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Where has all the money in the world gone?

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

#51

Post by InclinedPlane »

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 missed something.

Look more closely. The deer hunter gives his dollars to the apple farmer. But he then BUYS SHOES WITH AN IOU FROM THE APPLE FARMER. And the shoe maker can then trade that promissory note to others if he desires as well. The point is that the promissory note is no different in function or substance than money. Money isn't a thing, it's just a universally recognized form of transferable debt.

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

#53

Post by gaius »

zanny wrote: post #20
WA wrote: post #9

Earlier quoted context omitted.

You ask how any of this debt can ever be repaid. But is this really what we want to achieve? Repay the debt? If money is, like in the reddit post, an IOU (or a certain unit of debt), then the idea is to balance out the amount of money (debt) with the growth of the economy. Too much and we got inflation. Too little and we cripple the economy. I'm very curious why debt should be repaid at all, care to explain? (Note: I…

Here is the catch in the 21st century - we are creating debt in exchange for things that can create goods without human intervention. The entire monetary system is built off the idea of trading goods and services that are the products of human labor. Things like automated assembly lines are a precursor - when we had 3d printing, you remove all human factors in the creation of goods besides the raw resource acquisitio…

Once you make movie A, the next million copies of movie A are essentially free. So we divide the cost of A by the number of units we expect to sell, rather than charging the full price of it to the first viewer, and giving it away to the others.

Crucially, and this is where the whole utopian post-scarcity dream falls apart, the cost of making movie B doesn't significantly depend on the cost of movie A. Because a movie isn't a "thing". Movie B is a different thing than movie A.

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

#54

Post by Atropos »

adventureful wrote: post #42
Atropos wrote: post #40

Earlier quoted context omitted.

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 sha…

At the moment only Greece (2,65% of eurozone gdp), Portugal (1,83%) and Ireland (1,82%) have received bailouts - which makes 6,3% not "half the Eurozone melting down". Spanish banks may get a €100b bankout aswell - big deal.

But I agree with you on the source of the problem - socialism or uneconomic regulation. That is visible in the doing business rankings of the world bank (http://www.doingbusiness.org/rankings). Ireland(rank 10), France(29),Portugal(30) will hopefully be fine. Spain at 44 is troubling; I'm only really worried about Italy (87) and Greece (100).

However Portugal+Spain+Greece have voted in conservative governments, Italy has an interim economist technocrat government. There is the European Fiscal Compact (http://en.wikipedia.org/wiki/European_Fiscal_Compact). And Germany is pushing very hard for economic reforms in the bailout countries.

Overall it is just a problem with a few countries with bad governments/regulation, not a "Euro" problem and certainly not a European Union problem... And we seem to be taking more steps dealing with it then the US or UK with their problems!

I compared to the US$ because the import/export in USD or GBP is incredibly more significant than the few currencies the Euro has done badly against, like the Swiss Francs or Japanese Yen or Norwegian/Swedisch Krones etc...

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

#55

Post by ExpiredLink »

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…

Exchange rates Euro to USD:

10 years ago: 1 EUR = 0,95 USD

today: 1 EUR = 1,3 USD

As European I really like the 'Euro crisis'. I'd be pleased to get more of it.

PS: What media has written about the financial crises since 2008 is mostly nonsense. In fact, we have seen a deep media crisis. Media is not able any more to give a remotely adequate picture of reality (not limited to financial aspects of course).

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

#56

Post by judofyr »

InclinedPlane wrote: post #51
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 missed something. Look more closely. The deer hunter gives his dollars to the apple farmer. But he then BUYS SHOES WITH AN IOU FROM THE APPLE FARMER. And the shoe maker can then trade that promissory note to others if he desires as well. The point is that the promissory note is no different in function or substance than money. Money isn't a thing, it's just a universally recognized form of transferable debt.

And now the history repeats itself:

- In the same way that apple- and potato-certificates could have different values, how do you know which IOUs you can trust?

- Someone says: "Hey, instead of giving IOUs to each other, come to me. I'll figure out if the person is actually able to pay it back later and give him money." Instead of having the IOU accepted by everyone in the village (a seller won't accept an IOU unless he knows he can trade it with other people, so a buyer needs to prove his credit to everyone), there's only one person/system who needs to accept it.

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

#57

Post by Retric »

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…

Your making several mistakes with that post. #1 the 14 trillion debt is not a single loan it's millions of them. People pretend that bonds are the same thing as money all the time, but there not. If the government started paying back 0.1% of it's debt a month you would see huge cash flows, but though taxes the same money would be used to pay down different loans several times.

PS: There are valid reasons for treating bonds as cash equivalents, but M1, M2, M3, etc are simply different ways of looking at the money supply.

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

#58

Post by tempuser008 »

gaius wrote: post #53
zanny wrote: post #20

Earlier quoted context omitted.

Here is the catch in the 21st century - we are creating debt in exchange for things that can create goods without human intervention. The entire monetary system is built off the idea of trading goods and services that are the products of human labor. Things like automated assembly lines are a precursor - when we had 3d printing, you remove all human factors in the creation of goods besides the raw resource acquisitio…

Once you make movie A, the next million copies of movie A are essentially free. So we divide the cost of A by the number of units we expect to sell, rather than charging the full price of it to the first viewer, and giving it away to the others. Crucially, and this is where the whole utopian post-scarcity dream falls apart, the cost of making movie B doesn't significantly depend on the cost of movie A. Because a movi…

And then we apply the same principle to a song. Once you record the first song, the next million copies of it distributed via internet is basically free. Or is it. It would be nearly free if there were no fat cats in the middle.

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

#59

Post by gaius »

tempuser008 wrote: post #58
gaius wrote: post #53

Earlier quoted context omitted.

Once you make movie A, the next million copies of movie A are essentially free. So we divide the cost of A by the number of units we expect to sell, rather than charging the full price of it to the first viewer, and giving it away to the others. Crucially, and this is where the whole utopian post-scarcity dream falls apart, the cost of making movie B doesn't significantly depend on the cost of movie A. Because a movi…

And then we apply the same principle to a song. Once you record the first song, the next million copies of it distributed via internet is basically free. Or is it. It would be nearly free if there were no fat cats in the middle.

Distribution is free - but shouldn't the band be paid what they would have gotten with no record label in the way? That may mean songs on iTMS being 10p instead of 99p - don't creators of products you want deserve paying?

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

#60

Post by tempuser008 »

zanny wrote: post #20
WA wrote: post #9

Earlier quoted context omitted.

You ask how any of this debt can ever be repaid. But is this really what we want to achieve? Repay the debt? If money is, like in the reddit post, an IOU (or a certain unit of debt), then the idea is to balance out the amount of money (debt) with the growth of the economy. Too much and we got inflation. Too little and we cripple the economy. I'm very curious why debt should be repaid at all, care to explain? (Note: I…

Here is the catch in the 21st century - we are creating debt in exchange for things that can create goods without human intervention. The entire monetary system is built off the idea of trading goods and services that are the products of human labor. Things like automated assembly lines are a precursor - when we had 3d printing, you remove all human factors in the creation of goods besides the raw resource acquisitio…

Well said. I can't but wonder how the system evolved: The workers build, the scientists study & discover, the engineers design and improve, and everything they produce is sold for X amount of money while they are being paid Y amount of money. X - Y = P (profit) which goes to the capital owners who can spend it on the goods produced by the others without much participation at the production effort. Also I find it amazing that after all the advancements, discoveries and increases of productivity, the working class has to work 8 hours a day for longer number of years then the previous generations. The retirement age only increased in the last 50 years. Why do we need to work more if today we produce more, faster and cheaper than few years ago.
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