$this->bbcode_second_pass_quote('Ludi', 'Y')ou don't own it if you're still making payments on it! The bank owns it and you are buying it from them! You only own part of it (the principal of the mortgage which you have paid off)!
What the hell?
PeakOil is You
Americans' hallucinated net worth
Re: Americans' hallucinated net worth
by pablonite » Thu 24 Dec 2009, 14:13:19
This is the bizarre part, money is debt!
hhttp://www.hasslberger.com/economy/money.html
$this->bbcode_second_pass_quote('', 'C')redit money versus debit money
Today, when money is created, it is created in the form of credit for the banks, and is issued in the form of debit to whoever takes the loan, private citizen or government. Of course the debt must be repaid, the money is considered to be "the bank's money", and of course for that reason we must pay interest. I call that debit money and I have already pointed out that this debit money is the cause of much — if not all — of our economic suffering.
Credit money, on the other hand, does not have these drawbacks. The money should be issued and be given — yes, given not as a loan, but as a rightful share in the development of the economy, to each and every citizen. When money gets created, it was not the banks that worked for it, but the people, and so quite rightfully, the people should become the owners of the money once it is issued.
I dunno, there are millions of articles and videos like this out now. We are all completely ignorant of where money comes from and that looks to have been by design. Money is important, so how come you can ask 1000 people on the street "Where does money come from?" and maybe one might have the correct answer, the other 999? "Da Goovernmint?".
Oh well, gettin' there
-
pablonite - Tar Sands
- Posts: 723
- Joined: Sun 28 Sep 2008, 03:00:00
Re: Americans' hallucinated net worth
by CrudeAwakening » Thu 24 Dec 2009, 21:44:42
Pablonite
The sad truth is more complex than that article suggests.
Every time the government spends money, money is created debt-free. Yes, hard to believe isn't it? This has always been the case, and is no different today, despite the fact that various self-imposed rules have been put in place to prevent governments from spending with too much abandon.
Government spending adds to the total of bank reserves in the system, putting downward pressure on the overnight (fed) funds rate. The constituency of people who prefer to see monetary policy control the direction of the economy, at the expense of fiscal self-determination, insist that the government borrows back much of it's spending (popularly known as "funding the debt", a misnomer) in order to allow the central bank to maintain control of its target short term interest rate. In other words, government borrowing is not required in order to conduct fiscal policy, but is a tool to enable the central bank to successfully conduct monetary policy with non-zero interest rates. The government can continue to spend without borrowing, but this would put short term interest rates at zero (unless interest is paid on bank reserves, another issue).
When the government spends money into the economy, the financial equity position (financial assets - financial liabilities) of the private sector is increased. This is in stark contrast to what happens when people borrow from banks, where no net financial assets are created, although real assets may be created, depending on how the borrower spends the new deposit. In other words, government spending can help to repair the balance sheets of the private sector. This is what is occurring now, the only problem is that the balance sheets that are being repaired are those that belong to the people and institutions who screwed things up in the first place. Notice how there was always money available to fund the bail outs, but now that the top end of town have received their dues, there is suddenly talk of getting back to balanced budgets and tightening belts. The sad fact is that government has the ability to create debt free money, but it has been captured by special interests who have hijacked it's potential to pursue the public good for their own ends.
Whenever you hear someone say "the government does not have enough money for such and such a program", this is a political statement, and has no relation to the operational reality of the spending abilities of a sovereign government. The government can afford anything that is for sale, and is only limited by the real resources available. The financial straightjacket that the requirement of a "fully funded deficit" produces is entirely self-imposed, and speaks to the modern day capture of government by largely neoliberal interest groups.
I could go on about how taxes don't fund government spending either, but that's enough for today.
The sad truth is more complex than that article suggests.
Every time the government spends money, money is created debt-free. Yes, hard to believe isn't it? This has always been the case, and is no different today, despite the fact that various self-imposed rules have been put in place to prevent governments from spending with too much abandon.
Government spending adds to the total of bank reserves in the system, putting downward pressure on the overnight (fed) funds rate. The constituency of people who prefer to see monetary policy control the direction of the economy, at the expense of fiscal self-determination, insist that the government borrows back much of it's spending (popularly known as "funding the debt", a misnomer) in order to allow the central bank to maintain control of its target short term interest rate. In other words, government borrowing is not required in order to conduct fiscal policy, but is a tool to enable the central bank to successfully conduct monetary policy with non-zero interest rates. The government can continue to spend without borrowing, but this would put short term interest rates at zero (unless interest is paid on bank reserves, another issue).
When the government spends money into the economy, the financial equity position (financial assets - financial liabilities) of the private sector is increased. This is in stark contrast to what happens when people borrow from banks, where no net financial assets are created, although real assets may be created, depending on how the borrower spends the new deposit. In other words, government spending can help to repair the balance sheets of the private sector. This is what is occurring now, the only problem is that the balance sheets that are being repaired are those that belong to the people and institutions who screwed things up in the first place. Notice how there was always money available to fund the bail outs, but now that the top end of town have received their dues, there is suddenly talk of getting back to balanced budgets and tightening belts. The sad fact is that government has the ability to create debt free money, but it has been captured by special interests who have hijacked it's potential to pursue the public good for their own ends.
Whenever you hear someone say "the government does not have enough money for such and such a program", this is a political statement, and has no relation to the operational reality of the spending abilities of a sovereign government. The government can afford anything that is for sale, and is only limited by the real resources available. The financial straightjacket that the requirement of a "fully funded deficit" produces is entirely self-imposed, and speaks to the modern day capture of government by largely neoliberal interest groups.
I could go on about how taxes don't fund government spending either, but that's enough for today.
"Who knows what the Second Law of Thermodynamics will be like in a hundred years?" - Economist speaking during planning for World Population Conference in early 1970s
-
CrudeAwakening - Tar Sands
- Posts: 834
- Joined: Tue 28 Jun 2005, 03:00:00
Re: Americans' hallucinated net worth
by OutOfGas » Fri 25 Dec 2009, 22:26:21
My advice is to pay off all debt; especially your home.
It feels so good to have zero debt.
If possible , always pay cash when you purchase personel property items.
Americans need to learn to live on less and be frugal.
It feels so good to have zero debt.
If possible , always pay cash when you purchase personel property items.
Americans need to learn to live on less and be frugal.
- OutOfGas
- Peat
- Posts: 152
- Joined: Sat 21 Mar 2009, 19:31:45
Re: Americans' hallucinated net worth
by jdmartin » Sat 26 Dec 2009, 10:45:07
$this->bbcode_second_pass_quote('OutOfGas', 'M')y advice is to pay off all debt; especially your home.
It feels so good to have zero debt.
If possible , always pay cash when you purchase personel property items.
Americans need to learn to live on less and be frugal.
It feels so good to have zero debt.
If possible , always pay cash when you purchase personel property items.
Americans need to learn to live on less and be frugal.
Actually, if you knew when the market was going to hyperinflate (and it's coming for sure at some point) or completely disintegrate, the smartest thing would be to buy a shitload of stuff with today's dollars because you'd either have double the less worth dollars tomorrow, or things would be completely destroyed and you wouldn't worry about paying it back anyway. Of course, you'd want to buy useful things which doesn't really include granite countertops or skiing trips to Aspen. The problem, of course, is being able to time the complete disintegration of the economy.
Thus, I tend to agree & live the way you suggest. Actually I use a cash back credit card for all my regular purchases, pay the balance in full every month and collect that check. I'm reverse-engineering the credit card cycle. Yeah, the merchant's paying the cost, and so am I through higher prices, but since this paradigm isn't going to shift any time soon it's at least a way of helping recover some of my costs.
After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.
-
jdmartin - Heavy Crude
- Posts: 1272
- Joined: Thu 19 May 2005, 03:00:00
- Location: Merry Ol' USA
Re: Americans' hallucinated net worth
by pablonite » Sat 26 Dec 2009, 14:34:21
$this->bbcode_second_pass_quote('CrudeAwakening', 'T')he sad truth is more complex than that article suggests.
No argument here.
It also seems to be a global parasite that is selling off public assets into the hands of the private sector at an alarming rate in the last 10 years. Where I grew up, in the heart of suburbia, public money built the 407 toll highway at huge cost and then proceeded to lease it to an offshore multinational for hundreds of years at what anyone would consider - a bargain!
I'll have to digest your post a bit more but I will admit to be hung up on the workings of monetary systems for a bit too long and seem to be ignoring some other factors...
I was watching Rupert in Collapse the other night and he did bring up the incredible expansion of money since oil came on to the scene. It's intersting.
-
pablonite - Tar Sands
- Posts: 723
- Joined: Sun 28 Sep 2008, 03:00:00
