The Labour Party Left The Uk With £7.9 Trillion In Debt.

[Injin]

Ok then. Go ahead.

Money stock 100

Lent out @ 10%

Money demanded back in next time period

110

Money must increase by 10% or bankrupcy.

Where does money come from in this system?

By people going into debt. So either the total amount of debt must increase or the whole system must go bankrupt.

[South Lorne]

Ye but what are you going to do with the debt

Do you keep growing the total debt on the basis that you hope it collapses some time in the future when its no longer your problem

Or do you tell anyone over 40, sorry but youre only going to be getting 10p in the pound back on those pension savings you thought youd accrued

Its a very difficult choice for a politician

...that is a an issue requiring a separate solution ...part of the problem is that some of the clowns who created the problem are still around and need to be cleared out....to jail with the others ....and all loan liars (lenders and applicants) should be banned immediately from pension rights (all ages) ......

[Injin]

...that is a an issue requiring a separate solution ...part of the problem is that some of the clowns who created the problem are still around and need to be cleared out....to jail with the others ....and all loan liars (lenders and applicants) should be banned immediately from pension rights (all ages) ......

The clowns who made this system are long dead.

[MarkG]

The clowns who made this system are long dead.

You could still dig Keynes up and hang his bones from a lamp-post on Westminster Bridge to encourage the others.

[onesmallstep]

Money stock 100

Lent out @ 10%

Money demanded back in next time period

110

Money must increase by 10% or bankrupcy.

Where does money come from in this system?

By people going into debt. So either the total amount of debt must increase or the whole system must go bankrupt.

well my thinking is that the system only works if you are a net exporter and hence your wealth increases.

doesn't work very well of you rely on asset prices to rise which you yourself have to pay for.

[South Lorne]

Money stock 100

Lent out @ 10%

Money demanded back in next time period

110

Money must increase by 10% or bankrupcy.

Where does money come from in this system?

By people going into debt. So either the total amount of debt must increase or the whole system must go bankrupt.

....borrower of £100 plants seeds and harvest crops value of net £1,000 and pays back after year £110 to Bank...gains net after Bank Interest of £890....is this a problem..?....

[South Lorne]

The clowns who made this system are long dead.

...not talking about the system ...but the recent practice....

[Injin]

....borrower of £100 plants seeds and harvest crops value of net £1,000 and pays back after year £110 to Bank...gains net after Bank Interest of £890....is this a problem..?....

You aren't looking at the system as a total.

[onesmallstep]

The clowns who made this system are long dead.

it's not really a system though is it? more a chain of ill thought out short term solutions to iminent problems.

The problem really is the culture at the heart of our nation. Probably emanates from what we are taught at school and experience in every day life as we grow up.

[Tired of Waiting]

Money stock 100

Lent out @ 10%

Money demanded back in next time period

110

Money must increase by 10% (...)

Only if all the money stock were lent, in only one direction. But as you have both lenders AND borrowers, then it is a different story, as someone's cost is another's revenue. Like this:

Mary has £100. Paul has £100. Total "money stock" = £200.

Paul wants to borrow £10, for 1 month, asks Mary, and offers her £1 pound for it. She agrees, and lends it to him.

One month later he pays her back. Mary has £101. Paul has £99. Total "money stock" = £200.

[onesmallstep]

Only if all the money stock were lent, in only one direction. But as you have both lenders AND borrowers, then it is a different story, as someone's cost is another's revenue. Like this:

Mary has £100. Paul has £100. Total "money stock" = £200.

Paul wants to borrow £10, for 1 month, asks Mary, and offers her £1 pound for it. She agrees, and lends it to him.

One month later he pays her back. Mary has £101. Paul has £99. Total "money stock" = £200.

in the end Paul runs out of money, Mary is rich, end of system.

[Bloo Loo]

Only if all the money stock were lent, in only one direction. But as you have both lenders AND borrowers, then it is a different story, as someone's cost is another's revenue. Like this:

Mary has £100. Paul has £100. Total "money stock" = £200.

Paul wants to borrow £10, for 1 month, asks Mary, and offers her £1 pound for it. She agrees, and lends it to him.

One month later he pays her back. Mary has £101. Paul has £99. Total "money stock" = £200.

what did Paul buy?

[Tired of Waiting]

in the end Paul runs out of money, Mary is rich, end of system.

Nah Paul keeps working like a slave, and Mary just loves the Caribbean. Paul is still working.

[Tired of Waiting]

what did Paul buy?

Sorry, i forgot to ask him. Probably drank it.

[onesmallstep]

Nah Paul keeps working like a slave, and Mary just loves the Caribbean. Paul is still working.

so who's paying Paul?

answer is the tax payer which is in fact Paul.. Ta Da!!!

tax payer owes too much, end of system again.

I think the govt, the boe et al have finally got it, but realise it is way too late.

Edited March 6, 2011 by onesmallstep

[Injin]

Only if all the money stock were lent, in only one direction. But as you have both lenders AND borrowers, then it is a different story, as someone's cost is another's revenue. Like this:

Mary has £100. Paul has £100. Total "money stock" = £200.

Paul wants to borrow £10, for 1 month, asks Mary, and offers her £1 pound for it. She agrees, and lends it to him.

One month later he pays her back. Mary has £101. Paul has £99. Total "money stock" = £200.

Nope.

There is no money until someone borrows. You have made the classic mistake of thinking that the money is there before someone asks to borrow it.

It isn't.

We start with nothing - £0

Bob asks to borow £100 from the bank

The bank adds £100 to it's books, creates £100 from thin air and wants £110 back.

Either bob or the bank go bankrupt next cycle or more borrowing occurs to get the money. It's more debt or total collapse. Brilliant design, sheer evil genius.

[Tired of Waiting]

so who's paying Paul?

answer is the tax payer which is in fact Paul.. Ta Da!!!

And a pub landlord came into the game too, since Paul drank the 1£.

This is getting out of hand now.

[Bloo Loo]

Nope.

There is no money until someone borrows. You have made the classic mistake of thinking that the money is there before someone asks to borrow it.

It isn't.

We start with nothing - £0

Bob asks to borow £100 from the bank

The bank adds £100 to it's books, creates £100 from thin air and wants £110 back.

Either bob or the bank go bankrupt next cycle or more borrowing occurs to get the money. It's more debt or total collapse. Brilliant design, sheer evil genius.

this is called monetisation..a pile of receipts against a pledge of security.

something the FED said it hasnt done..its done QE instead. which is of course, entirely different.......NOT

[Tired of Waiting]

Nope.

There is no money until someone borrows. You have made the classic mistake of thinking that the money is there before someone asks to borrow it.

It isn't.

We start with nothing - £0

(...)

OK Injin. If you say so.

I really have to go now, sorry, dinner is ready here, and I can tell that Mrs ToW is getting annoyed. 'Til another day.

[onesmallstep]

this is called monetisation..a pile of receipts against a pledge of security.

something the FED said it hasnt done..its done QE instead. which is of course, entirely different.......NOT

trouble is, the real value of that security is tending to zero.

[Bloo Loo]

And a pub landlord came into the game too, since Paul drank the 1£.

This is getting out of hand now.

so the landlord is Off balance sheet?

[Injin]

OK Injin. If you say so.

I say so, and it's the case. Facts don't change.

I really have to go now, sorry, dinner is ready here, and I can tell that Mrs ToW is getting annoyed. 'Til another day.

Have a nice dinner.

[onesmallstep]

Nope.

There is no money until someone borrows. You have made the classic mistake of thinking that the money is there before someone asks to borrow it.

It isn't.

We start with nothing - £0

Bob asks to borow £100 from the bank

The bank adds £100 to it's books, creates £100 from thin air and wants £110 back.

Either bob or the bank go bankrupt next cycle or more borrowing occurs to get the money. It's more debt or total collapse. Brilliant design, sheer evil genius.

But if Bob makes a nice chair and sells it to Pierre for £200 notes, Bob can pay everyone back and make more Chairs and sell them to Hans and Miguelle (if they have any money and if they don't have a preferred supplier). Surely Bob has then added £90 to the nation. (but not the world)

[Tiger Woods?]

Sigh... you can't inflate away state pension liabilities... unless you plan to euthanise everyone at 65.

The olde folks still need feeding clothing and housing.

As someone else pointed out, no they don't. The USSR being a case in point. People just die from poverty.

[Tiger Woods?]

You introduce a policy against old people and they can fight back easily withholding their vote.

In what elections?