The Monetary System

[cityfanlee23]

I recommend you youtube Steve Baker mp. He is one of the few politicians that understands this scam and speaks very well on the subject.

I completely agree, fractional reserve banking coupled with ZIRP is a plague which will destroy the current fiat system.

 

 

Just watched this one, very interesting ideas! 

@@MooseBreath have a look, quite interesting. 

 

[Mike Oxlong]

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.

This thread is just a mass debate

[Rincewind]

This thread is just a mass debate

I thought that was the Tinder thread?

This is the rank thread.

[cityfanlee23]

This thread is just a mass debate

 

It was not meant to be, it was meant to be a discussion on alternative monetary systems, instead it ended up being a debate on how the current system has/has not forced housing prices up, with a bit of mince and gravy 

[Izzy]

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.

Are you seriously suggesting that by putting this to FT we'll suddenly discover an alternative or way of improving the UKs monetary system?

I admire you for wanting to change the world Lee, but not sure FT is the right vehicle old chap.

[MooseBreath]

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.

Why would banks want to loan to people who they know are going to default on a loan backed by an asset they know is going to crash?

Banks lend because they can make money on the interest. If they wanted to ultimately own the asset they'd just buy the asset.

I think you're being choosy with your figures. Obviously 2008 was the height of house prices but data I've seen suggests they're not, as I say, massively overpriced relative to earnings and big jumps in prices correlate with times of population growth and low supply. Interest rates weren't especially low in the run up to the 2008 crash so if you're saying that crash was caused intentionally by the lowering of interests rates then you're clearly wrong.

[Great Boos Up]

Isn't the current system basically based value of gold and gold bars kept in a vault in Bonn. Every transaction builds up until they move a gold bar from one countries cage to another. Seriously this actually happens.

More to the question, if a global nuclear war wiped out the world leaving a few post apocalyptic humans to re start. It would be impossible to replicate the current system as it's just so complicated. Thousands of years of trading would evolve in a totally new way.

And again those who have, will want to keep, and those who have not will want to exploit.

 

Greed, envy, ect.....I'm sure someone tried to warn us once.

[Izzy]

Isn't the current system basically based value of gold and gold bars kept in a vault in Bonn. Every transaction builds up until they move a gold bar from one countries cage to another. Seriously this actually happens.

More to the question, if a global nuclear war wiped out the world leaving a few post apocalyptic humans to re start. It would be impossible to replicate the current system as it's just so complicated. Thousands of years of trading would evolve in a totally new way.

And again those who have, will want to keep, and those who have not will want to exploit.

 

Greed, envy, ect.....I'm sure someone tried to warn us once.

Just bring back the 'bartering' system really. Much simpler

[cityfanlee23]

Are you seriously suggesting that by putting this to FT we'll suddenly discover an alternative or way of improving the UKs monetary system?

I admire you for wanting to change the world Lee, but not sure FT is the right vehicle old chap.

 

Obviously not, Just wanted friendly discussion to see if anyone had any other suggestions to alternative systems that I could look into for my own interest and possibly discuss how they could/could not work, but now you mention it, changing the world is a great idea, I'll sign you up

[cambridgefox]

It was not meant to be, it was meant to be a discussion on alternative monetary systems, instead it ended up being a debate on how the current system has/has not forced housing prices up, with a bit of mince and gravy 

May I ask what your profession is?

[Webbo]

Obviously not, Just wanted friendly discussion to see if anyone had any other suggestions to alternative systems that I could look into for my own interest and possibly discuss how they could/could not work, but now you mention it, changing the world is a great idea, I'll sign you up

There's nothing wrong with discussing these things Lee. If people aren't interested they don't have to join in.

[cityfanlee23]

Why would banks want to loan to people who they know are going to default on a loan backed by an asset they know is going to crash?

Banks lend because they can make money on the interest. If they wanted to ultimately own the asset they'd just buy the asset.

I think you're being choosy with your figures. Obviously 2008 was the height of house prices but data I've seen suggests they're not, as I say, massively overpriced relative to earnings and big jumps in prices correlate with times of population growth and low supply. Interest rates weren't especially low in the run up to the 2008 crash so if you're saying that crash was caused intentionally by the lowering of interests rates then you're clearly wrong.

 

Obviously banks are not loaning to people they KNOW will default on a loan backed by an asset they KNOW is going to crash, but they do know they are creating a bubble, which can only burst should they get greedy, its the greed/risk reward that they lost control of, they were making such easy money in the decade prior to the crash, Expanding the money supply on easy loans because of low interest rates systematically put in place to do just that, create an easy short term boom, and in most cases had 0 risk because they were packaging up bad mortgages and selling it into the stock/speculation markets, so the actual financial risk on these banking institutions was minimal, because they only kept the good mortgages and sold off the rest, therefore the only way for it to crash, is when people start defaulting and the stock/speculation market crashes, which is when the bubble bursts, runs get put on banks and they fail, which means the tax payer has to bail it out.

They are not deliberately loaning into a market they are trying to crash, unfortunately history proves they always get too greedy though and it crashes anyway. 

 

 

The irony is, is that it's the banks/government that set the interest rate lower, to encourage the tax payer to borrow them out a mess they created, by creating money from loans... It's a cycle that will never end unless we change the system.

 

Where are your figures? would be interesting to see.

did you watch the video I linked to the MP suggested earlier Steve Baker? he gives a few facts I've not mentioned on the effects the monetary system had on bubbles such as housing and how that has effected relative pay. 

 

[cityfanlee23]

There's nothing wrong with discussing these things Lee. If people aren't interested they don't have to join in.

 

Absolutely not, but i'd expect them not to try to get involved at all, instead of petty comments. Moose is one of the good ones, and I'm sure he does not feel patronised in any way by me, if he did I'm sure he'd say something instead of having others sticking up for him 

[AKCJ]

To be fair Lee, I doubt anyone is going to feel patronised by you

[cityfanlee23]

May I ask what your profession is?

 

I have a small printing company, we print clothing for new businesses and kickstarter campaigns primarily, but hoping to now really expand online.

 

Yourself?

[cityfanlee23]

To be fair Lee, I doubt anyone is going to feel patronised by you

 

There we go, So moose does not need someone coming into a thread and having to stick up for him, especially someone who's not even contributed to the topic 

there we go, no point discussing spherical anyway, waste of time from the topic in hand, I actually quite like him, obviously the feeling is not mutual   

[cambridgefox]

I have a small printing company, we print clothing for new businesses and kickstarter campaigns primarily, but hoping to now really expand online.

 

Yourself?

Used to be a Bank Manager!but only High Street personal,so I'm taking no responsibility here.

Packaging industry/sales/design in Cambs mainly, absolutely love it,only a few of us but do ok.

[cityfanlee23]

Used to be a Bank Manager!but only High Street personal,so I'm taking no responsibility here.

Packaging industry/sales/design in Cambs mainly, absolutely love it,only a few of us but do ok.

 

Enjoying it is half the battle, I watched something about money, and the bloke on it said "Real wealth is your time" 

 

Providing your job pays the bills, and takes you where you want to go that's 50% of the way, the other 50% is enjoying it, otherwise its more like slavery!

 

"it's not work if you enjoy it"

[Great Boos Up]

Back to the very serious topical point!

 

I also thought you were a boy/girl pony tail table tennis champion.

[Izzy]

"Real wealth is your time" 

 

I like this. I know many people who are 'cash rich' but 'time poor' and aren't happy with their lives. They work 70 hour weeks and are too tired to play with their kids at weekends.

I'd like to think I'm 'time rich' and still earn enough to lead a comfortable lifestyle. I work for myself and mainly from home. My business model is simple: work as few hours as possible and charge as much as possible for the work I do.

My motto is: 'life's too short for a full time job'. I see my kids every day, play golf three times a week and take a two hour siesta most days. I'll never be a millionaire, but I do make sure I smell the roses on life's journey.

[cityfanlee23]

Back to the very serious topical point!

 

I also thought you were a boy/girl pony tail table tennis champion.

 

You thought correct 

 

"Real wealth is your time" 

 

I like this. I know many people who are 'cash rich' but 'time poor' and aren't happy with their lives. They work 70 hour weeks and are too tired to play with their kids at weekends.

I'd like to think I'm 'time rich' and still earn enough to lead a comfortable lifestyle. I work for myself and mainly from home. My business model is simple: work as few hours as possible and charge as much as possible for the work I do.

My motto is: 'life's too short for a full time job'. I see my kids every day, play golf three times a week and take a two hour siesta most days. I'll never be a millionaire, but I do make sure I smell the roses on life's journey.

 

That is the key to life, I want to be a millionaire, but not for my own gain, I'd love to do some really positive things with that money, I'm not really very time rich at present, but hoping that will pay dividends so one day i can really dedicate my time in a way that benefits society, and obviously want to be financially secure to avoid the shower of crap that is coming in the economy in the next 10-15 years.

[cityfanlee23]

Full debate on monetary policy and the creation of money. Very interesting ideas from this.

 

 

"The present system, whereby the banks will either produce too much credit in a boom, because of the high profit prospects, which produces a housing bubble and falsely raises house prices, or they produce too little credit in a recession, which exacerbates the lack of demand"

 

97% of all money is created as private money.

 

83% of private money creation does not go into productive investment. 

[BigMicky]

Someone's just got a Netflix subscription..

[cityfanlee23]

Someone's just got a Netflix subscription..

 

huh? 

[BigMicky]

huh?

Surprised you had time to reply considering you aren't very "time rich"...