Where has all the money in the world gone? • Hacker News Board

Re: Where has all the money in the world gone?

#41

Post by hobin » Sat, Jun 23, 2012, 9:31 AM UTC

icandoitbetter wrote: post #37

sirclueless wrote: post #14

Earlier quoted context omitted.

I don't know about you, but I have had down periods in my life, when I wasn't actually producing anything of value. If we actually used a barter economy then I would starve, or be reduced to sweating in a field growing plants. But since we live in a world where money is transferrable and credit is obtainable, I can weather those periods just fine and live in a decent house with air conditioning in the summer and heat…

Is it impossible to imagine a system where fellow human beings would help you even if you didn't produce anything of value?

Given that such systems already exist, I would hope not.

Re: Where has all the money in the world gone?

#42

Post by adventureful » Sat, Jun 23, 2012, 9:37 AM UTC

Atropos wrote: post #40

bokonist wrote: post #2

The fundamental problem is that the monetary systems of the modern world are all designed on the Wile E. Coyote principle. As long as you never look down, the system works. In the U.S. there is ~$14 trillion in government debt. There exists tens of trillion more in private debt. But only $2 trillion exists in bonafide, actual, real honest-to-goodness dollars (I'm including in that count accounts at the federal reserv…

Yeah Europe is stupid, if only our leaders were as wise as a random blogger! But please explain me this: EUR/USD started at 1,17 at inception and it is still at 1,26 now. US 10 year bond yield is 1,67420 and Germany's is 1,58100. US debt/gdp is around 101% and Germany's is 81,2%. Moreover the US has a huge trade deficit and Germany has a huge trade surplus. To me the eurocrisis seems primarily a US/UK media thing...

The EU crisis is absolutely not a US/UK media thing. Half the Eurozone is melting down, and requires trillions in bailouts from 'printed' Euros to bail them out. It's from decades of unpaid-for lifestyle choices, accumulated debt from Socialism (same thing America is choking on, we just spent more of our money on things like war, but that's a welfare program too for jobs and corporations).

The US is in much worse shape than most are willing to admit or accept, but the US has the global reserve currency it gets to abuse. That changes the game dramatically for the US. If the Eurozone had properly integrated its system, they might have stood a better chance, as it would have been easier to inflate, issue Euro bonds, and buy a lot more time as the US is doing. The EU is half a properly integrated system.

However, you refer to the US Dollar vs the Euro, but then you pick one specific country on the bond yield. Why not pick Switzerland? They have negative yields.

How about the bond yields for Spain, France, Portugal, Italy? France is going to explode next, so we can throw them in as well.

Re: Where has all the money in the world gone?

#43

Post by Jimmie » Sat, Jun 23, 2012, 9:38 AM UTC

InclinedPlane wrote: post #24

wavephorm wrote: post #4

When you learn how money really works, you begin to understand just how diabolical our entire socio-economic system is. Inflation, recessions, boom-bust, the stock market, fractional reserve banking, interest rates... it's all rigged, a giant shell game, and it boils down to an invisible whip that the rich use to keep people working for things they don't really need and to pay taxes for the sole purpose of perpetuati…

It goes beyond that. Think about how very tenuous ordinary civilization is. Think about what would happen if you suddenly turned into a psychopath. How easy it would be to kill so many people around you. Jam a pen in someone's neck and they're dead. How easy would it be for the guy standing behind you in line to take your life? And that applies to everyone around you all the time. Every second of every day we are put…

It's twisted but I always wonder the same thing. Why don't psychopaths "get" more people? If someone rings my doorbell I answer the door, I expect the person on the other side to be a rational human being. It wouldn't be too hard for the other person to just bum-rush me with a knife and take me out.

I think there may be an evolutionary factor involved, easier to survive in a group so there is an incentive not to harm those around you. Able bodies can warn of nearby danger and help fight off threats, as long as you aren't a threat to them and they aren't a thread to you you're golden. There's also the fact that most people are fairly content in society and like things to stay relatively constant. Nobody wants to risk the rest of their life by doing something dumb like even accidentally injuring someone, let alone purposefully killing someone.

Re: Where has all the money in the world gone?

#44

Post by adventureful » Sat, Jun 23, 2012, 9:49 AM UTC

xtiy wrote: post #5

xtiy wrote: post #3

Watch Zeitgeist Moving Forward and you'd understand.

The government can not print money, every dollar printed has to be borrowed into existence via debt. If the government could print, then there'd be no need for tax. Watch the Moving forward movie for more revelations.

Our government can print, the Treasury has the legal ability to do so at any time. The Federal Reserve however owns the Federal Reserve Notes (aka the 'dollar'), and they own the US Government accordingly.

Our government would both print and tax, as many other governments throughout history with an abusive printing press have done. Just because a government has a printing press, they never stop taxing.

Governments print and tax because they can, it slows down the rate of inflationary pressure that printing would generate if that's all you did. As it is, they like to keep inflation hidden as much as possible by keeping it moderately low so you don't notice it year to year. The whole point is to boil the frog without the frog jumping out of the pot.

Re: Where has all the money in the world gone?

#45

Post by alan_cx » Sat, Jun 23, 2012, 9:49 AM UTC

gaius wrote: post #21

killerpopiller wrote: post #19

Earlier quoted context omitted.

imho you forgot to mention the key difference between US and Europe. The US can print money because there is still demand in buying $. This demand is an artificial one caused by the petro-$, the binding of every oil purchase to $. So everybody involved in oil trading has to purchase $ to purchase oil! Iraq and Iran threatend to sell oil in €, for several reasons, they couldn't and didn't deliver, unfortunatly. The BR…

Iraq only couldn't because they got invaded! There is a strong case that this was the real reason for Gulf War II.

The first one actually.

Re: Where has all the money in the world gone?

#46

Post by InclinedPlane » Sat, Jun 23, 2012, 9:55 AM UTC

Jimmie wrote: post #43

InclinedPlane wrote: post #24

Earlier quoted context omitted.

It goes beyond that. Think about how very tenuous ordinary civilization is. Think about what would happen if you suddenly turned into a psychopath. How easy it would be to kill so many people around you. Jam a pen in someone's neck and they're dead. How easy would it be for the guy standing behind you in line to take your life? And that applies to everyone around you all the time. Every second of every day we are put…

It's twisted but I always wonder the same thing. Why don't psychopaths "get" more people? If someone rings my doorbell I answer the door, I expect the person on the other side to be a rational human being. It wouldn't be too hard for the other person to just bum-rush me with a knife and take me out. I think there may be an evolutionary factor involved, easier to survive in a group so there is an incentive not to harm…

Psychopaths kill plenty of people though. But it helps that the vast majority of people are not psychopaths, and they react when someone does something like kill someone. If you murder someone in front of someone else your opportunities for surprise go out the window, and so much of our lives are lived in public (long stretches of private time notwithstanding). The other thing is that humans, even psychopaths, are sentient. They have feelings, they need a motivation, a reward for killing. And suicidally trying to kill as many people as possible is, in most cases, not in the cards, which is another limiting factor. If you took, say, 1 ppm of all humans on Earth and suddenly exchanged their brains for typical movie "monster rules" then things would get very ugly very fast, but not indefinitely, they would be contained, killed, brought under control by the majority of sane folks.

Nevertheless, look at folks like Ted Bundy who had a very specific target for his murders and yet still killed dozens of people in his life.

Re: Where has all the money in the world gone?

#47

Post by adventureful » Sat, Jun 23, 2012, 9:56 AM UTC

mtgx wrote: post #29

bokonist wrote: post #2

The fundamental problem is that the monetary systems of the modern world are all designed on the Wile E. Coyote principle. As long as you never look down, the system works. In the U.S. there is ~$14 trillion in government debt. There exists tens of trillion more in private debt. But only $2 trillion exists in bonafide, actual, real honest-to-goodness dollars (I'm including in that count accounts at the federal reserv…

But what happens if US has to print a lot of money all of the sudden? Won't they just wipe out a lot of value from most people's incomes, while also creating higher prices for products?

The plan is to not print a lot of money all of a sudden. The ideal is to inflate gradually, as the Fed has been doing for decades (destroying 97% of the dollar in the process).

As twisted as it is, the US has an interest in seeing the Euro destroyed. It would leave the dollar as the only standing potential global currency (until perhaps China unlocks their currency, but who knows when that would be). Then the US could abuse the dollar at a much greater scale, with fewer competing major currencies for money to escape to.

Re: Where has all the money in the world gone?

#48

Post by jamesaguilar » Sat, Jun 23, 2012, 9:56 AM UTC

mmaunder wrote: post #36

guynamedloren wrote: post #27

Very interesting explanation, but unless I missed something, the concluding statement is simply incorrect, which makes the whole thing wrong . > So now you're still growing apples, but instead of trading them for deer-haunches and shoes, you trade them for Loddars. So far, so good. Once again, you want some meat, except harvest time hasn't come yet so you don't have any Loddars to buy meat with. You call me up (cellp…

You wouldn't have been able to create Loddars if you said "Well the value of an IOU from the apple farmer has been established at this point so you can't just create a Loddar". But Loddars were created because money is an IOU for anything. And so you can create new money by creating a new IOU even though Loddars exist.

Right. Also, in the real economy this note IS a dollar. This is because of fractional reserve banking.

Re: Where has all the money in the world gone?

#49

Post by rajivm » Sat, Jun 23, 2012, 9:57 AM UTC

TeMPOraL wrote: post #38

mmaunder wrote: post #36

Earlier quoted context omitted.

You wouldn't have been able to create Loddars if you said "Well the value of an IOU from the apple farmer has been established at this point so you can't just create a Loddar". But Loddars were created because money is an IOU for anything. And so you can create new money by creating a new IOU even though Loddars exist.

I keep wondering: When you create this new IOU you basically start to repeat the process that resulted in Loddars in the first place; you could theoretically repeat it with the new IOU. Isn't it getting recursive? :).

Yes, and in fact this happens many times over:

Greg gets a loan from the Bank for $5000. Greg gives Stacey the $5000 to buy her car. Stacey deposits the $5000 in the bank. Bob gets a loan from the Bank for $4500. Bob deposits this $4500 in his bank account to spend. Mark gets a loan from the Bank for $4000. And it goes on.

In the United States: Of less than $11.5 million have no minimum reserve requirement; Between $11.5 million and $71.0 million must have a liquidity ratio of 3%; Exceeding $71.0 million must have a liquidity ratio of 10%.

That means mosts Banks only have to retain 10% of their money as cash and can continue to recursively loan out the rest of it.

Re: Where has all the money in the world gone?

#50

Post by adventureful » Sat, Jun 23, 2012, 10:00 AM UTC

calibraxis wrote: post #34

bgilroy26 wrote: post #8

Earlier quoted context omitted.

I thought US debt was backed by the military? The debt represents faith in the United States and the world-system as a whole. I think the only way this could collapse Wile E. Coyote style was if the trade routes in the Atlantic and the Pacific developed a huge problem with highwaymen and the US military couldn't lock it down.

Yeah, no country's going to compel the US to pay back its debt, given that the US probably spends about as much on the military as the rest of the world combined. Instead, they simply roll over the debt by buying more US Treasury IOUs. It looks far more like tribute to the military superpower, than the usual creditor-debtor relationship where the creditor dominates the debtor. Of course, weak countries must pay their…

It would take extreme desperation for someone like Japan to call in their held paper. That's an entirely plausible scenario though, given their debt loads.

However, the US could push a button and 'print' $2 trillion tomorrow morning in a monster QE3, and then hand Japan and China each a trillion dollars and nearly pay them off completely. All it would do is probably push the dollar index back down into the mid 70's, where it was 9 to 12 months ago. The bigger problem would actually be confidence, such a move would freak everybody out. Instead the Fed prefers to gradually inflate the value of Chinese and Japanese debt holdings away (which is also why China has taken such a liking to gold).