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Why Excessive Socialism Doesn't Work

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posted on Sep, 1 2018 @ 11:26 PM
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a reply to: ScepticScot


A 10% across the board increase actually increases inequality (%s on bigger number). Which is why there needs to be measures to reduce income inequality.

If I were to say "each group gains an extra $1000" then the level of inequality would change, I specifically said a percentage so the ratio between the two groups stayed the same, it doesn't matter if one group is gaining more in the process.
edit on 2/9/2018 by ChaoticOrder because: (no reason given)




posted on Sep, 2 2018 @ 12:01 AM
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a reply to: ScepticScot


However if you want a set or even more regulated system of money creation then that is a pro goverment intervention argument. What we have now is a highly market driven system of money creation which has both advantages and disadvantages.

That is a ridiculous argument, a market driven system of money would be something created organically by a society wishing to conduct trade and not something concocted by bankers. One example would be cryptocurrency, no one is forced to use it yet they do, and it's very possible to create a new cryptocoin with an endless money supply yet the majority of them have a limited supply. If we look back at history we can see people have always used currencies with intrinsic scarcity, from shell money to the gold standard, and none had the type of regulation and manipulation we see today. Banks along with the federal reserve now create their own rules and have full control over the fiat money supply.


originally posted by: ChaoticOrder
What do rare shells, huge boulders, precious metals and bitcoins all have in common? Obviously, they are all scarce. However, more importantly, no one was forced to use any of these currencies. In each case it was a spontaneous voluntary formation based on group consensus. Natural emergence fueled by the needs and desires of the masses. They recognized that a currency must have certain properties, and they chose accordingly from what was available to them.

True Money: Part I



posted on Sep, 2 2018 @ 01:23 AM
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a reply to: ChaoticOrder

The creation for money is driven by the demand for loans and willingness of banks to supply those loans. Its very market driven.

Don't want to go to far off topic but one of the many reasons Crypto aren't any use as a currency is that there is no limit on supply. Crypto A may set a limit of x but Crypto b can then be created (which functionally identical) with a limit of x again doubling the money supply.

The adoption of a standard money isn't an organic event, it's firmly driven by taxation. Whatever currency (dollars, gold, pretty seashells) becomes the default currency as there is a continual and unavoidable demand for that currency.



posted on Sep, 2 2018 @ 02:41 AM
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a reply to: ChaoticOrder

If people were less fearful of socialism and less indoctrinated into capitalism the more they are likly to concede there are some good things about socialism.

If people were less fearfull of capiltalism and less indoctrinated into socialism, there more they would likely see the beneifts of private enterprise.

when people are indoctrinated into one extreme or the other, the greater the likelyhood of mistrust, distrust and even hostility and eventaully violence.

The right mix of both would likely bring about long terms befefits for all.



posted on Sep, 2 2018 @ 03:09 AM
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originally posted by: ScepticScot
a reply to: ChaoticOrder

The creation for money is driven by the demand for loans and willingness of banks to supply those loans. Its very market driven.

Yeah, if we have a system which allows the banks to loan way more money than they have it's perfectly possible for them to hand out loans to anyone who wants it, but it's a very dangerous practice which can lead to a currency based debt bubble, similar to the global debt crisis which was caused mostly by an abundance of debt in the housing sector. A currency with a strict limit does not allow the money system to become dominated by debt because in order to make a loan the entity making the loan needs to actually have the money. With small reserve limits a bank can loan out far more than they actually have, even if they reach the limit they can always ask the fed to create more money for them via bonds or some other process which creates more debt-based money. The population never decided they wanted this type of money system, in the U.S. it was forced upon them with the abolition of the gold standard, at one point making it illegal to own any significant amount of gold. That's not to say fractional reserve banking is an entirely bad thing, it can have some benefits if operating withing reasonable limits.

originally posted by: ChaoticOrder

Remember that when the Government gets new money from the Federal Reserve it's actually loaning that money. The Government must pay interest on this debt, however the Federal Reserve will claim nothing sinister is going on here because all the interest it gets from the Government goes back to the US Treasury. That is in fact true, and you might wonder why they would even bother charging interest in the first place if that's the case. The reason for it is complicated but it basically helps mitigate inflation rates, or so they say.

Now this sounds all fine and dandy on the surface, however it ignores the fact that a very large portion of the money supply actually exists in the form of bank credit created by private banks, and the interest paid to the private banks is not paid back to the treasury. Link this with the fact that the Federal Reserve makes extremely low interest rate loans to its member banks which proceed to put those loans into reserve and multiply that money through fractional reserve banking and you begin to see the true sinister nature of this enterprise.

True Money: Part II



Don't want to go to far off topic but one of the many reasons Crypto aren't any use as a currency is that there is no limit on supply. Crypto A may set a limit of x but Crypto b can then be created (which functionally identical) with a limit of x again doubling the money supply.

Well at least you admit there needs to be a limit on the supply of a currency. However there are several reasons this argument is flawed. First it takes energy to mine cryptocurrency, which costs money. Second, clone coins which offer nothing new will die off and the best will rise to the top and dominate the market, which is exactly what we see. The thing that truly makes Bitcoin superior as a currency system is that we don't need to trust the government or the banks to properly manage the creation of new currency, we just need to trust the math.


originally posted by: ChaoticOrder

Now consider the way bitcoins are created. Not only is there a finite limit placed on the amount which can ever be created, but the generation of new bitcoins requires a considerable amount of electrical energy to perform the calculations required. Like the stone coins, this gives them some sort of underlying value which is determined by the amount of energy put into their creation.

However once again the main force driving the increase in the value of bitcoin is simply the demand for bitcoin. But why is there demand for bitcoins if no one is forced to use them? Bitcoin emerged naturally, to include many of the ideal properties I listed earlier. It's decentralized, fairly anonymous, provably scarce, highly divisible, and very predictable (since we always know how many coins are in circulation).

True Money: Part I



posted on Sep, 2 2018 @ 03:28 AM
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a reply to: ChaoticOrder

I think you touch on, what for me, is possibly the main concern with current banking system. That as the Fed (or whatever central bank) will basically loan to banks on demand any reserve requirement becomes largely meaningless. Banks create loans first and worry about reserves later. This can easily escalate bubbles or allow banks in poor financial position double down and hope to ride it out (with potentially disastrous consequences.

Now there are as you mention benefits of reserve banking. The key one is that it allows liquidity in the economy to be determined by demand. Not a preset amount by goverment, nature or algorithm.

I'll reply about Crypto in a separate post if you don't mind.



posted on Sep, 2 2018 @ 03:43 AM
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a reply to: ChaoticOrder

There are a number of reasons why Crypto (at least as we know it now) doesn't work as a currency. These include but no limited to.

Fixed supply - The math is based on either creating a fixed amount or limiting the rate at a preset rate. There isn't anything in this to determine if this is the actual amount of money that is needed in circulation. In a worst case scenario this could be incredibly deflationary.

Costly - the 'mining' operations used by bitcoin and others use a tremendous amount of real resources (computers and energy) that could be far more productively used elsewhere.

No set demand - taxation drives acceptance of a currency, unless a goverment adopts a crypto then they rely on the 'greater fool' process of acceptance. At some pont there are no fools left.

No intrinsic value - in the absence of tax driving value then currency falls back on intrinsic value, here crypto has none.

No lender of last resort - During economic downturns there is no ability to increase liquidity in the system when required. It also makes counter cyclical economic policy much more restricted.

Unlimited supply - new coins don't need to offer anything new, they just need to offer the same and get enough people to initially accept them (which can easily be manipulated). The supply is therefore effectively unlimited.



posted on Sep, 2 2018 @ 03:53 AM
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a reply to: Azureblue


If people were less fearful of socialism and less indoctrinated into capitalism the more they are likly to concede there are some good things about socialism.

Which is why I do concede there are some good things about socialism. I was a pretty hardcore socialist for a while, believing in the idea of a resource based economy where all production is highly centralized and managed by the government. As I've matured and my understanding of the world has developed I have come to understand why those ideologies are flawed and why we should lean towards free market capitalism while supplementing it with socialist policies where necessary.



posted on Sep, 2 2018 @ 04:58 AM
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a reply to: TrueBrit




Of course, your attitude to what is and is not socialism is likely broken, from lack of experience of it, and only having lived in a debauched hellish hypercapitalism, where no one is supposed to be moral in the way they conduct business, and in fact amorality is rewarded more voluminously than any other trait.


Yes we get that Britain like Australia has a good free health care system unlike the US super expensive system. But then to say that Britain is some sort of non-hypercapitalism just and fair system leaves you open to ridicule. Just in case you forgot think:

to name a few..
City of London - law unto themselves
Libor rate fixing impacts on the whole world
Expansionist empire invading and looting other sovereign nations
Mercenaries used furthering UK corporations ambitions to distance the UK Govt from "bad press"
LBMA - Bullion Market
Shell - BP & their interests in Nigeria, aside from other incursions
Sharing of the lucrative drug trade from Afghanistan with the US

Bail out of Banks in Britain by the taxpayer - non-citizen instigated Socialism handouts for the banking system

Lets not get into the House of Lords and their non-elected status.



veiled fascist apologist piece of effluent


tsk, tsk, a bit triggered?



posted on Sep, 2 2018 @ 05:09 AM
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a reply to: ScepticScot


Fixed supply - The math is based on either creating a fixed amount or limiting the rate at a preset rate. There isn't anything in this to determine if this is the actual amount of money that is needed in circulation. In a worst case scenario this could be incredibly deflationary.

Well I don't particularly buy into the idea that a currency which holds value or even increases in value is a bad thing for the economy. When people have more money they tend to work less and spend more, businesses make more profit, and it's a process that benefits everyone. The logic behind moving away from a gold standard was based on the idea that people will save and not spend when the value of the currency is rising, so using a fiat currency they can create more when necessary to suck that extra purchasing power from the currency and encourage people to spend. Not only do they suck the extra value, they create so much money that the value consistently falls. Also, companies such as Bitpay and Coinbase have repeatedly reported that whenever the value of Bitcoin surges the level of spending increases in response, because people can spend less BTC to get the same items.

originally posted by: ChaoticOrder

Mainstream economists will argue we need central banks to be the mastermind behind maintaining our economic stability, but central banks only really have a purpose when the currency is a debt based fiat paper money. Under a limited money system they have no such mechanisms and they are at the whim of the natural free market forces. However they believe their feeble human minds to be wiser than the free market.

They believe they can use "mechanisms" to artificially force the market to where they want it to be, regardless of the short and long term side effects. They didn't seem to realize people only save money so that they can spend it later, if only they had waited a short time the savings would have came back into circulation and even if they didn't the market would become accustomed to the new level of spending and saving.

True Money: Part I


When the authors leave the Great Depression aside, and plot average inflation and output growth rates for all countries for all five year episodes—which begin in 1820 for some countries in the sample—except 1929–1934 it turns out that 65 of 73 deflation episodes involved no depression while 21 of 29 depression episodes were not associated with deflation. In other words, 90 percent of deflation episodes did not culminate in depression. From this the authors conclude, "In a broader historical context, beyond the Great Depression, the notion that deflation and depression are linked virtually disappears." This conclusion is also supported by the slope coefficient and the standard error for the data excluding the Great Depression, which are 0.04 and 0.03 respectively.

When the regression is run for all episodes including the Great Depression, the result is that a 1-percentage point drop in inflation is associated with a piddling decline in the average growth of real output of .08 percentage points with a standard error of .03. While this result is statistically significant it is certainly not economically significant.

Deflation and Depression: Where's the Link?



Costly - the 'mining' operations used by bitcoin and others use a tremendous amount of real resources (computers and energy) that could be far more productively used elsewhere.

It also takes a great deal of energy and resources to mine precious metals, doesn't mean there's no point to it. Also there are several alternatives to the proof-of-work algorithm which do not require large amounts of energy to mine new coins.


No set demand - taxation drives acceptance of a currency, unless a goverment adopts a crypto then they rely on the 'greater fool' process of acceptance. At some pont there are no fools left.

I'm pretty sure there is at least one government which uses crypto as a currency already, a few months ago I was reading about a country which was in the process of designing a cryptocoin to act as their currency. And if you're trying to imply Bitcoin is some sort of pyramid scheme that argument is invalid. Ah now I remember, we've had this debate before...

Bitcoin does not fit the definition of Ponzi scheme for various reasons:

* There are no paid dividends to any investors.
* The purpose of using bitcoin isn’t to recruit new participants.
* There’s no centralized body that funnels money up to the top.
* Unlike Ponzi schemes, Bitcoin will still have value and continue to function even if no new participants join the ecosystem.

Why Bitcoin Isn’t a Ponzi Scheme



No intrinsic value - in the absence of tax driving value then currency falls back on intrinsic value, here crypto has none.

Fiat debt-based money has no intrinsic value either, it's literally backed by debt and only has value based on the credibility of the government issuing it. If cryptocurrency were truly worthless no one would assign any value to it.

originally posted by: ChaoticOrder

Consider the huge stone coins, does the intrinsic value of the stone differ from the face value of the stone coin? Yes it certainly does, the historic value of the stone can even give it more value. So you see there isn't always a definite link between value and real tangible objects; historic value has no tangible properties. The face value of the stones is also determined by other important factors.

The energy which went into creating those stones plays a large role in determining their value. You cannot redeem the stones for the energy which went into creating them, yet much of their face value is still determined by the amount of energy burned up in their creation. In this case the money supply can be inflated without any damaging effects because they aren't easy to create like paper money.

True Money: Part I



No lender of last resort - During economic downturns there is no ability to increase liquidity in the system when required. It also makes counter cyclical economic policy much more restricted.

It is certainly possible to have fractional reserve banking based on cryptocurrency, the actual crypto is treated as the reserves and the balances on the bank accounts are altered accordingly.


Unlimited supply - new coins don't need to offer anything new, they just need to offer the same and get enough people to initially accept them (which can easily be manipulated). The supply is therefore effectively unlimited.

No it's not because there's still an overall market cap, it's like $238 billion right now. Many new coins could be created without the market cap changing at all. And the fact is it's very hard for new coins to gain dominance, the top 10 coins account for more than 80% of the entire crypto market value and Bitcoin accounts for 52% by its self.
edit on 2/9/2018 by ChaoticOrder because: (no reason given)



posted on Sep, 2 2018 @ 06:05 AM
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a reply to: NthOther




The computer you posted that message on was created by our quasi-capitalist system.


Not entirely accurate. Much of the hardware was innovated by the Military Industrial Complex with their taxpayer funded largess. We get the benefit of cheap consumer goods a few years later. Take the colour TV as an example.

When the MIC stop funding politicians and lobbyists and innovate solely on venture capital without Govt per-orders then you may have a point.
Look at the development of the F35 fighter as an obvious example.



posted on Sep, 2 2018 @ 06:06 AM
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a reply to: ChaoticOrder

The aversion to the risk of deflation is pretty much core to mainstream economics. The rights and wrongs of that are open to debate, I would agree at least that we that moved too much the other way with targeting small inflation to prevent deflation, rather than aiming for price stability.

Cost and energy to mine minerals is required by nature and we constantly adapt technology to reduce that cost. Metals also have actual intrinsic value.

The cost of mining of bitcoin is entirely artificial, designed to increase in cost and creates no inherent value. The idea that the energy used creates value is just absurd with even a little critical thought.

Biticoin isn't a ponzi but it certainly seems to be a bubble with little or no long term future. It's only value comes from its use as a payment system(and there are far better methods) , however speculation has made it even less suited to this.

Increasing liquid requires increasing the monetary base, fractional reserve banking on Crypto just increases the debt, one of the main things you are arguing against.

Taxes drive fiat currency value, as goverment will always accept their own currency in payment. Money is basically always an IOU, with fiat currency taxation is at the end of the IOU chain.



posted on Sep, 2 2018 @ 06:22 AM
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a reply to: AboveBoard




True maturity lies in Interdependence. Neither dependent nor selfish, both participating in one’s own destiny and self-actualization, and communal responsibility in the context of creating a compassionate and secure society. Individual worth and determination balanced with contribution to the betterment of the whole.


So true. I cynical that a solution for the betterment of the masses will ever be allowed to flourish.
We have 2 so called opposing parties in liberal democracies and yet they take turns feathering their own nests adn either getting further into debt or being forced to privatize state assets.

The system is designed to pit 1 against the other. Meanwhile the power for a a nation to create their own currency has been taken away. Controlled by the ultimate owners of the Banking groups in the World.



posted on Sep, 2 2018 @ 06:38 AM
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a reply to: ScepticScot


The aversion to the risk of deflation is pretty much core to mainstream economics.

I'm aware, and I disagree with this foundation for reasons already stated. It's a system promoted by our corrupt banking institutions because it benefits them to an unfair degree and spreads this mentality we should be afraid of falling prices but be perfectly content with rising prices.


The idea that the energy used creates value is just absurd with even a little critical thought.

I never said it creates all the value, I said it plays a role in determining the value, which it clearly does upon some critical thought. Every time the block reward halves, miners are spending the same amount of energy but getting less coins in return, and it does affect the price because miners don't want to sell for a price that isn't profitable to them. I'm quite looking forward to the next halving.


Biticoin isn't a ponzi but it certainly seems to be a bubble with little or no long term future.

I've heard people say that since 2011 when I first discovered Bitcoin, and the future is looking brighter now more than ever, with a lot of breakthroughs happening in the crypto community over the last couple of years.


Increasing liquid requires increasing the monetary base, fractional reserve banking on Crypto just increases the debt, one of the main things you are arguing against.

It does increase the money supply by creating new bank credits just like normal fractional reserve banking. Every dollar created with normal fractional reserve banking is also debt based, not a single dollar is created without also creating debt in the process.

You might think that the credit loans come from the existing reserves or from other bank accounts, but they don't, the bank credit simply comes from thin air like I just said. Keep in mind this process is another way that new money comes into existence, separately from the debt monetization process. These are the two main ways that the money supply can be expanded. These bank credits flow through the banking system and virtually act as real money, so in the process of creating new bank credits out of thin air they essentially expand the money supply.

True Money: Part II

edit on 2/9/2018 by ChaoticOrder because: (no reason given)



posted on Sep, 2 2018 @ 07:08 AM
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originally posted by: oldcarpy
a reply to: TrueBrit


I remember the seventies in the UK. Not good - (leaving aside the clothes and hairstyles)

&0's Strikes and Blackouts

When the uncurbed Unions brought the country to it's knees. Strikes, electric blackouts, the three day week and uncollected rubbish rotting on our streets. Workers afraid to change a bog roll in case they were accused of doing someone else's job.

Yes, those were the days, eh?


Some unions were overblown but what about the coal miners?
They got pandered to with billy clubs in a disgraceful show by the Thatcher government.



posted on Sep, 2 2018 @ 07:44 AM
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a reply to: ChaoticOrder

I'll move on from the inflation/deflation as I think we more or less agree that.

Energy expended still doesn't give it value as what is produced has no inherent value. It may create a artificial cost floor but nothing more. Bitcoin is actually detrimental to economies as the cost of running the system is way more than any value it adds.

Not sure how the future is looking brighter than ever considering the collapse of value since last year. The vast majority of activity on bitcoin seems to remain speculative and it shows little sign of adoption as an actual currency,

It isn't the monetary supply that would be the problem but the monetary base. New money could only be created by increasing private debt as bank reserves would be fixed to the level in circulation. As economy grows then debt would also grow with the demand for new money.



posted on Sep, 2 2018 @ 07:46 AM
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there isnt an excessive socialism. it is called communism. it is an utopian regime as long as there are seperate communes.
edit on 2-9-2018 by Damla because: (no reason given)



posted on Sep, 2 2018 @ 07:57 AM
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a reply to: ChaoticOrder




Banks being able to generate money on demand with little or no reserve requirements doesn't exactly strike me as the most free market system, it lets the market freely create debt but I don't think that really fits the definition. A currency should not be something that can be created out of thin air at a whim as if it were sand on a beach.


But they have been for a while. One figure quoted is that through fractional reserve system they lend out 50 x every dollar they have on deposit.

Long article about how these banks went quietly borrowing money overseas
www.moneymorning.com.au...


That Australia had the best prudential regulation in the world. That Australian banks were different to all those dirty foreign banks.



www.ainsliebullion.com.au... 722/default.aspx


SENATE PASSES ‘BAIL IN’ LAW – HOW SAFE IS YOUR CASH NOW?


So looks like depositors are no longer guaranteed their money is safe.

The Cyprus crisis of a few years ago was a test run on seeing how the populace would react to being fleeced; they used the excuse for the MSM/populace that it was brought on by shaky Russian Mafia Money.

We're being prepared for the big mother of all collapses/haircut of the populace.
Recently they passed legislation in Australia that any cash transaction over $10 k even though through a legitimate Co transaction will be deemed non tax deductible as an expense. They are doing away with cash and yet the black economy still exists. Corrupt banks and politicians turn a blind eye to the big movers of capital from tax avoidance.
We had a GST tax imposed that was supposed to cure all ills. Yet people are still being screwed more and more.

Bubbles are created by the by the creation of easy money and asset classes favoured by the banks. A recent tightening of lending criteria is throwing a lot of people into higher rate mortgages even though the value of the asset hasn't decreased.

They're preparing us for the Mother of all depressions. Capitalization of some companies reflects nowhere the reality of their true earnings per share. Its the old story like in the 1920's. When the the time is right they will crash the system and come back in and buy everything for pennies in the dollar.
The only problem being is that it wont be a 10 year depression like the 20's. The debts is in the trillions

www.cadtm.org...


In an era when calculations in the trillions are commonplace, a figure that hasn’t yet been heard regularly is “quadrillion,” but that may be about to change. As total global debt continues its inexorable and menacing rise, surpassing $233 trillion in Q3 of 2017, it is projected to hit a quarter of a quadrillion dollars sometime next year. For those not sure what it means, quadrillion is 1 followed by 15 zeros, or one thousand trillion to look at it another way. Whichever way you look at it though, there’s no avoiding the fact that this active debt volcano will eventually explode and cause a financial cataclysm of unprecedented ferocity.

The colossus of record-breaking monetary indebtedness has appeared in every sector of economic activity. From banking systems to governments, from private businesses to households, levels of debt have increased insanely since the financial meltdown of 2008, which itself was brought about, we were told, by excessive debt.


What you gloss over is that under true capitalism Banks wouldnt have a stranglehold over money creation.
Look what happens to Central banks that the Rothschilds havent got their fingers in. eg Iraq Iran

Qaddafi was deposed because he pushed for a Gold based Dinar to bring sanity and value back to money.

Most central banks have surreptitiously sold off their Gold reserves - When a new monetary system comes in after the depression who controls the Gold will be king.

Theres reasons why the "true" price of gold is suppressed. Going historically Gold should be trading around some say upwards of $20,000 per ounce.

If we lived in a true capitalist society these things shouldnt exist.
What you all neglect to admit is that we live in a plutocracy where wealth sets the rules.

Communism/socialism/capitalism - blah blah - TV talking points for all of you while we live under the yoke.



posted on Sep, 2 2018 @ 08:23 AM
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a reply to: ScepticScot




The adoption of a standard money isn't an organic event, it's firmly driven by taxation.


Income taxation didnt come about till after the 1st world war and yet money was printed long before that.
Maybe you;re not explaining yourself well?



posted on Sep, 2 2018 @ 08:31 AM
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a reply to: ScepticScot




Unlimited supply - new coins don't need to offer anything new, they just need to offer the same and get enough people to initially accept them (which can easily be manipulated). The supply is therefore effectively unlimited.


And this hits the nail on the head of what governments actually do - they pay off todays debts in the future by inflating the economy, a further debt robbing the worker of his future work/output through his future "tax paying" capability.



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