@ Telmo
Hi Telmo
>> The key word here is "leveraged". Ultimately, this level of leveraging
is only possible because the Fed can create money out of thin air.
You'll have to elaborate on that. As far as I am aware the banks were leveraged
by money currently in circulation. Loans made by insurance companies, pension
schemes, hedge funds etc.
Of course, central banks can print money and they will do that in a crisis to
ensure liquidity, but Im not aware that they do it to support leverage in
investment banks. And they are reluctant to do it at all because of the dangers
of inflation. But maybe I don't really get your gist here and you are saying
something more fundamental ...
>> In a rational resource based economy, this entire situation would not be
possible to begin with.
Again, you have the edge here because Im new to economics and had to look up
'resource based economy'. As attractive as the idea seems to me one thing
strikes me as essential about it right off the bat and that is that they must
emerge rather than get imposed. This, to stop them becoming the very kind
autocracy that they don't wish to be. From a brief read I gather there is
agreement about that, advocates do not wish to be seen as revolutionary. Given
that, we seem stuck with the current system for the time being.
>>If you begin with the dogma that government must control the money
supply, then sure. But it might be a bit early to claim that the
economy was saved. What I see is western governments accumulating
unprecedented levels of debt. China seems to be winning the game, but
then what?
When I say that in mid sept. 2008 the global market was in cardiac arrest I
really mean that. I think there's a strong case that argues capitalism would
have come to an end there and then had the central banks not stepped in. Of
course, solutions to that issue might cause subsequent problems. An immediate
catastrophe was averted but that isn't to say the system is not still in
crisis. I can certainly agree with you there. There will be another crisis
sooner or later and the question is whether we fix the problems we observed in
2008 (ie. regulate) or carry on as normal...
As for China, I think the relationship is pretty symbiotic. China, being an
export economy, can't 'win the game' without US Debt. So what you see emerging
is less China vs. US and more China + US.
>> My hope is that bitcoin or something like that will finally set us
free from the criminals that have been running the financial systems.
I don't think you eliminate fraud by decentralizing a currency and a fair
amount of fraud has already been associated with bitcoin. Plus, the value of a
bitcoin seems to fluctuate wildly. Isn't that the kind of value activity that
necessitates central banks in the first place? Whatever currency the future
uses it will need to be stable rather than jump and drop in value just because
a server crashes or an exchange's database gets hacked. Those are the cyber
equivalents of bad weather and a currency needs to ride them.
And as a side point, you can't have both bitcoin (money) and a resource based
economy (moneyless).
Date: Thu, 18 Jul 2013 10:15:49 -0700
From: meeke...@verizon.net
To: everything-list@googlegroups.com
Subject: Re: Capitalism : the way of creating wealth OUT OF THIN AIR
On 7/18/2013 2:27 AM, Telmo Menezes
wrote:
Also, it's a funny moment in History to pretend that giving this much
power to governments does not have consequences. What if the economy
is saved but we end up living under a modern global Stasi? This
sounded like "conspiracy theory" stuff a few weeks ago, but what about
now?
My hope is that bitcoin or something like that will finally set us
free from the criminals that have been running the financial systems.
I still believe in technology more than I believe in politics.
But it's technology
that's enabling the global Stasi. If someone had to actually
listen to your phonecalls and take notes our privacy would be
secure.
Brent
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