Fractional Reserve Banking

Gut the global market, trade through bartering, lend money without interest backed primarily by labor, partially by gold.

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You can't have interest on anything, it creates disparity.
We're saying could you have two currencies, national and worldwide for whatever country involved.

Fractional reserve banking doesn't exist, though I'm not sure if that negates your question because private bank created money does exist.

What do you mean it doesn't exist? On a national level?

At all. Something similar exists, but the way it is described isn't really how banking works. It's usually described as a reserve increase allowing the bank to create loans which expands the money supply. What really happens (in a simplified way) is that banks create money through loans anytime they find somebody they consider credit-worthy, and then they look for the money to meet their reserve requirements at the end of the day later. If they can't find it through interbank loans, they basically get a loan from the Fed. So private banks really drive the money supply right now through demand for credit, and their own policy as well as regulations which dictate who they are going to give loans to.

Just as more explanation, this is a somewhat recent but well-known article by the bank of england describing this process.

bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

>If you’re going to use money it absolutely has to be controlled by a 3rd party
G O L D B I T C H E S

This guy gets it. Money is just a receipt for precious metals/assets.
youtu.be/wd7R67yydcY

>Could a global market still work if a country was able to produce its own currency ad infinitum?
No, any currency produced above GNP devalues the currency.
The fractional reserve is just another way in which additional currency is produced and devalued.

>Or is taxation on top of interest free loans issues from a global bank a better solution?
No, one country should not be forced to pool their money/resources into a bank that will then independently decide how that money will be spent in another country.

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Bump for G. Edward Griffen. I have extra copies of this book on hand in case I run in to somebody with a brain who needs a leg up.

>If you’re going to use money it absolutely has to be controlled by a 3rd party

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Why would you want that?

Trade is an agreement agreed upon by all parties. There does not need anymore kikery than that.

Look at the shitshow the petrodollar has caused

It's all belief and indoctrination. I, for one, look forward when the singularity releases us from all this nonsense.

End usury.

We need a way to trade services and there are too many services and only a finite amount of gold.

Adjusting money supply to money demand is the way to go, so the system can easily deal with spikes without arbitrarily increasing interest rates. What should matter is whether the project's quality meets a threshold not whether there is enough money around.

This.

Why do you feel the need to control the flow of money? What's wrong if we don't worship money?

We? It's the private banks that do this, not the government.

What do you propose to do in order to improve the situation?

No. Fractional Reserve banking exists because it allows banks to expand the money supply by many times more than what they could do if they only lent the money they have on hand.

You realize that even when we were on the gold standard that fractional reserve banking and central banks were superior to simple exchange of money.

It just isn't possible. The expansion of the money supply is limited by the quantity of the physical gold in existence/circulation and that is very variable. Production of goods and services easily expands beyond the base money supply and only periodic crises bring it back to earth again. On the other hand all the "sound money"/0% interest recommendations that you hear here are even more unworkable then the elite central banker policies that people loathe.

Friendly reminder that no matter how much you may believe in your flag money will ALWAYS perform that function because that is literally the function of money.

>411
checked and verified fpbp

Good, all your reasons are shit.
fuck off and die

Most of the problem is related either to retarded government incentives to banks (e.g. all poor people must own a house) or them focusing their loans for financial products. Both can be dealt with regulation, and capital requirements are also a plus as they prevent banks from going overboard if they get too confident (i.e. the threshold I mentioned being too low).

>It just isn't possible. The expansion of the money supply is limited by the quantity of the physical gold in existence/circulation and that is very variable
This is simply not true, and hasn't been true for quite a long time.

>On the other hand all the "sound money"/0% interest recommendations that you hear here are even more unworkable then the elite central banker policies that people loathe.
I don't understand what you mean here. There shouldn't be a 0% interest, just a fixed risk-free interest rate applicable to the whole economy and set by the central bank, plus an investment specific risk premium. The risk-free rate can be 0% but you can increase it to prevent banks from going overboard on their loans.

Kikes want to keep enslaving you and cutting your kids dicks, remember that

We should ban usury, which is really indentured servitude.

>money without interest backed primarily by labor

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That's what Trump is gonna do.

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>no argument

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Explain what is wrong with this.

>This is simply not true, and hasn't been true for quite a long time.
Think about it this way: why can't the money supply be expanded infinitely? If this could be done, according to the prevailing theory, couldn't we end economic crisis?
>muh too much money chasing after too few goods
Okay, so how come there hasn't been one single central bank in the world able to create the right amount of money at exactly the right time to keep their economy expanding? The main fear of economists and politicians is usually that the money supply will be too small and cause deflation. That suggests that overproduction is far more common and likely than underproduction. Production expands faster than the money supply, usually; credit makes up the difference in good times. I don't know if you've ever looked into it but the output of Chinese toy factories expands at a far greater rate than the production of gold.

hmmmm....

If we consider the fact that the FED is actually only bankrupt on paper and the sole reason for that is its gold holdings that haven't been revalued on their books since the 70s. Central Banks all over the world have thousands of tons of gold.

You might have noticed that the biggest holders are all major economic super-powers:
forbes.com/sites/greatspeculations/2016/05/26/top-10-countries-with-the-largest-gold-reserves/2/#1c9235c22dbb

Curious. Additional evidence is to be found in the fact that when investors feel that fiat currency supplies are expanding too rapidly that they dogpile into gold and then the price of gold moons. Gold is money, pure and simple.

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Think of it this way. Money is a measure of the value of the favors you have provided to others. In rudimentary societies, people provide favors to others and expect something in return. If someone consistently gets favors but gives nothing back, they are usually shunned. This would work on a small scale, like among a family. However, as society gets larger and larger, the number of interactions grows more than proportionally, so this system is completely intractable. Hence, you need some technology to account for the favors you provided to others - that is money.

What I believe you don't like the most is the fact that money is a store of value, hence it maintains its value beyond the life of the individual who earned it. This can be dealt with, and you'd be a radical but not as radical as an ancom. However, note that even in primitive societies with no money there is an inheritance of reputation, human and social capital to one's offspring. And, in many, people paid favors back to the kids of those to whom they owed something. Whatever you do, you must understand each person as part of a continuum of generations. Fighting against this is a hopeless battle.

Money evolved as a means of exchange between communities and not individuals. That's why hunter-gatherer tribes that don't frequently interact with other tribes have no money; any other type of society typically develops some form of money early on, however rudimentary.

>Okay, so how come there hasn't been one single central bank in the world able to create the right amount of money at exactly the right time to keep their economy expanding?
Because central banks do not control the economy, the merely influence it. There are many other factors going on.

>The main fear of economists and politicians is usually that the money supply will be too small and cause deflation.
They fear deflation because firms are incapable of reducing wages nominally and it makes them more indebted in real terms, therefore the firms costs in real terms keep on increasing making them go bankrupt. This implies the labor market adjusts through quantity instead of prices, exacerbating the crisis and destabilizing the country.

Gold is a good last stand because its value will be there even if all institutions fail due to its intrinsic properties. Otherwise it is irrelevant. Focusing on gold in today's economy makes little to no sense.

Those tribes are small, so, within, people can track each other relatively easily. Money evolves as soon as you start having mixing up genetically diverse people in big communities, i.e. cities. And, yes, probably there was some form of money between tribes, but that was likely marginal. I'm talking about widespread use.

Your post is consistent with mine.

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Debt is a stock variable
Interest is a flow variable

That pic makes no sense

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Cash flows are due on different days in the future. It doesn't matter if they are principal or interest payments. Interest due and principal due are both equally debt.

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>That pic makes no sense
Ponzi Schemes never make sense.

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You don't understand the difference between a stock and flow variable. Moreover, interest is income on the part of someone. It doesn't disappear.

I meant that it is wrong. What you're saying is factually wrong and based on a misunderstanding.

This book is a good number two to read after Creature.

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I think he is saying that an amount of money can pay off debts that may be larger than the amount of money. The money that pays interest to private banks just goes back into the economy through wages, which can then go back to paying interest on debts to banks. The same kind of confusion of stocks and flows can be used to say that there aren't enough wages in the economy to cover all the profits, because the cost of all goods is necessarily going to be set above the total wages in the long run, since the difference between the two is profit. If the wages are what are supposed to make those profits, then there is an impassable wage-price gap in the economy.

>Because central banks do not control the economy, the merely influence it.
So, in other words, marginalist monetary theory is almost certainly wrong because no one has been able to successfully implement it anywhere on Earth. I mean maybe its right but if we look at its statistical likelihood it seems very small. To blame it on "other factors" would suggest that there are regularly occurring structural crises of capitalism and that's not what the theory says.

>They fear deflation because firms are incapable of reducing wages nominally
That's just another way of saying that firms are incapable of passing through meaningful wage cuts because of worker resistance. People don't like their wages getting reduced and they understandably resist it but Keynesians come along and say that if we reduce wages through inflation then workers are less likely to rebel.

>t makes them more indebted in real terms,
Granted, but if you have to borrow at a higher interest rate due to banks adjusting for inflation then there isn't much difference. Only your old debts get reduced; if you need to take out new ones then it could be more painful.

>Gold is a good last stand because its value will be there even if all institutions fail due to its intrinsic properties.
Why hold it at all if its just another commodity? From that perspective keeping gold at Fort Knox is the equivalent of having a banana depot and keeping it under armed guard.

The behavior of gold during (post)-modern economic crises is always very interesting. Gold usually goes through the roof while all other commodities tend to fall or stay stable in price. When you look at it over the long-term commodities may rise in price over the long-haul due to inflation in fiat terms but they tend to fall enormously when you look at them in gold terms.

That suggests that very little is actually changed by pro-inflationary policy.

Let's link a classic
youtube.com/watch?v=O6ayb02bwp0

The best part is when his fellow Jew starts speaking Hebrew. If you've never lived in an Orthodox Jewish community, you might not have ever heard these thing like I have.

When you borrow $1000 from a commercial bank, they create the money instantaneously out of thin air at the moment the load is made.
When you pay the $1000 back to the commercial bank, the money disappears from existence.
This is done with the approval and control of the Fed.
Do this for 100 people on an island economy and $100,000 will be created when loans are made.
And $100,000 will vanish when the loans are repaid at the end of the year.
But now $5,000 of interest is also due at the end of the year.
But the entire $100,000 has vanished on repayment of the principal.
So there is no money in existence for anyone to pay the $5000 in interest to the bank.
Unless new loans are made.
It is exactly a Ponzi Scheme.

Your crap about stock variables and flow variables doesn't take into consideration the fact that loans have fixed terms when the principal must be repaid.

THIS

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whats this picture?

It's labeled mate. Meant to post something else, but I'm too lazy to rectify the situation.

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I mean I saw the label, but for practical uses how would this be used? It's a cool visualization but is there anyhting more to it?

this, tax the fuck out of trading floors

>but is there anyhting more to it?
No. You just stare at it and trip off the black diagonals of "missing" primes.

>So, in other words, marginalist monetary theory is almost certainly wrong because no one has been able to successfully implement it anywhere on Earth. I mean maybe its right but if we look at its statistical likelihood it seems very small. To blame it on "other factors" would suggest that there are regularly occurring structural crises of capitalism and that's not what the theory says.
I don't know what you mean here, and the last part is not at all in line with what the large majority of mainstream economists believe.

>Keynesians come along and say that if we reduce wages through inflation then workers are less likely to rebel.
I know it is stupid. I understand you perfectly, but it is what the data shows and economists are as puzzled about it as you are. It's almost impossible to get nominal wages to go down, but manageable for real wages to go down.

>Why hold it at all if its just another commodity?
Gold has value because, as you said, it is a form of money. Dumping it is like throwing away money. However, macroeconomically speaking, it is mostly irrelevant.

>The behavior of gold during (post)-modern economic crises is always very interesting.
It's standard behavior for very safe assets. The same happens to government bonds, for instance. Gold is even safer than governments bonds.

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This post explains my point I understood your point. The issue is that you're assuming the contrived case where money rolls over the economy just once, which is ridiculous. In such a scenario, that is, if people were to pay all their interest + principal right now all at once, yes, there would be not enough money. But that is precisely because you're not letting the income of the bank go through the economy.

why are two of the arrows ghetto ass mspaint?

Nope! Just some code I wrote a few years ago, and finally dug up while cleaning up my projects folder the other day. Makes for interesting visualizations, but has no real practical purposes beyond that.

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FPBP

Although I'd suggest we should keep the IRS and replace the 16th with a version far more carefully constructed to make it ACTUALLY applicable only to monetary income with no 'rebates', and some percentage limit (should be fairly high). And also make that amendment bar the federal government from all other forms of taxes, charges, and fees (distinct from fines subject to habeus corpus), and the state governments from ANY AND ALL REVENUE-RAISING, officially ending federalism and making the states into administrative agencies of the single national government.

INCOME TAX NEEDS TO BE WIPED OFF THE MAP. Also the IRS is pure evil.

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Yes, they stagger the loans. And then they keep making an increasing number of new loans to keep it going as long as possible. (Exactly as you would expect in a Ponzi Scheme.) So we agree that what is happening is mathematically equivalent to a Ponzi Scheme, right? (New money is used to pay interest/returns on old investments.)

The interest deficit got so large in 2008 that the system was near collapse as the monetary system was exposed as a fraud. The only way they could keep it going was to deflate the Ponzi with negative interest rates. This ramped up principal portion of the debt, while reducing the interest deficit (the ultimately unpayable portion of the debt when the system collapses.)

For the last 10 years the amount of debt outstanding globally has been growing much faster than the economy. This is completely unsustainable.

>But that is precisely because you're not letting the income of the bank go through the economy.
Spinning a lot of plates to keep the machine from crashing to the ground....

If just the right debtor borrows new money to pay his old interest due and then the right amount of wages come to him from the bankers spending their interest income then he can repay the missing principal on his new loan, but now he is still missing the interest due on the new loan, so here we go again...

This is how God made the universe out of nothing btw.

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The Federal Reserve along with fractional reserve banking CREATE infinite money already. What would the difference be if the state did it without EVER paying a dollar in interest to the fucking parasitical Jews? Seriously...what would be the difference? Other than we save 500 billion a year in interest payments.

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'a universal percentage taxed off of all monetary income for a given period' is the only thing that makes sense if you're aiming for maximum simplicity, clarity, and transparency. you could try the same thing with a sales tax but that would necessitate 'essentials' exceptions which would be the chink the armor to invite corruption. excise taxes are just a total mess that should be written off, far too much power if interpreted broadly.

What we suffer from in the USA is nickle-and-dime, death of a thousand cuts shit, from the total impenetrability of our governmental bureaucracy. Not just 'evil income tax', what's wrong with the income tax code, and all other tax code, is that it's a fucking impenetrable swiss-cheese mess of (custom-ordered open-corruption) exceptions, rebates, and loopholes.

Trump should just have the Treasury print United States Notes to pay for his infrastructure plan.

>United States Notes were issued directly by the US Treasury to pay for stuff.
>United States Notes were dollars that circulated along side Federal Reserve Notes.
>United States Notes exchanged 1-for-1 with Federal Reserve Notes by law.
>Federal Reserve Notes are issued by a private corporation: The Federal Reserve.
>The Federal Reserve lends Federal Reserve Notes to the Treasury/US Government.
>The Treasury/US Gov must pay back Federal Reserve Notes with interest to the private bankers/Fed.
>Borrowing Federal Reserve Notes creates enormous debts for the Treasury/US Government.
>Printing/spending United States Notes creates NO debt for the Treasury/US Government.
>The last president to try to print United States Notes was JFK. He was assassinated.
>Trump can have $1 Trillion of new spending on infrastructure with no debt!
>Yes, United States Notes are inflationary if you print too many.
>However, anything is better than being in perpetual debt to the private bank/Fed/hyenas.

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If it has to be explained to you, you wouldn't comprehend the answer.

were draining the swamp. NESARA

You fucking dummy. Keynes like everyone else believed that central banks (government) can control the money supply, when it's blatantly controlled by private financial institutions. They don't need any reserves to make new money.

To answer your question: markets would still work no matter what, but stable inflation would require capital controls and/or fixed trading currency.

You are kind of right here. It's called "accommodation" If the commercial banks run to the limit of their fractional reserve percentage set by the Fed (say 10%) they can go to the fed to increase the base money supply. But that is the Fed's call. The Fed can accomodate or not. But the fractional system does actually exist. I just exists system wide. Not for each individual bank. Though smaller banks have no required reserves. They can lend everything on deposit while bigger banks can't. But some banks can over lend....so long as some banks don't. The over lent banks can use the Fed Funds (interbank lending market) to acquire base reserves.

> with what the large majority of mainstream economists believe.
The majority of mainstream economists believe in Says Law either explicitly or implicitly. Even many Marxian economists believe implicitly in Says Law because they reject that there are limits on the expansion of the money supply that do not affect industrial production to the same degree. They will typically focus more on monopoly, profitability, or underconsumption as causes of crises which actually isn't too far from what mainstream economists do but in a different way.

>but manageable for real wages to go down.
But the question is this, is it desirable? The way I calculate it the average minimum wage of the 50s-60s in the US was worth about $35-55 in present gold terms. The fact that the deflation caused by economic crises actually often improved workers standards of living is completely ignored by most economists.

>b-but at least you'll have a job if we destroy the value of your wages
Maybe, but the thing is, I've heard India has a low unemployment rate but its not like I want to move there and sell loose cigarettes for a dime an hour.

>However, macroeconomically speaking, it is mostly irrelevant.
A small reserve of gold can be leveraged many ways in much the same way that a reserve of fiat currency can. Perceptive economic observers have suggested that gold is M-Subzero that it is the true base-level of all the different layers of the money supply and have gone so far as to state that right now we are on a de facto gold standard.

> The same happens to government bonds, for instance.
But government bonds as you stated, are assets, they are not money. A bond returns your money with interest, it is an investment, and at the very least is typically better than idle fiat money or a savings account in preserving its value.

The 70s is a good example, the dollar was so weak against gold that only offering bonds at record high interest rates solved the problem.

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I blame all LEAFS for breathing my oxygen. Grab a plastic bag, put on head...seek the singularity.

>It just isn't possible. The expansion of the money supply is limited by the quantity of the physical gold in existence/circulation and that is very variable.

NOPE that's just wrong.

>Production of goods and services easily expands beyond the base money supply and only periodic crises bring it back to earth again.

So What.

>On the other hand all the "sound money"/0% interest recommendations that you hear here are even more unworkable then the elite central banker policies that people loathe.

And your proof????

INFLATION IS WHAT KILLS COUNTRIES

all currency is ultimately nothing but a symbol of respect and trust that the currency will be exchangeable for some essential common good or service at more or less the same rate for the foreseeable future. this is the secret true wisdom behind fiat currency, why it is actually a good idea... if properly controlled (and it is WHY fractional reserve banking and its constant positive inflation is so fucking awful).

I think the only service treasury bonds offer really is a safe investment haven.

>but that is the Fed's call

Does the Fed ever not allow them to get money? And as far as I know this isn't a terribly common thing, especially now as the banks still have immense reserves from 2008. But also as far as I know, the Fed is very accommodating as long as the bank appears to have quality assets. Given the fact the whole thing collapsed in 2008 because of all of the junk assets, I can't imagine the Fed or FDIC combs through that stuff too thoroughly. Maybe moreso over the years since the recession.

Is demurrage theft?

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We should all support Post Keynesian economics
youtube.com/watch?v=MgCUzIRadRU

It's the 'modern' part of art that's a bubble. That's where most of the worthless but inflated bullshit is.
The problem is that easily reproducible art is made so new rich people can afford it, and then they have to keep its value with artificial barriers.

>NOPE that's just wrong.
What constitutes the limit on the money supply?
>hurr durr its the supply of goods and services, too much money chasing too few goods!
Okay, so how come no central bank in the world has ever gotten the correct proportion of money-to-goods right? We still the same old economic crises everything 7-10 years that we saw before we ditched the gold standard.

>So What.
The money supply expands too slowly, at some point even the credit lines allowing production to expand beyond the bounds of the money supply dry up. Goods can't be sold at profitable prices because there isn't enough money to go around and then the economy falls into a crisis. The end result is either the destruction of the value of the currency or the liquidation of commodity stocks through deflationary price-cutting.

>And your proof????
Where is your evidence that it can be done? Yeah, we had 0% interest rates when surplus capital was abundant and inflation was extraordinarily low in the wake of the recession but now that the economy is booming again it got moved up by Based Trump's FED chairwoman because of fear of inflation and increasing strain of low-rates on reserves in the financial system.

The only real answer to this situation is that charging interest should be punishable by death.

>charging interest should be punishable by death.
*industrialist earns greater returns exploiting his workforce than he could by holding bonds or loaning money*
N-nothing wrong w-with that, just a fellow Aryan engaging in productive activity!

you're fucking delusional if you actually believe any of that horse-shit. the basis of the conspiracy theory seems to be presuming Bill Clinton was actually secretly benevolent.

here's a bit of general wisdom: secret benevolence does not exist.

Get the fuck out of my country you commie faget. You may be more comfortable in a mudshit country following Islamist financial law.