Did deregulation cause the economic crisis?

[Francesca R]

Of course it is a flat tax. Apparently using cash equates to "taking money out of circulation" to you. Are you pretending hard currency doesn't exist and circulate, or is magically exempt from this tax? Wikipedia and most economists are correct, you are wrong.

Wikipedia is indeed right--saying as it does that "monetisation can be seen as a flat tax". It can, particularly by anti-fiat money gold bugs. That doesn't make such a viewpoint any less foolhardy.

The unit of currency depreciates in spite of the fact that you may make a pittance on your savings account, and you continue to ignore the fact that this punishes those who do not have assets or access to capital markets in favor of those who do.

So you agree that asset returns and floating interest rates tied to the central bank overnight rate do compensate for (anticipated) inflation? That's what this reads as, in which case you have knocked away the "argument" than monetisation taxes people. If you still maintain otherwise, justify why.

That's ridiculous. If the Federal Reserve System didn't stand ready to print more monopoly money, the surplus government bond offerings would have no real demand. Treasury issues new IOUs knowing full well the market (consisting mostly of foreign central banks who debase their own national currencies) will not absorb them all, and in fact depends on the Federal Reserve to finance its deficit spending.

Out of interest, in your world where everyone else is debasing their currency as well, does that help the US?

As far as the effects of monetary debasement on prevailing interest rates - they vary. When discussing interest rates it pays to be specific. For instance the so-called TED spread, the spread between t-bills and the LIBOR is near all-time highs, reflecting the illiquid credit markets. When inflation causes asset bubbles such as that in real-estate, it often pays more to simply acquire assets. The Fed can only manipulate the rates it has direct control over.

LIBOR (eurodollar) rates are not interest rates on government securities. Do you not know this? The government does not pay LIBOR to borrow. To give you the benefit of the doubt, I mean interest rates on government debt which are--after all--obviously the only interest rates which are a call on the taxpayer which is all that matters to deal with the question of whether monetisation is a flat tax. Please address the point. Show me evidence that treasury bond buybacks in the US at any time over the last 20 years caused interest rates to rise. Come to think of it, show me evidence that treasury bond issuance over the last 20 years caused interest rates to rise. Thank you.

I never suggested monetary demand doesn't exist. Of course it exists, and in the case of national governments and banksters, it's insatiable. I merely pointed out that in the real world the supply of goods bears directly on the price of goods, and this is true for the supply of currency as well. The important distinction being, of course, that increases in the supply of goods can only come from productive economic activity - the supply of currency is entirely arbitrary, and can be created by keystroke or printing press.

Demand for money from the private sector. Money supply does not act alone in influencing either interest rates or inflation. Money demand matters. You ignored it and you still do, ascribing it only to government (I don't know what "banksters" means), which is the conduit of net supply, not demand.

It is you who is doing the figurative "wool-pulling", because you would have us believe that the price of goods is dependent on the supply of goods, yet, if we take the reciprocal of price, the price of currency is somehow magically independent of the supply of currency.

If demand for money (cash, cash-like instruments) rises (such as in a credit contraction or an expected economic downturn) then increased money supply will not bring on inflation. If money demand is low (such as in a boom where credit growth is already strong, then it likely will. That is the mechanism of supply-demand-price. It is you who focus on supply only and seem to view demand as fully inelastic. And in that implied belief you are wrong.

Close, but not quite. More accurately Bernanke chooses which of his bankster friends he's going to bail out with his funny money, and they go and buy yachts (and mansions, and sports cars) with it. You're free to believe the "it's done on society's behalf" lie if you wish. If I had access to unlimited bailouts, I could increase my share of money faster than my existing money could be debased. There is no counterfeiter's paradox.

Translation--government is violence, yada yada yada.

Translation - the purchasing power of money in your wallet and your checking accounts is subject to perpetual confiscation, and you fully support this.

Frictional cash does not earn interest, for an individual, a billionaire or a multinational corporation. Of course, financial liberalisation and credit disintermediation has brought capital market access to far more people than would be possible under a gold standard full reserve banking economy--we can look at history for that. But you have no problem confiscating such freedoms on behalf of people less wealthy than you.

In fact, even the "real" rate of return is dependent on the phony CPI and GDP calculations designed to minimalize cost-of-living adjustment expenses of government entitlement programs. And CPI doesn't account for asset bubbles at all, does it? It only accounts for hedonically adjusted consumer prices. The fact that the average home-buyer has to mortgage half her life away to become a "homeowner" is just an afterthought, I suppose.

Translation: The Bureau of Labor Statistics is complicit in the attempt to defraud the public too. Thus, your credibility deficit as regarded by rational individuals likely grows wider.

That sentence corrected should read "It comes at the direct expense of anyone who holds currency, not just those who issue interest-bearing debt" Inflation hurts creditors, and helps debtors. Are you really claiming otherwise?

I have made my points several times and the only way you refute them is to claim that someone or other in government is lying and defrauding. Lenders are compensated for expected inflation and borrowers are charged for it. That is what capital markets do.

 

[Tippit]

So you agree that asset returns and floating interest rates tied to the central bank overnight rate do compensate for (anticipated) inflation? That's what this reads as, in which case you have knocked away the "argument" than monetisation taxes people. If you still maintain otherwise, justify why.

Interest rates compensate people primarily for the time value of money, and some measure of expected inflation. It still doesn't change the fact that monetization is a tax because a) people still use and circulate hard currency b) the "real" rate of return is overstated by a phony CPI c) the CPI doesn't account for fiat-money generated asset bubbles that reward asset holders and punish those without assets, and d) government interest payments must be financed ultimately by either more taxation, or more inflation. That you fail to recognize any of these reasons is a function of your patent dishonesty.

Out of interest, in your world where everyone else is debasing their currency as well, does that help the US?

Anyone whose costs are denominated in relatively weaker currencies and whose revenues are denominated in relatively stronger currencies is going to benefit, whether these are importers or exporters depends on the situation. What doesn't change, however, is the lost purchasing power suffered by anyone who holds a debased currency. Who gains the purchasing power, Francesca?

LIBOR (eurodollar) rates are not interest rates on government securities. Do you not know this? The government does not pay LIBOR to borrow. To give you the benefit of the doubt, I mean interest rates on government debt which are--after all--obviously the only interest rates which are a call on the taxpayer which is all that matters to deal with the question of whether monetisation is a flat tax. Please address the point. Show me evidence that treasury bond buybacks in the US at any time over the last 20 years caused interest rates to rise. Come to think of it, show me evidence that treasury bond issuance over the last 20 years caused interest rates to rise. Thank you.

Wrong again. Monetization is a tax primarily on currency holders, and secondarily on taxpayers who are on the hook for the interest. Whenever the central bank counterfeits money to buy government bonds, it dilutes the currency and therefore robs whoever holds it of purchasing power. This may or may not be reflected in prevailing interest rates, as it may be offset by other factors that determine the price of credit. I am often bemused when I hear someone talk about how the issuance of all of this government debt will affect their children, or their children's children. No, the government received money immediately when they sold their IOU, and if the Fed or some other central bank purchased it, then it was the currency holder and the bond holder who took the hit, today.

My use of the TED spread is to show you that even if the Fed counterfeits a lot of money to shore up bank balance sheets, it doesn't necessarily translate into bank lending which is evidenced by TED being near all-time highs. The Fed is sometimes described as "pushing on a string" in this regard.

Demand for money from the private sector. Money supply does not act alone in influencing either interest rates or inflation. Money demand matters. You ignored it and you still do, ascribing it only to government (I don't know what "banksters" means), which is the conduit of net supply, not demand.

If demand for money (cash, cash-like instruments) rises (such as in a credit contraction or an expected economic downturn) then increased money supply will not bring on inflation. If money demand is low (such as in a boom where credit growth is already strong, then it likely will. That is the mechanism of supply-demand-price. It is you who focus on supply only and seem to view demand as fully inelastic. And in that implied belief you are wrong.

No, once again you've willfully missed my point. The point is, demand for real goods and services must be met with real economic activity. If I want a new HD television, I cannot merely wish it into existence. Engineers have to design it, and factories have to produce it. The demand for HDTVs is naturally regulated by scarcity and technology constraints. Contrast this with the demand for money - bankers can simply create it at will, lend it on demand, and then charge interest for the privilege! It is this aspect of the system that necessitates the boom/bust cycles. The demand for fiat money has no natural regulation, because fiat money has no meaningful cost, and is not scarce, and this is the root cause of the so-called credit crisis. It is this systemic problem which facilitates asset bubbles that arbitrarily reward some, and financially destroy others.

Frictional cash does not earn interest, for an individual, a billionaire or a multinational corporation. Of course, financial liberalisation and credit disintermediation has brought capital market access to far more people than would be possible under a gold standard full reserve banking economy--we can look at history for that. But you have no problem confiscating such freedoms on behalf of people less wealthy than you.

Translation - more people now than ever are free to have their pensions, their 401Ks, and their IRAs looted by the money masters who run the scam that is our monetary system.

Translation: The Bureau of Labor Statistics is complicit in the attempt to defraud the public too. Thus, your credibility deficit as regarded by rational individuals likely grows wider.

The government stands to gain a lot by understating cost-of-living increases, it represents hundreds of billions of dollars in savings that would otherwise go to entitlement recipients. According to http://www.shadowstats.com/ the CPI as calculated before the Clinton ERA is closer to 8% than 5%. The evidence is all there, read it yourself. You even admitted in your previous post that real returns on savings accounts are often negative even using phony CPI calculations, let alone honest ones!

I have made my points several times and the only way you refute them is to claim that someone or other in government is lying and defrauding. Lenders are compensated for expected inflation and borrowers are charged for it. That is what capital markets do.

Reality is a bitch, Francesca. People lie and defraud other people, and sometimes on a large scale. Capital markets do compensate for some measure of inflation, but anyone who relies on official CPI/PPI/GDP is a dupe, unfortunately. None of this changes the fact that purchasing power lost by the counterfeiting of new money is gained by the counterfeiter, nor the fact that generalized asset bubbles can only occur in periods of fiat monetary excess.

You can argue about whether a fraud should be more or less regulated, but that doesn't change the fundamental nature of the fraud.

 

[Tippit]

Wikipedia is indeed right--saying as it does that "monetisation can be seen as a flat tax". It can, particularly by anti-fiat money gold bugs. That doesn't make such a viewpoint any less foolhardy.

That's funny, because Ben Bernanke even admitted that inflation is a tax. Here's the video, you can fast-foward to the 2-minute mark:

Bernanke: "Inflation is a tax."

Congratulations, Francesca. Now you have the distinct honor of being either smarter than Ben Bernanke, or just wrong.

Thanks to Zaphod in another sub-forum for providing a link to this video.

 

[trvlr2]

RE: the OP--Meadmaker and all, I found this history of financial crises in the US.
Thought it might help explain things. A little perspective, perhaps.


http://www.neatorama.com/2008/10/08/10-american-financial-meltdowns-in-the-past-century/

 

[69dodge]

No, once again you've willfully missed my point. The point is, demand for real goods and services must be met with real economic activity. If I want a new HD television, I cannot merely wish it into existence. Engineers have to design it, and factories have to produce it. The demand for HDTVs is naturally regulated by scarcity and technology constraints. Contrast this with the demand for money - bankers can simply create it at will, lend it on demand, and then charge interest for the privilege!

I don't understand how you're using "demand" here. Engineers have to design TVs, and factories have to produce them, but isn't that entirely a supply question? If design and production are hard, designers and producers charge more for TVs, i.e. the supply is low; if easy, they charge less, i.e. the supply is high. What has that to do with how strongly consumers want TVs, how much they're willing to pay for them, i.e. the demand for them?

I think you missed her point, actually. (Whether willfully or not, I don't know. Probably not.) If more money is created, i.e. the supply of money increases, but people prefer to keep it rather than spend it on things, i.e. the demand for money also increases, then the prices of those things won't increase, i.e. inflation won't happen. For prices to increase, it is not enough that more money exist; it is necessary also that people be willing to spend it.

 

[Francesca R]

That's funny, because Ben Bernanke even admitted that inflation is a tax. Here's the video, you can fast-foward to the 2-minute mark:

Bernanke: "Inflation is a tax."

Oh how funny. You've moved your goalposts a little there. And you would like Ron Paul to do your bidding. (Thank you for the pointer to skip two minutes)

Thanks to Zaphod in another sub-forum for providing a link to this video.

Quote-mining on your own is getting too hard for you, huh?

 

[Francesca R]

Interest rates compensate people primarily for the time value of money, and some measure of expected inflation.

You're learning. So if one does not believe your conspiracy lies, and is not horrified about the possible change in price that may occur before frictional cash is spent or saved, this point should be closed. Asset price changes do indeed create winners and losers, as do changes in the price of herrings relative to toothbrushes.

What doesn't change, however, is the lost purchasing power suffered by anyone who holds a debased currency. Who gains the purchasing power, Francesca?

Closed as above.

Whenever the central bank counterfeits money to buy government bonds, it dilutes the currency and therefore robs whoever holds it of purchasing power. This may or may not be reflected in prevailing interest rates, as it may be offset by other factors that determine the price of credit.

Closed, as above.

My use of the TED spread is to show you that even if the Fed counterfeits a lot of money to shore up bank balance sheets, it doesn't necessarily translate into bank lending which is evidenced by TED being near all-time highs. The Fed is sometimes described as "pushing on a string" in this regard.

I think your use of the TED spread was to obfuscate.

No, once again you've willfully missed my point. The point is, demand for real goods and services must be met with real economic activity. If I want a new HD television, I cannot merely wish it into existence. Engineers have to design it, and factories have to produce it. The demand for HDTVs is naturally regulated by scarcity and technology constraints.

No, it is not. The supply of HDTVs is limited by those. You have this upside down. I do not believe you are unintelligent so why are you trying to obfuscate like this? I assure you it is futile.

Contrast this with the demand for money - bankers can simply create it at will, lend it on demand, and then charge interest for the privilege!

No, that is the supply of money.

It is this aspect of the system that necessitates the boom/bust cycles. The demand for fiat money has no natural regulation, because fiat money has no meaningful cost, and is not scarce, and this is the root cause of the so-called credit crisis. It is this systemic problem which facilitates asset bubbles that arbitrarily reward some, and financially destroy others.

You are conflating demand for money with something else. You have been given adequate information to understand what I refer to, which is a mechanism that you first brought up in relation to goods and services. Another poster has understood and put your response back on the right track already. Get real and be honest.

Translation - more people now than ever are free to have their pensions, their 401Ks, and their IRAs looted by the money masters who run the scam that is our monetary system.

Oh dear, may I remind you that we have already dealt with this and obfuscation will not work. Capital assets and interest bearing debt compensate for expected inflation. You do not get to flip-flop.

Reality is a bitch, Francesca

Would that be why you try so hard to hide from it and make up stuff?

 

[Tippit]

I don't understand how you're using "demand" here. Engineers have to design TVs, and factories have to produce them, but isn't that entirely a supply question? If design and production are hard, designers and producers charge more for TVs, i.e. the supply is low; if easy, they charge less, i.e. the supply is high. What has that to do with how strongly consumers want TVs, how much they're willing to pay for them, i.e. the demand for them?

I think you missed her point, actually. (Whether willfully or not, I don't know. Probably not.) If more money is created, i.e. the supply of money increases, but people prefer to keep it rather than spend it on things, i.e. the demand for money also increases, then the prices of those things won't increase, i.e. inflation won't happen. For prices to increase, it is not enough that more money exist; it is necessary also that people be willing to spend it.

What I said was "The point is, demand for real goods and services must be met with real economic activity." Met in this context means "supplied". Supply in most cases presupposes demand. People don't typically make widgets without there being a demand for widgets, or at least speculative market research indicative of a demand for widgets. Where i said "The demand of HDTVs", substitute supply for demand. The demand is independent.

Note that I'm well aware that you can increase the money supply, and it may not lead to general price inflation, if it is met by increased economic productivity that offsets the monetary debasement. This is irrelevant to the fact that fiat money creation is a form of theft with arbitrary winners and losers. It's no less a theft of purchasing power if the general price level doesn't budge - in this case the purchasing power stolen would equal the productivity gains. Consumers who would otherwise have enjoyed lower prices do not.

The fact that monetary demand varies is not a valid argument in favor of the status quo. Hard money serves as a natural regulator of credit because it is scarce, and requires time and effort to obtain. If we had hard money there would be no asset bubbles, because prudent lending practices would be the norm, not the exception, and because it takes monetary excess to create bubbles. It would solve any regulatory dilemmas as they pertain to mortgage lending, or any other lending. Since hard money has intrinsic value, lenders are forced into making good lending decisions, and there is no bailout-induced moral hazard.

 

[Meadmaker]

I've had a chance to review the information Wildcat posted. Some comments:

It's funny, because a year and a half ago Ben Bernanke gave a speech in which he credited the CRA along with other laws/regulations for creating the secondary mortgage market as well as the subprime loan market: http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm

I don't think Bernanke said this at all. The only law cited at all with credit for expanding the secondary mortgage market was a 1992 law, not named, that directed Fannie and Freddie to serve the low income sector. The laws noted in the expansion of subprime lending were the repeal of usury laws, and he noted that most issuers of subprime loans weren't subject to the CRA. In one of the references of the paper (Apgar 2003) it was noted that only 30 percent of subprime loans were made by institutions subject to the act. So, contrary to Wildcat's assertion, the relationship of the CRA to the subprime market was that most of the subprime market was not covered by the CRA, as in this quote from the speech:

Most mortgages are now packaged by brokers, and nearly two in three mortgages are originated by nondepositories not covered by the CRA.11

If the CRA was ever responsible for this market, it seems that by 2006,it wasn't a significant player. Certainly Bernanke did not give it that credit.

There was nothing preventing them from making those loans prior to the 1995 CRA revision. Nothing at all! Yet, they weren't "jumping at the opportunity" then. Why was that? Did greed get invented as soon as Bush was elected? Or, as Bernanke thought in March 2007, did such loans only become viable once 2 things happened? The first being improvements in information technology allowing a secondary mortgage market to exist, the second being the proliferation of subprime loans suddenly mandated by the CRA as well as Freddie and Fannie the banks were eager to get off their books as soon as possible.

This would be all very well, except that the CRA didn't mandate any subprime loans. The first thing you cite was enough. As the speech noted:

Bankers were also gaining experience in underwriting and managing the risk of lending in lower-income communities. After years of experimentation, the managers of financial institutions found that these loan portfolios, if properly underwritten and managed, could be profitable. In fact, a Federal Reserve study found that, generally, CRA-related lending activity was at least somewhat profitable and usually did not involve disproportionately higher levels of default (Avery, Bostic, and Canner, 2000; see also Board of Governors, 1993).

So, once they figured out how to make them profitable, there was no need to hold back, and they didn't. There was no need to mandate lending. They were making money, and they did, indeed, jump at the chance.

If the CRA was so vital in mandating this market, what explains the 2/3 of the loans created by entities not subject to CRA?



I am left with the conclusion that any role played by the CRA was incidental. Perhaps, if one were to be generous with this argument, you could say that the CRA "got the ball rolling". Perhaps the banks would never have been able to make it profitable to lend in these markets if the CRA had not mandated that they do so. Nevertheless, the reason banks and mortgage brokers were making these loans is that they were making money on those loans. If the CRA started the process, regular old profit motive (sometimes called "greed", but it means the same thing) kept it going and let it gather momentum. Meanwhile the people in charge failed to see that it was about to go over the cliff.

 

[trvlr2]

Here's a story from AP.

ttp://www.sfexaminer.com/ap/?c=y&id=947049

Apparently Freddy hired lobbyists to kill legislation which would have held tighter reins on the F&FM's.
Mortgage companies thought the legislation would slow the housing mortgage business down... Dems and Reps,both, killed the legislation.
Ah, the humanity!

 

[SaulOhio]

Francesca: This whole post demonstrates exactly why we can't see eye to eye on this issue. You read things into what I say that I do not intend, jump to conclusions from it that do not actually follow, and find ways to portray my ideas to make them SEEM idiotic and insane. If I really did believe what I say in the way you interpret it, I would be crazy.

That is not the same thing, is it? (In the aftermath of the 1930s depression, that is)

Whats not the same, as what?

See, every time you say something dumb like "pretend", which banks are not doing in respect of "money in their vaults", you confirm that you believe in a conspiracy.

If the money is available for withdrawl at any time, then yes, that is pretending it is still there.

Which on your own terms apparently means you are finished here. Unless that was a lie. Looks like it.

I never said that believing a conspiracy theory means anything at all. It is YOU and The Central Scrutinizer who seem to think it matters. If I believed in some conspiracy, I would say it. Conspiracies do happen in real life. Like I keep saying, I can prove that you and TCS believe in a conspiracy theory. Since you and he think that would disqualify someone from a debate, do you promise to stop arguing with me if I can prove you believe a 9/11 conspiracy theory? Or at least stop accusing me of one?

So to confirm, you think that Jane public not bothering to check out the creditworthiness (default probability) of her savings bank is "lax risk management"? So you want her to inspect the financial statements and gain the necessary training first to be able to understand them. Suppose she did all that and concluded that WaMu was indeed a sound bank, and suppose then there was a bank run and she didn't get paid. That means her actions were "folly" does it? What rot.

Because apparently according to you, they would have to acquire a financial degree before even using a bank.

Obviously, not everyone can be a financial expert, and I do not demand that they become experts. It is the bankers and other lenders that are becoming lax in their risk management. It is the very experts we do depend on that no longer are motivated to take care who they lend to, since its heads they win, tails they don't lose. And there is so much easy credit, provided by the Fed at low interest rates, that it would be stupid not to gamble with it. The same is true about borrowers. They see easy opportunities to make money using low interest loans, they take them. This is why we have seen so many get rich quick schemes out there based on no-down-payment mortgages. You take out a mortgage, buy a house, sell it almost right away at a profit, and pay back the loan out of the procedes. Just as long as real estate prices kept going up, this was a sure thing.

Nonsense, it is possible in any economy.

Simple assertion. How would it be possible in a free market? You may be referring to "free goods" like air, or positive externalities, but I am talking about easy money and get rich quick schemes like the one I explained.

This is typical of your debating technique. You point out examples where what I say does not apply, claim that as proof that I am all wrong, ignoring the places where it DOES apply.

Nonsense again. The government never said it would constantly push up house prices, nor can it.

I never said it did, or could. But since the government and the banks are constantly pumping cash into the economy, it is natural to make that assumption. I remember plenty of instances of people telling me that real-estate prices will never fall. Even at the beginning of the housing slump, as prices stopped rising, people told me that historically, at least real estate prices have never fallen. It was accepted as a historical fact.

Let's get this straight--the government was responsible for everything bad that has happened, and all private actors were unwitting faultless pawns in this vast conspiracy? Yeah, right.

No. People are capable of making mistakes even under the best cricumstances. All this government intervention just makes it much easier to make mistakes. In fact, is often makes it impossible to tell when you have made a mistake.

Again, youy read more into what I say than I intend. I say that government intervention makes it hard to manage risk rationally, you take that as implying that without government, everyone would be perfectly rational and never take bad risks.

You do this because you want to be able to dismiss what I say as insane nonsense. Ever hear of the principle of charity? If your interpretation of something somebody says is that nutty, try to consider the possibility that your interpretation may be at fault.

But your arguments show the kind of hysteria that Greenspan observed in most oponents of a gold standard.

"An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions."--Alan Greenspan, "Gold and Economic Freedom"

You are unable to consider my arguments rationally, jumping to conclusions and making interpretations that are unwarranted by anything I said.

So take a deep breath, stop, and think about what I am actually saying, not what you imagine I am saying.

 

[Francesca R]

I never said that believing a conspiracy theory means anything at all. It is YOU and The Central Scrutinizer who seem to think it matters.

This is a lie. It is you:

Name me one time I promoted an actual conspiracy theory, and I will leave this forum forever. Present one bit of actual evidence that I believe these conspiracy theoryies, and I will leave.

---

think about what I am actually saying, not what you imagine I am saying.

You really ought to take this advice, rather than give it.

 

[SaulOhio]

Originally Posted by SaulOhio

I never said that believing a conspiracy theory means anything at all. It is YOU and The Central Scrutinizer who seem to think it matters.

This is a lie. It is you:

Originally Posted by SaulOhio

Name me one time I promoted an actual conspiracy theory, and I will leave this forum forever. Present one bit of actual evidence that I believe these conspiracy theoryies, and I will leave.

The argument about conspiracy theories has two parts:

1: That what I am arguing for is a conspiracy theory
2: That being a conspiracy theory, it is automatically invalid.

I can argue against 1, or 2. The second quote was of me arguing against #1. That does not invalidate #2.

So your accusing me of lying is a pile of #2.

 

[Francesca R]

Whose "argument about conspiracy theories" is that? It isn't mine.

Your lie is there because, contrary to what you said, you do think that "believing a conspiracy theory" means something. Specifically you think that if you believe one, that means you will leave the forum. (Hence I have furnished the evidence that you have a theory that banking is a conspiracy, but your newest lie stands regardless of that.)

 

[SaulOhio]

WOW! I have never seen this level of dishonesty, of intentionally taking somoene's words out of context before. I clearly meant that wether something is a conspiracy theory doesn't matter to wether or not it is true. My challenge to you to name a conspiracy theory I have promoted is an entirely different thing.

You are unable to actually answer my actual arguments, which is why YOU and TCS keep bringing it up on any thread on which I post.

YOU are the ones bringing it up. No matter what the topic, you are the ones bringing it back to fractional reserve banking, fiat money, and conspiracy theories. I can't discuss anything else on any of these forums because YOU keep interrupting with this nonsense.

Go re-read the Paul Krugman thread, and you will see that it is true. I never brought up fractional reserve or conspiracy theories till you and TCS did. This is YOUR obsession, not mine.

 

[Francesca R]

OK SaulOhio . . . Never. Mind.

(Crap I just know this is going to AAH now. So be it if it does . . .)

 

[Tippit]

WOW! I have never seen this level of dishonesty, of intentionally taking somoene's words out of context before. I clearly meant that wether something is a conspiracy theory doesn't matter to wether or not it is true. My challenge to you to name a conspiracy theory I have promoted is an entirely different thing.

Francesca has been proven wrong repeatedly, most recently on her claim that inflation is not a tax. When she made a fool of herself, instead of acknowledging that she was wrong, she attempted to obfuscate the issue by implying that debt monetization is not inflationary. Of course it is inflationary - not necessarily of the general price level, but of the money supply. You know it, I know it, Ben Bernanke knows it, and even Francesca knows it. It is this knowledge coupled with her arrogance, condescension, and willful denial that makes her vain and dishonest.

But I don't debate her on this forum with any notion that I will sincerely change her mind - that isn't possible. I do it to expose the lies and half-truths of the status quo that she fails to defend, and as an exercise in thought. It's an opportunity to clarify the issue on a public forum, and in my own mind. I suggest you don't get too upset when dealing with her.

You are unable to actually answer my actual arguments, which is why YOU and TCS keep bringing it up on any thread on which I post.

If animated GIFs of laughing dogs were IQ points, TCS would be a brilliant man. As it stands however, his posts say absolutely nothing, and as such, they aren't worthy of a response. Just my $.02.

 

[SaulOhio]

I don't get upset. I have actually found this very educational. She and others do occasionally ask questions and make statements that I need to do some research to answer. But her repeated misinterpretations of my simple statements would get frustrating if I really expected to change her mind. As it is, it can be pretty funny.

Not that I agree with everything you say, Tippit. But at least you don't misinterpret what people are saying (or at least not that I have seen), you don't use insults, and you don;t try to intimidate people with laughing dog emoticons.

I still wouldn't call fractional reserve a conspiracy.

It is a practice that has become acceptable through hundreds of years of use. It has evolved, in Hayekian fassion, partly from market forces, and partly from the ignorance of rulers concerning the proper role of government. There are powerful interest groups that lobby in favor of such things, and they probably did way back when there was question of outlawing the practice. And, many people do think that it is needed in order to promote economic growth, that without it the economy would permanently stagnate.

There is no reason to suppose a conspiracy is concerned when simple human ignorance and self-interest will do.

 

[Tippit]

Not that I agree with everything you say, Tippit. But at least you don't misinterpret what people are saying (or at least not that I have seen), you don't use insults, and you don;t try to intimidate people with laughing dog emoticons.

I still wouldn't call fractional reserve a conspiracy.

Well, we can agree to disagree. It's not an injury to me when someone uses the "C" word as an attack - there is no one on this forum for whom my credibility is vital, if it depends on the use of that word.

I believe it's a conspiracy because I believe the bankers who run the system are well aware of the consequences of their actions. Monetary science isn't so obfuscatory or speculative that the practitioners are ever in uncharted waters. Grey's Law applies here - "Any sufficiently advanced incompetence is indistinguishable from malice".

It is a practice that has become acceptable through hundreds of years of use. It has evolved, in Hayekian fassion, partly from market forces, and partly from the ignorance of rulers concerning the proper role of government. There are powerful interest groups that lobby in favor of such things, and they probably did way back when there was question of outlawing the practice. And, many people do think that it is needed in order to promote economic growth, that without it the economy would permanently stagnate.

There is no reason to suppose a conspiracy is concerned when simple human ignorance and self-interest will do.

Or to my cynical mind, whenever a conspiracy could exist and it represents significant material gain, it probably will. I guess it all depends upon your perspective.

 

[SaulOhio]

There is something I have been trying to find. I once heard of a lawsuit from way back in the 16th or 17th century. A judged ruled that it is a legal, honest practice, and should not be outlawed. It might actually add something to this debate to know some of the details.