!!Why it is all absurd and we should wake up!!

boltneck123

Dryhat,

Could I just ask, how would you describe how the current banking system works?

If you have read any of my posts in this thread then you may see that I am trying to understand exactly how it works and have gotten information from the Positive Money website, I have also read and watched other sources that discuss the same things as their site does.

Is anything that I have watched got any validity in it, what do you think? What is your opinion and view of the current system.

Loughton_Monkey

dryhat wrote: »

....Are you suggesting that a bank only lends money that they already have?

a bank only lends [STRIKE]money[/STRIKE] the value of assets that they already have?

You cannot easily talk about 'money' without defining it.

If we define it as the standard measure of wealth (in, say, £ or $), then money is created and destroyed all day every day.

If I'm a market gardener, I'll buy a few packets of seeds, and plant them. A bit of water, a lot of care and attention, and my audited accounts will show assets of £30,000, being the value of all the tomatoes, which I will sell tomorrow. Having made £25,000 profit, I have created £25k of wealth, because last year I only had £5K, which I spent on seeds and water.

The day after that, 3,000 people will buy these tomatoes for £50K with cash, giving £20K profit to the retailer and scoff the lot! All of a sudden, that's about £45K of wealth (money) destroyed.

The monetary value created every day [by labour adding value to raw materials, and/or digging things out of the ground...] is astronomic. Similarly, the monetary value destroyed every day by consumption and/or depreciation is also astronomic. Probably makes the banks look like a petty cash tin.

If I take the example above and tell you that I borrowed the £5K from the bank, and paid them £500 interest, then they aren't 'creating' this £500 out of thin air. They are simply taking it out of the £25 that I created.

Labour creates money. Consumption destroys it. Banks swish it about. Bean counters count it.

I can't see any fundamental problems with this.

boltneck123

Loughton_Monkey wrote: »

a bank only lends [STRIKE]money[/STRIKE] the value of assets that they already have?


Labour creates money. Consumption destroys it. Banks swish it about. Bean counters count it.

I can't see any fundamental problems with this.

I understand this.

When everything is consumed, what then? There is only so much matter available on Earth that can be used. Growing food, converts matter into another form i.e. the food. This is eaten and thus we can live and create more humans to eat it. Then the next round of plants grown has to be larger to support the new population, taking more mineral to grow into plants and so on and so forth.

If there was an infinite amount of matter, then our current system could go on and on and on (there potentially is infinite matter, but we would require advanced space travel to procure more resources - not guaranteed to happen before it is to late)

dryhat

boltneck123 wrote: »

Dryhat,

Could I just ask, how would you describe how the current banking system works?

If you have read any of my posts in this thread then you may see that I am trying to understand exactly how it works and have gotten information from the Positive Money website, I have also read and watched other sources that discuss the same things as their site does.

Is anything that I have watched got any validity in it, what do you think? What is your opinion and view of the current system.

The current system is corrupt, broken and unfit for the current age.

"Positive money" have correctly recognised fractional reserve banking as the root cause of this failure and hence the situation we now find ourselves in. Their solutions, while not perfect, are better than what we have now.

The problem is the solutions still rely on a central authority to administer the system, which could eventually lead to different corruption from a different set of politicians.

And they don't like Bitcoin. Which is a bit like IBM not liking the internet in1990 or whenever.

Different people around the world with different problems and the their problems have the same root. The only way we can build a better world is for ordinary people to unite and recognise what we have in common and bring about change on our own terms.

That might never happen.

But until then, we have Bitcoin.

boltneck123

Ok thank you Dryhat,

Prior to me finding the information on the Positive Money website, I have been and still am concerned about the rate of consumption. It does not take a genius to realise that there is only so much available. This is what prompted me to look into how the current economic system runs, and I decided to look into how the financial crash occurred.

I have to admit that I am not 100% convinced when it comes to what I have learnt from the Positive Money website, however I lean towards it more and more. The current system, in principal works, only if however there is unlimited resources available to permit growth. Which I see as it's flaw and ultimately what will bring it crashing down around us. However, I don't think any significant change will take place until it comes crashing down, for good, because people are complacent and happy to go on as long as their lives are fine (which seems to be on the whole, the majority).

This debate could go on for ages and ages, I will still take part, but I don't think I can add anymore, I need to learn more.

Loughton_Monkey

boltneck123 wrote: »

I understand this.

When everything is consumed, what then? There is only so much matter available on Earth that can be used. Growing food, converts matter into another form i.e. the food. This is eaten and thus we can live and create more humans to eat it. Then the next round of plants grown has to be larger to support the new population, taking more mineral to grow into plants and so on and so forth.

If there was an infinite amount of matter, then our current system could go on and on and on (there potentially is infinite matter, but we would require advanced space travel to procure more resources - not guaranteed to happen before it is to late)

Even without man's active intervention, life has existed for billions of years, and man for quite a few hundreds of thousands...

Growth of crops, aided by naturally occuring sunlight and water, has sustained 'life' so far. Plants grow. Animals eat them. Man eats both. All of this is renewable.

Of course the rate at which we dig oil, coal, or fell trees is probably unsustainable in the long run but maybe not if solar power etc. is efficiently harvested. All of this is really another debate, but man can/will always be sustainable, even if it means going back to live in caves and become hunter gatherers.....

Rightly or wrongly, we tend to measure our wealth in "stuff". Basic food and clothes are relatively minor in the economy. A few quids worth of iron ore, carbon, etc. is [by human labour and man made machines] turned into cars at £30K a pop. Tiny amounts of sand and rare earth metals suddenly becomes a £400 Android phone.

More specifically, a bit of space, plus some sand, cement, plastic and copper can - with a bit of labour - become bricks and then a "house". The bean counters measure it's value as £250K rather than the £3,000 value of sand and other really 'raw' materials. Supply and demand is working.

If you think through the scenario of all the material running out, then this wouldn't happen overnight, but quite slowly. The same 'market forces' and financial systems we have today would still operate. Petrol would cost £25,000 a gallon. Car production would be 10,000 per annum worldwide... and eventually we'd all be in the caves (as above). But I can guarantee that the same financial/value system - including supply & demand - would operate exactly the same. Just at a totally different level.

dryhat

Imagine you had a car that did 50 mpg and filled it with a gallon of petrol that cost £5 a gallon
You then drive the car 50 miles from home until you run out of petrol.

How much would it cost you in manpower to pay one/two/three whatever people to push that car home? More than £5?

CLAPTON

if we 'over' exploit the real resources of the planet has nothing to do with the monetary system

if we run out of food it doesn't matter whether we use bitcoins, gold, fractional banking or coconut shells, we are going to die or at least drastically reduce in numbers

boltneck123

Loughton Monkey,

If you are happy for the human race to consume itself back into caves then you probably don't care about the future of our race.

For every human in existence = less resources = higher demand for resources left. Is it something like up to 60% of a human body is made of water? Every person born takes water out of the ecosystem, not good if there is so much taken out that animals have nothing to drink and die, then we are left with no meat.

Granted this seems like it would take years, hundreds, possibly thousands of years to happen, we will all be long dead and it wont be our problem right? But I would be pretty pi33ed if I was alive in 1000 years and historians told me that we live in such a baron world because of greedy consumers from the 20th and 21st centuries.

Of course technological advancement will aid us, but there is simply not going to be enough room for us if the population doubles, triples, quadruples. Shall we clear more land to create space, then what happens when there are no plants or tress to generate our oxygen supply. The current trajectory of the human race is wrong, we may survive, we may still exist in many years to come, but it wont be a very nice existence for those people.

dryhat

CLAPTON wrote: »

if we 'over' exploit the real resources of the planet has nothing to do with the monetary system

if we run out of food it doesn't matter whether we use bitcoins, gold, fractional banking or coconut shells, we are going to die or at least drastically reduce in numbers

That's right.

Rising poulations and increasing consumption does not "add up" and is unsustainable.