ALL BLOG POSTS AND COMMENTS COPYRIGHT (C) 2003-2018 VOX DAY. ALL RIGHTS RESERVED. REPRODUCTION WITHOUT WRITTEN PERMISSION IS EXPRESSLY PROHIBITED.

Tuesday, November 26, 2013

Mailvox: you talking to ME?

Serge Tomiko is a rather strange anklebiter who enjoys informing me that I know absolutely nothing about economics, which statement is inevitably followed by an economics-related assertion that indicates he has read the appropriate material, but he hasn't understood it. He's very much like Kevin Cline in A Fish Called Wanda; the last time he showed up, he failed to understand that the graph he was citing to dispute my contention was charting the data from the very same Federal Reserve report I had cited in the first place.

This time he felt the need to "correct" my factual statement that deposits are unsecured loans from the depositor to the bank:
Once again, Vox shows he is absolutely clueless about how banking functions. Deposits are NOT loans to the bank. Banks do not in any way require deposits. It is a service they provide.

Banks create money by the authority of the government, which is given to entities in exchange for interest payments. They do not lend money. In this case, the banks are being perfectly honest. It doesn't matter in the slightest whether or not they have deposits. In fact, this kind of policy is intended to discourage deposits. 
Because beating up on Serge feels rather like kicking a toddler in the head, I thought I should give him the opportunity to retract his foolish "correction".  I wrote: "Serge_Tomiko, I humiliated you the last time you tried to correct me. Fair warning: I'm going to prison-rape you on this one, brutally, if you don't retract this. You have until tomorrow to think this over."

Not being the brightest bulb on the planet, Serge proceeded to double-down.
What more can one say? It should be blatantly obvious. How could banks charge negative interest rates if their lending was at all dependent upon deposits?

This is a complicated issue, but Vox has it completely wrong.

This would a good, recent work that not only demolishes Vox's common, yet ill informed idea of banking, it explains the origin of his error. Will he read it? I doubt it. 
As it happens, I did read it. I could have written it. And not only do I completely agree with it, but I note that it has precisely NOTHING to do with my original contention. The article deals with what bankers do with the money they are loaned by their depositors and says absolutely nothing about the nature of that money or the nature of the legal relationship between the depositor and the bank. Regardless of what Serge thinks, the central message of Buddhism is not every man for himself.

On the other hand, the 1848 Foley-Hill case in the English House of Lords said everything that one needs to know about both.
Edward Thomas Foley,–Appellant; Thomas Hill and Others,-Respondents

(1848) 2 HLC 28
English Reports Citation: 9 E.R. 1002
July 31, August 1, 1848.

Mews' Dig. i. 42, 1007; ix. 76; xi. 988. S.C. In 8 Jur., 347; 1 Ph. 399; 13 L.J. Ch. 182. On point as to relation between banker and customer, considered in St. Aubyn v. Smart, 1867, L.R. 5 Eq. 189; A.-G. v. Edmunds, 1868, L.R. 6 Eq. 390; Moxon v. Bright, 1869, L.R. 4 Ch. 294; Summers v. City Bank, 1874, L.R. 9 C.P. 587; Marten v. Rocke, 1885, 53 L.T., 1948. Distinguished on point as to limitation (1 Ph. 399; cf. 2 H.L.C. pp. 41, 42) in In re Tidd (1893), 3 Ch. 156, and in Atkinson v. Bradford Third Equitable, etc., Society, 1890, 25 Q.B.D. 381.

EDWARD THOMAS & FOLEY, – Appellant; THOMAS HILL and Others,–, Respondents [July 31, August 1, 1848].

Banker and Customer–Accounts not complicated, subject for action, and not for bill.

The relation between a Banker and Customer, who pays money into the Bank, is the ordinary relation of debtor and creditor, with a superadded obligation arising out of the custom of bankers to honour the customer's drafts; and that relation is not altered by an agreement by the banker to allow the interest on the balances in the Bank.

The relation of Banker and Customer does not partake of a fiduciary character, nor bear analogy to the relation between Principal and Factor or Agent, who is quasi trustee for the principal in respect of the particular matter for which. he is appointed factor or agent.
Is that sufficiently clear? The relationship between the depositor and the bank is the normal one between a creditor and a debtor. Because it is a loan from the former to the latter. In case the Old English legalese is too complicated for you, we can go from 1848 to 2013 and make it even simpler. Last week, the investor Jim Sinclair explained the same thing on Market Sanity:
I think that our listeners need to understand that when they make a deposit in a bank, they don’t have an asset. They become an unsecured lender to the banking institution, that goes back to British law in the 1850s and present law in North America and elsewhere. In fact, it’s universally accepted that once you make a deposit in a bank you’re lending the money to the bank. When you hear that the bondholders and lenders will have to undertake the rescue of any banking institution that faces difficulty to the listener, you are the lender. You are a lender without collateral. You are in a very junior financial position.
And if you're still in doubt, it is right there in US law, specifically 12 USC § 1813 - Definitions
The term “deposit” means—
(1) the unpaid balance of money or its equivalent received or held by a bank or savings association in the usual course of business and for which it has given or is obligated to give credit, either conditionally or unconditionally, to a commercial, checking, savings, time, or thrift account, or which is evidenced by its certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness, or other similar name, or a check or draft drawn against a deposit account and certified by the bank or savings association, or a letter of credit or a traveler’s check on which the bank or savings association is primarily liable:
What is an "unpaid balance of money received?" It is a loan. As it happens, it is an unsecured loan, albeit one that is nominally guaranteed by the FDIC, at the FDIC's sole discretion. Which is exactly what I stated in the first place. Banks are nothing but middlemen, which is why they require loans from their "depositors" in order to make new loans and profit from the difference between the interest they pay and the interest paid to them. The real service they provide is collecting all of the many smaller deposit-loans into a single large credit pool that can then be borrowed from more efficiently in larger loan packages. This is a legitimate function, perhaps even a necessary one, but hardly one that rationally justifies nearly 30 percent of all the operating profit in the country being devoted to it.

As it happens, the ability of the banks to create money is not completely dependent upon receiving loans from the general public. They can also receive loans directly from the Federal Reserve. And, as per the previous post, that $2.5 trillion injection of credit from the Fed is what has produced the $2.1 trillion nominal increase in bank assets since 2008.

The amusing thing about this particular failure to grasp the obvious is that Serge is a self-avowed fascist who flatters himself with the idea that he understands the English Common Law. It appears he is still stuck on the Magna Carta and hasn't reached the 19th century yet.

Labels: , ,

390 Comments:

1 – 200 of 390 Newer› Newest»
Anonymous Catan November 26, 2013 4:42 AM  

Don't the banks create money, as he says, but at something like a 10 or 40 to 1 ratio, where they are required to hold a percentage of what they create in assets? (And of course, said 'assets' have become more fantastical by the years)

What he's saying is that they create without any limit at all, or at least he acknowledges no limit. Considering that they just invented 'assets' such as subprime packages and derivatives in order to create more loans, it's not terribly far from the truth, but he doesn't seem to be factoring in any of this.

I'm not terribly familiar with the subject, is that accurate?

Anonymous Nitpicker November 26, 2013 4:47 AM  

The real service they provide is packaging all of the many smaller loans(deposits) into a single large credit pool that can then be borrowed from more efficiently in larger installments.

Anonymous VD November 26, 2013 5:05 AM  

Don't the banks create money, as he says, but at something like a 10 or 40 to 1 ratio, where they are required to hold a percentage of what they create in assets?

No. That hasn't been the case since 1990. Anything that is a non-personal time deposit or under $13.3 million doesn't require any reserves.

Duly noted, Nitpicker. I will clarify that.

Anonymous Steve Johnson November 26, 2013 5:22 AM  

Yes, from a legal standpoint a deposit is a loan to a bank.

Banks also don't need deposits to operate - they can hold any asset they wish then create money based on that.

Serge Tomiko is making a correct statement that doesn't actually contradict Vox's point.

Anonymous Difster November 26, 2013 5:38 AM  

Let's have a meeting of all the top banksters on top of the Federal reserve. Then we'll push them off.

Anonymous Stilicho November 26, 2013 6:14 AM  

I find it amusing that so many critics of the banking industry which enjoys the power of its privileged position due to government regulation criticize capitalism as the source of the problem and recommend that banking industry excesses be curbed by even more government regulation. Gasoline, meet fire.

Blogger Glen Filthie November 26, 2013 6:25 AM  

Well as far as I am concerned, the only bigger turd polisher than a political scientist is the economist. In the real world if the banks fail - you lose your money.

And - there's only two reason to use banks: investment, and safe keeping. In the dirty thirties when you couldn't trust the bank, your grandmother kept the family's cash in a tin up in the cupboard.

I'm beginning to think that would be a real good idea to go back to. When these institutions fail - they do so quickly and without warning.

Blogger Outlaw X November 26, 2013 6:26 AM  

Best to have a credit union where the common depositor sits on the board of directors. People you know and work with who accountable for the decisions they make. Of course this makes for slightly lower interest rates in my credit union but at the same time there is no derivatives and loan packaging to be resold and no shenanigans because it is their money as well. Our credit union although FDIC insured knows most of the borrows and have set up strict rules for loaning out their money.

I know some say credit unions are no different than Chase, but the ones with local control are. It is not an argument of any sort about Vox it is a security that I highly value. That being said the Treasury and the Feds can still change the rules anytime, because it is not our money when the rubber meets the road.

Blogger tz November 26, 2013 6:32 AM  

There have been extreme penalties for early withdrawl since Genesis 38.

But even simpler, go through the histories of the "Bank Runs" even to MF Global and some lesser known financial institutions.

In the runs jusst before 1860, the Silver panic, or all the failed banks at the start of the 1930's, were the banks charged with larceny, or were the depositors simply told to wait until the assets were split and they would get pennies on the dollar?

This is not mere political connection cronyism. There are institutions that do have a fiduciary duty (e.g. non-fungible precious metal - after MF Global, I'm sure the warehouse receipts may be for nonexistent commodities, or 10 receipts for the same pile - though Chase and Goldman are shuffling metal stockpiles here in detroit to generate fees).

Note that bitcoins can't be fractionally reserved, the last entity on the block-chain is the owner. It would be either you or the bank.

Blogger tz November 26, 2013 6:36 AM  

To add to Nitpicker's points, Banks also borrow short (checking accounts) and lend long (mortgages or car loans). The difference in maturities nearly killed the S&Ls in the 1970's. So there is something like impedance matching the durations. CDs are an attempt to help.

Blogger Outlaw X November 26, 2013 6:43 AM  

I have tried to get several people smart to try and tell me what money is. So far I have never got a satisfactory explanation to the question, when I press them on the subject. I don't understand the concept I must admit I don't really know what it is other than a means of trade. Wherein I don't have to bring in 1,000 pounds of copper to buy a TV set I just give them a piece of paper that in reality has no real value in its physical form, only a value in its perceived form. Accepted and traded by the confidence of that paper. That is the only way I know how to define it. Not made by me but loaned out to me for services rendered or banks robbed.

Anonymous Rosalys November 26, 2013 7:01 AM  

Ann Barnhardt has for me given the best definition of wealth I ever heard of.

http://www.barnhardt.biz/2013/11/05/the-one-about-how-we-are-the-gold/

Anonymous Eduardo November 26, 2013 7:19 AM  

The one flaw in A Fish Called Wanda:

"The central message of Buddhism is not 'Every man for himself.'"

Because it kind of is.

Anonymous PhillipGeorge(c)2013 November 26, 2013 7:24 AM  

Outlaw X

All commerce is contract. Offer acceptance and valuable consideration.

Governments create bonds out of nothing and Federal Reserve Banks create Promissory Notes out of Nothing to buy the bonds.
Given both instruments have no definite value the system operates in Legal Fiction.
Fortunately it only applies to corporate personalities - Legal Fictions.

Seeing the Canon Law/ backed by Rome recognizes Juridical Personage a system seems to have evolved, in the true sense of the word, where one section of the nominal church sanctions the creation of a fictitious world and helps the peek body called the Bank of International Settlements manage the Fictional World. Given no-one audits any of these entities how the world is run remains an impenetrable mystery.

Sshhhhhhhhhhh, Mums the word.

of course all of this is offered up as a humble opinion, best of all, without prejudice.

Of course very real people, men, sweat, bleed and die chasing that rainbow coloured fool's gold fictitious money. Something about 'love of money' comes to mind. No pockets in a shroud, they tell me.

cheers

Blogger TontoBubbaGoldstein November 26, 2013 7:27 AM  

"What was the middle part?"

Blogger Markku November 26, 2013 7:56 AM  

Outlaw X: It is a claim to a specific small fraction of the issuing nation's economy. If that economy turns into crap, then you have a claim to crap.

Anonymous jack November 26, 2013 7:57 AM  

Question: Where you are using direct deposit you have to have a bank. If you get a check [retirement payments]in the mails is there a mechanism where that check can be converted to usable cash without the local bank? And, if you have to have a bank account just to process checks you get and they start requiring a fee just to have your cash on hand what can you do?

I know the answer is probably 'you're screwed' but maybe some of the economic types here [and they are many] may have other answers.
Thanks

Anonymous Josh November 26, 2013 7:59 AM  

That is the only way I know how to define it

That's not a bad way to define it.

Money is a medium of exchange, a unit of account, and a store of value.

Anonymous Josh November 26, 2013 8:03 AM  

If you get a check [retirement payments]in the mails is there a mechanism where that check can be converted to usable cash without the local bank?

Is this after it's already been direct deposited? If it's a paper check, you could cash it at walmart, grocery stores, or one of those general stores in the ghetto that is essentially a bank for vibrants (they usually offer payday loans, check cashing, lotto tickets, money orders, cash4gold, title loans, tax returns, bill paying, etc. And also fried chicken).

And, if you have to have a bank account just to process checks you get and they start requiring a fee just to have your cash on hand what can you do?

Find another bank.

Blogger River Cocytus November 26, 2013 8:10 AM  

And this is the precise reason why you only deposit your money in a bank you trust. FDIC only has so much magic trust-dust before the purple things start turning invisible again.

Blogger Some dude November 26, 2013 8:23 AM  

uhhhh .. then why do I have my money in the bank????!!!!!!

Blogger Some dude November 26, 2013 8:24 AM  

@River

you used the word "deposit". But it's not a deposit. It's a LOAN.

Fuck! I don't want to be loaning money to these assholes!!!!!!

Anonymous Roundtine November 26, 2013 8:26 AM  

This article is a pretty good overview of bank funding methods: The Liability Structure of FDIC-Insured Institutions: Changes and Implications

This part jumps out:
And in 1994, when the Federal Reserve Board authorized banks to use this software to reclassify any transaction-account, retail sweep programs developed as banks notified their customers when they opened an account that “your deposit may be reclassified for purposes of compliance with Federal Reserve Regulation D. . . .” Banks began initiating sweeps without the customers’ explicit approval, and the volume of transfers occurring between transaction accounts and MMDAs increased dramatically.

The MMDA used in a retail sweep program operates as a “shadow” account that is visible only to the depository institution. The bank reduces its required reserves while leaving unchanged the transaction deposits that are available to the depositor. A bank’s level of transaction accounts decreases sharply, whereas the depositor’s view of the account appears unaffected.42 Just as this transfer occurs without the depositor’s explicit approval or knowledge, so, too, any profits that the bank earns are not generally shared; in addition, banks also can choose how the funds will be invested.

During 2002, the Federal Reserve estimated that banks swept $526.6 billion into MMDAs, and when then Federal Reserve governor Laurence Meyer testified before Congress, he expressed the belief that banks would probably reduce or eliminate the use of deposit sweeping if the Federal Reserve began paying interest on reserve accounts.

Anonymous hygate November 26, 2013 8:27 AM  

I thought this was common knowledge. I find the fact that anyone would dispute it to be disturbing.

Anonymous Josh November 26, 2013 8:39 AM  

I thought this was common knowledge. I find the fact that anyone would dispute it to be disturbing.

I find your lack of faith in human stupidity disturbing.

Anonymous hygate November 26, 2013 9:02 AM  

Josh - What can I say, I'm an optimist. I lost $50 betting against Obama being relected.

Blogger The Deuce November 26, 2013 10:05 AM  

Catan:

"What he's saying is that they create without any limit at all, or at least he acknowledges no limit. Considering that they just invented 'assets' such as subprime packages and derivatives in order to create more loans, it's not terribly far from the truth, but he doesn't seem to be factoring in any of this."

But even that can't be read into what he said. Even in the cases you describe, the banks are "creating" money by making loans, and yet Serge_Tomiko actually said "They do not lend money." What he seems to think is that the government gives all banks the authority to literally print currency, by fiat, in exchange for them paying some of the money to the government as interest for the privilege. Or something. Actually, it's impossible to say what he means, cause it's just nonsensical.

Anonymous Harsh November 26, 2013 10:15 AM  

uhhhh .. then why do I have my money in the bank????!!!!!!

Technically, you don't.

Blogger Jordan179 November 26, 2013 10:28 AM  

Savings deposits are most definitely "loans" to the bank in the normal meaning of the word "loan" -- you give the bank your money to hold, they invest it in various enterprises (mostly by loaning it to them) and they pay you interest on the money. Non interest-bearing accounts may involve the depositor paying the bank money for the convenience of electronic transfer. For obvious reasons, it is a bad idea to put any large quantity of money in a non interest-bearing account.

Perhaps Serge is confused because the usual terms of a bank deposit involve the right of the depositor to freely withdraw the money upon demand. This is exactly like a loan which may be called in at any time. Individuals rarely take out loans under such terms for the obvious reason that it might bankrupt them without warning: such loans are the bread and butter of banking because the large number of individual depositors makes it unlikely that all or even any large percentage of depositors will empty their accounts simultaneously. (When they do it's called a "run on the bank," and it's one of the worst fates a bank can suffer).

Blogger Jordan179 November 26, 2013 10:30 AM  

It is true that a bank can theoretically operate with no money at all. However, this is just asking for a run on the bank, and any bank which tries to operate in such a fashion for very long will go "bankrupt" -- and one should seriously consider the fact that this word means simply "bank broken," which is the long and short of it.

Anonymous Idle Spectator November 26, 2013 10:33 AM  

You mean Kline. There's also a somewhat semi-sequel to it called Fierce Creatures from 1997, with the same cast and Kline being a derring-do nincompoop.


"Magna Carter? That stuff that comes from a volcano?"

Anonymous The other skeptic November 26, 2013 10:36 AM  

I suspect that Serge is really Paul Krugman

Anonymous Aeoli Pera November 26, 2013 10:50 AM  

I, for one, am thrilled that superaddition is a real word.

Participation complete. End recording.

Anonymous Anonymous November 26, 2013 11:12 AM  

I don't know the amount of money I have, I only know how how many pounds of money I have - Ron Swanson. Works for me.

Blogger Serge_Tomiko November 26, 2013 11:24 AM  

"Banks are nothing but middlemen, which is why they require loans from their "depositors" in order to make new loans and profit from the difference between the interest they pay and the interest paid to them. "

There is nothing in anything you have cited that supports this assertion.

And come Jim Sinclair? The most insane gold bug of them all? No wonder you're having a hard time understanding the banking system.

I'm a busy guy, but I'll try to write something later.

Blogger Serge_Tomiko November 26, 2013 11:28 AM  

"But even that can't be read into what he said. Even in the cases you describe, the banks are "creating" money by making loans, and yet Serge_Tomiko actually said "They do not lend money." What he seems to think is that the government gives all banks the authority to literally print currency, by fiat, in exchange for them paying some of the money to the government as interest for the privilege. Or something. Actually, it's impossible to say what he means, cause it's just nonsensical."

See above. Vox, and many gold fetishists, believe in the money multiplier. I.e., banks are restricted to lending X times the deposists they have on hand. This is not true.

Anonymous ThirdMonkey November 26, 2013 11:33 AM  

When I was a teenager, our church had a good chunk of change on deposit at the local bank. My father, who was on the finance committee, started exploring other options as the rate we were getting was piss-poor. As is the case in small towns, word quickly got out, and suddenly, the a lot of the people who had lines of credit for their farm/ranch/business were having difficulty accessing their line of credit. At the next business meeting, the recommendation from the finance committee was voted down by an overwhelming majority. It was then that learned what Serge does not understand.

Anonymous TWS November 26, 2013 11:38 AM  

So now I'm just confused. Who are the bastards that are first against the wall when the revolution comes?

Blogger Serge_Tomiko November 26, 2013 11:40 AM  

"When I was a teenager, our church had a good chunk of change on deposit at the local bank. My father, who was on the finance committee, started exploring other options as the rate we were getting was piss-poor. As is the case in small towns, word quickly got out, and suddenly, the a lot of the people who had lines of credit for their farm/ranch/business were having difficulty accessing their line of credit. At the next business meeting, the recommendation from the finance committee was voted down by an overwhelming majority. It was then that learned what Serge does not understand."

I have no idea what is you are claiming here. I can't possibly speak to the perceived credit worthiness of anyone or anything in your small town.

What you have written has nothing to do with my point of contention: that deposits have nothing to do with a bank creating loans.

Blogger JCclimber November 26, 2013 11:44 AM  

Oh, the stupid, it hurts!
Actually, I suspect it has something more to do with a disconnected logic circuit somewhere in the brain, it is always amusing to encounter in real life where someone just doesn't seem to grasp a point that the majority of people are able to understand, eventually.

It is always kind of sad to see it strike a man. I've learned to expect it to some degree from women, but it is sad to see in a man.

Anonymous Jack Amok November 26, 2013 11:45 AM  

The definition of money, I think we had some go-rounds about that a while back. But Outlaw X hit on one very important aspect of it. Whatever money is, it must be something who's percieved value outweights its real physical value. Even for gold - which has a real physical value of shiny jewelry and electronics components, but a perceived value far higher. The source of the percieved value is the belief that other people will give you something of real physical value for it. Call it a shared delusion. Money - gold, silver, bank notes or bitcoins - is a mass suspension of disbelief that it's worth something. If the masses stop disbelieving in the form of money, it's value plunges.

Serge's contention that deposits aren't loans is another sort of shared delusion, one similar to believing the cops are there to "protect and serve." It's part of a fantasy (that was close to being a reality at one time in our more civilized past) about civic virtue and proper behavior and responsibile instutuions run by men who were flawed but still usually decent with any crooks weeded out...

The shared delusions that support a whole bunch of our instututions are fading away under onslaught from the sociopaths. Bad news for the forms of money that depend on those specific shared delusions.

Anonymous damntull November 26, 2013 11:45 AM  

I'm consistently amazed how people like Serge come back here, still defiant after being "prison raped" by Vox. I get Vox's point about dialectic/rhetoric, but the surprise is still there every time I see a rabbit enter the lion's den.

Blogger Serge_Tomiko November 26, 2013 11:46 AM  

"So now I'm just confused. Who are the bastards that are first against the wall when the revolution comes?"

That's a good question.

The problem with Vox in particular, is that he is admirably a devout Christian. He should not believe in these insane Enlightenment fictions of rational actors or absolute values that come from man.

All truth comes from God. There is nothing pure on his earth, least of all gold. It is not the system that is the problem, but the people running who are, fundamentally, evil.

I have made the argument previously that money is a projection of sovereign power. Whether it is used for good or evil, whether it enriches the lives of the people for the greater glory of God, or defiles them as Satan wishes, ultimately is the responsibility of the sovereign.

Blogger Serge_Tomiko November 26, 2013 11:49 AM  

"The definition of money, I think we had some go-rounds about that a while back. But Outlaw X hit on one very important aspect of it. Whatever money is, it must be something who's percieved value outweights its real physical value. "

This is an Enlightenment fiction.

Money is whatever a sovereign power says it is, that is demanded in taxes, and that can used to settle all debts public and private in a court of law.

Gold, for the last time, has rarely been used as a currency. Clay tokens have been used for a longer period of time in aggregate than gold in the entire history of mankind. Obviously, clay tokens aren't worth shit to anyone accept the king with the army who will kill you for counterfeiting them.

Blogger Serge_Tomiko November 26, 2013 11:52 AM  

"I'm consistently amazed how people like Serge come back here, still defiant after being "prison raped" by Vox. I get Vox's point about dialectic/rhetoric, but the surprise is still there every time I see a rabbit enter the lion's den."

I rarely come back here, actually. I'm just one of the few people who refuse to participate in Vox's circle jerk, so I believe I stand out.

It's not like Vox is going to be able to prove that deposits are lent out in the form of loans, so I would take a break before praising your god too much.

Blogger Nate November 26, 2013 11:54 AM  

"Money is whatever a sovereign power says it is, that is demanded in taxes, and that can used to settle all debts public and private in a court of law. "

You're an idiot.

Governments can say leaves are money... doesn't make it so. People will just resort to barter.

Anonymous ThirdMonkey November 26, 2013 11:58 AM  

Serge_Tomiko November 26, 2013 11:40 AM
I have no idea what is you are claiming here.

By threatening to withdraw their funds, the church was in effect calling their unsecured note. If banks do not require deposits as you are claiming, why would the president of the bank threaten to refuse to extend further credit to its customers? If a bank JUST creates money by government authority, then it wouldn't matter if a depositor had $10 or $10 billion on deposit. Yes, a bank can "create" money, but it needs a foundation of assets, which include deposits, as a base.

Blogger Serge_Tomiko November 26, 2013 11:58 AM  

"You're an idiot.

Governments can say leaves are money... doesn't make it so. People will just resort to barter."

If I say that you are going to pay me 5000 tokens of pressed horse shit every year otherwise I am going to kill you and your family, you are going to get me my tokens of pressed horse shit. If you are sued in my court of law, and you lose, I am going to force to pay the plaintiff in pressed horse shit tokens otherwise I am dragging your rebellious ass off to jail where you will work a slave.

You have no fucking clue how the world really works. The nerve, to call me an idiot. I'd rather slap you in the face. In a more civilized age, you'd be tiling the field of your lord. Be thankful a slave like you has a this make believe "freedom"

Anonymous Josh November 26, 2013 11:59 AM  

Gold, for the last time, has rarely been used as a currency. Clay tokens have been used for a longer period of time in aggregate than gold in the entire history of mankind.

Define "rarely"

Which economies used Clay tokens and over what time? Be specific..

Blogger Nate November 26, 2013 12:00 PM  

The stupidity in Serge's claim is obvious... but just to demonstrate... Serge claims that whatever the "sovereign power" is money... is money. This is very convenient for him... because when we point out that Zimbabwe went hyper-inflation no one actually used the Zimbabwe bills anymore and instead started using the currency of other nations.

Much like dollar bills used to be coveted in mexico over pesos.

Serge will of course fall back on the no-true power defense... see that doesn't count because those governments weren't really the "sovereign power".

Anonymous patrick kelly November 26, 2013 12:01 PM  

Then a straw man wandered into a forest fire.....

Blogger Serge_Tomiko November 26, 2013 12:01 PM  

"By threatening to withdraw their funds, the church was in effect calling their unsecured note. If banks do not require deposits as you are claiming, why would the president of the bank threaten to refuse to extend further credit to its customers? If a bank JUST creates money by government authority, then it wouldn't matter if a depositor had $10 or $10 billion on deposit. Yes, a bank can "create" money, but it needs a foundation of assets, which include deposits, as a base."

I don't believe this story. Find me something in any major news source that describes a similar scenario. There are few banks these days, so perhaps this was not actually a bank that has access to the federal reserve system.

Anonymous Josh November 26, 2013 12:03 PM  

Find me something in any major news source that describes a similar scenario

How did Lehman go bust?

Blogger Serge_Tomiko November 26, 2013 12:05 PM  

"The stupidity in Serge's claim is obvious... but just to demonstrate... Serge claims that whatever the "sovereign power" is money... is money. This is very convenient for him... because when we point out that Zimbabwe went hyper-inflation no one actually used the Zimbabwe bills anymore and instead started using the currency of other nations.

Much like dollar bills used to be coveted in mexico over pesos.

Serge will of course fall back on the no-true power defense... see that doesn't count because those governments weren't really the "sovereign power". "

Money is a projection of sovereign power.

What you describe, is a sovereign that no longer has power.

The aforementioned tokens of horse shit I am going to force you and your family to give me, aren't going to matter very much if suddenly I am dead and defeated and a new power has taken my place.

Hyper inflation, by definition, is the collapse of sovereign power. In Africa, things are a bit more complicated as the natives are incapable of civilization. So, "sovereign power" is really projected power from other countries. Colonialism is alive and well, but much less direct.

Anonymous Josh November 26, 2013 12:06 PM  

Nicely done, Nate.

Blogger JCclimber November 26, 2013 12:06 PM  

I'm still wondering where people are finding bank accounts that give interest.
My credit union gives about 0.05% on my savings, and about 0.02% on checking.
Etrade Money market is giving about 0.1% interest.
Bank of America? Ha. 0.01%. Nothing on checking.
Bank of the West? 0.008% on savings. Nothing on checking.

If you haven't realized that putting your "savings" in a bank is now for chumps, you haven't been reading your bank statements.

Blogger Serge_Tomiko November 26, 2013 12:07 PM  

Josh:

Lehman went bust to fuck over Lehman. Most "going bust" has been to facilitate wealth and power aggregation.

This goes back to my reference to God. The system, in theory, could work very well, but the people running it are evil.

Blogger TontoBubbaGoldstein November 26, 2013 12:07 PM  

Gold, for the last time, has rarely been used as a currency. Clay tokens have been used for a longer period of time in aggregate than gold in the entire history of mankind. Obviously, clay tokens aren't worth shit to anyone accept the king with the army who will kill you for counterfeiting them.

I will buy your gold for clay tokens.
Anytime.
Anywhere.
Please tell me what denomination to stamp the tokens with. If we're going WiskeyZulu style, I may have to use exponents or really big tokens.

Blogger Nate November 26, 2013 12:11 PM  

"You have no fucking clue how the world really works. The nerve, to call me an idiot. I'd rather slap you in the face."

You're welcome to try... the notion that you immediate respond with a reference to violence just indicates that my insult is justified.


Blogger Nate November 26, 2013 12:12 PM  

"What you describe, is a sovereign that no longer has power."

Called it.

Piss off retard.

Anonymous Josh November 26, 2013 12:12 PM  

Lehman went bust to fuck over Lehman. Most "going bust" has been to facilitate wealth and power aggregation.

I asked "how". What were the steps in the process, what was the mechanism?

If banks can just create money, how can any bank ever fail?

Blogger JCclimber November 26, 2013 12:14 PM  

Ya see Serge,
we all have this thing called "real world experience" where in real life, we have seen our own local banks go under because people pulled their money out, or the example above of a church shopping around for better rates and the bank to protect itself stops lending as much money.

And you demand internet stories or major MSM news articles.

This is why we laugh at you after a short pause to determine if you are just trolling and pulling our legs, or if you are truly serious in your belief that banks make money out of thin air (which they do, but only after creating a small amount of paint job fictional deposit base).

If banks can just create money out of thin air, why don't they just provide unsecured lines of credit to all their friends and relatives? And when the relatives don't pay, just create more money to pay for them?

Anonymous Josh November 26, 2013 12:15 PM  

The system, in theory, could work very well, but the people running it are evil.

Perhaps that is why it's best to have a system that limits the damage evil people can do by giving them less control over the economy. Like a gold standard with no fractional reserve lending.

Anonymous Porky November 26, 2013 12:17 PM  

Merry Christmas, you wonderful old Building and Loan!

Anonymous patrick kelly November 26, 2013 12:17 PM  

Serge you have a rather obtuse dead hobby horse there to beat.....

Blogger Serge_Tomiko November 26, 2013 12:18 PM  

Josh. Obviously, this is complicated. Try this.

http://www.positivemoney.org/how-money-works/advanced/the-money-multiplier-and-other-myths-about-banking/

Anonymous Josh November 26, 2013 12:20 PM  

Links in lieu of a response are insufficient.

You'll have to use your own words and your own arguments, not someone else's.

Anonymous Micah November 26, 2013 12:20 PM  

Outlaw X,

Be very careful before you put your full faith and trust in that credit union of yours, especially a "federal credit union." If you decide to make an installment loan with them you need to read the back of the contract first where it states that not only is the collateral backing your loan, but every dime you have in a checking, savings or CD can be confiscated if you get delinquent or default on the loan. This is not the case with banks and major lenders.

Blogger Serge_Tomiko November 26, 2013 12:22 PM  

"Perhaps that is why it's best to have a system that limits the damage evil people can do by giving them less control over the economy. Like a gold standard with no fractional reserve lending."

1) there isn't enough gold to meet demand
2) It is not possible to limit the evil man, except by proactively rooting out the evil. It is not as if the brief period of the 19th century when gold was plentiful was at all free of corruption.

Blogger Serge_Tomiko November 26, 2013 12:22 PM  

Josh: Don't be a faggot.

Anonymous patrick kelly November 26, 2013 12:23 PM  

Really, why care who pays back anything if you can just create more sovereign money endlessly. It's raining sovereign rainbow unicorn farts........

As for the shit chips, if a significant part of the populace starts buying up gold, or even food, fuel, ammo etc. with those shit chips, and especially since they can buy a few horses to make more shit chips, pretty soon shit chips won't be worth shit......the King can collect all the shit chips he wants, but the people will still have all that other stuff that is still worth much more than shit..........

Am I oversimplifying this? I don't claim to be an internet genius or awca, I'm barely ilk, but some of this seems pretty obvious to me.

Anonymous Noah B. November 26, 2013 12:24 PM  

Serge, you're the one who dropped the soap.

Anonymous ThirdMonkey November 26, 2013 12:25 PM  

A bank fails when the FDIC and the Comptroller of Currency determines it is critically undercapitalized. If it matters not whether the bank has deposits, then why shut it down?

This is what the "knockout" game must feel like on a crazy homeless person.

Anonymous patrick kelly November 26, 2013 12:26 PM  

It's only a flesh wound....

Anonymous Jack Amok November 26, 2013 12:26 PM  

What you describe, is a sovereign that no longer has power.

And how exactly does a sovereign power come to not have any power?

By ignoring reality and demanding people pay taxes in pressed horseshit would be a one way of getting there.

Back to my comment about shared delusions, "sovereign power" is another sort of shared delusion. We all consent to grant the sovereign power in exchange for some benefit we believe is worth it. If we stop believing the benefit is worth it, we withdraw our consent and the sovereign stops having power.

Oh, and for the "or they'll kill you" argument, Serge should take a look at what happens when fans at a soccer game get pissed at the cops for being too rough with a fan running onto the field.

http://www.minds.com/blog/view/144649/police-brutality-backfires-the-people-will-not-stand-idly-by-as-lone-man-is-beaten-once-subdued

That's what "withdrawl of consent" looks like.

Anonymous Michael Maier November 26, 2013 12:26 PM  

As it happens, I did read it. I could have written it. And not only do I completely agree with it, but I note that it has precisely NOTHING to do with my original contention. The article deals with what bankers do with the money they are loaned by their depositors and says absolutely nothing about the nature of that money or the nature of the legal relationship between the depositor and the bank. Regardless of what Serge thinks, the central message of Buddhism is not every man for himself.

I would agree with most of that piece too, except I must nitpick the idea that free-flowing and cheap money from the Fed is a "capitalist" idea. It is massive government intrusion into the market.

Blogger Nate November 26, 2013 12:28 PM  

"Josh: Don't be a faggot."

Those are the rules of the blog you mongoloid. Abide... or piss off.

Anonymous Josh November 26, 2013 12:28 PM  

1) there isn't enough gold to meet demand
2) It is not possible to limit the evil man, except by proactively rooting out the evil. It is not as if the brief period of the 19th century when gold was plentiful was at all free of corruption.


1)To meet demand for what? As far as "enough gold" the specific quantity of the gold doesn't matter as much as people think. Gold can be subdivided into grains and grams.

2)How does one proactively root out evil men, and what is to prevent other evil men from using those laws, institutions etc to root out good men?

Blogger Nate November 26, 2013 12:29 PM  

"I feel I might get raped through my computer."

To late.

Anonymous Josh November 26, 2013 12:31 PM  

truly sorry, I did attempt some civil discussion

Called people faggots is civil?

Fascinating

Anonymous Michael Maier November 26, 2013 12:33 PM  

Noah B. November 26, 2013 12:24 PM Serge, you're the one who dropped the soap.

PLEASE let someone get it when I say "Northstar's back" in this VERY particular context.

It's so appropro.

Anonymous Jonathan November 26, 2013 12:37 PM  

Has anyone, here, attempted an explanation of fiat currency in the first place? Nearest I can tell, the standard alt-right explanation for fiat currency is ... people are stupid.

Blogger Some dude November 26, 2013 12:49 PM  

This comment has been removed by the author.

Anonymous Porky November 26, 2013 12:56 PM  

Guys, Serge is right about this. If a bank is eligible for primary credit they typically don't have to provide any detailed information to the Fed for overnight funds.

Anonymous GreyS November 26, 2013 12:59 PM  

Though I am nearly illiterate about economics, one thing I've learned from studying the charts from the Anklebiter Exchange over the years is that, when you see an anklebiter use words such as "Vox is absolutely clueless about banking" or use "you are ignorant"-type insults it always means one or both of two things: The person is faking their knowledge and/or has let their emotions about VD get the best of them.

Blogger The Deuce November 26, 2013 12:59 PM  

Serge_Tomiko:

Josh. Obviously, this is complicated. Try this.
http://www.positivemoney.org/how-money-works/advanced/the-money-multiplier-and-other-myths-about-banking/


You freaking numbskull. Nothing in that article supports your ludicrous claim that banks don't require deposits or capital. What a perfect illustration of Vox's contention that you read things but don't understand them.

The article cites several individuals arguing that banks typically first extend credit, and then go out looking for the reserves to back it.

Attention moron: That the banks may go out looking for the necessary funds to back the credit they extended *after* extending it doesn't somehow mean the funds aren't necessary. The bank is still hosed if it doesn't have the cash on hand to pay its obligations when those obligations come due or are called in.

Regardless of the order the banks tend to do things in, we're all agreed that they don't keep your deposits in a warehouse, untouched, to be kept safe until you call on them. That's because they're using your deposits for other activities from which they profit, and don't have the cash on hand to pay everyone at once. They need most people to keep their deposits "in" the bank. That simple fact contradicts your claim that banks don't "need" deposits, and could (and want to) get out of them at any time with no problems.

Blogger Nate November 26, 2013 1:01 PM  

"Has anyone, here, attempted an explanation of fiat currency in the first place? Nearest I can tell, the standard alt-right explanation for fiat currency is ... people are stupid."

Yes. Fiat currency was explained in detail during the debate.

MUCH time was spent on it by both me and Vox.

Anonymous patrick kelly November 26, 2013 1:02 PM  

"If a bank is eligible for primary credit they typically don't have to provide any detailed information to the Fed for overnight funds."

Porky thinks this is what Vox disagrees with. I think Porky is mistaken.

Blogger Outlaw X November 26, 2013 1:04 PM  

If you decide to make an installment loan with them you need to read the back of the contract first where it states that not only is the collateral backing your loan, but every dime you have in a checking, savings or CD can be confiscated if you get delinquent or default on the loan. This is not the case with banks and major lenders.

Thanks Micah, but I don't make loans.

Anonymous patrick kelly November 26, 2013 1:11 PM  

"...but every dime you have in a checking, savings or CD can be confiscated ..."

Oooo....good to know.

"This is not the case with banks and major lenders." Maybe by the letter of the loan contract, but I'm sure it's somewhere in the "social contract" if the PTB deem it.....Fed's money, Fed's bank, Fed's rules......whatever they want them to be.....whenever they want them.........unless you're in their club......I'm not a member.....

Anonymous Jonathan November 26, 2013 1:11 PM  

Yes. Fiat currency was explained in detail during the debate.

MUCH time was spent on it by both me and Vox.


Basically, your explanation boiled down to a combination of governments are evil/people are stupid.

In other words, a non-explanation. An actual explanation involves providing a mechanism that explains the causal factors.

Anonymous Porky November 26, 2013 1:16 PM  

Porky thinks this is what Vox disagrees with.

Porky never mentioned Vox.

I think Porky is mistaken.

I think you're a silly mick.

Attention moron: That the banks may go out looking for the necessary funds to back the credit they extended *after* extending it doesn't somehow mean the funds aren't necessary. The bank is still hosed if it doesn't have the cash on hand to pay its obligations when those obligations come due or are called in.

As I remember, Citi failed their stress test. To my knowledge they haven't had the discount window slammed shut on them.

Anonymous VD November 26, 2013 1:16 PM  

Guys, Serge is right about this. If a bank is eligible for primary credit they typically don't have to provide any detailed information to the Fed for overnight funds.

Who cares what he was right about when no one was disputing that. No one said anything about any of that. He was completely and utterly wrong about this:

"Deposits are NOT loans to the bank."

Serge is a complete fucking moron who doesn't even know what deposits are.

Anonymous damntull November 26, 2013 1:16 PM  

I love this! The idiot troll Serge gets a story from ThirdMonkey that doesn't comport with his position. So what does he say? "I don't believe this story!" He keeps his eyes and ears closed to protect his delusions. To bad he won't keep his mouth shut as well.

Anonymous Jonathan November 26, 2013 1:19 PM  

@ Nate

It seems pretty obvious that debt-based fiat currency is an inevitable long-term consequence of the nation-state form of government. In other words, if you want avoid fiat currency, then, you're going to need to offer an alternative form of government to the nation-state.

Got any in mind?

Anonymous VD November 26, 2013 1:19 PM  

Links in lieu of a response are insufficient.

Especially links that you don't understand and aren't relevant to the point being discussed.

Blogger Nate November 26, 2013 1:23 PM  

"Basically, your explanation boiled down to a combination of governments are evil/people are stupid."

You could just say "I didn't read it.". That would be easier.

Fiat currency is what we call it when the government makes one bit of money win the commodity competition by providing it with some advantage. IE passing a law making it "legal tender" or some other such non-sense.

People wouldn't normally choose to pass around slips of paper... but they do... becuase the government tells them too.

That's fiat currency.

There are other commodities out there that people would rather use but they don't because of Fiat.

Blogger Nate November 26, 2013 1:24 PM  

" In other words, if you want avoid fiat currency, then, you're going to need to offer an alternative form of government to the nation-state."

Yes. A series of short term nation-states that are replaced when they start doing the bad things that nation states do in the long term.

Anonymous Jonathan November 26, 2013 1:27 PM  

People wouldn't normally choose to pass around slips of paper... but they do... becuase the government tells them too.

That's fiat currency.

There are other commodities out there that people would rather use but they don't because of Fiat.


Talk about completely whiffing the question.

Yes, we agree that this does happen. You've yet to explain why this comes about in the first place.

I read every bit of that discussion and not once was an explanation offered that answers my question. Offering a description of the function of something is not the same thing as explaining why it came to be.

This is not a tough distinction to understand.

Anonymous Jonathan November 26, 2013 1:29 PM  

@ Nate

Yes. A series of short term nation-states that are replaced when they start doing the bad things that nation states do in the long term.

I'm sorry, but how is this different form Permanent Revolution. I'm guessing that 99 percent of people are going to accept stable corruption over constant upheaval. But, hey, you can always fall back on patting yourself on the back and smugly proclaiming "most people are idiots".

Anonymous patrick kelly November 26, 2013 1:29 PM  

"Porky never mentioned Vox. "

Ok, I'll correct my statement: Porky thinks this is a serious point of contention in this comment thread..

I still think Porky is mistaken.

"I think you're a silly mick.""

You're partially correct. I'm a silly Micksican. We should have some of my special Micksican coffee sometime......

Blogger Eric November 26, 2013 1:30 PM  

Serge, if I'm understanding your position correctly, bitcoin must ultimately fail as a currency unless it attracts a state backer. Is that what you believe?

Blogger Nate November 26, 2013 1:31 PM  

"Yes, we agree that this does happen. You've yet to explain why this comes about in the first place."

yes. I did. I explained that governments do this because it affords them the ability to counterfeit. It gives them the ability to manipulate the money supply in their own favor. I believe specifically one quote I used was something like "Governments always do this. They can't not do it. There is simply to much power to be gained."

Which is why governments should never be allowed this authority in the first place.

They shouldn't even be allowed to coin money.

Blogger The Deuce November 26, 2013 1:34 PM  

Porky:

As I remember, Citi failed their stress test. To my knowledge they haven't had the discount window slammed shut on them.

The relevant word here being "test." Failure to punish Citi for being proven unprepared to meet their obligations in an emergency due to insufficient reserves doesn't somehow demonstrate that they don't need reserves to meet their obligations in an emergency.

Blogger Nate November 26, 2013 1:34 PM  

"I'm sorry, but how is this different form Permanent Revolution."

Because there would be brief periods of "not revolution".

Look.. I never claimed there was a good solution. The fact is most people don't want to be free. They don't want liberty. And to the extent that they do want liberty... they are not willing to pay the price it takes to keep it.

You can whine about that answer and call it a cop out all you like. It is the truth.

Blogger Outlaw X November 26, 2013 1:34 PM  

I wonder if people were all able to live in their means and no one took out loans would banks even exist without negative interest rates?

Anonymous Porky November 26, 2013 1:39 PM  

Who cares what he was right about when no one was disputing that. No one said anything about any of that.

Well, somebody brought up a story about some bank that might have collapsed if a church closed it's account. It doesn't really work that way so much anymore.


He was completely and utterly wrong about this:...

Yes, I saw the shower scene with Ed Norton.

Blogger The Deuce November 26, 2013 1:43 PM  

Nate:

yes. I did. I explained that governments do this because it affords them the ability to counterfeit. It gives them the ability to manipulate the money supply in their own favor.

And, of course, it makes taxation much easier from the government's end.

Blogger Nate November 26, 2013 1:46 PM  

"And, of course, it makes taxation much easier from the government's end."

Only direct taxation. Which another power that governments shouldn't have.

Anonymous Jonathan November 26, 2013 1:52 PM  

@ Nate

I explained that governments do this because it affords them the ability to counterfeit.

agree. In fact, this is so obvious that you need to explain why people come to accept this fiat currency that is so open to manipulation. Your answer should provide a *mechanism* that isn't reducible to "cuz people are stupid". What is the mechanism whereby people accept fiat currency?.

Which is why governments should never be allowed this authority in the first place.

I know, maybe if you click your heels three times and chant "there's no place for fiat currency, there's no place for fiat currency" the ability of government to print fiat currency will magically disappear.

They shouldn't even be allowed to coin money.

Okay. Who's gonna stop them?

They don't want liberty. And to the extent that they do want liberty... they are not willing to pay the price it takes to keep it.

Then why are we even bothering with this discussion?

Anonymous Porky November 26, 2013 1:56 PM  

Failure to punish Citi for being proven unprepared to meet their obligations in an emergency due to insufficient reserves doesn't somehow demonstrate that they don't need reserves to meet their obligations in an emergency.

Obligations?? Lol!!!

Blogger Nate November 26, 2013 2:04 PM  

"Obligations?? Lol!!!"

Well they do have obligations. They just don't have obligations to unsecured creditors.

Anonymous Noah B. November 26, 2013 2:07 PM  

Porky, I haven't gotten my free health care yet. Should I be worried?

Blogger Nate November 26, 2013 2:10 PM  

"What is the mechanism whereby people accept fiat currency?."

We did cover this. The fiat... creates the faith in the people that the currency will be accepted by others later... and thereby it wins the money competition.

"Okay. Who's gonna stop them?"

Free men with guns. Assuming they are actually willing. They really almost never are.


"Then why are we even bothering with this discussion?"

Because you accused us of a cop out. Its not a cop out. I didn't say anything that Jefferson didn't say a few centuries ago.

The price for liberty is near constant war.

Blogger James Dixon November 26, 2013 2:18 PM  

> In a more civilized age, you'd be tiling the field of your lord. Be thankful a slave like you has a this make believe "freedom"

Better people than you have tried to make slaves of us before, Serge. Sometimes they succeeded; for a brief time. Maybe you'll have better luck than they did. But I doubt it.

> I don't believe this story.

So you're calling him a liar. And you think you would be the one slapping someone in the face?

Anonymous Noah B. November 26, 2013 2:20 PM  

"The price for liberty is near constant war."

Or "eternal vigilance" so as not to frighten the children.

Blogger James Dixon November 26, 2013 2:23 PM  

> ... What is the mechanism whereby people accept fiat currency?.

The government requires you to accept their fiat currency for payments to and from the government. They may even go as far as banning the use of alternative forms of payment. This creates a substantial cost for using other currencies.

Anonymous Porky November 26, 2013 2:27 PM  

Porky, I haven't gotten my free health care yet. Should I be worried?

Vox is apparently giving free colonoscopies.

Anonymous Porky November 26, 2013 2:32 PM  

Well they do have obligations. They just don't have obligations to unsecured creditors.

Unless somebody goes to jail, there are no obligations.

Anonymous Jonathan November 26, 2013 2:35 PM  

@ Nate

Free men with guns.

If the majority of people are inclined to freedom, then, you're talking about those inclined to freedom ruling over everyone else. I don't have a problem with this but it seems to have its own problems.

Anonymous Jonathan November 26, 2013 2:37 PM  

@ James Dixon

The government requires you to accept their fiat currency for payments to and from the government. They may even go as far as banning the use of alternative forms of payment. This creates a substantial cost for using other currencies.

Hmmm, okay, sounds pretty convincing. However, you do realize that both Nate and Vox have dismissed this explanation with utter contempt, right?

Blogger Serge_Tomiko November 26, 2013 2:41 PM  

I can't help it. I continue to be astounded by the libertarian madness here.

"yes. I did. I explained that governments do this because it affords them the ability to counterfeit. It gives them the ability to manipulate the money supply in their own favor."

Governments can't counterfeit. There is a reason counterfeiting has always been one of the supreme crimes against the state, and is the original reason even the US Secret Service was founded.

Again, money is the primary manifestation of sovereign power. Counterfeiting is tantamount to rebellion, and has always been treated as such - in every single polity in the history of mankind. It doesn't matter if you crazy libtertarians are dreaming up some fantasy world.

It will never happen. Your head is not planet earth. It's very simple. If every single human civilization has always done the same thing, it is likely impossible to change. And I only use the word likely because the only certainty is God himself.

"Only direct taxation. Which another power that governments shouldn't have."

Also absurd, based on the prior premise. You're not God. It's not like no one has thought up this madness before. It doesn't work.

Taxation is not about raising revenue. No sovereign entity has to tax. The first cities, all of which used clay tokens, did not need to tax for any other reason than to organize society. Clay is cheap and plentiful. The tokens, somewhat difficult to counterfeit, combined with stiff punishments for counterfeiting, were required by the people to pay to the state. They acquired them by performing work for the state. This was the beginning of a large organized economy, rather than simple barter in a village.

Your libertarian world couldn't possibly work. You would never have enough resources to adequately defend yourself, and you would crushed instantly.

How can you possibly argue with people who believe in fantasies that have never existed and obviously couldn't work?

I just can't imagine what it must be like to be a libertarian. AH, if only the world - the entire - would just do what I want. We could have utopia!

What a horribly frustrating worldview.

"The price for liberty is near constant war."

Yeah, tough guy. Good luck building those tanks and nuclear weapons with your voluntary state. All for yet ANOTHER absurdly anti-christian fantasy - liberty.

Your only freedom is to choose to follow God's commands, or not. you are not free on this earth, where you are constrained by God's will of creation and the presence of evil.

I admire at times the fervent defense of Christianity Vox can proclaim. But this blaspheming of Enlightenment craziness, I just don't get it. Two thousands years of Christian Europe, and we - libtards? Bizarre.

"The government requires you to accept their fiat currency for payments to and from the government. They may even go as far as banning the use of alternative forms of payment. This creates a substantial cost for using other currencies."

But that doesn't matter. Government is evil! They can't tell us what do. There won't be any government next year, so it is completely illogical to even ponder what powers Government has. It's just an unnatural aberration to which we are temporarily subject.

Blogger Serge_Tomiko November 26, 2013 2:46 PM  

"The government requires you to accept their fiat currency for payments to and from the government. They may even go as far as banning the use of alternative forms of payment. This creates a substantial cost for using other currencies.

Hmmm, okay, sounds pretty convincing. However, you do realize that both Nate and Vox have dismissed this explanation with utter contempt, right?"

Of course they, have they are completely ignorant of what power entails.

I almost want to set a dictatorship to have both of them arrested for even proclaiming such absurdities. I would love to hear them screaming as they are dragged off in chains that "THE STATE IS VOLUNTARY!!".

I've got a great idea. Both of these cats should start making their own currency, and using it to pay their debts and taxes. I would love to see this contempt be hurled at the Secret Service and a Federal Judge.

it's crazy, completely madness. One must be entirely unhinged to believe that this kind of world exists anywhere.

Anonymous patrick kelly November 26, 2013 2:47 PM  

"They may even go as far as banning the use of alternative forms of payment. This creates a substantial cost for using other currencies."

Until it doesn't, see my shit chips as money example. There are limits to any "sovereign" ability to do this.

Jonathan, , I know you didn't propose Serge's shit chips, but it applies to anything that doesn't have real life, intrinsic value, like food, fuel, etc. Yes, even gold can fall into this category, but only after things much get worse than for fiat currency to fail. Even a bitcoin bubble can burst.

Blogger Serge_Tomiko November 26, 2013 2:50 PM  

""Deposits are NOT loans to the bank."

Serge is a complete fucking moron who doesn't even know what deposits are."

We have Vox, quoting 19th century law as proof that I am wrong.

You have been given a well cited article, that explains in detail that banks

This is the relevant section

"Perception of Banking Number 2: The Middle -Man.

The other two thirds of the UK public have a slightly better understanding of how banks really work.

They believe that banks take money from savers and lend it to borrowers. In this idea, banks borrow money from people who want to save it, such as pensioners and wealthy individuals, and they then use that money to lend it to people who need to borrow, such as young families that want to buy houses or small businesses that want to invest and grow. The banks make their money by charging the borrowers slightly more in interest than they pay to the savers. The difference between the interest rates – known as the spread – makes up their profit.

In this model, banks just provide a service by getting money from people who don’t need it at the time, to people who do. The Cobden Centre poll mentioned earlier asked people if they were worried about this process: around 61% of people said they didn’t mind so long as they get some interest and the bank isn’t too reckless.

The implications of this theory are that if there’s no-one who wants to save, then no-one will be able to borrow. That means it’s good for the country if we save, because it will provide more money for businesses to grow, which will lead to more jobs and a healthier economy. This is the way that a lot of economists think as well. In fact, a lot of economics courses at universities still teach that the amount of investment in the economy depends on how much we have in savings. But this is completely wrong, as we’ll see shortly."

Blogger Nate November 26, 2013 2:50 PM  

Serge...

You're literally to stupid to discuss this. You completely lack the ability to read and understand.

Anonymous VD November 26, 2013 2:55 PM  

Okay. Who's gonna stop them?

The invisible hand will. It just takes time. One of the problems is that the average person thinks in terms of days and weeks. A few don't. Remember, I left 15 years ago because I saw this coming. Mises left AUSTRIA in 1934, only a year after Hitler came to power and four years before the Anschluss.

The Federal Reserve isn't going to be any more successful in keeping the game going than Diocletian was or than the Chinese printers of paper money were. It never works. It always fails amidst depression, political chaos, and war. You will probably live to see it; your children definitely will.

Blogger James Dixon November 26, 2013 2:55 PM  

> However, you do realize that both Nate and Vox have dismissed this explanation with utter contempt, right?

I realize they've done nothing of the kind.

> Until it doesn't,

Exactly. Once the costs are exceeded, people will use another currency for everyday expenses and only use the government one when required. The government can make the costs quite high, of course. But that makes the breakage even more complete when it happens.

Blogger Serge_Tomiko November 26, 2013 2:56 PM  

"Until it doesn't, see my shit chips as money example. There are limits to any "sovereign" ability to do this."

You hardly described a limit.

You made the bizarre proclamation that because YOU don't like shit chips, somehow that means 1) other people feel the same way, and this affects value and 2) you will be immune from prosecution when my Secret Service agents come and arrest for attempting to use another currency.

You are nothing but a peon. You don't have any say in what anything of value is. You do what you are told, and you attempt to find some pleasure and power in this fantasy. But when the gun is to your head, you will grovel and beg, and hand me my shit chips like every other peon.

All of this, in a typical libtard fashion, is a delusional will to power. You have none, so you create this fiction.

Anonymous Josh November 26, 2013 2:58 PM  

Serge,

When are you planning on answering the questions I asked you?

Blogger Serge_Tomiko November 26, 2013 2:58 PM  

"The Federal Reserve isn't going to be any more successful in keeping the game going than Diocletian was or than the Chinese printers of paper money were. It never works. It always fails amidst depression, political chaos, and war. You will probably live to see it; your children definitely will."

Well, duh. As a Christian, you should know that we are born corrupt. Nothing on this earth lasts.

Blogger Serge_Tomiko November 26, 2013 2:59 PM  

Josh: ask again, I'm sorry.

Anonymous VD November 26, 2013 2:59 PM  

We have Vox, quoting 19th century law as proof that I am wrong.

The law is still in effect. It is cited in numerous cases, in both the USA and in England. You have been shown to be conclusively wrong. Again. Moreover, you omitted to mention the fact that I also cited current US code.

Everyone except you understands that bank deposits are loans from the depositor to the bank.

Anonymous MendoScot November 26, 2013 3:00 PM  

OT. There's a Chilean econoblogger I follow intermittently, Gonzalo Lira, who has recently discovered the manosphere:

Why does this matter? This overlap between Game and Zen Buddhism? Actually, I don’t know. But like a pig in a forest, I can smell that there’s a truffle here somewhere. Perhaps it’s that my one critique of many Gamers is that they follow it too robotically, and don’t realize that the situation and the flow of the moment—something which Zen values and respects—ought to weigh more heavily when running Game than mechanically adhering to strict algos. That is, don’t be a bulldozer, mindlessly and destructively forging ahead—be a sailing yacht, bending with the wind even as it is always clear as to its ultimate direction.

Now, the other point I wanted to make: How Game can apply to business.


Should have posted this on Alpha Game, but Google is denying that I am who I am.

Blogger Serge_Tomiko November 26, 2013 3:00 PM  

"The invisible hand will. It just takes time. One of the problems is that the average person thinks in terms of days and weeks. A few don't. Remember, I left 15 years ago because I saw this coming. Mises left AUSTRIA in 1934, only a year after Hitler came to power and four years before the Anschluss."

And, let us remember that Third Reich - which controlled a country not much bigger than Texas, and which had no gold and no oil, and limited industry, was able to conquer most of Europe and fight the whole world for 6 years.

So much for the invisible hand.

Blogger James Dixon November 26, 2013 3:01 PM  

> You are nothing but a peon.

A quote from "The Princess Bride" comes to mind here.

> But when the gun is to your head, you will grovel and beg, and hand me my shit chips like every other peon.

As I said, Serge, it's been tried before. Sometimes it's worked. Do you feel lucky?

Anonymous Jonathan November 26, 2013 3:02 PM  

@ patrick kelly

intrinsic value

If value is purely subjective, then, there is no such thing as intrinsic value. I'm not the one with whom you have an argument.

Blogger Serge_Tomiko November 26, 2013 3:02 PM  

Vox, again - you talk about this law like you're a damn Pharisee. What bible are you reading?

Laws mean nothing. Absolutely nothing. Jesus made this quite clear.

If anything, they are used to promote evil, not to prevent it.

Anonymous Josh November 26, 2013 3:05 PM  

Serge,

Gold, for the last time, has rarely been used as a currency. Clay tokens have been used for a longer period of time in aggregate than gold in the entire history of mankind.

Define "rarely"

Which economies used Clay tokens and over what time? Be specific.

Also, my question about Lehman.

Anonymous Jonathan November 26, 2013 3:06 PM  

@ James Dixon

Yes, both Nate and Vox have, in past posts explicitly denied that taxation has any causal role in the development of fiat currency. This denial follows logically from the premise that value is a product of nothing but individual, subjective choice.

Anonymous Josh November 26, 2013 3:06 PM  

Laws mean nothing. Absolutely nothing. Jesus made this quite clear.

The law of gravity means nothing?

Blogger Nate November 26, 2013 3:07 PM  

"And, let us remember that Third Reich - which controlled a country not much bigger than Texas, and which had no gold and no oil, and limited industry, was able to conquer most of Europe and fight the whole world for 6 years."

stupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupid
stupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupid
stupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupid

Anonymous Josh November 26, 2013 3:08 PM  

And, let us remember that Third Reich - which controlled a country not much bigger than Texas, and which had no gold and no oil, and limited industry, was able to conquer most of Europe and fight the whole world for 6 years.

So much for the invisible hand.


No one is arguing that it doesn't appear to work in the short run.

And "limited industry?" Are you freaking kidding?

Anonymous Jonathan November 26, 2013 3:09 PM  

@ Josh

The law of gravity means nothing?

He's talking about human laws, all of which have an expiration date. Gravity is a law of the nature and, by extension, the God of that nature. Conflating human laws and God's laws? Nice work.

Blogger Nate November 26, 2013 3:09 PM  

"Yes, both Nate and Vox have, in past posts explicitly denied that taxation has any causal role in the development of fiat currency."

Because taxing in printed bills is SO much harder than taxing in silver coins...

Anonymous patrick kelly November 26, 2013 3:09 PM  

Serge, seems like you see the phrase "libertarian christian" and get all lit up, but really, this thread is not about some kind of proposed ideologically utopian government. There will likely be better threads to pontificate about the errors of "the enlightenment", but doing it here just makes you look silly, and I should know....

The statement "deposits are unsecured loans from the depositor to the bank" does not necessarily contradict the statement "Banks do not in any way require deposits".

Anonymous DCM November 26, 2013 3:10 PM  

Mr. Tomiko,

Look at any bank's balance sheet. Deposits are listed as "liabilities." The money a bank pays depositors beyond the amount deposited is called "interest." Look up "liability" and "interest" in any dictionary. Detectives call things like this "clues."

Blogger Serge_Tomiko November 26, 2013 3:11 PM  

Josh: I am not going to summarize whole books. I would recommend reading _A History of Money in Ancient Countries from the Earliest Times to the Present_ by Alexander Del Mar. In it, you'll find all the information you need.

The truth is that the times gold was used were actually the times of the most turmoil. The first period, and this is rather unknown, is the Semitic invasion of Europe. The reason the various Punic settlements were founded was their proximity to gold. We know how that worked out. Their love of gold and money, arguably, was one of their major weaknesses, and the reason the Romans despised them and had no problems crushing their civilization.

It is actually a very fascinating book, I highly recommend it. It is impossible to find a good modern edition, so if you are near a major library, I would try to get it. I first read a copy at the New York Public Library. The only new copies are reproductions, and are hard to read.

Anonymous Josh November 26, 2013 3:12 PM  

He's talking about human laws, all of which have an expiration date. Gravity is a law of the nature and, by extension, the God of that nature. Conflating human laws and God's laws? Nice work.

I had confused his response there with his response to the invisible hand.

However, since serge is adamant that money only exists because of legal tender laws, it's quite evident he doesn't really believe that laws don't matter.

Anonymous Josh November 26, 2013 3:14 PM  

Sorry Serge, that's not an answer. Give some examples, with some dates, or withdraw your claim. You can't just say "go look at this book which is probably not in most libraries"

Anonymous Jonathan November 26, 2013 3:14 PM  

@ Josh

it's quite evident he doesn't really believe that laws don't matter.

Where in the New Testament does it say that human laws matter? Be specific.

Blogger Serge_Tomiko November 26, 2013 3:15 PM  

"Serge, seems like you see the phrase "libertarian christian" and get all lit up, but really, this thread is not about some kind of proposed ideologically utopian government. There will likely be better threads to pontificate about the errors of "the enlightenment", but doing it here just makes you look silly, and I should know...."

Bullshit. We got a bunch people, who believe in decidedly Anti-Christian concepts like the invisible hand, or even the idea that popular will can have any kind of good. Vox portends to be a Christian. These are heretical beliefs.

"The statement "deposits are unsecured loans from the depositor to the bank" does not necessarily contradict the statement "Banks do not in any way require deposits"."

this is true, but my point of using that terminology is to highlight the reality that that banks do not require deposits in order to lend. The negative interest rate does not mean what Vox thinks it does, and it will not have the result that he predicts it will.

Blogger Nate November 26, 2013 3:16 PM  

"Where in the New Testament does it say that human laws matter? Be specific."

What the hell are you talking about? His point is that Serge does believe laws matter because Captain Retard has said over and over that government laws are what makes money money.

Blogger Nate November 26, 2013 3:18 PM  

"Bullshit. We got a bunch people, who believe in decidedly Anti-Christian concepts like the invisible hand, or even the idea that popular will can have any kind of good. Vox portends to be a Christian. These are heretical beliefs. "

stupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupid
stupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupidstupid
stupidstupidstupidstupidstupid

Blogger Serge_Tomiko November 26, 2013 3:18 PM  

"However, since serge is adamant that money only exists because of legal tender laws, it's quite evident he doesn't really believe that laws don't matter."

Obviously, laws are required for a functioning society. I am not saying they are not. I am however saying that they are not proof of anything, and that laws don't always describe how things are really working. And this would be a great example.

You can have money, with the system I describe, WITHOUT writtens laws. That's likely how things always worked in the past. Modern accounting simply wasn't feasible until the past century. Various kings, or other agents of the government, would create and spend money with delegated authority, and the actual law was largely irrelevant, if it existed at all.

Anonymous Porky November 26, 2013 3:18 PM  

...a delusional will to power

Best description of libertarianism I've seen yet.

Anonymous Josh November 26, 2013 3:20 PM  

Also Serge, you're a fucking liar.

From the preface of the very book you gave as an answer:

From the fall of the Roman Commonwealth to the Revolution, coins, (made partly from old accumulations of metal,) were substantially the only moneys of Europe. During this lengthy period, all general and long-sustained changes in the level of prices are attributed to the changing level of the stock of coins,

Anonymous patrick kelly November 26, 2013 3:21 PM  

@Serge
"You hardly described a limit."

Yes, once the general populace no longer values what the King declares to be currency things unravel quickly.

"You made the bizarre proclamation that because YOU don't like shit chips, somehow that means 1) other people feel the same way, and this affects value "

No. It's not because I don't like shit chips. In fact, I like them very much because I bought a shit chip producing horse with them. Now I can pay the King all the shit chips he requires because they don't cost much of me anything I value.

"and 2) you will be immune from prosecution when my Secret Service agents come and arrest for attempting to use another currency." I doubt things stay stable long enough for the SS to go around arresting people for bartering stuff with real value. Come to think of it, I could burn shit chips as fuel.................

"You are nothing but a peon. You don't have any say in what anything of value is." I don't have any say in what the King values. Apparently sometimes the King ain't too bright.

"You do what you are told,"

Yes, but more and more it is for the same reasons I would listen to the local mob or drug cartel, they have the most guns and money, not any moral authority. I like breathing.

" and you attempt to find some pleasure and power in this fantasy. But when the gun is to your head, you will grovel and beg, and hand me my shit chips like every other peon. "

Yes, because I don't value shit chips. Here, have another pile. However, I doubt you will be King at the time.

"All of this, in a typical libtard fashion, is a delusional will to power. You have none, so you create this fiction.""

I wish I could write such comedy. You're a hoot....

Blogger Nate November 26, 2013 3:22 PM  

"From the preface of the very book you gave as an answer:"

dear God... how many times will we have to watch Captain Retard get shot with his own gun?

Anonymous Josh November 26, 2013 3:22 PM  

Where in the New Testament does it say that human laws matter? Be specific.

Every person is to be in subjection to the governing authorities. For there is no authority except from God, and those which exist are established by God.

Blogger Serge_Tomiko November 26, 2013 3:22 PM  

Josh, I'm trying to humor you here. I am not going to summarize a book. this is the most authoritative text on the subject. If you don't want to make an interlibrary loan, or purchase a copy from Amazon, that's your choice. You are being a dick by asking me to waste my time summarizing a whole damn book.

I've already given you a hint - that the Punic colonies were about the first attempt at a broad usage gold. What does that tell you? Gold was not widely used prior to that time.

Blogger Nate November 26, 2013 3:27 PM  

"Best description of libertarianism I've seen yet."

No. Its just simple projection. Captain Retard is the one with a delusional will to power. LIbertarians are only delusional enough to wish the could be left alone.

Blogger Serge_Tomiko November 26, 2013 3:27 PM  

"Also Serge, you're a fucking liar.

From the preface of the very book you gave as an answer:

From the fall of the Roman Commonwealth to the Revolution, coins, (made partly from old accumulations of metal,) were substantially the only moneys of Europe. During this lengthy period, all general and long-sustained changes in the level of prices are attributed to the changing level of the stock of coins,"

Fuck you. you fucking faggot. What are you claiming? That believe paper money was used in 500 AD? I mean seriously. What. The Fuck.

I haven't lied about anything.

You blasphemous libtard bitches are just incapable of having a civilized discussion.

No wonder Vox is always going on and on about betas and gammas. You're all basement dwelling, virginal faggots who place all your self worth in this debate. I'm sitting here giving you valuable information, when NONE of you have provided anything of substance, and I'm getting insults.

Suck a dick, I'm out.

Anonymous patrick kelly November 26, 2013 3:34 PM  

@Jonathan: Re: subjective value.

If things go all Fallout4 on you, no, it is not subjective at all. What enables you to survive is more valuable than what does not. Assuming you want to survive.

Air, water, food, shelter, clothing, or something I can trade for or secure it with. If the guys who has it only wants ammo or whiskey in trade, those are valuable, and all the piles of gold, paper currency, or shit chips are worthless to me.

Guns, ammo, and a common supportive community are valuable in securing survival.

That's what I mean by "intrinsic value". Beyond that are the luxuries of modern civilization.

Anonymous hygate November 26, 2013 3:35 PM  

I have no idea what is you are claiming here. I can't possibly speak to the perceived credit worthiness of anyone or anything in your small town.

What you have written has nothing to do with my point of contention: that deposits have nothing to do with a bank creating loans.


I would think that he is saying the bank was making a point that the money that was being lent out came from the deposits. If the church withdrew its funds, then the bank would not be able to loan out the money that farmers are dependent on.

Anonymous Jonathan November 26, 2013 3:37 PM  

@ Serge

We got a bunch people, who believe in decidedly Anti-Christian concepts like the invisible hand, or even the idea that popular will can have any kind of good. Vox portends to be a Christian. These are heretical beliefs.

No, not heretical, but completely orthogonal to anything in the Bible. Further, your comment implies that popular democracy is anti-biblical but I see nothing in the Bible implying anything of the sort.

Anonymous Josh November 26, 2013 3:38 PM  

More from Serge's book:

Thus accepted, they open a wide field for the history of money. They prove not only that money was known and used at least twenty-three centuries before Christ, but that even at this remote period representative and probably numerical systems of money were employed. The bell-shaped coin of Sung announces itself as good for gold, implying that gold had previously been used as money and hat bronze coins were now used to represent it

Anonymous Jonathan November 26, 2013 3:41 PM  

@ Nate

His point is that Serge does believe laws matter because Captain Retard has said over and over that government laws are what makes money money.

I don't think Serge was saying that laws have no consequence but that there is no lasting permanence to any system of human laws. Yes, his rhetoric seems to overshoot the point a bit but that was obviously the content of his claim.

If Serge quits paying his taxes he is surely aware that he'll wind up in jail and that any particular human system of laws has temporal consequences. He is disputing that human laws are of any eternal value, in themselves.

Anonymous Jonathan November 26, 2013 3:43 PM  

@ patrick kelly

I listen to the local mob or drug cartel, they have the most guns and money, not any moral authority

What is this moral authority, and how do we identify who has it?

Anonymous Jonathan November 26, 2013 3:46 PM  

@ Josh

Every person is to be in subjection to the governing authorities. For there is no authority except from God, and those which exist are established by God.

Ah, yes. Now, I wonder why it is that you don't go on. Could it be that the reason to obey the authorities is that they are established by God for the instrumental purposes of establishing public order, and not for some eternal purpose?

Anonymous patrick kelly November 26, 2013 3:47 PM  

"I don't think Serge was saying that laws have no consequence but that there is no lasting permanence to any system of human laws."

But we're talking about human banks and money governed by human laws. He's just seeing everything through his "enlightenment bad" fog colored lenses.

"Yes, his rhetoric seems to overshoot the point a bit.."

Easy to do when you twist yourself into an obtuse angle before firing.......

Anonymous Jonathan November 26, 2013 3:48 PM  

@ Josh

God makes it clear that the authorities he establishes are done so for nothing more than a secular purpose, that of establishing social order. That secular purpose is directly established in the very passage you cited, Romans 13.

Blogger Nate November 26, 2013 3:50 PM  

"Fuck you. you fucking faggot. What are you claiming? "

He's pointing out the obvious. That you didn't read the book... and if you did... you certainly didn't understand any of it.

You're a blithering idiot on a scale not often seen in the wild. Usually the best place to observe your kind is some kind of institution... where we observe you licking windows... or beating your head against padded wall.

Anonymous Jonathan November 26, 2013 3:50 PM  

@ patrick kelly

He's just seeing everything through his "enlightenment bad" fog colored lenses.

No doubt. Lots of criticism of the enlightenment seems to overshoot the target. In my experience, it's often possible to discern real content *despite* rhetorical excesses.

Anonymous patrick kelly November 26, 2013 3:51 PM  

"What is this moral authority, and how do we identify who has it?"

Sounds like a nice rhetorical question. I don't have much of a clue how to answer it better than the old definition of obscenity, I know it when I see it.

I suggest the authority must in some sense be moral itself, but then we gotta' define moral.....I got nothin'..........not sure it exists......not sure it doesn't.......

It has to be something better than might makes right.

Anonymous Josh November 26, 2013 3:51 PM  

Ah, yes. Now, I wonder why it is that you don't go on. Could it be that the reason to obey the authorities is that they are established by God for the instrumental purposes of establishing public order, and not for some eternal purpose?

You never specified that I needed to find where the laws mattered eternally. Just that they mattered. Perhaps you should be more specific in your questions in the future.

Blogger The Deuce November 26, 2013 3:51 PM  

Serge_Tardiko:

We got a bunch people, who believe in decidedly Anti-Christian concepts like the invisible hand

It's a metaphor, you dolt, for the operation of the laws of economics. No doubt you'll be telling us why those are nonexistent or optional too, and how it's obvious and anyone who doesn't realize it is an idiot, even though somehow you're the only one who's figured it out.

Anonymous Jonathan November 26, 2013 3:52 PM  

@ patrick kelly

Fine, but you are directly arguing against Nate and Vox. take it up with them.

Anonymous Josh November 26, 2013 3:53 PM  

Usually the best place to observe your kind is some kind of institution... where we observe you licking windows... or beating your head against padded wall.

To quote Ron Swanson, "nature is amazing"

Anonymous Jonathan November 26, 2013 3:53 PM  

@ Nate

It is extremely churlish for you to expect someone to summarize a gigantic tome in an internet comment section. It makes you look like a total buffoon.

Blogger Nate November 26, 2013 3:56 PM  

"It is extremely churlish for you to expect someone to summarize a gigantic tome in an internet comment section. It makes you look like a total buffoon."

Rules of the blog sugartits.

Anonymous patrick kelly November 26, 2013 3:56 PM  

"Fine, but you are directly arguing against Nate and Vox. take it up with them."

Something has obviously gone whoosh way over my head. Vox, Nate, would one of you please berate me and remind me what I'm arguing with you about?

Gotta; be about Glocks or Canadian whiskey.........

Anonymous patrick kelly November 26, 2013 3:57 PM  

.....or my random use of semi colons.....

Blogger Nate November 26, 2013 4:00 PM  

Jonathan... this is tiresome. Patrick is not arguing against Vox or me. I will demonstrate this with a rather close-to-home example.

Why did the US form the first Federal Reserve Bank? Was it to aid in taxation?

No. It was to lend itself money.

your focus on taxation is silly. Direct taxation is plenty easy to execute without fiat money. Is it slightly easier? Perhaps but that doesn't make it the primary reason for going fiat. The primary reason to go fiat is... and always will be... fraud.

Anonymous Jonathan November 26, 2013 4:03 PM  

@ Nate

patrick is arguing that things have intrinsic value.

Anonymous Josh November 26, 2013 4:03 PM  

Hell, I didn't ask for a summary, just some examples of societies that used clay money and not gold, with dates.

And the book he threw out as evidence states that gold has been used as money since at least 2300 bc. So that's roughly 4200 years of gold being used as money.

Anonymous patrick kelly November 26, 2013 4:05 PM  

Jonathan to Nate: "Let's you and him fight...."

Nate would win, kick my ass....and I would go home so humiliated I would buy a Glock...and drink Canadian Whiskey............and smoke Macanudos........

Anonymous Porky November 26, 2013 4:06 PM  

LIbertarians are only delusional enough to wish the could be left alone.

Funny how the dreams of libertarians and feudal lords seem so congruent.

Oh, to live in your own little fiefdom...

Anonymous Jonathan November 26, 2013 4:08 PM  

@ Nate

Rules of the blog sugartits.

Lots of perennially important topics involve mountains of empirical evidence. What you're saying, in effect, is that topics involving lots of empirical evidence to discuss meaningfully are forbidden on this blog. That's great.

From what I see, Serge takes a position, using rhetoric I would have avoided, that involves lots of evidence argued in gigantic books.

What you're saying is that Vox gets to take pot shots at Serge but that Serge doesn't get to respond. Stay classy Nate.

Anonymous patrick kelly November 26, 2013 4:08 PM  

Yeah, that's what libertarians are all about, fiefdoms........forcing other people to work for them..........

Anonymous Noah B. November 26, 2013 4:10 PM  

The Founding Fathers were libertarians, or at least close enough for my taste. They forged a nation. What have anarchists ever accomplished?

Anonymous Jonathan November 26, 2013 4:12 PM  

@ Nate

your focus on taxation is silly. Direct taxation is plenty easy to execute without fiat money.

Talk about jumbling up cause and effect! No, taxation makes the implementation of fiat currency possible. Fiat currency solidifies the claims of sovereignty. The cycle goes like this:

Taxation => Fiat currency => Increased control by the sovereign

Yes, taxes can be collected without the medium of a fiat currency. However, taxation allows for government to establish a fiat currency and the sovereign has a vested interest in doing so because it cements their sovereign position.

Anonymous Jonathan November 26, 2013 4:14 PM  

@ Noah B

The Founding Fathers were libertarians

Ideology is pretty clearly mostly ex post justification.

Anonymous Noah B. November 26, 2013 4:15 PM  

"However, taxation allows for government to establish a fiat currency and the sovereign has a vested interest in doing so because it cements their sovereign position."

Except when it doesn't. Like Nate's Zimbabwe example earlier.

Anonymous Noah B. November 26, 2013 4:20 PM  

Basically -- while your argument that the power to levy taxes helps give a government the power to create currency by fiat -- a government can still overplay their hand. Beyond a certain point, people will not continue to accept the legitimacy of a fiat currency. Which was Jack's point earlier.

Anonymous Josh November 26, 2013 4:21 PM  

Lots of perennially important topics involve mountains of empirical evidence. What you're saying, in effect, is that topics involving lots of empirical evidence to discuss meaningfully are forbidden on this blog. That's great.

It's not like there have been massive debates about the threat of a Japanese West coast invasion which required lots of empirical evidence. Or a massive debate about calvinism. Or a massive debate about inflation and deflation.

Anonymous Josh November 26, 2013 4:26 PM  

From what I see, Serge takes a position, using rhetoric I would have avoided, that involves lots of evidence argued in gigantic books.

This particular book isn't that gigantic. According to the epub I downloaded it's around 300 pages

Anonymous Daniel November 26, 2013 4:27 PM  

What have anarchists ever accomplished?

Anarchy, of course. If you are going to give credit to the Founders for liberty, then you darn well better give the anarchists credit for Banksy, Lady Gaga and the CIA.

Blogger Nate November 26, 2013 4:30 PM  

"What you're saying is that Vox gets to take pot shots at Serge but that Serge doesn't get to respond. Stay classy Nate."

No. I am saying that you don't get to say "You're wrong because BOOK!" particularly when the book in question doesn't actually say what you're claim it says.

Anonymous Porky November 26, 2013 4:31 PM  

Yeah, that's what libertarians are all about, fiefdoms........forcing other people to work for them..........

That's usually what it takes to be left alone if you are intent on having a government.

The Founding Fathers were libertarians, or at least close enough for my taste. They forged a nation.

Welcome to it.

What have anarchists ever accomplished?

Lived free. Died free. Killed a few invaders in between. Sailed the seas. Farmed the highlands. Basically had a kick ass life and did whatever the hell they wanted.

1 – 200 of 390 Newer› Newest»

Post a Comment

Rules of the blog
Please do not comment as "Anonymous". Comments by "Anonymous" will be spammed.

<< Home

Newer Posts Older Posts