The downside to deflation in a debt-based monetary system?

[The Gold Standard]

I am aware of your opinions on those cases. You believe that in the entire system there exists 100% reserves for every outstanding loan. That is the only way banks could sell loans to other banks that have extra reserves laying around to cover their loans.

The 10% reserve requirement must not mean anything, it must not even exist. Obviously reserves must exist to cover every loan or the banks will fail.

You also believe that the bank owns your money when you put it in a checking account. I don't know what real world example leads to believe that, but whatever floats your boat. I was never told that I couldn't withdraw my money because that money was out on loan. Maybe those banks always had 100% reserves behind their loans. I live in reality though and know they are only required to have 10% reserves.

[The Gold Standard]

We have already described one part of the contemporary flight from sound, free market money to statized and inflated money: the abolition of the gold standard by Franklin Roosevelt in 1933, and the substitution of fiat paper tickets by the Federal Reserve as our "monetary standard." Another crucial part of this process was the federal cartelization of the nation's banks through the creation of the Federal Reserve System in 1913.

Banking is a particularly arcane part of the economic system; one of the problems is that the word "bank" covers many different activities, with very different implications. During the Renaissance era, the Medicis in Italy and the Fuggers in Germany, were "bankers"; their banking, however, was not only private but also began at least as a legitimate, non-inflationary, and highly productive activity. Essentially, these were "merchant-bankers," who started as prominent merchants. In the course of their trade, the merchants began to extend credit to their customers, and in the case of these great banking families, the credit or "banking" part of their operations eventually overshadowed their mercantile activities. These firms lent money out of their own profits and savings, and earned interest from the loans. Hence, they were channels for the productive investment of their own savings.

To the extent that banks lend their own savings, or mobilize the savings of others, their activities are productive and unexceptionable. Even in our current commercial banking system, if I buy a $10,000 CD ("certificate of deposit") redeemable in six months, earning a certain fixed interest return, I am taking my savings and lending it to a bank, which in turn lends it out at a higher interest rate, the differential being the bank's earnings for the function of channeling savings into the hands of credit-worthy or productive borrowers. There is no problem with this process.

The same is even true of the great "investment banking" houses, which developed as industrial capitalism flowered in the nineteenth century. Investment bankers would take their own capital, or capital invested or loaned by others, to underwrite corporations gathering capital by selling securities to stockholders and creditors. The problem with the investment bankers is that one of their major fields of investment was the underwriting of government bonds, which plunged them hip-deep into politics, giving them a powerful incentive for pressuring and manipulating governments, so that taxes would be levied to pay off their and their clients' government bonds. Hence, the powerful and baleful political influence of investment bankers in the nineteenth and twentieth centuries: in particular, the Rothschilds in Western Europe, and Jay Cooke and the House of Morgan in the United States.

By the late nineteenth century, the Morgans took the lead in trying to pressure the U.S. government to cartelize industries they were interested in – first railroads and then manufacturing: to protect these industries from the winds of free competition, and to use the power of government to enable these industries to restrict production and raise prices.

In particular, the investment bankers acted as a ginger group to work for the cartelization of commercial banks. To some extent, commercial bankers lend out their own capital and money acquired by CDs. But most commercial banking is "deposit banking" based on a gigantic scam: the idea, which most depositors believe, that their money is down at the bank, ready to be redeemed in cash at any time. If Jim has a checking account of $1,000 at a local bank, Jim knows that this is a "demand deposit," that is, that the bank pledges to pay him $1,000 in cash, on demand, anytime he wishes to "get his money out." Naturally, the Jims of this world are convinced that their money is safely there, in the bank, for them to take out at any time. Hence, they think of their checking account as equivalent to a warehouse receipt. If they put a chair in a warehouse before going on a trip, they expect to get the chair back whenever they present the receipt. Unfortunately, while banks depend on the warehouse analogy, the depositors are systematically deluded. Their money ain't there.

An honest warehouse makes sure that the goods entrusted to its care are there, in its storeroom or vault. But banks operate very differently, at least since the days of such deposit banks as the Banks of Amsterdam and Hamburg in the seventeenth century, which indeed acted as warehouses and backed all of their receipts fully by the assets deposited, e.g., gold and silver. This honest deposit or "giro" banking is called "100 percent reserve" banking. Ever since, banks have habitually created warehouse receipts (originally bank notes and now deposits) out of thin air. Essentially, they are counterfeiters of fake warehouse-receipts to cash or standard money, which circulate as if they were genuine, fullybacked notes or checking accounts. Banks make money by literally creating money out of thin air, nowadays exclusively deposits rather than bank notes. This sort of swindling or counterfeiting is dignified by the term "fractional-reserve banking," which means that bank deposits are backed by only a small fraction of the cash they promise to have at hand and redeem. (Right now, in the United States, this minimum fraction is fixed by the Federal Reserve System at 10 percent.)

Fractional Reserve Banking

Let's see how the fractional reserve process works, in the absence of a central bank. I set up a Rothbard Bank, and invest $1,000 of cash (whether gold or government paper does not matter here). Then I "lend out" $10,000 to someone, either for consumer spending or to invest in his business. How can I "lend out" far more than I have? Ahh, that's the magic of the "fraction" in the fractional reserve. I simply open up a checking account of $10,000 which I am happy to lend to Mr. Jones. Why does Jones borrow from me? Well, for one thing, I can charge a lower rate of interest than savers would. I don't have to save up the money myself, but simply can counterfeit it out of thin air. (In the nineteenth century, I would have been able to issue bank notes, but the Federal Reserve now monopolizes note issues.) Since demand deposits at the Rothbard Bank function as equivalent to cash, the nation's money supply has just, by magic, increased by $10,000. The inflationary, counterfeiting process is under way.

The nineteenth-century English economist Thomas Tooke correctly stated that "free trade in banking is tantamount to free trade in swindling." But under freedom, and without government support, there are some severe hitches in this counterfeiting process, or in what has been termed "free banking." First: why should anyone trust me? Why should anyone accept the checking deposits of the Rothbard Bank? But second, even if I were trusted, and I were able to con my way into the trust of the gullible, there is another severe problem, caused by the fact that the banking system is competitive, with free entry into the field. After all, the Rothbard Bank is limited in its clientele. After Jones borrows checking deposits from me, he is going to spend it. Why else pay money for a loan? Sooner or later, the money he spends, whether for a vacation, or for expanding his business, will be spent on the goods or services of clients of some other bank, say the Rockwell Bank. The Rockwell Bank is not particularly interested in holding checking accounts on my bank; it wants reserves so that it can pyramid its own counterfeiting on top of cash reserves. And so if, to make the case simple, the Rockwell Bank gets a $10,000 check on the Rothbard Bank, it is going to demand cash so that it can do some inflationary counterfeit-pyramiding of its own. But, I, of course, can't pay the $10,000, so I'm finished. Bankrupt. Found out. By rights, I should be in jail as an embezzler, but at least my phoney checking deposits and I are out of the game, and out of the money supply.

Hence, under free competition, and without government support and enforcement, there will only be limited scope for fractional-reserve counterfeiting. Banks could form cartels to prop each other up, but generally cartels on the market don't work well without government enforcement, without the government cracking down on competitors who insist on busting the cartel, in this case, forcing competing banks to pay up.

Central Banking

Hence the drive by the bankers themselves to get the government to cartelize their industry by means of a central bank. Central Banking began with the Bank of England in the 1690s, spread to the rest of the Western world in the eighteenth and nineteenth centuries, and finally was imposed upon the United States by banking cartelists via the Federal Reserve System of 1913. Particularly enthusiastic about the Central Bank were the investment bankers, such as the Morgans, who pioneered the cartel idea, and who by this time had expanded into commercial banking.

In modern central banking, the Central Bank is granted the monopoly of the issue of bank notes (originally written or printed warehouse receipts as opposed to the intangible receipts of bank deposits), which are now identical to the government's paper money and therefore the monetary "standard" in the country. People want to use physical cash as well as bank deposits. If, therefore, I wish to redeem $1,000 in cash from my checking bank, the bank has to go to the Federal Reserve, and draw down its own checking account with the Fed, "buying" $1,000 of Federal Reserve Notes (the cash in the United States today) from the Fed. The Fed, in other words, acts as a bankers' bank. Banks keep checking deposits at the Fed and these deposits constitute their reserves, on which they can and do pyramid ten times the amount in checkbook money.

Here's how the counterfeiting process works in today's world. Let's say that the Federal Reserve, as usual, decides that it wants to expand (i.e., inflate) the money supply. The Federal Reserve decides to go into the market (called the "open market") and purchase an asset. It doesn't really matter what asset it buys; the important point is that it writes out a check. The Fed could, if it wanted to, buy any asset it wished, including corporate stocks, buildings, or foreign currency. In practice, it almost always buys U.S. government securities.

Let's assume that the Fed buys $10,000,000 of U.S. Treasury bills from some "approved" government bond dealer (a small group), say Shearson, Lehman on Wall Street. The Fed writes out a check for $10,000,000, which it gives to Shearson, Lehman in exchange for $10,000,000 in U.S. securities. Where does the Fed get the $10,000,000 to pay Shearson, Lehman? It creates the money out of thin air. Shearson, Lehman can do only one thing with the check: deposit it in its checking account at a commercial bank, say Chase Manhattan. The "money supply" of the country has already increased by $10,000,000; no one else's checking account has decreased at all. There has been a net increase of $10,000,000.

But this is only the beginning of the inflationary, counterfeiting process. For Chase Manhattan is delighted to get a check on the Fed, and rushes down to deposit it in its own checking account at the Fed, which now increases by $10,000,000. But this checking account constitutes the "reserves" of the banks, which have now increased across the nation by $10,000,000. But this means that Chase Manhattan can create deposits based on these reserves, and that, as checks and reserves seep out to other banks (much as the Rothbard Bank deposits did), each one can add its inflationary mite, until the banking system as a whole has increased its demand deposits by $100,000,000, ten times the original purchase of assets by the Fed. The banking system is allowed to keep reserves amounting to 10 percent of its deposits, which means that the "money multiplier" – the amount of deposits the banks can expand on top of reserves – is 10. A purchase of assets of $10 million by the Fed has generated very quickly a tenfold, $100,000,000 increase in the money supply of the banking system as a whole.

Interestingly, all economists agree on the mechanics of this process even though they of course disagree sharply on the moral or economic evaluation of that process. But unfortunately, the general public, not inducted into the mysteries of banking, still persists in thinking that their money remains "in the bank."

Thus, the Federal Reserve and other central banking systems act as giant government creators and enforcers of a banking cartel; the Fed bails out banks in trouble, and it centralizes and coordinates the banking system so that all the banks, whether the Chase Manhattan, or the Rothbard or Rockwell banks, can inflate together. Under free banking, one bank expanding beyond its fellows was in danger of imminent bankruptcy. Now, under the Fed, all banks can expand together and proportionately.

"Deposit Insurance"

But even with the backing of the Fed, fractional reserve banking proved shaky, and so the New Deal, in 1933, added the lie of "bank deposit insurance," using the benign word "insurance" to mask an arrant hoax. When the savings and loan system went down the tubes in the late 1980s, the "deposit insurance" of the federal FSLIC [Federal Savings and Loan Insurance Corporation] was unmasked as sheer fraud. The "insurance" was simply the smoke-and-mirrors term for the unbacked name of the federal government. The poor taxpayers finally bailed out the S&Ls, but now we are left with the formerly sainted FDIC [Federal Deposit Insurance Corporation], for commercial banks, which is now increasingly seen to be shaky, since the FDIC itself has less than one percent of the huge number of deposits it "insures."

The very idea of "deposit insurance" is a swindle; how does one insure an institution (fractional reserve banking) that is inherently insolvent, and which will fall apart whenever the public finally understands the swindle? Suppose that, tomorrow, the American public suddenly became aware of the banking swindle, and went to the banks tomorrow morning, and, in unison, demanded cash. What would happen? The banks would be instantly insolvent, since they could only muster 10 percent of the cash they owe their befuddled customers. Neither would the enormous tax increase needed to bail everyone out be at all palatable. No: the only thing the Fed could do, and this would be in their power, would be to print enough money to pay off all the bank depositors. Unfortunately, in the present state of the banking system, the result would be an immediate plunge into the horrors of hyperinflation.

Let us suppose that total insured bank deposits are $1,600 billion. Technically, in the case of a run on the banks, the Fed could exercise emergency powers and print $1,600 billion in cash to give to the FDIC to pay off the bank depositors. The problem is that, emboldened at this massive bailout, the depositors would promptly redeposit the new $1,600 billion into the banks, increasing the total bank reserves by $1,600 billion, thus permitting an immediate expansion of the money supply by the banks by tenfold, increasing the total stock of bank money by $16 trillion. Runaway inflation and total destruction of the currency would quickly follow.

http://www.lewrockwell.com/rothbard/frb.html

[Black Flag]

I am aware of your opinions on those cases. You believe that in the entire system there exists 100% reserves for every outstanding loan.

Gold, are you insane?
Where have I ever posted such a bizarre thing?

That is the only way banks could sell loans to other banks that have extra reserves laying around to cover their loans.

*sigh*

You are very confused.

A bank buying a loan from another bank is the same as if the bank made a new loan.

The same ability for that bank to make a new loan is the same ability for that bank to buy a loan from another bank.

The 10% reserve requirement must not mean anything, it must not even exist. Obviously reserves must exist to cover every loan or the banks will fail.

Why you are making up these stories, I do not know - but it must come from the same place you make up with other stories that you believe explains banks making money out of thin air.

You also believe that the bank owns your money when you put it in a checking account.

It does - whether you believe it or not matters not.

Money deposited in a bank account is, as established under case law going back more than 200 years, legally the property of the bank, rather than the account holder

In 1825 the Supreme Court of the United States stated that when a customer deposits money in a bank that money becomes the property of the bank. From the case of Bank of the United States v. Bank of Georgia:

It is clearly not the case of a special deposit, where the identical thing was to be restored by the defendants; the notes were paid as money upon general account and deposited as such, so that according to the course of business and the understanding of the parties, the identical notes were not to be restored, but an equal amount in cash. They passed, therefore, into the general funds of the Bank of Georgia and became the property of the bank. The action has therefore assumed the proper shape, and if it is maintainable upon the merits, there is no difficulty in point of form.

It could be nothing else, for the bank uses your money to lend - it cannot lend what it does not own. It is NOT your agent - that is, it is not lending YOUR money on your behalf. You know this, since you have not signed an agent agreement with the bank. You signed a deposit slip - which transfers ownership of your money to the bank in return for a promise to repay upon demand.


PS: You are not alone in misunderstanding the situation and agreement you are making with your bank. Few people understand it at all. Few people are confronted by the consequences of this misunderstanding, so they will tend to ignore it.

On a superficial level, this agreement is transparent - the bank fulfills its promise to repay you on demand. To you, as a normal, ignorant member of society, it appears the bank is giving back what you own.

But you need only to pull the cover back a bit.
You deposited FRN with a particular serial number. Those FRN are your property - and are serialized.

But when you withdrew your deposit, you got different FRN with different serial numbers. They are not the same ones you place into the bank.

A described above, the bank is not a bailment - you sold your FRN in trade for a deposit slip and sold your deposit slip back to the bank for someone's else sold FRN

At a superficial level, none of this matters ...dollar in, dollar out.... but the danger as you are doing, you are making up crackpot theories explaining this process based on your superficial review, and then trying to apply these crackpot theories to explain the bank system itself.

[Black Flag]

Any point in your post that you wish to discuss?

[The Gold Standard]

Any point in your post that you wish to discuss?

If banks are covering their loans and demand deposits without creating money then the reserves exist to do this. Period.

Regarding the article I posted, let's see a clown like you go ahead and tell everyone how wrong and uninformed Murray Rothbard was about the banking system.

[Black Flag]

Personally, I find you to be completely confused about what money is, but feel free to rant away anyway.

With no doubt, I am sure you are the one befuddled.

[thoughtomator]

Guys, "Black Flag" is trolling us here. Had he spent a fraction of the time viewing the video I gave him that he has spent being wrong in post after post after post here, this thread would have wrapped up pages ago. As he seems to have no end to time to create long posts, yet can't watch a 4-minute video that gives him exactly the "monopoly money" counting-out example that he requested, the only reasonable conclusion is that his posts here are motivated by malice.

Were this my forum he'd have gotten a C-level IP network ban about 3 pages ago.

[Black Flag]

If banks are covering their loans and demand deposits without creating money then the reserves exist to do this. Period.

I have patiently described how, and given you a physical tool to watch how the system works.

Because you are afraid to learn that you did not know how the banking system works - and sat with some crackpot theory of it on your lap for so long, you refuse to read the description nor do the excerise.

You are content to live in your self-imposed ignorance.

Rothbard said nothing except that there are multiple, exclusive but concurrent demands on the same deposit, and such a situation is immoral.

[Black Flag]

Guys, "Black Flag" is trolling us here. Had he spent a fraction of the time viewing the video I gave him that he has spent being wrong in post after post after post here, this thread would have wrapped up pages ago. As he seems to have no end to time to create long posts, yet can't watch a 4-minute video that gives him exactly the "monopoly money" counting-out example that he requested, the only reasonable conclusion is that his posts here are motivated by malice.

Were this my forum he'd have gotten a C-level IP network ban about 3 pages ago.

The video certainly repeats the mess and garbage you want to hear.

It does not explain the banking system as it exists in reality. As such, you hold serious errors in your understanding, serious errors in your assumption and serious errors in your solutions - such as "paying of debt shrinks the money supply and puts the economy in deflation".

[Travlyr]

With no doubt, I am sure you are the one befuddled.

Heh... heh...

[Paul Or Nothing II]

Steven and gang,

I mean, you guys harp about FRN not being money and gold being money ... as if the system would function differently if gold was the money.

But as the exercise shows, it doesn't make a difference.

So, when you consider that the FED was created in 1913 - the start of the Fractional Reserve - it must be astounding to you to also know that the US was on a gold standard!

...and that the crash in 1929 occurred when the US was on a gold standard! It was on a gold standard until 1936 when FDR seized the gold and replaced it with FRN.

So your ranting about that the system of FRN we have today is the issue (and as a corollary, would not occur if it was "gold") is demonstrably false by fact of history, which dismisses your pet theory of banking as well.


You guys are like a novice chemistry student, proclaiming that hydrogen and oxygen mixed together creates water.
Well, sorry, newbie, it doesn't.
You can mix them for eternity and you will get no water!

...because you need a spark or an ignition source too!

And that's the problem you have - you have a pet theory, and for your theory to work(?!?) you need to label things to be things they are not. This creates different conceptual issues, so you try to fix those issues by making up more things and bizarre declarations like "banks make money out of thin air", which of course anyone with an unpolluted brain would look at you like you are daft ....because it is daft!

When the old chemistry teacher shows how the system works, and its underlying function and form, it confounds your pet theory - and *gasp* you can't have that!

So go ahead, stir away into eternity hoping to get some water, heat and light with all that hydrogen and oxygen.

I think you should at least read before acting like everyone here is an idiot, I think the terminology both sides are using is causing confusion as I believe you're also against FRB ()

May be it's "Austrian thing" to say "FRB creates money" but what is really being said is that the process of re-depositing & re-lending of demand-deposits causes money to be spent over & over "as if it's new money" due to conflicting claims

And please, read around a little, NOBODY claimed that FRB can't happen under gold-standard, of course, they know it can happen under gold-standard & caused boom-bust cycles but the reason we prefer gold is because nobody can just "create it" out of thin air like Fed creates money

And I could be mistaken but do you follow Chicago School???

Anyways, again, may be it's the terminology but even mainstream economist like Friedman clearly says that FRB (re-depositing & re-lending) "creates money"

Listen carefully after 15:00 or so, he says a banker "creates money" then goes on to talk about "money is created & destroyed" by (re)depositing & (re)lending

[Travlyr]

The video certainly repeats the mess and garbage you want to hear.

It does not explain the banking system as it exists in reality. As such, you hold serious errors in your understanding, serious errors in your assumption and serious errors in your solutions - such as "paying of debt shrinks the money supply and puts the economy in deflation".

The banking system? The banking system? Who cares about the banking system? It is much like caring about the shoe system. Nobody cares. Bankers are just a bunch of thieves, dude. They dress up in Armani suits and gang rape productive individuals. They are just fancy thieves.

"Banking was conceived in iniquity and born in sin. Bankers own the Earth. Take it away from them but leave them the power to create money, and, with the flick of a pen, they will create enough money to buy it back again. Take this great power away from them and all great fortunes like mine will disappear and they ought to disappear, for then this would be a better and happier world to live in. But, if you want to continue to be the slave of the bankers and pay the cost of your own slavery, then let the bankers continue to create money and control credit." - Sir Josiah Stamp, President, Bank of England (2nd richest man in England)

Thieves. That's all they are. Yes. Your local banker sits in church on Sunday in fine clothing looking all important and stuff ... all he is is a thief. Modern banking is theft plain and simple.

[Steven Douglas]

Methinks you guys are confused about the factual circumstances surrounding a deposit.

A bank deposit is NOT a "bailment"

That is correct, but one of the mistakes you are making here, and it is a big one (besides coming off as arrogant and condescending), is not knowing who you are talking to, or what their understanding of the system is. You assume, generally speaking, that posters here do not understand the difference between a deposit (and actual transfer of title) and a bailment (an allocated holding). That is not the case, as most really do understand that. Evidently you are not aware that the subject, including the history of deposits vs. bailments, is talked about here.

You then take great pains as you patronize everyone with monopoly set exercises to drive points home on which we might well agree, or that don't require any prior explanation, in what appears to be an attempt to get everyone thinking along the lines your preferred definitions.

There are many who insist on semantic purity when referring to things like "money", "inflation", or other terms, the common usage of which has rendered them forever bastardized. "Don't call it money! It's debt!", or "No, debt is not money, only money is money! Money is Constitutionally defined, call it fiat currency instead!" Or inflation: "Inflation is a general increase in prices levels!" versus, "Inflation is increasing the money supply!" - all pathetic of course, because the former definition managed to dethrone the latter through common usage, and therefore common acceptance.

Then we go inefficiently and unnecessarily round and round on something that really is minor, even irrelevant, given that all that was really needed rather than clarify your intent, or see through the spirit of someone else's intent and translate on the fly, clarifying as you go.

No, you instead hold fast to your definition, as if there is purity in definitions, or some kind of law that applies to naming conventions, often arguing trivial or meaningless points without realizing where there is already fundamental agreement!

I would submit, however, that if your arguments require elaborate prefaces, and disambiguation such that everyone finally accept and adopt your favored terms, your criteria, your models and your definitions for understanding, then you're already on slippery footing. The reason for this is that while you may well be arguing a particular thing on principle, semantics and definitions aren't principles. They're human constructs. Getting people to see that "debt is not money" may be a way for you to focus everyone's attention on what you consider the root problem you want addressed -- but most aren't concerned with what something is called, but rather what is does, regardless what it is called.

So I have a suggestion, one that I doubt you will take: Rather than take the 'wayward ignorant flock' here by the hand and lead us all out of the Dark Forest and onto the Yellow Brick Road of your superior understanding and monetary enlightenment, why don't you just come out with your conclusions first, and argue your ultimate points, directly and forthrightly, from there?

So you have your own definition of "money", and your own criteria by which a thing may or may not be called such. This seems to be key to your arguments, because bottom line, you don't seem to have a problem with fiat currency, which you do think of as money (to the point of insisting, and want everyone else to think of as money, based on your favored criteria). What you do seem to have a problem with - and many here do as well, including myself - is bank fraud, as longs are played against shorts with contradictory claims to the same existing UNITS when they are used as money.

[Danke]

Don't know if it has been brought up yet, but "The Two Faces of Debt" by the Chicago Federal Reserve is a good read.

[Black Flag]

Paul, Steven, and others:

I think you should at least read before acting like everyone here is an idiot, I think the terminology both sides are using is causing confusion as I believe you're also against FRB

First, I did not say anyone was an idiot.

I said that some hold crackpot theories that they cannot support except by waving their hands in the air and pretending "banks create money out of thin air".

This all started when someone said "Debt liquidation causes deflation" - which is not true - and they argued their point by claiming since the banks created money out of thin air to create debt, the reverse -eliminating debt- must make this thin air money vanish - and thus, create deflation as if it was real money vanishing.

Thin-air money appearing and disappearing, however, does no such thing to inflation or deflation - it causes nor creates neither since it does not exist.

It is, in fact, merely an artifact of record keeping and not money whatsoever.

Inflation occurs when "real" money supply increases, and deflation occurs when "real" money supply decreases - and no amount fantasy about "thin-air" money changes these facts.

To demonstrate the point, I created an exercise where anyone with their own eyes can see this.

Of course, the main antagonists here totally refused to do the exercise, since it would undermine their crackpot theories.

May be it's "Austrian thing" to say "FRB creates money" but what is really being said is that the process of re-depositing & re-lending of demand-deposits causes money to be spent over & over "as if it's new money" due to conflicting claims

I think we all agree regarding the concurrent claims on the same money - but that does not mean thin-air money exists or ever exists.

The claims on the same money by more than one party is exactly the issue.
If any two parties makes the claim at the same time and the bank is has not enough of real money to satisfy both, the situation becomes very messy.

But it is messy because of the claims and not because there is some fictitious "thin-air" money that exists

Further, at no time -ever- is anyone spending anything other than real money.

but the reason we prefer gold is because nobody can just "create it" out of thin air like Fed creates money

Exactly.
And you nailed it - the FED creates all the money - no where else does this happen.

So this idea that the "banks" create money out of thin air is simply a fantasy, diverts the truth away from the real center of cause and builds a necessity to act against peripheral systems where energy is consumed attempting to fix problems that do not exist and leave free central systems to operate unchanged and unmolested.

And I could be mistaken but do you follow Chicago School???

No.
I do not ascribe to their monetary theory.

Listen carefully after 15:00 or so, he says a banker "creates money" then goes on to talk about "money is created & destroyed" by (re)depositing & (re)lending

Again, simply apply the exercise I provided above and see if what he says actually happens.

You will find it does not. No money is destroyed and no money is created.

Accounting entries are added and accounting entries are subtracted. But these are not money.

The banking system? The banking system? Who cares about the banking system?

Well, it is the cause and reason why the economy is in turmoil, so it is beneficial to care about these things.

. Bankers are just a bunch of thieves, dude.

No, they are not.

They dress up in Armani suits and gang rape productive individuals. They are just fancy thieves.

No, they are not.

They do not threaten you with violence.

You deal with them because you want something from them. They do not hunt you down and force you to come to them.

The Federal Reserve and the Fractional Reserve banking system have many disagreeable components that create massive, unfavorable consequences - but I do not see this as theft... it is more of unintended consequences arising from ignorance of human action and a few who believe they can better manage other people's lives and money then the people themselves - a matter of conceit.

Steven

A bank deposit is NOT a "bailment"

That is correct You assume, generally speaking, that posters here do not understand the difference between a deposit (and actual transfer of title) and a bailment (an allocated holding).

I can see that you read none of the subsequent posts - at this point, you appear to be the only other one that knows this - the rest assume that they still owned their money on deposit - which leads to massive confusion of how a bank operates and why it can move money around.

Perhaps it is only one or two that are confused here - but it was those one or two who posted here.

That is not the case, as most really do understand that.

I hope you are right - but at this point, present company excepted, sorry, I have no found little to support your claim.

Evidently you are not aware that the subject, including the history of deposits vs. bailments, is talked about here.

True, I am "new" here and that is good if there has been dialogue on the subjects

You then take great pains as you patronize everyone with monopoly set exercises to drive points home on which we might well agree, or that don't require any prior explanation, in what appears to be an attempt to get everyone thinking along the lines your preferred definitions.

One of the great, destructive things in today's society is the constant re-defining of words in such a manner as to pervert concepts and meanings, while maintaining the word itself, in such a way that people become in agreement with things that they would normally oppose.

Revolution within the Form

As Confucius said:
To halt the collapse of a society, the first thing that must be done is for words to have meaning.

So our definitions must be well understood and -equally important- reflect the reality the word is supposed to represent.

No, you instead hold fast to your definition, as if there is purity in definitions, or some kind of law that applies to naming conventions, often arguing trivial or meaningless points without realizing where there is already fundamental agreement!

As I explained, it is vitally important for definitions to be solid and not sand, to be precise and not arbitrary - or else the same words will become the tools to manipulate people into agreeing to things that they truly oppose.

And as well exampled in our thread here, by the confusion of definitions we get confusion of cause/effect.

When in an environment where a certain outcome exists, and this confusion lays a blame toward a cause --- that is utterly wrong.

Applying solutions to problems that do not exist and avoiding solving problems that do exist leads down a very destructive path.

but most aren't concerned with what something is called, but rather what is does, regardless what it is called.

But these same concerned people do not understand enough to know what is called - how can you claim they understand enough to even know the problem, let alone competent enough to participate in a solution?

I mean, do you believe you can go into a surgery room, and offer your opinion to a doctor on how to save a life when you can't tell the difference between an intracranial hematoma and a renal vein thrombosis?

So I have a suggestion, one that I doubt you will take: Rather than take the 'wayward ignorant flock' here by the hand and lead us all out of the Dark Forest and onto the Yellow Brick Road of your superior understanding and monetary enlightenment, why don't you just come out with your conclusions first, and argue your ultimate points, directly and forthrightly, from there?

Sir, I did that.

The an original posit of this thread was that debt caused 'inflation' and therefore 'debt liquidation' caused deflation - the big-buga-boo - and that the system of banking... which entails deposits and loans ... is itself the fault of all of this economic chaos.

I disputed - that debt does no such thing regarding inflation and deflation, and that the banking system - deposits and loans - is NOT the fault of economic chaos.

And our little thread raced ahead - with a bevy of posters attempting to justify their crackpot theories of debt, inflation, deflation, and the evil bankers ... each and every one of these attitudes directly due to a gross misunderstanding created by a gross mis-definition of common economic and financial terminology and mechanics.

you don't seem to have a problem with fiat currency

No, I have a lot of problems with fiat currency - but that has nothing to do with the mechanics of banking.

which you do think of as money

Because it is money.

You trade for it and trade with it
The trade occurs without having to discount one side or the other of the trade for the trade to be accepted.
You pay your taxes with it.
All other goods and services are priced with a reference to it.

Thus, it is money.

What you do seem to have a problem with - and many here do as well, including myself - is bank fraud, as longs are played against shorts with contradictory claims to the same existing UNITS when they are used as money.

Not quite, sir, and I will edit your statement and then attach my agreement to it:

What you and I do seem to have a problem with is bank fraud, as longs are played against shorts with concurrent claims to the same money.

[Travlyr]

Black Flag, you don't have a clue as to what money is. What you are referring to is currency. Currency can be dictated by decree, but money is a natural law much like the laws of supply & demand, and the laws of physics. Natural laws are not declared by man. Natural laws are like rights. They are inherent.

Here is what it is. Money is a medium of exchange. If I catch two fish and only want one then I may be able to convince some vegetable grower to trade me one fish for a head of broccoli and a potato. You see that fish and those vegetables are money. They are great as food but not a good quality money because they'll rot and spoil.

High quality money holds value over time. Gold, silver, copper, and now platinum & rhodium meet all the characteristcs of high quality money because they are desirable, divisible, durable, portable, and scarce. Land is a high quality asset, especially if water & mineral rights come with it, but it is low quality money because it is not portable. Fish is not durable. Paper and electronic entries are low quality money because they are not scarce.

Money is not decreed by governments. Currency is.

[Black Flag]

Here is what it is. Money is a medium of exchange.

Money is the most desired commodity in a marketplace.

It has been at one time or another salt, pearls, sticks of wood, metal, a mix of metal, playing cards, wooden nickels, jewels, large rocks with a hole in the middle, and cigarettes.

The feature that made these things "money" is that people valued these things the highest at that time - which is why they wanted these things - and why it was easy to trade with it because everyone else wanted it too. Easy to buy and easy to sell.

Thus, it becomes the medium of trade - this is a FEATURE of money; it does not make it money.

If I catch two fish and only want one then I may be able to convince some vegetable grower to trade me one fish for a head of broccoli and a potato. You see that fish and those vegetables are money. They are great as food but not a good quality money because they'll rot and spoil.

You are judging a quality of a good - such as it rots - as if this quality or lack of it makes it become money.

But it does not.

We have massive examples of very bad quality money - Zimbabwe dollar, for one simple example - but it is (was) still money

A Rai stone - money in Micronesia - is a stone so big it can't be moved. Some sit at the bottom of a deep lagoon.
It isn't fungible. It's a rock!
It isn't portable. It weighs tons!
...but it is money...in Micronesia.

http://en.wikipedia.org/wiki/Rai_stones

High quality money holds value over time.

Nonsense.

Value is wholly subjective to an individual and as such wanes and whithers and grows depending on the desires of that individual.

What you value may be valueless to me, and vis versa - example, I hold zero value for a Rai stone and Micronesia probably doesn't value my copper pennies at all much either.

Gold is NOT a store of value - but it is something valuable to store.

So do not bother trying to "prove" something is money or not money based on your perception of value, which is subjective to you.

Gold, silver, copper, and now platinum & rhodium meet all the characteristcs of high quality money because they are desirable, divisible, durable, portable, and scarce. Land is a high quality asset, especially if water & mineral rights come with it, but it is low quality money because it is not portable. Fish is not durable. Paper and electronic entries are low quality money because they are not scarce.

Money is not decreed by governments. Currency is.

As already shown with examples from history and current, money has nothing to do with these things you claim.

Yes, a money that is fungible makes this money easy to use - but fungible does not make something money.
Yes, a money that is portable makes this money easy to use - but portability does not make something money.
Yes, a money that is durable makes this money easy to use - but durable does not make something money... etc.

Indeed, something that has all these features all at once does not that make that something money.

As Mises showed - and demonstrated by all the examples of money past and present - needs one, and only one thing ....

the most desired commodity in a marketplace

[Travlyr]

Money is the most desired commodity in a marketplace.

And it sure as hell is not some stupid Federal Reserve Note forced onto me by an unconstitutional decree. They can take their money scam to some deserted island for all I care. Let me decide what is most desirable to me and they can $#@! off.

[Black Flag]

And it sure as hell is not some stupid Federal Reserve Note forced onto me by an unconstitutional decree.

It is not forced on you whatsoever.

You can use whatever you want to trade for whatever you want. You can sell and buy in Euro's if you want - no one stops you at all - or, trade your gold coins....

The only thing you need FRN for is to pay your taxes - but that isn't the money's fault - that is because people like to be taxed.

. Let me decide what is most desirable to me and they can $#@! off.

But that is what you have right now, for you.

You don't need one darn FRN -except at tax time- but I guarantee someone, somewhere will trade their FRN for your gold coin at some price for you to pay your taxes, but other than that - you are absolutely free to use whatever you want to use to trade for other things.

It may be a little more difficult to successfully complete transactions - it maybe a bit harder to establish a mutual price - but (shrug) for you, it should be worth doing to avoid using money.

[Travlyr]

It is not forced on you whatsoever.

You can use whatever you want to trade for whatever you want. You can sell and buy in Euro's if you want - no one stops you at all - or, trade your gold coins....

The only thing you need FRN for is to pay your taxes - but that isn't the money's fault - that is because people like to be taxed.


But that is what you have right now, for you.

You don't need one darn FRN -except at tax time- but I guarantee someone, somewhere will trade their FRN for your gold coin at some price for you to pay your taxes, but other than that - you are absolutely free to use whatever you want to use to trade for other things.

It may be a little more difficult to successfully complete transactions - it maybe a bit harder to establish a mutual price - but (shrug) for you, it should be worth doing to avoid using money.

Difficult for sure because some $#@!s like to be privileged and screw with everybody's lives. I can't even grow industrial hemp without some $#@! telling me to stop. Audit the Fed ... ASAP. Put the counterfeiting criminals in jail.. that's what I say, ... put their asses in jail to rot.

[Travlyr]

It is not forced on you whatsoever.

Are you aware of legal tender laws? LMAO. Come on. You seriously don't expect me to believe your bull$#@!? Seriously? LOL.

[Paul Or Nothing II]

That is correct, but one of the mistakes you are making here, and it is a big one (besides coming off as arrogant and condescending), is not knowing who you are talking to, or what their understanding of the system is. You assume, generally speaking, that posters here do not understand the difference between a deposit (and actual transfer of title) and a bailment (an allocated holding). That is not the case, as most really do understand that. Evidently you are not aware that the subject, including the history of deposits vs. bailments, is talked about here.

You then take great pains as you patronize everyone with monopoly set exercises to drive points home on which we might well agree, or that don't require any prior explanation, in what appears to be an attempt to get everyone thinking along the lines your preferred definitions.

There are many who insist on semantic purity when referring to things like "money", "inflation", or other terms, the common usage of which has rendered them forever bastardized. "Don't call it money! It's debt!", or "No, debt is not money, only money is money! Money is Constitutionally defined, call it fiat currency instead!" Or inflation: "Inflation is a general increase in prices levels!" versus, "Inflation is increasing the money supply!" - all pathetic of course, because the former definition managed to dethrone the latter through common usage, and therefore common acceptance.

Then we go inefficiently and unnecessarily round and round on something that really is minor, even irrelevant, given that all that was really needed rather than clarify your intent, or see through the spirit of someone else's intent and translate on the fly, clarifying as you go.

No, you instead hold fast to your definition, as if there is purity in definitions, or some kind of law that applies to naming conventions, often arguing trivial or meaningless points without realizing where there is already fundamental agreement!

I would submit, however, that if your arguments require elaborate prefaces, and disambiguation such that everyone finally accept and adopt your favored terms, your criteria, your models and your definitions for understanding, then you're already on slippery footing. The reason for this is that while you may well be arguing a particular thing on principle, semantics and definitions aren't principles. They're human constructs. Getting people to see that "debt is not money" may be a way for you to focus everyone's attention on what you consider the root problem you want addressed -- but most aren't concerned with what something is called, but rather what is does, regardless what it is called.

So I have a suggestion, one that I doubt you will take: Rather than take the 'wayward ignorant flock' here by the hand and lead us all out of the Dark Forest and onto the Yellow Brick Road of your superior understanding and monetary enlightenment, why don't you just come out with your conclusions first, and argue your ultimate points, directly and forthrightly, from there?

So you have your own definition of "money", and your own criteria by which a thing may or may not be called such. This seems to be key to your arguments, because bottom line, you don't seem to have a problem with fiat currency, which you do think of as money (to the point of insisting, and want everyone else to think of as money, based on your favored criteria). What you do seem to have a problem with - and many here do as well, including myself - is bank fraud, as longs are played against shorts with contradictory claims to the same existing UNITS when they are used as money.

That's the problem, he thinks everyone in the world should agree with his definitions, which is never going to happen because words are just constructs

It's like something is going to crash into the Earth & people are debating whether it's an asteroid or satellite, as opposed to doing something about it

How much are you willing to bet on this thread going 190 pages like the other stupid thread? I see some potential I think if this one goes like this for 190 pages then you might shoot yourself or go crazy

It is, in fact, merely an artifact of record keeping and not money whatsoever.

Yes, creation of that "artifact" is what we & most of the world calls & sees as "money" because it affects consumer preferences & prices & so on, now, you may be an enlightened being that doesn't call it that, which is fine, but the good thing is that people here DO agree that this "artifact" is a problem & needs to be taken care of so stop wasting everyone's time on your definitions because the whole world is never going to agree on definition of every word, let's move on

Ok, just shove this BS aside for a moment & just say what do you want? What's your view on economics & how YOU think things "should" be? So that we can see where you stand, for the sake of clarity

[Black Flag]

Are you aware of legal tender laws? LMAO. Come on. You seriously don't expect me to believe your bull$#@!? Seriously? LOL.

Ah, duh... what do you think that means to you?

Do you believe that if you say to someone "I will sell my car, but only if you pay me 10oz of gold", that they can stuff $17000 in your hand and take your car?
If you believe that you are daft! They would be stealing from you and they would be arrested and charged as such.

The ONLY thing the legal tender laws force you to do is to discharge YOUR TAXES in that currency - but that is a demand of government and not anyone else.

[Black Flag]

That's the problem, he thinks everyone in the world should agree with his definitions, which is never going to happen because words are just constructs

Sir, if we can't agree on the meaning of words, we are doomed as a society!

Further it is not the meaning of the words that is so much the issue - it is that you and others change the meaning of the words whenever it suits your agenda.

Today, money is this, but now, I need money to be this air-thing so, I'll change the definition of money to also include that for now.....

It's like something is going to crash into the Earth & people are debating whether it's an asteroid or satellite, as opposed to doing something about it

Ummm but that kinda makes a difference.
One is going to burn up in the atmosphere, with at best a few small fragments reaching the surface...
...and the other is going to obliterate a continent or two.

So it is kinda important to know what you are talking about - it is the difference of not worrying about it and kissing your a$$ goodbye.

Yes, creation of that "artifact" is what we & most of the world calls & sees as "money"

And calling it a good time doesn't make it change what it is either - accounting entries.

because it affects consumer preferences & prices & so on,

It absolutely does no such thing!

Another crackpot theory is born out of the same pixie dust of thin-air money!

See, Steven - this is exactly my point.
Completely bizarre understanding of money and *poof* another crack pot theory!

but the good thing is that people here DO agree that this "artifact" is a problem

See, Steven, exactly my point.

Because of a complete misunderstanding of what is money and what is accounting, this good sir is advocating that there is a problem ... and it has to do with the accounting of the flow of money and not one wit about what is the actual problem - the concurrent claims on the same money!!!

Ok, just shove this BS aside for a moment & just say what do you want? What's your view on economics

"View"?

Economics is a science, not an opinion.

[Steven Douglas]

The ONLY thing the legal tender laws force you to do is to discharge YOUR TAXES in that currency - but that is a demand of government and not anyone else.

Yeah, that, along with another minor additional little thing. If you are in a civil dispute with someone, and you are offered legal tender to resolve it, the court will actually give you a choice: you can accept the legal tender, or you can refuse it, and the court will consider the debt discharged, and you can pound sand. But it's true, nobody will put a gun to your head and force you to accept FRNs.

Oh, but you're wrong about it being only about taxes. Dead wrong. Legal tender laws force you to use legal tender for any debt, fine, judgment, penalty, fee, etc., ad nauseam, public or private, that is enforced by the courts.

As I wrote in the other thread, but you didn't respond, legal tender laws are not just a declaration of what the taxman demands as payment. It is also a declaration, by fiat, for what the taxman's courts will decide the market will accept, and often be forced to use as payment (hence, "legal tender for all debts public and private").

[Black Flag]

Yeah, that, along with another minor additional little thing. If you are in a civil dispute with someone, and you are offered legal tender to resolve it, the court will actually give you a choice: you can accept the legal tender, or you can refuse it, and the court will consider the debt discharged, and you can pound sand. But it's true, nobody will put a gun to your head and force you to accept FRNs.

Not to be nothing but a disagreeable stuck in the mud.....

...if we contracted with each other that you would provide X number of coins of gold, and you failed to do so and I took you to court - you would STILL be required to fulfill our agreement of providing such number of coins.

Whereas you would be correct in saying that the court could say "Well BF, X coins at today's rate in FRN is Y, so Steven, pay BF Y in FRN and BF can go get his damn coins himself"

As I wrote in the other thread, but you didn't respond, legal tender laws are not just a declaration of what the taxman demands as payment. It is also a declaration, by fiat, for what the taxman's courts will decide the market will accept, and often be forced to use as payment (hence, "legal tender for all debts public and private").

Fine, sharpen the pencil - as write in "...or whatever the taxman and his courts wishes to be resolved financially"

However, the point to Travlyr is that if HE chooses not use FRN in HIS transactions, he is free to do so.

PS: the fundamental point of government money exists solely as a means to pay government obligations and to receive taxes as revenue to pay those obligations.

If there was no taxes, government tender laws would be unnecessary.

All modern money exists because of the desire of the people to discharge their tax debts.

PSS: Which means if "you" out there wish for a "free market" money to compete with "government" money, the first step is to abolish taxation

[Steven Douglas]

Sir, if we can't agree on the meaning of words, we are doomed as a society!

The problem here is not about mutual agreement on the definitions, but rather a need you see for mutual acceptance of yours, as a condition or basis for discussion. There is a big difference.

EXAMPLE: I saw you use a definition for inflation that I happen to agree with, as simply "an increase in the money supply". Of course, Ben Bernanke and many others would disagree, insisting on their preferred definitions, as a "general increase in price levels" (sometimes with an additional "...thought to be cause primarily by an increase in the money supply").

So who is "right"? Both can be, because both are accepted definitions, based on common usage; one being the original, but now increasingly archaic, and the one that came into later usage.

There is no such thing as a "pure" definition, but we can at least approach a purer understanding, especially when we realize that communication always starts out as a negotiation (like hand-shaking in modem speak, as various protocols are worked out) - and also realizing that clear communication is incumbent upon both the sender and the receiver.

You aren't hand-shaking or negotiating. You aren't listening to anyone else's protocols or definitions, or trying to clarify them. You have a protocol of your own. It is the only one that matters to you, and you are insisting that it be the only one used. That's a bigger problem for you than anyone, because you are the one trying to make a point.

I KNOW that the word 'inflation', by itself, has been bastardized.
I ACCEPT this bastardized meaning, which I believe was intentional, and does nothing but obfuscate and confuse.
I ACCEPT that most people will hear "price increases" when they think of inflation. I try not to fight that, so...
I ADAPT by not saying "inflation" at all. Not by itself. I will instead say "money inflation", or "currency inflation" or "supply inflation". That makes MY meaning abundantly more clear, and leaves no wiggle room for obfuscation by someone who wants to play word games to his or her advantage, as when someone prefers to refer to inflation only in terms of a general effect with multiple causes.

[Steven Douglas]

However, the point to Travlyr is that if HE chooses not use FRN in HIS transactions, he is free to do so.

Oh, sure, sure, yes of course he is "free" to do so. Likewise, State banks were "free" to compete after 1865. The National Bank Act did not prohibit them from competing at all. Ignore the little matter that state bank notes were taxed out of existence. Even so, they were "free" to compete, and likewise, people were "free" to use them anyway.

So yes, he can use gold or silver coins if he wants, or even bullion. He is "free" to trade in them. He just has to "buy" them, and pay applicable taxes on them. And when the Fed's currency is devalued against it, and most other commodities over time, as it is wont to do, he can pay the "currency valuation loss" tax (misnamed in his case as a "capital gains" tax), which of course will be valued in FRN's. Other than that, no problem. After paying all applicable taxes and fees, he is "free" to anything he wants. Sure. And we are even free to refer to this as "free".

PS: the fundamental point of government money exists solely as a means to pay government obligations and to receive taxes as revenue to pay those obligations.

If there was no taxes, government tender laws would be unnecessary.

Yeah? Then why weren't legal tender laws always enacted? FRN's weren't always the currency.

All modern money exists because of the desire of the people to discharge their tax debts.

OK, that's pretty over the top right there. Talk about a reach. In fact, "the desire of the people to discharge their tax debts" is friggin hilarious. Yeah, everyone sitting around, just pining away, desiring to discharge tax debts, and wondering howsomever they might do so.

Now I'm thinking that the little mini-debate you had with Roy L. was a sock puppet exercise, because that is precisely how he reasoned. Izzat you, Roy? Come on, be 'honest' now. I suspected before, but now I STRONGLY suspect that I am talking to a sock puppet of Roy L. - you even yawned and double yawned at "each other". lol

Black Flag? As in "arg"? Did you pirate a Roy L. ship of state?

And, btw, I noticed you were careful enough to qualify that sentence with "modern money". That kind of narrowed it.

PSS: Which means if "you" out there wish for a "free market" money to compete with "government" money, the first step is to abolish taxation

Yeah, if I bought into your premise about "modern money", or why it exists. But hardly. No, to compete with "government money" (funny how that collectivizes it when you say it that way), I could do as the government did, and simply abolish government money -- force government to reckon money according to the market, and not the other way around. But I don't even care about that, because I don't think in terms of artificial (state imposed) advantages or disadvantages. That's a mistake government has been duped into making. There's no need for anything like that.

To compete with government money all that is needed is to abolish all artificial barriers to entry of other forms of competing currencies. That includes abolishing legal tender laws and abolishing taxation on anything that people decide to use as money. (and yes, I recognize you might consider that an abolishment of taxes - so before you sharpen your pencil, it's stipulated). HR 1098 is a good step in that direction. My kingdom for an HR 1098.

[Paul Or Nothing II]

"View"?

Economics is a science, not an opinion.

Ok, I've had enough of this BS!

It was a simple question but obviously you're not here for an honest debate but just to waste everyone's time since you're obviously in the habit of splitting hair on every issue so I'm done with this BS!

OK, that's pretty over the top right there. Talk about a reach. In fact, "the desire of the people to discharge their tax debts" is friggin hilarious. Yeah, everyone sitting around, just pining away, desiring to discharge tax debts, and wondering howsomever they might do so.

Now I'm thinking that the little mini-debate you had with Roy L. was a sock puppet exercise, because that is precisely how he reasoned. Izzat you, Roy? Come on, be 'honest' now. I suspected before, but now I STRONGLY suspect that I am talking to a sock puppet of Roy L. - you even yawned and double yawned at "each other". lol

Black Flag? As in "arg"? Did you pirate a Roy L. ship of state?

I wouldn't be surprised one bit if that were the case, clearly their posting styles are the same with quoting one or two liners to reply, etc

Some people just need to get a fricking life

[Black Flag]

Ok, I've had enough of this BS!


It was a simple question but obviously you're not here for an honest debate

You are very weird.

What you asked was a two part question:

The first part was -to quote you exactly-:
"What's your view on economics"

Now, since this is the first part of the question which - by its placement means it is fundamental to understanding the second part, I answered it.

And you go half-cocked spinning like a top...which to me means you do not believe economics is a science and is only a bunch of opinions.

So, why don't you take your soccer ball and go home if you are all huffy about it.