The Immorality of Money Printing and Why It's Driving the World To Socialism

[Rau]

Again, another program to help the poor which was so badly structured that the poor didn’t really get anywhere.

Some of the businesses involved viewed it as a program to enrich themselves. You’ll recall the prosecutions, fines etc.

 

[Annie]

Sorry Annie. Down here as in down under as in Australia.

Ok, that makes sense.

And the GFC ended up costing the jobs of at least two people I know.

You seem to be quite into overgeneralization tonight! (Or today… or tomorrow? )

The government down here had to spend BIG money just to keep country afloat.

Well, when it comes to economics, I have some “different” ideas; I am more a distributist than anything else. I am wary of economic overentanglement between nations, which causes problems like that.

Which is not to say I am not sympathetic, my family was hit hard by the collapse, but that I don’t think turning to socialism or communism will help. Maintaining something more like what people call capitalism with certain changes such as no overentanglement would be better, imo.

 

[PetraG]

Gee and I thought we had social programs because if the poor are taught to read they’ll put two and two together and revolt if they’re treated like the chattel of a wealthy class that doesn’t care if the poor live, starve, or die as long as the rich still turn a profit.

If the poor can read, they’re going to want a believable social contract that treats the destitute and disadvantaged like human beings. It’s uncanny how that works.

 

[AlNg]

1. If capitalism is not working, why did Hungary, Bulgaria, Estonia, Latvia, Lithuania, Poland, Ukraine, BelaRus, Armenia, Montenegro, Moldavia, Croatia, Serbia, Romania, Russia, Albania, and many others all throw out socialism and replace it with a controlled capitalism. Why are people fleeing Venezuela which has a socialist economy? If the US has such a bad capitalist economy which enslaves the poor, why are so many millions of poor people desperately trying to cross the border illegally into the capitalist US? But at the same time we don’t see too many poor American people in the capitalist US who are trying to flee to socialist Venezuela?
2. The article reports that critics say that quantitative easing causes the devaluation of currency (which is sometimes called inflation). But then it says that interest rates remain low under quantitative easing. But interest rates are a reflection of the inflation rate. So since quantitative easing has resulted in low interest rates, this then means that quantitative easing has not caused inflation or the devaluation of currency.
   So I cannot make sense of what the article is talking about.

 

[ProVobis]

many others all throw out socialism and replace it with a controlled capitalism.

Is that what they call subsidies to farmers?

 

[ProVobis]

this then means that quantitative easing has not caused inflation

Not wage inflation yet but certainly stock price inflation and higher insurance premiums and lower interest income. Someone likened Bernanke and his QE purchases as “pushing on a string.”

 

[AlNg]

Is that what they call subsidies to farmers?

It is a mixed economy some elements of governmental intervention and control. But restaurants, hotels, and many other enterprises are allowed to operate as private businesses, but of course there are governmental regulations such as code enforcement and safety regulations, etc.

 

[AlNg]

higher insurance premiums

In California there were huge losses due to fires that went out of control. The insurance companies lost billions. With regard to medical insurance, because of government regulations, it becomes more expensive to test and confirm the effectiveness and safety of drugs as they come on the market. Some private doctors are charging $300 for a visit that lasts less than 15 minutes. At least that is what it cost me.

certainly stock price inflation

As the economy booms with increasing profits and declining unemployment rates, the intrinsic value of a company increases, and this is reflected in the increase in stock prices. Inflation is when something costs more but is worth the same as before. I see deflation and not inflation in some areas such as large screen TV’s. I was able to buy a 32 inchTV for $79 recently, whereas in previous years, the same TV was going for well over $300. The 55 inch and the 65 inchTV’s have had a similar big drop in price from several years ago. And we have had enormous quantitative easing. Why has the price gone down so much if quantitative easing causes inflation?

 

[Freddy]

Freddy:

We actually didn’t have an indoor toilet in the house where I was brought up until I was fourteen.

And…?

10

And…it used to be cold in the winter.

Not every post is making an argument, Annie.

 

[Freddy]

Freddy:

Your knack of the obvious is unparalleled.
So you get a second job. Or you go to school. Or you learn a trade through an apprenticeship. The venture capitalist wasn’t born with the knowledge, experience, and credentials to succeed in his line of work.

I worked two jobs for twenty years. I never said it was easy - sometimes it wasn’t, but we always had all the necessities, and enough to share with those in need.

Presumably the ones in need aren’t working two jobs. Maybe not even one. If there’s just enough work to go around and half the people are doing two jobs to meet their necessities then the other half are out of work. Those are the people you are sharing with.

Seems a weird way to run things.

 

[graciew]

Or maybe working two jobs and not making it even then… this is real too…

 

[Freddy]

Or maybe working two jobs and not making it even then… this is real too…

Too right. There’s a reason why unions fought for a six day then a five day week. And an eight hour day. Boldlygo has my genuine sympathy needing to have to have worked two jobs for so long. A system that requires people to do that is broken.

 

[HarryStotle]

So capitalism is the problem because it’s not working. And the rich get richer and the poor poorer. Sounds about right to me.

Only an uninformed individual could reach the conclusion that “capitalism isn’t working.”

What isn’t working is the governments in collusion with the banking establishment running up greater and greater debt in order to control their citizens using social welfare schemes. That would be crony capitalism.

These were the prescriptions suggested at the end of the article.

First, leave your masters and don’t accept their powers anymore, which means today: don’t accept the Fed’s poisoned credit offer.

Second, enter the desert: Live a modest life and take care of your family, the only institution that can reliably provide support in difficult times.

Third, destroy the golden calf: Reject all promises by political parties or the government of paradise on earth in exchange for your taxes. Instead, take responsibility for your own actions and deal with the risks of living together with your family.

@Salibi’s notion that “a stronger social welfare system” is the solution is precisely the opposite of what is being proposed.

The central banking establishment, including the Fed, the world bank, IMF and national banks function as banking for the banks. They all have a vested interest in sustaining or building the wealth of the monied elites by controlling the assets of the remaining population. By the way, so does China have monied elites, that is the way its dictatorial class states in power – by building around it a loyal class of wealthy elites. China has more billionaires than the US since 2016 – China had 568 billionaires versus the United States’ 535, likely more now.

That is why communism isn’t the answer precisely because it centralizes power in the hands of a few who can then dictate more effectively all the social, political and moral rules that maintain control in the hands of the wealthy and powerful.

The three prescriptions being presented are to reduce the power of government and reduce the dependency of individuals on the state. Don’t live on credit borrowing – which profits only the monied elites while at the same time impoverishing the working class by placing them into long-term debt. Live by your means, support local entrepreneurs who create goods and services (and not money by fiat). Also keep the government accountable by reducing spending by politicians and the bureaucrats who control and seek to continue to grow out of control ministries – taking more and more tax money with very little benefit to the people.

 

[RogueSemicolon]

I worked two jobs for twenty years. I never said it was easy - sometimes it wasn’t, but we always had all the necessities, and enough to share with those in need.

While I admire your hard work and strong will to make due with what opportunities you had available to you, not everyone is capable of working two jobs just to get by, whether it be from lack of transportation, lack of income, lack of opportunity, family obligations, discrimination, physical or mental disability, or other myriad of reasons that an individual has little control over. Pulling yourself up by your boot straps is well and good if you have the opportunity, the strength, and the fortitude to persevere through the hard times. Simply telling those in poverty to work harder and take responsibility for themselves ignores all those left behind for whom are already doing what they can and it’s not enough.

What do we do with those who have tried and failed despite their best efforts? What is to happen to those who have striven for the American Dream, if not for themselves then for their children, only to see their hopes die and their children left with nothing but a dream, if dream they dare to do?

 

[Freddy]

Only an uninformed individual could reach the conclusion that “capitalism isn’t working.”

As someone said:

I’m not saying that capitalism in itself is bad. But it can lead to what we might describe as bad results.

Ah, it was me.

 

[graciew]

Read Laborem Exercens ( St John Paul II) when you have time. It is worth it.

 

[HarryStotle]

HarryStotle:

Only an uninformed individual could reach the conclusion that “capitalism isn’t working.”

As someone said:

I’m not saying that capitalism in itself is bad. But it can lead to what we might describe as bad results.

While socialism and communism lead inevitably to democide, capitalism (entirely free market controlled for honesty and fairness) has taken more people out of poverty than any other system. There is no comparison.

Anyone who advocates for socialism or communism because capitalism isn’t perfect is uninformed. The problem with capitalism begins when governments become used by the wealthy to promote their enterprises unfairly over natural competition. If governments would stick to justice, fairness and security of citizens, the free market tends to look after itself in the long run.

 

[AlNg]

Don’t live on credit borrowing – which profits only the monied elites while at the same time impoverishing the working class by placing them into long-term debt.

i think that is very poor advice. Very few people have the money to buy a house in cash. In the past, people have gone into debt of 30 years, paying off the mortgage monthly, in order to buy their house. This has worked out very well. Similarly for small businesses which take out loans for expansion. You pay back the debt monthly over a 30 year period and all the while the equity in your house or business is increasing. It is those who did not take advantage of long term debt and who did not live on credit borrowing who have lost out on having their equity increase substantially over time.

 

[HarryStotle]

HarryStotle:

Don’t live on credit borrowing – which profits only the monied elites while at the same time impoverishing the working class by placing them into long-term debt.

i think that is very poor advice. Very few people have the money to buy a house in cash. In the past, people have gone into debt of 30 years, paying off the mortgage monthly, in order to buy their house. This has worked out very well. Similarly for small businesses which take out loans for expansion. You pay back the debt monthly over a 30 year period and all the while the equity in your house or business is increasing. It is those who did not take advantage of long term debt and who did not live on credit borrowing who have lost out on having their equity increase substantially over time.

The reason it takes people these days 30 years to buy a house is because the price of a home relative to wages has skyrocketed over the past 60 years or so. That would be because the monied elites have syphoned off a great deal of the value of a home by artificially inflating prices.

House prices between 1940 and 2000:

• 1940: $2,938
• 1950: $7,354
• 1960: $11,900
• 1970: $17,000
• 1980: $47,200
• 1990: $79,100
• 2000: $119,600

Here are those values again, adjusted for 2000 dollars:

• 1940: $30,600
• 1950: $44,600
• 1960: $58,600
• 1970: $65,600
• 1980: $93,400
• 1990: $101,100
• 2000: $119,600

So even adjusted for inflation the price of a house has quadrupled, and house prices are rising at twice the rate of inflation.

Interest payments (at 5%) double the cost of a house over a thirty year mortgage, which is why resale has to be kept artificially high so buyers have a chance to recoup some of their investment. Who is benefiting most, though? The bankers.

Why are you paying 5%+ interest on a loan but the banks only pay 2% or less on savings? They certainly don’t want to encourage saving, do they?

 

[AlNg]

Interest payments (at 5%)

Current interest payments are closer to 4% for 30 year fixed and 3.1% for 15 year fixed.

Who is benefiting most, though? The bankers.

The banks are taking a risk by lending you the money. You benefit by being able to buy a house using your own money for only 20% of the cost and using the banks money for 80% of the cost.
If you don’t buy, you have to rent anyway and whenyou rent you don’t get any equity. so your advice

Don’t live on credit borrowing

Is very, very poor advice. It is much better to buy a house with the money of the bank than to pay rent for the same house and end up with nothing after 30 years,.