Pope Francis claims global economy is close to collapse and describes youth unemployment rates as an ‘atrocity’ in damning message

[ralfyman]

You posted:

To which I replied: Of course, what’s your point?

To which you replied:

What does your second post have to with the first?

And no, money isn’t borrowed into existence, it’s loaned.

But that’s a moot point since what the Fed is doing is not borrowing, it’s printing.

The Fed is a consortium of private banks. Given that, it will not work contrary to what private banks want. That’s why, as was pointed out earlier, the financial elite controls money supply, not the government.

For money to be loaned, there has to be a borrower. Thus, my argument remains the same.

Finally, it’s a moot point only if we assume that much of money supply is created by the Fed. That’s not the case. More money is created as private banks borrow and lend, and M2 levels go beyond what is expected from a money multiplier.

In short, what drives increasing money supply is not government or the Fed or central banks but the very free market capitalist global economy that thrives on the same.

 

[freeRadical]

The money saved by people is printed by the Fed and is borrowed into existence through loans made from private banks. That’s why M2 is much higher than one expects given the money multiplier principle.

What the Fed is doing is not real savings, it is inflation-driven investment.

What has been taking place goes beyond the money multiplier and Keynesian 101. That’s why M2 is many times greater than what it should be. That’s why we have a global unregulated derivatives market with a notional value of over a quadrillion dollars.

You posted it again. You seem to have some kind of fetish with this “unregulated global derivatives market” which wouldn’t be possible without the Fed. It is Keynesian 101. Have you read the General Theory? What we are seeing is what Keynes wanted, a global economy dominated by a global monetary system led by financial “experts”.

Most money is not created by government. Most credit is not created by government. For the U.S., the organization that prints most money isn’t even a government office.

The Treasury still prints physical money and it is the only one allowed to do it. The Fed doesn’t really print money, it is all done electronically, but it is still referred to as “printing” by economists.

Where do you think citizens get their wage increases, promotions, bonuses, easy credit, and returns on investment needed to pay for middle class conveniences?

Let’s see:

Wage increases, promotions, and bonuses would come from the business they work for.

Easy credit would come from financial institutions and the Fed.

Returns on investment would come from whatever financial vehicle they have chosen to invest in.

Most of credit involved in unregulated derivatives don’t involve central banks because most of money supply is created through the money multiplier and endogenous money. In addition, these financial instruments are unregulated, which means governments have no control over them.

If the credit doesn’t come from a banking system then where does it come from?

The money multiplier does not exist, it is a Keynesian fabrication.

Bail outs consist of money.

Yes, they do. You’re point?

Sorry about that. I’d like to point out, though, that most of money supply isn’t created by the Fed but by private banks. See the article shared earlier for details.

I never said that most of the money supply was created by the Fed. Of course, most of it is created by private banks.

I don’t need to read your article. I am well versed in economic theory. Thanks anyway.

 

[ralfyman]

Why is an increasing money supply a problem?

It’s a problem because more energy and material resources have to be used to maintain the value of money. Put simply, as more money is created, more is invested, which means more goods have to be produced and sold to earn more profits, to ensure higher returns on what is invested, which increases what is re-invested, increasing money supply further, etc.

Thus, we have a global economy that needs ever-increasing energy and material resources in a world with physical limitations.

On top of that, money can be used for financial speculation, which leads to increased risks and crashes. That’s what happened in 2008, and the world continues to feel its effects.

The Fed may have arose out of free market capitalism but it is not free market capitalism and it is not required for free market capitalism.

The point is that it is a result of the same, and there’s nothing we can do about it unless we challenge the financial elite. That’s what I gathered from Pope Francis’ argument.

Yes, the Fed is a central bank. It doesn’t matter that it is a consortium of private banks and independent from the government. It controls the money supply, it controls interest rates, and it controls banks. It is a central bank. Period.

It matters a lot because a central bank is usually controlled by the government. This one is made up of private banks and works independently of the government. This is one factor that explains the point that the financial elite controls money supply.

The only reason the Fed controls the global reserve currency is because the global reserve currency is the US dollar.

That’s right. That’s another reason why the Fed is very different from counterparts in other countries.

You’re right, most of the money supply isn’t created created by the Fed, but it’s not created through a money multiplier since the money multiplier doesn’t really exist. It is a Keynesian fabrication. If there is a money multiplier, it is very small and negligible.

It exists, which is why M2 is much larger. One of the factors involved is fractional reserve banking.

What makes the multiplier a myth isn’t that it doesn’t exist, but that actual M2 is far larger than can be explained by the multiplier.

Why is it far larger? The article explains this.

Most of the money supply is created though private real savings which, in turn, is loaned out. However, that part of the money supply is dwindling thanks to low interest rates, a tax code that discourages saving, and a government that encourages borrowing and spending. Thus, the Fed has had to pick up the slack with inflation-driven investment, which are not real savings, and the result is bubbles and busts.

Exactly, and this explains the money multiplier. But why is M2 not “dwindling” but many times higher than it should be, and even with low interest rates? The reasons are given in the article I shared.

 

[freeRadical]

The Fed is a consortium of private banks. Given that, it will not work contrary to what private banks want. That’s why, as was pointed out earlier, the financial elite controls money supply, not the government.

Again, all of this is what I’ve said. Do you even read my posts? I don’t want a Federal Reserve or a central bank. If there wasn’t a Federal Reserve then private banks would not control the money supply.

For money to be loaned, there has to be a borrower. Thus, my argument remains the same.

The act of loaning creates the money not the act of borrowing.

Finally, it’s a moot point only if we assume that much of money supply is created by the Fed. That’s not the case. More money is created as private banks borrow and lend, and M2 levels go beyond what is expected from a money multiplier.

It may not be created by the Fed but it is controlled by the Fed, and thus, by private banks.

In short, what drives increasing money supply is not government or the Fed or central banks but the very free market capitalist global economy that thrives on the same.

There is nothing wrong with an increasing money supply.

 

[freeRadical]

It’s a problem because more energy and material resources have to be used to maintain the value of money. Put simply, as more money is created, more is invested, which means more goods have to be produced and sold to earn more profits, to ensure higher returns on what is invested, which increases what is re-invested, increasing money supply further, etc.

Thus, we have a global economy that needs ever-increasing energy and material resources in a world with physical limitations.

You cannot have a growing economy without savings and investment. There is nothing wrong with an increasing money supply, it is need for a growing economy. Unless you would prefer a stagnant economy or a shrinking economy.

On top of that, money can be used for financial speculation, which leads to increased risks and crashes. That’s what happened in 2008, and the world continues to feel its effects.

Financial speculation is not caused by an increasing money supply. It is caused by the Fed pumping excess credit into the economy, keeping interest rates low, and bailing out financial institutions. The government is also complicit in the guilt.

The point is that it is a result of the same, and there’s nothing we can do about it unless we challenge the financial elite. That’s what I gathered from Pope Francis’ argument.

We can do something about it by getting rid of the Federal Reserve and other central banks.

It matters a lot because a central bank is usually controlled by the government. This one is made up of private banks and works independently of the government. This is one factor that explains the point that the financial elite controls money supply.

It doesn’t matter if the central bank is controlled by the government or not. If it controls the money supply, interest rates, and the banking system then it is a central bank.

If there was no Federal Reserve then the financial elite would not control the money supply.

That’s right. That’s another reason why the Fed is very different from counterparts in other countries.

Yes, the Fed is different. It is more powerful.

It exists, which is why M2 is much larger. One of the factors involved is fractional reserve banking.

My feelings on fractional reserve banking are mixed but there is nothing inherently wrong with it.

What makes the multiplier a myth isn’t that it doesn’t exist, but that actual M2 is far larger than can be explained by the multiplier.

Why is it far larger? The article explains this.

That doesn’t make any sense. The money multiplier doesn’t exist.

Exactly, and this explains the money multiplier. But why is M2 not “dwindling” but many times higher than it should be, and even with low interest rates? The reasons are given in the article I shared.

The reason M2 is not dwindling is because banks do not need to rely on depositor’s savings anymore. They can just borrow interest free money from the Fed and loan that out instead. That is not real savings. M2 would not be so high if banks had to depend on their depositor’s savings.

 

[ralfyman]

What the Fed is doing is not real savings, it is inflation-driven investment.

I never argued that the Fed does that. What I said is that real savings involves money supply from the Fed.

You posted it again. You seem to have some kind of fetish with this “unregulated global derivatives market” which wouldn’t be possible without the Fed. It is Keynesian 101. Have you read the General Theory? What we are seeing is what Keynes wanted, a global economy dominated by a global monetary system led by financial “experts”.

You have to go beyond textbooks and look at what empirical data shows. The argument is given not only by financial experts but also by organizations like the BIS.

The Treasury still prints physical money and it is the only one allowed to do it. The Fed doesn’t really print money, it is all done electronically, but it is still referred to as “printing” by economists.

I mentioned this earlier. My point is that most of M2 is not printed by the Fed.

Let’s see:

Wage increases, promotions, and bonuses would come from the business they work for.

Easy credit would come from financial institutions and the Fed.

Returns on investment would come from whatever financial vehicle they have chosen to invest in.

That’s right. And most money is created by financial institutions. Some money leading to M2 is printed by the Fed, which is a consortium of the same financial institutions offering financial vehicles from which people get their returns on investment, which in turn they reinvest in the same financial institutions.

If the credit doesn’t come from a banking system then where does it come from?

As I said, it comes from private banks and not injected by the Fed into the system.

The money multiplier does not exist, it is a Keynesian fabrication.

It exists because of fractional reserve banking and is seen in M2.

Yes, they do. You’re point?

Because bailouts consist of money, then more bailouts means more money. More money means higher money supply.

I never said that most of the money supply was created by the Fed. Of course, most of it is created by private banks.

This was my impression given your points that we can solve the current crisis by simply getting rid of the Fed.

Also, you should be aware that if most of money supply is created by private banks, then this proves the money multiplier.

I don’t need to read your article. I am well versed in economic theory. Thanks anyway.

I think you need to consider endogenous money, which explains why M2 is much larger than expected. You will discover that most of it involves private bank loans, which supports all of my points.

 

[ralfyman]

Again, all of this is what I’ve said. Do you even read my posts? I don’t want a Federal Reserve or a central bank. If there wasn’t a Federal Reserve then private banks would not control the money supply.

What you want is not free market capitalism but heavy regulation of the financial elite.

In previous messages, it was argued that this is the conclusion of Pope Francis’ argument.

The act of loaning creates the money not the act of borrowing.

Something loaned is borrowed.

It may not be created by the Fed but it is controlled by the Fed, and thus, by private banks.

Exactly my point. The problem is the presence of powerful, private banks, which in turn are led by a financial elite.

There is nothing wrong with an increasing money supply.

That’s what the financial elite and private banks want.

 

[ralfyman]

You cannot have a growing economy without savings and investment. There is nothing wrong with an increasing money supply, it is need for a growing economy. Unless you would prefer a stagnant economy or a shrinking economy.

Exactly, but that money supply is essentially controlled by a financial elite, and they wants to create even more money through financial speculation. That’s why, as Pope Francis points out, they’d rather make higher and quick profits from the stock market than through providing work for people.

Financial speculation is not caused by an increasing money supply. It is caused by the Fed pumping excess credit into the economy, keeping interest rates low, and bailing out financial institutions. The government is also complicit in the guilt.

It is for painfully obvious reasons.

Again, most credit isn’t created by the Fed but by private banks.

Private banks and the financial elite want low interest rates because that allows them to borrow cheaply and then profit from the stock market and commodities. People also want low interest rates because they get to borrow money to buy houses and other middle class conveniences.

Thus, it’s not just the government but generally everyone wanted the same thing. That’s why people voted for one administration after another that promised deregulation, low interest rates, more freedom for Wall Street to play, etc., since the early 1980s.

And, not surprisingly, similar things were taking place in other parts of the world, as seen in asset bubbles in China.

As I said, it’s all part of free market capitalism.

We can do something about it by getting rid of the Federal Reserve and other central banks.

Again, most money is created not by central banks or the Fed but by private banks. The same private banks want central banks and the Fed to ensure a regime of low interest rates so that there will be lots of borrowing and spending. Businesses want the same because that allows for more sales and higher profits. The financial elite want the same because they can borrow cheaply and gamble heavily in other financial vehicles. The government is voted to power by households that want easy credit and are supported by businesses and the financial elite that want higher money supply.

It doesn’t matter if the central bank is controlled by the government or not. If it controls the money supply, interest rates, and the banking system then it is a central bank.

That’s right, and free market capitalism thrives on low interest rates. In addition, the financial elite can use a central bank that they control to bail themselves out if they get into trouble.

If there was no Federal Reserve then the financial elite would not control the money supply.

Or it is inevitable for a financial elite to form something like the Federal Reserve and then take over. Which is exactly what happened.

Yes, the Fed is different. It is more powerful.

The power lies not in the Fed but in what constitutes the Fed. That is, powerful private banks and partners, including multinational mega-corporations.

My feelings on fractional reserve banking are mixed but there is nothing inherently wrong with it.

It is the source of the money multiplier.

That doesn’t make any sense. The money multiplier doesn’t exist.

It exists, as seen in M2.

The reason M2 is not dwindling is because banks do not need to rely on depositor’s savings anymore. They can just borrow interest free money from the Fed and loan that out instead. That is not real savings. M2 would not be so high if banks had to depend on their depositor’s savings.

Actually, it involves more than just borrowing money from the Fed. Read the article I shared to find out why.

 

[freeRadical]

I never argued that the Fed does that. What I said is that real savings involves money supply from the Fed.

No, that is not real savings.

You have to go beyond textbooks and look at what empirical data shows. The argument is given not only by financial experts but also by organizations like the BIS.

I know what the empirical data shows. What is happening is straight out of the General Theory. Have you read it? What is happening now is exactly what Keynes wanted.

I mentioned this earlier. My point is that most of M2 is not printed by the Fed.

I never said it was.

That’s right. And most money is created by financial institutions. Some money leading to M2 is printed by the Fed, which is a consortium of the same financial institutions offering financial vehicles from which people get their returns on investment, which in turn they reinvest in the same financial institutions.

There is a difference between banks loaning out money from the savings that people deposit into their banks and banks loaning out money they get interest free from the Fed. The first is real savings, the second is not.

The Fed does not offer financial vehicles to invest in.

As I said, it comes from private banks and not injected by the Fed into the system.

The Fed is still injecting excess money into the economy. That is a fact.

It exists because of fractional reserve banking and is seen in M2.

The money multiplier, which doesn’t even exist, has nothing to do with fractional reserve banking or M2.

Because bailouts consist of money, then more bailouts means more money. More money means higher money supply.

That is not how the money supply works. Bailouts do not increase the money supply.

This was my impression given your points that we can solve the current crisis by simply getting rid of the Fed.

We can.

Also, you should be aware that if most of money supply is created by private banks, then this proves the money multiplier.

Yes, I believe I said that most of the money supply is created by private banks. But there is a difference between real savings and what the Fed is doing.

That does not prove the money multiplier, it has nothing to do with it. The point is moot though because it doesn’t exist.

I think you need to consider endogenous money, which explains why M2 is much larger than expected. You will discover that most of it involves private bank loans, which supports all of my points.

I still don’t know what points you are trying to make. M2 is bigger then expected because banks are able to loan out more money then they have in deposits because they can get interest free loans from the Fed and loan that out.

There is nothing wrong with private bank loans.

I don’t see how any of that supports your points, whatever your points may be.

 

[freeRadical]

What you want is not free market capitalism but heavy regulation of the financial elite.

Who are these financial elite you keep mentioning? What I want is the for the Fed to be abolished.

Exactly my point. The problem is the presence of powerful, private banks, which in turn are led by a financial elite.

The only reason they are powerful is because they have a central bank controlling the money supply. Without a central bank, the financial elite wouldn’t control the money supply.

That’s what the financial elite and private banks want.

Of course it is but it is also what we want. You cannot have a growing economy without an increasing money supply. Would you rather have a stagnate or shrinking economy?

 

[freeRadical]

Exactly, but that money supply is essentially controlled by a financial elite, and they wants to create even more money through financial speculation. That’s why, as Pope Francis points out, they’d rather make higher and quick profits from the stock market than through providing work for people.

If there wasn’t a central bank then the financial elite could not control the money supply.

It is for painfully obvious reasons.

Again, most credit isn’t created by the Fed but by private banks.

Yes, I know, which I have mentioned several times.

Private banks and the financial elite want low interest rates because that allows them to borrow cheaply and then profit from the stock market and commodities. People also want low interest rates because they get to borrow money to buy houses and other middle class conveniences.

Again, something I have said before and we have been over. Yes, private banks and the financial elite want low interest rates. Now, who controls the interest rate? That’s right, the Fed. No Fed, no interest rate manipulation.

And, not surprisingly, similar things were taking place in other parts of the world, as seen in asset bubbles in China.

As I said, it’s all part of free market capitalism.

No, it is not free market capitalism. It is Keynesian macroeconomic theory 101. Read the General Theory.

Again, most money is created not by central banks or the Fed but by private banks. The same private banks want central banks and the Fed to ensure a regime of low interest rates so that there will be lots of borrowing and spending. Businesses want the same because that allows for more sales and higher profits. The financial elite want the same because they can borrow cheaply and gamble heavily in other financial vehicles. The government is voted to power by households that want easy credit and are supported by businesses and the financial elite that want higher money supply.

Another post about the same thing we have been over several times. You just keep posting the same thing over and over.

Without the Fed, there wouldn’t be low interest rates. Problem solved.

That’s right, and free market capitalism thrives on low interest rates. In addition, the financial elite can use a central bank that they control to bail themselves out if they get into trouble.

No, free market capitalism does not thrive on low interest rates. They are not needed. It thrives on savings and investment.

If there was no central bank, the financial elite could not bail themselves out.

I’m going to say this one last time: The only reason the private banks and financial elite have so much power and can do what they do is because they have a central bank manipulating interest rates, giving them cheap credit, and bailing them out. Without a central bank, they would not have any power.

Or it is inevitable for a financial elite to form something like the Federal Reserve and then take over. Which is exactly what happened.

The financial elite didn’t create the Federal Reserve, the government did. And they can just as easily abolish it.

The power lies not in the Fed but in what constitutes the Fed. That is, powerful private banks and partners, including multinational mega-corporations.

The power lies in the Fed and the power that the government gives to it. No Fed, no power.

It is the source of the money multiplier.

No it is not.

It exists, as seen in M2.

No it doesn’t.

Actually, it involves more than just borrowing money from the Fed. Read the article I shared to find out why.

I don’t need to read your article.

 

[Seamus_L]

The Pope’s statement yesterday “We cannot resign ourselves to losing a generation that has no job and therefore has no dignity”, to be a bit strange. A person may feel that they have no dignity if they’re unemployed, but I don’t see any reason to make it such a black and white statement that having no job should automatically result in a person having no dignity.

 

[ProVobis]

Real savings consist of money, and ultimately involves profit and interest, both of which increase money supply.

Savings is counted differently in microeconomics than in macroeconomics, so your statement needs to be qualified.

 

[ProVobis]

That’s why the Fed is not a government central bank but a consortium of private banks.

The Fed has its own balance sheet and is currently owning over $4 Trillion, for which the taxpayers pay about 3-4% interest. It’s nice to print money for yourself so you can call yourself a successful private business, no?

That’s why most of money supply is created by private banks and not central banks.

It’s true that the banks can increase money supply with fractional reserve banking but they can also decrease money supply by calling in loans as well. The banks don’t want you to be paying 3% interest when market conditions can get them 5% interest from you. There are two sides to every loan.

That’s why the largest component of credit worldwide is over a quadrillion dollars (notional value) in unregulated derivatives.

That’s why the Fed quickly bailed out the financial elite.

Just take care of the needs of the primary market. If people want to place bets with their own money, it should be their right.

That’s why governments are supporting businesses by keeping interest rates low, which allows more borrowing for more expansion, production, sales, and profits.

And why can’t competition between banks determine interest rates? Who’s the Fed to decide that all must comply to their set rate?

 

[ProVobis]

Try unregulated derivatives with a notional value of $400 trillion, and part of a $1.2 quadrillion global market.

Derivatives such as futures, options, mortgage bundling and other bets are just side shows and cancel each other out. Is this what you’re referring to? How can you possibly control such betting? Let the economy circulate the money they have now. Once they learn how to do that, there will be no further dependence of the Fed or any other central bank. And yes, Bernanke admitted the Fed is a central bank, and also absolutely essential to the world. As it stands, I can understand why he feels that strongly about the latter.

 

[ProVobis]

Yes, but lower interest rates also means more money borrowed

Well, good luck with trying to get banks to give you 0% loan, as they themselves can get from the Fed.

 

[ProVobis]

Yes, but private banks have to keep lending to earn more money,

Banks actually lose revenue when existing high-interest loans are called in and replaced with lower-interest ones. The only way they can increase revenue in such an environment is by issuing many more loans at rates to at least offset their costs. But how is this possible where the government/Fed sets the upper limit on CD’s and other interest rates?

If a bank were to issue 5% CDs right now, do you realize how much private money they could raise and make available for loans? But they are prevented from doing so by the Fed and the government. (I believe it’s in the Dodd-Frank bill.) And this is rather absurd given that Bernanke et al were shouting at the banks to raise more cash.

 

[hazcompat]

The Pope’s statement yesterday “We cannot resign ourselves to losing a generation that has no job and therefore has no dignity”, to be a bit strange. A person may feel that they have no dignity if they’re unemployed, but I don’t see any reason to make it such a black and white statement that having no job should automatically result in a person having no dignity.

II Work and Man

1. In the Book of Genesis

The Church is convinced that work is a fundamental dimension of man’s existence on earth. She is confirmed in this conviction by considering the whole heritage of the many sciences devoted to man: anthropology, paleontology, history, sociology, psychology and so on; they all seem to bear witness to this reality in an irrefutable way. But the source of the Church’s conviction is above all the revealed word of God, and therefore what is a conviction of the intellect is also a conviction of faith. The reason is that the Church–and it is worthwhile stating it at this point–believes in man: she thinks of man and addresses herself to him not only in the light of historical experience, not only with the aid of the many methods of scientific knowledge, but in the first place in the light of the revealed word of the living God. Relating herself to man, she seeks to express the eternal designs and transcendent destiny which the living God, the Creator and Redeemer, has linked with him.

The Church finds in the very first pages of the Book of Genesis the source of her conviction that work is a fundamental dimension of human existence on earth. An analysis of these texts makes us aware that they express-sometimes in an archaic way of manifesting thought - the fundamental truths about man, in the context of the mystery of creation itself. These truths are decisive for man from the very beginning, and at the same time they trace out the main lines of his earthly existence, both in the state of original justice and also after the breaking, caused by sin, of the Creator’s original covenant with creation in man. When man, who had been created “in the image of God… male and female”(9), hears the words: “Be fruitful and multiply, and fill the earth and subdue it”(10), even though these words do not refer directly and explicitly to work, beyond any doubt they indirectly indicate it as an activity for man to carry out in the world. Indeed, they show its very deepest essence. Man is the image of God partly through the mandate received from his Creator to subdue, to dominate, the earth. In carrying out this mandate, man, every human being, reflects the very action of the Creator of the universe

Laborem Exercens

Encyclical Letter

Pope Saint John Paul II

on Human Work on the Ninetieth Anniversary of Rerum Novarum

Addressed by the Supreme Pontiff

to His Venerable Brothers in the Episcopate, to the Priests, to the Religious Families, to the Sons and Daughters of the Church and to All Men and Women of Good Will

September 14, 1981

Peace

 

[hazcompat]

Laborem Exercens

Encyclical Letter

Pope Saint John Paul II

on Human Work on the Ninetieth Anniversary of Rerum Novarum

Addressed by the Supreme Pontiff

to His Venerable Brothers in the Episcopate, to the Priests, to the Religious Families, to the Sons and Daughters of the Church and to All Men and Women of Good Will

September 14, 1981
…

And yet, in spite of all this toil-perhaps, in a sense, because of it - work is a good thing for man. Even though it bears the mark of a bonum arduum, in the terminology of Saint Thomas(18), this does not take away the fact that, as such, it is a good thing for man. It is not only good in the sense that it is useful or something to enjoy; it is also good as being something worthy, that is to say, something that corresponds to man’s dignity, that expresses this dignity and increases it. If one wishes to define more clearly the ethical meaning of work, it is this truth that one must particularly keep in mind. Work is a good thing for man–a good thing for his humanity–because through work man not only transforms nature, adapting it to his own needs, but he also achieves fulfillment as a human being and indeed, in a sense, becomes “more a human being”.

Without this consideration it is impossible to understand the meaning of the virtue of industriousness, and more particularly it is impossible to understand why industriousness should be a virtue: for virtue, as a moral habit, is something whereby man becomes good as man(19). This fact in no way alters our justifiable anxiety that in work, whereby matter gains in nobility, man himself should not experience a lowering of his own dignity(20). Again, it is well known that it is possible to use work in various ways against man, that it is possible to punish man with the system of forced fulfillment in concentration camps, that work can be made into a means for oppressing man, and that in various ways it is possible to exploit human fulfillment labor, that is to say the worker. All this pleads in favour of the moral obligation to link industriousness as a virtue with the social order of work, which will enable man to become, in work, “more a human being” and not be degraded by it not only because of the wearing out of his physical strength (which, at least up to a certain point, is inevitable), but especially through damage to the dignity and subjectivity that are proper to him.

Peace

 

[ralfyman]

No, that is not real savings.

It doesn’t matter, as much of money supply consists of credit created by private banks. That’s why M2 is much larger than cash.

I know what the empirical data shows. What is happening is straight out of the General Theory. Have you read it? What is happening now is exactly what Keynes wanted.

Not even close. Empirical data shows money supply way beyond what even fractional reserve banking allows. More details in the article shared earlier.

I never said it was.

Most of money supply is not created by the Fed.

There is a difference between banks loaning out money from the savings that people deposit into their banks and banks loaning out money they get interest free from the Fed. The first is real savings, the second is not.

It doesn’t matter because most of money supply doesn’t even consist of real savings.

The Fed does not offer financial vehicles to invest in.

Exactly! They are created by financial institutions that are the source of most money supply.

The Fed is still injecting excess money into the economy. That is a fact.

That’s only a fraction of money supply created. Most money is created by private banks. More details in the article shared earlier.

The money multiplier, which doesn’t even exist, has nothing to do with fractional reserve banking or M2.

Completely wrong. Fractional reserve banking is the driver of the money multiplier. The M2 is the result of the money multiplier.

That is not how the money supply works. Bailouts do not increase the money supply.

I am not referring to how the money supply is created. And bailouts increase money supply for painfully obvious reasons, unless you can argue that the bailouts did not come in the form of money.

We can.

Given a century of the presence of the Fed, I very much doubt it.

Yes, I believe I said that most of the money supply is created by private banks. But there is a difference between real savings and what the Fed is doing.

Notice that this point contradicts everything you wrote above, from the emphasis to the Fed to the claim that a money multiplier doesn’t exist.

And there is no difference between real savings and what the Fed does, as both are essentially dependent on a consumer spending economy to purchase what is produced.

That does not prove the money multiplier, it has nothing to do with it. The point is moot though because it doesn’t exist.

The fact that private banks produce most of money supply proves that it does. See also M2 vs. money base.

I still don’t know what points you are trying to make. M2 is bigger then expected because banks are able to loan out more money then they have in deposits because they can get interest free loans from the Fed and loan that out.

What you just described is the money multiplier!

There is nothing wrong with private bank loans.

That’s not my point. My point is that most of money supply isn’t created by the Fed, and the process involves a money multiplier, which you just described above.

I don’t see how any of that supports your points, whatever your points may be.

Money supply is increasing readily not because of the Fed or central banks but because private banks are lending beyond what fractional reserve banking allows. That’s why M2 is more than ten times greater than cash. That’s why the notional value of the global unregulated derivatives market is over one quadrillion dollars, many times larger than the global economy.

That unregulated market is the source of the 2008 crash and the reason why the financial elite are engaged once more in financial speculation. That point is the basis of Pope Francis’ second argument.