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How Can The Debt Be Repaid......


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So how does a business raise finance? start knocking on peoples doors asking for cash?

Why does a business need cash in the first place?

You are asking me to solve a problem that only exists because of banks in the first place.

How does the holder of large cash deposits look after their money hire a security guard to stand outside their house?

Why on earth would you need lots of cash to make a house? Only slaves todebt buy houses, free humans build them with their neighbours help or inherit them from their parents.

Using money is one thing directing capital is another.

Capital is real world goods. It's completely needed for capitalism to work.

I believe we need banks what we have now is an abuse of a reasonable system.

Would you need banks without fiat currency - i.e. if a situation existed where your money constantly grew in purchasing power due to growth instead of declining constantly due to inflation?

SOomany things exist that do not need to, but habit makes us think that they should.

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Why does a business need cash in the first place?

You are asking me to solve a problem that only exists because of banks in the first place.

Why on earth would you need lots of cash to make a house? Only slaves todebt buy houses, free humans build them with their neighbours help or inherit them from their parents.

Capital is real world goods. It's completely needed for capitalism to work.

Would you need banks without fiat currency - i.e. if a situation existed where your money constantly grew in purchasing power due to growth instead of declining constantly due to inflation?

SOomany things exist that do not need to, but habit makes us think that they should.

You are a hypocrit for even using a computer or the internet, this technology would not have been available in your lifetime under your punitive rules.

Businesses need capital to research and turn good ideas in to being. Money is only a means of exchange those with a surplus of money are at liberty to exchange that medium for commodities or lend it to someone who can make better use of it.

Are you suggesting to a return to barter? as this would imply that all suppliers would have to be neighbours with their customers.

edited to add:

If money always grew in purchasing power nobody would ever spend it we would just get hoarding only a currency that maintained its purchacing power would be neutral and act as a true medium of exchange.

Edited by gravity always wins
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You are a hypocrit for even using a computer or the internet, this technology would not have been available in your lifetime under your punitive rules.

I don't have any rules, punitive or otherwise. I seek to remove the ones we have.

Businesses need capital to research and turn good ideas in to being. Money is only a means of exchange those with a surplus of money are at liberty to exchange that medium for commodities or lend it to someone who can make better use of it.

People require resources to invent new things, I quite agree. There is no need for a medium of exchange to acquire the bulk of a humans needed resources unless someone (hello banksters!) has annexed said raw materials and you have to go to them cap in hand to get access.

Are you suggesting to a return to barter? as this would imply that all suppliers would have to be neighbours with their customers.

No, I am suggesting a free market. Let people decide what they find valuable in their own estimation. I doubt it will be pictures of the queen on flimsy paper, somehow.

edited to add:

If money always grew in purchasing power nobody would ever spend it we would just get hoarding only a currency that maintained its purchacing power would be neutral and act as a true medium of exchange.

Not at all. People spend money on things they find valuable, worthwhile and worth more than the money.

Most people (as you can clearly see from your day to day life) do not give two curly turds about money - they want the experiences, items etc that money can bring but not the money itself. Saving some of todays items to be able to create more items in future is very important and a monetary system should ideally reflect that bias. Left to a free market, it will.

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People require resources to invent new things, I quite agree. There is no need for a medium of exchange to acquire the bulk of a humans needed resources unless someone (hello banksters!) has annexed said raw materials and you have to go to them cap in hand to get access.

OK lets take the copper inside your computer say from Chile how does it get inside your computer without a medium of exchange?

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don't tell me a computer is not part of a humans neede resource - rice fom china maybe?

I said the bulk of a humans needed resources do not require money.Food and shelter do not require a medium of exchange as a rule, until the banksters ans statists step in to annex raw materials.

Last time I checked PC's weren't needed by humans to exist. (Although I am one to talk, eh?)

While there are advantages to exchanging goods and services with others, there are also disadvantages.

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I said the bulk of a humans needed resources do not require money.Food and shelter do not require a medium of exchange as a rule, until the banksters ans statists step in to annex raw materials.

Last time I checked PC's weren't needed by humans to exist. (Although I am one to talk, eh?)

While there are advantages to exchanging goods and services with others, there are also disadvantages.

An interesting argument lets take houses it is possible for a community to build houses for each other but with the division of labour the ones who are best (or willing) just build houses and the rest provide another service as the division continues the supplier and consumer are further away from each other thus the increase in the demand for a medium of exchange.

If the community decided to build its house then members would have to forgo their normal incomes for a period but why if they already have a house would they want to join in and what could the person who wanted the house built offer them in exchange if not a promise to recompense them at a later date an iou or they would have had to save some commodity that the others may need if they felt inclined at that point in time.

If they decided they wanted a different form of recompense for their effort then the homeowner would have to exchange these commodities for the ones desired at that point in time - much better to have a universal medium of exchange.

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I said the bulk of a humans needed resources do not require money.Food and shelter do not require a medium of exchange as a rule, until the banksters ans statists step in to annex raw materials.

Last time I checked PC's weren't needed by humans to exist. (Although I am one to talk, eh?)

While there are advantages to exchanging goods and services with others, there are also disadvantages.

That's Stephen Hawking ******ed then

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No, I am suggesting a free market. Let people decide what they find valuable in their own estimation. I doubt it will be pictures of the queen on flimsy paper, somehow.

They will simply clamour for another universal medium of exchange which can they exchange for any commodity. What a crazy world if people had to constantly store and accumulate a variety of commodities just to act as barter.

Life is much simpler if you can exchange your effort for a medium of exchange that is universally accepted by all.

Paper is cheap whats the problem? Why does the medium of exchange have to be of value? it rather defeats the object of a medium of exchange.

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An interesting argument lets take houses it is possible for a community to build houses for each other but with the division of labour the ones who are best (or willing) just build houses and the rest provide another service as the division continues the supplier and consumer are further away from each other thus the increase in the demand for a medium of exchange.

Is there any way that you can imagine under such a system where you would be providing 25 years of labour in exchange?

In fact, if what you are saying is true (which it is, I agree) house should be getting cheaper and cheaper year on year, every year.

If the community decided to build its house then members would have to forgo their normal incomes for a period but why if they already have a house would they want to join in and what could the person who wanted the house built offer them in exchange if not a promise to recompense them at a later date an iou or they would have had to save some commodity that the others may need if they felt inclined at that point in time.

A house takes what? A few months to put up and then people can live in it (with care) for 200-300 years if not longer. (Not the same people, obviously.) If you can't trade with anyone you can make a servicable dwelling that will keep the rain off in a few hours and something more complicated than that solo in a few months. A modern house would take a reasonably fit person about 12-18 months to make. There only expense during this time is likely to be food and water, both of which do not cost a great deal.

If they decided they wanted a different form of recompense for their effort then the homeowner would have to exchange these commodities for the ones desired at that point in time - much better to have a universal medium of exchange.

If it's better and people are free to choose it, then it will happen. If it isn't better then people won't. (hint : it isn't better and we can tell this because there has to be a law passed before people will use it).

All I am saying is give people the choice.

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Is there any way that you can imagine under such a system where you would be providing 25 years of labour in exchange?

IMO I think this an abuse of the system.

In fact, if what you are saying is true (which it is, I agree) house should be getting cheaper and cheaper year on year, every year.

A house takes what? A few months to put up and then people can live in it (with care) for 200-300 years if not longer. (Not the same people, obviously.) If you can't trade with anyone you can make a servicable dwelling that will keep the rain off in a few hours and something more complicated than that solo in a few months. A modern house would take a reasonably fit person about 12-18 months to make. There only expense during this time is likely to be food and water, both of which do not cost a great deal.

land reform would help

and a return to the original building societies (you could set one up if you wanted I believe there is no law against it).

If it's better and people are free to choose it, then it will happen. If it isn't better then people won't. (hint : it isn't better and we can tell this because there has to be a law passed before people will use it).

All I am saying is give people the choice.

I thought I had made reference to this earlier in a court the debtor is forced to repay the debt by way of legal tender laws. You are free to trade barter your services today if you want to people are doing this across the country right now. Have you joined in if not why not.

Govts can't tell people what to use as a medium of exchange - the medium has to be accepted first that is to say it has to be in issue first and accepted as such by the people if the govt told us tommorow we had to use dollars we simply couldn't because there arent any in circulation it could force debtors in a court of law to repay a sum in dollars if that was the law. But we would be unable to comply with the law if people felt the dollar was not a good medium of exchange there would be no demand for dollars. If the bank of issue starting to retract sterling and only issue dollars very little pounds would circulate back to the bank of issue.

You have a choice right now

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IMO I think this an abuse of the system.

It's inherent in the design of the system.

land reform would help

Aye.

and a return to the original building societies (you could set one up if you wanted I believe there is no law against it).

I thought I had made reference to this earlier in a court the debtor is forced to repay the debt by way of legal tender laws. You are free to trade barter your services today if you want to people are doing this across the country right now. Have you joined in if not why not.

Told ya already - I am out of the system.

Govts can't tell people what to use as a medium of exchange - the medium has to be accepted first that is to say it has to be in issue first and accepted as such by the people if the govt told us tommorow we had to use dollars we simply couldn't because there arent any in circulation it could force debtors in a court of law to repay a sum in dollars if that was the law. But we would be unable to comply with the law if people felt the dollar was not a good medium of exchange there would be no demand for dollars. If the bank of issue starting to retract sterling and only issue dollars very little pounds would circulate back to the bank of issue.

You have a choice right now

No, you have to use fiat currency because of taxation.

i.e. you use it or you go to jail.

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I also meant taxation when I wrote debtors which obviously must be paid with whatever the law dictates.

If you are outside the system you have no taxes to pay.

That all depends on who you ask.

(And you need to add licences, fees, insurance etc etc to that list.)

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  • 2 weeks later...

So,

Having thought about this for a bit,...

if you go to the bank and say, Excuse me, but I've been thinking. Can you provide me with evidence of where the money came from that you loaned to me, then they'll say sorry, no can do, as they actually just magicked out of thin air. I then say, well, since you can't prove the money came from anywhere, then you made it up. It doesn't exist. I don't think I need to pay it back since you just magicked out of the air. They'll then say "whoops. you got me", and remove all the pretend '000s.

Ask for Proof... but banks are legally entitled to do this, are they not? What proof could prove the money was not real to begin with?...

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Injin, Would you mind posting the questions you asked the bank to avoid paying your debts off here? I'd like to give it a shot :P

Just out of interest, how do you get internet access without any bank account/cards etc.

Thanks

Graham

Edited by daddyg
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The total money supply in notes and coins is around £60billion, of which around £55bn is held by banks. All the other money is PC numbers and only exists on bank PC screens.

The rest is in wallets and teapots etc up and down the country.

If the banks stop giving out both types in new loans, how can anyone repay the old debts?

If all the money in the world is lent to 1 person at interest then they can't pay it back. If it is lent to 2 people at interest then one of them can pay it back. Your question should be "If the banks stop giving out both types in new loans, how can everyone repay the old debts?" To that I'd respond "Why should we care?" Not everyone can be rich but we allow people to work and be poor. Not everyone can pay off their debts and we let them work and be debtors.

-=-=-

Your point about the time and effort taken to build a house is an interesting way of valuing a property but you've left some things out. I'll postulate on the time taken to buy a property with debt rather than build one without. Obviously we don't work solely to pay off the mortgage, so I'd cut the 25 years by at least half, and the debt stays the same whilst the system that gave us that debt helps to inflate our wages (hopefully) so we can probably halve it again. About 1/3 of the price of a house is materials, which would be required in either scenario, so take that figure down to 66%. We're now at about 4 years via debt and 12-18 months without but the debt-funded house comes complete with land whereas in your idealised scenario I think the options, rather than buying the land, would be

a) Build in the middle of nowhere so you're not in anybody's way

B) Spend a good few months, if not longer, convincing people in the place you want to live that you're a good chap and just the sort they want living near them, so they don't knock the house down whilst you're putting it up

c) Build in the village you were born because everyone already knows you're a good chap and wants you around

Obviously the relative costs of each scenario differ from person to person. I'm a relatively introverted person who was born somewhere sh*te and likes the hustle and bustle of a populated area. For me the debt-funded house is the way to go. I'm also rubbish at DIY.

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Going back to the original question, there may be a way to do this. Suppose the bank crashed and its mortgage book is taken on by the receiver. I believe they are obliged to obtain the best price they can for the assets. So if you have a 100k mortgage and another institution is offering 50p on the £1 for the mortgage book, you offer 51p for your mortgage. So you are buying back your 100k mortgage for 51k. Thus the debt goes away.

They may wish to offer the mortgage book as a whole, yet it is still individual mortgages. CDO's are a virtual grouping construct, the asset is the mortgages. If the receiver didn't offer to sell them back to the mortgagee then he could be accused of failing to get the highest price. Anyone will pay up to 100% for their own mortgage which is likely to be higher than others would offer.

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Going back to the original question, there may be a way to do this. Suppose the bank crashed and its mortgage book is taken on by the receiver. I believe they are obliged to obtain the best price they can for the assets. So if you have a 100k mortgage and another institution is offering 50p on the £1 for the mortgage book, you offer 51p for your mortgage. So you are buying back your 100k mortgage for 51k. Thus the debt goes away.

They may wish to offer the mortgage book as a whole, yet it is still individual mortgages. CDO's are a virtual grouping construct, the asset is the mortgages. If the receiver didn't offer to sell them back to the mortgagee then he could be accused of failing to get the highest price. Anyone will pay up to 100% for their own mortgage which is likely to be higher than others would offer.

Not so. The receiver is duty bound to get the "best" offer but that is not necessarily the most money as he must take in to account who can actually complete. He does not have to break down each individual mortgage and offer this to any seperate person (in this case the houseowner). Buyers of the "book" take the rough with the smooth which is why they pay only a fraction of the actual asset price. No receiver worth his salt would do what you suggested and offer the debt to the property owner. Sorry but fact.

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If economics is a science it can answer this question.

If I am the central bank and I control all money, and I lend person A £1m and Person B £1m and charge them 5% interest a year how do person A and B get the £50,000 pound to pay me the interest?

If I only accpet my currency £ where does the money come from?

Now person A may do person B a job and charge them £50,000 they can then pay me all my money back plus interest. Person B now only has £950,000 and is £100,000 short?

The only possible way Person B can pay the bank back is if I increase the money supply and may lend a Person C who's just turned up £1m. Person B then does work for Person C and charges £100,000. Person C is now £150,000 short of the money they owe the central bank.

It appears my thoughts are not alone on how this works.

So it appears that the only logical way the central bank can get there money back is to continually create new money and lend it out to the original lenders and ever new lenders.

However the central bank rates is currently 5% and money supply has been growing at 10%+ so where has this money been going???

It appears to be a circular system which needs the banks to continually increase the money supply and create new lending to get it's money back from past lending.

Has money supply growth ever been zero?

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