"In the world of common sense an object cannot increase in value if the object itself has not grown or has something added to it."

Nonsense. An object, any object, is only worth something when exactly 2 people agree on what the value of it is: The buyer and the seller. If you buy a house, it increases in value because YOU say it does, and you find a buyer that agrees.

No object has lasting intrinsic value. Not houses, not gold, not even food or oil. Furthermore, the price of anything is elastic because of the above mentioned principle. If you want to sell something, your options are to either sell it for what you want and wait to find a buyer who will pay, or lower your price until you find a buyer quickly.

Further, I'm surprised that the conspiracy community really buys into this notion that we should be backing our economy with gold, and that banks create money through debt. You guys seem to lean towards loving freedom and believing in merit. If money were backed by gold, who do you think would own most of the gold? Answer: not you.

Banks do not create money through debt. Debt (and fed reserve money for that matter) represents future productivity, which is about the only thing worth investing in. In other words, YOU create money by taking on debt. When you borrow money, you are promising the person lending it to you that you will cut them in on a portion of your future productivity for a certain amount of time. When you buy a house, you are really convincing the bank that you are going to be productive for a certain period of time, and they have various formulas to judge whether you are worth the risk or not. The reason why they demand to get most of that payment in the first half of the mortgage is because nobody can predict the future 30 years out, so its safer for them to recoup the majority of it as quickly as possible.

Now, this is OK if you are buying an object that appreciates, like a house (that is, if you can convince someone it appreciated, which is generally easy to do.). In a sense, you are using your house to store a little bit of the work that you have already done (ie building equity). If your house doesn't depreciate, which is a risk, but it does happen, you should be able to access some of your stored wealth in the future by either selling your house, renting it out, or tapping your equity. The current mortgage crisis, by the way, happened both because banks were lax in judging who could reasonable be productive in the future AND buyers and sellers were absolutely nuts with what they were agreeing to buy and sell houses for.

Where the conspiracy comes in, if you want to call it that, is when you use your credit card to create money to buy depreciating assets. In this case, you are promising your future self is going to work a certain amount of time to pay for that xbox you want right now. Most people are out of control with their spending and eventually promise to work more than they possibly can in any amount of time in the future. This is what leads to economic slavery. I would call it greed more than a conspiracy though. Accumulating Opportunisms.

The reason why backing money with gold is a bunch of BS is several fold:

Gold has no intrinsic value. That's right, its subject to the same principle as mentioned above with the buyer and the seller, but since it is relatively rare its highly vulnerable to price manipulation. The decision to back money by gold in history was completely arbitrary based on its rarity and the ability of nobles to control the means of production. Future productivity (ie you doing work) is a better store of wealth in the short term because its less volatile. Chances are, you are going to go to work tomorrow, and the next day, and next week and flip the same amount of burgers or more. Plus storing wealth in your future productivity gives you more flexibility because you can upgrade your skills and get a better job and be more productive and therefore be more valuable to societ

By the way, I know I'm not going to convince anybody, because the federal reserve gold conspiracy is too sexy not to believe in. I'm just pointing out the way money, debt, investing and interest work in a modern capitalist society.

You don't have to believe me, you can put the principles to work for yourself. Go ahead and invest money in the stock market, or even a high yield savings account. You will observe money being created for YOU. Just remember, that money isn't coming out of thin air though, its coming from the future.

Originally posted by ldunquist
By the way, I know I'm not going to convince anybody, because the federal reserve gold conspiracy is too sexy not to believe in. I'm just pointing out the way money, debt, investing and interest work in a modern capitalist society.

You don't have to believe me, you can put the principles to work for yourself. Go ahead and invest money in the stock market, or even a high yield savings account. You will observe money being created for YOU. Just remember, that money isn't coming out of thin air though, its coming from the future.

What do you mean its not comming from thin air. When central banks "INJECT" money into the credit market, thin air is exactly where that money came from, and if it came from anything else it would be inflation.

Everything you said sounded like it came from some motivational speach cleverly designed to only show you the positive without you diving to deep into the hardship that comes with it.

If the system wasnt workable for intelligent people to get ahead, then intelligent people would end up plotting against the establishment, this way, with all the "Loopholes" smart people think they are getting away with something when in reality they are only being redirected to an unthreatening state of mind.

It isn't coming from thin air. Its coming from your next paycheck. As you promise, when you borrow it.

Let me put it another way: If I borrow $20 from you and promise to pay you back from my paycheck next week $25. Did that $25 come out of thin air? Did any portion of it come out of thin air?

Second question: Why am I repaying you $25 when I only borrowed $20? Because I might get hit by a bus on tuesday and you would be out $20. That is called risk.

When you borrow money from a bank its no different. You ask the bank for money, they look at your credit history, check if you really have a job, and see your good for it so they lend it to you. Where do they get? They borrowed it from another bank, based on the same criteria. Where did that bank get it? Probably from the federal reserve. Where did the federal reserve get it? The US government says its good for it BECAUSE WE WILL BE MORE PRODUCTIVE NEXT YEAR. That is the basis of capitalism. How is that any different or better than the us government saying it has a worthless pile of rocks sitting in Fort Knox? What, are you going to do in a gold system? Go down to the bank and demand your gold back so you can...do what with it exactly?

So then how does the bank get their money back, and how does it go up the chain so the government gets its money /word back? It comes out of your future paycheck.

What does your future paycheck mean? It means that the previous week, you flipped x amount of burgers.

When you borrow money, you are essentially promising to flip burgers for another week. Everybody wins.

"Everything you said sounded like it came from some motivational speach cleverly designed to only show you the positive without you diving to deep into the hardship that comes with it."

What hardship? That you actually have to go to work? Be productive? Actually manage your finances and control your spending? That nothing is given to you?

Life is hard. Get over it. Look around you. Look at all of the stuff you own. The clothes you are wearing. The computer you are typing on. The breakfast you ate this morning.

How much of that did you bring with you when you came into this world? It all had to come from somewhere. It all came from working (or your parents working on your behalf).

That is the way it is for everybody.

Originally posted by sc2099
Quite right. This is why financing ANYTHING is stupid. By the time you "own" your home, you've paid the bank twice what it's worth. A home is one thing, but hopefully no one who reads this forum would finance a car.

Yes but what is the other alternative? You have to live somewhere if you don't want to be homeless so you rent. Then what. You are now paying for someone else's mortgage. After renting for so many years you tally up how much money you gave to someone else so they can pay for their house and it's even more sickening. You get NOTHING in return for that investment when you leave. At least if you finance a house you build equity and you are investing in yourself. That investment you will get returns on whereas renting you get none. So again, what's the alternative? Just magically make half a million dollars appear out of a hat so I can buy my home outright?

my parents paid 80 thousand for their condo. It is now worth around 400000 and they owe about 15000 more. I would say that now matter what they paid in interest when they sell it they are going to be making money, and seeing they are about to retire that 400000 will come in very handy, no matter how much it ended up costing over the life of the loan. They could of rented and where would they be today. Well they would be 400000 poorer. And why is everything have to be about the NWO or something similar. Banks rip people off. It is a known fact. Doesnt mean they are part of some conspiracy.

As far as I've read into the Federal Reserve® (a privately owned company, no doubt!), when they loan money to a bank, that bank is allowed to loan out 10 times that amount, and it is garaunteed by the Federal Reserve®. So when a bank borrows $1 million from the Federal Reserve®, they are allowed to to loan out $10 million. The bank pays 4% interest on the $1 million to the Federal Reserve®, but the bank itself is recouping 4% from the $10 million it is loaning out. A profit of 3.6% of $10 million = $360,000 profit, from a loan of $1 million.
Wouldn't you want to have your own bank!!!

This post makes me kind of glad that my credit is trashed. At least now I pay as I go and put a little away consistently. The trap is wanting more than what you actually need to be comfortable.

and then they devalue like mad...
you see in 1913 a dollar was a dollar, we had almost 50 years of prosperity beyond any peoples imagination, we were becoming rich.
all of natural resources were plenty and almost free. by 1900 it was obvious - that hard work, frugal spending and a sound military and just government would work. and that scared the elites that ordinary people would obtain wealth and would displace their authority over global commerce. so they devised a banking scheme that would ensure the destruction of the American Dream in 100 years... we are on year 96 at the moment and your once dollar is now only worth 4 cents and next year 3 cents and following all the way down to zero in 2012.
AMERO and the NAU merger. is the only way to growth past 2012.
we can grow populations but what would they do...? Technology has surpassed our wildest dreams and now you can run a billion dollar a year enterprise such as Hienz Ketcup with what 12 people.
so, we have issues to hash out ... and I'm not so sure the members of this board post from a historical or futuristic stand point. I assisted this technological boom of the 90's and yes it was a scam - I worked for EXODUS and my personal story proves "to me" it was a scam...

[edit on 23-5-2008 by 888LetsRoll]