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 Post subject: Money = Confidence
PostPosted: Fri Mar 13, 2020 8:52 am 
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Holyman
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No Confidence = No Money.

Happy Friday 13th everybody!!

<:-P

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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 9:51 am 
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Holyman wrote:
No Confidence = No Money.

Happy Friday 13th everybody!!

<:-P

Confidence pisses a lot of people off... I am confident that I have gotten in trouble a lot for being confident...

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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 10:01 am 
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Ah, sorry D, wasn't quite what I meant.

Money, the actual stuff that dominates all of our lives, is based entirely on Confidence.

That is:

The dollar-cash in your purse, the dollar-numbers you see in your bank account, are all worthless.

That is: they have no intrinsic or utility value.

When you hand over a $10 bill in exchange for goods or services, the person/business accepting that bill, is doing so because they have confidence that the Government that issued it, will guarantee its value. And because they have confidence that other people and businesses will also accept that bill, when they want to exchange it for goods and services.

When confidence disappears, currencies crash.

Same with stocks and shares.

The whole business of Money is based on shared confidence in the "Medium of Exchange" (currency).

Therefore:

No Confidence = No Money.

Is what I meant.

:D

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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 10:11 am 
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Very valid point. >:D<

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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 10:20 am 
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Sorry, filtered through what one is going through at the time. Just another day of fun over here. Everyone has lost their marbles...

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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 11:53 am 
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Money is just tickets that give you a claim on all economic output (as opposed to say a movie ticket that gives you a claim on the “output” aka viewing of x y z movie). It’s stable and secure as long as there is confidence in it, which is virtually guaranteed to be the case as long as the government issuing it accepts it exclusively for paying taxes.

This, despite being literal fact, used to be radical shit; it’s good to see more people understanding it.

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Alaskan Viking wrote:
Trump is going to lose to Hillary in a landslide, he is literally the only candidate who could have lost to her, we will have 4-8 more years of lefty insanity, possible lose the congress, and have a liberal dominated supreme court for a generation.

And I fucking blame you fuckwits who voted for Trump in the primary, classic low information voter.

We need pull taxes, to cull the opinions of DINDU's and inbred Trump supporters. >>::$


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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 1:23 pm 
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Here's hoping people lose confidence in the Yen more than the Canadian dollar over the next couple of months so I can exchange some cash. p@:>

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What you gave has been given here
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Change is the Law of The Universe

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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 1:40 pm 
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tgrant wrote:
Here's hoping people lose confidence in the Yen more than the Canadian dollar over the next couple of months so I can exchange some cash. p@:>


I’m afraid the Bank Of Canada is one of the most competent central banks there is. So not gonna happen sadly

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Alaskan Viking wrote:
Trump is going to lose to Hillary in a landslide, he is literally the only candidate who could have lost to her, we will have 4-8 more years of lefty insanity, possible lose the congress, and have a liberal dominated supreme court for a generation.

And I fucking blame you fuckwits who voted for Trump in the primary, classic low information voter.

We need pull taxes, to cull the opinions of DINDU's and inbred Trump supporters. >>::$


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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 3:58 pm 
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Hoff wrote:
tgrant wrote:
Here's hoping people lose confidence in the Yen more than the Canadian dollar over the next couple of months so I can exchange some cash. p@:>


I’m afraid the Bank Of Canada is one of the most competent central banks there is. So not gonna happen sadly


wait wait...competent?! or incompetent?

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What you have taken, Has been from here
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What belongs to you today
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Change is the Law of The Universe

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“A good traveler has no fixed plans, and is not intent on arriving.” – Lao Tzu


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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 4:10 pm 
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Competent

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Alaskan Viking wrote:
Trump is going to lose to Hillary in a landslide, he is literally the only candidate who could have lost to her, we will have 4-8 more years of lefty insanity, possible lose the congress, and have a liberal dominated supreme court for a generation.

And I fucking blame you fuckwits who voted for Trump in the primary, classic low information voter.

We need pull taxes, to cull the opinions of DINDU's and inbred Trump supporters. >>::$


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 Post subject: Re: Money = Confidence
PostPosted: Fri Mar 13, 2020 4:27 pm 
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Hoff wrote:
Competent



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What you have taken, Has been from here
What you gave has been given here
What belongs to you today
belonged to someone yesterday
and will be someone else’s tomorrow

Change is the Law of The Universe

-------------------------------------------------

“A good traveler has no fixed plans, and is not intent on arriving.” – Lao Tzu


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 Post subject: Re: Money = Confidence
PostPosted: Tue Mar 17, 2020 8:42 am 
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Holyman
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16th March, 2020

'Fed is a Bystander': COVID-19 Economic Woes Bigger Than Central Banks Can Handle

As one country after another shuts down public events and urges citizens to stay home amid the pandemic spread of the COVID-19 novel coronavirus, federal banks have struggled to prop up the buckling world economy. However, one analyst says the central banks aren’t being successful because their available tools won’t address the core of the problem.

On Sunday, the US Federal Reserve, which functions as the country’s central bank, lowered its benchmark interest rate to an effective 0% after Washington declared the COVID-19 pandemic a national emergency and states and cities across the country began shuttering shops, transportation and public arenas.

However, that did little to stem the collapse of confidence in the market, as the New York Stock Exchange registered a colossal drop Monday. The Dow Jones Industrial Average fell almost 3,000 points, its largest single-day drop in history, and oil prices lost 8% of their value, falling below $30 a barrel.

“The federal banks don’t have the tools to fix what the problem is, because the problem is bigger than the central banks.”

“The 2008 financial crisis was bigger than one central bank - the Federal Reserve - and it was necessary to create coordinated bailouts across multiple central banks in order to stop the contagion,” he noted. “This year, we’re already at that point and beyond that because the Fed did announce coordinated swap lines” with the Bank of Japan, Swiss National Bank, the Bank of England, Bank of Canada and the European Central Bank (ECB).

“But the bigger problem here is that - you know, interestingly enough, you brought up the $1.5 trillion in ‘bailout money’ on Friday - they didn’t actually do that, they just opened up a repo facility, a huge, enormous repo facility, that no one came and bellied up to. $1.5 trillion was offered, but only $117 billion was actually used … The problem here isn’t the lack of dollars, it’s the lack of collateral. In order to do a repo transaction, you have to have a security you’re willing to post at that price, and no one was willing to do it.”

“The Fed wasn’t offering high enough rates, and the problem is that this situation is now - the market wants higher short-term interest rates; demand for the dollars demands higher short-term interest rates in the overnight funding market, and it’s not there, because the Fed drops rates to zero. And now they’re going to print a whole bunch of money to do ‘quantitative easing’ and the rest of it, in order to try and keep things liquified. But that’s not actually the solution to the problem, any more than any other solution that the Fed has at its disposal.”

“The Fed is a bystander,” Luongo observed, noting that “this is happening around the Fed, it’s happening around the ECB. This is a bigger problem than them. The real markets, the offshore dollar markets - the real financial markets - the Fed is a bystander, and they don’t have any control over this.”

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 Post subject: Re: Money = Confidence
PostPosted: Tue Mar 17, 2020 8:52 am 
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MARCH 16, 2020

Can Coronavirus Force Policy Types to Think Clearly About Intellectual Property?

by DEAN BAKER


It will be hard to decide the most Trumpian moment in his dealing with the coronavirus pandemic, but my nomination is Trump’s meeting with executives from several pharmaceutical companies, where he discussed developing a vaccine. According to Trump, he asked them to “speed it up,” and they said that they would.

The idea that Trump’s admonition to hasten the development of a vaccine would have any impact on these companies’ efforts is too loony to envision for anyone outside of Trumpland. These companies have every incentive in the world to move as quickly as possible to develop a vaccine. It can be hugely profitable for them to be the first company with an effective vaccine and I’m sure at least some of them also care about public health.

In this context, Trump’s urgings probably had about the same impact as the advice to “keep breathing.” It’s sound advice, but you don’t really need someone to tell you.

Anyhow, it is not just Donald Trump who has cloudy thinking about the development of vaccines, it’s pretty much the whole policy elite. In this situation we have a worldwide health crisis, with more than 100,000 people already affected and many tens of millions threatened. In this context, developing a vaccine as quickly as possible should be a top priority for the whole world.

While there are researchers all over the world working on developing a vaccine, they are to a large extent working in competition. Each team wants to be the first to develop a vaccine so that they can secure a patent and get immensely rich.

The prospect of a high-priced vaccine has already caught public attention, as Health and Human Services Secretary Alex Azar testified that he couldn’t guarantee that a vaccine would be affordable. As Azar said, drug companies will have to recover their research costs.

This is one of the great absurdities of our system of relying on patent monopolies to finance the development of new drugs and vaccines. (This argument is laid out in chapter 5 of Rigged [it’s free.]) These government-granted monopolies make something that would almost invariably be cheap, into items that are very expensive. We then hope the government will take steps, such as price controls, to make drugs and vaccines affordable. But if the government didn’t grant the monopoly in the first place then there would be no problem. Drugs would be cheap, like paper clips or plastic cups.

But making drugs expensive is only part of the problem with patent financed research. Science advances most quickly when it is open and widely shared. Rather than having teams in China, Korea, Europe, the United States and elsewhere competing to develop a vaccine first, why wouldn’t we want them cooperating so that they all learned from each other’s successes and failures?

There is actually a good model for this sort of cooperation. The scientists working on the Human Genome Project posted their results on the web nightly. This rule was the centerpiece of the Bermuda Principles. The idea was that the mapping of the genome was a common project that people worked on collectively.

There should be a similar logic to developing a vaccine against coronavirus. And, since much of the research funding is already coming from the government, there is no reason that anyone should effectively be paid twice with a patent monopoly. You get paid once for the research: full stop. If any researchers have a problem with that, they should go into a different line of work.

In making this argument with policy types, I am usually confronted with the argument that we want to pay people for results, not just twiddling their thumbs. This has always struck me as an unbelievably bizarre argument. I have known many academics over my life. The vast majority take considerable pride in their work, they would not just twiddle their thumbs even if they had the option to do so and still collect a paycheck.

But stepping beyond the idea of researchers being intrinsically motivated, they are working for pharmaceutical companies who have an incentive to produce actual results. Suppose that Acme Pharmaceutical Company got a big chunk of the funding for developing a vaccine and it hired researchers who just twiddled their thumbs rather than produce anything of value. Sure, the Acme folks could have a big laugh, but would the company ever get another dime of public money? (Okay, if the execs were members of Mar a Lago, but probably not in a normal world.)

This is more or less the logic of military contractors. They are awarded contracts to do work developing weapons, they don’t get a patent on a weapon system and then try to convince the government it is a good product. There are plenty of abuses in military contracts, but at the end of the day, contractors do generally develop effective systems. (I am not endorsing how they are used.)

And, this sort of advance payment system in developing drugs and vaccines would have a huge advantage over military research in that there is no excuse for secrecy. While we don’t want ISIS to get all the details on the latest weapon system the Pentagon is developing, we do want every researcher in the world, as well as interested lay people, to be able to learn of the latest developments in drug or vaccine research. It would likely be clear very quickly if a company was just paying people to twiddle their thumbs.

This sort of cooperative approach has troubled many people who worry that someone responsible for a great innovation may not get properly rewarded. After all, if someone makes a major breakthrough in developing a drug or vaccine that could save millions of lives, shouldn’t that person get incredibly rich?

This one is hard for me to understand. First of all, this person is already being paid for their work. If they didn’t consider the pay adequate, they shouldn’t have taken the job.

Second, there is little reason to think that we could actually identify the person who was responsible for an important breakthrough. After all, under the patent system, the party that gets the patent is often not the party that made the key breakthrough. Furthermore, since it will typically be a pharmaceutical company that gets the patent, there is little reason to believe that the scientist responsible for the breakthrough is actually getting the big bucks out the deal.

But does the researcher in some sense “deserve” a huge reward? This is one that is better left to philosophers than economists. Many people do things that have enormous value and don’t get paid commensurately. The firefighter who rescues two young children from a burning building should perhaps be paid millions, but they aren’t. Does this bother us?

How about the anti-smoking activists who led what must have often seemed like a quixotic campaign to restrict smoking in public places? As a result of their work, millions of people are living longer and healthier lives. How much did these people get paid? Does anyone even know their names?

Intellectual types seem really bothered by the idea that someone is not getting a reward that they think is due. I remember many years ago when I was teaching at a small college, we had a small award (I think it was $1,000 – which would be around $2,000 in today’s dollars) to give to the best senior economics major.

When our department voted we had a tie vote with four professors voting for one student and four voting for another. It seemed that none of us had both students so that they were in a position to make a direct comparison.

I suggested flipping a coin. Everyone then laughed. When I tried to get them to take the idea seriously they got angry at me, saying that they could not leave it to random chance. Instead, they had to pretend that they were really determining the best student, when they were actually engaged in a process whose outcome was going to depend on which side was more persistent in carrying through their argument.

Anyhow, we should just be prepared to accept that our system of rewards will not correspond perfectly to what people have contributed. If you have a problem with this, grow up.

There is one other point worth hammering home. People will invariably complain that it will be hard to work out appropriate mechanisms for sharing research costs internationally. That is correct, and anyone who has followed trade deals for the last quarter century knows that it is hard to work out mechanisms for sharing costs with the patent monopoly system as well.

Rules on intellectual property have been major sticking points in all our trade deals. In fact, the Trans—Pacific Partnership would almost certainly have been signed and approved under the Obama administration had it not been for the time it took to work out a deal on data exclusivity for biological drugs.

So yes, we would have to negotiate rules on the sharing of research costs. There will be conflicts and the rules will not be perfect, but so what?

One final point, if someone is really a “globalizer” they should support open research freely shared across borders. This is not Alice in Wonderland where the pharmaceutical industry and their elite supporters get to change the language to suit their purposes.

Those folks who support longer and stronger patent and related protections are anti-globalizers, trying to lock down technology. They are welcome to hold that position, but they are liars if they call themselves “globalizers.”

Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC.

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 Post subject: Re: Money = Confidence
PostPosted: Tue Mar 17, 2020 11:27 pm 
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As I understand the concept of money... my drunk ass wishes I never had the need for it tbh. Sick of bending over for the man... And loving people always are the first to get screwed, not in a good way, orgasms fuckers. Empathy isn’t always fucking easy ffs. I swear, half the time I want to give the fuck up. Drinking, this world is insane... Not in a good way either... Cheers!

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 Post subject: Re: Money = Confidence
PostPosted: Wed Mar 18, 2020 7:14 am 
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DEANNA79 wrote:
As I understand the concept of money... my drunk ass wishes I never had the need for it tbh. Sick of bending over for the man... And loving people always are the first to get screwed, not in a good way, orgasms fuckers. Empathy isn’t always fucking easy ffs. I swear, half the time I want to give the fuck up. Drinking, this world is insane... Not in a good way either... Cheers!


in vino veritas.

O{DC}O

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 Post subject: Re: Money = Confidence
PostPosted: Wed Mar 18, 2020 9:52 am 
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Markets slide despite government stimulus pledges to fight Covid-19 recession - business live

>*^*<

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 Post subject: Re: Money = Confidence
PostPosted: Thu Mar 19, 2020 12:34 pm 
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EVERY Briton could be paid a universal basic salary by the government regardless of means to help the country through the coronavirus cash crisis

Wow, that sounds like a really great idea!

Anyone around here know anything about "Universal Basic Income"?

Seems like something we should discuss...

:-"

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 Post subject: Re: Money = Confidence
PostPosted: Thu Mar 19, 2020 12:35 pm 
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(The rate things are going, I'm holding out for the Financial Transaction Tax within a year!)

[-O<

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 Post subject: Re: Money = Confidence
PostPosted: Thu Mar 19, 2020 10:51 pm 
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Holyman wrote:
EVERY Briton could be paid a universal basic salary by the government regardless of means to help the country through the coronavirus cash crisis

Wow, that sounds like a really great idea!

Anyone around here know anything about "Universal Basic Income"?

Seems like something we should discuss...

:-"

Nope... not a soul... Holyman...*hug*

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 Post subject: Re: Money = Confidence
PostPosted: Sat Mar 21, 2020 12:51 pm 
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We Need to Understand This

How can our governments suddenly find the money to pay everyone’s wages, everyone’s bills, even their mortgages and rent?

We need to understand this clearly.

Not so that we can keep an eye on the Government, not so that we can ensure we don’t miss out, if there’s “free money” being doled out…

But so that we can ensure that we never go back to the way it was before our governments took these (apparently) extraordinary steps.

That’s the most important thing right now.

More important than not getting infected with the coronavirus.

Understanding how our governments are suddenly able to create all of this money to give to us.

Because if we can all understand it, we won’t ever need to go back to the way things have been for all of our lives until now.

Money isn’t a Real Thing

We’ve most of us heard something along those lines, throughout our lives.

“Money isn’t worth the paper it’s printed on”, is an entirely accurate statement.

What does that actually mean though?

Until the first half of the 20th Century, bank notes were essentially pre-printed cheques. A bank note was never intended to have any intrinsic value. Quite the opposite.

It was intended to save you the trouble and risk of transporting something actually valuable, like gold for example, when you wanted to purchase something.

You left your gold in the bank vault, and the bank would give you a promissory note as a receipt for that gold. Later, when you wanted to get your gold back in your pockets, you would take the note to the bank and exchange it back for your gold.

Alternatively, you could give the bank’s promissory note to somebody else, and they could take it to the bank, who would give the note’s bearer, the sum of gold indicated on the note.

And that’s where promissory notes really came into their own.

If you wanted to purchase something that the seller would give you in exchange for say, an ounce of gold, instead of taking an ounce of gold with you on your shopping trip, you would:

• Deposit the ounce of gold at a bank
• Get the promissory note as a receipt from the bank
• Give the promissory note to the seller of the item you wanted
• And the seller would take the promissory note to the issuing bank, who would pay the bearer of the note, on demand, the equivalent sum in gold.

Importantly then, the promissory note was never supposed to have an intrinsic value. It was always supposed to be worthless. Representing only the value that it could be exchanged for at the bank that issued it.

The Government Says So

During the 1914-45 European Civil War, it became increasingly impractical to keep using gold bullion as a means of payment.

In particular, the vast purchases of War Materiel from the United States would have required the shipping of gold bullion to America, just at a time when shipping things across the Atlantic became extremely hazardous.

By 1944, all of the major European powers had come off the “Gold Standard”, that tied a nation’s currency to gold reserves; and were instead using fiat currencies.

That is:

Government-issued currency that is only able to be used as a medium for exchanging value, because people trust the government that issued it.

So long as the Government doesn’t issue too much of it, the currency should remain stable and therefore usable as a means of both exchanging and storing value.

By 1971, every nation in the World was using its own fiat currency.

From that point onwards, currencies were worth whatever the people using the currency believed it was worth – something that fluctuates on a daily basis, depending on the performance of the government that issued it.

That is all that “Money” is, now.

No intrinsic value. Just units of account. Just a way of keeping score.

NOT a Real Thing.

It’s Easy to Think Differently

Every day, we try to engage in activity for which we will be rewarded. And most of us accept our reward in the form of “Money”.

Something that we all know at some level, has no intrinsic value.

Our labour, our skills, some of the things we own, they all have Value. To someone.

The simple ability to lift a heavy box, move it somewhere, and put it down, will have value to someone who doesn’t have the ability or time to do that themselves, but needs it doing.

If you do that heavy-lifting for someone, you have given the value of your ability to someone who needed it. And in return, they may give you a worthless piece of paper, that has no utility value at all to you (or the person giving it to you) – although if the toilet-paper situation gets any worse, that may change…

But we don’t feel unhappy or short-changed by that transaction.

Because we know that there are other people who will accept the same worthless scrap of paper, in exchange for other goods and services of value.

So even though we know we are giving something of Real Value – our labour, skills, time – and are getting something of no value whatsoever in return; we are happy and confident that the worthless bits of paper and metal will be accepted by others, who will hopefully then give us things of Real Value in return.

The Magic Money Tree

What this means then, is that a Government that controls (however formally or informally) its own Central Bank, can create as much money as it likes, whenever it wants to.

Most of us understand this to some degree or another. Just as we understand that if a government were to print too much money, it would debase the currency through inflation and hyper-inflation.

We may be aware of situations in Germany in the 1930’s or Zimbabwe at the turn of the Millennium, where hyper-inflation saw multi-trillion-unit bank-notes printed. Multi-trillion notes that could barely pay for a loaf of bread.

Simply: the more money created within an Economy, the less that money will be able to purchase.

A mechanism is therefore required to remove money that Government has printed/pumped into their Economies: and that mechanism is Taxation.

Governments need to spend the money they can print on goods and services they have promised or are obligated to make available to their Citizens.

And so long as the individuals and organisations providing those goods and services are willing to accept the money a government prints, in exchange for those valuable goods and services, a government can purchase as much as it feels like.

But if a government prints too much money, eventually, its goods and service providers will stop accepting that money; insisting instead on a “hard currency”. That is: a currency that has not been debased by political and economic mismanagement (but still nevertheless, a fiat currency).

But if a government can reliably remove the money it created and pumped into the Economy, without too much protest, it should be able to prevent hyper-inflation affecting its currency.

Taxation is the mechanism by which governments can legally and arbitrarily take money from individuals and organisations.

We are asked to believe and accept that taxation funds Public Spending.

It doesn’t.

Governments can fund as much Public Spending as it chooses, providing it can pay for that spending with the money it can print.

Once it has spent that money into the Economy; it can then remove any money it no longer wants to be in the Economy, using taxation.

The money came from nowhere, and it goes back to nowhere. Which makes sense, for something that is worth nothing.

A Magic Money Tree, if you like.

Time to Sleep

As a result of the coronavirus, most Government-managed Economies have now been shut down.

Because human lives are more important than hard work (apparently).

But a Consumption-based Economy that suddenly finds itself without consumers, is going to struggle to remain intact during the period of the shutdown.

If this shutdown were run according to Capitalist, Free Market principles: then the Consumer Economy would have already died, more or less instantly. With no hope of any recovery.

So our governments have no alternative but to do what they are now doing.

Which is to turn on the printing presses and create the money that, up until now, we all thought we had to work hard to create and generate.

Nothing New

The last time our Governments did anything like this?

About ten years ago, or so, and more or less ever since.

And plenty of other times before that too.

Difference this time is that instead of restricting the flow of free, printed money, to the Finance Sector and Super-Wealthy (and calling it something baffling, like “Quantitive Easing”): our governments must now give it to Everyone.

They have to give it to Everyone, because there simply isn’t enough time to allow the Finance Sector to let the free money it has been receiving since 2008 – and continues to receive – “trickle down” to where it is NOW needed.

The post-2008 “Recovery” accrued – by a significant margin – to those at the “Top” of the Economy, who were supposed to then “trickle” the money down to where it was most needed.

But it is just plain common sense to understand that if you give money to a wealthy person, they will just throw it on the pile with all the rest of their money. But, if you give money to a poor person, they will spend it immediately, because they have no choice but to spend it.

Marginal Propensity to Consume

In Economics, the term that describes this is: “Marginal Propensity to Consume” (MPC).

Your current level of income and stored wealth determines how much you spend.

When you are rich, your MPC is low, because you don’t need to spend more, as you have likely already satisfied all of your wants (and very likely, all of your needs).

Let’s say that as a wealthy person, your MPC is 0.4. This means that if I give you a pound, you are going to spend 40p and save 60p. But if you’re poor, your MPC is going to be 0.8 or higher. So if I give you a pound, you will definitely spend 80p, and may save 20p.

Now the reason I am giving you the money (that I just printed), is because I NEED you to spend it: not save it. I need it circulating in the Economy, not sitting on a pile of the stuff, in a back-room of someone’s mansion.

So who am I better off giving it to? A rich person, or a poor one?

Whatever You Do With It: Don’t Repay Your Debts!

The problem that governments now face with this approach, is that so many consumers are so heavily in debt.

So actually, with the money that is now going to be given to consumers (sorry: Citizens), the bulk of it is likely to be used to pay debt obligations.

Which won’t help the Economy get through this “Snooze” moment.

For this reason, in addition to the Free Money now being offered by Governments, most debtors will also have received notifications from the financial organisations they owe money to, telling them not to worry about paying their credit-card, hire-purchase, loan and mortgage bills for at least the next 90 days.

Because people using the free money to repay their debts won’t stimulate the consumer spending needed to get the Economy going again.

But that is not something that governments or financial institutions can guarantee.

Once the money has been printed and handed over to individuals, they will do whatever they feel they need to do with it. And for most people, after they’ve made their rental payments on the property they live in, or on the money they have rented in order to buy a property they “own”, the next priority is servicing all of the other debts they have.

If they didn’t have all the debts they had, they wouldn’t need as much money as they do now. And for the most part, wouldn’t be doing a lot of the really shitty jobs many people have to do.

Repay What?

So as people begin to get their heads around this sudden and unexpected change in their understanding of Money and Economics, the first and most suspicious question they are asking is:

When this is all over, how are we going to repay all this Money we are getting?

Is it going to require another century or more of “Austerity”?

To which the answer is: no, it won’t.

Why should it?

What is it that needs repaying exactly?

Government is just printing this money.

It isn’t borrowing it from anyone. Who would lend to any Government, the kind of money that Governments are spending, when nobody has any clarity at all, about who or what is still going to be alive in 6-12 months. Where’s the confidence that money loaned can or will be repaid?

Governments are printing money.

Or rather: now printing the money that they have been allowing banks to print since at least 2008; and redirecting the flow to the Bottom, rather than the Top of Society.

So what is it that would need repaying?

They’re not even actually printing anything. It’s just numbers on screens these days. “Keystroke Money” it’s called; following on from “Pen-Stroke Money”.

No ink or counterfeit-proofing technology required. Just a few keyboard presses to update some electronic ledgers.

Job done.

So what’s to be repaid exactly?

Could be a Currency Inflation problem, if the taps are left open for too long.

But in the short-term, that’s a major benefit to debtors. Your debts won’t go up with currency inflation; but your wages will, along with the price of bread and other essentials.

Whilst it might sound shocking that you could soon be paying £200,000 for a loaf of bread; comfort yourself with the fact that you would also likely be earning more than a billion pounds a week for even a menial job…

…And could therefore pay off your mortgage, for the cost of 1, 2, 3 or 4 loaves of bread.

And once Everyone has settled-up, the Government can just turn off the taps.

And use the Taxation System to remove any surplus money it created, that is no longer required, and which may now be creating other problems.

Money is Only a Lubricant

An internal combustion engine, of the type found in every fossil-fuelled automotive vehicle, is a collection of finely-engineered mechanical parts.

In order to produce power, those mechanical parts must work together in perfect alignment, with perfect timing, and in perfect order.

An engine that every minute, is trying to typically contain six-to-twelve thousand explosive events within its cylinders, and translate that energy release into mechanical movement, requires a lot of lubrication and cooling.

That is provided by the oil we put inside the engine.

If there is no oil, the engine will overheat, its metal parts will expand, and the mechanism will seize up.

If there is too much oil, the oil will interfere with the proper functioning of the engine, blow gaskets, cause leaks, and usually, create a lot of undesirable smoke.

Money is just what Human Society uses to lubricate its Economy, to keep it functioning. To stop it seizing up or blowing a gasket.

It isn’t an item that has any other use. It has no other utility value. And for the most part, in the 21st Century, money doesn’t even exist as a tangible, material item you can touch, grab, hoard or use to wipe your self with.

So after all of this is over…

What exactly is it that would need to be repaid?

Who, at the end of it all, is going to be missing something they had before all this began?

The money that is being printed for this crisis can be used for this crisis. And when the crisis is over, it can be unprinted.

No biggie.

Everything’s going to be Fine.

Now Enjoy Yourselves.

<:-P

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 Post subject: Re: Money = Confidence
PostPosted: Sun Mar 22, 2020 12:08 am 
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Quote:
The coronavirus crisis is a disaster for many workers. In the UK, for instance, we often forget that prosperity does not rest on a handful of well-regarded business titans and big-named companies — many of whom are now visibly lobbying the government for financial support.

It also depends on the nearly 5m self-employed workers and 6m small businesses that live a comparably hidden economic life, out of public sight, and with little influence over policy. The pandemic provides a dramatic reminder of their contribution. And it is they who are most threatened today.

But our traditional policy instruments cannot reach them. Changes in interest rates do not help self-employed workers who face disappearing incomes and no sick pay.

Financial stability packages do not bail out the vast number of restaurants, theatres, cafés, pubs and shops that will continue to see footfall collapse in the days to come. Big infrastructure investments do not support those small businesses — 99 per cent of all companies in the UK — whose pockets are not deep enough to survive the disruption of the coming months.

The time has come, then, for something completely different — a Universal Basic Income. A cash payment made to everyone, with no strings attached, can support these people and their families. Providing everyone in the UK with £1,000 per month would give a direct and instantaneous burst of financial relief to the millions who find themselves unable to make basic ends meet.

I approach the notion of a UBI from a position of scepticism. In recent years, the popularity of such a scheme has surged. Many have seen it as a necessary response to the threat of automation, a way to support displaced workers who might find themselves without a job, and an income, in the future.

But in my own work looking at the impact of technology on the labour market, I have tended to view it as an imperfect response to a challenge that we do not yet face. For now the problem is not a world without enough jobs, but one in which people lack the skills needed for the jobs that have to be done.

The arrival of coronavirus has changed my attitude. Robots may not have taken all the jobs just yet, but the pandemic is decimating the demand that those jobs rely upon. Andrew Yang, the Democratic US presidential candidate, who built his campaign upon the promise of a UBI, put it well on Twitter: “I should have been talking about a pandemic instead of automation.”

A UBI could be affordable. For instance, handing out £1,000 cash per person per month would cost the government about £66bn a month — a fraction of the nearly £500bn bailout the UK needed to stay afloat during the 2008 financial crisis. It would only be a temporary measure.

The government says the UK will see half of all coronavirus cases in a three to four-week period either side of the peak in infections; 95 per cent of cases over a nine to 10-week period. We can still hope this will be a short-term crisis, requiring only temporary, albeit extraordinary, measures.

It also would be politically feasible, and not just in the UK. A UBI is emerging as one of those rare policy proposals that makes the political spectrum bend back on itself, with people on opposite ends meeting in violent agreement.

Jason Furman, chair of the Council of Economic Advisers under president Barack Obama, noted: “Congress should send you $1,000 — and another $500 for each of your children — as soon as possible”. And Steven Mnuchin, the US Treasury secretary, is now “looking at sending cheques to Americans immediately”.

While a UBI like this might sound a little basic, its simplicity is its strength. There is no need for complicated means-testing and monitoring, no requirement for clunky bureaucracy and administration. In Britain, everyone gets £1,000 — as simple as that. As a result, we can do this quickly; if the peak of the crisis is to come in weeks, that is a virtue not to be underestimated.

In 1942, amid the devastation of the second world war, William Beveridge published Social Insurance and Allied Service, transforming ordinary peoples’ lives at a time of great crisis by leading to the creation of the National Health Service and the expansion of National Insurance.

“A revolutionary moment in the world’s history”, he writes in the opening pages, “is a time for revolutions, not for patching”.

Our crisis is different. But like Beveridge, we must respond to it with imagination and open-mindedness. Tinkering and tweaking existing interventions is not enough. We must be far bolder.


https://www.ft.com/content/927d28e0-684 ... 22541af204

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 Post subject: Re: Money = Confidence
PostPosted: Sun Mar 22, 2020 4:11 pm 
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Got a feeling that Andrew Yang may suddenly become a front-runner for President this year.

Just checking the odds...

:!!

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 Post subject: Re: Money = Confidence
PostPosted: Sun Mar 22, 2020 4:14 pm 
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Goddammit!

Not even available to bet on. Which means when he is, it'll be too late.

>>::$

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 Post subject: Re: Money = Confidence
PostPosted: Sun Mar 22, 2020 4:38 pm 
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MARCH 20, 2020

The Virus and Capitalism

by ROB URIE


The U.S. is in the midst of a full-blown public health crisis made worse by systemic political dysfunction. The benchmark Imperial College study suggesting that up to two million people in the U.S. could die from the coronavirus epidemic assumes that the U.S. has an adequate healthcare system— that no one dies from not getting treatment. It doesn’t. Without one, expected deaths are much higher. Should the U.S. experience be similar to Italy or Wuhan to date, add another eleven million* dead to the worst case scenario.

The point here isn’t to create fear or panic, but to illustrate the difference in outcomes that a robust government response can make. In trying to corner the market for virus test kits, Donald Trump assured that few, if any, would be available. In like fashion, House Democrats passed a paid-time-off bill so fraudulent that even Pravda-on-the-Hudson, the New York Times, called them on it. The official plan to date is financial, to bail out Wall Street and the airlines, a payroll tax cut and token checks to the masses, and hope that it all works out.

In lieu of providing an adequate level of healthcare to address the pandemic, which even hardened D.C. hacks know can’t be conjured out of thin air in a timely enough fashion, what is left is ‘social distancing.’ This is polite speak for quarantines variably undertaken. China was able to reduce the mortality rate after Wuhan by 4/5ths through a combination of draconian quarantines and a rapid buildout of healthcare provision. However, the infection rate reportedly began rising as soon as the quarantine measures were relaxed.

The strategy of ‘flattening the curve,’ of slowing the spread of the virus so that the healthcare system isn’t overwhelmed at any one time, could bring the mortality rate in the U.S. down by matching healthcare need to capacity. But implied in the structure of the economic stimulus is a couple of weeks at home watching Netflix and then it’s back to the races. This is a low probability outcome. Eighteen months, the anticipated duration of the pandemic if effective action to mitigate it is taken, means that a radically changed world will emerge from the other side.

The idea being floated by Wall Street that pandemics are ‘black swans,’ unanticipated and unanticipatable events that legitimate extraordinary responses like government bailouts of private enterprises, suggests that history be made a required subject in business schools. Here is a partial list of epidemics and pandemics. They are so common that a functioning society would have thousands of permanent staff that do nothing but plan for them. And they are one of several thousand reasons why a functioning society would have a functioning healthcare system.

To understand why Wall Street should be left to rot this go around, look back to January 1980, when the current bull market can be estimated to have begun. The S&P 500 has to fall by another 2/3rds, from 2,400 to 910, to get to the normal valuation level (CAPE P/E = 8.5) at which this epoch of finance capitalism began. Understand, the S&P 500 at 910 wouldn’t represent a crisis, just a more reasonable valuation level. The financial crisis, to the extent there is one, is due to systemic leverage, the same problem that Wall Street faced in 2008.

The pandemic is but the catalyst for current financial troubles, not the cause. As was warned in 2009, 2010, 2011, 2012, 2013, 2014, etc., the Obama Administration’s bailouts were to make rich people rich again, not to ‘save the economy.’ So, here we are ten years later and the previously bailed out are once again telling us that the Federal government has to bail out corporations and the rich to ‘save the economy.’ ‘The economy’ is indeed in trouble, but it is in trouble because of the fragility created to benefit corporations and the rich, not because stock prices have fallen.

If ever there was a time for bold government action, this is it. The problem is that four decades of neoliberalism have instantiated the ethos that the role of government is to make rich people richer. Naomi Klein call this ‘disaster capitalism.’ I defer to Marx and Lenin. The idea that bailouts for corporations benefit workers begs the question: if the goal is to help workers, why not give the money to workers? It is the CEOs and corporate boards that loaded up their companies with debt to raise the value of their stock options that made these corporations so economically fragile.

More broadly, through the self-serving mythology of rugged individualism, capitalism has been used to shape and reshape social relations. This makes its dependence on serial bailouts both ridiculous and pathetic. Conceived several centuries ago to shift power from Aristocrats to a burgeoning business class, without a large and intrusive government to prevent consolidation and self-dealing, it quickly creates a new Aristocracy to close the door behind it. What is left is the privileged, remote and self-dealing oligarchy that now stands before us.

During ‘normal’ times, when this oligarchy isn’t acting to destroy other nations and the world, malgovernance for its own benefit is made the ordinary working of government. For instance, the U.S. military is wildly overfunded while the healthcare system is structured to let the people die at a politically acceptable pace. During ‘not normal’ times, a hierarchy of privilege is set in motion. First, save the wealth of the rich through bailouts. Second, secure the rights of corporations to profit from catastrophe. Last, let the people die at a politically acceptable pace.

A pandemic forces the afterthought— the pace at which the people are allowed to die, to the fore. The U.S. is currently working through bailouts to secure the wealth of the oligarchs and corporate monopoly plays to profit from catastrophe. Threatening to overturn the applecart is people dying at a politically unacceptable pace. The edifice of unenlightened self-interest risks being exposed. A few days without a paycheck and the rent doesn’t get paid. Without the rent, the landlord can’t pay the mortgage. Without the mortgage being paid, the bank goes under.

Suddenly the ‘richest country in the history of the world’ looks like some crappy third-world backwater. The social brutality of working paycheck to paycheck is transformed from individual to systemic failure. Bailouts for the rich expose how they got rich in the first place. And corporate chieftains scrambling to extort profits from sick and dying people exposes the class dynamic by which the rich get rich— by making poor people poor. The risk for the rich is that the logic of the guillotine begins to make sense. The risk for the rest of us can be counted in the sick and dying.

The coronavirus pandemic was both predictable, in that pandemics have been regular occurrences throughout human history, and it is external to how social organization is conceived under capitalism. Neoliberalism is a theory of governance without governing, of letting nature, in the form of markets, decide. Letting nature decide in a pandemic means the passive acceptance of mass deaths, which ties to the neoliberal refusal to create a functioning healthcare system. Political economy premised on individual desires is antithetical to the social nature of a pandemic. As with environmental degradation, it produces the logic of collective suicide.

The official American response to the pandemic has been exceptional only in the sense that markets have failed so spectacularly. The insipid, bi-partisan house ideology hasn’t worked because capitalism doesn’t solve social problems. It isn’t intended to. Donald Trump’s clumsy effort to corner the market in virus test kits for ‘American’ corporations has meant that we simply don’t have them. Obamacare certainly hasn’t produced any. The strategy that is unfolding of ad hoc quarantines and wishful thinking will either be converted into a robust response or the existing political order will end.

The hope that Democrats will fix what the Republicans broke is running up against three decades of Democrats breaking things. Joe Biden, who wholeheartedly supported George W. Bush’s $4 trillion war against Iraq, just last week claimed that the U.S. can’t afford a functioning healthcare system. Mr. Biden’s actual history in elected office has been to the right of Ronald Reagan. He spent decades trying to cut Social Security and Medicare. He supported bankruptcy legislation that shifted the onus for unpayable loans from banks to poor people. He is the worst person the Democrats could put forward in a pandemic if they care about governing.

The question of bailouts is fundamentally different from that of taking care of people. An adequate response to the pandemic will require years of dedicated effort, not tossing a trillion dollars at ‘the economy’ and hoping for the best. Social distancing and quarantines might require income and material support for tens of millions of people for as long as eighteen months. Nancy Pelosi is reportedly already balking at spending government money to do what is necessary. It would be a benefit to workers if she forced her corporate sponsors to provide paid time off for their employees, but she won’t do this.

The economic fragility behind the rapid descent into economic crisis isn’t a product of nature. It was purposely created by the bi-partisan political establishment at the behest of oligarchs and academic economists. NAFTA was meant to make workers economically insecure. Welfare ‘reform’ was passed to make life outside of capitalist employment intolerably tenuous. The minimum wage hasn’t been a living wage for forty years. And plans to cut Social Security and Medicare are meant to increase economic fragility. Likewise, austerity is the enforcement mechanism to keep the rich in control of American political economy.

This combination of manufactured social fragility and neoliberal governance will sooner or later produce a political rupture. The election of Donald Trump was the first act of one. An extended economic crisis can produce social solidarity or a deeply ugly political response. The Democrats’ choice to stick with their neoliberal program means that they are indifferent between electing Joe Biden and a second term for Donald Trump. Add the widespread unemployment that is already baked into their reflexive austerity and a more perfect formula for fascist ascendance is difficult to imagine.

The question of who would be to blame for such an outcome depends who gets to decide the answer. That makes it about power, not truth. As this pandemic plays out, finger pointing will be the least of our worries.

Notes.

* 330 million people X 80% infection rate X 5% mortality rate = 13.2 million dead in U.S.; 330 million is the U.S. population, 80% is the expected infection rate from the Imperial College study and 5% is the realized mortality rate in Italy and Wuhan.

Rob Urie is an artist and political economist.

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“We are moving into an era where authority cannot be The Truth. Only the Truth shall be the Authority in coming times, as sanctity of all authorities will be questioned."- Sadhguru


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 Post subject: Re: Money = Confidence
PostPosted: Sun Mar 22, 2020 5:03 pm 
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I wouldn't expect a Minimum Basic Income/Universal Basic Income/Universal Guaranteed Income/Citizen's Pay Initiative type thing yet. This is most likely going to be a one off situation.

That said, talk of direct cash injection to people instead of by way of traditional welfare state or traditional political programs (infrastructure, tax cuts, etc.) may work to break that first barrier and get people talking about the concept even if for the time being few, if anyone truly understands it.

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