Keep Having To Try Multiple Empty Atms

[the_austrian]

Things aren't real until they are real.

How much is a winning lottery ticket worth?

[Injin]

How much is a winning lottery ticket worth?

How much does a winning lottery ticket add to the money supply?

[the_austrian]

Things aren't real until they are real.

There's nothing unreal about the central bank's commitment to print money (it's what they do best).

[Injin]

There's nothing unreal about the central bank's commitment to print money (it's what they do best).

The money doesn't count towards the supply until it's printed.

There are apparently billions in the banking system, trillions even. That's stacks of paper miles high.

You're seriously telling me a pound would retain it's value if you changed it from numbers on a screen into the real world, where we would all have to wade through fivers to get to the shops?

Edited June 6, 2008 by Injin

[the_austrian]

The money doesn't count towards the supply until it's printed.

There are apparently billions in the banking system, trillions even. That's stacks of paper miles high.

You're seriously telling me a pound would retain it's value if you changed it from numbers on a screen into the real world, where we would all have to wade through fivers to get to the shops?

What can I tell you... Who do you believe? Me or your lying eyes?

[Injin]

What can I tell you... Who do you believe? Me or your lying eyes?

I believe in what is.

[Timm]

(. . .)

If people pulled money from the virtual world into the real world as paper, then it's value would fall catastrophically.

That's right - if we merely changed the form of money from e-money to paper money it would be hyperinflationary, even if we didn't add any more. Why?

Because the price of something is determined by the amount of it there is. Not by the amount of it + what people think there is, not the amount of something + fraudulent transactions that pretend to be it, but by the actual amount. Basically, the screen PC money trades as if it is paper money but doesn't really dilute it's value all that much.

(. . .)

Injin, are you yanking our chains? The above scenario would be massively deflationary. The conversion of debt money to paper money will always be deflationary.

You simply cannot convert all the debt money to paper money, because it does not exist yet. Calling in the debts would result in the destruction of more than 90% of the current nominal value of the debt money.

[Injin]

Injin, are you yanking our chains? The above scenario would be massively deflationary. The conversion of debt money to paper money will always be deflationary.

You simply cannot convert all the debt money to paper money, because it does not exist yet. Calling in the debts would result in the destruction of more than 90% of the current nominal value of the debt money.

It's in the sig -

Credit isn't money.

It's credit.

[boynamedsue]

If 2-3% of people woke up and demanded cash the whole thing would be dead by dinnertime. That's right folks, our monetary system can be shut down by a news report, a rumour or some half decent graffiti in the right place.

Which is why, I suspect, this thread was started.

Edited June 6, 2008 by boynamedsue

[Guest Steve Cook]

If 10% of depositros withdrew their funds, then the banks would need to replace it by printing more in order to maintain liquity ratios on the rest of the deposits.

If people pulled money from the virtual world into the real world as paper, then it's value would fall catastrophically.

That's right - if we merely changed the form of money from e-money to paper money it would be hyperinflationary, even if we didn't add any more. Why?

Because the price of something is determined by the amount of it there is. Not by the amount of it + what people think there is, not the amount of something + fraudulent transactions that pretend to be it, but by the actual amount. Basically, the screen PC money trades as if it is paper money but doesn't really dilute it's value all that much.

Why would it? It's only in "existence" because of a double counting fraud.

It's like if my fly by night brother in law promises 10,000 new motorbikes to people when he only has a few hundred, some smoke and some mirrors. If he ever has to provide those bikes then the price of them will crash catastrophically (or he'll go bust and get tarred and feathered).

I can see what you are getting at injin.

However, I am not so sure about your proposition that credit is not money.

If money is, at its most fundamental level, simply a universal means of exchange, then anything that serves this purpose can be deemed as money. Well, electronic credit can be used as a universal means of exchange and so should also be classified as money.

That's the problem, though, isn't it. Non CB lenders can effectively lend "money" (in the form of credit) into existence.

Isn't what the CBs are doing at the moment, amounting to replacing all of the defaulted credit with actual CB issued "money" in order that the banks do not go insolvent? I think the effect of this is not to cause inflation. It is simply to stop a massive deflation of the money supply as a result of all the defaulted debts.

To be sure, the CBs may well overshoot and end up causing inflation by overcompensating for the debt defaults. However, the primary intention is to stop a massive deflation of money.

Bernanke has as good as admitted that.

Edited June 6, 2008 by Steve Cook

[piece of paper]

I can see what you are getting at injin.

However, I am not so sure about your proposition that credit is not money.

If money is, at its most fundamental level, simply a universal means of exchange, then anything that serves this purpose can be deemed as money. Well, electronic credit can be used as a universal means of exchange and so can should also be classified as money.

That's the problem, though, isn't it. Non CB lenders can effectively lend "money" (in the form of credit) into existence.

Isn't what the CBs are doing at the moment, amounting to replacing all of the defaulted credit with actual CB issued "money" in order that the banks do not go insolvent? I think the effect of this is not to cause inflation. It is simply to stop a massive deflation of the "money supply as a result of all the defaulted debts.

To be sure, the CBs may well overshoot and end up causing inflation by overcompensating for the debt defaults. However, the primary intention is to stop a massive deflation of money.

Bernake has as good as admitted that.

I think that Injin's starting point is that only legal tender is money. Legal tender being the only type of 'money' that must be accepted in the settlement of debts.

Perhaps I'm wrong.

p-o-p

[Injin]

I think that Injin's starting point is that only legal tender is money. Legal tender being the only type of 'money' that must be accepted in the settlement of debts.

Perhaps I'm wrong.

p-o-p

And in the popular imaginstion too.

When push comes to shove, I don't think account statements and PC screens are going to calm the crowd at the banks door.

Do you?

[piece of paper]

And in the popular imaginstion too.

When push comes to shove, I don't think account statements and PC screens are going to calm the crowd at the banks door.

Do you?

No. I'm with you on this one. I was rather surprised during the NR run that people seemed to be happy walking away with a cheque. Perhaps they were drawn on other banks.

I'm interested in your views on legal tender v credits and the differences between statements and bills. I do get a bit p1ssed off with the mystery that you seem to like to shroud these things in.

I like cash, not because it doesn't go through my books, more because it doesn't belong to the bank for four days. I'm even considering charging in Sovereigns, just in case CGNAO's predictions creep up on us rather quickly.

Why don't you start a thread divulging all (well most of it) to let your theories (knowledge) take a testing?

p-o-p

[Guest Steve Cook]

And in the popular imaginstion too.

When push comes to shove, I don't think account statements and PC screens are going to calm the crowd at the banks door.

Do you?

You're correct, injin, they are not..

However, the point I am trying to make is that E money created through lending it into existence is no more or less a fiction than CB-issued paper fiat that is minted into existence prior to lending to the banks. It's true enough that the popular public psychology holds that paper fiat is somehow a more real version of money. This, though is an illusion. They are both as real (or fictional) as each other in the sense that they can both be used to exchange for goods and sevices as long as we all hold the collective agreement (or delusion) as to their exchange value.

Edited June 6, 2008 by Steve Cook

[Injin]

No. I'm with you on this one. I was rather surprised during the NR run that people seemed to be happy walking away with a cheque. Perhaps they were drawn on other banks.

Lucky they did, eh?

I'm interested in your views on legal tender v credits and the differences between statements and bills. I do get a bit p1ssed off with the mystery that you seem to like to shroud these things in.

The difference is that no one has to accept one, but people have to accept the other. (However, I even broke this rule...it's a knack I suppose.)

I like cash, not because it doesn't go through my books, more because it doesn't belong to the bank for four days. I'm even considering charging in Sovereigns, just in case CGNAO's predictions creep up on us rather quickly.

Why don't you start a thread divulging all (well most of it) to let your theories (knowledge) take a testing?

p-o-p

I really should tell "my story" you are quite right.

[Injin]

You're correct, injin, they are not..

However, the point I am trying to make is that E money created through lending it into existence is no more or less a fiction than CB-issued paper fiat. It's true enough that the popular public psychology holds that paper fiat is somehow a more real version of money. This, though is an illusion. They are both as real (or fictional) as each other in the sense that they can both be used to exchange for goods and sevices as long as we all hold the collective agreement (or delusion) as to their exchange value.

Yes, but one fiction is built on the other.

The secondary fiction (PC screen money) can fail, but the banksters cannot allow the first one to. It would be the end of them.

[Guest Steve Cook]

Yes, but one fiction is built on the other.

The secondary fiction (PC screen money) can fail, but the banksters cannot allow the first one to. It would be the end of them.

I can agree with this to the extent that E money is an inherently more unstable store of exchange value than paper fiat simply because it is so much more manipulatable, both in terms of speed and magnitude. As we both know though, paper fiat is also manipulatable on the same grand scale, just not at quite the same speed. So, I guess this makes it a bit more stable. But, certainly no more real.

If we track this back all of the away down the rabbit hole, the only real store of exchange value is in the form of an actual useful commodity. For example, wood, iron, oil etc. The trouble with storing your exchange value in this way, though, is the difficulty in exchanging it for items or services that you may want at any one time. So, if you hold your exchange value in iron, for example, you will need to find someone who both has the goods you want and also wants iron in exchange for it. And so we come full circle. It becomes inevitable, in an economy that is at any level above the most simple, that we have in place a universal means of exchange. It is actually quite an advantage to ensure that the medium used for this purpose is of little practical value in and of itself. That way, you will not automatically get deflation of supply of this "money" as it is siphoned off to do "useful" stuff. This is why wood, for example, would make a fairly crappy form of money because people would keep burning it and so cause periodic defaltions.

Hence, it is no surprise that the earliest and most historically consistent form of money has been precious metals such as gold or silver. The trouble with these is that it is precisely because the supply is hard to mainiupulate, that they tend to become inconvenient as a consequence of limitations of supply. To buy a loaf of bread in gold, you would need to pay in a vanishingly small physical quantity of the stuff. And so, we come to the invention of paper fiat. Eventually one that is de-pegged from the gold standard. This though, raises the spectre of CBs playing all kinds of inflationary tricks and so wrecking our capacity to manage our finances because we can no longer rely on how much our money is worth.

Eventually, our economies become so frenetic that even paper fiat become cumbersome. Thus, we move on to e-money with all of it's even more severe frailties than the lower forms of money I have mentioned above.

However, I reiterate, all symbolic forms of exchange, all the way from gold right up to e-money are fictional representations of exchange value. As I said before, the only real exchange value is in the form of an actual base commodity. However, these fictions are absolutely necessary in order for any economy of any level of complexity to function.

I don't really know what I am trying to suggest as an alternative here injin. I guess I am just trying to clarify my thoughts on this subject

Edited June 6, 2008 by Steve Cook

[Injin]

I don't really know what I am trying to suggest as an alternative here injin. I guess I am just trying to clarify my thoiughts on this subject

A fine thing to do and you raise some great points.

Do you think that the general population even knows about the division though?

The problem isn't so much with the fact that it's a fiction but with the fact that it's held in place by lies. People can accept a fiction and use it, they do so every day but to misrepresent is something entirely different, and on this scale.......doomed to eventual failure and utter ruin.

[Guest Steve Cook]

A fine thing to do and you raise some great points.

Do you think that the general population even knows about the division though?

The problem isn't so much with the fact that it's a fiction but with the fact that it's held in place by lies. People can accept a fiction and use it, they do so every day but to misrepresent is something entirely different, and on this scale.......doomed to eventual failure and utter ruin.

I am certain the public do not understand the division, sadly

I also agree, it is destined to eventual failure because of the scale and speed now involved with all of the consequent instability this engenders.

Edited June 6, 2008 by Steve Cook

[MoonliteFlight]

I haven`t noticed a problem with cash machines. This is because I always use my credit card, which gives me 1% off everything I buy. It may not sound like much, but since I got the card, last September, I have "earned" about £400. I visit a cashpoint about every 3 months for some "spare change" to buy cheap stuff, like newspapers and milk. Everything else goes on the card.

So you have spent £40,000 on consumables in the last 9 months?

Edited June 6, 2008 by MoonliteFlight

[Guest Steve Cook]

...Heres for novelty. Try slumming it at the local recycle depo. Its fun. Really. And you meet a better class of punter.

very true...

[Guest Steve Cook]

So you have spent £40,000 on consumables in the last 9 months?

I don't think he can have, to be honest. I think he has done what we are all a little guilty of from time to time, A little embellishment in order to accentaute the argument he is putting forward...

Though, I should say, claiming (indirectly) to have spent 40k on consumables in the last 9 months does seem a little excessive on the old embellishment front....

Edited June 6, 2008 by Steve Cook