Inflating Away The National Debt

[Injin]

I'll answer your actual question. (Even though I was anyway)

An IOU is issued when one party receives a service but fails to providing anything in return at that particular moment. The IOU is usually redeemable on demand.

I hope this clears things up.

I didn't ask when the IOU is issued, I asked you what item the IOU is for.

i also asked a lot of other very simple questions which you have consistently avoided.

I am curently assuming either troll or shill. Some simple answers to some simple questions would go a log way to changing my mind.

You have the questions already and I won't be bothering to respond to any more of your posts until I get somethying that at least resembles a direct answer.

[Stars]

Yes, it is. Ask around - most people have an arrangement with their bank whereby they rock up, and their cash is available on demand.

A small correction (only added because your arguments are mainly word games):

............whereby they rock up, and cash is available on demand, according to the contract.

No gaurantee is made that this is the same notes and coins the customer deposited earlier and nearly everyone is aware of this - and apart from people with mental difficulties, nobody cares

You aren't saying that the general understanding of what a bank is there for and the legal paperwork are different, are you?

Why would that matter? - such a situation is not definitionaly fraud

The public general understanding of the operation of a jet engine may vary considerably from the reality...so what?

And am glad you agree that it's a fraud.

Not fraud - the bank is not saying it is doing the things you seem to imagine people think it is doing.

Edited May 4, 2010 by Stars

[Injin]

A small correction (only added because your arguments are mainly word games):

............whereby they rock up, and cash is available on demand, according to the contract.

No gaurantee is made that this is the same notes and coins the customer deposited earlier and nearly everyone is aware of this - apart from people with mental difficulties. Nobody cares

I never mentioned it being the same cash. And I never said that anyone cared.

Why would that matter? - such a situation is not definitionaly fraud

The public general understanding of the operation of a jet engine may vary considerably from the reality...so what?

The general publc isn't being asked to do things based on their misaprehension of jet engines.

Not fraud - the bank is not saying it is doing the things you seem to imagine people think it is doing.

It is not making explicit the disparity between general understanding and actual practice and profiting from it.

It's a fraud of non disclosure of the material. Unless you are making the case that the bankers are unaware that what they do and what people think they do are light years apart I see no defence to the charge of fraud.

Edited May 4, 2010 by Injin

[Authoritarian]

I didn't ask when the IOU is issued, I asked you what item the IOU is for.

i also asked a lot of other very simple questions which you have consistently avoided.

I am curently assuming either troll or shill. Some simple answers to some simple questions would go a log way to changing my mind.

You have the questions already and I won't be bothering to respond to any more of your posts until I get somethying that at least resembles a direct answer.

Our currency IOUs aren't backed by anything solid -such as gold - they're debt backed. So the IOU in question can be for any number of items.

It's like asking what item a £10 note is for, the question doesn't make any sense so it's impossible to answer.

Edited May 4, 2010 by Chef

[Injin]

Our currency IOUs aren't backed by anything solid -such as gold - they're debt backed. So the IOU in question can be for any number of items.

It's like asking what item a £10 note is for, the question doesn't make any sense so it's impossible to answer.

So you are saying it's an IOU nothing.

Is that right?

[Authoritarian]

So you are saying it's an IOU nothing.

Is that right?

I wouldn't say that no. If you're holding a £10 note in your wallet I'd say that you're able to claim £10's worth of the nation's wealth.

You have a claim on something even if you're unsure as to what it is yet.

Edited May 4, 2010 by Chef

[Injin]

I wouldn't say that no. If you're holding a £10 note in your wallet I'd say that you were able to claim £10's worth of the nation's wealth.

How?

You have a claim on something even if you're unsure as to what it is yet.

So it's an IOU "something undefined" ?

[Authoritarian]

How?

It's an annonymous IOU redeemable on demand.

So it's an IOU "something undefined" ?

I suppose so, yes.

[Injin]

It's an annonymous IOU redeemable on demand.

For no specified item.

I see.

I suppose so, yes.

Are contracts with no defined terms valid?

[Authoritarian]

For no specified item.

I see.

It's a debt backed currency though, so as long as somebody pays their debts it doesn't matter what form the work takes.

Are contracts with no defined terms valid?

Contracts with no defined terms will be full of loopholes. If people find these loopholes then generally the terms are tightened up.

[Stars]

I never mentioned it being the same cash. And I never said that anyone cared.

So most people don't imagine their money sits in the bank waiting for them to withdraw it?

The general publc isn't being asked to do things based on their misaprehension of jet engines.

I can't think of a single thing it would make any difference to

It is not making explicit the disparity between general understanding and actual practice and profiting from it.

Not fraud. How i provide a service and how you (a customer) imagine I provide it don't have to line up unless you specifically request it or I specifically claim it.

It's a fraud of non disclosure of the material. Unless you are making the case that the bankers are unaware that what they do and what people think they do are light years apart I see no defence to the charge of fraud.

Some people misunderstanding what you do, does not make you a fraud (except if you are a banker).

My advice: try to get a chip for the other shoulder as well :0

Edited May 4, 2010 by Stars

[Injin]

It's a debt backed currency though, so as long as somebody pays their debts it doesn't matter what form the work takes.

How can you pay your debt if you don't know what to pay?

Contracts with no defined terms will be full of loopholes. If people find these loopholes then generally the terms are tightened up.

Afaik no defined terms means no contract at all, full stop, good night vienna.

First you need to define specifically what is at the end of the IOU rainbow. So far you have been unable to do that. How can you be given something if you won't say exactly what it is you want?

Edited May 4, 2010 by Injin

[Injin]

So most people don't imagine their money sits in the bank waiting for them to withdraw it?

Most that i asked certainly did, yes.

I can't think of a single thing it would make any difference to

So you can't see that paying your attitude to "repaying" credit card "debt" or mortgage would dramatically alter if you foudn out you had never been loaned anything?

Why not?

Not fraud. How i provide a service and how you (a customer) imagine I provide it don't have to line up unless you specifically request it or I specifically claim it.

But I did. So did everyone else. They asked to be loaned existing cash. A nice pile of tenners or twenties.

Some people misunderstanding what you do, does not make you a fraud (except if you are a banker).

Never said that it did.

My advice: try to get a chip for the other shoulder as well :0

Not interested in your advice, tbh. Thanks anyway.

[Stars]

Most that i asked certainly did, yes.

I have never met anyone who believes that

So you can't see that paying your attitude to "repaying" credit card "debt" or mortgage would dramatically alter if you foudn out you had never been loaned anything?

Sure. Not sure what relevance this has though

But I did. So did everyone else. They asked to be loaned existing cash. A nice pile of tenners or twenties.

And if they asked fo cash, they would have got it as cash. You don't even have to ask for cash when arranging the loan, simply withdraw your loan as cash.

Not quite sure, in functional terms, what more you expect

Edited May 4, 2010 by Stars

[Injin]

I have never met anyone who believes that

Oh you have. Just ask a load of people and find out like I did.

Sure

Righto.

And if they asked fo cash, they would have got it as cash. You don't even have to ask for cash when arranging the loan, simply withdraw your loan as cash.

it's all supposed to be cash. Every transaction.

Not quite sure, in functional terms, what more you expect

That when I agree with someone to deliver something to someone else in exchange for my service later, they actually do it and don't just put on a dog and pony show to make it look like they have.

Pretty simple.

I employed a guy to do a job, he didnt do it. He faked it instead.

And of course, for a long time I fell for it and ran around doing a lot of stuff for him for free, thinking I was "repaying my debt."

[Stars]

Oh you have. Just ask a load of people and find out like I did.

And he just repeats again

We discussed this already. Most people don't think about these things and so have no answer already calculated. If you actually ask people and give them a day to think about their answer, they will mostly arrive at the correct answer.

it's all supposed to be cash. Every transaction.

I disagree. (for example) If two organsisations want to keep a ledger of transactions between them and only settle occasionaly, that's up to them (or three organisations, or four).

what do you mean by 'every transaction'..?

That when I agree with someone to deliver something to someone else in exchange for my service later, they actually do it and don't just put on a dog and pony show to make it look like they have.

If the bank didn't do it, who do you imagine provided the net missing service for the person you paid, to be paid?

Edited May 4, 2010 by Stars

[Injin]

And he just repeats again

We discussed this already. Most people don't think about these things and so have no answer already calculated. If you actually ask people and give them a day to think about their answer, they will mostly arrive at the correct answer.

Well I repeated again because I have tested and that's what I found. if you go and find something different, that's great, let me know how you get on.

I disagree. (for example) If two organsisations want to keep a ledger of transactions between them and only settle occasionaly, that's up to them (or three organisations, or four).

what do you mean by 'every transaction'..?

Every transaction that their customers believe is in cash shoudl be in cash. That's why they "repay."

If the bank didn't do it, who do you imagine provided the net missing service for the person you paid, to be paid?

No one.

Never happened - just another dog and pony show.

[Traktion]

The point which interests me isn't the legal consequence, but the practical consequences.

It looks like too many promises against future productivity have been made, which may never occur. With peak oil banging on the door and peak fossil fuel energy on the horizon, it is becoming more likely that these promises will not be kept. The consequences could be devastating and long lasting, which makes me think the current financial system is ill equipped to handle what the future is likely to throw at us. This is without even considering the consequences of rampant credit creation blowing big bubbles.

[Stars]

No one.

Never happened - just another dog and pony show.

A troubling conclusion, considering they were paid.

What a conumdrum

Edited May 5, 2010 by Stars

[HumanAction]

The point which interests me isn't the legal consequence, but the practical consequences.

It looks like too many promises against future productivity have been made, which may never occur. With peak oil banging on the door and peak fossil fuel energy on the horizon, it is becoming more likely that these promises will not be kept. The consequences could be devastating and long lasting, which makes me think the current financial system is ill equipped to handle what the future is likely to throw at us. This is without even considering the consequences of rampant credit creation blowing big bubbles.

Isn't that how it always ends though? The bankers make promises that they cant actually keep, presumably hoping that at some point they or maybe our children will be able to make good, at some point it becomes impossible to do so. It's like stealing in the hope that you can replace the item stolen before anyone notices, some posters here would no doubt argue that there has been no crime unless you get caught..... In reality the existence of the theft ( or fraud ) is not contingent on it's detection.

[HumanAction]

I'm just dealing with the facts.

I think people in general are able to grasp the concept of an IOU. But if one group of people have demanded so much that they cannot possibly be paid then perhaps we need to review the 'service' that they're providing for the community, because it would appear on the surface as if monopolies are at work.

Yes I agree, I offered the simpler solution. It's cheaper.

I dont find the claim that the phrase IOU is expensive very convincing. If you've ever looked over a loan agreement you can soon establish that our banker friends are not actually averse to the use of large numbers of words at all..... If your claim were true they'd keep is simple, they do not do so at all.

[Confounded]

We can not inflate our way out of it achieve real growth as in the past. The underestimating of inflation when calculating GDP will help but they will have to find a way to further underestimate inflation if they want to hide the magnitude of real GDP decline from the masses.

[Injin]

A troubling conclusion, considering they were paid.

What a conumdrum

They weren't paid, they to were shown some numbers and a piece of paper called an "account statement" but no cash was involved at the time the banks claimed it was.

This is true in roughly 97% of all cases.

No conundrum, simple fraud. "Banks have no money, which they pretend to lend." - Fraud.

[Traktion]

Isn't that how it always ends though? The bankers make promises that they cant actually keep, presumably hoping that at some point they or maybe our children will be able to make good, at some point it becomes impossible to do so. It's like stealing in the hope that you can replace the item stolen before anyone notices, some posters here would no doubt argue that there has been no crime unless you get caught..... In reality the existence of the theft ( or fraud ) is not contingent on it's detection.

I don't disagree, but that is part of the problem with the current financial system - when the "investments" by the bankers go bad, it causes so many problems in the economy, that the government says it has to step in on our behalf. Whether the banks should be able to put the rest of us in this position or whether the government should bail them out are two very good questions.

Firstly, the banks shouldn't be able to hold us to ransom. This is why I support the idea of Limited Purpose Banking, where individuals (or fund managers on their behalf) make the investment choices and gain/lose by the results - no bankers leveraging up on behalf of the taxpayer, so no bailouts needed.

Secondly, the government shouldn't make promises it can't keep without borrowing on our kids behalf in general - a structural deficit is surely unfair for the future generations*. Why should the government (or even us electorate as "mob rule") have the right to indebt others in the future? How is this fair?

* Even this "stimulus" package is the government borrowing on our behalf, when the rest of us have decided enough is enough. Even if it is the banks hoarding, that goes back to banking reform too - we should decide as individuals when we want to lend/borrow and the government should keep out of it, IMO.

Edited May 5, 2010 by Traktion

[Traktion]

We can not inflate our way out of it achieve real growth as in the past. The underestimating of inflation when calculating GDP will help but they will have to find a way to further underestimate inflation if they want to hide the magnitude of real GDP decline from the masses.

I was pondering this last night. I came to the following conclusions:

- Broad money is a misnomer. Replacing credit with printed money is not replacing like for like. The former is backed by a promise of productivity, the latter is just pasting over the cracks (essentially, making good the due payment).

- If you need to replace credit with printed money, you are accepting that the promised productivity isn't going to be there. If the promised productivity isn't there, but someone prints up some money to pay for it, clearly the value of money will go down - it has not been backed by actual productivity.

So, while printing may make debts good it will cause inflation, regardless of any replacing of lost "broad money" (credit). It may mean you can meet payments, without having to default, but the side effects will be felt. Whether QE will ever be repaid (ie. sold on the market by the BoE) is another question, but the government creating more money by going into debt would cause the same problem (although it would be backed by our future productivity then, via taxes - inflation now, for deflation later?)*.

*Which begs the question about how we could repay the debt, without getting deflation. It seems like sooner or later a bullet will need biting, but the muppets in charge would rather keep kicking the can down the road for as long as possible. When it does collapse... ouch... I can't imagine that being a soft landing and there would either be lots of deflation or hyperinflation (more likely - governments will try to "do something" - printing, via QE which is never sold on by the BoE - and cause this).

Edited May 5, 2010 by Traktion