|
Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
|
| View previous topic :: View next topic |
| Author |
Message |
Unposter
Joined: 04 Jun 2006
|
 Posted: Wed May 23, 2012 2:20 am Post subject: |
 |
|
Fractual Banking is a good example of why the U.S. economy can never be a free market. Any attempt to get rid of fractual banking would collapse the U.S. and with it the World economy. It just can't be done.
So, if the economy cannot be freer, it should at least be fairer.
The problem is that the current government-intervened-economy is too tilted toward the banks, some large industries and the financial companies.
The U.S. government needs to invest more money into low - to no interest university loans, subisdies for education at all levels, health care and social security - all programs that benefit and improve the quality of life of all American citizens, regardless of race, creed or income class. |
|
| Back to top |
|
 |
visitorq
Joined: 11 Jan 2008
|
| Posted: Wed May 23, 2012 9:33 am Post subject: |
|
|
| Unposter wrote: |
Fractual Banking is a good example of why the U.S. economy can never be a free market. Any attempt to get rid of fractual banking would collapse the U.S. and with it the World economy. It just can't be done.
So, if the economy cannot be freer, it should at least be fairer. |
The economy can certainly be freer, even under a fractional-reserve banking system. In a way, the real economy and the financial system are two separate things. Of course finance ultimately controls the real economy and can even destroy it, but it is still possible have a relatively free market without the government trying to regulate everything (just so long as Wall Street is not allowed to gobble everything up and shut down their competition using government regulations).
| Quote: |
| The problem is that the current government-intervened-economy is too tilted toward the banks, some large industries and the financial companies. |
Yes, and also to most of the largest corporations (think Fortune 100), which are either owned or controlled by these same financial institutions, and do not like having to compete against smaller companies. Many of these companies are virtually dependent upon government contracts and subsidies. The military industrial complex is the best example (some of the largest companies are defense contractors, and the largest customer for petroleum products in the world is the US military). Big Agro could not exist without subsidies. Big Pharma could not survive without government intervention through regulation. The housing market could not have inflated to such ridiculous levels without Fannie and Freddie. And of course the banking cartel on Wall Street could not exist as it does without the Federal Reserve.
| Quote: |
| The U.S. government needs to invest more money into low - to no interest university loans, subisdies for education at all levels, health care and social security - all programs that benefit and improve the quality of life of all American citizens, regardless of race, creed or income class. |
This is an admirable goal, but I question its practicality. Whenever the government gets involved in these schemes, there are nearly always unforeseen consequences. In the case of subsidies, whatever is subsidized increases drastically in volume and leads to a glut in the market. Attempting to give people free education and healthcare may sound nice, but in my opinion would ultimately result in unintended negative consequences, such as less choice, lower quality, and a higher tax burden (or inflation).
In the first place, nothing is really for free, and the public would have to pay (either through direct taxation or through inflation). Secondly, people would be forced into it. This is problematic since the government is simply not capable of allocating resources to their most productive ends through command and control, and tends to waste a lot resources along the way on bureaucracy (and corruption). I believe free market competition does the best job at allocating resources and providing people what they actually want (ie. the ability to chose where and how much to work, and how to spend their own money) ultimately benefits everyone regardless of race, creed or income class. Prices are driven down, and firms are forced to compete to better serve their customers. Government bureaus do not have this incentive- they just spend our money. |
|
| Back to top |
|
|
jaykimf
Joined: 24 Apr 2004
|
| Posted: Wed May 23, 2012 10:34 am Post subject: |
|
|
| Unposter wrote: |
Fractual Banking is a good example of why the U.S. economy can never be a free market. Any attempt to get rid of fractual banking would collapse the U.S. and with it the World economy. It just can't be done.
So, if the economy cannot be freer, it should at least be fairer.
|
Fractional reserve banking IS the free market at work. It was not created by the government or the Fed . It is an arrangement made between lenders and borrowers in the free market. Bank checks (IOUs) are not money because the government or Fed says so. They are money because they are accepted as money by the free choice of individuals and businesses in the free market. If people refused to accept bank checks and instead accepted only the actual Federal reserve notes, the banks simply would not be able to create money. The banks power to create money has been given to them by the public's choices in the free market. There is no law requiring anyone to accept a bank check. If the Government tried to prohibit fractional reserve banking, it would be making the market less, not more free. There is nothing fraudulent or deceitful about Fractional reserve banking. It is common knowledge how the system works. Someone deposits money in a bank and someone else borrows some of that money. By acting as a middleman and bringing borrowers and lenders together, banks provide a valuable service that makes the economy more efficient. If banks are engaging in abusive practices, perhaps the government should step in with regulations to prevent such abuse. Perhaps the Government should intervene in the free market. Perhaps it was a mistake for the Fed to intervene by bailing out AIG and the banks. Maybe the Fed should have let them go bankrupt, but that really has nothing to do with the question of Fractional reserve banking. Some people still don't seem to understand how fractional reserve banking works. A bank does not make loans in excess of the amount of deposits it has (generally speaking). If you want proof of that all you have to do is look at the balance sheet of any bank, for example: http://www.bankspider.com/financials/jp-morgan-chase-financials.html As you can see, Chase had deposits of over $1trillion and total loans and leases of $754 billion. |
|
| Back to top |
|
|
visitorq
Joined: 11 Jan 2008
|
| Posted: Wed May 23, 2012 12:48 pm Post subject: |
|
|
| jaykimf wrote: |
| Fractional reserve banking IS the free market at work. |
This would be true, if we had a free market system and competing currencies (which we don't).
| Quote: |
| There is no law requiring anyone to accept a bank check. |
There is a law requiring people to accept Federal Reserve notes exclusively as legal tender. So much for the free market.
| Quote: |
| A bank does not make loans in excess of the amount of deposits it has (generally speaking). If you want proof of that all you have to do is look at the balance sheet of any bank, for example: http://www.bankspider.com/financials/jp-morgan-chase-financials.html As you can see, Chase had deposits of over $1trillion and total loans and leases of $754 billion. |
JP Morgan Chase also has over $70 trillion in derivatives exposure. So to say your deposits are safe with them just because they have a trillion on deposit is grossly misleading. |
|
| Back to top |
|
|
atwood
Joined: 26 Dec 2009
|
| Posted: Wed May 23, 2012 3:03 pm Post subject: |
|
|
| visitorq wrote: |
| atwood wrote: |
| Some of you guys need to get a sense of humor. It's a common conspiracy theory that Jewish bankers control the world's economy. Satire, dude, satire. |
That isn't satire. That's just a massive cliche (like your entire persona). When the deluded, ignorant leftist has lost the debate, and else fails, then it's time to play the race card. Gee, how original. Give it up already. |
The politically correct reactionary--that's the real cliche. |
|
| Back to top |
|
|
atwood
Joined: 26 Dec 2009
|
| Posted: Wed May 23, 2012 3:13 pm Post subject: |
|
|
| visitorq wrote: |
| jaykimf wrote: |
| Fractional reserve banking IS the free market at work. |
This would be true, if we had a free market system and competing currencies (which we don't).
| Quote: |
| There is no law requiring anyone to accept a bank check. |
There is a law requiring people to accept Federal Reserve notes exclusively as legal tender. So much for the free market.
| Quote: |
| A bank does not make loans in excess of the amount of deposits it has (generally speaking). If you want proof of that all you have to do is look at the balance sheet of any bank, for example: http://www.bankspider.com/financials/jp-morgan-chase-financials.html As you can see, Chase had deposits of over $1trillion and total loans and leases of $754 billion. |
JP Morgan Chase also has over $70 trillion in derivatives exposure. So to say your deposits are safe with them just because they have a trillion on deposit is grossly misleading. |
There is no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. |
|
| Back to top |
|
|
atwood
Joined: 26 Dec 2009
|
| Posted: Wed May 23, 2012 3:17 pm Post subject: |
|
|
| visitorq wrote: |
| Unposter wrote: |
Fractual Banking is a good example of why the U.S. economy can never be a free market. Any attempt to get rid of fractual banking would collapse the U.S. and with it the World economy. It just can't be done.
So, if the economy cannot be freer, it should at least be fairer. |
The economy can certainly be freer, even under a fractional-reserve banking system. In a way, the real economy and the financial system are two separate things. Of course finance ultimately controls the real economy and can even destroy it, but it is still possible have a relatively free market without the government trying to regulate everything (just so long as Wall Street is not allowed to gobble everything up and shut down their competition using government regulations).
| Quote: |
| The problem is that the current government-intervened-economy is too tilted toward the banks, some large industries and the financial companies. |
Yes, and also to most of the largest corporations (think Fortune 100), which are either owned or controlled by these same financial institutions, and do not like having to compete against smaller companies. Many of these companies are virtually dependent upon government contracts and subsidies. The military industrial complex is the best example (some of the largest companies are defense contractors, and the largest customer for petroleum products in the world is the US military). Big Agro could not exist without subsidies. Big Pharma could not survive without government intervention through regulation. The housing market could not have inflated to such ridiculous levels without Fannie and Freddie. And of course the banking cartel on Wall Street could not exist as it does without the Federal Reserve.
| Quote: |
| The U.S. government needs to invest more money into low - to no interest university loans, subisdies for education at all levels, health care and social security - all programs that benefit and improve the quality of life of all American citizens, regardless of race, creed or income class. |
This is an admirable goal, but I question its practicality. Whenever the government gets involved in these schemes, there are nearly always unforeseen consequences. In the case of subsidies, whatever is subsidized increases drastically in volume and leads to a glut in the market. Attempting to give people free education and healthcare may sound nice, but in my opinion would ultimately result in unintended negative consequences, such as less choice, lower quality, and a higher tax burden (or inflation).
In the first place, nothing is really for free, and the public would have to pay (either through direct taxation or through inflation). Secondly, people would be forced into it. This is problematic since the government is simply not capable of allocating resources to their most productive ends through command and control, and tends to waste a lot resources along the way on bureaucracy (and corruption). I believe free market competition does the best job at allocating resources and providing people what they actually want (ie. the ability to chose where and how much to work, and how to spend their own money) ultimately benefits everyone regardless of race, creed or income class. Prices are driven down, and firms are forced to compete to better serve their customers. Government bureaus do not have this incentive- they just spend our money. |
You overstate the dependence of private industry on government support. As you say, "you believe," and it's beliefs, not facts, driving your conclusions. |
|
| Back to top |
|
|
visitorq
Joined: 11 Jan 2008
|
| Posted: Wed May 23, 2012 3:27 pm Post subject: |
|
|
| atwood, you obviously have nothing of substance to contribute, so kindly stick a sock in it already. Stop replying to my posts with your inane garbage, and I'll stop replying to yours. Deal? |
|
| Back to top |
|
|
comm
Joined: 22 Jun 2010
|
| Posted: Wed May 23, 2012 4:17 pm Post subject: |
|
|
| atwood wrote: |
| There is no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. |
I really hope Zyzyfer is still reading this thread. I think by now he'd understand why atwood is having so much difficulty.
Here you go atwood, the absolute basics of "legal tender". Also, it'd be great if you could keep your meaningless drivel tied up in one post, rather than posting three times in a row.
| jaykimf wrote: |
| Someone deposits money in a bank and someone else borrows some of that money. By acting as a middleman and bringing borrowers and lenders together, banks provide a valuable service that makes the economy more efficient. |
I see this as only partially true, and visitorq already addressed it pretty well. But I just wanted to take a moment and thank you for making posts that are rational and at least somewhat researched. |
|
| Back to top |
|
|
jaykimf
Joined: 24 Apr 2004
|
| Posted: Wed May 23, 2012 6:04 pm Post subject: |
|
|
| atwood wrote: |
There is no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. |
Big mistake Atwood. You should always use quotation marks and credit your source when quoting something directly, even it is only Wikipedia. Furthermore I think it would
be better to quote the U.S. Department of the Treasury directly: http://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx |
|
| Back to top |
|
|
comm
Joined: 22 Jun 2010
|
| Posted: Wed May 23, 2012 6:33 pm Post subject: |
|
|
It would be even better if his comment had some bearing on the discussion. visitorq was obviously referring to U.S. dollars being legal tender. The ability of a business to reject payment in various forms of cash (such as pennies or $100 bills) is irrelevant, as the business is still legally required to accept U.S. dollars in some form. |
|
| Back to top |
|
|
Zyzyfer
Joined: 29 Jan 2003
Location: who, what, where, when, why, how?
|
| Posted: Wed May 23, 2012 8:23 pm Post subject: |
|
|
| comm wrote: |
| atwood wrote: |
| There is no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. |
I really hope Zyzyfer is still reading this thread. I think by now he'd understand why atwood is having so much difficulty. |
I'm still reading but should point out I'm not pro-atwood. Flaming is great and all but it seemed a little imbalanced when I wrote my last post. Looks a bit more balanced now.
I was reading around earlier this week and actually wanted to write up a post countering the hyperinflation point (specifically the 1000% remarks) and a few other observations but have been a little too busy to do it justice. But I can summarize my findings...
- I checked on one website comparisons between various common cost benchmarks (bread, gas, rent, home prices, etc) between 1931 and 2011, average wages as well. While wages have not really risen evenly with the benchmarks, I was surprised that the difference was not necessarily high enough to call it completely imbalanced. Gold right now at 1560 IS imbalanced to wages, but the 2007 average gold price was less significant.
- In fact, all of the significant imbalances can be attributed to skewing due to economic events. Average rent for 2011 for instance outpaces wages compared to 1931, but has also been driven higher recently due to lower home ownership - more people are forced to rent at the moment.
- Also, while I do not subscribe to the Libertarian style of a free market, I do agree that banks have pulled a fast one on the people. Even in Europe, where the ECB doled out its LTRO deal, there were reports of dissatisfaction with the banks for not doing what they are supposed to do and insert said �funding� into the economy. I love how the ECB said screw this and refused to do further financing, only to have several government heads plead for renewed ECB support. The economy right now is a total joke, but I don't see it as historically broken.
- I additionally read over on the Dealbreaker blog about how the Glass-Steagall act would not have prevented anything. I see the heart of the problem being Too Big To Fail, full stop. These behemoth banks simply should not exist...but then that would require regulation, which I am currently ambivalent about.
Apologies for the somewhat rambling post, typing it on the mobile. |
|
| Back to top |
|
|
atwood
Joined: 26 Dec 2009
|
| Posted: Wed May 23, 2012 10:20 pm Post subject: |
|
|
| visitorq wrote: |
| atwood, you obviously have nothing of substance to contribute, so kindly stick a sock in it already. Stop replying to my posts with your inane garbage, and I'll stop replying to yours. Deal? |
I've made my point. Anyone who wants to join your ideological camp and believe that cartels and csonspiracies are behind all the world's events are more than free to. |
|
| Back to top |
|
|
atwood
Joined: 26 Dec 2009
|
| Posted: Wed May 23, 2012 10:25 pm Post subject: |
|
|
| jaykimf wrote: |
| atwood wrote: |
There is no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. |
Big mistake Atwood. You should always use quotation marks and credit your source when quoting something directly, even it is only Wikipedia. Furthermore I think it would
be better to quote the U.S. Department of the Treasury directly: http://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx |
I didn't realize you had to quote factual information. Are you the copyright police? |
|
| Back to top |
|
|
bucheon bum
Joined: 16 Jan 2003
|
| Posted: Thu May 24, 2012 7:12 am Post subject: |
|
|
| atwood wrote: |
| jaykimf wrote: |
| atwood wrote: |
There is no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. |
Big mistake Atwood. You should always use quotation marks and credit your source when quoting something directly, even it is only Wikipedia. Furthermore I think it would
be better to quote the U.S. Department of the Treasury directly: http://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx |
I didn't realize you had to quote factual information. Are you the copyright police? |
Wow. Whipping out snark on someone who is on your side and gave you a bit of support. Way to prove your detractors right. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
