Topic: The truth is out: money is just an IOU, and the banks are rolling in it - page 2. (Read 4053 times)

Im surprised ppl caught on this late... Ever since i read chris martnesons ebook ive had my eyes open.

Yeah....it is quite mad that this argument is coming into mainstream. Would have been unthinkably taboo just a few short years ago to see this type of thing discussed anywhere in mainstream press. However, bear in mind that 95% of our money is created by the private banking system, but backed up with the legal authority and the tax raising powers of the UK government. Bitcoin in turn is backed up by how much of this 'worthless government backed fiat' someone is willing to pay at any given time on any one of a wide array of shoddy and generally untrustworthy online exchanges that may or may not pay out customers funds upon request.

It is not true to say that Fiat is backed by nothing. It may be created out of thin air by the banking system but is backed by our government and all the resources that it ultimately commands. Bitcoin, now Bitcoin is backed by nothing. In a hypothetical post USD collapse world, you think anyone is gonna happily trade a couple of hens and a few sacks of vegetables with you for some lines of intangible computer code? Unless that computer code is backed by something real (precious metals, energy, by decree of ruling authority), Bitcoin can only ever be a means of quickly transferring money. It can never be money and in any instance where it is used as a money substitute it will be completely dependent on its convertibility into fiat currency.


That is kind of what happened. The credit crunch happened cos some institutions got way too far ahead of the game and started not being able to clear their account with central banks which made other institutions nervous of lending them money, que chain of defaults on grand scale.

The ideal of course is, that banks create credit and grant it to those who are willing and capable of going out into economy and creating real wealth....but who can be bothered with all that hassle? Better just to give it to a big pile of crack addicts wanting to get in the property owning game and the repackage it up and sell it on to dumb Chinamen.

what if i own two fractional reserve banks and i just have them multiply and lend money to each other until the money supply reaches infinity.

Yes. This stuff is really easy to sensationalise, and requires no actual understanding of economic theory. The Guardian article is already halfway there. The Sun, well....

Nice post, welcome to the monkey house.

I want the shitstorm now.

Buy Bitcoins or die miserably.

lol! Yeah, going after some fee sure is massive war on banks!

I think we are safe from seeing an article of the level of the one in The Guardian there.  

true ... or ..

yes, it will read:


WE ARE FUCKED

 

You think The Sun is going to run a headline economic theory article?

Nice that this info has moved from the dark corners of the internet to the broadsheets.

Next stop, the red tops. Then the fireworks really begin.

I think now is the best time to sell your BTC and withdraw fiat to cold storage because charts.

Would have been better in most parts of the world with more mainstream hard assets such as a house.

It's something I considered a few years back when the economy was in the shitter.
To borrow as much as I could in order to buy gold. I'm glad I didn't, banks were bailed out and gold went down.

nice first post. welcome.

Lol, that's hilarious. Truly bizarre why those employees at the BoE would publish that paper. The question everyone has to ask themselves is, "Why am I not borrowing as much money as possible to buy up hard assets and investments? After all, money is essentially free, and most debt can be wiped away if it gets out of control.

The Bank of England let the cat out of the bag.
http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerity?CMP=fb_ot
Banks original paper: http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerity?CMP=fb_ot

I suppose this is pretty obvious for the Bitcoinistas out there, but how about the ordinary Joe? Could this drive a shift towards cryptocurrencies? Will it affect the price?


Btw. Hello to all! I've been lurking for a long time. 1,5 Years.. Thought it would be about time to post.