Sunday, December 30, 2012
Saturday, December 29, 2012
Why moneylenders MUST be busted
The equivalent of one US dollar invested on the night of Christ's birth at less than 4 per cent per annum, would today be worth more than the Earth's weight in gold.
Here's the math:
a. The Earth's mass is estimated at (5.9722 times 10 to the power 24) kilograms
b. According to goldprice.org, a kilo of gold today costs $53,235.21
c. a*b = $(3.17931 times 10 to the power 29)
d. $1.03434 to the power 2012 = $(3.18127 times 10 to the power 29)
e. d>c.
Yes, you say, but what about tax?
Let's assume that interest over the last two-millenia-and-a-bit was taxed every year at the outrageous rate of 50%. All that does, by reducing the effective interest rate to 1.7% p.a., is defer the date at which the goal is reached; in this case, the year 4030.
The same argument applies to inflation, as long as it's significantly less than the interest rate.
So in the long run, the lender must end up owning everything - provided he can always find borrowers and especially, always have his capital safe.
Our governments, by bailing out the banks, have ensured that capital security.
Better still, under the present arrangement banks hardly need their own capital at all. If the Federal Reserve conjures up a billion dollars and lends it to a bank at zero interest, and the bank uses the money to buy safe government securities (albeit at a low yield), then the bank is being drip-fed free cash. Inflation doesn't matter - there's no bank capital to erode, so all inflation does is reduce the value of the guaranteed profit.
Give the lender complete security of capital, and real interest after expenses, taxes and inflation, and you will in time give him the Earth.
Which is why there must be a reset, or Jubilee.
There is no such thing as a perpetual motion machine, or a safe paper-based solution to a broken economy in which a minority increasingly takes ownership of their fellows. Sooner or later, the gathering of wealth by materially unproductive means must end.
Here's the math:
a. The Earth's mass is estimated at (5.9722 times 10 to the power 24) kilograms
b. According to goldprice.org, a kilo of gold today costs $53,235.21
c. a*b = $(3.17931 times 10 to the power 29)
d. $1.03434 to the power 2012 = $(3.18127 times 10 to the power 29)
e. d>c.
Yes, you say, but what about tax?
Let's assume that interest over the last two-millenia-and-a-bit was taxed every year at the outrageous rate of 50%. All that does, by reducing the effective interest rate to 1.7% p.a., is defer the date at which the goal is reached; in this case, the year 4030.
The same argument applies to inflation, as long as it's significantly less than the interest rate.
So in the long run, the lender must end up owning everything - provided he can always find borrowers and especially, always have his capital safe.
Our governments, by bailing out the banks, have ensured that capital security.
Better still, under the present arrangement banks hardly need their own capital at all. If the Federal Reserve conjures up a billion dollars and lends it to a bank at zero interest, and the bank uses the money to buy safe government securities (albeit at a low yield), then the bank is being drip-fed free cash. Inflation doesn't matter - there's no bank capital to erode, so all inflation does is reduce the value of the guaranteed profit.
Give the lender complete security of capital, and real interest after expenses, taxes and inflation, and you will in time give him the Earth.
Which is why there must be a reset, or Jubilee.
There is no such thing as a perpetual motion machine, or a safe paper-based solution to a broken economy in which a minority increasingly takes ownership of their fellows. Sooner or later, the gathering of wealth by materially unproductive means must end.
Cause for outrage: what bankers and traders have done to "the people"
"When floodwaters cover our homes, we expect that FEMA workers with emergency
checks and blankets will find us. There is no moral or substantive difference
between a hundred-year flood and the near-destruction of the global financial
system by speculators immune from consequence. But if you and your spouse both
lose your jobs and assets because of an unprecedented economic cataclysm having
nothing to do with you, you quickly discover that your society expects you and
your children to live malnourished on the streets indefinitely. "
- From "The Sharp, Sudden Decline of America's Middle Class" by Jeff Tietz, Rolling Stone magazine. The article details the harrowing experience of recession victims, many of whom have done "all the right things" and never been unemployed before.
Inequality is starkly worse in the USA than in other "developed" countries, as shown in the graph below (source):
"The Gini Index for the United States in the 2011 ACS (0.475) was significantly higher than in the 2010 ACS (0.469). This increase suggests more income inequality across the country."
- From "The Sharp, Sudden Decline of America's Middle Class" by Jeff Tietz, Rolling Stone magazine. The article details the harrowing experience of recession victims, many of whom have done "all the right things" and never been unemployed before.
Inequality is starkly worse in the USA than in other "developed" countries, as shown in the graph below (source):
That uses data from 2010, but according to the official Census it's getting worse:
Saturday, December 01, 2012
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