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alstry (35.03)

Is printing money legalized theft?

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July 14, 2010 – Comments (25)

Let's think about quantitative easing for a second.....

The Fed instructs the treasury to print money to by bad loans from banks.......in effect, the government now owns a legal interest in whatever property that secured that loan without ever having had the consideration to pay for it.

Not only that, the banker who made the bad loan is made whole and can relend that money back to the government at a handsome profit.

The only one left holding the bag is the original borrower.....who spent that money and was responsible for driving revenues into the economy.

If you extend this a bit further...simply by printing money and cutting off credit to the economy....in a relatively short period of time government and bankers can own most of the nation without ever having had any consideration to pay for it.......

and the citizens become the slaves of the above.......

How we let our government bail out the bankers and not the debtors is absolutely amazing......pretty soon our nation will be shut down and even if your are solvent, your government will tell you it needs more of your money because too few are paying taxes.

In the end, government and bankers will own everything and everyone if this insanity keeps up much longer.

 

25 Comments – Post Your Own

#1) On July 14, 2010 at 10:08 PM, NOTvuffett (< 20) wrote:

I hear the govt. running the printing presses as fast as possible, but the paper catches fire at 451 degree farenheit, lol.

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#2) On July 14, 2010 at 10:33 PM, alstry (35.03) wrote:

It is one thing to print money and give it back to the citizens...after all it is their money.....it is something totally different to print it and take the citizens property.

Can you imagine where this is going?

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#3) On July 14, 2010 at 11:52 PM, 1315623493 wrote:

In one word, NO. You essentially want it all. I bet if the government didn't bail out the banks, you'd complain about that, especially after seeing the equivalent of a second Great Depression affect you personally. But alas, you can sit there, blogging all day, about something which probably doesn't even affect, like an arm-chair general declaring a war as just without having any personal stake in it. I asked you several times about what you were doing to change this "evil" system, besides blogging about it every day, and I have yet to receive even one attempt at answering. I take it, you've done absolutely nothing, beyond blog 3 or 4 times a day about how evil the system is, which would explain your lack of motivation in answering my question.  

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#4) On July 15, 2010 at 12:29 AM, alstry (35.03) wrote:

So you think by bailing out the banks and letting the citizens suffer with an unservicable amount of debt we won't have The Greatest Depression in history?

Remember, we are a consumer based economy....without consumers borrowing and spending massively, there is no economy.

Commercial Real Estate Sales are down 90%.....

Residential Construction is down 80%....

Auto production is down 50%....

We have pretty much shut down much of the rust belt....

and in the process of shutting down the Gulf states........

My friend....the current process of bailing out the banks and hanging the consumer out to dry has killed our economy, you just don't realize it yet.....but you will....we all will....I promise.

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#5) On July 15, 2010 at 12:59 AM, ChrisGraley (30.25) wrote:

Beta you seem to fart liberal.

I for one would be overjoyed if our government did something as responsible as letting the banks fail.

Do I want a depression? At this point yes, because it's the only cure. Will it hurt me financially? It will hurt me extremely, but it won't hurt me now as much as it will hurt my kids later if we prop up stupidity one more time.

This is not rocket science. You can't spend what you don't have and expect to get away with it perpetually!

We should have a bunch of bankers in jail right now, but instead we are arguing about whether or not they should have record bonuses.

Your argument is that I can't have everything and on that front I'm only asking for a little bit of sanity and didn't get anything.

I'm not going to waste a ton of time since your party won't be in power much longer, but if you look all around, people are holding up signs saying "I need a job"

The first order of business was to support the banks that caused the problem. The second order of business was to create the largest pork laden bill in history and call it a stimulus package. The third order of business was to ask a bunch of unemployed people to bend over and accept a health care bill that benefits the health care companies and creates a bigger burden on the unemployed.

I don't want everything. I want something.

I'd like responsibility. I'd like something other than you trying to convince me that printing money is good for me or my children. 

In other words Beta, I'd like you to step up and be a man. I know it's a game to you and you don't believe half of the political crap that you spew. I know that you are just executing the play-book.

It's different for me though. I don't give a damn if I die broke tomorrow.  I do give a damn about my kids taking a second job just to pay debts that my generation took on to stay above water.

With debt comes interest and somebody has to pay that interest after we are both long gone.

Don't expect me to tattoo a smiley face on my ass because the printing presses are working full speed. 

Compare the purchasing power of a wage earner in the 50's to what we have today and then try to tell me that I shouldn't be worried about my kids having to shoulder my debt.

I think about things like this because I am a man. I care more about my kids than I do about politics and play-books. 

Please enjoy your free ride and try to understand it when your kids spit on your grave.

I'm trying to be a man, but I don't think I'm man enough to stop stupidity. My kids should spit on my grave too for not being able to stop the money printing lunatics. 

I usually never post on an Alstry blog, but I had to chime in when you implied that everyone should be happy with the bone that was given. the public never really got even a bone.

Good luck in the next election,

Chris, 

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#6) On July 15, 2010 at 1:04 AM, tomatoflu (< 20) wrote:

BetapegLLC,

The thing is, education is how the system is changed, and showing people its inherent flaws.

You seem to have wasted your time complaining, that those who educate are not good enough for your discerning standards.

Like a spoilt, very spoilt child....Those that are working are not working to your standards....

We will all eagerly wait for your approval when you are happy with the quality of information.

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#7) On July 15, 2010 at 2:03 AM, 1315623493 wrote:

alstry, 

So, on top of bailing out banks *which the government had no choice in doing*, you also want the government to bail out who? People who own homes they can't afford? And if the government did do that, then what? Would you still cry foul? 

May I ask where you obtained your statistics? 

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#8) On July 15, 2010 at 2:17 AM, 1315623493 wrote:

Chris, 

I'll respond to the bolded sentence and disregard the nonsense that I don't believe half the stuff I say.

This is not rocket science. You can't spend what you don't have and expect to get away with it perpetually! 

No one ever said we could. Not Bernanke, Greenspan, not me, not Mr. Keynes, no one. And if you can find me one person who does say so, then I myself, would call them an idiot. One of the Federal Reserve's mandates is to keep inflation in check. Doing that would involve doing exactly the opposite of what you think I or essentially every other mainstream economist believes. You cannot keep inflation in check and "print money perpetually". And if we take a look at inflation figures, we'll see that inflation is indeed in check, and that our main worry at this point isn't even inflation. It's deflation. So I say, relax, take a deep breath, and let's discuss real solutions other than "End the Fed".

Are government debt/deficits uncomfortably high? Yea, they are, and I'm a liberal. Surprise! Yes, I said it. I don't like the government debt/deficit spending either. But I'm realistic about it.

You might not have a problem with 30% unemployment (as in absolutely no work), half of states with ZERO banks (because they all failed), and credit markets coming to a complete halt, as happened in the Great Depression, but the rest of us do have a problem with that, and would do everything in our power to prevent such a calamity. That alone justifies propping up the financial system, as corrupt as it was, with the Federal Reserve and government bound to never again allow that to happen again. In that case, I am a full-fledged supporter of that mandate, and will continue to be one of the few voices here in CAPS to argue in favor of government and central banking when it comes to this issue. 

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#9) On July 15, 2010 at 2:22 AM, 1315623493 wrote:

tomatoflu,

If the situation is so dire, then I ask, what are you doing about it? If you have a problem with that, then tough luck. I'll be here to provide the counter argument to the "education" of Mr. Alstry, wherever I may disagree, and anyone else at that. 

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#10) On July 15, 2010 at 4:13 AM, tomatoflu (< 20) wrote:

BetapegLLC

Education is what we are doing about it.

Let me see if we can make something usefull out of your formulation.

You wrote: "

"This is not rocket science. You can't spend what you don't have and expect to get away with it perpetually!"

Just one spelling mistake.

I will correct for you.

This is not rocket science. You can't "LEND" what you don't have and expect to get away with it perpetually!

Two letters of the alphabet were corrected and now you are good to go.

 

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#11) On July 15, 2010 at 4:42 AM, tomatoflu (< 20) wrote:

Of course, the symantic errors in your formulation, "You can't spend what you don't have and expect to get away with it perpetually!", need a lot of work.

I am aware you both overlooked the spelling mistake.

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#12) On July 15, 2010 at 5:28 AM, tomatoflu (< 20) wrote:

Re: Faulty formulation: "You can't spend what you don't have and expect to get away with it perpetually!"

Re: Corrected formulation, so that it does not contain poor semantics and *spelling errors.   "You can't *lend what you don't have, and if you try to on an ongoing basis, expect to get away with it perpetually!"

I would further add " and especially if you charge interest".

Else it is a little bit like placing children in a room filled with the 'principal of loans' and watch them behave confusedly while they busy themselves temporarily, and try to formulate 'why' there is not enough 'additional money' in the room they find themeselves in to pay/service the interest owing on it all as well.

Many fools here allready know that the component to service the interest on all this money which is created as debt is not created during the current 'fractional reserve banking' money creation process.

If you think the formulation i corrected can be refined or you see a symantic error, please feel free to edit it.

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#13) On July 15, 2010 at 6:50 AM, NOTvuffett (< 20) wrote:

Glad you cleared up those symantic errors for us tomatoflu, lol.

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#14) On July 15, 2010 at 7:28 AM, dinodelaurentis (69.10) wrote:

Spell Checkers R Us, a free service of the Motley Fool dot com.

10% off all compound words every Thursday, don't miss out... Sign up now!

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#15) On July 15, 2010 at 8:16 AM, ChrisGraley (30.25) wrote:

One of the Federal Reserve's mandates is to keep inflation in check. Doing that would involve doing exactly the opposite of what you think I or essentially every other mainstream economist believes. You cannot keep inflation in check and "print money perpetually". And if we take a look at inflation figures, we'll see that inflation is indeed in check, and that our main worry at this point isn't even inflation. It's deflation.

The fact that you actually believe this is a huge part of the problem. Do you remember any time where we actually took money out of the system? If inflation were in check, my silver would be worthless and not worth twice what I paid for most of it.

As far as unemployment goes, we currently have 20% unemployment with all that money spent to prop everything up.

How did we get into this problem? The same way we got into it every other time. (By spending money that we don't have.)

 

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#16) On July 15, 2010 at 8:29 AM, allstarvulture (< 20) wrote:

ChrisGraley

the public never really got even a bone.

Oh, the public got boned, all right! *

 

 

*Disclaimer:  Yes, a childish and non-productive addition to the thread.  But I couldn't resist.

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#17) On July 15, 2010 at 8:50 AM, susan400 (< 20) wrote:

Is placing capital in dead yellow or white metal a crime against humanity?

 

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#18) On July 15, 2010 at 10:36 AM, tomatoflu (< 20) wrote:

 dinodelaurentis

thanks!! Never have enough dictionary links!!  And anticipates the burning need for better spelling felt by a good many fools. So let me digress!!

From: http://legal-dictionary.thefreedictionary.com/consideration

"Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

Consideration is an essential element for the formation of a contract. It may consist of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do. In a bilateral contract—an agreement by which both parties exchange mutual promises—each promise is regarded as sufficient consideration for the other. In a unilateral contract, an agreement by which one party makes a promise in exchange for the other's performance, the performance is consideration for the promise, while the promise is consideration for the performance".

Alstry writes:

"bankers can own most of the nation without ever having had any consideration to pay for it......."

The key word here is "Consideration", with a capital C.

What consideration has the banking cartel offered or ever given in return to a souvereign country in return for the legal right to emit fiat digital currency?

It is a legal question more than it is a so called economic question.

 

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#19) On July 15, 2010 at 10:47 AM, GNUBEE (26.83) wrote:

ChrisGraley

Do you remember any time where we actually took money out of the system?

Just thinking out loud here. If the populance (personal and corporate) removed money from the system by hoarding it for fear of it's unavailability would that count? If there is a "magic" quantity of money that needs to circulate, and current levels fall below that threshold, wouldn't it be prudent to "top off" the system? Remove the excess once the hoarded money comes back in?

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#20) On July 15, 2010 at 10:58 AM, tomatoflu (< 20) wrote:

The wanton printing of digital currency with gay abandon without attaching something of real value to it is folly.

Like a drug lord who thinks he can get away with selling the ownership of each syringe to more than one addict.

At the end of the day, it will remain a legal question

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#21) On July 15, 2010 at 11:08 AM, GNUBEE (26.83) wrote:

I think the concept of money needs to be rethought.

Think of money as nothing more than a common motivator for societies populance to interact.

Yes there is property ownership, but that's a byproduct.

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#22) On July 15, 2010 at 11:11 AM, tomatoflu (< 20) wrote:

 

My tomato was really seeing red over the material on this thread tonight here in Au, but it really helped clear the sinus i was getting from the flu.

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#23) On July 15, 2010 at 11:32 AM, tomatoflu (< 20) wrote:

GNUBEE, With respect to your quoted text.

"Do you remember any time where we actually took money out of the system?"

 Fiat currency is taken out of the system when a loan is retired.

The  act of paying down or retireing the principal of any loan actually cancels/destroys the currency that was created when the loan was financed.

This is very improtant to consider when the question of how money is removed from the financial system arises.

As debt is serviced, it removes currency from the system.

See money creation destruction

From there you will see this quote:

"Money creation is the process by which new money is produced or issued. There are three ways to create money:

by manufacturing paper currency or metal coins,through fractional reserve banking and lending by the banking system,and by government policies such as quantitative easing."And this one.........

"When a commercial bank loan is extended, new commercial bank money is created. As a loan is paid back, the commercial bank money disappears from existence."

"As a loan is paid back, the commercial bank money disappears from existence"

 

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#24) On July 15, 2010 at 12:30 PM, 1315623493 wrote:

Chris,

The fact that you actually believe this is a huge part of the problem. Do you remember any time where we actually took money out of the system? If inflation were in check, my silver would be worthless and not worth twice what I paid for most of it.

Yes. The Federal Reserve raises interest rates and sells bonds on the market to take money out of the system, when the economy is overheating. They don't "perpetually print money". And yes, inflation is in check. We're basically at 0% inflation. The reason your silver has appreciated like it has is hardly a function of inflation, for your information. Has it occurred to you that other factors play a bigger part? Why do you just focus on one asset? Just because your silver doubled doesn't mean inflation is 100%. How you came to that conclusion, boggles my mind, and to expect me to agree, it ain't going to happen. 

As far as unemployment goes, we currently have 20% unemployment with all that money spent to prop everything up. 

Now you're just making numbers up. Not saying unemployment is uncomfortably high, but it sure ain't 20%. 

How did we get into this problem? The same way we got into it every other time. (By spending money that we don't have.) 

Agreed. But if the Federal Reserve "prints money perpetually" with no limit, then inflation would be 0%, but more like 1000%. It's not and to say otherwise is nothing more to me, than alarmist rhetoric which does little in providing substantive discussion on some very serious issues. 

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#25) On July 15, 2010 at 12:47 PM, GNUBEE (26.83) wrote:

tomato,

Money "in" the system doing nothing serves the same purpose as money "out" of the system. The money "in" and "working" is the important money, the money that affects change.

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