Life is riddled with a procession of minor impediments

[COMMANDO FORCES]

Noooooooooooooooo

You've done it now Cosh

[Trout]

I believe the idea is that money is an abstract concept. More "promises" - ie banknotes with said promise printed on them - exist than actual assets, like gold. Therefore banks are built on shaky foundations.

Shock fucking exclusive, that. 

[The Legendary Shark]

On a £5 note it says 'I promise to pay the bearer, on demand, the sum of five pounds'.

It does not say 'I promise to redeem this note for 5lb of gold'.

We use currency (a promise to pay) and not money (a promise to redeem). Whether you keep the promisary notes in a shoebox or a digital form is irrelevant, they are still backed only by promises to pay in the future.

Yes, you can buy gold with currency - which at present is probably a wise thing to do - but neither governments or banks are obliged to redeem currency for gold. This is why they can issue as much currency, and demand as much interest, as they can mathematically create. This leads to inescapable debt and inflation. Simples!

[Frank]

When you get a loan, they're not lending you actual money, they're lending you credit. A promise to pay. Specifically, your promise to pay. So they're actually lending you your own credit, which is cheeky. Cheekier still, they charge you interest for using your own credit. At least your friend isn't doing that, Foxy.

Okay, you're going to have to explain that first part to me again more slowly. I'm fairly certain they lend you actual money because no amount of semantics changes the fact that you can take it all home with you and put it in a shoebox behind the air vent.

The banks or credit card companies don't actually have your hundred quid sitting anywhere. If the world's financial institutions tried to realise their assets it wouldn't meet the value of all the credit in play around the world today. They invent and imagine some theoretical money based on their expectations of your future ability to earn more imaginary money to make good on their imaginary debt. That money you stuff in the shoe box only has any value as long as folk believe it does; if they stop believing in it (or you) you might as well be hoarding your own shite (see Zimbabwe).

The world's financial systems work for the same reason that Santa's sleigh can fly and Tinkerbell is brought back to life in stage versions of Peter Pan. Every now and again the sleigh dips low in the sky, Tinkerbell starts to look peekit, and everyone has to screw up their eyes and really believe so that everything can carry on as before.

[I, Cosh]

Money is an abstraction we collectively agree upon in order not to have to carry x number of pigs and eggs around with us. This much I get. Why is one amount of this abstraction different from another (specifically referring to TLS' original bit about "When you get a loan, they're not lending you actual money, they're lending you credit." here) in any meaningful way. And why does it matter if the basis of the abstraction is notionally tied to quantities of one substances (whose own inherent value is just as much of an abstraction when it comes down to feeding a family) or not?

[COMMANDO FORCES]

We could all go back to the barter system!

[The Legendary Shark]

Money is an abstraction we collectively agree upon in order not to have to carry x number of pigs and eggs around with us. This much I get. Why is one amount of this abstraction different from another (specifically referring to TLS' original bit about "When you get a loan, they're not lending you actual money, they're lending you credit." here) in any meaningful way. And why does it matter if the basis of the abstraction is notionally tied to quantities of one substances (whose own inherent value is just as much of an abstraction when it comes down to feeding a family) or not?

Excellent question.

I reckon that we're going to start hearing a lot about returning to the Gold Standard pretty soon. That is, directly backing currency with gold. (As a heads-up, don't go for it - because he who controls the gold controls the Standard and at the moment the ones who own the most gold are private corporations.) But anyway.

With classical money, there can only ever be so much money because there can only ever be so much gold to back it. The actual material backing money isn't important, as Sauchie pointed out, it's our faith in it. Gold and silver were traditionally used because they are both relatively uncommon metals and it's easy and convenient to strike them into coins. So long as there are enough coins circulating throughout a society then everyone should have access to at least basic provisions (in an ideal world).

I think that this is a fair representation of what everyone believes money to be.

In the 1600's a family of goldsmiths hit upon a marvellous scheme. As goldsmiths, they had the best safes and so agreed to look after other people's gold for them. If someone deposited five pieces of gold in the goldsmiths' vaults, they would be given notes to the same value. Soon, people found it easier to trade with these notes than with bulky gold coins.

As time went on, the goldsmiths noticed that more gold was being deposited than was being withdrawn and hit upon a cunning plan - which they would call 'fractional reserve lending' and I call 'theft'. They began to issue more notes than they had gold. These notes were issued as loans which were redeemable in gold. That is, you could pay the goldsmiths back with gold or more notes - which you'd have to earn, steal or borrow. Just like today.

Eventually, the goldsmiths gave up goldsmithing and became international bankers, lending to princes, kings, emperors, presidents, corporations, warmongers, pacifists, churches, governments and you and me.

The answer to the vast majority of the world's problems today is to take away the goldsmiths' power to issue those notes and return that privelige to the people, where it properly belongs. When this happens, it doesn't really matter how or what a currency is tied to or backed by. It's your faith in it that counts, just like today. The crucial difference will be that publically created money can be spent into society exactly the same way as it is today (paying for public goods and services) with no need for any interest or, indeed, repayment. (It's a little more complicate than that, but I'm conscious that I'm ranting about an ostensibly boring subject in completely the wrong thread...)

[Trout]

Aaaaaaaaaaanyway... I like sweeties. There's a marvellous shop near us that specialises in old-fashioned ones. I like the aniseed balls.

[The Legendary Shark]

When it comes to balls, there's only one winner...


Now there's a place in Wigan a place you all should know
A busy little factory where things are all the go
They don't make Jakes or Eccles Cakes or things to stick on walls
But night and day they work away at Uncle Joe's Mint Balls

Chorus (to be sung after each verse)

Uncle Joe's Mint Balls keep you all aglow
Give 'em to your grannie and watch the beggar go
Away with coughs and sniffles, take a few in hand
Suck 'em and see, you'll agree
They're the best in all the land

Me dad has always wanted curly hair on his bald head
Suck an Uncle Joe's Mint Ball that's what the doctor said
So he got an Uncle Joe's Mint Ball and sucked it all night long
When he got up next morning, he'd hairs all over his tongue

Me uncle Albert passed away from ale upon the brain
The doctors said that he were dead and would never walk again
So they gave the corpse an Uncle Joe's and then stood back aghast
Cos the corpse jumped up and ran to the pub and spent the insurance brass

Me granny said me granddad 'e were gettin' old and slow
And fire in grandad's boiler 'ad gone out long ago
So 'e got an Uncle Joe's Mint Ball, sucked it all the night
But his hot breath singed her vest and set the bed alight

We 'ad a pigeon it were bald and couldn't fly too fast
Never won places in the races, always come in last
Though it were bald, no feathers at all it won a race one day
We give it an Uncle Joe's Mint Ball and it ran al't bloody way

I had a girl her name was May in passion she were lackin'
Fed 'er with whisky to make 'er frisky, still she wouldn't get crackin'
So I gave her an Uncle Joe's Mint Ball to get 'er all aglow
Now she combs the streets of Wigan, looking for Uncle Joe!

We gave some to the coalman's 'orse as it stood in the road
It gave a cough then beggared off with it's cart an' load
It ran onto the racecourse going like a bird
Covered the track with nutty slack and came first, second and third

The RSPCA have bought six tons of Uncle Joe's
To give to all the animules to keep 'em all aglow
Our budgie now is six foot tall, the cat is eight foot three
And all the poor brass monkeys are as happy as can be.

[Frank]

In the 1600's a family of goldsmiths hit upon a marvellous scheme. As goldsmiths, they had the best safes and so agreed to look after other people's gold for them. If someone deposited five pieces of gold in the goldsmiths' vaults, they would be given notes to the same value. Soon, people found it easier to trade with these notes than with bulky gold coins.

Goldsmiths, eh? What did a Rothschild make in the olden days?

Aaaaaaaaaaanyway... I like sweeties. There's a marvellous shop near us that specialises in old-fashioned ones. I like the aniseed balls.

Aniseed balls are an abstraction, if all the supposedly aniseed balls in circulation today ....

[TordelBack]

I've just realised that a minor impediment in my own life is that The Legendary Shark doesn't drink in my local.  It would elevate those setting-the-world-to-rights high-stool sessions to a whole new level.

[The Legendary Shark]

And fisticuffs.

Never forget the fisticuffs








(I think that my minor impediment is that I don't know when to shut up.)

[CrazyFoxMachine]

I've just realised that a minor impediment in my own life is that The Legendary Shark doesn't drink in my local.  It would elevate those setting-the-world-to-rights high-stool sessions to a whole new level.

Yup.

[Mardroid]

My minor impediments today were that a bank machine gobbled up my debit card when I attempted to withdraw a tenner. (It didn't give me the tenner either, the greedy little blighter!)

Then when I called the 'missing card' number* they asked me for three digits of my security number. I couldn't remember it as I hardly use it. (I tend to use internet banking and it's not he same as my internet banking ID number. I think I had to use it when I first set up internet banking, but after that I use different codes.) I tried the one on my secure key card, but that didn't work. Three tries later... the code is locked. Grrrr!  And I'm going out to dinner next Tuesday...

Anyway, I should be off Monday so I guess I can sort it out then. Although it's doubtful the card will arrive in time for Tuesday, but I'm hoping that I will be able to withdraw cash with my knowledge of sort code and account number.

Except.... my branch is closed for refurbishment, and I think other branches need a guarantee card (which happens to be the same thing as the debit card) to do that... Maybe I'll have to just use the credit card.

So annoying. And I'll admit, a bit amusing. A little bit.

*It's actually the one for when your card is actually lost or stolen. I'm not sure it's the correct one to call, but I didn't see any 'machine ate my card' numbers on the website.

[The Legendary Shark]

See, this is what happens when you rely on imaginary money looked after by pirates.



Sorry, I just had to.


I resisted for hours, honest I did.