Puerto Rico has triggered the biggest municipal default in US history

a reply to: jrod

And the Petro dollar is dying I think last count was 56 countries off it. When it finishes dying all that currency will flood back into our economy to purchase real assets and will not go back out. We have no way to contract the money supply at that point...game over.

a reply to: Reallyfolks

Yep - my mistake - mea culpa

originally posted by: Aloysius the Gaul
a reply to: Reallyfolks

There is no such thing as a Puerto Rico dollar - the territory uses the US$.

He said Petro dollar.

That's P-e-t-r-o

a reply to: Aloysius the Gaul

Petro dollar, not Puerto Rico dollar

a reply to: Aloysius the Gaul

All good. I had to check what I posted

a reply to: Reallyfolks
Not for all of us. I'm good with the trade and barter system.
Many US States are close to default from what I understand...

a reply to: jrod

That actually is very interesting to me for some reason. We may see it some day.

originally posted by: links234
Meanwhile, Hedge funds tell Puerto Rico: lay off teachers and close schools to pay us back.

It should be noted that the island paid $400 million plus on it's debts but specifically didn't pay the $58 million debt because that debt is owned by the people of Puerto Rico. The government alluded that this was because 'they were less likely to sue.'

Puerto Rico, more afraid of the banks than of their own population.

Here is where hedge fund managers need to learn..dont hedge your bets. It s Gambling and as such they should have to deal with losing their money and not get paid back. Oh you bet a trillion bucks? and lost? No you dont get a refund because you didnt have to bet that money.

a reply to: xuenchen

When they pretty much booted the Navy out of there they cut off a lot of funding from themselves. I saw this coming from way back. They should have as well.

a reply to: xuenchen
Our economy is a damn joke and nothing the government does can fix this broken systems

originally posted by: Reallyfolks
a reply to: Aloysius the Gaul

Sigh..there is
Let's walk through a hypothetical example to show how the act of bank lending creates new money. Say that person A has $100 dollars in cash and decides to deposit this money into a bank. The bank has a reserve ratio of 10%, and so it must keep $10 in reserves but can loan out the other $90. Let's say the bank makes a $90 loan to person B.

Time to stop and recap what just happened. Person A originally had $100 cash and consequently $100 worth of purchasing power. When person A deposits this money into a bank, they still have $100 in purchasing power.

One person might be able to write that $100 cheque, but all of the bank's customers cannot do so for all their deposits.

the Bank, and the customers, are relying on most people to leave their $100 IN THE BANK - where they are NOT spending it so do NOT have $100 purchasing power.

The ability to on-loan that $90 relies upon a bunch of people foregoing their ability to buy stuff by leaving their money in the bank.

If that doesn't happen there is considerable trouble!!

This has been clearly explained in my last link, which you obviously did not read.

If you require 100% reserve - ie banks do not on-loan any money at all - then the bank becomes a warehouse full of cash - which means people have to PAY to store their money there - because that is the only way the bank will get any income - which they need to pay the ground rent and a caretaker if nothing more!

As a result of that deposits would shrink in value......effectively of course there would be none - why would anyone bother?

And then you me and probably 80% of the rest of eth world would be on the dole queue - except there would be no dole, since here would be pretty much economy any more, so no taxes, no welfare, no roading, no anything else.

That may sound appealing to you and other nutters, but fortunately there are relatively sane people in charge....even if they are greedy!

If Fractional Banking did not exist, someone would earn a nobel prize or more for "inventing" it.

a reply to: Grimpachi

This is true, however I am against them using a tropical island for target practice.

For a fraction of what the US gives Israel we could bail Puerto Rico, our own commonwealth, out of this hole with the FEDs monopoly money.

What really bothers me is violent crime has been on the rise for many years now in PR, now the economical backlash from this could really escalate the violence over there. This is my biggest concern for my friends on the island.

a reply to: jrod

I gave upon them when they voted down several plans to convert to renewables and opted to stay with importing their energy needs (fossil fuels). The current politicians need to be booted out and the people there have the power to do so, but until then they are unsustainable and it is through their own short sightedness both military usefulness and mones brought in and inability to plan ahead in lieu of a buck.

a reply to: Aloysius the Gaul

I don't have a problem with fracional reserve banking.

I have a problem with private fractional reserve banking. We don't need it and we don't need to charge usury, which causes inflation. A system such as this was working quite well in Libya.

We need a federal bank ran by the government, with all profits returning to the people.

I don't want people getting rich off of loaning out our money. The only ones who should profit is us. The banks are making a killing by doing nothing but moving other people's money around.

And when they make bad investments, tax payers have to bail out the private banks.

And they truly are/were scamming the system, which is why Iceland jailed several of them.

How can we know for certain that they create money out of thin air? There is more debt in the world than there is currency to pay off the debt. If they weren't creating imaginary money, the amount of total debt would never exceeded the total monitary supply.

The world is in debt over 200 trillion dollars. Good luck finding 200 trillion to pay that off. Hint it simply doesn't exist. So that means some of it is imaginary, but we are supposed to pay it back with real currency.

Private fractional reserve banking and usury are not feasible monitary systems. By there very nature they create inflation and are bound to fail at some point.

originally posted by: Aloysius the Gaul

The Bank, and the customers, are relying on most people to leave their $100 IN THE BANK - where they are NOT spending it so do NOT have $100 purchasing power.

The ability to on-loan that $90 relies upon a bunch of people foregoing their ability to buy stuff by leaving their money in the bank.

I think it is important to distinguish between "cash" and "money". The former is notes and coins. The latter is anything that will be accepted in exchange for goods and services. It includes cash, of course, but also includes bank deposits. If you write me a cheque for $40 that I am willing to accept, then that is money. I pay the cheque into my account and our respective banks, in settling up their business at the end of the day, simply make an accounting adjustment in their ledgers, to the effect that your bank is now "down" $40 and my bank is now "up" $40.

I would rephrase your second sentence in the quote as follows: The ability to on-loan that $90 depends on the expectation that only a small fraction of it will be withdrawn IN CASH at any one time.

This is how the system in Reallyfolks' original example can support total deposits of $1000. So long as people behave as expected, and withdraw no more than $100 IN CASH at any one time, then there is enough cash in the system to satisfy their needs. But there can be endless non-cash spending taking place in the meantime - people simply pay by writing out a cheque.

Of course, if banks misjudge things and end up in a situation where people are trying to withdraw more cash than they have available (either because they have over-extended their lending by attempting to support, say, $1500 of deposits on the basis of just $100 in cash, or because there is a "run on the banks" as customers lose faith in the system), then you are perfectly correct: "There is considerable trouble".

a reply to: Aloysius the Gaul

Read that article on wall street journal as well or was it Bloomberg. Regardless my example is dead on, purchase power is created with no money to back it, the Fed prints money out of thin air I believe at a ratio of 260 dollars for every 1000 printed. The fiat system is back by nothing but imagination. You can argue all day, these three items cannot be disputed and money in fact is created out of thin air. That Bill is coming due as the petro dollars keeps getting replaced

a reply to: links234

The population has access to guns and machettes.

And they aren't afraid to use them effectively.

I'm not sure they aren't afraid of the wrong crowd.

originally posted by: grey580
a reply to: links234

The population has access to guns and machettes.

And they aren't afraid to use them effectively.

I'm not sure they aren't afraid of the wrong crowd.

I always have said we need to back our currency with lead

originally posted by: jrod
a reply to: Reallyfolks
Not for all of us. I'm good with the trade and barter system.
Many US States are close to default from what I understand...

States are always close to default. No one wants to keep a surplus on hand because it represents over taxation. At the same time though the states can't run at a huge deficit since they can't invent their own currency.

originally posted by: xuenchen
This could be a plot to "force" a Statehood vote.

Look at all the Democrat votes just sitting there wasting away !!

A perfect crisis.

51 gets it done.

edit on Aug-04-2015 by xuenchen because: [_-o-_]77

They had a vote. No need to force it.