Re: [WDDM] Economics and Change

[Joshua N Pritikin <jpritikin(at)pobox.com>]

On Mon, Jan 17, 2011 at 02:19:20PM -0800, Joseph Hammer wrote:
> 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.

Yes, correct. We are getting somewhere...

> 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?

It is a political decision how much money per money to funnel through
individual retirement accounts.

> 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.

You can't use the money for any purpose. There would be restrictions on
use similar to how the Chilean pension system works:

http://en.wikipedia.org/wiki/Chile_pension_system

> We are welcoming price fixing (0% interest is price fixing), and so we
> should expect smuggling in its many forms... Arbitrage, imbezzlement,
> etcetera.

Granted, but we have these defects in the present system. Let's talk
about how to structure a system to minimize fraud, etc.

> 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.

What do you mean? What is the larger context?

> 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.

Because the quantity of a commodity is inelastic. The amount of gold (or
whatever) is fixed and cannot expand to discount the future value of new
investments.

> 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.

Distrust is healthy, but I would not encourage you to dismiss new ideas
without weighing carefully.