2013/12/17 Telmo Menezes <[email protected]> > On Mon, Dec 16, 2013 at 9:02 PM, meekerdb <[email protected]> wrote: > > On 12/16/2013 12:53 AM, Telmo Menezes wrote: > >> > >> On Mon, Dec 16, 2013 at 5:59 AM, meekerdb <[email protected]> wrote: > >>> > >>> On 12/15/2013 4:23 AM, Telmo Menezes wrote: > >>> > >>> > >>> > >>> > >>> On Sun, Dec 15, 2013 at 9:49 AM, Bruno Marchal <[email protected]> > wrote: > >>>> > >>>> > >>>> On 14 Dec 2013, at 23:27, LizR wrote: > >>>> > >>>> I haven't had a chance to watch it, but I do know that banks are > >>>> stealing > >>>> our wealth - as indeed are rich people generally, since "wealth breeds > >>>> more > >>>> wealth" and that more wealth has to be extracted from you and me. > >>>> > >>>> > >>>> > >>>> Money and richness is not a problem. It is the blood of the social > >>>> system. > >>>> > >>>> Money and richness is a problem only when it is based on lies, and > when > >>>> it > >>>> is used to hide the lies and perpetuate them. > >>>> > >>>> Honest money enrich everybody. True, it is slower for poor, and > quicker > >>>> for the rich, but when people play the game "honestly", everyone win, > >>>> and > >>>> poverty regress. > >>>> > >>>> In a working economy, there are few poor. Presence of poverty means > that > >>>> there are stealers and bandits (or war or catastrophes). Accusing the > >>>> system > >>>> and money itself is all benefices for the bandits. It dilutes their > >>>> responsibility and wrong-doing in the abstract. It helps them to feel > >>>> like > >>>> not guilty. > >>>> > >>>> As I said, criticizing the economical system is like attributing to > the > >>>> blood cells the responsibility of some tumor since the blood cells > feeds > >>>> it. > >>>> It hides the real root of the problem, and focus on the wrong target. > >>> > >>> > >>> I agree, unsurprisingly. :) > >>> I also agree with Liz, in that it is clear who is stealing the money. > >>> > >>> The "rich get richer" is a very fundamental phenomenon. Even if we > remove > >>> money from society, it will still happen because it also applies to > >>> social > >>> interactions. The more friends and alliances you have, the more likely > >>> you > >>> are to get new ones. This is the reason why every entrepreneur seeks > the > >>> allegiance of celebrities. It's a more subtle form of currency. > >>> > >>> However, we got trapped into a system that effectively amplifies "rich > >>> get > >>> richer" dynamics. This system is central banking -- since the powerful > >>> have > >>> the capacity to issue fiat money in the form of debt, two things > happen: > >>> > >>> > >>> It doesn't take central banking to make the rich get richer. > >> > >> Yes, that is what I said. My claim is that central banking amplifies the > >> effect. > >> > >>> Ever since > >>> civilization began the rich have been able to get richer just by owning > >>> stuff. For a couple of millenia it was owning land. If you owned land > >>> then > >>> serfs and peasants had to pay you for working the land. Then > >>> merchantilism > >>> added ships to what you could own. Then industrialization added mines > >>> and > >>> oil and factories. Banking and insurance added financial instruments > >>> that > >>> you could own. But it's all of a piece. If you own stuff that you can > >>> rent/lend you're rich and you can get richer. > >> > >> But central banks can print new money. This new money is lent. The > >> more money you have, the more new money the banking system will lend > >> to you. Thus the amplification. Also, the marginal value of money > >> decreases the more you have, so this devaluation and speculation with > >> new money exposes the poor to more risk, while they don't actually > >> have access to the investment opportunities that the rich have. > > > > > > You always refer to "central" banks. But all banks always did this. The > > bank would take 1M$ in deposits and then make 10M$ in loans, depending on > > the fact that statistically only a few depositors would ask for their > money > > at any one time. So they collected interest on 10M$ while only having to > > pay interest on 1M$ (if at all). > > I agree. It is interesting to notice that it is highly illegal if a > private citizen does this, but it is the business model of modern > banks. An advantage of bitcoin is that it removes the need for the > bank as a storage facility.
Bitcoin is not a solution, the first to use the system get richer as the system is adopted in time... new comers don't get a share to enter, they have to buy it with external real accepted currency... it does more looks like a con system, than a faithful replacement to fiat money. Plus bitcoin is inherently deflationist... Quentin > It will still be useful to have security > experts providing safe wallets, but they will not be able to behave as > banks and lend your money. > > We already have pear to pear lending, although it is illegal in many > places. Again, with bitcoin, it will be very hard to regulate against > such behaviours, and I think that is a good thing. > > The current situation is very unfair. We need banks to store our > money, and they get to invest it in ways that we are not allowed. > Then, we don't get any of the profit the bank generates from our own > money. This also amplifies "rich get richer" dynamics. > > > Of course this occasionally resulted in > > "runs" on banks and consequence failure of the bank. Central banks were > set > > up as part of a system to regulate this. The central bank insures > deposits, > > but also the same regulatory system limits the discount rate, i.e. the > > amount of money a bank has to have as a fraction of what it can loan. So > > Central banks exist to *limit* the "printing" of money. > > I guess you buy into the narratives of power more easily than I do. We > have different personalities in that regard. Maybe you're right, but I > don't think you are. > > What I observe is that central banks control the supply of money and > the price of money. This is bound to create an elite that has > incredible power over the rest of us, including power over > governments. > > "Let me issue and control a nation's money and I care not who writes the > laws." > - Mayer Amschel Rothschild > > A simple, straightforward solution in terms of regulation would be to > forbid fractional-reserve banking by default. No central banking > needed. If banks wanted to loan my money, then they would need my > agreement and they would need to share the profits, and I would share > the risk. But this is never on the table. > > In the same vein that politicians tell us that bailing out the big > banks is unfair but unavoidable, but they never comment on why not > bail out the people who's lives have been destroyed by the banks, and > who payed the taxes that make the bailout possible in the first place. > Again, never on the table. > > > And the policy is generally adjusted to try produce small, but positive > > inflation. This is because deflation is considered unstable. Inflation > is > > stable and encourages investment because just holding money loses value. > > Yup, it's the current dogma. Infinite growth. I would argue that if > you want to cut CO2 emissions, this would be a good place to start. > > > > >> > >>> Of course you can also > >>> influence government and governments exist largely to protect your > >>> property > >>> rights. > >>> > >>> > >>> > >>> - The money I have in my pocket is not safe. They can devalue it and > >>> there > >>> is nothing I can do about it. They have a strong incentive to devalue > my > >>> money because they can give the new money they created to their allies, > >>> through sophisticated mechanisms. It is very cleverly disguised, but > it's > >>> still plain old theft; > >>> > >>> > >>> That means you have a strong incentive to invest/spend your money. And > >>> that > >>> applies also to a rich person that has a lot of money - inflation > >>> encourages > >>> him to spend it on something. > >> > >> Right, and this prevents the bulk of the population from escaping wage > >> slavery even though technology could replace labour. > > > > > > The reason technology doesn't allow them to escape is that they generally > > can't buy the technology to replace their labor. When they can, as for > > example farmers do by buying tractors, cultivators, etc, then they > replace > > the laborers they would otherwise employ. This causes the latter to > escape > > wage slavery by being unemployed. > > True, but in other models, like the deflationary model implied by > bitcoin, as the need for human labour contracts, the fees for the > remaining that is necessary increases (in a free market). A good > direction for society would be to reduce the amount of years one has > to work to pay for one's life. Imagine the deal: maybe society doesn't > really need any more physicists urgently, but maybe it needs plumbers. > What if you could work as a plumber for 5 years and then spend the > rest of you life pursuing your own interests? I don't see why we > couldn't create a system with this type of incentive, except that it's > never on the table. Democracy provided for a very limited menu. > Sometimes there's a special, but unlike nice restaurants, you get last > week's meal with some food colouring to pretend it's lobster > casserole. > > > > >> > >>> So one of the reasons for the current > >>> recession is that wealth is very concentrated by inflation is quite > low, > >>> so > >>> corporations and wealthy persons are not motivated to take much risk on > >>> investing their money; they can easily wait and see. > >> > >> I would argue that a deeper reason is that technology made many jobs > >> disappear, but the inflationary economic system we live under cannot > >> accommodate that. > > > > > > I'd say it accommodates that just fine from an economics standpoint. > > If it did we would need to work less years to pay for our lives. > Instead, we have to work more and get less money for it. > > > In the > > U.S. the recession only lasted a year after the mortgage crisis; the GDP > > started back up. BUT unemployment has remained high for three years. > And I > > think you are right that technology is a good part of the reason for > that. > > But the other part is just because many are unemployed and many more are > > concerned about their economic security, consumer spending is low. The > rich > > won't invest in making stuff if they think it will be hard to sell it. > So > > there's a negative feedback - deflationary instability. > > > > > >> > >>> - The more wealthy, who can invest, can leverage their investments by > >>> orders > >>> of greatness. The more money you have, the more you can leverage it (by > >>> effectively creating new "fake" money). The poor are the most > vulnerable > >>> to > >>> the inevitable systemic collapse that a debt-based economy will create. > >>> The > >>> poor implicitly risk their homes and means of survival when the rich > play > >>> the big casino game of leveraged investments, derivative markets and so > >>> on. > >>> > >>> > >>> But that money isn't fake. > >> > >> Yes, maybe a better word is stolen, because it was created by diluting > >> the value of the money in people's banks accounts, but it is then > >> given to other people. > >> > >>> The poor may lose their home which has real > >>> value. And even if they don't lose their home they end up paying > >>> excessively for the money they borrowed to buy it - that's real labor > >>> value. > >>> The rich gain real money, not just fake. All over Southern California > >>> houses whose value dropped and are threatened with foreclosure are > being > >>> bought up for cash. It's not poor people who can pay $500,000 in cash > >>> for a > >>> house. > >>> > >>> > >>> > >>> Bitcoin might solve these two problems. > >>> > >>> > >>> Naah. It's just another medium of exchange. > >> > >> Unlike the existing mediums of exchange after the end of the gold > >> standard, a central authority cannot issue more bitcoins. Bitcoins can > >> only be produced by mining, with a predictable and increasing > >> computational effort, and up to a certain amount. So in some point in > >> the future the last bitcoin will be mined, and that's it. If I own a > >> bitcoin right now, I do not have to fear that it will get devalued by > >> political decisions. Also, it is not possible for a bank to lend > >> bitcoin that it doesn't own or that were lend to it, so there is no > >> amplification effect. > > > > > > That's like going on a gold standard. There's only so much gold. Which > is > > both an advantage, in that is prevents inflation devaluing the gold, but > > also a disadvantage in that there's not enough to support the level of > > international trade. But ultimately trade depends on trust in the > system. > > There's nothing to prevent a bank that owns 1M bitcoins from lending 10M > in > > bitcoin value. It's all numbers in ledgers. > > With bitcoin, why would I risk my money with fractional-reserve > banking when I can store it myself with some strong cryptography, > including backups in services that are much cheaper than banks and > gain no control over it? > > > > >> > >> I'm not saying that Bitcoin is a silver bullet that will solve all of > >> the problems, but I find it hard to argue that it does not prevent > >> inflation by the actions of central authorities and that it does not > >> prevent the ability of the rich to leverage their investments by 1000x > >> like they can do in derivative markets with fiat currency. > >> > >>> Whoever owns a lot of stuff > >>> will still be able to use it to get more - > >> > >> Yes, this is true even without money, as I said before. > >> > >>> without actually producing the > >>> extra value, rather by taking it from those who have little. > >> > >> One advantage of having rich people is that they can tolerate more > >> risk. This allows for the allocation of resources to speculative ideas > >> that could improve everyone's lives in the future. > > > > > > That's fine and companies like H-P and Apple and Google were started that > > way. But some enterprises are too big and risky for private investors. > So > > satellites, vaccination, GPS, the internet, radar,...were underwritten by > > government investment. > > It's hard for me to argue against this because it's circular. The > private sector is not allowed to do certain things under free > competition (as is he case with communications and health care), and > then people argue that the government is needed to do these things. > Maybe you're right, but we don't really know. I think it's worth a > try, but that is not on the table. Also, notice that all of the > above-mentioned innovations were motivated by increasing military > power. Then they had nice externalities for the general population, > but I very much doubt that the government would care if it weren't for > the military applications. I would rather have a slower pace of > innovation and no wars. > > > The problem with rich people is many just inherited their wealth and then > > they grow it just by "renting" it, without contributing anything > actively. > > I agree, this is a problem. However, I cannot think of any way to fix > it that doesn't introduce even more unfairness (because it doesn't > matter what regulations you come up with, a lot of money will buy you > a way around them). You see this with taxes, where the power narrative > is social fairness but the reality is that the middle class ends up > paying all of them. > > > I always find it fascinating when a candidate for the U.S. Presidency is > > asked about his wealth (and most of them are wealthy). He generally > > disclaims any knowledge of how it is managed and says he has put it in a > > blind trust. This always raises the question in my mind, "If you're not > > even managing the money (and you probably haven't for years) why should > any > > of the proceeds go to you? It's just money earning money." > > This is similar to the height of the Roman Empire. I think there are a > lot of similarities between the US and the Roman Empire, especially in > their respective transitions from Republic to Empire. > > "History doesn't repeat itself, but it does rhyme." > -- Mark Twain > > Telmo. > > > > > Brent > > > > -- > > You received this message because you are subscribed to the Google Groups > > "Everything List" group. > > To unsubscribe from this group and stop receiving emails from it, send an > > email to [email protected]. > > To post to this group, send email to [email protected]. > > Visit this group at http://groups.google.com/group/everything-list. > > For more options, visit https://groups.google.com/groups/opt_out. > > -- > You received this message because you are subscribed to the Google Groups > "Everything List" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected]. > To post to this group, send email to [email protected]. > Visit this group at http://groups.google.com/group/everything-list. > For more options, visit https://groups.google.com/groups/opt_out. > -- All those moments will be lost in time, like tears in rain. 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