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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (119578)	10/14/2009 1:38:26 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

money is only as sound as the integrity of humanity. it's a trap!

To: Knighty Tin who wrote (119578)	10/15/2009 10:49:43 AM
From: Freedom Fighter	1 Recommendation Respond to of 132070

KT, I think extremely bright well intentioned people in a position to be heard (all 3 of them LOL) have been trying to come up with a sound monetary system for a very long time. I don't know of a sound system, but I've also heard good things about Singapore. I read a few things by Ben Graham that he wrote many decades ago, a few things by Howard Buffett, and a lot of stuff by the Austrian school. They all seem to struggle with some of the issues, but all come down on the side of money being backed by something tangible. Maybe there isn't a perfect system. To me the key is that all demand money has to be available all the time. That would cut bank profits, but it would also eliminate bank runs. IMO you can't have a system of fractional reserves either with or without government support. It's a recipe for disaster. Without support, occasional honest banking mistakes will wipe people out. With support, deliberate risky activity will allow bankers to rape and pillage tax payers and take huge salaries based on short term results. People might have to pay a very small fee for demand money, but in an environment of zero inflation or gentle deflation resulting from sound money, that would work fine, just as it has in the past. Deflation becomes a problem when it's a debt deflation, not when it results from productivity gains. With the rest of their cash they could buy CDs etc... take risk, earn interest etc... which the banks would loan out at a profitable rate. The second thing that needs to be done is returning interest rates to the market. We can't have a system where a handful of imperfect guys, with imperfect understanding, and imperfect information (and IMO often imperfect intentions) are setting interests and impacting the most important input to our system. Interest rates have to be the result of the availability of saving and the demand for capital. A system like this would sharply reduce the excesses that result from bouts of greed and would also handcuff government. If society wanted new a program or higher spending, government would have to either cut something else or raise taxes. That would force people and politicians to make the kind of value judgments responsible families make in their own lives. There would be no ability to finance wars or the welfare state via the printing press or make promises that can't be kept. We could still have those things, but in ways that we could afford and according to the priorities of society. We don't have a system like this specifically because Wall ST and government WANT the ability to rape and pillage, the ability to inflate out of mistakes and promises, the ability to grab power from the public, the ability to dictate what they want to do etc.. This is why I am so anti government, Fed and Wall ST. It's a very evil cabal that needs to be overthrown and gutted. The "bad guys" won those political battles many decades ago, but it's time to purge them and return freedom, responsibility, and power to us.