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Toto deVeer

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Everything posted by Toto deVeer

  1. I doubt that a new gold standard will be backed 100%. Maybe it will start with fiat being backed, say 20% only. Using your analogy, if there is not an increase in currency (as debt) then there will not be enough currency in circulation for the shoe shiner to find 110 customers. He will only find 100. Somebody else has to borrow the extra 10 into existence somewhere else, and this goes on and on. So if the borrowing interest rate is, say 5% apr, the debt has to approximately double every 14 years in order for the monetary system to function properly.
  2. Don't you think that Europe should be about each country participating equally, rather than one country in domination? Isn't it dangerous to Europe to have one dominant country? My personal view is that Europe would function much better without a single currency. If the national governments of Europe really cared about the welfare of their own peoples they would not stay in the Euro and they would default on debts. They are facing a reset in any case, at least the reset with their own currency preserves their national and cultural sovereignty. In the longer term, were these countries to break away, Germany would be the one who would have the most to lose, as is always the case for export driven national economic policy, just as has happened in Japan, and will also happen with China, eventually.
  3. That's a logical and rational conclusion. But then you have things like: Confessions of an Economic Hit Man, John Perkins: "...vast loans are granted on the assumption (created by the like of Perkins) that they will trigger of very high rates of economic growth. When this growth does not occur countries pile up the debt, default and hence become beholden to their loan shark (i.e. the IMF, international banks, and the American led capitalist sytsem in general). [ps, for a more detailed account of this dynamic, see Chossudovsky, "The Globalisation of Poverty"] For richer countries (normamlly due to oil), there is the opposite problem: they have too much cash. Thus the economic hit man draws up programmes for the investment of this cash in schemes which benefit the USA..." and From Joseph Stiglitz on the IMF/World Bank as published in the Guardian (in "IMF's four steps to damnation"): "...At this point, according to Stiglitz, the IMF drags the gasping nation to Step Three: market-based pricing - a fancy term for raising prices on food, water and cooking gas. This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls 'the IMF riot'. The IMF riot is painfully predictable. When a nation is, 'down and out, [the IMF] squeezes the last drop of blood out of them. They turn up the heat until, finally, the whole cauldron blows up,' - as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots. There are other examples - the Bolivian riots over water prices last year and, this February, the riots in Ecuador over the rise in cooking gas prices imposed by the World Bank. You'd almost believe the riot was expected. And it is. What Stiglitz did not know is that Newsnight obtained several documents from inside the World Bank. In one, last year's Interim Country Assistance Strategy for Ecuador, the Bank several times suggests - with cold accuracy - that the plans could be expected to spark 'social unrest'. That's not surprising. The secret report notes that the plan to make the US dollar Ecuador's currency has pushed 51% of the population below the poverty line. The IMF riots (and by riots I mean peaceful demonstrations dispersed by bullets, tanks and tear gas) cause new flights of capital and government bankruptcies This economic arson has its bright side - for foreigners, who can then pick off remaining assets at fire sale prices. A pattern emerges. There are lots of losers but the clear winners seem to be the western banks and US Treasury..."
  4. On 1: Strange. Have to think about that one. Seems to be a contradiction in logic somewhere. On 2. Maths is generally separated into two broad categories: deterministic and non-deterministic. Both categories can be used for modelling purposes. If you are saying that the behaviour of individuals is not predictable, well that is different from being not deterministic, mathematically speaking. On 3: If by entropy you mean randomness then this does not preclude the development of useful models, again mathematically speaking.
  5. Are there cigar smoking bankers on the 50th floor watching and laughing at it all? The monkeys running the banana shop..
  6. Merkel is just following the script (model)...
  7. Are these values calculated using heuristics, like the US inflation calculation?
  8. I don't believe that it is an accident, this media view of Armageddon. Follow the money...
  9. Little harsh. It's only 2 or 3 years old. It is growing rapidly. Too early, no? Why is this (new chains) a problem? Isn't there a limit as to how fast they may be produced in any case? Please explain.
  10. Thanks Traction, personally I find these developments very interesting, In many countries these currencies are illegal, and I have read that the FBI has been trying to disrupt Bitcoins in particular, although haven't confirmed the validity. As you know all a currency needs is confidence. Bitcoins have ranged in price from 0 (at release) to a high of about 30 USD; at the moment they seem to be stable around 5 USD, I understand that they were introduced in 2009/2010. Here is my theory as to why Bitcoin will succeed. I draw the analogy to the Betamax/VHS wars. It seems that VHS won this war because of the pornography industry. In the same way the Bitcoin is being supported by drugs trade and other transactions. Whilst I am not condoning these things, I believe that the world-wide crackdown on cash and other related activity will lead to Bitcoin success. It is possible to carry billions of dollars of Bitcoins around on a pen drive. The market of course is not this big, but it is amazing that the Bitcoin market has grown from 0 to around 50 million dollars in about 3 years. It is possible to convert Bitcoin into various currencies, gold, silver or other hard assets now. And I understand that their trade is completely legal in some countries (like Switzerland). There is also a new peer to peer technology (Open Source) that does not require permanent storage. This has been under development at Delft University for about 5 years. This has just been released during the last month or so, and it is virtually impossible to stop. The only way to stop it is to turn the Internet off. When you combine this with something like Bitcoin it becomes a very formidable way to conduct free trade. I've seen speculation about what could happen if just one country opened their system to these technologies. It is speculated that it could completely disrupt existing currency and trade systems. I'm not so certain about Ripple. I don't no enough about it. Ripple sounds like something that could be used to settle trade between countries actually, not just internet companies. Interesting stuff.
  11. Keynes' concept of central control of monetary policy and running deficits in times of recession and accumulating surplus in times of growth is utter nonsense in my view. I presume this is what your approach, leicestersq? Human nature, particularly in regards to politics, is going to ensure this idea will lead to complete failure. History proves this to be the case, as our present predicament illustrates. No amount of QE or monetization will solve this problem. And besides this it is wrong to think that today's complex economy can be run so centrally. However I believe that the Austrians have a more realistic view of things. Here's my analogy: a petrol engine: where the petrol is human capital that fuels the system (including creativity, innovation and labour), money is the lubricant and the engine is the economy (output). The engine needs sufficient oil for lubrication, but the oil does not power the system. Rothbard shows, for example, that the US economy grew rapidly in the mid-late 1800's while experiencing price deflation, and all the while the money supply increased. Price deflation is not something to be feared, indeed it is healthy. Note that the US did not have a central bank from about 1836 to 1914.
  12. How can you separate monetization of government debt from private debt? In the real world one always bleeds over into the other. Can you say that today there is no monetization of private debt? Of course there is. Once the money taps open up to the banks. it happens. Money is fungible. Everything else I've said follows from this situation.
  13. Capitalism without bankruptcy is not capitalism. The end point of what you are supporting is Fascism. This idea of the paradox of thrift is a theoretical nonsense. In the real world there are winners and losers. What you are proposing is to not permit losers, by penalizing winners. Deflation actually rewards the prudent. Inflation penalizes, and rewards those who have access to money first. The 'trickle up' effect. What you are proposing is more of the same. As this continues there will be fewer and fewer people who will be motivated to work. The working population will dwindle. People will choose to opt out of the system. This is already happening in the US.
  14. Those who lived within their means for decades, and were prudent, are watching their life savings disappear. That's a real economic motivator. Yes indeed.
  15. In support of Mel, you've got to admit that Edinburgh is a nice place...
  16. But Britain has the ultimate Trojan Horse, a total debt to GDP of 1000%, enough to destroy any aggressor...
  17. Answer: As long as the Bernak keeps rates down, the BOE will follow. Damn the torpedoes and full speed ahead,,,
  18. When Bill Clinton proudly announced that the US would pay back all it's debt within 10 years, Alan Greenspan was noted to have said "But we won't need a central bank then!"
  19. Excluding the 3% cash in circulation, what happens to the money supply if all debts are repaid?
  20. Prior to monetization, there was the matter of choice. Actors could choose whether they wish to take on debt or not, whether they wish to save or not. The ultimate endgame of the monetization of government debt, however, is negative interest. This will take away choice. Everyone will be obliged to take on debt or starve. The proverbial 'gun to the head'. The US Congressional Super-committee, has recently produced a report recommending that the US Treasury Secretary remove the zero bound limit on interest. Soon, those prudent persons of society who have been enduring negative real interest rates anyway, will see their savings disappear to the banks until their balance reaches zero. They they will have to go to those same banks to borrow money so that they can eat.
  21. The UK very much has capital controls. Try going to a bank to withdraw all your savings, or increasing your ATM limits. Can't do it.
  22. I agree that the problem is Greece's politicians. The Greeks need to do exactly what Iceland did, so does Ireland, Portugal, Spain and Italy. But where would this leave Germany?
  23. I presume that you are using this in the context of monetising government debt? From an academic and mathematical standpoint, and the position that money==debt, then monetisation is a tool to be used. But the side effects, as sleeping dog indicated, is the destruction of the moral fibre of society. This is what the academics fail to see. But I'm really delighted to see it used, because the so-called 'sheeple' (ie people like you and me) are finally seeing what an utter scam the present debt based system is, how it steals from the productive and prudent elements of society, how it perverts the very foundations of capitalism (by making impossible the formation of investment capital and creating gross misallocation of capital), and makes the most corrupt, vile and evil parts of society wealthy at the suffering of old age pensioners. It will lead a world revolution before it is over. Yes, certain persons (myself not included) would be happy to use Eugenics to improve the human race too. Monetization represents the ultimate Eugenic, totalitarian central bank policy. Now that they (central banks) have released this demon, they will never be able to put it back in the box. It's kind of like the reign of a Dictator; to maintain control against an unwilling people, more and more force is needed. But this is effectively a sign of weakness; and the noose for this Dictator is not far away. We are at the end game of the debt based system, and monetization represents the ultimate form of a failed state apparatus.
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