Who really creates new money is the state through the central bank, not bankers.
And the difference between the state and the bankers is...??
hehehe, okay, fair enough...
Topic: The real problem behind inflation - page 6. (Read 10854 times)
And the difference between the state and the bankers is...??
hehehe, okay, fair enough...
I don't think it works that way. The banker can't get a shoe shine with the new money, because it does not belong to him. It belongs to the bank. And what the bank does with the new money is lend it out.
The banker is the closest person from the money supply. His salary is paid directly with it. Again, a financial director from an investment bank told it to me himself : "stay near from the tap".
Who really creates new money is the state through the central bank, not bankers.
And the difference between the state and the bankers is...??
We use these names like 'the state' and 'the banks' as abstract concepts, but the actions are all done by people -- people who are part of the state gang, people who are part of the banker gang.
Often the same people belong to both gangs, e.g., the 'revolving door' between Goldman Sachs, the USFed, and the USDeptTreasury. These people are criminals. They may have bent the government law to make their actions 'legal', but a thief is a thief, no matter whether the theft has been 'legalized' or not.
Quote
We speak with great reverence of this thing called "the law," as if it is the decree of the gods, which no decent human being would dare to disobey. But what is it really? It's whatever the politicians decide to command you to do. Why on earth would anyone think that obedience to a bunch of liars and crooks is some profound moral obligation? Is there any reason for us to treat with reverence such commands and demands? No rational reason, no. The only reason we do it is because we have been trained to do it.
Some might point out that obeying the laws against theft and murder is a good thing to do. Well, yes and no. It is good to refrain from committing theft and murder, but it is NOT because "the law" says so. It is because theft and murder are inherently wrong, as they infringe upon the rights of others. And that was true before any politician passed a "law" about it, and will be true even if they "legalize" theft and murder (as every government has done, in the name of "taxation" and "war"). What is right and wrong does not at all depend upon what is "legal" or "illegal." And if you need POLITICIANS to tell you what is right and what is wrong, you need your head examined. Instead, you should judge the validity of so-called "laws" by whether they match what is inherently right and wrong.
--Larken Rose (see the link in my signature below)
Some might point out that obeying the laws against theft and murder is a good thing to do. Well, yes and no. It is good to refrain from committing theft and murder, but it is NOT because "the law" says so. It is because theft and murder are inherently wrong, as they infringe upon the rights of others. And that was true before any politician passed a "law" about it, and will be true even if they "legalize" theft and murder (as every government has done, in the name of "taxation" and "war"). What is right and wrong does not at all depend upon what is "legal" or "illegal." And if you need POLITICIANS to tell you what is right and what is wrong, you need your head examined. Instead, you should judge the validity of so-called "laws" by whether they match what is inherently right and wrong.
--Larken Rose (see the link in my signature below)
I don't think it works that way. The banker can't get a shoe shine with the new money, because it does not belong to him. It belongs to the bank. And what the bank does with the new money is lend it out.
Who really creates new money is the state through the central bank, not bankers.* And it does use it as a form of spending since the central bank is constantly buying state debt, and when the debt bonds expire in the hand of the central bank, the treasury doesn't pay for it (as it would be the state paying to the state...). Inflation is also hidden tax. And it's worse than that, due to the reasons explained above.
* Okay, when the compulsory decreases, banks do create new money through the fractional reserve system. But the compulsory stays constant most of the time. It's the central bank that really drives inflation.
I don't think it works that way. The banker can't get a shoe shine with the new money, because it does not belong to him. It belongs to the bank. And what the bank does with the new money is lend it out.
Its even worse.
Not only inflation steals from some to give to a few (as you describe it), but it also makes the economy underperform because it creates malinvestments and in extreme cases bubbles. So its not only stealing a part of the pie for a few, its making the pie smaller or not as big as it could be.
Not only inflation steals from some to give to a few (as you describe it), but it also makes the economy underperform because it creates malinvestments and in extreme cases bubbles. So its not only stealing a part of the pie for a few, its making the pie smaller or not as big as it could be.
Exactly. In central banking, Keynesian systems, inflation is used to manipulate the interest rate. The interest rate is a fundamental price that guides people planning in what concerns time. ("The market coordinates time with interest" http://www.youtube.com/watch?v=d0nERTFo-Sk )
Inflation alone is bad thing because it's a "hidden tax". Taxes are all bad, and the more hidden they are, the worse. But inflation in our current system is even worse, as it creates business cycles that end up destroying lots of capital.
Its even worse.
Not only inflation steals from some to give to a few (as you describe it), but it also makes the economy underperform because it creates malinvestments and in extreme cases bubbles. So its not only stealing a part of the pie for a few, its making the pie smaller or not as big as it could be.
Inflation really makes the middle class and specially the poor miserable.
Not only inflation steals from some to give to a few (as you describe it), but it also makes the economy underperform because it creates malinvestments and in extreme cases bubbles. So its not only stealing a part of the pie for a few, its making the pie smaller or not as big as it could be.
Inflation really makes the middle class and specially the poor miserable.
Most of the time when I read an article or watch a video about how terrible is inflation to economy, I kind of feel that there's something missing.
Usually the author insists on how much the price of goods can have increased in, say, fourty years, and therefore how futile it is to save money. But who saves money for fourty years anyway ? I mean, there are certainly many better long term savings than cash. Nobody saves large amounts of money for that long.
To me, the most obvious problem with inflation is the theft of value from the money printers. And this occurs in real time, not with a 40 years delay. When a banker receive some freshly printed money from a central bank, this money looks exactly identical to currently existing money. Thus, this guy can obtain some good or services, ie real value, for this money, although this money has been obtained with absolutely no counterparting real value, apart from the pressing of a button.
When some banker wants his shoes to be polished, all he has to do is to print money and to give it to a shoeshiner. The shoeshiner is immediately stolen, although he will probably realize that in a few years, when he witnesses inflation. This, is what's outrageous with inflation.
This is not rethoric. I used to work in an investment bank and I was personnaly advised not to seek a job in an other sector because it was important to stay "near from the tap". Money supply was compared to a tap from which it was crucial not to be too far away. Do we really need a better explanation of how corrupted is this system ?
Usually the author insists on how much the price of goods can have increased in, say, fourty years, and therefore how futile it is to save money. But who saves money for fourty years anyway ? I mean, there are certainly many better long term savings than cash. Nobody saves large amounts of money for that long.
To me, the most obvious problem with inflation is the theft of value from the money printers. And this occurs in real time, not with a 40 years delay. When a banker receive some freshly printed money from a central bank, this money looks exactly identical to currently existing money. Thus, this guy can obtain some good or services, ie real value, for this money, although this money has been obtained with absolutely no counterparting real value, apart from the pressing of a button.
When some banker wants his shoes to be polished, all he has to do is to print money and to give it to a shoeshiner. The shoeshiner is immediately stolen, although he will probably realize that in a few years, when he witnesses inflation. This, is what's outrageous with inflation.
This is not rethoric. I used to work in an investment bank and I was personnaly advised not to seek a job in an other sector because it was important to stay "near from the tap". Money supply was compared to a tap from which it was crucial not to be too far away. Do we really need a better explanation of how corrupted is this system ?
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