New - Money as Debt II Promises Unleashed

[RBM]

Money as Debt II Promises Unleashed (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

Further animation effort that illustrates all the financial games.

This is the partial version, see below for link to full.

[Cincinnatus]

From my understanding of this short film, the optimal solution proposed for this current system is to have the entities with the largest sums of cash to spend their money in order for the borrowers to have money to pay their interest. With that, I also mean money not borrowed from debt. Is that correct?

[RBM]

Your goal is to ensure borrowers have cash to pay interest ?

How does you solution achieve that ? What are the ramifications of that solution ?

Id suggest to eliminate the 'Casino' would be the most direct way to achieve the goal with minimal negative affects to the system.

Besides you don't seem to grasp the 'system' aspects of the graphic - the amount of cash in the system is always an inherent attribute of the system.

[Cincinnatus]

Your goal is to ensure borrowers have cash to pay interest?

No, not my goal. I'm trying to interpret what they're suggesting and gain a better overall understanding of what's been shown. In a sense, it's their goal until I have further clarification. Hence, I said "optimal solution proposed."

How does you solution achieve that? What are the ramifications of that solution?

We are not yet at that point. I've not yet found clarification on what's been laid out.

Besides you don't seem to grasp the 'system' aspects of the graphic - the amount of cash in the system is always an inherent attribute of the system.

Maybe that's why I'm trying to gain an understanding of the video through asking you questions?

[RBM]

Do you have formal economics education ? I don't.

the optimal solution proposed for this current system

Optimal - : most desirable or satisfactory.

The system is performing optimally. The film shows the consequences to that optimal operation.

Here's the full film (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) which is the youtube's poster's site. It is a bit more verbose.

My understanding is that money has to be kept in circulation to service debt plus interest.

[Visum]

My understanding is that money has to be kept in circulation to service debt plus interest.

Yes, and this recession is a prime example of where the liquidity dried up, and thus the FED needed to prime the economy by injecting it with fresh dollars. The banks were dry, no new loaning, and they are debtors themselves. This is a huge reason why the FED does not want to be audited. The audit will reveal the identities of the liquidity receiving banks, banks on the verge of collapse, because they have lent out your savings, and can't pay it back on demand, or issue more loans for that matter. Had the FED not "bought" up the banks debt, the recession would have lasted longer and been deeper. Problem is that what can happen is that entities with savings end up servicing crap debt instead of using it to their benefit with business expansion, research, etc.. It is good money after bad money.

What has just happened is that the FED has bought, "saved", those banks with toxic debt so that they can live a while longer. BUT, the debt has not gone away. It is still there, and will come out again. The system is still sick, unless you accept that injecting fresh and free money into an economy is normal and ok. Keynesian BS economics. When the printed money starts to flow, "velocity of money" we will most likely suffer inflation, even if the economy as a whole is not improving.

Also, we need to understand that because the dollar is the world's reserve currency, the FED is injecting THE WORLD's financial system with fresh and free dollars. If the FED gets audited, I will not be surprised to see a bunch of European banks on the list of liquidity infusions.

[RBM]

I just read Chris Dodd's response to seeing who received taxpayer monies with 'I'll ask'. Sounds pretty limp to me.

I know inflation is the conventional fear but I know there are some that strongly refute that. Stonleigh (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) of The Automatic Earth provides a primer and writes extensively with her co-blogger, ilargi, about that potential.

[Visum]

I just read Chris Dodd's response to seeing who received taxpayer monies with 'I'll ask'. Sounds pretty limp to me.

I know inflation is the conventional fear but I know there are some that strongly refute that. Stonleigh (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) of The Automatic Earth provides a primer and writes extensively with her co-blogger, ilargi, about that potential.

The historical record of fiats and this game is clearly against them. If we do not have inflation, the system will cease to function, or at least we will be in stagflation. Inflation is a reality, the norm. The extent is subject to how the world reacts when the spending starts, and how the FED consumes the excess liquidity, if they can.

[RBM]

I'd better clarify - inflation will come, but not at first as deflation will, as I understand.

Given the historic nature of this particular financial mess, I don't give 'the norm' much credence, on it's own.

[Visum]

I'd better clarify - inflation will come, but not at first as deflation will, as I understand.Yeah, we are currently at a turning point, last few weeks. The equity rallies are, IMO, not based on fundamental economic strength, but rather the liquidity injection. The questions are, will the injection work and pull us out, and if so, for how long? I don't expect you to answer this. So, if the markets do continue to move up, we will surely see inflation as the new money moves into the economy as spending and loans --> increases the money supply. We have already had the deflation move, unless the markets tank again. If the markets do tank again, as in a prolonged move vs miner and normal correction, deflation will only occur if the world holds dollars as the market dumps stocks for dollars. Remember, US stocks are denominated in dollars and if you are selling your stocks you are buying dollars. If not, we could have the worst situation, with dropping economy AND inflation as the dollar holders sell/ditch them for another value retention vehicle. Helicopter Ben prefers inflation and has the power to make it happen. His worst fear is another Great Depression.

Given the historic nature of this particular financial mess, I don't give 'the norm' much credence, on it's own.
I am not sure we are understanding each other. I am referring to the historical norm of fiat currencies and Keynesian economics as a whole. The inflation and deflation cycle has been going on for a long time, but with inflation always occurring long term. There is not one example in the history of our world, that I am aware of, where a fiat currency did not blow itself up via hyperinflation. We might avert this scenario if the dollar gets morphed into a new world currency run by the IMF and UN. Bretton Woods no longer exists with the dollar as the preferred world currency. The new agreement most likely will be "other" or even "next".
The continental (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.(currency)) was the US's first example of a currency death by hyperinflation.

[reb]

the thought occured to me tonight on the drive home that one of the ways for the powers to get out of their conundrum was to 'redefine the currency' in some way. i'm a bit disturbed to see you, Visum, nibbling at that conclusion as well.

i did hear from the local financial planners saturday (radio show) that china has asked the u.s. to issue several trillion in t bonds/bills with about 1.6% interest. this was taken by the show host as a sign of confidence in the u.s. economy.

i am struck by the though 'well, the chinese have to have somplace to stick their 'idle money' the same as anyone else. sticking all of it under the mattress will not work.' but i see again, the international impact of the whole house of cards.

[Visum]

the thought occured to me tonight on the drive home that one of the ways for the powers to get out of their conundrum was to 'redefine the currency' in some way. i'm a bit disturbed to see you, Visum, nibbling at that conclusion as well.

i did hear from the local financial planners saturday (radio show) that china has asked the u.s. to issue several trillion in t bonds/bills with about 1.6% interest. this was taken by the show host as a sign of confidence in the u.s. economy.

i am struck by the though 'well, the chinese have to have somplace to stick their 'idle money' the same as anyone else. sticking all of it under the mattress will not work.' but i see again, the international impact of the whole house of cards.

The world has a lot of value rapped up in dollar notes. I doubt if the "world" would even let the dollar sink via hyperinflation, hence China voting its confidence via bond purchases. They are the largest holder of dollars, outside of the US. However, we know that the IMF is using the SDR as a note, amongst countries. I have no idea when it will happen, but the "trend" is a world currency where the fiat wars no longer exist, and the field becomes level. Most likely, IMO, we would see a "fair" transition where the current currencies would be converted into a note that represented the former value of the single past currency. If not, all hell will be unleashed. Rarely, today, does a country want to be the creator, and manager of a world reserve currency. The currency can be traded, sold, lent, and so forth at what ever interest rate in other countries, without the matron country's permission. It becomes an extremely difficult dance and poker game. It makes controlling the matron country's economy much more difficult, Keynesian.