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April 8, 2014
” Multiple studies have been coming out showing that private sector leverage is damaging to gdp growth above certain levels , typically in the range of 80-100% debt/gdp for either the household or business sectors. Combined private and public high leverage is doubly damaging. In the U.S. both the household and business sectors are at close to 80% debt/gdp now , per Keen :

http://2.static.australianindependentbusinessmedia.com.au/sites/default/files/styles/full_width/public/keen_us_4.png?itok=tvnG4Clc

Read more at http://pragcap.com/this-statistic-is-horrifying#wwTT6zbQ6UjiS0Kf.99

WHY can’t economist do ‘simple math’ ?
IF ‘households’ , people are in debt for @$20 trillion for an average @4% for @average 25 years ($1T-student loans, $4T- credit card loans,$12T- RE loans,
$3T-Misc loans), WHY would you not see this as maybe, perhaps some kind of problem?
Where the hell are the 90%, the debtors supposed to get the
ONE AND ONE HALF TRILLION DOLLARS a year, just to pay off this debt?
While at the same “maintain a standard of living”?
And since I speak English as not with the ‘forked tongue’ of an economist, why is $1.5 Trillion per year needed to pay off $20 Trillion?
Answer. Because the 4% interest is a revenue gain (Tax called “interest)
on the $20T which makes the balanvce to be paid $40 Trillion.
One could ask, “Why don’t you see these things coming?”

 

ANOTHER COMMENT:
http://rwer.wordpress.com/2014/04/07/how-not-to-win-an-economic-argument/#comment-48458

Could “Minsky” prove:
Banks that issue new money by ‘loans’(Ex. mortgages) that carry terms and conditions of ‘ interest’ create an income stream that generates a least 100% from old money (already in existence).
2001 to 2005 Mortgage loans went from $9 trillion to $12 trillion
From 2001 for the next 30 years @ $9trillion in loans @ 6% interest would create deposits into the banks in order for the notes to be paid an amount greater than $18 trillion.
Banks need only 6% of the $9 trillion ($54 billion) on their balance sheet, none of which needs to be their money-it need only to be ‘deposited, entrusted to them.
Can “Minsky” prove that “Banks by issuing new money by loans not only create that issuance but also have an asset that creates for the bank a means to gain
at least that amount as a profit.
The cause of the 2008-9 collapse and why a ‘systemic failure’ came to light.
Banks discovered a way to suck part of that “interest income gain” from the people and into their pockets. Not only was payment immediate but it was a deposit of a gain that was NOT recorded as an asset on their books.
The mortgage defaults were not at fault.
The banks blackmail and extortion of the appraisers to higher dollar loans were not a fault.
These have been a part of the system forever. A system that has earned the Private for Profit Banks trillions upon trillions and could eventually “allow them to gain ALL of the wealth …(“The greatest inability of the human
race is our inability to understand the exponential function”:
SO WERE DID IT GO WRONG ?
When the banks discovered how to beat the Rule of 72, How they could satisfy their greed immediately, they captured ‘the interest income gains’ they secretly spend over the 30 years-immediately.
They invented “MBSs” The trick was to collect “the non-existent future value of the asset-the loans without changing the assets value thereby allowing the banks to keep 100% of real money paid to them today. The asset remains the same and is zeroed out over time as it is paid.
Here’s the deal:
Hey, big money people, how would you like to be guaranteed $9 trillion INCOME over the next 30 years ?
Just write us a check for $1 trillion. BTW it’s a AAA Security on our books that can’t go wrong.
They took the money and ran.
On the next offer after some questioing the banks had to give a little-they paid for insurance against loss in order to close the deal. Next time around they had to guarantee against loss (recourse).
Here comes the systemic failure.
The insurance company didn’t have enough money to cover the loses-not
those of the “Ms” of the “MBSs” ;the losses of the future interest.
The banks didn’t have the money to buy back (their guarantee)
When “Banks” and “Insurance Companies” can’t pay and TRUST IS LOSS-
That is “systemic failure”, albeit the mortgages are still a valuable asset baked by the real property whatever real % and the government; they did not fail.
IF was the banks and the banks alone.
“Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha.
Inequality , injustice is like water, a part of life, but may, because of the size of its gaps, become toxic.
The solution:
“Capitalism is the “best” system to date devised by mankind. As it is administrated, perhaps, is where the “flaw” is manifested. If capitalism used its Central Bank properly,that is for the betterment of the common good, with equality and justice for all, capitalism would be the best ways and means to help “form a more perfect union….”, Pontifical Council.
DO FOR YOURSELVES WHAT YOU ALLOW THE CENTRAL BANK TO DO FOR THE (PFPB) BANKS !
LOAN YOUR MONEY AND CHARGE (interest), A TAX ON IT.ALSO commented on:
http://neweconomicperspectives.org/2014/04/three-passages-akerlof-romers-1993-article-prevented-crisis.htmlAndrew,”IOW the intermediate buyers were hardly victims– they created a Demand for the garbage loans so that they could securitize them into AAA rated RMBS, then CDOs for sale to …- PENSION FUNDS …- THE legitimate victims in the loops, w borrowers slightly behind.”
Because they purchased ” the guaranteed future interest income from the “M” of the MBSs”.
When that income disappeared and the guarantors (Banks and insurers ) could not make their promise to pay the system could have failed because of the loss of ‘trust’.
Borrowers were only slightly behind since their losses were limited to the actual amount they had in the game (some cases ;nothing).

Excerpt from Comments by “Justaluckyfool”
“Banks by issuing new money by loans not only create that issuance but also have an asset that creates for the bank a means to gain
at least that amount as a profit.”

The cause of the 2008-9 collapse and why a ‘systemic failure’ came to light.

Banks discovered a way to suck part of that “interest income gain” from the people and into their pockets. Not only was payment immediate but it was a deposit of a gain that was NOT recorded as an asset on their books.
The mortgage defaults were not at fault.
The banks blackmail and extortion of the appraisers to higher dollar loans were not a fault.
These have been a part of the system forever. A system that has earned the Private for Profit Banks trillions upon trillions and could eventually “allow them to gain ALL of the wealth …(“The greatest inability of the human
race is our inability to understand the exponential function”:
SO WERE DID IT GO WRONG ?
When the banks discovered how to beat the Rule of 72, How they could satisfy their greed immediately, they captured ‘the interest income gains’ they secretly spend over the 30 years-immediately.
They invented “MBSs” The trick was to collect “the non-existent future value of the asset-the loans without changing the assets value thereby allowing the banks to keep 100% of real money paid to them today. The asset remains the same and is zeroed out over time as it is paid.
Here’s the deal:
Hey, big money people, how would you like to be guaranteed $9 trillion INCOME over the next 30 years ?
Just write us a check for $1 trillion. BTW it’s a AAA Security on our books that can’t go wrong.
They took the money and ran.
On the next offer after some questioing the banks had to give a little-they paid for insurance against loss in order to close the deal. Next time around they had to guarantee against loss (recourse).
Here comes the systemic failure.
The insurance company didn’t have enough money to cover the loses-not
those of the “Ms” of the “MBSs” ;the losses of the future interest.
The banks didn’t have the money to buy back (their guarantee)
When “Banks” and “Insurance Companies” can’t pay and TRUST IS LOSS-
That is “systemic failure”, albeit the mortgages are still a valuable asset baked by the real property whatever real % and the government; they did not fail.
IF was the banks and the banks alone.

Comments by Justaluckyfool ( http://bit.ly/MlQWNs )

( “You are always welcome to share, copy, plagiarize, improve, etc..any comments.)
*WHAT IF THE …The Fed Reserve were to become the CENTRAL BANK WORKING FOR THE PEOPLE (CBWFTP) instead of working for the Private For Profit Banks (PFPB) .
Let’s try this game: Substitute the words “Central Bank Working For The People” (CBWFTP) where ever” Private For Profit Banks” (PFPB) appears.
****PFPB have $100 trillion in assets as mortgages on residential and commercial real property (RE) loans. The average compound interest rate is 4% for a term of 30 years. The PFPB would have created that $100 trillion ‘out of thin air’ which would have an attachment that would require $300 trillion to be paid to the PFPB in order for the loan to be paid in full. YES, take away the smoke and mirrors. Now we must replace (reduce to zero ) the initial loan amount by subtracting $100 trillion; leaving a profit,income,taxation from ‘somewhere else’ of $200 trillion. This amount goes as profits to the PFPB. Revenue they may use for their own selfish purposes.
READ IT AGAIN,
BUT THIS TIME REPLACE “PFPB” WITH “CBWFTP”.
Why would you not want prosperity for yourselves and your children?
Why would you not want $200 trillion turned over to Congress, to be used..”to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…”
Share: “You are always welcome to share, copy, plagiarize, improve, etc..“

 

Comments:
Why then… “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha’‘
Why not ‘due examination ‘of :
Prof. Michael Hudson ; http://www.globalresearch.ca/index.php?context=va&aid=28938 . “…. The Mathematics of Compound Interest A syndicate of less than one hundred American capitalists, if allowed to collect interest on their capital at a low rate and re-invest for 150 years or less, would at the end of that time own the earth and all real and personal property thereon. This is a simple mathematical proposition, capable of exact demonstration, and any one who doubts the truth of this statement may set all doubts at rest by computing compound interest on one and one-half billions of dollars for one hundred and fifty years, at five per cent per annum. …Flürscheim elaborated that “All exertions, all improvements in the methods and tools of labor, the strictest economy, the severest self-denial, are powerless to compete with the rapidity of self-increase possessed by capital placed at compound interest, and they cannot keep up with its demands.” To illustrate the dynamic at work, he composed an allegory (pp. 327ff.). Many ages after man was driven from Paradise and told “to earn his bread by the sweat of his brow, mercy began to prevail. A loving angel was sent down by the Great Master, charged with the task of lightening the burden. The angel’s name was Spirit of Invention. He began his work by teaching man to make useful tools” and tame animals, and in time to mobilize water power, air and wind power, fire and steam power to drive machinery. “It seemed that at last the golden era had come of which men had dreamed for ages past,” but “that envious spirit, that fallen angel, Satan,” was jealous that his own empire would soon be over for ever.
Why not..
“Capitalism is the “best” system to date devised by mankind. As it is administrated, perhaps, is where the “flaw” is manifested. If capitalism used its Central Bank properly,that is for the betterment of the common good, with equality and justice for all, capitalism would be the best ways and means to help “form a more perfect union….”, Pontifical Council.
Precisely. Soddy/Pontifical Council are/were perfectly conceptually aligned with Social Credit in this regard. However, power and profit require a symmetrically separate and equally powerful countervailing administrative agency that acts “in the betterment of the common good, with equality and justice for all,”BFWR commented on ” Is economics ripe for disruption? . .”
If it were possible to sum up the single greatest flaw to capitalism ,it would be :It allows for the “most powerful force in the universe”… to quote( Einstein ? ),” compounding interest ,” to be used against that society.The lender becomes the owner of all the money based upon the act of compounding at any rate within a long period of time.
As Soddy said, every monetary system must at long last conform, if it is to fulfil its proper role
as the distributive mechanism of society. To allow it to become a source of revenue to private issuers
is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough
ultimately to overthrow all other forms of government.”
He got it wrong ! They are no longer secret and illicit !
Frederick Soddy writings, namely “The Role Of Money”
(Entire book as a free download… http://archive.org/details/roleofmoney032861mbp

 

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