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Level 132 Comments: Respected Member Of Famiry
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I IZ AWESOME. DON'T YOU DARE DISAGREE. Been here forever, never made an account, now i have
latest user's comments
|#10 - In theory, for one person to make money, another must lose mon… [+] (19 new replies)||05/21/2012 on||0|
#12 - Absolute Madman (05/21/2012) [-]
Fortunately not true, Economics is not a zero sum game, everyone can gain. Not everyone understands that though :P
That is *not* what gives money value.
TLDR: the first anon is correct
#41 - YeYouKnoMe (05/21/2012) [-]
Everyone cant just gain, we all pay our bills and spend money, having bills their is no true "gain" we do our equal work to gain equal value. We work to get the money for bills and have a tiny bit extra spending money. As regular people this is all we can do.( P.S. I am trying to show I am 100 percent on your side mr rainbows.)
#71 - Absolute Madman (05/23/2012) [-]
As is often the case (and as I said before), you are confusing wealth and money, they are *not* the same.
As technology improves and therefore the productive potential of available resources improves, everyone can get richer.
It is not even technically true to say that resources will eventually run out, time will run out before all the available resources in the universe have been exploited (yes this seems like a very hypothetical remark, but just look at the discovery of the Americas and its effect on the European nations)
So basically, society's welfare can improve so long as technology does, we have yet to see any evidence to the contrary, nor will we.
TLDR: Econfag here, everyone can (and probably will) gain from the development of technology which's potential is pretty much infinite.
Also M0 (physical money in circulation) has pretty much nothing to do with how rich we are (just look at Zimbabwe)
Hope this helped, you can thumb me down, cos I enjoyed writing it anyway :P
#72 - YeYouKnoMe (05/23/2012) [-]
I watched this video in school today, it talked about how banks rule corporations and corporations rule us, we buy the product, the money goes to corporations and the banks use the corps money to make more money. What happens is lets say someone gets a 10,000 loan. 10 percent goes to the bank and the 90 percent goes to someones loan, the instant that 10,000 is taken from the bank you immediately have interested added on. so the bank is gaining profit without doing anything at all. each loan this is repeating until the bank has so much money they dont know what to do with. its complete profit and all it does is make us more poor.
#73 - Absolute Madman (05/30/2012) [-]
I'm afraid what you are describing is an *incorrect* Business Cycle Model.
Banks charging interest is *not* "free profit", what they are doing is charging for the risk of the loan. The actual interest rate determination is far more complicated and is totally beyond a single bank.
Banks play an absolutely vital role in providing economic growth, they act as a middleman separating the risk-averse savers from the risky investments. These are the investments that *really* drive the business cycle. Things like the development of air travel, the railways etc. (properly revolutionary ideas).
The role of the entrepreneur (if Schumpeter's RBC Theorem is to be believed) is one of a "creative-destroyer". He replaces the old tech. with new and in doing so reaps monopoly profits in the short run. This drives economic growth. But the banks cannot charge interest unless the entrepreneur is making profit.
Banks do not make us poor if they are working properly as they generally do.
The only way they can make us poor is if (as happened in 2007) they get out of control their incentives are twisted into one of maximising loans. This leads to a bubble, and inevitable a burst (recession!!!).
However you can't blame a bank manager for acting purely on rational incentives, it is not in his power to stop a boom by being safe. All he can do is try and maximise his profits while he can. These are what Keynes called the "animal spirits" at work.
It is the Government's job to regulate the banks so as this does not happen.
TLDR: Banks do not make you poor, I don't know what country you are from but your education system sounds very counter productive, and the idea of banks being evil etc. is actually quite dangerous.
#74 - YeYouKnoMe (05/30/2012) [-]
I'm not going to read this bro, thats complete bullshit. Picture this shit motherfucker, banks loan out 10,000 to a person for a car loan, that money goes to the car dealer and the dealer puts the money in the bank. The bank ends up making money without you realizing it. I don't know where you got your information from, government lies to you bro you can't just google this shit.
#75 - Absolute Madman (06/01/2012) [-]
Yeah, I think that I'm going to seriously believe a person who's information is gained solely from one video he watched in school rather than a person in the middle of an economics degree.
You state you're not gonna read it and then call it bullshit, you obviously have absolutely no understanding of how a *real* economy works.
You seriously believe that the £10,000 in your example will be put straight into the bank. The dealer needs to spend as well. Every person in the economy is a consumer. If everyone saves the economy will fall into a recession. Every economic agent has a "Marginal Propensity to Consume" which means that they save a bit and consume (spend) the rest.
So the bank does not receive all the money.
Secondly, the bank (as I have already explained and no doubt you have neglected to read) does not get anything for nothing. They make their money from loans, not people making savings. A bank with too much money stored in it and not enough loans made will fail.
It's pretty obvious really. The only reason a bank wants your money is so that it can lend it out with interest. It actually loses out if it has to *pay* savers interest and cannot find enough people to borrow. So your idea that people putting money in banks is free profit for them is ridiculous.
Finally, banks will not be able to lend money with interest unless the borrower is able to make a profit later and is therefore able to repay with interest.
The exception to this rule is the subprime mortgage crisis where banks basically lent money to fuel a bubble of overvalued assets. But this is *not* the point you were making, and I doubt you even understand the concept.
TLDR: Actually take some time out to read my reply and you might learn something.
It seems like you're the one who has been brainwashed with false ideas. If you want any evidence to prove me correct just look at how every economy on the last 200 years has worked and you will see that the banks are the cement that enables growth.
#76 - YeYouKnoMe (06/01/2012) [-]
No I did read it, I'm more trying to explain how corrupt the governments are...Banks claim that they lose their money and need the government to give them more...so they do. Tesla was studying energy and he ended up getting really close to what he thinks was an infinite energy suppy, the government shut down his lab and ostracized him. Same with millions of other scientists, what is the governments intentions? To keep us buying fuel so they don't lose money.
#79 - Absolute Madman (06/01/2012) [-]
I would say it was good to (reasonably) question authority as it is the people who need to keep the Government in check.
I would however conclude to say (as to all conspiracy theories) that people (the Government included) are not intrinsically evil, they do not act in an irrational way just because they can.
Keynes went so far as to say;
"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back."
Have a god day and hope you enjoyed this convo :)
#80 - YeYouKnoMe (06/01/2012) [-]
Explain 9/11, why are there pictures of the explosion starting from the basement? the explosion happened a few seconds before the plane crashed, the WTC towers 1,2, and 7 were blown up and 7 wasnt even hit by a plane. Also explain the molten metal at the crater of the pit, + why were there no reports of the molten metal? because they know steel only becomes molten at a certain temperature and jet fuel doesnt burn at a high enough degree to make the steel molten. Only thermite can which burns at 2000 degrees Fahrenheit which was also found at the scene of the attack...The government bullshits you and you are caught in there trap and are going to be a slave for the rest of your life.
#78 - Absolute Madman (06/01/2012) [-]
The main reason the Government needs to bail out the banks is that, once the bubble has burst there are several (key) amplification mechanisms that take place after a bubble has burst.
One of these is the need for banks to raise liquidity through the fire sale (very low price) of asset bundles.
This fire sale not only gets far less than it should, it also lowers the value of banks' other assets. This leads for the need to recall debts (mortgages included) and leads to defaults and the spread of the crisis to other parts of the world (most developing countries survive and grow because of flows of capital from developed countries)
This is how the crisis becomes *global*. It is also how the recession of 1929 became the "Great Depression" when over 9000 banks were allowed to fail.
What the Government can do is buy the virtually worthless "fire sale" assets for inflated prices. This stabilises the banks and means that they no longer need to look for other sources of liquidity.
This is what took place in Northern Rock, and what the Fed *eventually* did after they let The Lehmann Bros. etc collapse.
TLDR: The Government *needs* to pump money into the banks on order to prevent a greater collapse in the long run.
Granted, this does seem twisted considering that it was the bankers who caused it, but the deregulation of the banking and financial sectors throughout the 90s by the Governments of the World is really to blame.
If you incentivise people to act immorally, you are going to get immoral behaviour.
This is why the banking needs regulation by the Government.
As for Tesla, I can't really argue for or against as I honestly have never read anything about that, but I would be surprised if the Governments of the West really wanted the main energy source of the world to remain in one of the most unstable and anti-west areas of the World (the middle east).
#82 - Absolute Madman (06/02/2012) [-]
Well I have explained why the Government has to pump the money into the banks (to save the economy).
Really it all comes down to moral hazard, we need the banks so we have to pay for them when they make mistakes. The bonus system is actually designed to incentivise competitive behaviour and try and make more money. Compared to the amounts shifted around by the banks, the bonuses are pretty small.
As for the news, I think we can all agree that virtually every media outlet has a bias and will run with the times. If ordinary people hate the banks, then more people will watch the news if it confirms their views.
This doesn't mean the banks are in the right, but (aside from maybe the BBC) all news corporations should be taken with a considerable pinch of salt.
TLDR: Traders and bankers are paid a low wage with a large performance related bonus. So if they get a large bonus, they *technically* deserved it for giving shareholders far greater profits.
A fixed wage in the financial market simply *will not* incentivise profit making. It's the nature of the beast that it is a risky, high reward market. No-one complains about bonuses and the way banking works until the shit hits the fan.
We weren't concerned about this while it was making us *trillions* in revenue but we made our bed and now we must lie in it.
It's sad, but that's the way it works, and no other system would reap the benefits that our does when times are good.
#50 - Absolute Madman (05/21/2012) [-]
#55 - YeYouKnoMe (05/21/2012) [-]
Wait what? Its completely about the product cause thats what I'm presuming you're talking about. You put your money in lets say Nike shoes, depending on how many people have put their money in, how much money they put in and how many people buy the product...Is how much more you earn.
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