Money what it is part 2 how we got here and what it means

[divrack]

Gold is very relevant as the reason its used as an investment is its rare and can't be printed and therefore immune to inflation and on top of that people pay alot for jewellery made from it. Bitcoin has 2 of those things but as its useless as an actual currency its better to see it as gold without the physical value ie like gold (and any investment) investors only buy it if they think it will go up. Also what Clint said about if there was suddenly a huge amount of gold only owned by a small group of people is very much like the bitcoin industry as most of it is owned by a small group of miners who have the problem if they want to cash in the bitcoin they will crash the price so they need to carefully manipulate the price only selling small amounts.

I get the idea of it, it's just it's not really possible unless we crash the whole system. Bitcoin had some valuable contributions as you say and also major problems, not least this reliance on mining by algorithm which is insanely wasteful of energy. some predictions put it at half of a percent of total world energy use in the near future. insane system.
we might as well accept a system of state control of credit, overseen democratically as the only when slightly viable solution not counting total world-wide revolution

 

[simon12]

If anyones still interested I just watched this interesting video on this

 

[dweb]

Forgive my naivety here guys but I`ve a question,probably stupid....
Apart from quantative easing,is there a finite amount of "money" in existance and it just moves around from 1 person/corporation to another?
What I`m trying to ask is,when someone gets richer,someone gets poorer?

 

[simon12]

Forgive my naivety here guys but I`ve a question,probably stupid....
Apart from quantative easing,is there a finite amount of "money" in existance and it just moves around from 1 person/corporation to another?
What I`m trying to ask is,when someone gets richer,someone gets poorer?

There is a fixed amount of money at any given time but this amount is ever growing every time a bank lends money. So no by having money you are not directly denying someone else of it. If more money was paid back on debt than new debt was created the money supply would shrink but that never happens.

 

[Slid]

I'm sorry, but I just had an image of two or more medieval clergymen having a similar discussion about the total amount of piety in Christendom.

 

[dweb]

Where does interest come from?

 

[Slid]

Where does interest come from?

From the middle east, where writing was first used to record debts.
The practice of usury was condemned in the Old Testament (can't reference - not overly familiar with the OT - a bit of a mixed bag it is) and thereafter throughout Christemdom and Islam.

Didn't stop the lending of money at interest, though.

 

[Dutto]

I'm sorry, but I just had an image of two or more medieval clergymen having a similar discussion about the total amount of piety in Christendom.

Agree! Discussing today's world or UK economic state is very similar to the ecumenical discussion on how many angels can dance on the head of a pin!

Here's a useful name to remember Nelson Bunker Hunt and here's why ...

https://en.wikipedia.org/wiki/Nelson_Bunker_Hunt

I love the first paragraph where it states "He was a former billionaire whose fortune collapsed .... " but then again, no-one has ever accused me of being on the side of billionaires; especially those who want to get richer!

A few years ago, I saw a TV programme on "Time" that was presented by Ian Hislop (of Private Eye and HIGNFY fame) whereby he looked at an old house and garden to compare the amount of "Time" it took for someone to live in the house over the years.

When the house was built the labourer that lived in it had to work for two months each year (sowing and harvesting times) for the farmer who owned the house. The garden was approximately two acres in size and with careful tending it could provide sufficient meat and vegetables for a household. The labourer received only a tiny amount of pay for the two months that he worked for the farmer but for the remaining ten months of the year he could work for anyone in the vicinity.

Move forward 200 years and the farmer had built on the garden and sold the house; which was now worth in the region of £500,000!

At a 3.2% mortgage rate, to pay interest only on a £500,000 mortgage would take +/- £16,000 a year which is a sum of money that many Farm Labourers have to work a full twelve months to earn never mind buy a house and provide for their family.

We look back and think "Poor buggers! Living in tied houses." but in reality are we any better off or has the world become so screwed up that we can't see the wood for the trees?

 

[dweb]

Can banks lend money that they don't have?
I remember reading somewhere that some US citizens were defaulting on their mortgages deliberately as they reckoned the bank never had the money in the 1st place, so they were legally entitled not to repay the bank.
Allegedly some cases went to court and the judges agreed with the borrower.

 

[simon12]

Can banks lend money that they don't have?
I remember reading somewhere that some US citizens were defaulting on their mortgages deliberately as they reckoned the bank never had the money in the 1st place, so they were legally entitled not to repay the bank.
Allegedly some cases went to court and the judges agreed with the borrower.

Banks always lend money they don't have and its always money that didn't exist before, read the older thread linked on the 1st post. In the US if you have a mortgage you can basically just say to the bank I don't want the house anymore and give them the keys and they have to right off the debt and take the house instead.