Re: [WDDM] Economics and Change

[Joseph Hammer <parrhesiajoe(at)gmail.com>]

So, I see some wierd stuff here.

So, we have Zero percent loans, and at the same time, we are going to move to 100% reserves for money. So, we are going to increase the demand for loans dramatically (0% interest) while we decrease the supply of money dramatically (Increased reserve ratios). There has to be a third factor, or magic pixie dust... or this simply will not work.

There must, of couse, be rationing... there is already rationing, and they still say not enough money is out there. So, who decides on the rationing?

And, of course, Arbitrage. No one watches for arbitrage, but it is always there. Someone will buy a 0% loan and then they will resell it at it's natural value, pocketing the difference. We are welcoming price fixing (0% interest is price fixing), and so we should expect smuggling in its many forms... Arbitrage, imbezzlement, etcetera.

If I have an investment that has a 20% return, I will get the funds, even if they don't come to me through traditional channels. If I am forced to repay all profits, there will be mysteriously few profits. If there is a committee that decides who gets the money, I will try to get on that committee... or buy someone friendly on it.

This "reform" looks like it was written as a parachute for the banking industry... another way to squeeze us incase we wise up to the current scheme.

NO central banks. We should take the advice of Thomas Paine, George Washington, Thomas Jefferson and the rest. A central bank with zero percent loans is still a central bank. If you elect fiat money in any form, you invite all the attendant ills. To start with, it is theft. To make things worse, it destroys the wealth of a society.

But, WHY? Why not go to a commodity standard and let citizens choose their currency. You can have a central bank as long as you allow competition, because the central bank cannot survive in that environment. I'd be happy to see them try and pass off a money that goes down in value every year when any natural currency has the tendency to increase in value. Central banks require compulsion... even one with "For the People" scrawled over the door.

On Mon, Jan 17, 2011 at 1:13 PM, <Joshua N Pritikin> wrote:

On Mon, Jan 17, 2011 at 01:01:48PM -0800, Joseph Hammer wrote:
> Binary economics prints new money unbacked by anything of value.

The only money printed is backed by self-liquidating bills of credit.

For example, a loan for equity shares in a large, stable business that
pays dividends is self-liquidating because the dividends can be used to
pay back the cost of acquiring the shares.

In other words, in binary economics, the central bank's job is to
advance credit against the future value of an investment.

This affords to every individual the opportunity currently enjoyed only
by those who have savings to invest.

> On Mon, Jan 17, 2011 at 12:56 PM, <Joshua N Pritikin>wrote:
> > On Mon, Jan 17, 2011 at 12:40:17PM -0800, Joseph Hammer wrote:
> > > There are several problems with Binary economics, but chiefly, they
> > > disregard the role of interest as a primary coordinator of resources.
> > >
> > > They say, "Print money from a central bank at zero interest to hand to
> > > people to invest." This sound good, but it is destructive to society.
> > First,
> > > printing money does not increase the supply of goods available for the
> > money
> > > to buy. The value of the new money is stolen from those who already have
> > > money in hand. The loss shows up as inflation... the dollar in your
> > pocket
> > > buys less.
> >
> > That is not an accurate characterization of binary economics.
> >
> > Please try to understand the proposal before you turn to criticizing it.
> >
> > First advanced by Louis Kelso, binary economics holds that (1) labor and
> > capital are equally fundamental or "binary" factors of production, (2)
> > technology makes capital much more productive than labor, (3) the more
> > broadly capital is acquired with the earnings of capital the faster the
> > economy will grow.
> >
> > Binary economics is not inflationary. This is easy seen if you would
> > bother to study the proposal for more than ten seconds.
> >
> > http://papers.ssrn.com/sol3/papers.cfm?abstract_id=928752
> >

--
American? Join the effort toward National Initiative, http://ni4d.us