BIS: The most powerful bank in the world announces the crash

mistersmith
Whatever money I have made in my working life I've made by taking raw materials and making them into something useful and hopefully appropriate to its surroundings. That seems to me to be the honest way to prosper, whereas financial speculation and usury are neither honest nor honourable in my eyes. This is, I agree, a simple and limited view, and quite appropriate to my understanding of the situation. Personally, I'm happy that I can still hear the still, small voice of my conscience, since I've not had to ignore its guidance in the past.

We do the opposite then, my skills tend to revolve around creating digital objects which is creating from nothing rather than from raw materials.

I wonder if I might, without causing offence, draw a parallel between your feeling that Fractional Reserve banking could be a good system if it were only administered properly, and my feeling that Communism (as practised by the disciples of Christ, rather than later models) would, if only it were properly organised, be better than Capitalism ?

I think that both Communism and Capitalism are fine systems. They both have human nature as the root cause of their failure. In Communism no one is able to work harder in order to earn more, which causes everyone to become unproductive while in Capitalism the pursuit of profits and consolidation of companies reducing competition ultimately results in poor wages for the people and obscene profits for a few. When the systems aren't pushed to their extremes (such as say China now or the US in the 1940's-1980) both work well. Fractional Reserve banking is similar, when the money multiplier isn't forced too high it can work. I think fractional reserve banking will get more stable as time goes on, I know there's a lot of conspiracies about moving to a cashless society and there could be some merit to a few of them but one of the beneficial side effects of such a move is that there's no longer any physical good to withdraw from a bank which makes bank runs impossible.

Although you may easily feel that no such parallel exists, would you also deny that Fractional Reserve banking is one of the major weapons deployed by those who would concentrate wealth amongst the few, and impoverish the rest of us ?

No. The bankers do that through debt based currency, not through fractional reserve banking itself.

reply to post by Aazadan


Yes, we do seem to occupy rather different universes Aazadan, I'm not even sure what a "digital object" is, but that seems to be no bar to a fruitful debate.

In my last paragraph of the previous post, I made a distinct error, FR banking is not a weapon at all. Forgive my tendency to rant, it is one of the indulgencies I allow myself in old age. I should have said it is part of a system which widens the gap between rich and poor ........ but I was on a roll.

Something you said stood out from all the rest.
It really bothered me.
I mean, it really bothered me.
It may well be that you are correct, but if so, there is little hope for homo sapiens.

You will be familiar with the concept of "The Law of the Jungle."
Much selfish behaviour flies under this flag, does it not ?
A closer look at the animal kingdom reveals a surprising picture however.
Few animals kill more than they can eat, or take from Nature more than will meet their immediate need.
If we compare human behaviour against this natural situation, I would have to admit that many humans are not content until they have amassed more than they can possibly need, or use effectively.
From this, I would infer that selfishness and greed are as unnatural in mankind as they are amongst the "dumb animals," which set us such a fine example of how to behave.

So while you may be right in the (for me, very depressing) assertion that human frailty has scuppered communism and capitalism, and that both could work if practised by a more enlightened public -- I see that as a strong indication that our problems are not political or fiscal, but spiritual.

Without spiritual awareness and maturity, we can and do make a mess of the finest systems of government and finance, and no matter how we change the external situation, the fear and uncertainty in our hearts and minds must be dealt with.

mistersmith.

Perhaps we all ought to read once more the history of the Wiemar republic? a barrow load of useless paper to buy a loaf of bread? I once owned a twenty million Duetchmark bank note just black ink on white paper, printed on one side.

Crash the market, then buy everything that was left in ruins, then own our lives a little more...the same monopoly game we v been playing for decades, the only thing is...we dont get the get out of jail card.

mistersmith
Yes, we do seem to occupy rather different universes Aazadan, I'm not even sure what a "digital object" is, but that seems to be no bar to a fruitful debate.

It ranges from the creation of a 3d model like Shrek to the code this website runs on. Basically, if it's some form of electronic information or code I can create it, analyze it, modify it, or anything else. Sadly, those skills aren't in high demand in my area (though they're in high demand in many areas of the country).

A closer look at the animal kingdom reveals a surprising picture however.
Few animals kill more than they can eat, or take from Nature more than will meet their immediate need.
If we compare human behaviour against this natural situation, I would have to admit that many humans are not content until they have amassed more than they can possibly need, or use effectively.
From this, I would infer that selfishness and greed are as unnatural in mankind as they are amongst the "dumb animals," which set us such a fine example of how to behave.

Maybe this will be a little less depressing. Even animals can want more than they need. Something most any dog owner can attest to, is that sometimes on walks your dog will see something that it wants to bring home, either as a treasure or as a toy. My moms dog which I often care for, loves to visit the horse stables here in town because he loves the shaved off portions of horse hooves, he takes them home and buries them in the yard as his treasures. Another one would be tennis balls, many dogs love tennis balls and will try to bring one home with them should they find a discarded one on a walk, even if they already have plenty of toys including tennis balls at home. These represent desires beyond needs. The difference between us and our dogs is that we have the capability to want more sophisticated items and have in theory developed a system more fair than might makes right for the acquisition of these items.

It's more than just human nature these systems are fighting against, it's the nature of sentient life, and it's not all bad because that desire for more causes people to produce in order to obtain more wants. Greed in small amounts is very good. In large amounts it tends to be destructive. Like just about anything in nature, moderation is the key.

So while you may be right in the (for me, very depressing) assertion that human frailty has scuppered communism and capitalism, and that both could work if practised by a more enlightened public -- I see that as a strong indication that our problems are not political or fiscal, but spiritual.

It doesn't take many enlightened people, the framers had it right. They were wise enough to realize that in any proper system, no one can be trusted on a mass scale. This is the real wisdom of the constitution. In government if one party becomes trusted they amass power and become a dictatorship, even when coming out of benevolent intentions. In economic systems we see the same thing. Communism failed because the workers were trusted to produce for the good of the whole, sometimes at the cost of the individual. Capitalism has failed because the employers were trusted to produce for the good of the whole, at the cost of the individual.

In a proper system there are checks, balances, and regulations to prevent one side from being too trusted and amassing power. I don't know what that better system is though, I have some ideas and maybe one day I or someone else will figure it out, but there's still a world of difference between creating a less flawed system and actually implementing it.

I also think this is something that needs to be refreshed every couple of generations. When Thomas Jefferson said "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." he was entirely correct. The natural cycle is people are born into a good system, through human nature that system is modified to become more productive. Over time those modifications corrupt the system from it's original intent. The people who have modified this system never understood the old one, or the reasons for things being the way they were. Over time the benevolent system becomes corrupted and needs replaced.

We can take Glass-Steagall as an example. For years prior to officially repealing it, we had been "reinterpreting" the rules and weakening it. It was seen as a good thing because it allowed for an easy flow of money as well as bank profits. The downside however was that we had the 2008 collapse which resulted in too big to fail and an absolutely massive expansion in bank assets at the cost of the citizens. The bankers probably weren't being malevolent (other than a few at the very top), the politicians actually thought they were helping the people, and many members of the public supported it. We all know the results of how that turned out though.

More than it being uniquely human nature to obtain things, I think it's human nature to modify things. It's a trait we don't share with other animals. That trait is what ultimately destroys a system.

reply to post by Aazadan


Leaving aside dogs and their tennis balls, for after all their behaviour is modified by ours, I still feel that the animal kingdom progresses more by cooperation than by competition. There are bound to be exceptions, and our analysis of animal behaviour tends to the anthropomorphic, but I see an overall cooperation within nature, and even between hunter and prey where animals' awareness of the cyclic nature of life supersedes the individual's will to live. For that reason, the fact that everything seems to eat everything else does not send me into a panic regarding my own survival as an individual.
This naturally colours my thinking.

You paint a very recognisable picture of the way our political and fiscal systems degrade.
I see that process being largely facilitated by people who have no idea that they are eternal souls evolving as best they can, and who therefore concentrate on their immediate appetites and needs.
That's the logical thing to do.

A wider knowledge of the self, brings the impetus to compassion and self-sacrifice, when these are to the advantage of the whole. When we appreciate that we cannot ultimately profit at the expense of another, and that hurting others - we hurt ourselves, old patterns of behaviour fall away.

Somewhat esoteric as a fiscal policy perhaps ? Nevertheless, I maintain that to sufficiently alter our behaviour to the point where any system could be made to work, we need to reach out to something beyond our immediate experience, and recognise our true nature.

"I do not have a soul. I am a soul. I have a body." C. S. Lewis.

I would advocate that as a good starting point for policies of any sort, and essential for their continuing success.

mistersmith.

reply to post by coldkidc


Looking at the situation as a whole the best analogy I can give would b...

The Financial systems currently in place could be thought of as digging a hole where the material you remove is never enough to fill the whole back in again....

If you think that is stupid then wait until you hear their answer to this....

Let's dig another hole and use the material from that hole to fill the first.......

DUM DUM DUM!!!!

Korg.

starwarsisreal
reply to post by coldkidc

 

Well sooner later headlines will read "Civil Unrest has intensified with the demise of the US dollar"

Get a grip.

What makes anyone think that another financial crisis will lead to chaos and civil unrest?

In your conspiracy theories, if there is chaos and unrest, how exactly do you think the elites will regain control? By appearing before the masses and pleading with them?


For that matter, what makes anyone think the the overall crisis has passed?
The initial crisis was a bit of a fart...more farts will follow...until they have their new order in place.

If they lose control, they wont regain it.
This isn't about destroying the world, this is about taking total control.
Total control does not equal total chaos and anarchy on the streets where the police, military etc have no control and have been abandoned them selves.

There will be civil unrest.
But it will not escalate into complete and utter chaos where nobody has control.

That's the point.
To scare you so they can usher in the new order, because YOU will be asking for the new order to be ushered in, to STOP the CONTROLLED anarchy on the streets.

You will be terrified. Your families will be terrified. Your children will be terrified. Your friends and neighbors will be terrified.


Look at how most of you behave on this site.
You reach for the keys to your bunkers over simple internet articles with no basis.
Now imagine how some of you will react when there are riots in the streets and the police are battling back and forth with hooded hooligans, in that controlled anarchy I mentioned earlier in my post.

Like I said, YOU will be asking for the new order.



Bottom line is there is no reason to panic.
You will be able to live your life as you do now.
You will be able to buy your new car, your new house, your new flat screen tv, your new clothes, etc. Your kids will go to school, you will still go to work. You will still pay taxes, you will still pay your bills. You will still need to fuel your car.
Trucks, planes, boats, trains that deliver consumer goods and food stuff will also need to be fueled, they'll also need drivers, logistics personnel and managers.
The shops selling these goods will need staff and managers.
The shops will need electricity etc. Power stations and other services will need employees, managers, technicians, engineers, etc.


What I'm saying is that life will go on as normal. Except the normal will have changed a little from the normal we know today. But that normal we know today has changed to the normal of twenty years ago anyway.