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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?

#141

Post by colanderman »

wissler wrote: post #92
colanderman wrote: post #89

Earlier quoted context omitted.

It doesn't matter how you design the monetary system, what matters is that it's centralized -- a mandated system backed by SWAT teams. Create that, and you've just created a system that will inevitably result in sweeping financial destruction throughout the economy. I don't follow. Can you elucidate how the first sentence leads to the second?

https://docs.google.com/file/d/0ByyIBJqJ0pDBZDAyY2FhODUtYTY0...

That entire article is moot because (a) we're not on the gold standard and (b) it fails to account for risk. But I'll humor you and prove the article illogical two different ways.

Assume we were on the gold standard. The amount of gold in the world is limited. Most importantly, it does not grow exponentially with our economy (which is in fact the product of two exponentials -- population growth and technology growth). A gold standard is therefore deflationary in nature, meaning that the value of 1 oz of gold grows over time. This means that on the gold standard, interest rates would be FAR lower (probably even 0%) due to the inherent "interest" built into gold. However the article assumes both a gold standard (in the first paragraph), and moderate interest rates (5%). Therefore the article is inconsistent and illogical.

Let us instead limit our scope to risk-free loans (e.g. T-bonds). Take risk out of the equation and interest rates simply counteract inflation, meaning that the buying power of your loaned money remains constant. However, the article assumes both risk-free loans (since it does not account for losses due to defaults), and that one can purchase absurd quantities of goods with interest compounded over several years (which is not true if buying power remains constant). Therefore the article is inconsistent and illogical.

Furthermore, you did not state how this relates to the first half of what I quoted -- something about SWAT-team enforced standards. I am still utterly in the dark about the relevance of this to monetary policy. (Wouldn't any policy, e.g. gold standard, require some form of law enforcement to keep people from robbing each other?)

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

#142

Post by zanny »

aaronasterling wrote: post #133
zanny wrote: post #114

Earlier quoted context omitted.

The fruits of the labors of past generations are being filtered into 3 areas - the lowest common wage earner in the world that can do the grunt work the cheapest (Chinese, or Illegals, etc) the wealthy, who control all investment and funding, and governments that can freely tax and deficit all they want. We don't "need" to work more. The USA produces a substantial excess of food, even past the excessive eating habits…

One doesn't have to buy into the system you describe. I basically sleep on the beach on Maui and mostly eat for free. In many ways, it's a good life :)

I want in on this free food! Living on the beach doesn't sound like it has good internet connectivity though.

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

#143

Post by waterlesscloud »

ExpiredLink wrote: post #55
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).

2008: 1 Eur = 1.60 USD

Now: 1 Eur = 1.25 USD

That looks a little different.

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

#144

Post by tempuser09 »

tempuser008 wrote: post #60
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…

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 amaz…

Another freakishly depressing fact is that even if tomorrow we found a new technique of splitting the water with only the half of the energy obtained from recombining it (free energy !!!) the state would tax the freaking water or the technology or the distribution of this technology, GRADUALLY to a such extent that we (I mean the masses, not the oligarchy) would need again 9to5 jobs only to pay the freaking taxes !!!

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

#145

Post by kalininalex »

I recommend watching Money as Debt (http://video.google.com/videoplay?docid=-2550156453790090544). This fascinating video explains the roots and consequences of the crisis in the very visual way. For a more scientific approach take a look at The Debt Deflation Theory (http://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf).

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

#146

Post by tempuser09 »

lsc wrote: post #107
bergie wrote: post #96

Earlier quoted context omitted.

Exactly, the original point of EU was to disincentivize France and Germany from going into yet another war on resources. Lots of other good (but sometimes confusing) structure has since been built on that foundation, but to me that original point is already enough for keeping the Union around. Disclaimer: some of my current open source work is supported financially by the EU

For context, I'm an American; I've read a bit of history, and I have a very American perspective on the last two world wars; Like most people my age, both of my grandfathers fought in world war two, and like most people, I place more emotional weight on stories told me by family members than accounts written by people on the other side, so my view of European politics is biased in a certain direction, and I don't hav…

As long as the EU union is governed in a democratic way (as it is now) there is no serious fear that we (the rest of EU) would be the political slaves of Germany. Economically speaking, the eastern half of Europe (Hungary, Slovakia, Romania, Bulgaria, Poland + the 3 Baltic states) is nearly in economic slavery to the French, German, Austrian, Dutch and Swedish financial elites already. So what was in danger to be lost is already lost for the losers. On the other hand, the French and the Germans are negotiating rather well their interests (Greece !) and as long as this negotiation is not stuck, there will be no need for another war in Europe. I live in France now and there is no real fear here of anything (militarily speaking) cause they keep their Nukes warm and ready :D.

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

#147

Post by eurohacker »

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…

The European Union government could order the european central bank to print money to buy out the debt, but this creates all sorts of political conflict as it results in transferring real wealth from country A to country B.

what do you mean by ´real´ wealth?

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

#148

Post by CamperBob2 »

zanny wrote: post #114
tempuser008 wrote: post #60

Earlier quoted context omitted.

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 amaz…

The fruits of the labors of past generations are being filtered into 3 areas - the lowest common wage earner in the world that can do the grunt work the cheapest (Chinese, or Illegals, etc) the wealthy, who control all investment and funding, and governments that can freely tax and deficit all they want. We don't "need" to work more. The USA produces a substantial excess of food, even past the excessive eating habits…

While I think you're way out in the ozone with the idea that consumerism evolved as a reaction to Communism, the rest of your post is really well-stated. Our political system is geared toward promoting the idea of near-zero unemployment, where the goal we really should be working towards is near 100% unemployment.

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

#149

Post by icebraining »

lsc wrote: post #107
bergie wrote: post #96

Earlier quoted context omitted.

Exactly, the original point of EU was to disincentivize France and Germany from going into yet another war on resources. Lots of other good (but sometimes confusing) structure has since been built on that foundation, but to me that original point is already enough for keeping the Union around. Disclaimer: some of my current open source work is supported financially by the EU

For context, I'm an American; I've read a bit of history, and I have a very American perspective on the last two world wars; Like most people my age, both of my grandfathers fought in world war two, and like most people, I place more emotional weight on stories told me by family members than accounts written by people on the other side, so my view of European politics is biased in a certain direction, and I don't hav…

"They're doing economically what they failed to do by force" is an often repeated statement by many people here in Portugal, at least amongst left-leaning people (I live in one of the few municipalities where the Communist party wins consistently, and I interact a lot with educated but poorly paid people - actors, musicians, etc - so my views are probably biased).

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

#150

Post by icebraining »

jvm wrote: post #99
ExpiredLink wrote: post #55

Earlier quoted context omitted.

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).

I hope you also enjoy the 25% unemployment in Spain...

There's also the 36,6% for younger people (<25) in Portugal.
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