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How much power do the banks have?

Discussion in 'Tilted Philosophy, Politics, and Economics' started by ASU2003, Mar 10, 2013.

  1. ASU2003

    ASU2003 Very Tilted

    Where ever I roam

    This video looks at a history of money and banking in the US and the world. How recessions can be caused, and how wars and assassinations took place to get their way and keep their power. It is pretty shocking to learn what happened from the 1760's-1913 in this country with regards to how the banks were run and money was created. While the topic might be 'boring', it effects everything in the world.

    Should the government be the ones to print money or create digital money without debt, not the Federal Reserve? What chance do we have of the current two party system actually spending money wisely? Would the powerful wealthy people use wedge issues or start wars in order to reclaim their control in this day and age? What would happen to the credit industry that millions of people count on because they don't want to save money and have cash/debit for each transaction? What will happen if you will need to save much more money to be able to afford a house? Would inflation rise too much if the government would produce interest free money without debt and pay off it's national debt?

    Then you look around the world and see that virtually every country has had a recession or money problem in it's history, or is too poor to matter. They will try and sell their natural resources to pay back loans and such, but it only goes so far. How do you deal with this problem?
  2. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    So many questions...

    And sorry, I don't have enough answers.
    Personally, I like the idea of the Federal Reserve and it's distinction from the rest of the government.

    Strangely, enough...money is an illusion, but it is not at the same time.
    I don't think the Fed has too much power, but I do think the corporate banks have too much capacity for power.
    See, the Fed serves the nation...the corporate banks serve themselves.

    Sorry, I don't mind regulation on the banks...Why? Because they have tons of implicit power.
    Just because of their ability to claim money in accounts to provide loans,
    then through those loans based on that, make money from the interest...or take possession of people's homes & cars...
    or levy suits against citizens & other businesses.

    So they base their whole power on the illusion of funds... (they are only required to have a % of the whole to do business)
    Then they turn around and say to us, that we have to have money in our accounts to write checks
    and if that money doesn't exist when it comes...then we're responsible for it.
    I wish I could do business on just a % in my accounts like they do.

    And they have more than enough money...and power...and resources...and people to handle those regulations.
    And we've directly seen what happens when they don't have it.
    They undermine themselves and the whole economy.
    Not local economy, not just national economy...but the whole friggin' global economy.

    So put them under tight rein.
    The Fed, again...it serves the nation...so I'm not worried about it.
    The Big Banks...watch those suckers like a hawk. Because they are in it for themselves.

    Now, if you can tell me about this twisted scenario below and how it's going to play out...you're much better than me.
    Thankfully, I think the US has some rising good advantages that will allow them to get out of their mess.
    Returning manufacturing, new tech, services industry, new natural resources, fading wars...and the rest of the world valuing our currency.
    All of which help...like me getting more outside gigs for more income and past obligations now gone to be able to clean up my own house.
    It's a similar scenario...
    But, America got lucky...circumstances were in their favor, it wasn't by skill or intent.

    However, I do think the Fed is pushing the 0% rate for too long.
    They should bring it up a tick, by .25%...bit by bit, at least until they get to 1%...then slowly to 2%
    It would show stability and confidence in the nation...plus it would give them back "bullets" in case of emergency, right now they're out.
    I think the banks, businesses and people can handle a small uptick now.

    Last edited: Mar 12, 2013
  3. loquitur

    loquitur Getting Tilted

    We should have had a few failures and a lot fewer bailouts. No one wants any short-term pain, but the result has been a chronic sickness, where the patient isn't crippled but also never really heals. This dysfunctional financial oligopoly that emerged from the financial crisis (with its ratcheted oligarchical effects on politics) will be distorting our political economy for a long time.
    • Like Like x 1
  4. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    From what I understand, there were dozens of large banks that failed to the tune of hundreds of billions of dollars in assets. Add to that the scores of smaller banks that disappeared on a weekly basis after 2008, and, yeah, the oligopoly was certainly strengthened. The bigger banks went on rummage sales to acquire these assets.
  5. loquitur

    loquitur Getting Tilted

    Massive consolidation brokered by the feds. That doesnt' meet the definition of failure in my book.
  6. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    hmm...the Fed just put in 88 Billion into the Dept of Treasury as profit from the bonds it buys.

    Maybe this is why it doesn't care how much it spends...

    Plan A
    1. Print your own money. (now not based on any substance, like gold, but only on how much others value it...which right now is "the best" by global comparison)
    2. Buy bonds from your own area. (which helps support the value of your money, since you're helping your area/people/nation - growth/stability)
    3. Cash out bonds when they mature, profit
    4. Put money back into own bank
    Plan B
    1. Print your own money
    2. Loan funds out to your nation's banks
    3. Banks loan out money to corporations and people (allowing your citizens to become more productive)
    4. Corps and people repay loans for the most part
    5. Profit from repayment of loans from banks
    6. Put money back into own bank

    Money is an illusion.
    Power is the ability of your nation.

    Which is why developing nations are screwed often...corruption, destruction, death...all of which disrupt any productivity, infrastructure or investment. (from internal or external)

    So the thing is, we need to get rid of the holes...corruption, non-investment into infrastructure, deal with crisises ASAP, improve health.
  7. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Including something like this?

    View: http://youtu.be/WAjL_X_ZesE
  8. samcol

    samcol Getting Tilted

  9. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    I'm not sure what to make of it. On the one hand, you have what appears to be the democratization of currency. However, the risk in this is not so much the democratization, but the fact that the wealthy will essentially control it. I'm not sure which is worse, the wealthy controlling currency or the government (whether influenced by the wealthy or not).

    On the other hand, the idea that people could be widely paid $100 an hour seems ludicrous, but a part of me wants to give it credence. Even Elizabeth Warren has been asking about wages. Rather than look at currency, she looks at productivity gains and wonders why the minimum wage isn't more like $22/hour.

    If you factor in both issues, maybe it would explain why trickle-up economics has been so successful. After all, who benefits most from monetary policy (such as low interest rates and QE) and productivity gains?

    Overall, I get a strong sense of cognitive dissonance from this. It's difficult to get my mind around it, because these ideas are new(ish) to me.
    Last edited: Mar 21, 2013
  10. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Again, money is illusion...so it will only gain value as people value it.

    However, I will say this...I would say that it is in the long-run fairly speculative.
    Because nations have the capacity of their people and production to back up it worth and the ability to pay it back.

    This denomination is more like a stock, based on the value of the program.
    If it goes into a crisis for some reason, and this happens often enough, it will devalue immediately.
    Larger nations stick around...the same can't be said for web concepts.

    There's a reason that the US dollar is traded and kept, as well as the EU's euro.
    Even now, the Euro is having more difficulty than the Dollar, since the US is doing well in comparison...and the EU is fractious.
    If the program loses favor, it will dive faster than a national currency.

    It would be worse than a run on a bank.
    Because not only the bank would be emptied, but the currency being taken would be worth less, if not nil.
    You just need one really bad rumor or trend.
    Last edited: Mar 21, 2013