[OT] A realization, banks and the financial system

forge · Post by **forge** » Tue Jan 27, 2009 5:37 pm

Daim wrote: don't trust the media

they are in many ways more at fault...but still, the banks are scared to lend...not good when companies need to pay wages.....and so on...

Low Frequency Obstinator · Post by **Low Frequency Obstinator** » Tue Jan 27, 2009 5:39 pm

Geezus wrote:
Low Frequency Obstinator wrote:I think if we should all go back to the bartering system and trade our comodities/services with each other and take ugly 'cash' right out of the loop.

I'll start the proceedings by playing all my future gigs for the rider and birds alone.

My painter/decorator brother in-law has been made redundent recently so is currently decorating my house. Payment will be in food, weed and beer.
Food from my allotment, weed from the attic and beer from my home brew of 'Liquid Brains' (not quite as strong as last years 'Skull Crusher' but less of a hangover).

See, I could pay him with cash...... but he'd only blow it all on useless crap!
the dumb bartering system is why money was invented in the first place. If I'm a fisherman who wants a piece of bread, but the bread guy already has fish but needs a knife, I gotta then go to the knife guy to see if he wants fish so I can get a knife for the bread guy. But he doesnt need any fish either, but needs his shoes fixed, so I gotta go to the shoe guy and so on and so forth. Money solves this problem by creating a token that everyone can use for all goods and services.

The problem is that banks control the money being printed, and they charge interest on every "unit", thus forcing everything into perpetual debt. This leads to things like inflation and deflation, both as a result of the system being based on "debt" instead of the currency itself. Money needs to be controlled to represent actual resources, including labor and services. I dont know how that could be done but I do know that money becomes a useless token if its worth is no longer based on the goods and services available in the market and instead is based on arbitrary debts created by interest rates on printed money and interbank loans and inflation.

+1, how many financial institutions are kicking themsleves for 'buying debt'?

Maybe the current crisis will force a move back to a real economy?

"Mongo not know, Mongo just pawn in game of life"

beats me · Post by **beats me** » Tue Jan 27, 2009 5:40 pm

What scares me more as an individual is that in general there is no way to build wealth or a nest egg without taking large amounts of risk or getting in mass debt, in other words just getting a paycheck and after paying your monthly expenses have a lot left over for savings.

doc holiday · Post by **doc holiday** » Tue Jan 27, 2009 5:49 pm

i love how they are pumping money into the banks so they can lend us more..

we pay our taxes so the banks can lend the money back to us and charge interest on it.

Low Frequency Obstinator · Post by **Low Frequency Obstinator** » Tue Jan 27, 2009 6:00 pm

How did Barclays do so well out of it? They seem to be stating record profits for 2008 whilst the rest are floundering in a financial k-hole?

I dont trust any of them - The company I work for are owned by some big 'venture capital lloyds of london shizzle' thats only happy when we trundle along nicley and get all twitchy when we take risks.

I'm still in a good job but worry about the bread-heads at the top having too much control.

Would be nice to give up the day job but the music industries frigged too

Emissary · Post by **Emissary** » Tue Jan 27, 2009 6:00 pm

Order out of chaos

Problem
Reaction
Solution

The banks got us into the mess on purpose, the people are paying for it, the banks will be stronger and richer when this finishes. The people will be poorer and the dumb fucks of the world will continue on complaining and doing shit all. As long as the people of the world dont stand up to this crap I have no sympathy for them. Take their homes their land and their children's futures and if they still dont take action they deserve everything coming to them. This is the outlook of the elites too by the way.

UKRuss · Post by **UKRuss** » Tue Jan 27, 2009 6:21 pm

brightonalex wrote:
crumhorn wrote:
mikemc wrote:
Glum Rock?
Glum n Bass?

Fresh from the UK underground: Glummage

Anubis · Post by **Anubis** » Tue Jan 27, 2009 6:23 pm

doc holiday wrote:i love how they are pumping money into the banks so they can lend us more..

we pay our taxes so the banks can lend the money back to us and charge interest on it.

...but it doesn't stop there. As a token of their gratitude for having us, the taxpayers, loan them money (at 0% interest!) they then turn around and have recently unilaterally modified ALL the credit card agreements so that if you slip up and pay late -even once- they will jack your interest rate up to 30% or even cancel your line of credit.
I just received one such notice yesterday from Citibank(the new owners of WaMu), that if I slip up they will raise the rate from 12% to 30%! Then, when I get home I see that they intend to buy a billion dollar private jet while at the same time begging for a several hundred billion dollar bail-out.
Where the puck is the government in all this? How are consumers ever going to get out of debt if these companies are allowed to operate a la Cosa Nostra?

doc holiday · Post by **doc holiday** » Tue Jan 27, 2009 6:27 pm

Anubis wrote: How are consumers ever going to get out of debt if these companies are allowed to operate a la Cosa Nostra?

if the consumers are not over their ass in debt they are much harder to manipulate.

they should've bailed out the people, and let us figure out which companies make it.

jamester · Post by **jamester** » Tue Jan 27, 2009 7:27 pm

mikemc wrote:At this point, banks and the financial do nothing for you but take your money. That is, if you put your money in, it is almost guaranteed you will get less out.

Well, so long as your bank is FDIC insured this is not the case. My bank's interest rates are nothing to brag about, but my money's safe and is making (some) money...

Now my IRA and stocks/mutual fund is another story...but it's important to remember that losing money in the stock market is only losing *potential* money in stock sales; don't sell, don't lose money. When the market goes on the rise, so will your value. That's why now's a good time to buy. It only sucks for those who don't have time to wait it out, but then that's why people close to retirement shouldn't have most of their money in the market.

oblique strategies · Post by **oblique strategies** » Tue Jan 27, 2009 8:01 pm

forge wrote: EDIT: on the positive side - I've been listening to music like Joy Division and the Cure again lately - post-punk that grew out of shitty economic times - maybe we'll find a nice platform for a new musical resurgence

Absolutely. Per ardua ad astra.

I just watched the documentary 'Joy Division' -highly recommended.

I'll also recommend the first three albums by PiL.

mikemc · Post by **mikemc** » Tue Jan 27, 2009 8:02 pm

jamester wrote:
mikemc wrote:At this point, banks and the financial do nothing for you but take your money. That is, if you put your money in, it is almost guaranteed you will get less out.
Well, so long as your bank is FDIC insured this is not the case. My bank's interest rates are nothing to brag about, but my money's safe and is making (some) money...

I guess what I'm thinking about is when one is using the overall system-- savings account, checking, 401k-type/longer term investment, credit cards.

So your savings makes whatever percent, and that it guaranteed and that is good (unless it has some penalty involved in withdrawing that sets you back) but at least it is making a little money.

Meanwhile, your checking, credit interest cost you money. But, that is not so bad because your 401k-type/longer term/realestate stuff is making money...

unless it's not.

but, yes, unless you sell whatever your longer term stuff is, it is only potential loss, but what it means is that the money that was previously "working for you" is now working itself up out of a hole.

meanwhile Glumstep anyone?

Tone Deft · Post by **Tone Deft** » Tue Jan 27, 2009 8:16 pm

what's fucked up is that financial education is not part of the basic curriculum in schools in any country. there are some seriously scary naive ideas in this thread.

if you don't know what you're doing, pay someone to teach you. the 2nd worst thing you can do is have some fool handle your money, chances are, you're that fool. the 1st worst thing you can do is panic.

recognize what kind of investor you are, short or long term. understand your investment's risk and return. wait and let compound interest do its thing. nobody sells at the peak, nobody buys at the lowest, there is no single winning formula.

money can buy happiness, it can fuck with your head and make you feel bad. want money to make you happy? understand it and don't let every dumbshit Chicken Little like Emissary and Fox News make you panic.

LoopStationZebra · Post by **LoopStationZebra** » Tue Jan 27, 2009 8:21 pm

Fear not, lads. Soon enough we'll all be back to the barter system.

In fact, I've got a nice Minimoog here I'd be willing to part with for, say, a case of Newcastle Brown and a pound and a half of hamburger meat?

cyphersum · Post by **cyphersum** » Tue Jan 27, 2009 8:25 pm

Tone Deft wrote:what's fucked up is that financial education is not part of the basic curriculum in schools in any country. there are some seriously scary naive ideas in this thread.

if you don't know what you're doing, pay someone to teach you. the 2nd worst thing you can do is have some fool handle your money, chances are, you're that fool. the 1st worst thing you can do is panic.

recognize what kind of investor you are, short or long term. understand your investment's risk and return. wait and let compound interest do its thing. nobody sells at the peak, nobody buys at the lowest, there is no single winning formula.

money can buy happiness, it can fuck with your head and make you feel bad. want money to make you happy? understand it and don't let every dumbshit Chicken Little like Emissary and Fox News make you panic.

This is one of the best replies I have ever seen!
A huge +1 from someone who gets where Tone Deft is coming from.

[OT] A realization, banks and the financial system

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Re: [OT] A realization, banks and the financial system