or cool the economy at will and have accepted them as truths. Why the economy is doing badly has nothing to do with them as they are what keeps it going. It is always something like "irrational exuberance". Something extraneous or unforeseen that no one could have predicted. Well...they definitely couldn't - that's a given.

The inevitability of where we are heading economically is not apparent to those who are running the system. They are so well indoctrinated in its infallibility that they ignore the iceberg up ahead. Obama is just trying to calm the passengers while he orders full steam ahead.

I am not certain that Romney will do any better but he might cut spending and the size of government, inadvertantly righting the ship. It would involve a lot of weeping and gnashing of teeth in it's wake, and that is politically costly.

What would you do? Tax the rich and remove entitlements? Start an infrastructure rebuilding program? How did the infrastructure ever get in such rough shape. Business realizes it needs an infrastructure and maintains it. Government generally likes to keep its employees weii paid above all else.

So eventually maintenance gets to be too expensive so it is necessary to raise taxes which, if they realize any rise in revenue, they reward themselves first. Like a business they like to do things that increase revenues but unlike business they eventually arrive at the conclusoin that investment in infrastructure has to be paid with perhaps a special levy, not out of the existing tax revenues which if applied would cut into their pockets.

Edited October 30, 2012 by Pliny

[Michael Hardner]

But you do agree we have a workable system. So it's just a rough time right now.

My contention is that the economy is on thin ice and is getting thinner. The best of times were only creations of government that eventually collapsed and changing the fundamentals of money and banking were errors that are the sole factors in building such a flimsy foundation.

Is this about so-called 'fiat money' ? Because, if so, then I disagree. Governments have always been able to borrow money - if they are doing so irresponsibly or not today then it's not only because they can. It's also because the dialogue around the economy, and the attendant politics are ignoring certain truths.

I have heard the mantra "we can't afford it anymore" - which makes no sense at all. Productivity increases over time, so we can theoretically afford more social programs, more leisure time, more everything than in the past.

We need to be told the truth behind the economy and it requires a correct education in economics. Of course, it will take time and I don't think there is a lot of time. But a good understanding, not an indoctrination as one has a tendency to receive in his formal education, of economics will allow the election of better political representatives.

You can't hope for the masses to educate themselves adequately on economics. We have to rely on proxies - the intelligentsia for lack of a better word - to argue this on our behalf and hope that that works. If you have a better option, suggest it.

As an aside, Barack Obama was on Jay Leno a few days ago and said, "Once I got to grade seven math became bit of a problem." How truthful. He doesn't ever consider economics in his policies. I bet he can hardly keep his eyes open when he has a meeting about finances. He takes advice from only well-Indoctrinated economists with the best credentials. They are all versed on how to work with the established fundamental government tools to heat up or cool the economy at will and have accepted them as truths. Why the economy is doing badly has nothing to do with them as they are what keeps it going. It is always something like "irrational exuberance". Something extraneous or unforeseen that no one could have predicted. Well...they definitely couldn't - that's a given.

It sounds like you have contempt for them. I don't even know who they are and what they're arguing. I do know that the middle class has been decimated and that well-paying jobs are hard to come by. I also know that some of this happened due to globalized trade, and that globalized trade is generally a win-win for nations involved.

The inevitability of where we are heading economically is not apparent to those who are running the system. They are so well indoctrinated in its infallibility that they ignore the iceberg up ahead. Obama is just trying to calm the passengers while he orders full steam ahead.

I am not certain that Romney will do any better but he might cut spending and the size of government, inadvertantly righting the ship. It would involve a lot of weeping and gnashing of teeth in it's wake, and that is politically costly.

It depends on where he cuts costs.

What would you do? Tax the rich and remove entitlements? Start an infrastructure rebuilding program? How did the infrastructure ever get in such rough shape. Business realizes it needs an infrastructure and maintains it. Government generally likes to keep its employees weii paid above all else.

I don't know what I would do, I'm not that smart. I think that I might prioritize getting money into the hands of those that spend it, not those that hoard it.

So eventually maintenance gets to be too expensive so it is necessary to raise taxes which, if they realize any rise in revenue, they reward themselves first. Like a business they like to do things that increase revenues but unlike business they eventually arrive at the conclusoin that investment in infrastructure has to be paid with perhaps a special levy, not out of the existing tax revenues which if applied would cut into their pockets.

The idea that the politicians are personally benefiting from higher taxes - pensions and high salaries - it's just a myth. How much tax money pays the salaries of congress or the senate, as a percentage ? What do you think ? They make more money from their backers outside of government, I'm sure.

I just Googled California, as an example, and their Senate has a total budget of $100M out of $120B, which is less than .1%.

Mandatory spending in the US (entitlements, etc.) accounted for 53% in 2008 of Budget, Interest Rates were 8%.

http://en.wikipedia.org/wiki/United_States_federal_budget

The Defense portfolio takes almost 18%.

http://en.wikipedia.org/wiki/2013_United_States_federal_budget

[Pliny]

Is this about so-called 'fiat money' ? Because, if so, then I disagree. Governments have always been able to borrow money - if they are doing so irresponsibly or not today then it's not only because they can. It's also because the dialogue around the economy, and the attendant politics are ignoring certain truths.

I have heard the mantra "we can't afford it anymore" - which makes no sense at all. Productivity increases over time, so we can theoretically afford more social programs, more leisure time, more everything than in the past.

It is partly about fiat "money" because once a fiat token currency is introduced the nation will collapse within a generation. With a global economy on a fiat token system look for economic collapse within the same time frame. A generation is being charitable. We are about midway in a generation since the global "money" system became entirely about tokens and it is unraveling pretty fast. There are rumblings of currency wars because there is no real value attached to them anyway.

By "not being able to afford it any more" it is usually meant that servicing the debt and the interest on the debt is eating up the government's revenues.

You can't hope for the masses to educate themselves adequately on economics. We have to rely on proxies - the intelligentsia for lack of a better word - to argue this on our behalf and hope that that works. If you have a better option, suggest it.

How about they start in elementary schools? Absolutely nothing is known about economics when one graduates from high school today. How about a real education and not an indoctrination? There is a reason for economic ignorance and it isn't because it is a boring subject or irrelevant. Like yourself, teachers today feel "money" should be irrelevant and tokens can and should be issued as deemed necessary to resolve all our social ills.

It sounds like you have contempt for them. I don't even know who they are and what they're arguing. I do know that the middle class has been decimated and that well-paying jobs are hard to come by. I also know that some of this happened due to globalized trade, and that globalized trade is generally a win-win for nations involved.

Contempt for economists? Some yes, that should know better, like Allan Greenspan. Most economists today are just econometrists by their indoctrination and don't know any better, like Obama's ex-senior advisor, Arthur Goolsby and his Treasury Sec, Tim Geithner. then there are pretend politician economists like Barney Frank and Chris Dodds. Obama certainly has no understanding of the subject.

I don't particularly care for Paul Ryan's economic plan either except it may cut the size of government and give a little more time to educate people about economics and perhaps freedom and liberty can be pulled from the dustbin before it entirely disappears.

It depends on where he cuts costs.

If he cuts anywhere it will cost political points. You know quite well it is literally impossible to curtail or eliminate an entitlement once gained.

I don't know what I would do, I'm not that smart. I think that I might prioritize getting money into the hands of those that spend it, not those that hoard it.

Vilifying real saving by classifying it as hoarding and promoting consumerism is precisely what has occurred in our economic cycles. On the CPP thread, a middle class poster is advising to save, save, save because you may be on your own as regards your pension but saving won't help much if the currency is constantly devalued through inflation which is your solution of getting money into the hands of those who spend it.

While I would advise saving, I would also advise not stashing it all in a bank account or even a mutual fund or RRSP, I would say diversify by investing in hard assets. I'm not a financial adviser though so these are just my opinions.

The idea that the politicians are personally benefiting from higher taxes - pensions and high salaries - it's just a myth. How much tax money pays the salaries of congress or the senate, as a percentage ? What do you think ? They make more money from their backers outside of government, I'm sure.

They do have nice pensions and benefits. Are they getting CEO salaries? No. and yes they have an advantage outside government as well by being on the inside of the central planning and legislative grid and when they retire they can start to make the big bucks lobbying or advising on government policy.

I just Googled California, as an example, and their Senate has a total budget of $100M out of $120B, which is less than .1%.

.....and how many senators are there? Forty to be exact. I know they have to have a fancy office and a big edifice to operate in to impress the citizenry with how well they are spending their money but 100 million for forty legislators seems a lot. No wonder the budget is $120B.

Mandatory spending in the US (entitlements, etc.) accounted for 53% in 2008 of Budget, Interest Rates were 8%.

http://en.wikipedia...._federal_budget

The Defense portfolio takes almost 18%.

http://en.wikipedia...._federal_budget

While defense is a legitimate mandate of a federal government and should comprise a large portion if its budget, The US federal budget is way too high. I believe, they could downsize defense and not suffer any ill effects. They would have to, and should, lessen their role as global policeman and chief subsidizer of third world countries. That may leave a hole for China to fill which will increase its global influence and is a danger but the thing that national governments need to concentrate on is being economically strong and lead more by example rather than force.

Ron Paul has some good ideas but obviously America and the world isn't ready for them.

[August1991]

Here's what I said:

Risk?

Wait, you go further. Like a lawyer, you consider some of the worst-case scenarios:Risk!

What a concept!

In short, the State is not the family. They are different institutions.

Then BH and BC Chick, you post:

My French is rusty; does "in short" mean "as an irrelevant aside"?

Brilliant.

That pretty much says it.

-----

IMV, as individuals, we try to get along. The State and family are two very different institutions that we use to co-operate, to get along.

Edited November 9, 2012 by August1991

[BC_chick]

Here's what I said:

Then BH and BC Chick, you post:

-----

IMV, as individuals, we try to get along. The State and family are two very different institutions that we use to co-operate, to get along.

My analogy was about the moral implications of making a boatload of money from a dying entity under the guise of magnanimity. Either you missed the whole point or you diverted on purpose but the role of the state had nothing to do with it.

Bleeding Heart's response was brilliant.

[Wilber]

My analogy was about the moral implications of making a boatload of money from a dying entity under the guise of magnanimity. Either you missed the whole point or you diverted on purpose but the role of the state had nothing to do with it.

Bleeding Heart's response was brilliant.

It's just wealth redistribution. Taking wealth built by others and redistributing it to those who didn't. The only real difference between what these companies do and socialism is who winds up with the wealth. These companies don't build anything when they do this crap, they are just profiting from the misfortune of those did create something.

[dre]

Is this about so-called 'fiat money' ? Because, if so, then I disagree. Governments have always been able to borrow money - if they are doing so irresponsibly or not today then it's not only because they can. It's also because the dialogue around the economy, and the attendant politics are ignoring certain truths.

Governments have always been able to borrow money, but with the debt/money system its mathematically impossible to grow the economy without the ammoung of debt growing.

So all this debt was the completely predictable and unavoidable result of the systems rules. BTW... fiat currency and debt money are two different concepts. The former is about what the value of national currency is derived from (government action such as legal tender laws etc). The latter is about the process of how money comes to be.

You COULD disconnect those two machinations from each other.

In any case make no mistake about it, all the debt absolutely IS the result of the monetary systems rules.

[August1991]

My analogy was about the moral implications of making a boatload of money from a dying entity under the guise of magnanimity. Either you missed the whole point or you diverted on purpose but the role of the state had nothing to do with it.

I think that I have you missed your point. Please tell me how I can make a "boatload of money from a dying entity". My wife wants to redo the kitchen and I could use some extra cash right now.

It's just wealth redistribution. Taking wealth built by others and redistributing it to those who didn't.

And of course the people who built this wealth are naive and foolish and don't redistribute it to themselves. Wilber, you make it sound like a lottery. And even with a lottery, people voluntarily buy the tickets and gain the pleasure of dreaming for a few days.

-----

Profit opportunities exist but they are rare. In my book, anyone who finds one and develops it fully deserves the reward.

Edited November 13, 2012 by August1991

[Wilber]

Profit opportunities exist but they are rare. In my book, anyone who finds one and develops it fully deserves the reward.

Really. Should we reward profit for profits sake? Should a tax system reward dismantlers who after disappearing with the profits gained from the companies they gutted leaving society to deal with the remaining debris, in the same way it rewards those builders who's pursuit of profit benefits the rest of society?

[dre]

I think that I have you missed your point. Please tell me how I can make a "boatload of money from a dying entity". My wife wants to redo the kitchen and I could use some extra cash right now.

Theres a few different ways to do that, most of them LBO schemes. One way is to buy a company with somewhat stable cashflows using almost entirely the banks money. Then you fire most of the employees, and cut operations, use the savings to pay down most of the bank loan, and flog the company before theres time for all your cuts to do a whole lot of damage to the bottom line.

LBO schemes have their defenders though, and not all of them are designed to destroy companies.

[August1991]

Should we reward profit for profits sake?

Uh, yes.

Should a tax system reward dismantlers who after disappearing with the profits gained from the companies they gutted leaving society to deal with the remaining debris, in the same way it rewards those builders who's pursuit of profit benefits the rest of society?

Wait a second Wilber, are you blaming "private equity dismantlers" or the "tax system"?

Our tax system has admittedly many anomalies but when it comes to sustaining unsustainable businesses, I wouldn't look to the tax system. Frankly, given the size of the modern State, I'm more worried about taxpayers sinking money into a value-destroying enterprise. The Soviet Union did stuff like that and eventually ran out of "other people's money".

As to the "private equity dismantlers", a profitable organization is one in which the overall benefits are greater than the overall costs. No society is sustainable that chooses the opposite. The sooner value-destroying organizations are changed, the better.

To put this in context, think of an utterly incompetent elementary school teacher. Think of the number of children affected by an incompetent teacher who remains in their position year after year.

Theres a few different ways to do that, most of them LBO schemes. One way is to buy a company with somewhat stable cashflows using almost entirely the banks money. Then you fire most of the employees, and cut operations, use the savings to pay down most of the bank loan, and flog the company before theres time for all your cuts to do a whole lot of damage to the bottom line.

As I asked above, why would anyone sell a new Mercedes S600 for parts? Sure, you get a few thousand but you're losing a far more valuable asset. Such actions only make sense if property rights are not secure.

And IME, banks generally don't lend money when property rights are not secure.

----

I'm astonished. In another thread about real estate, there is a realistic even heartfelt discussion about whether being a landlord is a profitable endeavour. In this thread however, posters assume that "private equity" is an easy road to riches.

Edited November 14, 2012 by August1991

[dre]

As I asked above, why would anyone sell a new Mercedes S600 for parts? Sure, you get a few thousand but you're losing a far more valuable asset. Such actions only make sense if property rights are not secure.

Nobody is selling anything for "parts". None of that makes any sense...

[Pliny]

Theres a few different ways to do that, most of them LBO schemes. One way is to buy a company with somewhat stable cashflows using almost entirely the banks money. Then you fire most of the employees, and cut operations, use the savings to pay down most of the bank loan, and flog the company before theres time for all your cuts to do a whole lot of damage to the bottom line.

LBO schemes have their defenders though, and not all of them are designed to destroy companies.

Boy, some capitalists are surely nefarious, aren't they. It seems all you need to know is what a stable cash-flow is and when the damage to the bottom line starts to show. A guy could make a career out of that I'm sure.

While I am certain there are people who think this way and are encouraged by their secondary business admin indoctri...er...education, trampling on people's lives and destroying companies providing products and services people need and want is not what capitalism is about.

[Pliny]

Nobody is selling anything for "parts". None of that makes any sense...

dre, if you thought about it for a second you would see that what you suggest is what doesn't make sense. Why would someone destroy a profitable business, basically take apart a reliable late model Mercedes Benz, sell the parts and just before the wheels fall off sell it. As if someone in the market would unwittingly buy something where the the wheels are about to fall off.

Edited November 14, 2012 by Pliny

[Pliny]

Governments have always been able to borrow money, but with the debt/money system its mathematically impossible to grow the economy without the ammoung of debt growing.

So all this debt was the completely predictable and unavoidable result of the systems rules.

The debt in a fiat paper system is indeed predictable and unavoidable.

BTW... fiat currency and debt money are two different concepts. The former is about what the value of national currency is derived from (government action such as legal tender laws etc). The latter is about the process of how money comes to be.

They are not different concepts. A fiat currency and so-called debt money are both simply different names for debt instruments. Money is a different concept from both.

When you exchange a product for a fiat currency you are left holding the promise of a future claim on goods and it is basically a "debt" owed to you. Debt "money" is not money. I think it is obvious that it is an IOU in the same way a fiat currency is. Most people today believe these IOUs to be "money" out of common usage of the term and because by fiat you can trade them for real goods.

[Pliny]

My analogy was about the moral implications of making a boatload of money from a dying entity under the guise of magnanimity. Either you missed the whole point or you diverted on purpose but the role of the state had nothing to do with it.

Bleeding Heart's response was brilliant.

My analogy was about the moral implications of making a boatload of money from a dying entity under the guise of magnanimity. Either you missed the whole point or you diverted on purpose but the role of the state had nothing to do with it.

Bleeding Heart's response was brilliant.

You never convincingly argued that the dying entity was not helped. What were his choices?

The role of the State is in authorizing someone with "power of attorney". Unfortunately, it is at times abused. How many people wish to make a boatload of money from a dying entity under the guise of magnanimity and why would there be any question of its moral implications?

Politicians offer all kinds of entitlements and privileges to voters under the guise of magnanimity or even human rights - the moral implications of this seem to escape most, especially the beneficiaries.

[Wilber]

Uh, yes.

Wait a second Wilber, are you blaming "private equity dismantlers" or the "tax system"?

Uh, no.

Private equity dismantlers at their worst are little different from someone parting out a stolen car, except what they do is legal. They are a cost to society and should not be rewarded for their efforts by a tax system.

[dre]

dre, if you thought about it for a second you would see that what you suggest is what doesn't make sense. Why would someone destroy a profitable business, basically take apart a reliable late model Mercedes Benz, sell the parts and just before the wheels fall off sell it. As if someone in the market would unwittingly buy something where the the wheels are about to fall off.

What I said makes perfect sense, and it happens quite often.

As if someone in the market would unwittingly buy something where the the wheels are about to fall off.

The debt in a fiat paper system is indeed predictable and unavoidable.

They are not different concepts. A fiat currency and so-called debt money are both simply different names for debt instruments. Money is a different concept from both.

You dont appear to understand what debt/money is, and yes those are two different things. The reason our system is a debt-money system is because of the way new money is created.... virtually all money is created through bank loans, so the total ammount of money in circulation will always equal the total ammount of public and private debt. If people paid off all their debts there would be no money at all. The reason its called debt money is because it quite literally loaned into existence.

However fiat money does not have to be debt money. The government could simply make new money at the mint and distribute the money itself... its still fiat currency because it derives its value from legal tender laws, but it would not create a corresponding ammount of private or public debt. An example of this is Lincolns origional greenback.

trampling on people's lives and destroying companies providing products and services people need and want is not what capitalism is about

Capitalism is simply a framework its not really "about" anything. You can use the system in either benign or nefarious ways.

Edited November 14, 2012 by dre

[Pliny]

What I said makes perfect sense, and it happens quite often.

It may happen but it is illogical. The same as thinking about profit only. While profit is necessary it only continues to occur when one is thinking about filling a need or demand not making a profit, profits and losses are measured after the fact and are an indication of or lack of astute business acumen.

You dont appear to understand what debt/money is, and yes those are two different things. The reason our system is a debt-money system is because of the way new money is created.... virtually all money is created through bank loans, so the total ammount of money in circulation will always equal the total ammount of public and private debt. If people paid off all their debts there would be no money at all. The reason its called debt money is because it quite literally loaned into existence.

Can you tell the difference between a dollar you hold as a fiat currency or one that is debt/money? I guess one you have to give to settle a debt the other you have to give to collect on a debt.

Basically dre all you are saying is that a loan is created out of thin air and is a debt, duh. Money is simply a system of accounting these days.

However fiat money does not have to be debt money. The government could simply make new money at the mint and distribute the money itself... its still fiat currency because it derives its value from legal tender laws, but it would not create a corresponding ammount of private or public debt. An example of this is Lincolns origional greenback.

It creates the same amount of debt whether it is by fiat tokens or as a loan. It is either a claim on goods or a claim on a loan. Someone has a credit and someone has a debit.

Capitalism is simply a framework its not really "about" anything. You can use the system in either benign or nefarious ways.

There are many different concepts associated with capitalism. In its purest sense it is making money with money - it's all about "capital" and increasing it - and it spreads around - no need for redistribution. The nefarious ways of using it are generally not conducive to any longevity unless governmnet condones it by such things as granting monopolies or restricting competition. That kind of thing.

[dre]

It creates the same amount of debt whether it is by fiat tokens or as a loan. It is either a claim on goods or a claim on a loan. Someone has a credit and someone has a debit.

No it doesnt you are confusing two different concepts. A token can be exchanged for goods and services, but it doesnt necessarily have to be created as debt. Again you are confusing debt money with the concept of tokens, but one has nothing to do with the other.

If the government creates a coin in the mint, no debt is created. They dont owe anyone anything, and nobody else owes them anything. But in the debt money system all dollars are created as bank credit, and a dollar (plus interest) in private or public debt is created every time a dollar enters the money supply.

[Pliny]

No it doesnt you are confusing two different concepts. A token can be exchanged for goods and services, but it doesnt necessarily have to be created as debt. Again you are confusing debt money with the concept of tokens, but one has nothing to do with the other.

If the government creates a coin in the mint, no debt is created. They dont owe anyone anything, and nobody else owes them anything. But in the debt money system all dollars are created as bank credit, and a dollar (plus interest) in private or public debt is created every time a dollar enters the money supply.

I am not confusing debt/money and tokens. Your description of debt money is banks making a loan out of thin air. Yes, it has to be paid back. The person who got the loan purchased what he wanted and that so-called "debt money" sits in someone else's bank account to be spent again or as a claim on production.

If the government prints a dollar it borrows it from the central bank and must be paid back by the taxpayer. It is a debt. If you hold it in your wallet it is a claim on production by fiat, similar to an IOU which is a debt owed to the holder of the IOU. If the dollar becomes worthless you no longer hold a claim on production. The dollar becomes worthless two ways, revolt against the government or devaluation through over creation or what is termed hyper-inflation.

There are different forms of "money" creation. One is printing it into existence or minting it. Another is banks creating credit out of thin air (fractional reserve banking) I believe this is what you call "debt money". The government also creates bonds out of nothing and sells them - another debt instrument. All of it adds up to a total of "money" created.

[August1991]

Uh, no.

Private equity dismantlers at their worst are little different from someone parting out a stolen car, except what they do is legal. They are a cost to society and should not be rewarded for their efforts by a tax system.

So Wilber, you now blame "theft" - whether legal or not.

Again, I ask you, why would someone break up a valuable asset for parts? To compare this to real estate, why would someone buy a furnished duplex, sell the furniture/plumbing/white goods, knock down the building and then sell only the land?

Maybe because the location is more valuable than the dishwasher and the new roof.

Edited November 19, 2012 by August1991

[dre]

I am not confusing debt/money and tokens. Your description of debt money is banks making a loan out of thin air. Yes, it has to be paid back. The person who got the loan purchased what he wanted and that so-called "debt money" sits in someone else's bank account to be spent again or as a claim on production.

If the government prints a dollar it borrows it from the central bank and must be paid back by the taxpayer. It is a debt. If you hold it in your wallet it is a claim on production by fiat, similar to an IOU which is a debt owed to the holder of the IOU. If the dollar becomes worthless you no longer hold a claim on production. The dollar becomes worthless two ways, revolt against the government or devaluation through over creation or what is termed hyper-inflation.

There are different forms of "money" creation. One is printing it into existence or minting it. Another is banks creating credit out of thin air (fractional reserve banking) I believe this is what you call "debt money". The government also creates bonds out of nothing and sells them - another debt instrument. All of it adds up to a total of "money" created.

Ok, glad you changed your position and agree that debt-money and fiat money are two completely different concepts.

[dre]

So Wilber, you now blame "theft" - whether legal or not.

Again, I ask you, why would someone break up a valuable asset for parts?

This has already been answered, and explained to your how these LBO schemes work and why they happen.

[August1991]

This has already been answered, and explained to your how these LBO schemes work and why they happen.

Really? Provide a link, please.

You dont appear to understand what debt/money is, and yes those are two different things.

Debt and money are different? Really? I create "money" every time I write a cheque or use my credit card. Most money in the world is created privately.

-----

Dre, here's food for you to think about: the ultimate limit to creating "money" is the willingness of other people to hold it.

[And Dre, if you really want to discuss "money", take the discussion to another thread. This thread is about private equity. Discussions about money have a tendency to become similar to watching someone else watch porno: you see an obsessive person watch the same thing over and over.]

Edited November 19, 2012 by August1991