Banks robbing people?

[Bromden]

Does such a thing even exist?

 

[Mage246]

If it's based on something like gold or an artificial currency like BTC, sure. The benefit always goes mostly to the banks. They also assume the risk if people default.

 

[Bromden]

The risk being the bother of claiming and selling the deliquents' house. Big loans do need cover, so the bigger risk is at the people. And if I loan my money to the bank in a high risk loan to get an outlandish 10% interest, and the bank ****s it up, they will only say "you knew the risks" and give me the finger.

 

[Bromden]

There are numerous kinds of investments available for the common folks too, with various risk and interest rates.

 

[Bromden]

They do supposed to be risky, but what bugs me is the lopsidedness. You have to take a risk if you want more profit than some bones thrown at you, while the banks ask for an interest bordering extortion, while they are backed up by cover you took the money on.

 

[InfernoOfAbyss]

Oh look, Chicken Little is back.

Butthurt? Maybe I offended you than that, my little friend? ))

 

[InfernoOfAbyss]

Yea, it is creating money out of thin air. Soon the bubble will burst.

'Soon'

www.usdebtclock.org with best regards.

 

[InfernoOfAbyss]

He laughs best who laughs last. 

 

[Feragorn]

Yes, let's go back to the gold standard and the gilded age and I can go put on my top hat and grumble about the unwashed masses scrambling for their meager paychecks at my door.

 

[InfernoOfAbyss]

Yes, let's go back to the gold standard and the gilded age and I can go put on my top hat and grumble about the unwashed masses scrambling for their meager paychecks at my door.

That is, you want to say, printing money without control is more modern and the only reason it's better? You do not mind, for example, that the oil price does not depend on the amount of oil on the market, but from speculation on stocks and shares it on the IOUs to buy it, and that the global crisis associated with oil prices, created with the help of speculation with these prices on the stock exchange?

 

[Feragorn]

I have much more contempt for OPEC's price manipulating strategies than the free market mechanisms which determine oil prices. Of course, that implies that we should reduce our foreign energy dependence, which we're doing.

And as to the gold standard, you realize that all the gold ever mined is worth about $6,344,291,634,166 according to OnlyGold.com. No clue how accurate their numbers are, but given that GWP is about $72 trillion, it's close enough to make no difference. Now, that's just GWP, not total world worth. Try stretching that amount of gold to back that much currency. There, I'm assuming that you think the gold standard is a good way to back all world currencies. Even if you limit it to the US, GDP is still twice that value, and total US assets are something like $188 trillion. Source. The same problem crops up. If you back your currency with a hopelessly limited supply of gold, you're still going to have issues.

 

[InfernoOfAbyss]

You pleasantly surprised me, by your competent answer. I do not insist on a gold reserve, but in any case it's better than nothing.

 

[Mage246]

He just demonstrated why it isn't better than nothing.

 

[InfernoOfAbyss]

Wherewith? "Going to have issues" is better then collapse of the economy.

 

[Mage246]

He was putting it mildly. If your supply of gold can't accommodate growth in the economy, then by issues we're talking about either:

A) Your economy can't expand. What this means practically speaking is that while new goods can be brought in to the system, a shortage of currency (especially due to structural inequalities inevitably resulting in small groups controlling most of the money supply) means that people are forced to resort to barter in order to accomplish trade. That in itself must also result in making it very difficult to conduct international trade. So I guess an expanding economy isn't all that likely, anyway.... Which is itself a huge problem.

B) Your currency periodically has to be devalued against gold in order to expand. So periodically everyone who holds currency becomes much poorer. That's a recipe for economic chaos.

 

[Feragorn]

You pleasantly surprised me, by your competent answer. I do not insist on a gold reserve, but in any case it's better than nothing.

"hurr durr nobody knows economics but me"

 

[InfernoOfAbyss]

You're familiar with the law of conservation of energy (E = MC ^ 2)? If yes, then I wonder how you imagine buying resources in exchange for paper, fair? And how long do you think the country selling their natural resources in exchange for paper, it will endure?

 

[Jhessail]

They are not selling natural resources for paper. They are selling natural resources for a value, that doesn't exist outside of financial computer systems. Just like there's not enough gold to represent the virtual value of world economy, there isn't enough cash to represent it either.

Also, E=MC^2 is not conservation of energy. This is:

In physics, the law of conservation of energy states that the total energy of an isolated system cannot change—it is said to be conserved over time. Energy can be neither created nor destroyed, but can change form, for instance chemical energy can be converted to kinetic energy in the explosion of a stick of dynamite.
A consequence of the law of conservation of energy is that a perpetual motion machine of the first kind cannot exist. That is to say, no system without an external energy supply can deliver an unlimited amount of energy to its surroundings.

E=MC^2 is the mass-energy equivalent, a quite different beast:

In physics, mass–energy equivalence is the concept that the mass of an object or system is a measure of its energy content. For instance, adding 25 kilowatt-hours (90 megajoules) of any form(s) of energy to any object increases its mass by 1 microgram.
A physical system has a property called energy and a corresponding property called mass; the two properties are equivalent in that they are always both present in the same (i.e. constant) proportion to one another. Mass–energy equivalence arose originally from special relativity, as developed by Albert Einstein, who proposed this equivalence in 1905 in one of his Annus Mirabilis papers entitled "Does the inertia of an object depend upon its energy content?"[1] The equivalence is described by the famous equation:
E = mc^2 \,\!
where E is energy, m is mass, and c is the speed of light. Thus, this mass–energy relation states that the universal proportionality factor between equivalent amounts of energy and mass is equal to the speed of light squared. This also serves to convert units of mass to units of energy, no matter what system of measurement units is used.

In conclusion, you are dumb and don't know what you're talking about. But that's no news, business as usual for teenaged Russian "patriots".

 

[Sir Saladin]

Once upon a time most people decided that The Law of the Jungle sucks, but now it is gaining poularity again as a bold new concept. So we need treasure, piles and piles of real treasure which can be sat upon.

 

[kurczak]

You're familiar with the law of conservation of energy (E = MC ^ 2)? If yes, then I wonder how you imagine buying resources in exchange for paper, fair? And how long do you think the country selling their natural resources in exchange for paper, it will endure?

The point of export is to import in return. Whether a country sits on a pile of dollars or gold is irrelevant in the big picture. It's the same mercantilist nonsense.