The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Skeeter Bug who wrote (233884)	12/21/2009 3:57:29 PM
From: grusum	Read Replies (1) of 306849

SB: "specifically, what don't you believe and why?" i don't believe that the videos are giving correct information. i told you i've already watched them and don't believe them. why? because if there are conflicting views, i can't decide which one is right unless i thoroughly understand and agree with one of them. someone who does understand money and the federal reserve and its inner workings is Ahhaha. here what he wrote in answer to a statement i presented about the creation of money on his board a while ago. ------------------------- statement: Money is created when a trader makes a commitment, by buying goods or services from other traders, to place goods or services in the marketplace of equal value in the future. Ahhaha: No money is created in this "barter". Barter is moneyless. Most transactions are moneyless. statement: In making purchases, traders borrow against their future production if they DO not currently have a trading surplus. Ahhaha: Non sequitur or false as a standalone assertion. statement: Money is created as evidence of that debt. Ahhaha: Explicitly false. This would be equivalent to the claim that rising stock prices causes rising M2 money supply when only a correlation exists between rising stock prices and rising M2. statement: There's no quantitative connection between debt and money. Debt = barter. In a debt one agrees to return the money. There's no change in money quantity in that process. When I create a loan there's no a priori consequence to my net income. Ahhaha: How about C&I loans? Doesn't that create demand deposits? One has to distinguish between the M2 component that comes from private refactoring and the component that's due to FED operations. statement: Putting goods and services back on the market repays the debt, and extinguishes the money. Ahhaha: No money is "extinguished" when debt is repaid. statement: In other words, money is borrowed into existence, Ahhaha: The economy must be rolling in money given all the debt that has been extended... statement: and is extinguished as the loan is repaid. Ahhaha: Then we had better not repay all the debt because then we'd all be pennyless! statement: The effective lender, or guarantor of a loan is all the traders who trade with the borrower--in short--the community; the market." Ahhaha: Self-serving distortion. WHY DO YOU believe these ridiculous claims? DO YOU think they can be made rigorous? They can't.

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