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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (251336)	6/1/2010 7:45:16 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 306849

>>You recognize our current money as debt.<< except for coins, it is debt. >>Any time anyone signs an IOU they are creating money.<< not true. if i do yard work for you and you give me an IOU, the money supply hasn't changed one iota - no money has been created. >>The only real estate I've every purchased was done by signing an IOU with the seller.<< no money was created in this transaction - unless you are laving something out. >>The seller can then use that IOU as money, although usually at a bit of a discount.<< this process doesn't necessarily create money, either. if it doesn't include a bank somewhere, no money was created - the money supply itself did not change. >>The advantage is that I got a loan at better than bank rates, and the seller got interest at better than bank rates.<< makes sense - but no money was created thus far in your narrative. >>But I also got control of income producing property which I could not afford without the assumption of debt (the credit of debt money). There is a robust secondary market for such notes. If you look in various newspapers, you will see advertisements to purchase such notes. They are indeed money.<< but they aren't created dollars, they are dollars that already exist due to someone else taking on debt at some previous point in time. created money is new money that didn't exist at all, anywhere, and then came into being out of nothing - like when you take out a mortgage from a bank, a car loan or a credit card purchase. >>The first property I purchased this way, the note was eventually sold to a bank, because the holder passed away and the estate wanted to settle. We could conduct 100% of our economy by barter and IOU notes.<< but no money has necessarily been created in this scenario. >>No elites involved!<< and no money created, either. not until you involve the private bankers and loans are made, anyway. >>The problem with this approach is that there is no central control of the money supply, and the quality of money various by the individual. Both are significant disadvantages.<< the key is getting some central "massaging" by people in whose interest it is to look out for the good of the country instead of their own pocket books (private bankers) and power structure (private bankers). >>BTW, I'm not aware of what metrics are used to track this component of our money supply now. Based on myself and people I know, I would think it is significant, but I live in a rural farming community, and I suspect "handshake" deals are more common here than in urban settings.<< again, that doesn't create money, it just transfers already existing money. given that our monetary system is based on debt, the economy will collapse b/c only principle is create and not the interest - requiring more loans in the future to create the money required to pay back previous loans.