FED Conspiracy theories

[ArmillarySphere]

Out of curiosity, how does the money supply increase in a system with 100% reserve? There are some such economies around, e.g. the Islamic ones.

As has been mentioned, there has to be a mechanism to keep the money supply expanding at least as quickly as the economy does, or you end up with deflation.

 

[dudalb]

And throw in this for good measure:

 

[dudalb]

Major, paradigm-shifting developments in technology have led to monumental jumps in productivity.

These increases in wealth production have taken place in spite of the Federal Reserve and debt-based U.S. monetary system and they allow the this system to harvest more wealth than otherwise would have been possible.



Technology, technology, technology...

These advances would have taken place regardless.



The fraud is in forcing the U.S. population to use a monetary system operated by the Federal Reserve where the money needed to facilitate commerce is created and loaned at interest only. Mind you, this isn't gold or commodity money with any real use or value. This is paper money subject to perpetual inflation and other abuses.

Hundreds of billions of dollars per year to private corporations just to use the money the Constitution granted to Congress the authority to create for free. It's a gigantic scam perpetrated by a collusion between government and private corporations.

Paper money...wow, I smell a good dose of Gold Bug Nonsense in the near future....

 

[drkitten]

Out of curiosity, how does the money supply increase in a system with 100% reserve? There are some such economies around, e.g. the Islamic ones.

I didn't realize there were any such systems -- the idea of a 100% reserve doesn't appear to be part of the principles of Islamic banking in general. What I've seen suggest that the theorists accept fractional-reserve banking when applied to non-demand deposits such as CD's.

From an Islamic banking perspective, it's easy enough to adjust the lending mechanism to make it Islamic-compliant while still allowing fractional reserve.

One possibility is simply that the bank charges a fixed cost to the borrower (the fixed cost being the actual costs the bank incurs in making the loan) and a percentage of the profit the borrower makes. Another would be that the bank purchases the asset itself and re-sells it to the borrower, but while it (the bank) owns the asset, it can use that asset as collateral for another loan.

And, of course, a third method is simply to print more money and drop it out of a helicopter.

 

[LightinDarkness]

I heard of a country that is doing so well. It recognized how evil Federal Reserve Banking was and made the Federal Reserve a part of the government and gave politicians the ability to make monetary policy based on their short term political interests instead of leaving it in the hands of professionals who are obviously just the puppets of the Illuminati/Masons/whatever conspiracy its cool to believe in now.

But then I also heard Zimbabwe had some inflation problems due to that.