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Thread: The Fatal Flaws In Wall Street's Economic Theory

  1. #1

    Default The Fatal Flaws In Wall Street's Economic Theory

    http://whatreallyhappened.com/WRHART...fatalflaws.php

    "What few Americans realize is that under the private central banking system, all currency enters circulation as a loan at interest from the central bank. The money you are paid for work, the money you pay for food; all of it first entered the economy as a loan at interest form the Federal Reserve. Loans to the Us Government, loans to other banks, loans to businesses and loans to consumers. As that money circulates, passing from hand to hand to hand to hand, it accrues interest on that loan, which must eventually be repaid through higher prices and increased taxation.

    The trap of private central banking lies in the fact that the moment that first paper note enters circulation, more money is owed to the private central bank than actually exists. The only way that interest can be paid is if new money is created through more lending, with part of that newly created money used to pay the interest on the old money. The system can only perpetuate itself as long as ever-larger generations of new borrowers can be found to allow the creation of that new money. It is because of this basic principle that private central banks are little more than pyramid, or Ponzi schemes, albeit cloaked with an image of respectability."
    ATTAINING FREEDOM
    Man must get rid of illusions that enslave and paralyze him; he must become aware of the reality inside and outside of him in order to create a world which needs no illusions. Freedom and independence can be achieved only when the chains of illusion are broken.
    --ERICH FROMM

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  3. #2
    Lone Coyote ClydeCoulter's Avatar
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    Shared, thanks

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    that is why bust and collapse are inevitable.
    que zippy with some stupid bullshit.

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    Lone Coyote ClydeCoulter's Avatar
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    Quote Originally Posted by torchbearer View Post
    that is why bust and collapse are inevitable.
    que zippy with some stupid bullshit.
    How do some of you get those COOL Member tags, torchbearer the Lizard King ?

    edit: In twice before zippy
    Last edited by ClydeCoulter; 02-21-2013 at 04:47 PM.

  6. #5

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    Quote Originally Posted by ClydeCoulter View Post
    How do some of you get those COOL Member tags, torchbearer the Lizard King ?

    edit: In twice before zippy
    you may be able to change it through you profile editing section on the forum.
    give me a sec. and i'll see where its located.

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  7. #6

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    Quote Originally Posted by ClydeCoulter View Post
    How do some of you get those COOL Member tags, torchbearer the Lizard King ?

    edit: In twice before zippy
    ok, click on settings, the edit profile.
    its the second section down.

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  8. #7

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    Exhibit A, in "how to criticized the federal reserve system without looking like a nut job"

  9. #8

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    this is interesting never thought of it that way. good find.

  10. #9
    Lone Coyote ClydeCoulter's Avatar
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    Quote Originally Posted by torchbearer View Post
    ok, click on settings, the edit profile.
    its the second section down.
    Thanks, anyway, maybe I'm not authed. I don't see it, just date of birth, homepage and instant messaging in the 2nd section (and I see it in no other section).

  11. #10
    Truth is treason ... Occam's Banana's Avatar
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    Quote Originally Posted by ClydeCoulter View Post
    Thanks, anyway, maybe I'm not authed. I don't see it, just date of birth, homepage and instant messaging in the 2nd section (and I see it in no other section).
    You have to be a paying member ($20.00/year, IIRC). Then you can change your "label".
    Last edited by Occam's Banana; 02-21-2013 at 09:36 PM.
    quod omnes tangit, ab omnibus approbetur · fiat justitia, ruat caelum · sic semper tyrannis
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    Lone Coyote ClydeCoulter's Avatar
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    Quote Originally Posted by Occam's Banana View Post
    You have to be a paying member ($20.00/year, IIRC). Then you can change your "label".
    Hey, I should do that anyway. Can't live here rent free forever

  13. #12

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    There is plenty wrong with central banking, but this "problem" with interest is not one of them. See Tom Woods here to understand why:

    http://www.tomwoods.com/blog/why-the...ers-are-wrong/
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

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  14. #13

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    Quote Originally Posted by Acala View Post
    There is plenty wrong with central banking, but this "problem" with interest is not one of them. See Tom Woods here to understand why:

    http://www.tomwoods.com/blog/why-the...ers-are-wrong/
    That's what I wanted to post. Tom's critique is excellent.

  15. #14

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    Quote Originally Posted by Acala View Post
    There is plenty wrong with central banking, but this "problem" with interest is not one of them. See Tom Woods here to understand why:

    http://www.tomwoods.com/blog/why-the...ers-are-wrong/

    Tom was talking about money deriving from a commodity, not fiat.
    though most fiat derive originally from a commodity and then is broken-
    but a pure fiat, which we now have suffers from that fact that it is really nothing at all.
    I barter with an iou.
    there are not enough IOUs to cover the cost of credit.

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    Quote Originally Posted by torchbearer View Post
    Tom was talking about money deriving from a commodity, not fiat.
    though most fiat derive originally from a commodity and then is broken-
    but a pure fiat, which we now have suffers from that fact that it is really nothing at all.
    I barter with an iou.
    there are not enough IOUs to cover the cost of credit.
    No, Tom says explicity that the claims about interest are false under our existing fiat system, and I quote:

    "It is not true that “there is not enough money to pay the interest” under a gold standard or a purely free-market money, and it is not even true under the kind of fractional-reserve fiat paper system we have now."

    It is based on a flawed understanding of the way money works in both a fiat system and a commodity money system.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  17. #16

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    Quote Originally Posted by Acala View Post
    No, Tom says explicity that the claims about interest are false under our existing fiat system, and I quote:

    "It is not true that “there is not enough money to pay the interest” under a gold standard or a purely free-market money, and it is not even true under the kind of fractional-reserve fiat paper system we have now."

    It is based on a flawed understanding of the way money works in both a fiat system and a commodity money system.

    did you keep reading?
    when he was talking about the progression of fiat?

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    Lone Coyote ClydeCoulter's Avatar
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    Quote Originally Posted by torchbearer View Post
    did you keep reading?
    when he was talking about the progression of fiat?
    I have some not-so-warm-and-fuzzies with the Tom Woods article. I wish I had time to dig deeper, but I can't right now.

    Oh, and thank you and Occam for pointing me to becoming a subscriber to the forums...done

    edit: An analysis of production and consumption vs money might help
    Last edited by ClydeCoulter; 02-22-2013 at 05:40 PM.

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    Okay, interest paid is removed from consumption or new production (by the borrower) and put into creating more loans. It is a transfer of wealth without production other than the original borrowers intent (less interest). What else can be said about this?

  20. #19

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    Quote Originally Posted by ClydeCoulter View Post
    Okay, interest paid is removed from consumption or new production (by the borrower) and put into creating more loans. It is a transfer of wealth without production other than the original borrowers intent (less interest). What else can be said about this?
    It helps me to see interest as just the cost of money.
    but the cost is paid with the same money.
    if some real money was around before the fake money-racket, that real money would be eventually paid to the banks over time through the purchasing of new fake money.
    Eventually, if the fake persist, the pool of real money is syphoned to the banks.
    the crushed consumers only have bankruptcy to ease the crush of this system. but it will keep crushing.
    Last edited by torchbearer; 02-24-2013 at 11:17 AM.

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    Lone Coyote ClydeCoulter's Avatar
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    Quote Originally Posted by torchbearer View Post
    It helps me to see interest as just the cost of money.
    but the cost is paid with the same money.
    if some real money was around before the fake money-racket, that real money would be eventually paid to the banks over time through the purchasing of new fake money.
    Eventually, if the fake persist, the pool of real money is syphoned to the banks.
    the crushed consumers only have bankruptcy to ease the crush of this system. but it will keep crushing.
    And that real money keeps it's value while the fake devalues.
    Now, after all the real money is collected, and the fake is devalued greatly, it would be to the advantage of those with the real money to get back to real money as a base and start the cycle again (after somewhat devaluing the real money for a bit so that exchange rates can steal some more).

    edit: And, it is still worth putting production and consumption into the equation when dealing with interest to see how the transfer of wealth occurs during the cycle.
    Last edited by ClydeCoulter; 02-24-2013 at 11:27 AM.

  22. #21

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    Quote Originally Posted by ClydeCoulter View Post
    And that real money keeps it's value while the fake devalues.
    Now, after all the real money is collected, and the fake is devalued greatly, it would be to the advantage of those with the real money to get back to it and start the cycle again.

    the racket could go on indefintely.
    slavery via monetary system.

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