Perspectives on the global economic changes

chanakyaa · Post by **chanakyaa** » 10 Jun 2015 06:12

x-posting from UkR

When you have the support of the Cartel and benefit of electronic money, which only exists in a computer as digits, why not go all in.

IMF Says It May Finance Ukraine Even If Creditors Don’t Get Paid (Bloomberg)

Neshant · Post by **Neshant** » 10 Jun 2015 10:08

The IMF "loans" to Greece & Ukraine just flows back to European banks as repayment of debt or for the purchase of goods by those countries. In the end, when Greece & Ukraine default on the IMF debts, its countries of the world like India & China who end up holding the bag. The funds India contributes to the IMF go into the pockets of those euro banks while the defaults are passed onto us!

That's the whole reason cronies like Lagarde were installed as head of IMF - to represent Europe's interest of passing on their private bank bad loans and adding more bad loans (like Ukraine) which will all be defaulted on.

Its really a fraud. India should withdraw the 10 billion increase it pledged to the IMF and China its 40 billion. Its money down the toilet. There is better use for that money.

I knew something was crooked when France.et al in 2010 were offering India & China a deal-of-a-lifetime to increase their funding of the IMF. Basically they're stealing the money.

panduranghari · Post by **panduranghari** » 10 Jun 2015 12:47

Neshant saar, as much as I think the westphalian nation state idea is on its deathbed, do you really think eliminating Central Banking is realistic at this stage?

Neshant · Post by **Neshant** » 11 Jun 2015 09:15

Its very dangerous for control over the entire monetary system to be vested in some "wise man" sitting at the top.

Aside from the absurdity that such a person would know more about market supply & demand than the market itself, it opens the door for corruption of the govt & political class.

In the best case scenario, the guy fools himself into thinking he knows what ails the economy and how to "fix" it. He fiddles with interest rates (aka price fixing) or money printing (aka counterfeiting) to benefit one group at the expense of another. He comes up with nonsensical theories as to why this is good. Hopefully he does not blow things up like Bernanke.

In the worst case scenario, he can leave an entire nation destitute by a series of corrupt or foolish actions that benefit those who will profit him after he leaves office. A whole lot of Bernanke's and Tim Geithners are now sitting in multi-million dollar jobs as a reward for having offloaded the loss of private banks onto the people. Just imagine the hard work of millions getting stolen or wiped out by one moron sitting at the top.

This cancerous central banking idea that came from the west is not suited for India. It is based around financial chicanery and theft rather than profit from the pursuit of honest industry.

What should replace it is private currency. Unless people who earn the wealth have the freedom to choose the medium of exchange, a system of theft is in operation.

Neshant · Post by **Neshant** » 11 Jun 2015 10:45

wow I did not know India was the 2nd largest founding member of AIIB

chandrasekhar.m · Post by **chandrasekhar.m** » 11 Jun 2015 12:07

Since this is BRF, thought members would be interested in knowing Pakistan's contribution to AIIB.

From http://en.wikipedia.org/wiki/Asian_Infr ... _Structure , Pakistan is to contribute $1.2 billion, rather than just come with begging bowl. Waah re waah. Tarrel and deepel friend must have given that money too.

panduranghari · Post by **panduranghari** » 11 Jun 2015 16:05

Neshant wrote:
This cancerous central banking idea that came from the west is not suited for India. It is based around financial chicanery and theft rather than profit from the pursuit of honest industry.

What should replace it is private currency. Unless people who earn the wealth have the freedom to choose the medium of exchange, a system of theft is in operation.

I do not disagree. However, do you think the problem is more to do with the corruption of the money rather than the central banker himself/herself? And what is wrong with paper as a medium of exchange? It has made many things possible. Otherwise, we are always stuck with a double coincidence of wants?

The phrase double coincidence of wants was used in Jevons (1893). "[T]he first difficulty in barter is to find two persons whose disposable possessions mutually suit each other's wants. There may be many people wanting, and many possessing those things wanted; but to allow of an act of barter there must be a double coincidence, which will rarely happen." That is, paraphrasing Ostroy and Starr, 1990, p 26, the double coincidence is the situation where the supplier of good A wants good B and the supplier of good B wants good A.

The point is that the institution of money gives us a more flexible approach to trade than barter, which has the double coincidence of wants problem. Also known as dual coincidence of wants.

Suraj · Post by **Suraj** » 11 Jun 2015 21:00

Jeff Gundlach asserts very little rate movement this year, because of lack of maturities coming up. But he also says things will change quickly next year:
These charts have Jeff Gundlach convinced bonds will end 2015 right where they started
All disclaimers apply, but he has one of the best records at following the <1 year direction of bonds in the last few years, unlike Bill Gross, who's lost his prior touch.

Neshant · Post by **Neshant** » 12 Jun 2015 08:31

The whole reason a stooge like Lagarde was put in charge of the IMF was to pass on bad Greek debt from European banks to you. They're now trying to pretend as if they did not know.

That Greece was going to default was known well before any IMF "loan" was made to them. The German and French banks get repaid by the IMF "loans" to Greece. But when Greece eventually defaults on those IMF loans, the rest of the world that funds the IMF end up holding the bag.

Basically IMF is now a conduit of offloading bad European debt onto Asia, the Middle East and South America. Lagarde will feign total shock when Greece defaults and swallows up the IMF "loans" claiming nobody could have seen that coming.

___

IMF's 'never again' experience in Greece may get worse

BRUSSELS (Reuters) - For the International Monetary Fund, five years of playing junior partner in European bailouts for Greece has been a "never again" experience, and the worst may be yet to come.

The global lender has lent far more to Athens than to any other borrower, contributing nearly one-third of the total 240 billion euros, with the rest coming from euro zone governments and the bloc's rescue fund.

But it has sat uncomfortably in the side-car of the Greek rescue. Called in by EU paymaster Germany to try to keep the European institutions and the Greeks honest, the Washington-based IMF has never had control of the program.

Now Greece may be about to become the first European nation to default on the IMF, putting it in exclusive company with Zimbabwe and Argentina.

https://ca.finance.yahoo.com/news/imfs- ... -container

Neshant · Post by **Neshant** » 12 Jun 2015 09:15

panduranghari wrote:However, do you think the problem is more to do with the corruption of the money rather than the central banker himself/herself?

Its breeds corruption.

Banks start offering "consulting jobs" (aka deferred bribes) to regulators, ex-central bankers, politicians..etc after they are out of office for doing their bidding while in office.

Tim Geithner has been hired as a CEO for a large hedge fund and gets paid millions. Bernanke is doing "consulting" for 2 large financial firms who incidentally got lots of bailout money in 2008. His speaking fee is $300K a pop and he's got a full schedule courtesy of those same banks he bailed out who are now repaying him.

You can see subtle hints being offered to corrupt central bankers in India. Offers of a cushy position in the IMF made to ex-central bankers. Its purpose is intended to corrupt these folks with the hope that they will sell 1.2 billion down the drain to gain a well paid position at these crooked institutions.

As I said, its very dangerous for control over the entire monetary system to be vested in some "wise man" sitting at the top.

And what is wrong with paper as a medium of exchange?

Nothing is wrong as long as its a private currency - where people have the right to not accept it as a means of extinguishing debt.

The point is that the institution of money gives us a more flexible approach to trade than barter

Nobody is talking about barter. I'm talking about private currencies. You seem to have some notion that private currencies involves trading chickens for a sack of potatoes in the street. An example of a private currency is Bitcoin.

Essentially there should be no such thing as "legal tender" currency because that gives monopolistic powers to define what is money to some "wise man". Legal tender implies money can only be valid if private banking crooks or govt bureaucrats agree it is legal. Naturally what they agree is legal is that which gives them the most opportunity to steal.

The power to decide what is and what is not money should rest only with the people who have earned the wealth, not those who have had no part in it and certainly not those looking to steal it aka bankers.

panduranghari · Post by **panduranghari** » 12 Jun 2015 12:04

Bitcoin is too deflationary. Why should anyone holding it sell it, if they know there are only so many bitcoins? There in lies a conundrum. Of course, If I have to send my children to school then I would sell them but it takes away the ability of many who have no access to a computer to mine Bitcoins. besides, there is a huge problem where I have a service to offer but the opposing party who needs those services do not have bitcoins to give me. What do we do in such circumstances?

I can see you have issues with the inflationary tendency of the fiat currency. But how does bit coin solve the deflationary aspect of it? If central bankers are frauds as you are alluding to, then what does that make Satoshi Nakamoto? He stole most BC and his ran away into oblivion.

Bit coin is nothing more than a different take on gold standard. I wonder why the supranational governments are not willing to set up a gold standard when they (may be even you) believe the current one is so bad?

Neshant · Post by **Neshant** » 12 Jun 2015 12:25

Bitcoin would be one of MANY private currencies. In that sense, there is no limit to the amount of currency that can be produced.

The only limit would be the market which through supply & demand controls the type & quantity of money that can be in existence at any given time.

A private currency could be based on anything. As long as the counter party is willing to accept the currency as payment voluntarily (key word voluntarily), that is all that matters.

The creation of money which is currently the monopoly of a few would be the right of all. Even an individual could issue his own currency.

We live in an electronic age where exchange rates between currencies are instantaneously known. Inter-change between currencies are fast. Thus if the seller is unwilling to accept the private currency you hold, it can be converted at the prevailing exchange rate into a private currency he wants. Just as its done today between currencies from various countries.

The concept of a "wise man" and a good old banker boys club creating paper money and forcing people to use it on penalty of imprisonment & impoverishment is as obsolete as the horse & buggy.

panduranghari · Post by **panduranghari** » 12 Jun 2015 15:00

The creation of money which is currently the monopoly of a few would be the right of all. Even an individual could issue his own currency.

Will you trust the money I create? Why should I trust the money you create?

chanakyaa · Post by **chanakyaa** » 13 Jun 2015 07:55

Bitcoin is too deflationary

Is it really the Bitcoin that is deflationary or the lack of illegal distribution of new money, under Bitcoin regime, that is deflationary? Government decides to print new money, paper or electronic, without consulting the holders of the existing money. It leads to asymmetric distribution of new money to citizens. Those who are in a better position to attract the new money are better off than the ones who are less savvy. But that does not change the fact that new money was distributed without consulting existing holders. Bitcoin does not allow asymmetric distribution of the new money, in part because of the unique Bitcoin can not be duplicated. Paper or computer digits based modern day money can be reproduced and distributed illegally through banksters.

When a stock splits, each holder of the stock gets distribution of the new stock. It is symmetric. What if the company decided to print new stock and distribute at its will without consulting existing shareholders, how would the existing stock holders respond?

Neshant · Post by **Neshant** » 13 Jun 2015 08:32

panduranghari wrote: Will you trust the money I create? Why should I trust the money you create?

If you don't trust it, don't accept it. Its that simple.

The whole point is freedom of choice.

Ultimately if nobody trusts the money I create, they won't use it. I'll have to go out an earn money that someone does trust. This is entirely market driven.

TSJones · Post by **TSJones** » 13 Jun 2015 08:35

udaym wrote:
Bitcoin is too deflationary
Is it really the Bitcoin that is deflationary or the lack of illegal distribution of new money, under Bitcoin regime, that is deflationary? Government decides to print new money, paper or electronic, without consulting the holders of the existing money. It leads to asymmetric distribution of new money to citizens. Those who are in a better position to attract the new money are better off than the ones who are less savvy. But that does not change the fact that new money was distributed without consulting existing holders. Bitcoin does not allow asymmetric distribution of the new money, in part because of the unique Bitcoin can not be duplicated. Paper or computer digits based modern day money can be reproduced and distributed illegally through banksters.

When a stock splits, each holder of the stock gets distribution of the new stock. It is symmetric. What if the company decided to print new stock and distribute at its will without consulting existing shareholders, how would the existing stock holders respond?

stock splits do not affect the shareholder's investment other than to decrease the price of the stock. the shareholder's total investment remains the same. in a two for one stock split the share holder would then have twice as many shares. no tax consequences there of.

Neshant · Post by **Neshant** » 13 Jun 2015 08:37

Its now blindingly obvious that Europe has used the IMF to offload its bad Greek debt onto the rest of the world - primarily India & China who were asked to contribute more $ to the IMF. Those IMF "loans" have been channeled to European banks as debt repayment from Greece over the past few years.

But when Greece finally default on those IMF loans, the European banks would have got their money while India & China will be left holding the bag!!

Europe put their stooge Lagarde as head of the IMF for this very purpose. They're now acting as if they never saw a Greek default coming prior to making those "loans".

Now they trying to spin greater voting rights as the IMF as a win for India & China. But the reality is, India & China have been cheated of billions of dollars in this Greek bailout (or should I say European bank bailout).

____

IMF board postpones decision on reform for three months

https://ca.finance.yahoo.com/news/imf-b ... iness.html

WASHINGTON (Reuters) - The International Monetary Fund's board on Friday decided to postpone by three months its decision on how to raise emerging countries' voting rights at the institution, as it seeks to get past U.S. foot-dragging on reforms.

The IMF's member countries agreed in 2010 to give more voting power to countries like China and India, double the fund's resources and reduce the dominance of Western Europe on its 24-member board.

TSJones · Post by **TSJones** » 13 Jun 2015 18:16

IMF loans are almost always repaid. They *make* money, they don't lose it. A lot of banks would be envious of their loan success rate.

Neshant · Post by **Neshant** » 13 Jun 2015 23:08

Always repaid by African, Asian and South American countries.

We'll see what gets repaid from this Greek fiasco.

Simon says the only ones getting repaid will be the European banks to whom Greek debt is owed.

That money will come straight from IMF "loans" which will promptly be defaulted on by Greece when the time comes.

Effectively a transfer of bad debt from European banks to others via the IMF.

That's the whole reason Europe was eager to put its candidate Lagarde as head of the IMF.

TSJones · Post by **TSJones** » 13 Jun 2015 23:45

Neshant wrote:Always repaid by African, Asian and South American countries.

We'll see what gets repaid from this Greek fiasco.

Simon says the only ones getting repaid will be the European banks to whom Greek debt is owed.

That money will come straight from IMF "loans" which will promptly be defaulted on by Greece when the time comes.

Effectively a transfer of bad debt from European banks to others via the IMF.

That's the whole reason Europe was eager to put its candidate Lagarde as head of the IMF.

IMF head has traditionally been French. I don't know why since the US contributes 17% of all funding. That's just the way they roll.

the over whelming amount of loans to Greece comes from the "European Commission" whatever that is. IMF loans are not even close to it.

http://ec.europa.eu/economy_finance/ass ... dex_en.htm

click on "Overview of Disbursements"

TSJones · Post by **TSJones** » 13 Jun 2015 23:56

Neshant wrote:Always repaid by African, Asian and South American countries.

We'll see what gets repaid from this Greek fiasco.

Simon says the only ones getting repaid will be the European banks to whom Greek debt is owed.

That money will come straight from IMF "loans" which will promptly be defaulted on by Greece when the time comes.

Effectively a transfer of bad debt from European banks to others via the IMF.

That's the whole reason Europe was eager to put its candidate Lagarde as head of the IMF.

what happens if Greece defaults on its IMF loans is that it cuts them off from lenders of last resort. From then on out Greece would have to put up a percentage collateral in order to get a loan from anybody. The more risk, the greater the amount of collateral needed. Sorta like a pawn shop loan.

Singha · Post by **Singha** » 14 Jun 2015 12:41

there is a informal agreement between europe and D.C - one gets to rule IMF and other the WB. both cross-participate in the other.

when its time to rape third world economies they are very much in sync.

TSJones · Post by **TSJones** » 14 Jun 2015 13:09

third world countries can always put up collateral and get loans from the global markets. Or, China is looking to do loan business with the AIIB. Maybe third world countries will get treated better there. but really, financial principles are universal regardless, business risk must be evaluated in order for loans to be underwritten so nobody is going to be too loose with the cash.

Austin · Post by **Austin** » 14 Jun 2015 13:18

The problem is when West is the net Creditor but also has agency that valuates Credit Rating for countries that borrow from them then any turd world country is dependent on loan for these countries.

Its like if you need a home loan and the only person who would evaluate your credit rating and loan are the banks then you are at the merci of them , because if they evaluate your credit rating as not worthy then you get no loans or vice verse/

In any case the fastest growing economies of BRICS and SE countries have little say in these Western Institutions like IMF or WB so its little help for Turd World countries.

What ever Gora says , Brown Babu has to abide.

The newer institution like AIIB or BRICS bank would go a long way to over come these issues though they have a long way to go the baby is just born after labour of love among Turd world countries.

panduranghari · Post by **panduranghari** » 14 Jun 2015 14:54

udaym wrote:
Bitcoin is too deflationary
Is it really the Bitcoin that is deflationary or the lack of illegal distribution of new money, under Bitcoin regime, that is deflationary? Government decides to print new money, paper or electronic, without consulting the holders of the existing money. It leads to asymmetric distribution of new money to citizens. Those who are in a better position to attract the new money are better off than the ones who are less savvy. But that does not change the fact that new money was distributed without consulting existing holders. Bitcoin does not allow asymmetric distribution of the new money, in part because of the unique Bitcoin can not be duplicated. Paper or computer digits based modern day money can be reproduced and distributed illegally through banksters.

When a stock splits, each holder of the stock gets distribution of the new stock. It is symmetric. What if the company decided to print new stock and distribute at its will without consulting existing shareholders, how would the existing stock holders respond?

What difference? Bitcoin is currency, isn't it? Why do you ask - lack of illegal distribution of new money, under Bitcoin regime, deflationary? A currency is supposed to circulate. And it will circulate most if its considered good enough. I trust that currency because I believe that currency will buy me my necessities and if I save it for at least some time, it wont be lost to inflation. In this aspect Bitcoin is good. It circulates. But its not widely used. And the 'far right' people want to ban the fiat currency and replace it will bitcoin. They believe doing this will make money honest. This line of argument is also used with gold standard.

I wrote this elsewhere;

Marx classified society as the labour class and the bourgeois elite. He always believed the elite class has exploited the labour class. The elite had all the money and hence had the ability to control the event outcome. We see this attitude pervasive amongst doomsters today and many who support 'occupy wall street' movement. They believe the rich banksters are screwing the ordinary citizens by privatising profits and socialising the losses.

The two classes are not the Labour and the Capital, the rich and the poor, the proletariat and the bourgeoisie, or the workers and the elite. The two classes are the Debtors and the Savers. "The easy money camp" and "the hard money camp". History reveals the story of these two groups, over and over and over again. Always one is in power, and always the other one desires the power.

1. Debtors - "The easy money camp" likes to spend (and redistribute) money it did not earn, either by borrowing it, taxing the savers for it, or printing it. They like easy money because it is always and everywhere constantly inflating, easing the repayment of their debts.

2. Savers - "The hard money camp" likes to live within their means and save any excess for the future. They prefer hard money (or in some cases "harder" money) because it protects their savings and forces the debtors to work off their debts.

In 1789, the French Revolution, "the hard money camp" had been in power since 1720 when easy money collapsed, and starting in 1789 "the easy money camp" killed "the hard money camp" and took back the power. This is the way "the easy money camp", the Debtors, usually take power... by revolting against the hard repayment of their spending habits.

Only nine years later, 1797, easy money collapsed once again and a new French monetary system based upon gold was again reinstated. This is the way "the hard money camp", the Savers, almost always regain control: when the easy money collapses. On very rare occasions and only under highly favourable circumstances (like moving to a new continent!), "the hard money crowd" takes control by physically separating from "easy money" and declaring independence from the Debtors. And you get The American Revolution and the great American constitution which MANDATES hard money.

So just to repeat for clarity: Hard money regimes almost always end in bloodshed, when the easy money camp slaughters the hard money camp to avoid hard repayment terms. And easy money regimes almost always end in financial suffering when the easy money collapses. Here are a few more examples of "easy money collapses"...
link

Angola (1991-1999)
Argentina (1975-1991, 2001)
Austria (1921-1922)
Belarus (1994-2002)
Bolivia (1984-1986)
Brazil (1986-1994)
Bosnia-Herzegovina (1993)
Bulgaria (1991-1997)
Chile (1971-1973)
China (1939-1950)
Free City of Danzig (1923)
Ecuador (2000)
England (1560)
Greece (1944-1953)
Georgia (1995)
Germany (1923-1924, 1945-1948)
Greece (1944-1953)
Hungary (1922-1927, 1944-1946)
Israel (1979-1985)
Japan (1944-1948)
Krajina (1993)
Madagascar (2004)
Mexico (1993)
Mongolian Empire (13th and 14th Century AD)
Nicaragua (1987-1990)
Persian Empire (1294)
Peru (1984-1990)
Poland (1922-1924, 1990-1993)
Romania (2000-2005)
Ancient Rome (~270AD)
Russia (1921-1922, 1992-1994)
Taiwan (late-1940's)
Turkey (1990's)
Ukraine (1993-1995)
United States (1812-1814, 1861-1865)
Vietnam (1981-1988)
Yap (late 1800's)
Yugoslavia (1989-1994)
Zaire (1989-1996)
Zimbabwe (1999 - present)

So Marx had it backwards. It is always the debtors 'rich' who exploit savers 'poor'.

Why are debtors considered 'rich' and why are savers considered 'poor'?

The popular "Marxian" view of perpetual class struggle is as follows: The wealthy live the good life consuming as much as they want on the backs of the indebted poor who must slave away producing just enough to stay alive, plus some surplus for the wealthy to consume.
But is this reality?

Your assertion - Bitcoin does not allow asymmetric distribution of the new money, in part because of the unique Bitcoin can not be duplicated. Paper or computer digits based modern day money can be reproduced and distributed illegally through banksters.

So what? It cannot be duplicated. If it can be (or if it will be) what will you do next? Will you start from scratch again? Where will the global trade go while you wait to get consensus? The nature abhors vacuum.

What the era from 1944 to 1971 and from 1971 to 2008 taught us is - a currency based on gold backing works until it fails and The currency based on fictional reserve banking has not lead to any improvement over the past, except in the ability to improve the ability of producers to manufacture and sell goods to even more people who were unable to afford the goods until then. Unless we separate the functions of money, there will never be any safety valve within the system. The foundation of the monetary system is not robust enough and the system has become a bit too complicated for any way the safety valve to be effective. Its at best a band aid for a patient who is undergoing multi system failure.

The elephant in the room is there is already a running system which serves 15% humanity. Wont it be wonderful if the rest 85% also benefit? Its these 85% of humanity who are voting with their feet and saving whatever excess they have within an economic system, though still outside it. This automatically separates the retail banking from commercial banking, Glass Stegal act or not. It automatically prevents trading for the sake of trading. It makes stock market a realistic place to raise funds rather than act like a vipers nest where the biggest one will bite the most.

Just my 2paisa opinion.

Austin · Post by **Austin** » 14 Jun 2015 20:32

How Floating the Ruble Rescued Russia

Neshant · Post by **Neshant** » 14 Jun 2015 23:09

TSJones wrote:third world countries can always put up collateral and get loans from the global markets. Or, China is looking to do loan business with the AIIB. Maybe third world countries will get treated better there. but really, financial principles are universal regardless, business risk must be evaluated in order for loans to be underwritten so nobody is going to be too loose with the cash.

I'm not sure if you understood what I wrote.

European countries already know their banks are going to lose big time on Greece when that country defaults.

What European countries are trying to do via control of the IMF (through their stooge Lagarde) is offload those bad Greek loans onto the IMF (i.e. taxpayers of the world).

That lessens the loss on their own banks when Greece defaults.

Basically its a scam of transferring bad debt from themselves on to others.

That's the whole reason European countries were eager to put their own stooge Lagarde in the IMF and "lend" vast sums of money to Greece. Lagarde is working in the interest of European countries, not the shareholders of the IMF.

What's worse is that the IMF under Lagarde got China & India to contribute an additional 50 billion under the guise of expanding their roles in the IMF. The reality is the money will be going into European bank pockets via "loans" to Greece which that country will soon default on.

chanakyaa · Post by **chanakyaa** » 15 Jun 2015 05:15

Unless we separate the functions of money, there will never be any safety valve within the system. The foundation of the monetary system is not robust enough and the system has become a bit too complicated for any way the safety valve to be effective.

Can you please elaborate?

Neshant · Post by **Neshant** » 15 Jun 2015 08:57

Giving any entity a monopoly over anything is disastrous. That includes the creation of money.

The micro-managing of the monetary system by private bankers claiming to operate in the public's best interest is a sham. By forcing their monopoly over the creation of money onto society, they set themselves up as beneficiaries of this theft.

The notion than you need some committee of central bankers to decide what color shoes you should buy would be absurd. It is no different that this committee is deciding not only what money you may use but what its value should be and how & when a portion should be stolen from you.

Other than misallocating and stealing of capital from the productive economy - it promotes something far worse - the corruption of the political class & criminalization of the govt machinery. Given enough time to knaw away, corruption of the monetary system will destroy democracy & the republic itself.

The type of money in circulation has to be chosen by the free market - those who earn the wealth through their (hopefully) honest labor. Let the market decide what and how the monetary system should be, not some "wise man" in an ivory tower who thinks he knows what's best.

Unless that happens, there is no capitalism. Only crony capitalism.

panduranghari · Post by **panduranghari** » 15 Jun 2015 17:23

Money serves 3 functions- a unit of account, a medium of exchange and a store of value.

Currently the three functions are served by fiat currency. The people have realised the unit of account function does the job extremely well. The people also agree that the convenience of medium of exchange function, so much so that inspite of the failure of USA which reneged on its gold standard dollar promise, they still backed the USD to function as the global currency. Though 1971 was the culmination, the problem was recognised in 1922. In 1944, at Bretton Woods, the plan was to create something sustainable, but US reneged. It lead to a lot of grief in Europe. As Marshall plan was active, Europe did not have much say. I think this was a god sent opportunity for the colonised third world to rebuild and regain Gold for cheap. Yes IMFand WB screwed us along but the voracious appetite for gold kept the third world nobodies happy, relatively speaking. The third function of money is the store of value which USD did well but not long enough. The value of dollar fluctuated and we ended up with regular inflation. The idea that we are investors is wrong. i speak for myself at least. Predominantly, we are savers. Investing or speculating is for those who can afford to loose money. Money is meant to be spent, not hoarded. Unfortunately, if you save in fiat currency, you loose it to inflation. If you hoard money, its deflationary to the economy. As fiat currency is lost to inflation anyway due to its tendency to expand, we have been programmed to seek a return. The return is thus the risk premium.

If people buy into a mania that houses always go up in price, its primarily due to the Laziness to do their own due dilligence. They dont want to understand why prices are rising, they know if my neighbour can make money by flipping houses, why shouldnt I? They see inflation in all those things they need, while remarkable returns in all those things they dont need. Why would someone have multiple properties? Because parking money in a house, gives inflation beating returns. Thats true for stocks, bonds, warrants and even the innocent public provident funds. We want to save, thats it. We would rather not risk capital ( seeking returns to keep up with inflation).

But we do. Because the fiat currency, still acts like a store of value.

Separate this third function from the other 2 and you wont have this conundrum. How many man hours are spent by rakshaks to keep up with the inflation? Its a lot, quite assuredly. If that time ( money) was spent pursuing something of value, anything perhaps excellence, life would be less complicated more rewarding. The division of labour would keep everyone equitable depending on one another, rather than live detached from the reality. I am not suggesting an utopia. I am not an idealist either. But a world where the money is just money, nothing else is a better world.

Neshant · Post by **Neshant** » 16 Jun 2015 08:12

Money is meant to be spent, not hoarded.

Sorry my man but only the person who *earns* the wealth should have the right to decide this.

Not you nor anyone else.

The free market is all about people making decisions in their own best interest.

The moment you start forcing people what to what you want with THEIR money, the words "free market capitalism" and indeed freedom itself goes out the window.

We are back to the "wise man" sitting up in the ivory tower who thinks he knows what's best for everyone.

Austin · Post by **Austin** » 16 Jun 2015 10:07

Russia’s Central Bank upgrades trade balance surplus forecast for 2015 by 32% to $187 bln

MOSCOW, June 15. /TASS/. Russia’s Central Bank has upgraded its forecast on trade balance surplus forecast for 2015 from $141 bln to $187 bln, the regulator said in its monetary policy report on Monday.

The previous forecast by the Central Bank implied average Urals crude oil price at $50-55 per barrel in 2015 while the new forecast is based on average annual oil price at $60 per barrel in 2015.

The regulator also changed its forecast on trade balance surplus for 2016-2018. It provided two forecast scenarios depending on price of oil.

The first scenario implies oil price at $66 per barrel in 2016, the second one - at $60 per barrel. In first case the Bank of Russia forecasts external trade surplus at $104 bln, in second case - at $101 bln. In its previous forecast the regulator estimated external trade surplus at $90 bln at $60-65 per barrel oil price.

In 2017, depending on scenario /$74 per barrel and $60 per barrel oil price/ the Central Bank forecasts trade balance surplus at $117 bln and $81 bln respectively. Earlier at average annual oil price of $70-75 per barrel the regulator forecasted surplus at $119 bln.

According to the Central Bank, external trade surplus will total $121 bln in 2018 at $80 per barrel oil price, or $72 bln at $60 per barrel oil price.

Austin · Post by **Austin** » 16 Jun 2015 10:08

What does trade surplus exactly translate to ? Does that mean you get Higher Forex inflow/Forex Reserve for Central Bank or does it mean the companies make more profit but banks dont gain or loose any thing in bargain ?

Neshant · Post by **Neshant** » 16 Jun 2015 10:57

Cashless society move will begin to accelerate in the next 6 months according to this br0tha.

Purpose will be to enforce negative interest rates and steal from savers. And of course to give more control over your earnings & life to banking con artists.

I've said it before and I'll say it again, banking is all about scamming

TSJones · Post by **TSJones** » 16 Jun 2015 18:49

nobody wants to go back to third world economies with shadow banking and keeping assets in gold jewelry or coins.

*nobody* that is, who have seen the benefits of modern consumer retail banking.

Neshant · Post by **Neshant** » 17 Jun 2015 08:24

Modern consumer retail banking is nothing more than a leveraged scam that will implode.

Do you even know the meaning of the word shadow banking. You're using it but I bet you don't even know what it means.

Shadow banking is what exist under the present system. It enables leveraged bets by private financials through shell companies wherein they pocket the profits if the gamble pays off and dump the losses as defaults onto society (not traceable back to the parent company) when things go downhill.

Mathematically all these scams & schemes will implode. Its just a question of who will end up holding the bag - and you'll probably be one of many. Did you even watch the interview I posted above.

TSJones · Post by **TSJones** » 17 Jun 2015 08:49

http://www.bloombergview.com/quicktake/shadow-banking

The catchall phrase “shadow banking” encompasses risky investment products, lending between individuals, pawnshop and loan-shark operations in emerging markets, as well as more respectable activities like derivatives, money-market funds, securities lending and repurchase agreements at financial institutions in Europe and the U.S. The common denominator is that these activities flourish outside the regular banking system and often beyond the control of regulators and monetary policy.

Neshant · Post by **Neshant** » 17 Jun 2015 11:44

"More respectable activities like derivatives"

Now for the next question.

Do you know who ultimately holds the liabilities for derivatives once the counter parties fail to pay up?

Here's some respectable activities going on recently among bankers playing the derivatives leveraged casino. Guess who's going to be eating the loss.

FDIC To Cover Losses On $75 Trillion Bank of America Derivative Bets

Potential losses on Bank of America’s massive $75 trillion book of risky derivative contracts has just been dumped onto the FDIC by the Federal Reserve.

http://problembanklist.com/fdic-to-cove ... bets-0419/

panduranghari · Post by **panduranghari** » 17 Jun 2015 12:09

Neshant wrote:
Money is meant to be spent, not hoarded.
Sorry my man but only the person who *earns* the wealth should have the right to decide this.

Not you nor anyone else.

The free market is all about people making decisions in their own best interest.

The moment you start forcing people what to what you want with THEIR money, the words "free market capitalism" and indeed freedom itself goes out the window.

We are back to the "wise man" sitting up in the ivory tower who thinks he knows what's best for everyone.

Yada yada, rant rant. Is there anything more to offer ? Offer solutions first. If solutions are offered, dont be annoyed if holes are picked in the argument. If you dislike central banking so much, you will be disappointed with the new system.

TSJones wrote:nobody wants to go back to third world economies with shadow banking and keeping assets in gold jewelry or coins.

*nobody* that is, who have seen the benefits of modern consumer retail banking.

Exactly.

Neshant · Post by **Neshant** » 17 Jun 2015 12:29

I already told you what the solution is.

I've even told you what the solution isn't.

As I stated - people who do real work to earn the wealth should have the freedom to choose their monetary system.

You don't need a "wise man" to select your pants or shoes for you and neither do you need a wise man to select the monetary system to "solve" anything for you. If you cannot comprehend that, then you cannot comprehend anything I'm saying.