- #36
WhoWee
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brainstorm said:
It sounds as if someone might have serious potential for a high level political office?
How Does Population Affect the Value of Land and Currency?
- Thread starter BilPrestonEsq
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In summary, the conversation discusses the argument for a fixed money supply and its potential effects on land and currency values. It suggests that a fixed money supply in relation to a growing population would lead to a growing demand for each unit of currency, ultimately increasing its value. It also mentions the potential consequences of adopting this monetary policy, such as avoiding economic crises and improving overall efficiency. However, it also acknowledges that there are many other factors at play in the economy and the relation between different prices and costs.
It sounds as if someone might have serious potential for a high level political office?
- #37
mheslep
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Just read the one you actually provided, starting with the next section. There are caveats to supply and demand, namely elasticity, and you have not attempted to establish increased demand for land in the US.BilPrestonEsq said:
http://www.investopedia.com/university/economics/economics4.asp
Economics Basics: Elasticity
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- #38
WhoWee
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BilPrestonEsq said:
As far as I can tell, the OP "truths" have not been supported. Any arguments built on this premise are unsupported as well.
- #39
BilPrestonEsq
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mheslep said:
This is from the article you posted. I wanted to point that out. Since land is a necessity is it not so elastic. The demand for land will remain closely proportionate to the population. If I haven't attempted to establish increase demand for land in the U.S. that is because it is not necessary. The demand for land always goes up with population, so does rent and home values along with it. Why would you try to deny such an elementary principle? Where would I get a "land demand chart"? I am pretty sure that doesn't exist. You could record home prices but obviously that would not have any relevance to an increased demand. Since home prices are affected by the fractional reserve system. And affected by those that create policy for the system. This is the problem I have been pointing out. Why don't you think about the implications of such a system, instead of picking out the slightest of discrepancies, all while ignoring the major problems set forth by the fractional reserve system?
- #40
WhoWee
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BilPrestonEsq said:
Have you considered how assets other than land are financed? Large ticket equipment for manufacturing, ships, airplanes, computers, store fixtures, medical equipment, trucks, and farm equipment are all typically lease financed. Next is the auto industry. How much does an average new car cost? How many new car transactions are financed and how many are cash deals?
Now consider how the manufacturing costs of all of these items were financed?
Businesses of every type run on credit.
Please explain how banks can satisfy this need under your restructuring (of the entire banking system) proposal.
- #41
BilPrestonEsq
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WhoWee said:
Supported by what? I posted a site explaining the law of supply and demand. The 'truths'
are true because they are undeniable by the current laws of supply and demand.
So the arguments on this premise are in fact supported.
If I am in the Electical Engineering section of this forum for example, and I don't understand something that has been stated, am I going to argue that the statements are untrue? If I don't understand why a perpetual motion machine doesn't work, and someone gives me a few searches to look at after he/she has explained why it doesn't work, should I demand that they claim their ignorance on the subject because of my own ignorance? Or, should I just learn the facts behind their explanation and add something valuable to the conversation?
- #42
BilPrestonEsq
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WhoWee said:
That is true all businesses in this country and most of the world run on credit. That is what makes them and the whole fractional reserve design impossible to sustain.
Unfortunately, banks can not satify this need for restructuring. They also cannot continue to satisfy this need for credit as it is. That is the problem. So it is not an easy question to answer "how could we adapt this plan to our current system?". It really can't, not without massive problems. But the thing is, the economy we have will crumble regardless. That is why it is difficult to listen to me. I wouldn't want to either if I haven't already done the research myself. It is really bad news. My only intention is to open eyes to the problems we will be facing and to be able to learn from them to avoid making the same mistakes.
If you look at how the Fed came about you will see that our addiction to credit started long ago. This also shows that the majority has no concept of banking history in general. We talk now about recessions and bailouts and such like people haven't been going through this unnecessary and damaging 'business cycle' for generations. http://www.u-s-history.com/pages/h952.html"
This is on the panic of 1907.
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- #43
BilPrestonEsq
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brainstorm said:
I understand your point. You would like me to look at it from a different angle. To more deeply look into the causes of what you claimed to be 'general phenomona'.
The perspective I have is the result of a lot of research into the causes of 'general phenomena' and I have found they are not general phenomena at all.They are effects of very acute issues brought on by monetary and fiscal policy. This effects every little exchange down to every dime, nickel, and penny. All of these exchanges have been recorded somewhere in historical charts and graphs. That is why macro level claims are not claims at all but based on historical facts. They even can even exhibit the psychology of people based on how consumers or businesses react to certain economic circumstances.
There is nothing you can't learn about even the smallest details of monetary exchange through the study of empirical historical charts. This data can then be used to form fairly accurate hypothetical scenarios.
I know, and I must say, I like that better than the way I said it, earlier in this thread.
What your not factoring in is, that in order for a company to remain competitive with the company that just layed off workers, they must lay off workers themselves. Deflation leads to more deflation in a credit/debt based consumer economy. That is why historically in order to counteract this deflation, credit is again expanded by lower interest rates, or demand for money is eased by deficit spending or bailouts or tax relief in some cases. This is clearly stated in historical data.
I understand exactly what you are saying here. I have made the same observations. I have considered them in everything I have posted on this thread. This is only possible with a fractional reserve system. Consider that if given the opportunity to gain wealth through a such a system, history has shown that the majority will take the opportunity, to improve their chances of survival. If one business takes on a loan to invest in their company, so must their competitors or they will be left behind in the market. It is true that a company with a larger investment capital is more likely to succeed than their underfunded competitor. This opportunity for one business to obtain credit, creates a need for others to adopt the same credit policies in their businesses'. So unless no one took advantage of credit would it be possible for others not to have to follow suit. That is the problem with
blaming businesses for contributing to the problem. They must in order to survive.
As far as each private individual's contributing irresponsible spending habits, IMO that is also similar. In order to maintain a certain level of respect in a certain culture you must follow what the mainstream dictates that level of respect and how it is expected to appear. For example if I want to get into a certain click I must do what the mainstream views as being indentifiable to that certain click in order to be accepted. This is used in advertising to target a specific audience. Now one thing that the majority of people in the U.S. have is a TV. Television creates a culture through the material being broadcasted. This contributes to the individual money policies of the majority. Again in the face of competition it becomes necessary for each person's 'social survival'.
No, I am not trying to hynotize you. You have already been hypnotized. Have you noticed that no one has even entertained the idea that the fractional reserve system has major flaws, even in the face of economic turmoil? Or even begun to entertain the possible benefits of a fixed money supply? The statements I have made about the causes for this economic turmoil we are in now are the same causes that have come about in the past. These same causes have been considered by the mainstream and are available for you to learn if you just read into them. If you would like me to prove specific statements I have made with historical data, I will. The same arguments I have made have been made in the past, and once again they fall on deaf ears. Why people defend the same system that intends to harm them, I have no idea. I would not have to repeat myself if the statements I made were recognized the first time. The 'bunch of problems' that I listed, that you claim are independant of each other, our actually not independant at all. All those problems are created by the fractional system, they would not be possible without it's creation. Those problems are what make the fractional reserve system fundamentally flawed.
When you put your money into a checking account, you are not making a deposit, you are loaning the bank money, 90% of your deposit by law, anyways. They are inturn loaning than 90% out. 90% or your checking account is actually just a promise from the loanee. That is why banks need to be bailed out when large amounts of loans get defaulted. Because they don't have your money. They have a promise from someone else to pay that money. And they create profits from that interest. So the bank borrows money from you and lends it to someone else at their discretion, then profit off of it and give you your cut. So while they make 7% annual interest for example you make maybe 1% off of your money.
They are also lowering the demand for your cash you have loaned the bank through the creation of money, only possible in a fractional reserve system. This leads to land or home speculation that leads to a housing bubble that leads to defaults. Just naming one of the problems. That is all possible by your loaning money to the bank. That is the cause of the 'bunch of problems' that I have listed. I am claiming that fractional reserve banking creates these problems because it does create these problems. It is a fault of the foundation of it's design.
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- #44
WhoWee
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BilPrestonEsq said:
If you want to defend your "truths" - fine by me. I thought you wanted to discuss an isolated theoretical model? Let's begin with this:
"1. Population dictates the value of land. The value of land will increase according to an increase in population. There is a fixed suppy of land available on Earth. Increase in demand through an increase in population relative to fixed supply of land will increase land values."
Are you suggesting dense populations of poor people will increase land values in an area?
- #45
brainstorm
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What's strange about all these lease-financed transactions is that they all inflate the cost of industrial goods and services by making relatively large amounts of money available for them. The idea is that because equipment is going to be used to produce large amounts of product for sale, they should not be sold for as little as possible. In other words, it is not the labor and materials of production that determine the price but rather the amount that the final product contributes to someone else's revenues. Another way to look at it is that people want to get as large a piece of other people's revenues as they can, so they price their inputs as high as the buyer will bear. If lease-financing was not available, the buyer could bear a lot less, so industrial equipment would have to be sold for less or not at all. Then the question would be how much businesses would be willing to "save up" for new equipment and whether equipment providers would hold out for higher prices or whether they would go ahead and sell at a discount to keep those businesses in business.WhoWee said:
If you understand the micro-mechanics of economics, why do you keep going back to referencing the money supply and fractional reserve banking instead of identifying other factors? It's like you can't stand that economics is constituted through multiple factors influencing each other because you want one think, i.e. banking, to be determinant so that you can push to change this one thing and have everything else behave the way you want it to. You refuse to look at other factors and other responses to the changes you promote than the ones you hope for.BilPrestonEsq said:
Laying off employees is not the only way to cut costs. You can also reduce the amount paid to employees without laying them off. They may threaten to leave, but will they really? If they do, will the company that pays them what they want stay competitive if others are working for less?
You don't get it. It's not about you considering things and then making a decision and stating it. It's about having a discussion that negotiates conflicting logics through explicit grounded reasoning. The discussion should be explicit and logical enough that anyone (logical) reading it should be able to understand why each or both come to the conclusions that they do.
This is the logic of compulsory conformity. Once you start obeying this logic, you become a robotic servant of conformity. Ever see movies of people marching in lockstep?
Obviously there is an interest in convincing businesses that they will fail if they don't have the backing of the best funding. That is in the interest of investors with money to fund relative market control. What do you think would happen if un(der)funded businesses could compete with well-funded ones, undercut their prices, drive their competitors out of business, and provide everyone with extremely affordable alternatives to high-priced goods and services? The poor would flourish and the rich would make less money. Is this what the rich want? No, that's why they support corporate financing and the belief that only well-financed businesses can succeed.
Nonsense. These words are an ideology of people who are too lazy to try out alternatives but prefer to think of themselves as dutiful and driven rather than lazy and/or uncreative.
When does the lockstepping start?
And otherwise people get targeted for "social elimination," I suppose? Ok, I see where your head is now.
- #46
WhoWee
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brainstorm said:
The large ticket leasing business is structured around the tax codes.
- #47
brainstorm
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What's the point of saying this if you're not going to discuss how or otherwise relate it to the discussion? Are you just trying to imply that tax codes are determinant? Does anyone realize that ALL these factors are humanly constructed and thus negotiable in various ways?WhoWee said:
- #48
WhoWee
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brainstorm said:
I made the connection of leasing to tax codes to make the point that finance is complicated - changing capital reserve ratios doesn't help the economy.
A quick description of a typical large ticket lease structure.
http://www.leaseforce.com/ASP/Dictionary/bottom.asp?Action=FirstLetterSearch&Letter=W
"Wrap Lease
A lease transaction typically involving a lease from an investor to an operating lease company with a sublease by the operating lease company to the end-user lessee. Typically, the operating lease company acquires the equipment and leases it to an end-user lessee. The operating lease company then sells the equipment, in accordance with the terms and conditions of the lease, to a packager who re-sells it to an investor who then enters into a lease with the operating lease company for a term longer than the term of the lease between the operating lease company and its lessee. A wrap lease is essentially a sale-leaseback of its own equipment by an operating lease company."
Again, this is a basic structure.
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- #49
mheslep
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You're missing the point. Everyone does not have a necessity for a given amount of land.BilPrestonEsq said:
No, visibly it does not. The population density varies wildly all over the world and the US.
Because, as you've stated it here, you're wrong.
I'm not interested in your other, off topic as you defined it, issue, and your discrepancies are not slight.
- #50
BilPrestonEsq
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mheslep said:
If you do not understand the subject and are not willing to learn stop posting on this thread. I am not missing the point, I am well aware of varying population densities. Do you think I am saying that everyone is going to pay the same amount for land in a fixed money supply economy?
NO, I am not. Obviously land and homes and rent will be of more value in certain areas!
The population has an effect on the demand of any land, anywhere. It also has an effect on the demand for certain more desirable locations.You seem to have some kind of strange personal vendetta against me if you are trying to point out things that I haven't even said.Do you actually think you have proved anything or that you are in any way providing any constructive criticism?
You asked me to prove that demand for land is rising in the US? Is that a joke? How do you measure demand if not price? Price in this system cannot accurately measure the demand of land because of speculation. Which I already explained.
HAha ha! Where am I wrong here? "If I haven't attempted to establish increase demand for land in the U.S. that is because it is not necessary. The demand for land always goes up with population, so does rent and home values along with it. Why would you try to deny such an elementary principle?"
Do you realize that it is not important whether the population rises at all? The whole point is that the demand for currency follows the demand for land by population change. If one is fixed(land) the money supply must be, or you will end up in the situation we are in now! Housing bubblemassive foreclosures, massive defaults. All those defaulted loans are actually the money people expect to be able to withdraw from there bank accounts on demand. 90% of the money in your bank is actually just a promise from someone else. As I pointed out earlier in this post the value or price of rent is dependant on the availability of undeveloped land. Prices can only rise to a point that people are willing to pay. If I can make more money in a certain area I must also pay higher rent. If the rent is too high that I cannot afford the rent even with higher pay I will choose not to rent there. If I can find a better income to rent ratio I will find it wherever I can. Even if it happens to be in a more rural area than my original plan. So population always dictates the value of land which dictates the value of a home or an apartment even if there are more or less desirable areas.
That is why cities are formed and is why suburbs exist on the outskirts. That is also why suburbs will eventually become more developed and undeveloped land will become suburbs.
Elementary principles. Your link on elasticity does not prove my statements wrong at all. Did you read your own link? Especially the part I pointed out? There are no massive spikes in population that will give such elasticity to the supply and demand curve of land. Land is also a necessity, not just undeveloped land but homes and apartments. So there is not going to be much elasticity in the supply demand curve at all. So far you have proved nothing I have said wrong, even though you still for some reason seem so desperate to do so. But if you want to nuts let's get nuts. Bring specific discrepencies to me if you'd like so I can drown you in credible references. I am not claiming to be all knowing, and I am very careful what I claim to be truth or fact. I would prefer that you didn't and that this thread could be more than just people ignoring factual information in some kind of lame attempt to take credibility away from my arguments. This can be the end all of fractional reserve banking threads.
- #51
WhoWee
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BilPrestonEsq said:
I really don't know what any of this land develpoment discussion - as posted here - has to do with fractional reserve banking?
- #52
BilPrestonEsq
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brainstorm said:
How can you post this and then post this?
In in effort to get on the same page, could you please list some of these factors?
I have considered many factors based on historical data. The entire economy would be entirely different without inflation and credit, without the fractional reserve system. This credit dictates all other factors. This is the major communication breakdown here. It is not that it will behave the way I want it to. It will behave in a way that is dictated my monetary and fiscal policies. I am looking at the major factors that dictate the economic 'weather'. I am not overlooking anything or at least doing my best, so if there is some kind of economic phenomena that you would like to specifically address then please do so that we can clear the air here. Above you make a great observation on what credit actually does to the market. This credit and therefore the whole design of the banking system is responsible for this kind of economic phenomena. Those circumstances create the possibility for a certain outcome. I am not overlooking free will in my conclusions. It is the determining factor. And it is based on how people react to certain economic circumstances. These circumstances are created my monetary and fiscal policy. That is what you are overlooking.
You are ignoring that by laying off half the employees you still have the same effect on the rest of the consumer economy as paying all the employees half as much. Let's isolate this to one town. Let's say that half of the town works for this company. The other half own various businesses in town. These businesses rely on the spending habits of that company's employees. So now the company lays off half of their employees. The spending in town then is cut in half. Ok, so let's say instead that all the employees get there pay checks cut in half and keep their jobs. The spending in town would again be cut in half. We are assuming here in order to keep it simple that there is no unemployment benefits. Also you could change the hypothetical scenario to one where there is unemployment and the taxes go up in the town in order to keep the budget balanced. People would obviously still be needing the necessaties of survival. Those businesses would remain relatively uneffected. Either way there is half as much money going to all of the businesses combined. You could argue that the prices will go down on the products that this company produces. That would only help to compensate for their own decreased incomes and increased tax burden. There is no need to get that complicated. So it doesn't matter, half the employees no pay, or all the employees half pay. It is still the same outcome, it still has the same effect on businesses that rely on consumer spending. Which is all of them as far as I know.
And I feel that the logic is clearly there. It is based on a ton of data. If you would like to list some of the things that conflict with what I have stated then you should. But we should start using referenced material if necessary and keep it specific.
.
This is not an option for most companies that want to survive in a free market. It is possible
but very difficult for a company to afford research into something that will give them an edge in the first place. Ok, another way to think about it. Why is it that the Olympics doesn't allow steroids or other performance enhancing drugs? Obviously because it gives some an unfair advantage over the competition. If one person used steriods then in order to compete all participants must take them as well. You could argue that harder and more advanced training could put you at the same level, but how much more time are you spending on training than the other participants? This is important. If I spend more time but train and prepare fairly, I will then have a higher time to results ratio if you get me here.
Also those same participants, on all steriods are still looking for a new edge, maybe follow the same advanced training and the same hard work you are using to gain an edge on steroid users. So relating that to businesses, you could say that credit is much like steroids or any performance enhancing drug to a business. How can you compete if your competitor can afford to pay for more advertising, better employees, more research into product development? If you spend more time trying to defeat your competition fairly you end up with a lower time to income ratio. No matter how you cut it more money equals more power for businesses, it is up to them how they use it. So if there are three companies with equal credit extended to two of them, those two will still be competing by way of efficiency and ingenuity because they both have this credit edge, and the third company with no credit, no investment capital will be left in the dust.
It is not that they want to hold onto a belief, it is that the rich made the rules in banking so that they could profit off of loaning money. The rich designed the system. That way they make money off other people's money too. Clever right? Also by creating new money you are able to obtain real goods and services in the world through paper money. Just as counterfeiters do. There is no difference except it is legal for them, because they helped to create the laws. I posted a link to a US history page on the panic of 1907. This is a very important piece of history. I can back up these statements of the rich designing the banking system with links to historical data. I won't even use wikipedia anymore ok Whowee?
I can only answer that with another question: What came first the chicken or the egg?
This must be an inherent human quality, I would imagine, that has been around since the beginning of mankind. It has just evolved to what it is now. I don't think it is going anywhere either. Though I am sure it will continue to evolve. It is really all about finding a mate. The more money you have the more power you have. This power is gained in an attempt to find a better mate with good genes, we are attracted to good genes. So that our offspring has a better chance of survival. That would be my guess.
- #53
brainstorm
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You cannot assume any factor(s) "dictate" or determine other factors until you do a micro-level analysis of how various parameters are specifically defined by human action. For example, at a general level you can say that lowering interest rates ALLOWS people to borrow more AND that the hope/belief of property-value appreciation STIMULATES them to spend more in the hope of profiting more. However, this does not mean that at the micro-level lower interest rates DETERMINED/DICTATED that people spent more money on property causing it to inflate. You could just as easily claim that it was the dollar-signs in people's eyes that caused them to spend more money, taking out larger loans if necessary to do so. What you're doing is like blaming car accidents on gasoline-availability. Yes, if people would burn less gas by driving less, there would be less accidents - but that doesn't make cheap gasoline the most determinant cause of car accidents. Each accident has its own specific causes, and each decision to drive does as well; even though there are influential factors involved with each choice - each of which has other influential factors that influence the choices that cause them. Assuming determination is reductive.BilPrestonEsq said: