Philosophy Now Forum

There is no economic crisis.

The news is full of hysteria and dread as to how much of a an economic crisis the world is in. Rome trembles. So to speak.

I submit that it is all part of the social manipulation that is at work on us by the media. They only focus on the debtors and ignore the lenders.

These lenders are in actual control of the economy.

If mankind wants to end the so called economic crisis, all mankind need do is rein in those run away rich lenders.

Let us not forget, those nations in debt; Greece comes to mind, should also be made to come to heel on it‘s extravagances.

Woe to the rich. The tax man cometh.

If there were an actual economic crisis, it would be the lenders in the news and not the debtors.

Regards
DL

You're saying that the 'economic crisis' we're experiencing now is rather a designed manipulation by elites in order to enslave further, in some fashion, the populace?

Not to get tied up in defining words, I think we lean in the same direction but I do not give the rich the label of slave owner. It is an inadvertent indirect reality.

If you are thinking demographically, we are all slaves to the common. This includes the rich.

What I am saying is that the lenders have yet to be squeezed financially therefore, there is no crisis, other than the one the rich want you to see. It may irritate the rich when surveys continue to show a widening spread between the rich and poor.

Another inadvertent reality is that it may very well be that the rich are no more in true control of the economy than anyone else is.

Regards
DL

This is a woefully simplistic and misinformed point of view.

The point about the crisis, is that money has been borrowed which does not exist, and so we have mortgaged the future prosperity of the economy.

Those that have 'lent', where that means anything at all, are beyond the reach of the tax man

It is about the lenders. The whole point of the crisis is that if debtors can't or won't pay their bills, the lenders will stop lending, and then the economy will truly grind to a real halt.

Don't take my word for it. Try to get a small business loan, and you'll see what I mean.

Hi Chaz,

I never understood this idea that money "exists." I just can't wrap my head around the gold standard....if that is what you mean by money existing. What I am asking is , how does money 'exist' even if it has "gold" to back it up? The idea that something that comes out of the ground is worthy of an exchange for food, shelter and a roof over one's head is so ridiculous to my way of thinking. Can you please explain why gold should have such a value placed on it? I mean really...what is it good for? Jewelry? Big whoop. I don't get it. Why can't value be placed on something else? As an abstract idea, money to me amounts to the same thing as gold...it's a worthless object...as far as the abstract idea goes. So if it is like you say...and money which does not exist is borrowed on....then why do we keep on borrowing on it and as surely with the rate of inflation gold will run out eventually....right? I hope you get what I am asking...if there is a limited supply of gold and if prices keep escalating there would not be enough gold to cover the cost of the world demand of equity in stuff (property, cars, you know...junk) ...and the gold standard would still fail if it couldn't keep up with the cost of stuff...right? I just don't get it. I don't understand the whole "money/value of gold" thing. Why should we even worry about money existing when it seems that it is inevitable that sooner or later it is going to run out and will have to be a abstract concept anyway...based on nothing but faith in the inside workings of a human ant colony so to speak.

The gold standard was abandoned long-ago AS.

then what do you think chaz means by "money existing"? If it doesn't 'need' gold to hold up it's 'worth' , then what is the problem with government printing as much as it needs? It seems to me that money only exists in as much as people have faith it exists. I just don't understand what Chaz is trying to say.

You are exactly right as to what backs money now-a-days AS, the economists call it "confidence" and on the whole its low at present.

Hello friends,

I want to add something to the thread that perhaps, will make the issue more clear.
The basic problem in some of the western countries is that the governments are spending far more than their earnings or rather I should say that their earning is decreasing while the spending is either stable or increasing. This means that their economies are not generating enough tax collections to fulfill the needs of the societies but governments have to meet the requirements and aspirations of the public. In order to do that they have to borrow from somewhere amounting to the difference between earning and spending. This is done in the form of issuing government bonds, taking loans from international agencies like IMF and other countries. Large financial institutions and banks use to buy these bonds for two reasons; firstly these bonds are considered relatively safe in comparison to other asset classes as these bear the guaranty of a government instead of any individual and secondly bonds assure a fix return over a long time.

There is nothing wrong in it as this a normal and establish practice. The problem arises only when the difference between earning and spending of a country (budget deficit) breaches the comfort level, keeps widening and looking like that it will not come down in foreseeable future. This situation leads governments to borrow more money in the form of issue more bounds and ultimately, that stage comes, when there are no buyers as they doubt the capability of the government to redeeming at maturity.

Now, the government needs more money to meet its spending but due to credibility failure, nobody is willing to do the same so, the chances are that the government would default. This possibility drags the lenders, especially banks into the trap as they would be left only with a piece of paper as those bonds will not yield anything. This hurts the credibility and as well as balance sheets.

This is exactly the situation in Greece right now. Furthermore, even if Greece is able to avoid the default in the short term with the help of EU, the odds are in the favor of defaulting it in the long run. Stock markets are unanimous that there will be a default for sure. The divide is only about the character of default; some are expecting a smoother default while others are visualizing a hard and noisy one.

So, it would not be proper to say that there is no problem and all this is media generated. The problem is not only in Greece but some other countries are also going to follow the same route in the near future.

with love
sanjay

I did KIS but hardly misinformed.

Regards
DL

as, i think the idea is that even without the gold standard there is a limited amount of money, or should be

lets say the government prints x trillion dollars

thats all the dollars there are.

But then bank A borrows x billion dollars from bank B.

Now bank A has x billion dollars to spend. Bank B has accounts receivables increase to the tune of x billion - and that counts as assets so it still has assets it can leverage - those asserts are still treated as money.

so now we have in effect, x * 2 billion dollars even if we have x billion printed dollars

that is why some countries require their banks to have a certain amount of actual cash on hand and how much they can lend is limited by how much they have - this is why Canada's economy is doing better than ours

I would say that it is more because of our banking system but in this O P, I am looking at the overall picture.
If you are right though, WTF is wrong with the U S? Can they not mimic a better system?

Regards
DL

There is always a conspiracy in the Object. The economic crisis exists only to the extent that I grant creedence to what is spoken about my world, such that i may agree or disagree; either way, it has been created by social manipulation. So yes, you are correct, but only through your own polemic: you have been decieved (as if you werent before). What about when there was no 'ecomonic crisis? Was this a social manipuation? Were you being decieved then?

Sorry Kayla, I don't understand your point to any of this...why "should" there be a limit to how much money there is? What would happen if governments just printed money and doled it our to the masses instead of the banks? Or something to that effect. There is just too much hoarding going on with the rich. The average Joe doesn't usually hoard. Give it to him and he is sure to give it back to the big guy buy buying his product. I just don't understand the concept of a person working like a dog and still having to decide between health insurance or feeding his family. There is something fundamentally wrong with that scenario. A decent days wage for the average Joe would still put money into the rich pocket

Money is an abstract concept. If there was a catastrophe with the banks and a real bank run...I don't think the government would have enough money to make good on the deposit insurance program FDIC not in cash anyway. The 'real' money is not there...it's all imaginary money.

I think what needs to be done is limits of what corporations can charge the government for services or products and there should be strict laws governing the amount of profit a company can make off of government. That way we could start to see more of a balance of distributed money. It just seems stupid to allow them to be free to increase costs every year when wages and thus tax revenue is on a steady decline. Of course the numbers don't add up!

I think people have lost their minds when they keep saying..."cut spending!" (meaning cut social programs like payroll for police, teachers, firemen, etc.) There is only so much you can take from the average citizen. Why not instead cut the profits that corporations can make off of government? Do corporations like Halliburton really need to make record breaking profits from government contracts? How about some patriotism on their part and ask not what their country can do for them but what they can do for their country?