Thank you for your responses.
If you like charts, be my guest.
I'm not asking for a chart, specifically. I'm also not looking to search out for myself 100% of the evidence that would back your claims. I can only take your response to mean that you have no such information, in chart form or otherwise. That is unfortunate, as this would be by far the strongest evidence for your position of any of the specific questions I posted.
Forget the word "active". Money is created and issued at interest, it doesn't matter if it is reused after shareholders receive it, it is ill-gotten. Relending created money at interest only compounds the original sin.
No. Once the money is created it continues to exist. Once the loan that created the money has been satisfied, that money continues to exist and the money supply has expanded by the amount of money created while all related debts no longer exist. To now claim that the money doesn't count because it's tainted is a totally different argument, unless you have some more argumentation about why the moral properties of a given pile of money have relevance to the amount of money that exists. Our discussion (yours and mine, not necessarily that of the thread overall) is about economic mechanisms and effects, not morality.
They are receiving money 'they' originally created. Shareholders may occasionally donate money (easy to do when it was money for nothing). When they do spend money, they are shopping in a different league, spending a vast amount of that "hard earned" money in comparison to what the average person might spend, the recipient of which tends to be other wealthy people (trickle-down economics is a misnomer). When they are not spending money, they are investing it, for the express purpose of making profits (i.e. getting more in return, not letting any of it go) based on the originally created money.
The point I was making is that when the bank creates money then the money supply has expanded, to which you replied that they could ultimately hoard it so that the money supply contracts, to which I asked why they would hoard in this manner. Your response seems to be a concession that there's no particular reason to think that they would. Instead, you are saying that banks will spend the money in unethical ways. I haven't defended the moral character of banks or bankers, nor will I. That's not the position I have taken, and it's not what we have been discussing.
I'm referring to all banks under a Central Bank, and all Central Banks under International Central Banks.
So, to be clear, do you find similar behavior (loaning money leveraged against assets at interest) unobjectionable for banks regulated by someone other than a central bank? If so, why is the one OK while the other is not?
I'm confused. The money supply is expanded, debt on the money supply is also expanding. If the money supply is not expanded, debt still expands.
Again, there exists money in circulation right now that is not part of a loan. There is also a portion of this supply that was never created via a bank loan. Debt (in the sense of interest and fees beyond the principal of a loan) will outstrip the principal of a particular loan for any nonzero level of fees and interest by definition. Unless the value of the fees and interest together are greater than the existing money supply, there is not more debt than money. And again, when a loan is fully repaid the debt portion no longer exists, while all of the money involved continues to exist.
I'm confused.
My apologies-- the rest of that sentence was not typed out. Do you have argumentation supporting the fundamental immorality of interest, regardless of whether it is paid to banks by loan consumers, paid by banks to consumers, or paid by consumers to other consumers? I'm trying to find out if your position is that there is something inherently wrong with charging or paying a fee in exchange for access to money, or if it is a specific behavior of a specific subset of banks that makes those instance of that practice wrong.
Population growth. The "need" to perpetually make a profit. Rising prices. Redundancy.
These are independent of bank behavior, and even of bank existence. Maybe I was unclear-- the things you have described banks doing expand the money supply, which is an inflationary pressure. You described them as being ultimately deflationary, and eventually offered the example of possible hoarding as a source of potential deflation. What I was asking for was any additional aspect of the actions you have been talking about that might be deflationary. I asked for this because deflation seemed to be a major part of the mechanism by which the bad consequences you presented (full-on economic collapse) would happen.
You have fast-forwarded. The example starts with the first loan of money to illustrate a point.
Which is fine, so far as it goes, but that's not the way that the US economy developed and so the situation you are describing never happened. Nor is it the position that the US is in today. Again, bank loans are not the only vector by which new money enters the economy, and a money supply certainly existed prior to the establishment of any banks. If the point you are illustrating requires that this not be the case then it isn't supported by the illustration.
It's good that you are extrapolating from the example, but for simplicity, assume the "bank" is one person and no building.
I don't see the relevance of a bank being an individual versus a building. An individual still needs to eat, pay taxes, protect the money he or she possesses to fund bank operations, etc. These require some expenditure.
In the example, only the "seller" and the "government" has any money in circulation. The "purchaser" needs that money to pay back the "bank" on time or risk losing what was purchased. Both the "seller" and the Government have negotiating power because they have what the "purchaser" needs. I'm trying to illustrate what a "poor" position the "purchaser" has put itself in.
I don't really see why the purchaser needs a loan, then, rather than supplying something that the bank and government need from the purchaser. Generally, that's labor of some sort. If the purchaser does not and has never received any money from any source other than the loan, then he or she is in a poor position indeed. But I don't see how that applies in the general case, or even how it would happen in many (if any) individual cases.
Staying with the example, if the "bank" can't yet decide what to spend the money on, and doesn't want borrowers to eventually default, to avoid stalling the economy, Government intervention and risk losing being a member of the money for nothing club, the "bank" must invent money.
This is a really, really specific scenario being assumed into existence to support your point. Even if I hand-wave away the other key points I've made (external money supply, inability to hoard, etc.), it's not a very strong argument to say that "If we assume that the bank will not and cannot do anything but do A, then the bank will and must do A" without demonstrating that those assumptions are reflected in reality. If you have a reason that banks will and/or must find themselves in this situation, that's one thing. If what you are presenting is only that you can imagine such a situation, and that it would be bad, that's something entirely different. I'll pass over the government intervention part until for now.
I guess I'm not making myself clear. The bank needs the borrower to create credit, but the borrower is letting the bank take full command i.e. the power is out of borrower's hands and the stage is set for the bank do as it pleases.
Indeed there does need to be a loan recipient for the bank to make a loan. But what forces an individual to participate in this at all, or to accept a specific loan contract? Certainly there exist bad loan agreements for borrowers, and many people accept such agreements through bad judgement or desperation. The latter is a serious problem for the individuals themselves and for society as a whole.
Still looking for a way to pardon the banks, eh?
What? First, no I'm not. As above, I have never taken the position that banks are great or deserving of pardon. Second, that money exists which is not part of an outstanding bank loan wouldn't pardon bad behavior by a bank in any case. We have been talking about the money supply, effects of loans, debt, and money creation by banks. Not moral excellence (or awfulness) on anyone's part. Third, even if it would pardon a bank somehow, that money would still exist and would still cut against your arguments.
Access to confidential documents is not as simple as some people believe.
If you have some evidence that such documents exist and directly support the assertions you have made, but are unavailable, then present that. But to state that all of the evidence supporting your position must exist because you say so, and therefore I should accept your assertions as unquestionably true in the face of specific questions I have raised is the opposite of rational argumentation.
If I charge that you, BrianRhineheart, are an agent of banks and that you are acting secretly to support those banks in the very behaviors you are claiming to hate, and that proof of this probably exists but is kept super-secret by your employers, would you expect anyone to find that accusation credible?
If I were to suddenly suffer from memory loss.
So here we are again. Outside of your own observation that you, yourself believe your conclusion to be true, why would someone who doesn't already agree with you come around to your perspective? Given the arguments I have offered, which you have yet to refute or in some cases even address, we have:
1. Money (specific dollars, not the concept) created by banks is tainted and inherently immoral
2. Banks could conceivably hoard money, removing it from circulation and causing the money supply to contract
3. Banks are immoral actors who engage in bad activities
4. People don't treat themselves or others well enough, leading to bad behaviors and outcomes
From my reading you have taken two positions: one about morality and one about the mechanisms of the economy. For the second one you have made some very specific claims about how the monetary system works and what the consequences of it working that way are. That's the part that I have engaged you on, and I still haven't seen a whole lot in the way of counterarguments. In fact, it seems that you are eliding my questions by returning to the morality side and trying to argue that instead, though I haven't made any claims regarding the ethics or morality of any of this.
