Inflation Is Theft

[Dale-c]

It is based entirely upon labor.

Where does our national debt come from then?

 

[menageriekeeper]

Oh really Dale, you know where debt comes from. It comes from spending more dollars than a person takes in. Same with the gov. If they spend more money than people pay in taxes, then they have to borrow it. It then becomes "national debt".

Right now it is huge because Bush has been playing world policeman. Clinton had us balanced, but only on paper and what he really meant was that we were bringing in enough tax dollars to pay the interest on all the loans we've taken out over the years.

 

[Dale-c]

Oh really Dale, you know where debt comes from. It comes from spending more dollars than a person takes in. Same with the gov. If they spend more money than people pay in taxes, then they have to borrow it. It then becomes "national debt".

Right now it is huge because Bush has been playing world policeman. Clinton had us balanced, but only on paper and what he really meant was that we were bringing in enough tax dollars to pay the interest on all the loans we've taken out over the years.

Yes, I am quite aware of this fact but where does this money come from?
Where do they borrow it from?
Who had however many trillion dollars to loan us?

It comes from a "Fiat money" money that was produced out of nothing.

In economics, fiat currency or fiat money is money whose purchasing power derives from a declaratory fiat of the government issuing it. It is often associated with paper money unbacked by fixed assets, issued without the promise of redemption in some other form, and accepted by tradition or social convention. Fiat money is called fiduciary money in many languages.
The widespread acceptance of a fiat currency is enhanced by a central authority mandating its acceptance under penalty of law and demanding it in payment of taxes or tribute. Fiat money can be contrasted with alternative forms of currency such as commodity money and private currency.

 

[Hope of Glory]

Where does our national debt come from then?

The same place it came from when we (the world) used gold (and other metals) as a standard. If you spend more than you take in, you go into debt.

Some of that debt results from guns, ammunition, and other wars supplies, some results from Spam (seriously), some results from handout programs such as welfare.

Even if you used the barter system, and you needed more beef than you had grain to pay for it, and the guy let you take it any way, then you would be in debt.

If you owed someone 100 gold dubloons, and you only had 80, guess what? You would be in debt for 20 pieces of gold.

 

[Dale-c]

Here is a little more info. THis time about Fractional reserve banking.
It is quite interesting actually. I have been learning a lot reading about it.

In particular, the investment bankers acted as a ginger group to work for the cartelization of commercial banks. To some extent, commercial bankers lend out their own capital and money acquired by CDs. But most commercial banking is "deposit banking" based on a gigantic scam: the idea, which most depositors believe, that their money is down at the bank, ready to be redeemed in cash at any time. If Jim has a checking account of $1,000 at a local bank, Jim knows that this is a "demand deposit," that is, that the bank pledges to pay him $1,000 in cash, on demand, anytime he wishes to "get his money out." Naturally, the Jims of this world are convinced that their money is safely there, in the bank, for them to take out at any time. Hence, they think of their checking account as equivalent to a warehouse receipt. If they put a chair in a warehouse before going on a trip, they expect to get the chair back whenever they present the receipt. Unfortunately, while banks depend on the warehouse analogy, the depositors are systematically deluded. Their money ain't there.

An honest warehouse makes sure that the goods entrusted to its care are there, in its storeroom or vault. But banks operate very differently, at least since the days of such deposit banks as the Banks of Amsterdam and Hamburg in the seventeenth century, which indeed acted as warehouses and backed all of their receipts fully by the assets deposited, e.g., gold and silver. This honest deposit or "giro" banking is called "100 percent reserve" banking. Ever since, banks have habitually created warehouse receipts (originally bank notes and now deposits) out of thin air. Essentially, they are counterfeiters of fake warehouse-receipts to cash or standard money, which circulate as if they were genuine, fullybacked notes or checking accounts. Banks make money by literally creating money out of thin air, nowadays exclusively deposits rather than bank notes. This sort of swindling or counterfeiting is dignified by the term "fractional-reserve banking," which means that bank deposits are backed by only a small fraction of the cash they promise to have at hand and redeem. (Right now, in the United States, this minimum fraction is fixed by the Federal Reserve System at 10 percent.)

 

[Dale-c]

If you owed someone 100 gold dubloons, and you only had 80, guess what? You would be in debt for 20 pieces of gold.

Thank you for proving my point!

I forgot to add this link that tells more about debt and fractional reserve banking.
PLease read it and then tell me where he is wrong.

 

[menageriekeeper]

Ummm Dale, banks have operated like this for a long time.

It's not that they create money out of thin air, but that they take your money and lend it to others for things like houses or cars and such. This was what got a lot of banks into trouble during the depression. They didn't keep enough in reserve to cover the expect withdrawals. That is why there is a 10 % law on the books and also why we have the FDIC which will supposedly cover up to $100,000 if a bank unexpectedly goes belly up.

Of course, if we don't want to take the risk we could alway bury our gold in the backyard. But then there is this story in scripture about the unprofitable servant who did just that..........

 

[Dale-c]

Ummm Dale, banks have operated like this for a long time.

I understand that and it is common knowledge.
But is it BIBLICAL?

Did you read the link I sent?
Do you really think that this a fair and honest, which is to say Biblical banking system?
Do you think that a banking system NEEDs to be Biblical and honest or can they just do whatever they want?

 

[menageriekeeper]

Yes I read the link and it's clear that the writer's don't care much for our banking system.

But we are back to whether or not scripture provides a clear method for banking and whether that method is the gold standard. There is some stuff in Deut. about lending but it is related to Jewish law. I'll look into it a bit and see what else I can find later on today sometime. (which means I'll do it if I get time)

 

[Dale-c]

Yes I read the link and it's clear that the writer's don't care much for our banking system.

Very clear, neither do I. We are biased for sure. I won't deny that.

But we are back to whether or not scripture provides a clear method for banking and whether that method is the gold standard.

On this point I would say this.
THere is no set rules to just exactly how it must be done.
I do believe God made gold and silver for our use as currency. It is much better than any barter system as it is easily portable and when you have currency, it is something needed by all.

The Bible says that we can't steal and that government is to punish the evil doer.
It also says a false weight and balance is wrong.

So for a Christian, we must look at fractional reserve banking and fiat money from a perspective of what is honest and just.

Is it honest for a bank to create money that they don't have?
To just print it up if they need it, making everyone else's of less value?

Inflation of gold is limited by the labor and amount that miners can find more.
Paper money is virtually infinite and digital money IS infinite.
It can also be manipulated and skewed.

I am not saying that we should go out and start using gold. I don't see how that is possible.
I am only trying to show that we need to know that we are being cheated and lied to.
It will take a revival to get anywhere but "my people perish for lack of wisdom"
What we don't know IS hurting us.

 

[Dale-c]

Here is a little bit from the Wikipedia article on the Federal Reserve

Another criticism of the Federal Reserve is that it is shrouded in secrecy. Meetings are held behind closed doors, and the transcripts are released with a lag of five years. Even expert policy analysts are unsure as to the logic behind Fed decisions. Critics argue that such opacity leads to greater market volatility, as the markets must guess, often with only limited information, about how the Fed is likely to change policy in the future. The jargon-laden fence-sitting opaque style of Fed communication is often called "Fed speak." (see e.g. [14] [15] [16])
Furthermore, the lag in the release of FOMC transcripts, as well as the extremely limited and carefully worded minutes and statement, leads to the public being unaware of the issues of major concern to the Fed, and leaves it with an inadequate understanding of the logic and rationale behind the decisions. Some argue that this is a concerted attempt to keep Congress and the public at arm’s length, but this criticism has not gained much widespread acceptance.

 

[Dale-c]

This is from the Wikipedia article on government debt.

Lendings to a national government in the country's own sovereign currency are often considered "risk free" and are made at a so-called "risk-free interest rate". This is because the debt and interest can be repaid by raising taxes, a reduction in spending, or failing that by simply printing more money. Naturally, this would increase inflation and reduce the value of the invested capital. An extreme example of this is provided by Weimar Germany of 1920s which suffered from hyperinflation due to its government's inability to pay the national debt

 

[Hope of Glory]

Is it honest for a bank to create money that they don't have?
To just print it up if they need it, making everyone else's of less value?

Here is the fallacy of your beliefs: The Fed doesn't exactly make a habit of printing more money with nothing to back it. It's based on a portion of the GDP. Now, the GDP can change, but that is not intent at all.

Suppose you have a mortgage on your house and it's appraised at $200,000. Suddenly, the bottom drops out of the real estate market and your house is now worth $20,000. Your mortgage is for $200,000. Have you been cheated or are you simply a victim of a volatile market?

 

[Dale-c]

The Fed doesn't exactly make a habit of printing more money with nothing to back it.

Then how have we gotten so much currency?
Come on, do you really think there is enough gold or silver or ANYTHING to back up all the currency that is in circulation?
No banker argues about inflation, they just don't see immorality in it just as most of them would not see immorality to sodomy or abortion.

 

[Hope of Glory]

Then how have we gotten so much currency?

It is based on a portion of the GDP.

It is based on a portion of the GDP.

It is based on a portion of the GDP.

How many times does this need to be repeated for you to actually read it?

Does the GDP remain stagnant?

 

[Dale-c]

It is based on a portion of the GDP.

Are you denying the fact of inflation, the fact that the value of our money is lower than it used to be?

You can't buy a gallon of milk for 25¢ anymore, but you once were able to.

 

[Hope of Glory]

Are you denying the fact of inflation, the fact that the value of our money is lower than it used to be?

You can't buy a gallon of milk for 25¢ anymore, but you once were able to.

And what exactly does that have to do with anything that we are discussing here? There was inflation when money was based on precious metals as well.

 

[Dale-c]

And what exactly does that have to do with anything that we are discussing here?

That has everything to do with what we are discussing here.
And no, we didn't have "inflation when money was based on precious metals as well"

You can't just print up gold as you need it. It has a value in and of itself.
There were slight variations of course when new gold was found, but you are avoiding the fact that we have massive inflation today.

 

[billwald]

>Is it honest for a bank to create money that they don't have?

Is it honest to use credit cards to create money that we don't have?

 

[Dale-c]

Is it honest to use credit cards to create money that we don't have?

Good point but I would point out one difference and that is fraud.
credit cards are pure debt whereas printing money from nothing is essentially legalized counterfeiting.
Forget about Credit Cards, would it be wrong for you to print up your own money at your discretion?
I am sure you would go to jail for it because the Fed doesn't like competition!