The Monetary System

[cityfanlee23]

Sorry, stumbled onto this thread by mistake .....  Bye !

 

Not stalking my posts then @@Countryfox   

[AKCJ]

Just what we needed, another poverty thread.

[MooseBreath]

Sounds like you've been reading loads of dodgy blogs.

Sounds like you don't understand the very nature of our Monetary system.

Inflation hasn't really outpaced wage growth at all over the last few decades.

Inflation has not outpaced wage growth because the inflation calculation has been changed completely, the current calculation to inflation does not include things like Council Tax and Housing prices, rents etc.

So I'd advise you to look into how Inflation is calculated. they use the CPI which is not geared to accurately calculate inflation and is a con to the people to tell them inflation has not really risen, when infact we are worse off relatively than 50 years ago, it's just political spin that all parties use.

Houses are more expensive but that's because of population growth and supply issues.

In a small way, yes that's true, but you'd be naive not to realise that private banks pumping hundreds of billions into the housing market in the decade before the crash was the single biggest contribution to housing prices rising, in the 10 years prior to the crash, housing prices tripled, During that time, the amount of money created by private banks for mortgages quadrupled, Banks benefit from this in 2 ways, They make interest from the mortgage, secondly because they have the house as security over the loan, in a market they have falsely pumped into to push the prices up, as opposed to say a bank loan for a business, that could fail and is very risky to the bank, creating a "bubble" is the easiest way to transfer money from those that don't have it, to those that do, look at every bubble in history. Yes your statement is correct that demand outgrew supply, but the main contribution to housing prices rising at the rate they did, was because the banks pumped hundreds of billions into it to create a bubble, to boom the economy, to keep their viscous cycle going.

In 1997, a London resident would spend 22% of their salary getting a mortgage, in 2007 they had to spend 66.6%

People aren't forced into debt, they choose debt.

In some cases true, in a majority this is the biggest load of shit i've read today.

Banks may benefit from the creation of debt but so should the debtor.

In alot of cases the debtor does benefit, a mortgage in a rising market for example, the Debtor gets a house as a set rate, that is rising in price, However it's the future generations that lose from this in 1997 buying a house was one of the best investments you could make, fantastic, I'm alright jack... The fact your son/grandson now has to work 10x harder, for less, and cannot afford a mortgage without shelling out upto 70-80% of their income getting it is fine...... the way you say "May benefit" - come on, they are the only ones that really benefit, creating money from nothing, with your assets as security? they cannot lose.

The money created hasn't disappeared, it's all around you in the form of schools, hospitals, houses, shops, products, services etc.

No... The money created by the TREASURY is around us. £18bn in 10 years, compared to the 1.2 trillion created by banks that's put the uk's debt as a % of GDP up to 900% including household debts? GREAT...

Yes investment into schools and hospitals etc is fantastic, but the majority of the money does not go there.

If the treasury created £1.2trillion in 10 years to use democratically to benefit the people, are you seriously suggesting we'd be worse off than we are today?

I'm all for money creation providing it's created to benefit society, not for bankers to take bigger bonuses than the first round of public spending cuts after the biggest crash in history....

Regular home repossession after one missed payment simply isn't going to happen even if it was legal. Banks generally make more money from fully paid up interest than from repossessions.

Yet in america it does? The monetary system is globally collective in capitalist countries, why do you think a bank run in america caused the uk so much damage?

They do usually make more money from fully paid up interest I agree, however whilst they create fake money at the rate they are, encouraging people to debt themselves to their eyeballs, more people default now than ever before, but the fundamental point is the banks cannot lose...

Of course the inflation calculation changes, it has to in order to keep up with the idea that it represents a modern basket of goods. They're very open about exactly how inflation is measured, it's not a secret. There's a good reason why housing isn't included too if you'd bother to look it up.

Private banks only "pumped hundreds of billions" into the housing market by issuing mortgages. Mortgages that people chose to take out. Nobody forced them to. House price rises are more or less all down to lack of supply, especially in London. You could argue that's indirectly a banking issue, maybe it is, but that's not your argument.

...more stuff about house prices...

Why do even care about the UK's household debt to banks if you're so against banks? Why should I care if lots of people have got mortgages and car loans and business loans? Why should they care? Is it doing them any harm? They have houses, cars and businesses, exactly what they wanted.

I googled this one payment repossession and I think the story you are referring to is one woman who claimed she hadn't received about ten letters relating to some tax she hadn't paid. Looked like am administration error. It certainly isn't widespread and nor will it be. It makes no sense.

[sphericalfox]

 

Sounds like you've been reading loads of dodgy blogs.

Sounds like you don't understand the very nature of our Monetary system.

Inflation hasn't really outpaced wage growth at all over the last few decades.

Inflation has not outpaced wage growth because the inflation calculation has been changed completely, the current calculation to inflation does not include things like Council Tax and Housing prices, rents etc. 

So I'd advise you to look into how Inflation is calculated. they use the CPI which is not geared to accurately calculate inflation and is a con to the people to tell them inflation has not really risen, when infact we are worse off relatively than 50 years ago, it's just political spin that all parties use.

Houses are more expensive but that's because of population growth and supply issues.

In a small way, yes that's true, but you'd be naive not to realise that private banks pumping hundreds of billions into the housing market in the decade before the crash was the single biggest contribution to housing prices rising, in the 10 years prior to the crash, housing prices tripled, During that time, the amount of money created by private banks for mortgages quadrupled, Banks benefit from this in 2 ways, They make interest from the mortgage, secondly because they have the house as security over the loan, in a market they have falsely pumped into to push the prices up, as opposed to say a bank loan for a business, that could fail and is very risky to the bank, creating a "bubble" is the easiest way to transfer money from those that don't have it, to those that do, look at every bubble in history. Yes your statement is correct that demand outgrew supply, but the main contribution to housing prices rising at the rate they did, was because the banks pumped hundreds of billions into it to create a bubble, to boom the economy, to keep their viscous cycle going. 

In 1997, a London resident would spend 22% of their salary getting a mortgage, in 2007 they had to spend 66.6%

People aren't forced into debt, they choose debt.

In some cases true, in a majority this is the biggest load of shit i've read today.

 

Banks may benefit from the creation of debt but so should the debtor.

In alot of cases the debtor does benefit, a mortgage in a rising market for example, the Debtor gets a house as a set rate, that is rising in price, However it's the future generations that lose from this in 1997 buying a house was one of the best investments you could make, fantastic, I'm alright jack... The fact your son/grandson now has to work 10x harder, for less, and cannot afford a mortgage without shelling out upto 70-80% of their income getting it is fine...... the way you say "May benefit" - come on, they are the only ones that really benefit, creating money from nothing, with your assets as security? they cannot lose. 

The money created hasn't disappeared, it's all around you in the form of schools, hospitals, houses, shops, products, services etc.

No... The money created by the TREASURY is around us. £18bn in 10 years, compared to the 1.2 trillion created by banks that's put the uk's debt as a % of GDP up to 900% including household debts? GREAT... 

Yes investment into schools and hospitals etc is fantastic, but the majority of the money does not go there. 

If the treasury created £1.2trillion in 10 years to use democratically to benefit the people, are you seriously suggesting we'd be worse off than we are today?

I'm all for money creation providing it's created to benefit society, not for bankers to take bigger bonuses than the first round of public spending cuts after the biggest crash in history....

Regular home repossession after one missed payment simply isn't going to happen even if it was legal. Banks generally make more money from fully paid up interest than from repossessions.

Yet in america it does? The monetary system is globally collective in capitalist countries, why do you think a bank run in america caused the uk so much damage?

They do usually make more money from fully paid up interest I agree, however whilst they create fake money at the rate they are, encouraging people to debt themselves to their eyeballs, more people default now than ever before, but the fundamental point is the banks cannot lose...

 

 

So you've read 'Monetary Systems for dummies', and you've basically called Moosey an idiot by patronising him.

 

<pulls up chair>

[bovril]

If we hide the chebs in here google will never notice.

[Buce]

If we hide the chebs in here google will never notice.

Because the thread is full of tits already?

[cityfanlee23]

Of course the inflation calculation changes, it has to in order to keep up with the idea that it represents a modern basket of goods. They're very open about exactly how inflation is measured, it's not a secret. There's a good reason why housing isn't included too if you'd bother to look it up.

Private banks only "pumped hundreds of billions" into the housing market by issuing mortgages. Mortgages that people chose to take out. Nobody forced them to. House price rises are more or less all down to lack of supply, especially in London. You could argue that's indirectly a banking issue, maybe it is, but that's not your argument.

Interest prices were dropped through the floor to Encourage lending, because without the excessive borrowing following the .com crash we'd have gone into deeper recession, when offering interest rates less than 1% of course people are going to get mortgages, they almost cannot afford not to if they want to own a property. This is a trick used by governments and banks for decades to get themselves out of tight holes, they convince the public it's the best time ever to get a mortgage when they are falsely pumping up demand which increases housing prices, putting the wealth towards those that have a mortgage, and taking it away from those that don't, that's blatantly obvious surely? 

I'll say it again, the housing supply was a small factor in this, the demand was only a real issue because the banks were trying to push mortgages out at unsustainable rates to create more money, to create more private profit, Short termism at it's finest, Bollocks to the future we want profit today, I refer you to every bubble crash in history, in which private banks done exactly the same. 

...more stuff about house prices...

Why do even care about the UK's household debt to banks if you're so against banks? Why should I care if lots of people have got mortgages and car loans and business loans? Why should they care? Is it doing them any harm? They have houses, cars and businesses, exactly what they wanted.

 

Again, the point being the more we borrow today, the more we inflate today, the more we deflate the power of our currency in a short period of time, the worse off the future becomes, it comes down to basic morals to see how we are damaging our future generations, You think your great great gandchildren will be able to buy a house in their lifetime if we carry on today? you must be joking?

I care about UK household debt to banks, because it's the tax payer that has to bail them out! I'm not against banks?!!? I'm against private banks controlling 97% of all money creation primarily for their own gain at the expense of those that don't have any.

I googled this one payment repossession and I think the story you are referring to is one woman who claimed she hadn't received about ten letters relating to some tax she hadn't paid. Looked like am administration error. It certainly isn't widespread and nor will it be. It makes no sense.

 

I was not specifically referring to anyone, I said in this country it is not a big issue, In america repossessions are absolutely ridiculous, criminal infact. The point being the UK has huge investments into those mortgages in america, sub prime america put 100m into poverty, and helped put runs on UK banks, If we keep following this system how will it ever improve?

the very people that crashed it, are now advising the government, it's like setting up a committee on building safe housing, and getting 20 cowboy builders on the board..

[cityfanlee23]

So you've read 'Monetary Systems for dummies', and you've basically called Moosey an idiot by patronising him.

 

<pulls up chair>

 

If he feels patronised then I apologise, that was not my goal, but in his previous statements he showed an amateur grasp on how all of the things he says are causing these issues are actually controlled by the very system he says does not really affect it... Facts are Facts. 

 

Also are you actually going to contribute anything related to monetary policy?

[The Doctor]

If we hide the chebs in here google will never notice.

 

Nor will anyone else...

[Sharpe's Fox]

First you have to know what money is. Money is debt, it is either circulating government debt or is created by banks by making loans. You are right in saying banks are creating money Lee, but they don't do it for the sake of it, rather they make money off the interest of loans they supply.

If everyone was debt free the entire economy would collapse because there would literally be no money. That's how the world now works after the gold standard was abolished as a credible way of running the economy.

[cityfanlee23]

They put interest rates to 1% get everyone borrowing as much as humanly possible to create a false boom in the economy, then when they are forced to raise the unsustainable interest rates, massive amounts of people default and we are back to square 1, this has been repeated in history for too long, and the sheeple keep on doing it. 

 

All it's doing is killing off future prosperity.

[Mike Oxlong]

If we hide the chebs in here google will never notice.

Cheb hiding. Couldn't condone it.

http://www.foxestalk.co.uk/forums/topic/103031-what-do-you-want-for-christmas/page-3

[cityfanlee23]

First you have to know what money is. Money is debt, it is either circulating government debt or is created by banks by making loans. You are right in saying banks are creating money Lee, but they don't do it for the sake of it, rather they make money off the interest of loans they supply.#

 

Therefore have a huge incentive to put interest rates down and create more through loans... why do you think credit cards were created? the problem with that statement is that essentially, they ARE doing it for the sake of it, for short termism, they have to lend out to make money, they have to lend to keep the wheels turning, the faster they do it, the more profit they make, the poorer the tax payer gets, the richer the bankers get.

If everyone was debt free the entire economy would collapse because there would literally be no money. That's how the world now works after the gold standard was abolished as a credible way of running the economy.

 

Exactly, so we've created a circle where people have to be in debt for the system to survive... Paid for by the people, bailed out by the people when it bursts... time and time again... 

By controlling how money is created, and who can create it (not giving the role to the very people who profit from it's creation) it will not solve the issue, but it will slow it down massively. 

[sphericalfox]

If he feels patronised then I apologise, that was not my goal, but in his previous statements he showed an amateur grasp on how all of the things he says are causing these issues are actually controlled by the very system he says does not really affect it... Facts are Facts. 

 

Also are you actually going to contribute anything related to monetary policy?

 

[cityfanlee23]

 

....... Go away unless you're going to contribute. 

 

He's not a child, I'm pretty sure he won't get offended or cry about it, If he want's to patronise me then so be it, It's a discussion about the monetary system, we can disagree on it, but in my opinion he was talking about something in a very basic way which actually contradicted what he was saying as it's the monetary system that effectively controls everything he mentioned as the problem. 

 

if you don't want to add to it, then fine, but you're just wasting your time. 

[cityfanlee23]

 

First you have to know what money is. Money is debt, it is either circulating government debt or is created by banks by making loans. You are right in saying banks are creating money Lee, but they don't do it for the sake of it, rather they make money off the interest of loans they supply.#

 

Therefore have a huge incentive to put interest rates down and create more through loans... why do you think credit cards were created? the problem with that statement is that essentially, they ARE doing it for the sake of it, for short termism, they have to lend out to make money, they have to lend to keep the wheels turning, the faster they do it, the more profit they make, the poorer the tax payer gets, the richer the bankers get.

If everyone was debt free the entire economy would collapse because there would literally be no money. That's how the world now works after the gold standard was abolished as a credible way of running the economy.

 

Exactly, so we've created a circle where people have to be in debt for the system to survive... Paid for by the people, bailed out by the people when it bursts... time and time again... 

By controlling how money is created, and who can create it (not giving the role to the very people who profit from it's creation) it will not solve the issue, but it will slow it down massively. 

 

 

 

That's why I wanted to put it to FT, because as mentioned in the first OP, Maybe people have seen alternative systems or can think of a way to improve the one we have and make it work more efficiently. 

[cityfanlee23]

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford

 

in the vast majority of cases, money is created by banks, for the profit of the rich, at the expense of the rest. 

[bovril]

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford

 

in the vast majority of cases, money is created by banks, for the profit of the rich, at the expense of the rest. 

 

Is that you in your profile pic?

[cityfanlee23]

Is that you in your profile pic?

 

Erm, why are you asking me that? 

[MooseBreath]

Of course the inflation calculation changes, it has to in order to keep up with the idea that it represents a modern basket of goods. They're very open about exactly how inflation is measured, it's not a secret. There's a good reason why housing isn't included too if you'd bother to look it up.

Private banks only "pumped hundreds of billions" into the housing market by issuing mortgages. Mortgages that people chose to take out. Nobody forced them to. House price rises are more or less all down to lack of supply, especially in London. You could argue that's indirectly a banking issue, maybe it is, but that's not your argument.

Interest prices were dropped through the floor to Encourage lending, because without the excessive borrowing following the .com crash we'd have gone into deeper recession, when offering interest rates less than 1% of course people are going to get mortgages, they almost cannot afford not to if they want to own a property. This is a trick used by governments and banks for decades to get themselves out of tight holes, they convince the public it's the best time ever to get a mortgage when they are falsely pumping up demand which increases housing prices, putting the wealth towards those that have a mortgage, and taking it away from those that don't, that's blatantly obvious surely?

I'll say it again, the housing supply was a small factor in this, the demand was only a real issue because the banks were trying to push mortgages out at unsustainable rates to create more money, to create more private profit, Short termism at it's finest, Bollocks to the future we want profit today, I refer you to every bubble crash in history, in which private banks done exactly the same.

...more stuff about house prices...

Why do even care about the UK's household debt to banks if you're so against banks? Why should I care if lots of people have got mortgages and car loans and business loans? Why should they care? Is it doing them any harm? They have houses, cars and businesses, exactly what they wanted.

Again, the point being the more we borrow today, the more we inflate today, the more we deflate the power of our currency in a short period of time, the worse off the future becomes, it comes down to basic morals to see how we are damaging our future generations, You think your great great gandchildren will be able to buy a house in their lifetime if we carry on today? you must be joking?

I care about UK household debt to banks, because it's the tax payer that has to bail them out! I'm not against banks?!!? I'm against private banks controlling 97% of all money creation primarily for their own gain at the expense of those that don't have any.

I googled this one payment repossession and I think the story you are referring to is one woman who claimed she hadn't received about ten letters relating to some tax she hadn't paid. Looked like am administration error. It certainly isn't widespread and nor will it be. It makes no sense.

I was not specifically referring to anyone, I said in this country it is not a big issue, In america repossessions are absolutely ridiculous, criminal infact. The point being the UK has huge investments into those mortgages in america, sub prime america put 100m into poverty, and helped put runs on UK banks, If we keep following this system how will it ever improve?

the very people that crashed it, are now advising the government, it's like setting up a committee on building safe housing, and getting 20 cowboy builders on the board..

You seem a bit all over the place really. Low interest rates are a tool for increasing economic activity, can't see anything wrong with that myself. One effect of that is to increase demand for mortgages which may push house prices slightly higher (not many mortgage applicants are homeless when they apply for a mortgage so the impact on demand for housing isn't massive). You're suggesting this is all a big ploy to transfer wealth from non homeowners to homeowners, I'd say that a side effect.

This is the reason why house prices have risen.

www.marketoracle.co.uk/images/2014/Jan/uk-house-building-and-population-growth.gif

If the population grows massively and fewer house are built, prices go up. Basic supply and demand.

I can't see any evidence of currency devaluation.

Inflation is actually very low at the moment and we haven't seen exceptionally high inflation for what, a couple of decades?

My great great grandchildren will be able to buy a house provided enough homes are built to cope with the population at the time.

People can buy houses now. Prices outside London aren't a massive amount higher relative to earnings than they ever have been.

Are you just struggling to get on the housing ladder and looking for someone to blame?

[sphericalfox]

....... Go away unless you're going to contribute. 

 

He's not a child, I'm pretty sure he won't get offended or cry about it, If he want's to patronise me then so be it, It's a discussion about the monetary system, we can disagree on it, but in my opinion he was talking about something in a very basic way which actually contradicted what he was saying as it's the monetary system that effectively controls everything he mentioned as the problem. 

 

if you don't want to add to it, then fine, but you're just wasting your time. 

 

You're incapable of having a debate, as proven in previous topics you've posted. This is the Lee Show. It's a pretty poorly researched show, and probably won't get a second series. I'm out.

[bovril]

Erm, why are you asking me that? 

 

Just wondered. For ages I thought it was some female celebrity that had passed me by. I thought that was a ponytail, but then just now I realised it could be something on the wall. I'm not taking the piss or anything, it honestly just dawned on me the picture could be you.

[cityfanlee23]

You seem a bit all over the place really. Low interest rates are a tool for increasing economic activity, can't see anything wrong with that myself. One effect of that is to increase demand for mortgages which may push house prices slightly higher (not many mortgage applicants are homeless when they apply for a mortgage so the impact on demand for housing isn't massive). You're suggesting this is all a big ploy to transfer wealth from non homeowners to homeowners, I'd say that a side effect.

You are correct, Low interest rats increase economic activity because people borrow when rates are low... it's also a tool used to manipulate markets and push up bubbles.. such as the housing bubble, because lenders get very greedy and start pushing unsustainable loans to people that cannot afford them when the rates have to come back up, they cannot keep interest rates at 1%, it just does not work... People default and the system crashes, not really sure how you think I'm all over the place? I've clearly stated all this and agreed with the points you make, you seem reluctant to agree that what it does is creates a bubble, just to get out of a bubble that has previously burst from the same actions being taken.. 

This is the reason why house prices have risen.

www.marketoracle.co.uk/images/2014/Jan/uk-house-building-and-population-growth.gif

If the population grows massively and fewer house are built, prices go up. Basic supply and demand. 

Again.. for the final time I hope, I've already said yes supply/demand can change prices, but all of that is linked to monetary policy! pre crash, banks pumped hundreds of billions through mortgages created from low rates! this is a cycle of supply, but a cycle of greed from those who benefit most from creating the debts in the first place!

 

One point to note, is that the population only supassed housing creation around 1997, The housing bubble was created between 1997-2007, when those born in excess of creation would have been 10 years old. 

I can't see any evidence of currency devaluation.

Inflation is actually very low at the moment and we haven't seen exceptionally high inflation for what, a couple of decades?

Again, the CPI is always alot lower than the true inflation rate, it's not geared to accurately judge inflation, but because it's the lowest index the governments use it.

My great great grandchildren will be able to buy a house provided enough homes are built to cope with the population at the time.

People can buy houses now. Prices outside London aren't a massive amount higher relative to earnings than they ever have been.

Try living in my area then.... Prices outside london have tripled, your statement is factually incorrect. 

In 1997, the average person living outside london spent 17.5% of their salary on a mortgage, in 2008, they were spending 49.3%, so i'm sorry but that's simply wrong that prices outside london have not risen relatively to earnings by much. 

Are you just struggling to get on the housing ladder and looking for someone to blame?

No, I'm actually not, Housing was just an easy example of how the monetary system is destroying future prosperity, you're the only one that chose to talk about it and I wanted to discuss the ideas with you, if you'd chosen any other example i'd have discussed that. my initial post was not about housing, it was about the entire system. 

[cityfanlee23]

Just wondered. For ages I thought it was some female celebrity that had passed me by. I thought that was a ponytail, but then just now I realised it could be something on the wall. I'm not taking the piss or anything, it honestly just dawned on me the picture could be you.

 

hahahaha, I look feminine do i? It's not a pony tail it's the corner of the bed   

 

Not really sure what to say, in my defence I was fresh shaven which I never normally do

[cityfanlee23]

You're incapable of having a debate, as proven in previous topics you've posted. This is the Lee Show. It's a pretty poorly researched show, and probably won't get a second series. I'm out.

 

So are me and moose not debating? he seems to be debating, so I'm sure it is, 

Stop living in the past, i'm not talking about past posts, I'm talking about the monetary system on this one, If it's a "Poorly researched" show why don't you start discussing the monetary system and prove what I am saying is wrong? 

 

Thank god, goodbye.