#1
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Question regarding money and interest charging
I'm watching this docu:
Money As Debt http://video.google.ca/videoplay?doc...74362583451279 (it's animated and designed for a large audience) The explanations of the history and current situation are reasonably good (I'd say), but the proposed solutions I have a lot of problems with. They start with 'changing the system' at 33m37s. One of the central assertions made is that charging interest is a bad thing because that way eventually all the money would end up with the bankers. (I'm not sure if that is the exact assertion but it's something along that lines). They're also not a big proponent of the gold standard. Now: what is wrong with charging interest? If gold is a trade commodity, and a banker stores it for you, then he is providing a service, and why not would you agree to exchange value for this service? The banker will then effectively get a small part of the gold for the service. But the banker has got to eat as well, and so do the employers of the bank. The profits therefore will be used in the market again, and so the money will stay in circulation and not end up with one party or group of parties. amirite? |
#2
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Re: Question regarding money and interest charging
What?
At 37m47s they propose a mechanism to counter inflation: the govt taxes the population and takes the money out of use, "and thus restoring it's value". What good does that do? You have less money, and it's worth more. This doesn't make any sense. The problem of inflation is that the new money is distributed unequally, not that it's plentiful. |
#3
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Re: Question regarding money and interest charging
[ QUOTE ]
At 37m47s they propose a mechanism to counter inflation: the govt taxes the population and takes the money out of use, "and thus restoring it's value". [/ QUOTE ] Haha, I wish the guy who proposes that posted on this forum. Sit back and watch the biggest AC pile on ever. |
#4
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Re: Question regarding money and interest charging
bump
I've heard the 'usery is immoral' claim elsewhere also. |
#5
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Re: Question regarding money and interest charging
The U.S. tax code favors corporate debt FWIW i.e. there basically are optimum amounts of debt that a corporation has to maximize earnings vs. risk of owing the debt. Also banks aren't the only institutions that lend money. The market in Mortgage Backed Securities (MBS) bonds is larger than the market in U.S. treasuries. Pension funds, mutual funds, hedge funds, private investors, etc. own bonds.
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#6
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Re: Question regarding money and interest charging
The problem with this argument is that banks don't get money from trees, they pay consumers interest for their deposit.
If consumers who act correctly the spread between high interest deposits (5.25%) vs. auto loans (5.99%) are actually losing money for the banks (auto loans less expenses and loan losses) |
#7
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Re: Question regarding money and interest charging
[ QUOTE ]
The problem with this argument is that banks don't get money from trees, they pay consumers interest for their deposit. If consumers who act correctly the spread between high interest deposits (5.25%) vs. auto loans (5.99%) are actually losing money for the banks (auto loans less expenses and loan losses) [/ QUOTE ] That's not quite true--banks are going to be making much more than 5.25% on the deposit from other fees, higher interest loans and other sources. Banks do NOT lose money when paying interest to consumers. Prime is now 8.25%--this is what they charge their best business customers on unsecured loans--how are they losing money again? (losses from these for one, but I won't go into that for now). |
#8
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Re: Question regarding money and interest charging
The Federal Reserve actually does get money from trees.
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