Hey there! Sign in to join this conversationNew here? Join for free
    • Thread Starter
    Offline

    7
    ReputationRep:
    (Original post by ibzombie96)
    Sounds a lot like pragmatism to me :P
    Indeed. But with a dollop of objectivity.
    Offline

    19
    ReputationRep:
    (Original post by Polymath0)
    Because no one had been posting replies. I only just found a new reply and chose to respond. Is there a problem?
    This thread ought to be pinned as far as I'm concerned. To understand the monetary scam is paramount.
    You claim to be an objective free thinker but usage of terms like scam and cartel make it clear you've already made your mind up on this topic.
    Offline

    3
    ReputationRep:
    Previous periods of economic dislocation have been managed with wage inflation. This makes workers richer and those who hold cash poorer. The reason that this cannot be done now is that our economy must conform to EU guidelines:
    http://ec.europa.eu/economy_finance/...mission_en.pdf

    You have not heard about this because we are being shunted into a political union and those who are doing it are in control of most of the channels for disseminating information such as the BBC etc.
    Offline

    19
    ReputationRep:
    (Original post by newpersonage)
    Previous periods of economic dislocation have been managed with wage inflation. This makes workers richer and those who hold cash poorer. The reason that this cannot be done now is that our economy must conform to EU guidelines:
    http://ec.europa.eu/economy_finance/...mission_en.pdf

    You have not heard about this because we are being shunted into a political union and those who are doing it are in control of most of the channels for disseminating information such as the BBC etc.
    Our deficit was too high...

    When was the last time the deficit:GDP ratio was higher than 2008/09? Has it ever been?
    Offline

    3
    ReputationRep:
    debt-free money is a contradiction in terms. Money IS debt.
    Offline

    3
    ReputationRep:
    (Original post by Quady)
    Our deficit was too high...

    When was the last time the deficit:GDP ratio was higher than 2008/09? Has it ever been?
    During wars, but it has recently been at a high record since WWII
    http://www.economicshelp.org/blog/59...get-deficit-2/

    You can reduce sterling debt in real terms by a brief period of inflation. It has been done before and knocks a letter off our economic rating. Inflation was a reasonable option in 2010 and not used because of EU guidelines.
    Offline

    19
    ReputationRep:
    (Original post by newpersonage)
    During wars, but it has recently been at a high record since WWII
    http://www.economicshelp.org/blog/59...deficit</b>-2/

    You can reduce sterling debt in real terms by a brief period of inflation. It has been done before and knocks a letter off our economic rating. Inflation was a reasonable option in 2010 and not used because of EU guidelines.
    So the EU was wrong to say that having a deficit higher than any other time than being in a WORLD WAR was too high?

    You can knock sterling DEBT down like that (a painful way to do it too) but not a DEFICIT. Sterling devalued 30% against the dollar and 20% against the Euro and it did pretty much nothing to the deficit.

    CPI inflation was hitting 3.7% in 2010 rising to 5.2% in 2011, its hardly like we weren't doing inflation then...

    You realise we can ignore the commission right? We did in 2006...
    Offline

    19
    ReputationRep:
    (Original post by cole-slaw)
    debt-free money is a contradiction in terms. Money IS debt.
    Who do I owe my £1 coin in my pocket to?
    Offline

    15
    ReputationRep:
    (Original post by Quady)
    Who do I owe my £1 coin in my pocket to?
    The £1 coin is really a promise. Whoever you got it off paid it to you in lieu of £1's worth of goods and services.

    Notice how on paper money it says "I promise to pay the bearer on demand the sum of £10" (for example). That promise is another word for debt. The bank who issued the £10 note owes you £10 worth of gold (or whatever), and the paper represents that debt.
    Offline

    19
    ReputationRep:
    (Original post by felamaslen)
    The £1 coin is really a promise. Whoever you got it off paid it to you in lieu of £1's worth of goods and services.

    Notice how on paper money it says "I promise to pay the bearer on demand the sum of £10" (for example). That promise is another word for debt. The bank who issued the £10 note owes you £10 worth of gold (or whatever), and the paper represents that debt.
    Except they don't owe me any goods or services do they?

    The US bills say 'In God We Trust' - doesn't mean we actually do.
    Offline

    15
    ReputationRep:
    (Original post by Quady)
    Except they don't owe me any goods or services do they?

    The US bills say 'In God We Trust' - doesn't mean we actually do.
    Yeah it's a dated phrase (in both cases).
    Offline

    3
    ReputationRep:
    (Original post by Quady)
    Who do I owe my £1 coin in my pocket to?
    You don't owe it to anyone. The government owes it to you.

    Go and read a £20 note and report back on what it says.
    Offline

    3
    ReputationRep:
    (Original post by Quady)
    Except they don't owe me any goods or services do they?
    Yes, otherwise it would be a worthless circular lump of metal.Its only value comes from the fact that you can exchange it for goods and services. Surely you see that. Money IS debt. If you have £1000 in money, you effectively own £1000 of government debt in its most liquid form.
    Offline

    3
    ReputationRep:
    (Original post by cole-slaw)
    debt-free money is a contradiction in terms. Money IS debt.
    This is so unhelpful. Money is not equal to debt in any meaningful sense. Please don't point out the ancient wording on a fiver and tell me that the 'promise to pay the bearer' is actually an important part of finance in an applied sense.
    Offline

    21
    ReputationRep:
    BoE is privatised, the "Government" has no control whatsoever on how the money is maintained in our society, just like the Federal Reserve in the US, that can literally just print more and more money each and every year when wanted.
    Offline

    3
    ReputationRep:
    (Original post by ibzombie96)
    This is so unhelpful. Money is not equal to debt in any meaningful sense. Please don't point out the ancient wording on a fiver and tell me that the 'promise to pay the bearer' is actually an important part of finance in an applied sense.
    What do you think money is, if not debt? Why is the fiver in my wallet worth more than any other piece of paper?
    Offline

    9
    ReputationRep:
    I believe, and i may well be wrong here, but when money is printed, the value of the currency drops. Therefore the money in your pocket becomes worth less.

    Whilst more money is put into public services, investment etc It often takes a long time to see the effects of this in the average persons payslip.

    So its more effective to raise taxes for example, rather than print more money and weaken the currency
    Offline

    3
    ReputationRep:
    (Original post by IIEquinoxII)
    I believe, and i may well be wrong here, but when money is printed, the value of the currency drops. Therefore the money in your pocket becomes worth less.

    Whilst more money is put into public services, investment etc It often takes a long time to see the effects of this in the average persons payslip.

    So its more effective to raise taxes for example, rather than print more money and weaken the currency
    Its kinda like that. Inflation (your money becoming worth less) occurs when the growth in the money supply outstrips the growth in production in the real economy.
    Offline

    3
    ReputationRep:
    (Original post by cole-slaw)
    What do you think money is, if not debt? Why is the fiver in my wallet worth more than any other piece of paper?
    Ugh this is so tedious

    I know that money is essentially an IOU, but the use of money today is just as a measure of value. What you're doing is just spouting a piece of trivia. It may be fundamental to our monetary system but in any meaningful sense it's useless. Finance is an applied field and money is not seen as the same thing as debt. You don't hear the guys in DCM pondering how much in debt they are due to the cash in their pockets. I'm not disagreeing with what you're saying, I'm just saying it's essentially a fun fact.
    Offline

    3
    ReputationRep:
    (Original post by ibzombie96)
    Ugh this is so tedious

    I know that money is essentially an IOU, but the use of money today is just as a measure of value. What you're doing is just spouting a piece of trivia. It may be fundamental to our monetary system but in any meaningful sense it's useless. Finance is an applied field and money is not seen as the same thing as debt. You don't hear the guys in DCM pondering how much in debt they are due to the cash in their pockets. I'm not disagreeing with what you're saying, I'm just saying it's essentially a fun fact.
    Its perfectly meaningful when people bang on about "debt-free money". I'm just pointing out that that is a contradiction in terms.

    Its like saying that person B is owed money by person A, but person A doesn't owe any money to person B. Its a logical contradiction.

    and of course, in finance, owning debt is seen as an asset that is directly comparable to having cash in hand or in the bank. The two things are effectively identical - the only difference is the degree of liquidity.

    Without the concept of credit and debt, we would be back to a mediaeval bartering economy.

    The relationship between public and private credit/debt levels, and its symbiotic relationship with the macroeconomic indicators like inflation, interest rates and GDP growth is a fascinating and complex one.
 
 
 
Poll
Do you agree with the PM's proposal to cut tuition fees for some courses?
Useful resources

Groups associated with this forum:

View associated groups

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Write a reply...
Reply
Hide
Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.