tag:blogger.com,1999:blog-6519936705662831787.post7856907253682405949..comments2022-03-03T06:29:00.996-08:00Comments on Real Fact Bias: Why the Federal government should never run a budget surplus?Real Fact Biashttp://www.blogger.com/profile/04485667324660723517noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6519936705662831787.post-86360722747852513192015-10-16T06:57:17.049-07:002015-10-16T06:57:17.049-07:00Banks are a cancer to society, and inflation is th...Banks are a cancer to society, and inflation is their tool to extract your wealth from you, without your consent or in many cases knowledge. After a few bank failures people would begin to realize, "hey, I can look at the assets liabilities and equity of a bank whenever i want and i can determine how much they have lent out", and at that time, if they saw something like the books of Bank of American, Chase, PNC etc. they would not deposit with them. This would end the boom and the bust cycle and only permit sustainable growth. It would severely slow down the derivatives market (rightfully so) and transfer the wealth back from underserving 1% that contribute nothing to society back to the middle and lower class. <br /><br />Despite the fact that Milton Friedman was a proponent of Central Banking, he did say that without inflation there would be increased unemployment for a time but eventually the market would correct itself and it would be the end of the boom and bust cycle and only sustainable growth would follow. I find it hard to believe that Milton Friedman did not see Central banking as a problem, but who knows he could have been paid off, OR he just didn’t have enough information at the time to grasp how damaging central banking is.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6519936705662831787.post-34301815043283623142015-10-16T06:56:46.177-07:002015-10-16T06:56:46.177-07:00Inflation reply: I am actually replying to your po...Inflation reply: I am actually replying to your post: "No, the dollar did NOT really lose 95% of its value since 1913" since you disabled comments for some reason which i am hoping is not because you want to avoid a dissenting opinion. I think that your spot on, on pretty much every single thing, EXCEPT, like other commenters stated why does it take 2 earners in a household to support a family and in many cases barely. You say it is not inflation but the capture of the wealth by the top 1%. Well lets take it a step further. Every so often, something is invented that literally changes the world we live in. Those people sold their idea, and others bought it. Both parties benefitted and there was no force required in the transaction. <br /><br />Inventions like Facebook are good examples of this. Rightfully so, Zuckerberg deserves to be in the 1%. Then, there are individuals that rape the wealth of a nation in order to get into the top 1%. How they do it is through inflation like other commenters suggest. If money is brought into circulation through the federal reserve issuing money to banks who are fractional reserve lending and creating money from nothing, than wouldn't it make sense that over time those financial institutions would begin to consume the vast majority of the labor (wealth) of a nation? How else could they possibly amass trillions in assets? As of 2015-09-30, bank of Americas assets stand at 2.153 trillion dollars. Whilst their liabilities are 1.897 trillion leaving a small equity of 255 billion dollars. These institutions are growing exponentially for several reasons. They inject artificial liquidity into the market which among other things, creates artificial borrowers. These artificial borrowers then go and buy homes and increase the demand for them. As such the price of homes rise. A higher demand creates higher prices. Higher prices makes it harder to purchase a home out right, resulting in more people having to apply for loans in order to buy homes. More people having to apply for loans to buy homes consumes the profit of their labor and transfers it to the financial institution in the form of amortized interest in exchange for nothing. Peoples labor is literally being traded for the banks money. The banks money is was created for nothing. That means that the people are trading their labor for, NOTHING. <br /><br />The banks did not do anything to obtain this money they are lending from the Federal Reserve and if inflation was taken away by the removal of the Federal Reserve and a gold standard, none of this would be possible. Fractional reserve lending might still exist but the only assets the banks would be able to lend would be their own or that of their depositors, not newly printed money that devalues whatever savings people have. Take it a step further and remove the FDIC insurance and banks would fail regularly, especially in the beginning. However, people would eventually wise up like many of the people that survived the great depression and instead of even bothering with banks, they personally stored their wealth in assets or in cash, in the case of my grandmother in law, hidden in her non-functional dish washer. <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6519936705662831787.post-50820470409033515572015-03-22T11:06:54.499-07:002015-03-22T11:06:54.499-07:00I don't get it. If government deficits results...I don't get it. If government deficits results in equal increase in private sector wealth, why not run huge deficits for astronomical wealth creation? Where is the money coming from to finance the deficit? Government must borrow it. In that case it came from the private sector. There is no net gain in wealth to the private sector then when government spend the money it got from the private sector to begin with. $1.5T that the private sector lent to the government came back so no net gain there. If on the other hand the Fed printed money to cover the deficit that same money must be repaid via taxes which again represents no net gain to the private sector. In fact there is a reduction in wealth because of added cost of financing the debt. Additionally there seem to be a confusion between wealth and money. Increase in money quantity is not synonymous with increase in wealth otherwise Zimbabwe would be the wealthiest nation on earth.Jovanhttps://www.blogger.com/profile/03612283775792707516noreply@blogger.com