AuthorTopic: Money & Wealth: Part I  (Read 14261 times)

Offline luciddreams

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Re: Money & Wealth: Part I
« Reply #30 on: March 27, 2013, 06:51:44 PM »
Damn Bot...your a damn inspirational bot blogger aren't you.  And a Ken Wilber plug :emthup:  I spent a lot of time reading Wilber in my late teens early 20's. 

Your point about history is spot on.  But you'll start another Christian debacle trying to get them to see that point.  How much energy has gone into trying to prove Christianity with apologetics?  When it comes down to the Bible, the great transmission of Christianity, having to be written by divine intervention and believed on faith.  Why do you need to try and prove faith with apologetics?  It doesn't make any sense.  Faith doesn't care about apologetics...otherwise it wouldn't be faith.

Shit...what did I just do :D  Talk about starting a Christian debacle.  Fortunately Ashvin doesn't pay me any attention anymore :laugh:

But my original point is that, Bot, you are a very inspirational thinker.  I felt my spiritual mind expanding when I read your last comment.  I don't feel that often these days. 

Offline RE

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Money & Wealth: Part II
« Reply #31 on: April 03, 2013, 01:40:28 AM »
Money & Wealth: Part II by Diner Mod and Webzine Editor Monsta666 now UP on the Diner Blog as a Feature Article.

A lot to digest for the Newby, but great detail here from Monsta.

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Offline Eddie

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Re: Money & Wealth: Part II
« Reply #32 on: April 03, 2013, 06:35:14 AM »
Great concise article with perfect conclusions.

One small point. Monsta666 said:

Re-hypothecation Is the process where the creditor resells the collateral pledged by the borrower.

What is sold is NOT the collateral, but the debt instrument (the loan). This does usually give the new creditor the same claim against the collateral as the original lender...although we know recent times have seen massive problems in this area because the banks cut a lot of paperwork corners during the bubble years of the US housing boom.
What makes the desert beautiful is that somewhere it hides a well.

Offline monsta666

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Re: Money & Wealth: Part II
« Reply #33 on: April 03, 2013, 02:22:48 PM »
Great concise article with perfect conclusions.

One small point. Monsta666 said:

Re-hypothecation Is the process where the creditor resells the collateral pledged by the borrower.

What is sold is NOT the collateral, but the debt instrument (the loan). This does usually give the new creditor the same claim against the collateral as the original lender...although we know recent times have seen massive problems in this area because the banks cut a lot of paperwork corners during the bubble years of the US housing boom.

Thanks for the pointer. I will edit the article to correct for this mistake. On this note, if you spot any further errors please do not hesitate to call them out; I do plan to show this to people outside the Diner so the more accurate it is the better. I will also say that while the video I posted in the article does explain fractional reserve banking well I do not fully agree with its conclusions about the Fed. The subtle implication in that video is the Fed main culprit for the inflation we have seen in the last 100 years when I would say this inflation is primarily a product the fractional reserve system. What is also omitted from the video is the fact the free banking era was far from stable and was characterised by constant financial crisis and even depressions. The Fed did actually achieve its official objectives and that was to create greater financial stability. Since its formation in 1913 the frequency of financial crisis has clearly declined.

Now ironically the lack of financial crises may have created more inflation in the sense that since there are less crisis there have been less deflationary events. This creates its own problems but the worst is the fact that this greater stability means the banks power can grow more quickly as they are no longer periodically pruned before getting too large for their own good. With all that said the fed or any other central bank is bad news as it is another apparatus for centralised control of people so for that reason it should be eliminated but I don't think people should be under illusions the era of free banking will be more honest or stable. Likely it will be the exact opposite at least if the same system of fractional reserve and debt based money systems are maintained.

Offline RE

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Money & Wealth: Part III
« Reply #34 on: April 09, 2013, 03:03:55 AM »
Money & Wealth: Part III by Diner Mod and Webzine Editor Monsta666 now UP on the Diner Blog as a Feature Article.

Monsta loads on the Tables, Graphics & Vids in this one to HAMMER DOWN. Takes some issue with Damon Vrabel also, which is entertaining.  :icon_mrgreen:

Note:  I do have some disagreement with Monsta's hypotheticals on why the Debt based money system took control, and will get round to detailing them, but not tonight. Late already after all the damn Management Tasks I have these days on the Diner. Blah.

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« Last Edit: April 09, 2013, 03:13:53 AM by RE »
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Offline Eddie

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Re: Money & Wealth: Part III
« Reply #35 on: April 09, 2013, 05:37:23 AM »
Took a quick run through first thing before I had coffee. On first pass it looks really"fair and balanced". No, really. I'm not with Damon on the sinfulness of usury, either.

An interesting thought question for me revolves around coping strategies(or...now that we understand money, how are we going to use that knowledge?), and more specifically if inflation fighting strategies from the past are likely to work over the short term future. I'm a fan of Dan Amerman. I've seen him speak once, and read his books (except for the ones on derivatives), and he makes a strong case for real estate ownership, something a lot of deflationists think is crazy.

He also makes a case for gold, but mainly as a magic bullet to fight HI, if that were to occur. He doesn't like gold as an investment or as an inflation hedge.

There is no doubt that the banks have created a scenario that,in the past, would have been as inflationary as hell...but now, they don't really seem to be able to kick start their inflation machine. But they really, really want to....
What makes the desert beautiful is that somewhere it hides a well.

Offline g

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Re: Money & Wealth: Part I
« Reply #36 on: April 09, 2013, 06:05:41 AM »
Quote
There is no doubt that the banks have created a scenario that,in the past, would have been as inflationary as hell...but now, they don't really seem to be able to kick start their inflation machine. But they really, really want to....
Depends on where you are looking Doc, suggest you look at the Dow making new highs while the world is in depression, gasoline isn't exactly cheap either.
Rome wasn't built in a day. From where we stood at the bottom after the great crash, it is my view the inflation creators are on a slow and deliberate path to becoming very successful in their endeavors, beyond even their wildest expectations.

Offline Eddie

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Re: Money & Wealth: Part III
« Reply #37 on: April 09, 2013, 07:03:17 AM »
Let me be a little more specific.

I agree that we have inflation already in some areas, like food and fuel. But we are pretty flat on inflation in the things we own, and real estate (in much of the country anyway) could potentially go into freefall again, imho.

In the past, what has driven across the board inflation has been nominal wage increases driven bv high employment. It looks like that is over for good. And our current inflation seems mostly tied to rising fuel costs, which can't be blamed completely on money printing.

And demographics, that mightiest of all forces, seems to favor asset deflation.

Not trying to hijack the thread.I know the/inflation/deflation discussion is an old one.

What makes the desert beautiful is that somewhere it hides a well.

Offline g

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Re: Money & Wealth: Part III
« Reply #38 on: April 09, 2013, 07:10:04 AM »
Let me be a little more specific.

I agree that we have inflation already in some areas, like food and fuel. But we are pretty flat on inflation in the things we own, and real estate (in much of the country anyway) could potentially go into freefall again, imho.

In the past, what has driven across the board inflation has been nominal wage increases driven bv high employment. It looks like that is over for good. And our current inflation seems mostly tied to rising fuel costs, which can't be blamed completely on money printing.

And demographics, that mightiest of all forces, seems to favor asset deflation.

Not trying to hijack the thread.I know the/inflation/deflation discussion is an old one.

With all due respect you are again ignoring the stock and bond markets which have been pumped up by the trillions and have created much purchasing power for those that own them. You will also kindly note they are the ones buying the real estate now, hundreds of homes at a clip by vulture funds.

Offline Eddie

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Re: Money & Wealth: Part III
« Reply #39 on: April 09, 2013, 07:16:25 AM »
Point taken. And as you see it, then, this real estate investment by the rentier class would be enough to support that market?
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Offline g

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Re: Money & Wealth: Part I
« Reply #40 on: April 09, 2013, 07:52:46 AM »
Quote
Point taken. And as you see it, then, this real estate investment by the rentier class would be enough to support that market?

Correct Doc, especially where they borrow funds in unlimited amounts at 2% and the rest of the world is shut out. I fully expect their control to now move into the taking over of the residential housing market, where they will squeeze and torture the renter in ways unimagined. Two month leases, responsibility for repairs, payment of taxes, pay up or move to TENT CITY.  :-[

Offline monsta666

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Re: Money & Wealth: Part I
« Reply #41 on: April 09, 2013, 10:08:01 AM »
Here are my views on what I think is causing inflation. Quantitative easing has for the most part caused limited inflation. QE mainly inflates various asset classes and has had a limited effect on the general economy. QE causes inflation in various asset classes in two ways. First the very act of buying bonds or mortgage backed securities causes prices of those assets to rise as it creates artificial demand. The second way QE causes price rises is through indirect measures. The combination of QE and low interest rates means the returns from saving accounts/time deposits AND bonds is very low, below inflation in fact. This forces investors into higher risk products such as stocks and this drive towards stocks is what is causing inflation in that market. It should be noted the Fed is forcing investors to take greater risk to seek normal returns.

Finally real estate is also inflated because of various accounting gimmicks not to mention housing stock is kept artificially low in the market by keeping various housing either in a state of foreclosure or by allowing people to live in their homes despite not paying mortgage repayments. If all houses were foreclosed upon quickly then this would lead to a large amount of houses entering the market which would depress prices. The banks don't want that so they play games.

I do think the general inflation in the real economy is a result of rising energy prices and this is what is causing food/energy bills to rise. These factors are however very dependent on where you live. Food prices in Britain have been rising, and while the rate of inflation is not high it is consistently above the rise of wages. At least from official statistics food prices are increasing by around 3% per annum whereas wage increases have been around 1%. I guess the story could be largely the same in the US although it is hard to know as there doesn't seem to be official statistics on food inflation. On that note, we got to remember that nearly all government stats are massaged to make things look better than they are. If they say inflation is 3% I would bet the real figure is probably closer to 7%. 7% is a doubling in price every 10 years and from cursory observations of prices now and in the past this seems to be the case over in England. Have prices for most goods doubled in the last 10 years?

Offline DoomerSupport

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Re: Money & Wealth: Part III
« Reply #42 on: April 09, 2013, 11:10:48 AM »

An interesting thought question for me revolves around coping strategies


Same here - for all topics.  That's why I'm not getting engaged in the religious arguments here, even though they are fascinating. I do see a lot of religious argument here but unless they impact "doom" I don't care.

While I may get distracted by topics of interest to me personally, I'm more interested in how the information we come across impacts our daily lives.


Offline DoomerSupport

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Re: Money & Wealth: Part I
« Reply #43 on: April 09, 2013, 11:16:36 AM »
Quote
Point taken. And as you see it, then, this real estate investment by the rentier class would be enough to support that market?

Correct Doc, especially where they borrow funds in unlimited amounts at 2% and the rest of the world is shut out. I fully expect their control to now move into the taking over of the residential housing market, where they will squeeze and torture the renter in ways unimagined. Two month leases, responsibility for repairs, payment of taxes, pay up or move to TENT CITY.  :-[

Unless the surplus rental units available push the rental levels down, thus undermining the model of "buy-to-rent" and cutting the feet out of this second housing bubble.  The rent stream is looking like a good 'investment' with regular 'returns' to the big players, who need somewhere to park the money they they are getting from selling crap MBS to the buyer of last resort: the Fed. 



Offline RE

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Money & Wealth: Part IV
« Reply #44 on: April 25, 2013, 02:11:00 AM »
Money & Wealth: Part IV by Diner Mod and Webzine Editor Monsta666 now UP on the Diner Blog as a new Feature Article.

This series as a whole covers most of the topics for the Uninitiated into the world of Collapse Dynamics, and is a good one to Link to with Newby friends who are in the beginning stages of Waking Up from the Dream.

Also kudos to Monsta on his overall Layout work on the HTML level.  Good looking articles overall on this level.  Nice not to have to do cleanup work on layout for a change.  :icon_mrgreen:

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