Banker/Wall Street Governance

[kimmy]

Once again another poster on this forum feels qualified to dispute senior people at the top of their fields.

Which top experts, exactly, are on board with the Fred Griffin/Jeckyll Island version you're promoting here?

-k

[Riverwind]

First: No one borrows money to deposit it in a savings account

Money that is borrowed is always spent on something. The people who receive payments with borrowed money will eventually deposit it into a bank. See my example in earlier post.

secondly if the money is put into the savings account it becomes a bank asset - money created from nothing.

Wrong, the money is a bank asset but it is also a liability since the depositor has a right to demand the money at any time.

The interest paid is not the same as the interest owed and the bank can use the money to pay off the politicians for the next election or whatever else they want to do with it.

Banks make a profit on the difference between what they pay for the money and what they receive. Every business operates the same way. Even though banks can create money from nothing it still costs them money when they do. The bank rate set by the BOC is the average cost for a bank when it creates money.

Is there anything that a politician has ever said that you did not believe ? Have you ever heard anything on corporate mainstream media that you didn't believe ?

Have you ever found a website written by a raving lunatic that you did not believe?

[PolyNewbie]

Riverwind:No you don't - printing money creates inflation and hyper inflation. In the long run inflation harms the economy and the average person more than paying interest on gov't debt.

You don't just print it off and give it away, it still gets paid back so it doesn't cause inflation.

Interest bearing loans to the government is not the only way of managing inflation. Its really very inefficient because you are paying unecessary interest. Borrowing money interest free than burning some of it in a fire would accomplish the same thing except power would still be taken away from the banking oligarchy.

[PolyNewbie]

Riverwind:Have you ever found a website written by a raving lunatic that you did not believe?

Yes - many. There are many medical cures and miracles that I do not believe, I'm not convinced UFO's exist although many people are and can point to evidence. Many conspiracy related sites contain opinions I do not agree with or have falsified evidence.

Is there anything that a politician has ever said that you did not believe ? Have you ever heard anything on corporate mainstream media that you didn't believe ?

If so, what ?

[Riverwind]

You don't just print it off and give it away, it still gets paid back so it doesn't cause inflation.

It takes time to pay it back - in the meantime the money is in the system causing inflation. Any taxes high enough to counter act the effect of this excess money would hurt the economy more than taxes used to pay the interest.

Borrowing money interest free than burning some of it in a fire would accomplish the same thing except power would still be taken away from the banking oligarchy.

The money paid in interest is an essential part of the retirement plan for most people. Anyone with a pension is receiving interest payments on gov't debt. Anyone with an life, fire or auto insurance policy pays lower premiums because of the interest on the public debt. Most people with an RRSP and a good financial advisor will rely on income from the interest on the public debt once they retire.

Your premise regarding 'private bankers' unfairly profiting off taxpayers is completely false - I have even provided audited financial statements to back up my arguments. Yet you claim that audited statements posted on a gov't website are falsified. Such a desperate ploy simply demonstrates how horribly deluded you are.

[geoffrey]

Interest bearing loans to the government is not the only way of managing inflation. Its really very inefficient because you are paying unecessary interest. Borrowing money interest free than burning some of it in a fire would accomplish the same thing except power would still be taken away from the banking oligarchy.

Who is going to give their money to the government to have it burned for free?

[kimmy]

Back on topic: Another good site on monetary reform:

Comittee On Monetary and Economic Reform

That certainly sounds prestigious! Odd that a prestigious committee would have a website that looks like it was designed by grandma. The domain registry indicates that "www.comer.org" belongs to John Riddell, who was (not surprisingly) a Canadian Action Party candidate in the last election (he received 82 votes, which means he's one of the few Canadian politicians who have the distinction of having been trounced by a Marxist-Leninist Party candidate.)

His biography ( http://www.ctv.ca/mini/election2006/candid.../35095_CAP.html ) describes him as an "earthologist" and "concrete poet".

-k

[PolyNewbie]

Geoffery:Who is going to give their money to the government to have it burned for free?

I don't know - I guess people that don't mind a rising government debt due to interest. I wouldn't do it.

[PolyNewbie]

Riverwind:Your premise regarding 'private bankers' unfairly profiting off taxpayers is completely false - I have even provided audited financial statements to back up my arguments. Yet you claim that audited statements posted on a gov't website are falsified. Such a desperate ploy simply demonstrates how horribly deluded you are.

When the government borrows money from a bank it borrows from private bankers instead of its own bank. It should boprrow from its own bank because the government is ultimately responsible for the legitimacy of the currency. Borrowing money that says "Canada" on it from private bankers is nothing more than a straightforward rip off of the public.

[PolyNewbie]

kimmy:That certainly sounds prestigious! Odd that a prestigious committee would have a website that looks like it was designed by grandma. The domain registry indicates that "www.comer.org" belongs to John Riddell, who was (not surprisingly) a Canadian Action Party candidate in the last election (he received 82 votes, which means he's one of the few Canadian politicians who have the distinction of having been trounced by a Marxist-Leninist Party candidate.)

All Canidates were trounced by a Marxist Leninist Canidate. Harper won and he is selling off the countries assets to private corporations at deep discounts + participating in unjustified wars. There is no actual *evidence* that anyone from Afghanistan had anything to do with 911 but we are there killing them off and rebuilding their heroin trade after it was destroyed by the Taliban.

Just because the guy has unpopular views doesn't make him wrong or stupid. Good ideas are always unpopular at first.

I bet you know absolutely nothing about the North American Union, yet will argue in favour of it every time.

[Riverwind]

When the government borrows money from a bank it borrows from private bankers instead of its own bank.

Stop repeating points that have been proven wrong. Banks only hold 15% of the Canadian gov't debt. Futhermore, this 15% was likely purchased with the bank's cash reserves. There is no ripoff - this is simply a case of the gov't using the free market to finance its activies.

Just because the guy has unpopular views doesn't make him wrong or stupid. Good ideas are always unpopular at first.

Yeah, but for every guy with a good idea that is eventually proven right there are at least a 1000 people with dumb ideas that are simply dumb ideas. The evidence clearly indicates the CAP and its followers have nothing but dumb ideas.

[kimmy]

All Canidates were trounced by a Marxist Leninist Canidate. Harper won and he is selling off the countries assets to private corporations at deep discounts + participating in unjustified wars. There is no actual *evidence* that anyone from Afghanistan had anything to do with 911 but we are there killing them off and rebuilding their heroin trade after it was destroyed by the Taliban.

I thought you wanted to keep this thread focused on monetary reform?

Just because the guy has unpopular views doesn't make him wrong or stupid. Good ideas are always unpopular at first.

The ideas that Riddell and Griffin and others (and yourself) are promoting have been around for decades. Good ideas might be unpopular at first, but this particular idea hasn't gotten any more popular with age either.

I bet you know absolutely nothing about the North American Union, yet will argue in favour of it every time.

The North American Union, in the real world, only exists in the form of trade and security agreements such as NAFTA and SPP.

The North American Union that your paranoid friends are all amped up about only exists in the imagination of American right-wing ultranationalists who are scared shitless that waves of brown-people will be coming north from Mexico to live among them.

-k

[PolyNewbie]

Riverwind:Stop repeating points that have been proven wrong. Banks only hold 15% of the Canadian gov't debt. Futhermore, this 15% was likely purchased with the bank's cash reserves. There is no ripoff - this is simply a case of the gov't using the free market to finance its activies.

You take such a dogmatic approach to things that you don't really even read whats being said.

kimmy:The ideas that Riddell and Griffin and others (and yourself) are promoting have been around for decades. Good ideas might be unpopular at first, but this particular idea hasn't gotten any more popular with age either.

These ideas undermine a very powerful oligarchy and the fact that the ideas are being put forward by some very intelligent people and have not changed says something.

[Riverwind]

You take such a dogmatic approach to things that you don't really even read whats being said.

You keep repeating your BS about private bankers. What else can be said in response? The economics is also clear: letting the BOC buy the bonds increases the money supply; letting the market buy the bonds with existing savings does not increase the money supply. Any effort to compensate for the additional money supply via taxation would do more harm than the good because the taxes would have to be high enough to pay back the entire loan quickly. The current system only requires taxes to pay the interest.

These ideas undermine a very powerful oligarchy and the fact that the ideas are being put forward by some very intelligent people and have not changed says something.

It suggest that the ideas are not particularly good.

[PolyNewbie]

If you owned a store and shares in a company that made hammers, Brand A and you needed a hammer, would you go across the street to buy a different brand, Brand B from your competitor at full market value ?

If the Canadian government can borrow money interest free, than it is silly to borrow money and pay interest for it. Its that simple.

[PolyNewbie]

The North American Union, in the real world, only exists in the form of trade and security agreements such as NAFTA and SPP.

No. The existing North American Union amalgamates everything from police to meat inspection as well.

They are putting the police state into place for a reason - because when you see the North American Union you will not like it.

[Riverwind]

If the Canadian government can borrow money interest free, than it is silly to borrow money and pay interest for it. Its that simple.

No it isn't - as I said over and over again - borrowing money interest from the BOC would cause inflation because the money supply would expand by an amount equal to the principal of the loans. Any measure that tried to counter act this expansion would have to remove an equal amount of money from the economy. Removing this amount of money via taxation or high interest rates would cause a great deal of harm to the economy.

Issuing bonds that are paid for with current savings does not increase the money supply which means the gov't spending can do more good than it would if it was financed by BOC + punative tax and interest rate hikes.

[PolyNewbie]

Riverwind:No it isn't - as I said over and over again - borrowing money interest from the BOC would cause inflation because the money supply would expand by an amount equal to the principal of the loans.

I know you keep saying it and it sounds dumber every time you say it. The interest free loans would be paid back faster than those bearing interest. What you say about BOC loans applies equally to private banker loans.

As far as borrowing money at no interest instead of paying interest on bonds, the money supply can be managed through taxation and the country would save money. This would result in a better economy for investment.

I wish you wouldn't contribute to my threads. Your dogmatic nonsense is just a waste of time in debate. If I want to know your views I can just watch TV or read corporate mainstream media- who are paid off to give these views.

[Riverwind]

The interest free loans would be paid back faster than those bearing interest. What you say about BOC loans applies equally to private banker loans.

You seem to rocks in your head - the federal debt is _not_ financed by money created by banks. It is financed by the savings of Canadians. This means there is _no_ increase in money supply when the gov't issues bonds today. If the BOC bought the bonds then the BOC must create new money - that _does_ increase the money supply. The interest rate paid is irrelevant and far as these money supply calculations are concerned.

As far as borrowing money at no interest instead of paying interest on bonds, the money supply can be managed through taxation and the country would save money. This would result in a better economy for investment.

BS. If the government borrows $100 billion from the BOC then it must extract $100B from the private sector to prevent inflation. The negative effects of extracting this amount of money from the private sector would far outweigh any reduction in financing cost to the public sector.

In any case, the only person that is being dogmatic is you. Every argument you raise is easily shredded yet you simply post the same rubbish over and over again and try to pretend that it has validity.

[PolyNewbie]

The Financial Consequences of Funding the Halifax Harbour Bridges with Private Banking

(An analysis by Dr. Jerry Ackerman, with lots of help from Ken Munro)

Q. Could the cost of financing the Macdonald and McKay bridges have

exceeded the cost of building them?

A. Yes, it could. And, yes it did. Several times over. Let's look at some numbers:

Macdonald Bridge (1956)$10.6 million

McKay Bridge (1970) 32.9

McKay ramp (1987) 4.0

Total contract costs$47.5 million

Financing costs for the first 40 years (thru 1995) have totaled

$169 million (see graph showing annual debt charges). At the end of

that time, the bridge commission still owed $100 million, and was paying 11%

interest on a loan from a chartered bank that was guaranteed by the

Province.

...

Paying The Banksters Their Toll

Riverwind:BS. If the government borrows $100 billion from the BOC then it must extract $100B from the private sector to prevent inflation. The negative effects of extracting this amount of money from the private sector would far outweigh any reduction in financing cost to the public sector.

It seems to me that government does go to the private banks to finance capital works. Could you explain what the advantage of using private banks over public ones is ?

Your understanding of economics lacks insight and you are just repeating mantra of politicians which has been very well debunked on the COMER site. Increasing money supply DOES NOT always lead to inflation.

Inflation is not always a bad thing either.

You can't tell me that you have a greater understanding of ecomomics than the executive of the Canadian Action Party, I believe few people have this level of understanding, particularly of William Krehm who is not only a Phd from University Of Toronto (physics) but has been in economics for over 50 or so years. The guy is 91 years old and very very intelligent.

Really, your views are exactly the same as mainstream media on pretty much everything. Why bother posting ? You probably know that I have a TV.

[PolyNewbie]

Riverwind: You have also been using Monetarism as your sole theory in making your arguements. Monetarism while easy to understand provides an overly simplified view of economic behaviour.

I have thrown in some Keynesian theory which is the more accepted viewpoint but it went over your head. Keynesian economics addresses the problems that you seem to think private financing will solve.

[Riverwind]

Total contract costs$47.5 million

Let's see: he adds up 3 numbers from different decades and comes up with a total cost. That calculation alone is completely bogus since it did not take into account the effect of inflation. When you convert those numbers to 1995 dollars you get a total cost of $233 million - not $47.5 million.

Financing costs for the first 40 years (thru 1995) have totaled $169 million (see graph showing annual debt charges). At the end of

that time, the bridge commission still owed $100 million

Ok - so if we add up the interest paid $169 and the amount owed we have $269 million in 1995 for a project that cost $233 million in 1995 dollars. This means the real cost of borrowing (after inflation) is only $33 million. Now that number is likely low because the $169 million needs to be adjusted for inflation as well. However, the cost of borrowing is actually much lower than you would like to believe.

In any case, I don't understand why this project was funded with a normal bank loan. The gov't would always get a better rate if it sold bonds on the open market. I will agree that this particular project sounds like it had some strange financing arrangements. However, this one example has nothing to do with the discussion of gov't debt in general which is almost exclusively funded by bond issues on the open market.

[Riverwind]

Increasing money supply DOES NOT always lead to inflation. Inflation is not always a bad thing either.

There are many variables and you are correct to say that there is not a rigid link between the money supply and inflation, however, we know from experience that politicians cannot be trusted with managing money supply because politicians will almost always choose short term political gain over what is in the long term interest of the economy. That is why the current system ensures the BOC is free of direct interference by the politicians.

There used to be a time when some people honestly believed that communism is a better economic model than capitalism. There are still some very intelligent people that believe that. However, communism has failed miserably in every country that tried because communism is a theory that looks great on paper never works in practice because of human nature. Your economic theories are like communism - theoretically appealing to some people but fundamentally flawed.

The current mechanism lets the BOC focus on one thing: ensuring confidence in the Canadian dollar. Politicians are held accountable via the market. If they spend too much the cost of the interest on the debt will force them to cut back. Furthermore, the current system minimizes the negative impact of public spending on the private sector.

If you want to convince anyone that your model is better you will have to explain how your model would prevent politicians from abusing their power - saying the voters will is not good enough because the voters are very bad about stopping politicians from spending too much money.

[geoffrey]

Financing costs for the first 40 years (thru 1995) have totaled

$169 million (see graph showing annual debt charges). At the end of

that time, the bridge commission still owed $100 million, and was paying 11%

interest on a loan from a chartered bank that was guaranteed by the

Province.

...

Factor in inflation and it's cost them much less in financing. You can't ignore the time value of money when it's convenient for your statistics.

Riverwind: You have also been using Monetarism as your sole theory in making your arguements. Monetarism while easy to understand provides an overly simplified view of economic behaviour.

I have thrown in some Keynesian theory which is the more accepted viewpoint but it went over your head. Keynesian economics addresses the problems that you seem to think private financing will solve.

Keynesian theory has been dead in application for a few decades now.

[PolyNewbie]

geoffery:Keynesian theory has been dead in application for a few decades now.

The economy has been going down the pooper for a few decades now.