Its embarrassing how a well read man such as yourself always resorts to simplistic answers. You're a socialist,, you just hate the rich etc etc. One reason for having a problem with them was plastered all over the news today. Why is it we can afford to spend billions or just over a trillion (as in the case of the EU) to buy bonds from banks and such, yet in every other ****ing sector there is cuts. So, if I've got this entirely right, we are printing money to give to the institutions and the people who originally got us into such a dire economic situation in the first place. So that they can in turn help the plebs of society get a house loan. Don't try to tell me that printing money to give to the richest institutions and people in the world is in some way gonna ****ing help me. You'll just claim I'm jealous, no doubt. At the end of the day though this is some **** forum though so **** you and your rich world ending pals ****o.
I need to keep my replies short(ish) or else no **** reads them. If I was to talk about this as much as I want to I'd no doubt bore the ****e out of you too. First off, we need lenders (or Banks...) - if you have a bit of land which is doing **** all, you can borrow money from a bank at say 5% interest, put the land to productive use and make 15% per year - you get 10%, the bank gets 5%, everyone wins - in game theory it's positive sum. The whole Western system is based on this - the banks leverage deposits, people use them to fund businesses and expand employment, and our standard of living increases as production increases - with the caveat being that bankers cream off quite a chunk of the extra production in financial fees. One of the biggest problems that the developing world is facing is a lack of financial institutions - there are no lenders, property rights are weak, investors stay clear - and the investors who do lend are loan sharks with exorbitant interest rates. Bill and Melinda have recognised this as one of the biggest problems in development and set about solving it http://www.gatesfoundation.org/What-We-Do/Global-Development/Financial-Services-for-the-Poor and we've also got these ethical micro loans system http://www.kiva.org/ - again, the world needs lenders, our standard of living would be third world without money lending. To address your point - the central bank can not give the money directly to people - giving cash to people does not increase production, it only increases the supply of money trying to buy the same goods which causes inflation. By giving it to banks to lend out they will use their models to lend to businesses which have a chance of production (i.e. paying them back). If we increase money supply and production at the same time there is no inflation, as the amount of goods being sold in society increases in line with the increase in money. The downside to this is the things that are not increasing in supply, such as energy and housing, go up in price even as your new television gets cheaper. So this is where we are, even if they are a bunch of ****s we need the banks to maintain peoples jobs, which is why Governments saved them. There are libertarian alternatives emerging which are quite exciting in that they could remove Government and the Banks from this very process (crypto-currencies and peer to peer lending) and this could stop vested interests creaming off the growth and ideas of other people - but we're not there yet.
When the planet is ****ed money will be pretty pointless. Eh, it's worth it so your idols can live the way they do.
I'm no trying to start a couple of pages of argument but Para1: You're assuming that money lending services are of use to everyone. Personally, I see no difference between a bank, a payday lender or a loan shark. They are all parasites, leeching off of people and having the gall to think that they're the ones doing you a favour. I've no problem with the theory of lending money but I never intend to end up in debt with any banking institution. If that means I never own a house then so be it. I'll no be ****ing extorted then bitched at by some **** who sits on his cheeks all day thinking he's doing people favours by putting them into debt. Para2: I can't answer most of this seriously. You see a difference between a loan shark and a authorised lender - I don't. As for you bringing in the gates foundation. Come on to ****. Do you actually think that QE helps in the way that they're talking about? Do you think the poor are worried about getting a loan to start a company? Aye I'm sure its up above finding dinner in their list of priorities. It's also worth noting most of the gates foundations work is done in developing countries, so why you brought them into it I'll never ****ing know. It's not like many African states have QE policies is it? Para3: "To address your point - the central bank can not give the money directly to people" Thanks. I'm glad that you've cleared up that the BoE doesn't directly hand people big bags of money I know how QE is supposed to function Mick. I just don't believe that it benefits the entire nation like you say it does. Plenty of economists have argued that all it has done is made rich people richer. That's of no use to me, your common pleb. Para4: Just today the idea of having a regulated bitcoin market was floated. So you'll need to forgive me for not believing that change is to the medieval system is on the frontier. Finished and I'm no replying again. You'll just tell me that what I mean is such and such and that all I need is a nice big shafting from an institution with rates of interest that would make my arse collapse.
1. Most of us work in jobs with companies that use financing. Companies collapse when their credit line is taken away, look at Rangers. You use money to grow your business and pay back the interest with future earnings - the bank bets on you using the money wisely enough to be able to pay them a return. The economy gets bigger as people create stuff with capital - if there is no access to capital you can't seed your ideas and the economy doesn't grow. As I said it's a positive sum game, both sides very often win and both sides lose if one side loses. I don't expect you or anyone else to be grateful for banks, just understand that we need credit lines from someone, anyone! (and if a Government could do it better than a private company so be it - China doesn't appear to be doing too bad on that front). 2. I brought the developing world into it intentionally to show how dysfunctional societies are without financing institutions - and yes poor people do need loans to start companies. When you own a little patch of land and don't have enough capital to invest in tools, fertiliser, or even seeds then a small loan to get you started can set you up for life - it's what all these ethical micro loan companies are about. 3. I don't know if QE benefits the entire nation or not - genuinely have no idea - I just know the theory behind it. It seems to have done ok in America, but there's a million things that could have led to an improved American economy. I don't even think central banks know what they are doing, they are just giving it a bit of trial and error to try justify their wages - that's why I have become enthusiastic about Bitcoin, because it could put these ****s out of a job - and also **** a lot of companies like Mastercard and Visa who tax every transaction. You've got it in your head I want to protect these people for some reason - I don't, I want the market to work with as few inefficiencies (such as rent seekers) as possible. 4. No idea if they will get Bitcoin under control, it's not really designed to be controlled - I've no doubt they will try though. The US Government has been pleasingly sympathetic to it so far though, surprisingly so...
