The XYY Man Posted July 23, 2011 Author Share Posted July 23, 2011 Oh, man, you've just made my day. I've wanted to know this too, for years. The question that everybody wandered about, but nobody was brave enough to ask. Haha. I haven't a clue, mate. The Chinese? Tib Well you just made my day too, 'cos I thought I was the only one who didn't understand, and was too scared to ask for fear of looking stupid... Been thinking about it and suddenly Switzerland popped into my (hungover) head. Nobody ever f*cks with them - Even Hitler went round them rather than through them. Lots of the rich and famous live there, and many actors you thought died years ago AND they've got that mad "hadron" thing that cost squillions and can apparently suck the whole world into some kind of Doctor Who sh1t - if you believe David Icke and his mates. Switzerland - that must be the answer... XYY Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted July 23, 2011 Share Posted July 23, 2011 We (Britain) borrow money and owe loads out. So do all the European countries. And so do America. And so does just everyone else as far as I can find out.So just who the fk do we all owe this money to...? Pension funds and people with saving accounts mostly.The question is "did the money exist before we borrowed it?" I think the answer is no.Oh god the MCLs have got in again.When the govt wants to borrow it creates treasuries (bonds). These are made out of thin air. However this isn't the magic bit anymore than your promise on a contract to pay back a loan made by a lender with interest. The magic bit is where the banks "buy" the bond i.e. lend money to the govt in exchange for this bond. Because treasuries are (more or less) AAA and treated by the financial system as cash equivalent, the Bank can lend into existence the full required sum to the govt and in holding the treasury on its books has a balanced book. Asset and liability matched, with no need to create unbacked or fractional bank credit.Can someone shut the door, the MCLs keep getting in, and they are making this forum a laughing stock. Quote Link to comment Share on other sites More sharing options...
Setantii Posted July 23, 2011 Share Posted July 23, 2011 (edited) OK, here we go.... We (Britain) borrow money and owe loads out. So do all the European countries. And so do America. And so does just everyone else as far as I can find out. So just who the fk do we all owe this money to...? I've heard about goverment borrowing since I was a small boy, and yet at 46 I still don't know who it is who lends out all this cash. Is there some pan-galactic Provident agent who comes knocking on the door of 10 Downing Street every Friday...? Please can someone explain - In very, very simple terms if that's possible - 'cos I'd really like to understand.... Thanks in advance, XYY This link might help - For example, every country in the world suffers from a massive and constantly increasing national debt. Britain has a national debt that is fast approaching £400 billion. Canada's debt has reached $560 billion and Germany's now exceeds 500 billion deutschmarks. So are these poor countries? No more so than Japan with a debt equivalent to two trillion dollars or America with a national debt now in excess of five trillion dollars. Since the poorer nations are crippled by their indebtedness to international lending institutions and foreign banks, the overall picture is of a world suffering acute and ever worsening insolvency. But this is really quite illogical and absurd... The question almost asks itself. If all the nations of the world are in debt, who are they in debt to? http://www.cfoss.com/grip.html Edited July 23, 2011 by Setantii Quote Link to comment Share on other sites More sharing options...
winkie Posted July 23, 2011 Share Posted July 23, 2011 " We are all in this together " is some consolation......a massive debt negotiated reset has to be on the cards otherwise be born into debt borrow further debt a die indebted...... Quote Link to comment Share on other sites More sharing options...
Guest spp Posted July 23, 2011 Share Posted July 23, 2011 " We are all in this together " is some consolation......a massive debt negotiated reset has to be on the cards otherwise be born into debt borrow further debt a die indebted...... But debt = control So is a reset in the best interest of the controllers? Quote Link to comment Share on other sites More sharing options...
Injin Posted July 23, 2011 Share Posted July 23, 2011 Pension funds and people with saving accounts mostly. Oh god the MCLs have got in again. Can someone shut the door, the MCLs keep getting in, and they are making this forum a laughing stock. So you think money really does grow on trees or something? Quote Link to comment Share on other sites More sharing options...
winkie Posted July 23, 2011 Share Posted July 23, 2011 But debt = control So is a reset in the best interest of the controllers? ....A controller can only be allowed to be a controller for as long as we allow them to control. Quote Link to comment Share on other sites More sharing options...
AteMoose Posted July 23, 2011 Share Posted July 23, 2011 (edited) Your borrowing it from the future...... I borrow the money now on the confidence that I will be able to borrow money in the future to pay you back to the money I am borrowing now. This produces inflation and constantly falling value in currencies around the world... You missed the threads on Fractional Reserve Banking? Its the reason why you should borrow some money to invest to keep up. Edited July 23, 2011 by AteMoose Quote Link to comment Share on other sites More sharing options...
GordonBrownSpentMyFuture Posted July 23, 2011 Share Posted July 23, 2011 Well you just made my day too, 'cos I thought I was the only one who didn't understand, and was too scared to ask for fear of looking stupid... It's almost four hours since I posted the Money Masters video. What did you make of it? You understand now, yes? Quote Link to comment Share on other sites More sharing options...
easy2012 Posted July 23, 2011 Share Posted July 23, 2011 Oh dear, I still don't understand.... maybe I'm a bit thick, but specifically WHO do we owe the money to. One helpful f'ker said China - that could be correct for all I know, but I thought they were all peasants and we were supposedly the rich countries. So is RBS / Lehman rich or poor? If you walk into their office, you certainly think they are very rich... but are they? Surely if one country is lending all the others money and charges them all interest, then that country should be dead rich compared to all the rest of us. I always thought America was the richest country, but people on here talk of them defaulting leading to me getting even more confused. A rich country is one that has huge productive capacities that can provide more stuffs and services to its citizens and others. America problem - there is a slight difference between unable to pay and unwilling to pay... (Greece is the former, while US is the later). But then, even a rich guy can make promises more than what it can possibly deliver. Quote Link to comment Share on other sites More sharing options...
tricksters Posted July 23, 2011 Share Posted July 23, 2011 Oh, man, you've just made my day. I've wanted to know this too, for years. The question that everybody wandered about, but nobody was brave enough to ask. Haha. I haven't a clue, mate. The Chinese? Tib "Why everyone owes everyone and no one can pay" by John Lanchester. (Waterstones). Exposes the jaw dropping craziness of the global financial system. Quote Link to comment Share on other sites More sharing options...
Take Me Back To London! Posted July 23, 2011 Share Posted July 23, 2011 Quite. Quality of question: 10/10 Method of asking: 2/10 Attention Grabbing 11/10 Quote Link to comment Share on other sites More sharing options...
plummet expert Posted July 23, 2011 Share Posted July 23, 2011 (edited) OK, here we go.... We (Britain) borrow money and owe loads out. So do all the European countries. And so do America. And so does just everyone else as far as I can find out. So just who the fk do we all owe this money to...? I've heard about goverment borrowing since I was a small boy, and yet at 46 I still don't know who it is who lends out all this cash. Is there some pan-galactic Provident agent who comes knocking on the door of 10 Downing Street every Friday...? Please can someone explain - In very, very simple terms if that's possible - 'cos I'd really like to understand.... Thanks in advance, XYY The answers on here have not dealt with quantitive easing. Apart from real borrowing, where bonds are sold to be repaid at a stated date and often repaid by issuing more new ones, there is QE. That is where the govt pretends it's repaying it's borowing by redeeming bonds. The B of E simply makes an electronic credit appear in their account these days and pays it off with that! If there is not enough actual sterling notes in circulation then they just print them. That is why gold lovers believe paper currency is all baloney. It's pretend wealth unless backed by an equivalent hard asset like gold which actually exists alongside it in a vault. Not linking most major currencies to anything real is actually the source of todays problems - started 40 yrs ago. All such currencies have eventually collapsed throughout history. The European Central Bank is now engaged in nothing more than issuing bits of paper to Greece, buying up its unrepayable bonds and the ECB does not really have this money. So we just move the debt to a different place and pretend all is OK. In fact IT IS DEFAULT. THE GREEKS HAVE DEFAULTED AND THE REST WILL FOLLOW. THE MARKETS WILL NOT HAVE IT FOR LONG! IR's in bond markets may go up over the next few weeks for all the PIGS and then what will the ECB do? Print more bonds? Pretend some more? See joke I found here on bond repayment - second or third article I think called 'debt reduction' .... http://benstreetbooks.wordpress.com/ Edited July 23, 2011 by plummet expert Quote Link to comment Share on other sites More sharing options...
erranta Posted July 23, 2011 Share Posted July 23, 2011 (edited) First you need to understand the two-tier UK money system. Also that when the UK government borrows money by auctioning its IOU's (gilts) through the DMO (Debt Management Office) it borrows broad money that someone else in the past has already borrowed into existence. Debt upon debt. Here's a post I made on another thread which I hope helps: The phrase 'rent-a-currency' indicates that the circulating means of exchange must be borrowed into existence before it can be used. It cannot exist without corresponding debt to those who issued it. So the 'rent' in 'rent-a-currency' refers to the unavoidable background interest charges draining back to the issuer-lenders of the debt-based currency. Contrast this with a currency that is issued debt-free by a public body (i.e. the seigniorage accrues to the public purse) and that is spent into persistent circulation on stuff for the common good. This debt-free currency may of course, once spent into circulation, be lent and borrowed at interest among the money users. However, there is no overarching 'rent' on the currency as a whole, there are no special issuer-lenders. The logically and conceptually separate functions of money issuance and commercial money lending are separated also in reality. There is no good reason why these functions should be inextricably amalgamated as they are now. There are basically three types of money-numbers in the UK system, physical cash, electronic base money and electronic bank credit-money. In addition to these types of money, there are government IOU's (gilts) which can function as pseudo-money at certain points in the whole system (e.g. BoE OMO, QE.) To a good first approximation we can ignore the relatively small amount of physical cash and the limited and circumscribed role of gilts. The pivotal components of the money system for analysis are the (electronic) base money, the leveraged broad money and the relationship between them, which is the focus of the reform. The conventional and official interpretation of the two-tier money system is that the commercial banks provide us with access to the base money by extending credit. The accepted idea is that they facilitate productive investment through their ability to provide funds on demand and that they expand and contract the broad money supply to accomodate the needs of the economy. An alternative interpretation favoured by money reformers is that the provision of our means of exchange has been privatised. The cartel of commercial banks now forms an impenetrable interface between us and the wholly inadequate stock of our publicly issued base money. Our actual day-to-day means of exchange is now almost exclusively the banks' credit-money. The bankers have taken advantage of the electronic revolution to consolidate their control and usurp the provision of the means of exchange. The base money is no longer our means of exchange in any meaningful sense; it is now primarily the means of inter-bank settlement. It is the medium with which the banks keep the score between themselves as they both compete and cooperate to extract wealth from the real economy. Their shared role is to lend to us at interest our essential means of exchange. The stock of electronic base money, supposedly issued by the people, for the people, to use as their means od exchange, now circulates exclusively within the banking system and we, the money users, do not have any direct access to it. The logical structure of the two-tier electronic money system that has gradually developed is absurd. As money users, we should regard the banking and money system as a utility and ask which is the best system that we could organise for ouselves. From this simple utilitarian perspective it is obviously preferable for any cohesive trading community of money users to issue collectively (i.e. publicly for a nation state) and debt-free their own money tokens to circulate persistently within their economy. Why should any supposedly self-determined community of money users have to pay interest to a restricted class of money issuers merely for the existence of a viable means of exchange? PFi is one of the worst. Say £1 Billion normal cash for a new hospital PFi costs us £5 Billion+ over the term plus horrendous, utter rip-off, incremental-accumulating priced maintenance contracts built in for furniture+fittings! I'm sure the City loves setting these multi-billion £££ contracts up - taking huge cuts of cash from a state guaranteed/paid for riskless con, - which should attract the lowest interest payments due to the low risk lending involved! Short termist Politico scamming for idolism & votes - that's all PFi's are! ~They impoverish the next generations of tax payers and (younger generations) end up paying massive Usury interest repayments. PFi should be banned immediately as we have no way of knowing in 25years how the UK would be doing economically and whether we can afford to pay these usury debts back - which is what these present day Govt fekkers are gambling on !! (but they know they will be well out of the firing line in 25yrs - topped up with their golden goodbye funds and gold-plated index linked Govt pensions!) (the UK's Forces are already suffering from PFi borrowing - as their annual Govt payments are cut back year by year the previous PFi spending takes up more of their annual budget - which is why they don't have cash for exercises anymore and troops are confined to base!) Thomas Jefferson "EACH GENERATION MUST PAY IT'S OWN DEBTS" - You have being conned by UK Govt leaders since John Major Govt introduced PFi! Edited July 23, 2011 by erranta Quote Link to comment Share on other sites More sharing options...
Darkman Posted July 23, 2011 Share Posted July 23, 2011 That's a great little video. And yes I'd rather watch a short cartoon than a 3.5hr doc Certainly it had some over-dramatization, but you have take what you need and disregard the rest. The Fed Reserve is a private bank. Never knew that. And the quotes from Thomas Jefferson about private banks & debt were fascinating. Recommended viewing! Quote Link to comment Share on other sites More sharing options...
The XYY Man Posted July 23, 2011 Author Share Posted July 23, 2011 (edited) It's almost four hours since I posted the Money Masters video. What did you make of it? You understand now, yes? Ain't had chance yet mate, but I am gonna have a look. Thanks for the link - I am seriously interested in this and will watch the vid, just as soon as Mrs XYY gives me the rest of the afternoon off... XYY EDITED TO ADD: Thanks to everyone who has contributed answers/videos/books/ to my post - If I've not answered it's only because I need some time to take it in and study some of the suggested material and not because I'm an ignorant Northern tw*t...!!! [Actually, on reflection I am an ignorant Northern tw*t,... ] Edited July 23, 2011 by The XYY Man Quote Link to comment Share on other sites More sharing options...
plummet expert Posted July 23, 2011 Share Posted July 23, 2011 How does QE differ from the King making tally sticks which are then spent into the economy and lauded by Bill the Shill? EDIT: In fact in some ways I prefer QE to the credit money creation process as operated by the banks. I think the fact that base money has fallen by such a large proportion of our money supply from about half to c.3% today has unknown effects to the authorities, such as propensity to default. Indeed, it may only be by reversing that trend to having more base money that we may be able to get back to more 'normal' rates in the long run. It's a good point. There is a very real danger that lending has taken on an electronic aspect altogether. The leverage of it all is incredibly out of control. I do fear we are a bout to lose 30 years worth of rises in living standards. Quote Link to comment Share on other sites More sharing options...
erranta Posted July 23, 2011 Share Posted July 23, 2011 (edited) That's a great little video. And yes I'd rather watch a short cartoon than a 3.5hr doc Certainly it had some over-dramatization, but you have take what you need and disregard the rest. The Fed Reserve is a private bank. Never knew that. And the quotes from Thomas Jefferson about private banks & debt were fascinating. Recommended viewing! Westie World 4U Westie - "a Highland Terrier" Translates as Masonic 'Fascist' (WW) World for you The Red Shield design is an exaggerated "Swiss" Escutcheon also known as a 'Bouche' The curled up shield tops were for resting lances during jousting. Such escutcheons are known as a bouche. The mouth is correctly shown on the dexter side only, as jousting pitches were designed for right-handed knights. Heraldic examples of English a bouche shields can be seen in the spandrels of the trussed timber roof of Lincoln's Inn Hall, London. (Also Middle Temple, Inner Temple and Gray's Inn) "No room @ the Inn" + "kicked all the money lenders out of the Temple" - think the Elites are piss-taking out of the Bible - or not? Bible - piercing the side of Christ with a lance by Roman Soldier! The CAR-toon - a G_lancing blow in the side? Edited July 23, 2011 by erranta Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 23, 2011 Share Posted July 23, 2011 A bond is issued by a government...Its called a gilt edged bond as its promise is as real gold. It is backed by the future tax take of the Government. A financial institution with readies can "monetise" the bond. If it has then run out of readies, it can monetise the bond with another loan from another bank....and so the bond rolls around the world. The Bonds value is therefore the result of a peoples efforts at wealth creation. Money we have in our pocket is first brought into being by US, with interest, to pay US for our efforts. The borrowing therefore comes from US, and back onto US. without the duracell US, there is no money, no economy, no wealth. Shame WE cant decide how much we should be borrowing and for what purposes. Quote Link to comment Share on other sites More sharing options...
Darkman Posted July 23, 2011 Share Posted July 23, 2011 Westie World 4U Westie - "a Highland Terrier" Translates as Masonic 'Fascist' (WW) World for you The Red Shield design is an exaggerated "Swiss" Escutcheon also known as a 'Bouche' The curled up shield tops were for resting lances during jousting. Such escutcheons are known as a bouche. The mouth is correctly shown on the dexter side only, as jousting pitches were designed for right-handed knights. Heraldic examples of English a bouche shields can be seen in the spandrels of the trussed timber roof of Lincoln's Inn Hall, London. (Also Middle Temple, Inner Temple and Gray's Inn) "No room @ the Inn" + "kicked all the money lenders out of the Temple" - think the Elites are piss-taking out of the Bible - or not? Bible - piercing the side of Christ with a lance by Roman Soldier! The CAR-toon - a G_lancing blow in the side? And in English? Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 23, 2011 Share Posted July 23, 2011 OK, here we go.... We (Britain) borrow money and owe loads out. So do all the European countries. And so do America. And so does just everyone else as far as I can find out. So just who the fk do we all owe this money to...? I've heard about goverment borrowing since I was a small boy, and yet at 46 I still don't know who it is who lends out all this cash. Is there some pan-galactic Provident agent who comes knocking on the door of 10 Downing Street every Friday...? Please can someone explain - In very, very simple terms if that's possible - 'cos I'd really like to understand.... Thanks in advance, XYY ..a lot of it is cross borrowing /investing between countries....I'll buy yours ..if you buy mine... Quote Link to comment Share on other sites More sharing options...
Britney's Piers Posted July 23, 2011 Share Posted July 23, 2011 (edited) We owe it to ourselves, after it has been through a roundabout trip through bureaucracy and the parasite financial system where bonuses and interest are skimmed off the top. AIUI if you wanted a bus pass then you (A) would send money to the bus company B and then they would send a bus pass from B to A and that would be done. In order to get a "free" bus pass You (A) must pay tax to HMRC B, while also paying into a pension fund C, high street bank D and other investments E. C, D, and E would also all send money to B, but since B is not getting enough money then it would issue bonds which it would then take to the investment bank F. The bonds would move from B to F, and then money would move from F to B. F then breaks the big chunk of bonds into smaller chunks of bonds and moves them to C, D and other assorted funds E and rich people G and money moves in the opposite direction. Foreign governments H would then buy some using money they get from running a similar hoopla in their own territories. B can then send money to the bus company (I), then (I) finally sends a bus pass to A. Now A has to keeping sending money back to B who can send it to C, D, E, G, and H on a regular basis for the lending money to B (via F), and after paying massive bonuses to traders and investment bankers and funds managers and civil servants and support staff, and interest payments, and everything else involved in this process the bus pass now costs about a million pounds. Edited July 23, 2011 by Britney's Piers Quote Link to comment Share on other sites More sharing options...
The Spaniard Posted July 23, 2011 Share Posted July 23, 2011 How does QE differ from the King making tally sticks which are then spent into the economy and lauded by Bill the Shill? Tally sticks were a unitary money system. As far as I know, there was no general use of promises of tally sticks as a means of exchange. QE by contrast operates in our two-tier money system. Almost all the gilts purchased by the BoE were bought from non-banks. The result for such purchases was that equal nominal amounts of base and broad money were created. QE therefore strengthened the grip of the rent-a-currency banks by inflating the base money supply proportionally far more than it inflated the broad money supply. It reset the leverage ratio between base and broad money. Quote Link to comment Share on other sites More sharing options...
A.steve Posted July 23, 2011 Share Posted July 23, 2011 We (Britain) borrow money and owe loads out. So do all the European countries. And so do America. And so does just everyone else as far as I can find out. So just who the fk do we all owe this money to...? I'll try to answer that... two phases: 1. The money is owed by the country to the bond-holders. The bond-holders bought their bonds using money every bit as real as that we use to buy beer or doughnuts. Pension funds are significant holders of bonds - rich individuals may hold bonds independently of such managed investments. The bond holders are ordinary people - though they are skewed towards certain affluent demographics. 2. The bit you're missing is that one can borrow almost the full face value of reputable bond - and spend that money without being forced to sell the bond. This means, if you have one government bond with a yield of 5%, say - you'll be able to borrow short-term against your bullet-proof collateral for, say, 4%... and buy another bond with 5% yield to get a return of 6% on your capital... and, of course, you're then free to repeat this and increase returns further. It's foolproof as long as short-term borrowing is cheaper than long-term borrowing... and there's a liquid market for bonds so as to make it trivial to repay short-term debts... and there's no risk that the bonds might default. So... the refined answer is that a significant proportion of bond-holders are likely those with access to cheap short-term credit... as this will allow them to build more leveraged portfolios than other investors. From a broad perspective, any bonds held on balance sheets in this way - while owned by the bond-holder - actually are indirectly owed to the short-term financiers of those balance sheets... essentially, to banks... who can make short-term loans against robust capital at near zero cost. It would be very interesting to find an analysis of bond-holders for sovereign debt... but I doubt it will ever be publicly available information. Quote Link to comment Share on other sites More sharing options...
Guest spp Posted July 24, 2011 Share Posted July 24, 2011 We are not printing money! It is much worse. We Print Bonds – Not Money Quote Link to comment Share on other sites More sharing options...
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