No reply to my post? Not one? What is wrong with you people?
I know what it is. You people think just because you read the news you are smart and the others have to listen what you say. And no other post maybe as smart as yours is.

This is why democracy doenst work. Complex things cant be soluted by a democracy because many smart asses have to give their shit into descussion.

Like Jaques Fresqo already told in 197X that the World Economy will collapse soon. And he was fucking right. Just some years after he said that Nixxon had to took away the gold standart. Nixxon had to do this because the states were bankrupt. And by taking away the gold standart the way was open to much heavier debt. He simply extendet the time of the redemption.

And if you think im talkin bullshit, go back to my old post and tell me im wrong. Im askin for critic on my conclusion.

umm... because your post was impossibly broad, "money needs to be brought into the financial system another way(?). We are supposed to critique that?

you know what it is, You think because you speak in vague generalities you are smart and the others have to listen what you say. And no other post maybe as smart as yours is.

By the way, when was this magical year of 197X

"The rich aren't bleeding at all. It's the poor and middle class who are being bled dry. Somehow the Republicans don't seem to care about this. Nor do they care that we excessively overspend on defense"

And why should they? The defence of the nation protects the assets and investments of those super-rich who are the main stakeholder in american society. Those who drive forward the economy and decide which political candidate to support (whether democratic or republican, each ends up with millions in donations from 'super-rich')

Defence is the one thing you will not see cut (though robert gates has done his best to make better investments from the pentagon defend budget, to fight the wars you actually HAVE... which may save lives in the medium/long run)

"Puddle, the Social Security Trust fund doesn't really exist. It's just a manner of creative book keeping."

sure, but that means the money is owed to SS, and thus whether it's been spent elsewhere or not, This fact would not change the balance between income to the social welfare fund and the expenditure. If the balance is there then SS is sustainable (whatever the gov happens to waste this income on.)

"Take back the monopol for creating money back to the government. The hilarious thing about this is, its so simple most people (including you reading this) dont belive it. In such a Money system there is NO National Debt at all!"

is there some law preventing individual states from issuing their own currencies? That would of course screw up interstate commerce, which would be made more difficult (by the exchange between local currencies) and less dependable (by the change in cost of interstate imports and the change in value of interstate exports would make all revenues less dependable and thus riskier... and bussiness men are known for avoiding risk-taking)

Puddle having money to spend does not make a system sustainable. I've been living on savings for three months. Does that make not having a job sustainable? No. Income lost meet or exceed expenses to be sustainable. Social security's income does not meet expenses. In is less than out there fore it is not sustainable. The excess in the fund just puts off bankruptcy of the fund from 2011 to 2018.

@Darug, your point is correct, and i don't have any figures to disupte it.

not being american i don't really care that much. Europe faces a similar crisis, however ours is not overburdened by massive militrary spending, nor a massive influence of industry lobbying on all decision making (because most decision making is not as centralized)

However i have to ask, do you have facts to back up your claims?

And yes money has to be brought into the system another way. You people dont know how your money is being created? Its created out of Debt. These are basics.

How can you people discuss about a financial plan without knowing how money is being created.

This magical year was in 1974. Jaques fresco had a apperance in larry kings show. And in 1973 nixon took of the gold standart.

"is there some law preventing individual states from issuing their own currencies? That would of course screw up interstate commerce, which would be made more difficult (by the exchange between local currencies) and less dependable (by the change in cost of interstate imports and the change in value of interstate exports would make all revenues less dependable and thus riskier... and bussiness men are known for avoiding risk-taking)"

Yes there should be one. I read about one state which did this and the FED went to Court. (Dont know when and how im sorry). And it depends, during the great depression a province in austria issued its own money and the economy began go bloom. So when the main currency sucks (like the dollar does) provincial currencies are indeed helpful. But im am too no fan of provincial currencies.

For all people who actally care about this problem and dont just come here for self acknowledgement I propose to read: Web of Debt (ISBN-10:0-9795608-8-8). The cover of this book is indeed childish. But the content is written scientifcly.
So if you dont know how money is being created, read it.

But huh lets be realistic, none of you is going to read it.

elMuro, what you propose is setting the reserve ratio for commercial banks to 100% (and thus setting the money multiplier equal to 1), which would mean they would have to hold all their reserves in liquid assets. So indeed, as I predicted from the beginning, you want to scrap fractional reserve banking. My only mistake was assuming that you wanted to move to an asset backed currency, while you would be satisfied with fiat money.

i object to the use of the word scientifically - scientific knowledge is acquired by the use of 'science' a method for judging whether information is verifiable and accurate.

Observation, Hypothesis, experimentation, revised hypothesis...

simples, but not when you're looking at economic situations and human behaviour.

I would argue there is no science in economics. Understanding systems is hard enough (though game systems are the best ones we have to experimentation, and some behavioural economics is actually doing good work) I don't believe there is a good book out there with a true scientific analysis of the entire economics system.

Scientists tend to pick on one small part of a system to understand it first, and i seriously doubt there's much use from one book...

@: "But huh lets be realistic, none of you is going to read it. "

what a nice self-fullfilling prophecy, please stop being an ass, you're taking away from my own ass-es-ness!

"Observation, Hypothesis, experimentation, revised hypothesis...

I would argue there is no science in economics."

Experimentation as in conducting experiments? Then I suppose that hep-th is not scientific either.

Other than that, what you've written is bread and butter of econometrics.

Muro,

you are so smart, i wish i was like you. I am sorry all of these peons don't bow to you, they should, with your obviously superior intellect. If only we could carry around tiny Elmuros and use them as currency our problem will be solved

Keep speaking in riddles you hack.

Ulytau, it is consider 'bad form' to perform an experiment on the global economy, somethign which may risk hunger and starvaation the world over if the results are positive...

also we have no second earth with it's own global economy to perform such an experiment... is it not clear why this presents a problem? (we've only got hypothesis, and re-hypothesis, and some observation, which all amounts to a lot of hot air if you can't back it up with real data and examples, experiments which have been done multiple times by different people...)

Are the physicists conducting experiments on the scale of whole universe? Are they reenacting the Big Bang? No, their experiments are either aimed at studying isolated phenomena or they are not experimenting at all, because the available information is already there. That is not fundamentally different from performing time series analysis of daily stock exchange price movements like you can do in econometrics.

Of course due to dealing with people, you bring to the system an additional level of stochasticity that is difficult to model correctly, but that's not an example of fundamental unscientificness (?) of economics, that's just a reflection of the more complicated nature of phenomena it is studying.

@Orathaic: I agree that economics does not follow the scientific method. But I think that when you say "amounts to a lot of hot air" you're far too extreme. Observational studies do provide "real data" that can be verified, we just have to know that the method is not as rigorous and could be biased in several ways.
Does not mean it's all a lot of hogwash.
@Ulytau: most of the experiments by physicists (especially on isolated phenomena) are controlled experiments and that is just not possible in most cases for economics (or econometrics).

I'm not saying that it is possible to conduct economic experiments in the same rigorous way as physical ones (it is not) but if theoretical physics is considered as science, theoretical economics like game theory (and indeed more experimental branches of economics like behavioural economics) should be considered as science too.

I apologize for my kind. But ineffective discoussions are making me mad.

"Observation, Hypothesis, experimentation, revised hypothesis..." - orathic
Your totaly right. This book contains all these. It doesnt do experiments, but it talks about experiments which have been done and say which are the pros. (The contras you have to think on your own sadly)

And fractional reserve banking is not needed. Banks should to what their task is. Lend Money to people, from money they got from people. And make profit by different interest-rates. This is how the banking system should work. Not more, not less.
Fiat money has indeed a great pro against asset backed currency. Economical growth can be unleashed with fiat money. While with asset backed currency its harder. In a fiat money system it would be possible that no inflation or deflation would occour. In asset backed system you dont have this advantage.

And Indeed, human behaviour and economics are simple. Humans work on low needs. Sex, Food, Social acceptance. thats nearly it. You can do the same with economy. When something is complex, make it simple.

And do we want to gamble? I tell you here is no one going to read this book. This sounds very arrogant I know. I transfer 5$ for everyone who reads it and can prove that the read it. (show me a pic or something). I know 5$ arent much but this is all I can offer at least.

"Lend Money to people, from money they got from people. And make profit by different interest-rates. This is how the banking system should work. Not more, not less."

You cannot lend out money in full-reserve banking system as long as the depositor retains the right to withdraw the money on demand. If you don't something as simple as this, you probably didn't learn much from whatever books you read. An Web of Debt is probably qualitatively similar to stuff like Money as Debt, which is on par with brilliant thought-provoking movies like The Inconvenient Truth, Zeitgeist or Triumph of Will.

"Humans work on low needs. Sex, Food, Social acceptance. thats nearly it."

@elMuro

I'll tell you how humans work.......If I show you various pics of X people reading your book will I gain 5byX$?..........As actually reading it is not part of the bet isn't it?

"And Indeed, human behaviour and economics are simple. Humans work on low needs. Sex, Food, Social acceptance. thats nearly it. You can do the same with economy. When something is complex, make it simple."

did i mention that 'money' is just the abstract human idea of trust made into some kind of tangible form?

Did you play a game recently which involved trusting your allies? and then claim that humans are simple? well good luck in your diplomacy.

Sure you can lend out money in a full-reserve banking system. If I put 100$ in my acoount, the bank can lent my 100$ to another person. But not lent 1000$ and keep my 100$ as the 10% reserve.

And yes Zeitgeist brought me to this line of thinkin. But mostly I dont agree with their ideas. But the new Zeitgeist 3 is advisbale. Zeitgeist 1&2 are well...

simplifying in science is a regular ocfurance, especially physcis, we study the most simple system first - reductionism to reduce our system to the simplest parts, and attempt to study them seperately...

however physics has reached the limits of reductionism. We understand that complex behaviour (like in foams, stockmarkets, betting website, etc.) can not be understand be just looking at the simplest components.

We understand the concept of an emergent property, and how to describe it without reference to the underlying components.

and thus we've found the limitations of 'simplification' maybe other scientists haven't but that's not to say they are all doing a crap job.

Your point is that humans are simple, and i vhemently dispute that claim. BMy point is you can't do an experiment on an entire economy, and the emergent complex features are what throw all your simple models off.

The kinds of experiment you are talking about are uncontrolled historic examples. The error in a count is the square root of the count, thus if you can count 1 example the error is +/-1 (which gives arange of 0-2, or the possiblility that ever single example was just a fluke). I'm pretty sure no examples are precisely the same...

i've yet to see a good book, but i'd love to read this one and then continue my rant.

How a Nuclear Plant works is highly complex. But still you can break it down to 2-3 Sentences which are truly correct and explain most of its functions.

@orathaic
Um its hard to describe what I want to say. Humans are not simple. But you can make them simple. By just getting one individum to deal with this subject makes my day a good one. Thanks

that's because a nuclear power plant was designed by a human, and we have difficulty understanding complex systems, thus we make simple ones designed from simple parts...

we did not design the basic 'part' of the economy, which you could define as the human.

you can asusme they are simple, and your conclusions will result in a massive world-wide economic failure...

that said, humans will react and rebuild, so it's not a big problem in the long term, i'm just saying the so called 'models' have failed every time we've tried to control the economy.

you do NOT get complexity in a nuclear reactor. You do in weather patterns. (where we can only predict the weather for 3-5 days at best) i'm using the term 'complex' in the strictest meaning that a physicist uses it, not in lay terms.

"Sure you can lend out money in a full-reserve banking system. If I put 100$ in my account, the bank can lent my 100$ to another person. But not lent 1000$ and keep my 100$ as the 10% reserve."

No, under full-reserve banking, you put in a bank account 100$ and bank has to keep it to every cent and lend out nothing. That's why it's called full-reserve banking, you know? Under full-reserve banking, the bank can only lend out your money if you don't deposit money to your account but lend it to the bank, which is a fundamentally different thing.

Of course the problem lies in the fact that you don't understand the working of fractional reserve banking either. If the reserve ratio is 10%, bank will lend out 90$ out of your deposit of 100$, keeping a reserve of 10$ (that's a reserve of 10%). This will spur a cascading effect which will lead to an increase in money supply of 1000$ (your initial deposit of 100$ being in money base, the rest 900$ created by commercial banks).

But then again, explaining this to you is probably as useful as reading Web as Debt. For God's sake, you didn't even recognize the irony in my post.

@elmurro, Ellen Brown, in her book Web of Debt, is advocating that the the government take ownership of the Federal Reserve so that it has (in her own words - not necessarily from the book) the power "to expand the money supply". That is print more money. How is this an improvement? Is this not dangerous? Is it not better to have an independent federal reserve?

... The danger being potentially massive inflation.

Those are great questions, spyman. It won't be an improvement (expanding the money supply is easy already). It is dangerous and it is better to have an independent central bank. Only in a world resembling bastardized Keynesian cross model with fixed price level and fixed investment is relentless expansionary monetary policy somewhat helpful. But such a world doesn't exist, not even in a direst economic depression we ever had was the situation similar to such model.