[ralfy]

ralfy,
You repeated include links which do not answer the question.

I asked for evidence that banks don't follow rules regarding capital adequacy. You provided a link to your post within a thread about the myth of the money multiplier. Within that post, you included a link to an article by the same name. Nowhere in that article is there a claim (let alone evidence) that banks don't follow rules regarding capital adequacy.

When I asked whether you dispute that capital adequacy rules take into account positions in OTC derivatives, you again included that same link which, again, says nothing about capital adequacy rules.

Should I conclude that your record is stuck on this one idea, and that you believe it explains everything?

It answers your questions. See for yourself: banks are able to extend credit far beyond reserve requirements.

In addition, your previous message--where you were on a "roll"--validates everything that I wrote.

[ralfy]

Yes, government regulation. This is a bubble created intentionally by Greenspan when he was chairman for the Federal Reserve. Without government regulations enforcing the federal reserve's role in our economy, this would never have happened.

You're grasping at straws by ignoring the fact that the main proof of government regulation is the existence of the Federal Reserve, a private consortium that controls money supply.

The state offers protections against losses, it easy credit, and bailouts, and you'll still blame 'da free markit' like some kind of squawking parrot.

Actually, both happened, remember? Wall Street banks played hard ball, dropped the ball, and demand bailouts. Their government "regulators" obeyed.

So the government does offer "protections against losses"...to their bosses.

See? Free market capitalism at work. You start with a free market, until some become stronger than others and take over.

[Rothbardian]

You're grasping at straws by ignoring the fact that the main proof of government regulation is the existence of the Federal Reserve, a private consortium that controls money supply.

Actually, both happened, remember? Wall Street banks played hard ball, dropped the ball, and demand bailouts. Their government "regulators" obeyed.

So the government does offer "protections against losses"...to their bosses.

See? Free market capitalism at work. You start with a free market, until some become stronger than others and take over.

A government serving the interests of specific groups of people has nothing to do with a free market. Nor does anything that happens in a government-regulated economy. I find myself wondering again if English is your first language because you don't seem to know what any of the words you are using mean.

Governments serve their own interests just like any other man made institution.

[ralfy]

A government serving the interests of specific groups of people has nothing to do with a free market. Nor does anything that happens in a government-regulated economy. I find myself wondering again if English is your first language because you don't seem to know what any of the words you are using mean.

Governments serve their own interests just like any other man made institution.

It has everything to do with a free market. That's because you don't understand the results of the latter.

Put simply, you start with a free market, until some become stronger than others and take over. A government that is formed will work for them.

This explains why industrialists, and later banks, dominate the U.S. economy, as well as the formation of the Fed, which is a private consortium of commercial banks.

[Eran]

At best, ralfy, you could argue that a free market society isn't stable as such - that the freedom of the market tends to erode due to the collaboration of opportunistic politicians and capitalists.

But you cannot, consistent with the terminology the rest of us are using, refer to what is left after that erosion as "free market".

[ralfy]

At best, ralfy, you could argue that a free market society isn't stable as such - that the freedom of the market tends to erode due to the collaboration of opportunistic politicians and capitalists.

But you cannot, consistent with the terminology the rest of us are using, refer to what is left after that erosion as "free market".

I never referred to "what is left" as a "free market" but the result of a free market, i.e., free market capitalism.

Put simply, the "freedom of the market" doesn't "erode" but is used by those who become powerful due to accumulation of capital. And since there are not just "opportunistic politicians" but opportunistic people in general, then the formation of governments working in favor of capitalists is inevitable, especially when much of wealth takes the form of money and is controlled by a financial elite, and when the means of production are controlled by the same.

The catch is that in democracies the same government is put to power by citizens through the vote, and the reason why citizens will vote for governments that support capitalists is because the same citizens receive their credit from the latter.

[Rothbardian]

It has everything to do with a free market. That's because you don't understand the results of the latter.

Put simply, you start with a free market, until some become stronger than others and take over. A government that is formed will work for them.

This explains why industrialists, and later banks, dominate the U.S. economy, as well as the formation of the Fed, which is a private consortium of commercial banks.

Nothing you've stated here is even remotely factual. No government has ever formed this way.

[ralfy]

Nothing you've stated here is even remotely factual. No government has ever formed this way.

Yeah, right, no industries dominated in the States, no Fed was formed, there's no Wall Street, and much of the wealth of the economy is controlled by government.

[Rothbardian]

Yeah, right, no industries dominated in the States, no Fed was formed, there's no Wall Street, and much of the wealth of the economy is controlled by government.

The new government was formed as soon as the British government was overthrown. There was never a period of free markets in which one or a handful of businesses dominated all industry and then turned themselves into governments.

An industrialized anarchy did exist in the Western Territories, but it didn't end the way you describe, it ended by the federal government finally catching up with western expansion and extended itself out.

The wealthy began corrupting the new government within the first year of its existence. As I've pointed out in my criticisms of minarchy. As I've stated many times governments will ALWAYS serve opportunists. If you go full retar...full commie then those opportunists will simply become the government.

In any event, no state has ever been created by a free market.

[ralfy]

The new government was formed as soon as the British government was overthrown. There was never a period of free markets in which one or a handful of businesses dominated all industry and then turned themselves into governments.

And yet it was the same British government that protected colonists as took control of land occupied by Native Americans.

An industrialized anarchy did exist in the Western Territories, but it didn't end the way you describe, it ended by the federal government finally catching up with western expansion and extended itself out.

Actually, it was railroad companies, etc., expanding thanks to protection from government.

The wealthy began corrupting the new government within the first year of its existence. As I've pointed out in my criticisms of minarchy. As I've stated many times governments will ALWAYS serve opportunists. If you go full retar...full commie then those opportunists will simply become the government.

Well, at least you got one thing right.

In any event, no state has ever been created by a free market.

If by "free market" you are referring to hunter-gatherer tribes, then you are right, but a market then was insignificant as there was little surplus production. But as the same tribes moved from hunting and gathering to farming, then the market grew, but also the use of armed force to control various communities. From there, it was just a matter of time before land was enclosed and declared "private property," with peasants paid money rather than a cut of what was produced, which are the origins of capitalism.

[humanityresurrected]

what is my motive?

http://dotsub.com/view/a34fba0d-4016-48 ... 1b58dbc9a4

let's first consider what many think to be the good side of this system: incentive. As the theory goes, the need for profit provides a person or organization with motivation to work on new ideas and products that might sell in the market place. In other words, the assumption is that if people were not motivated by their need to obtain money, nothing would be invented and little social progress would be achieved. First of all, the most powerful contributions to society did not come from people seeking profit. Louis Pasteur, Charles Darwin, the Wright brothers, Albert Einstein and Isaac Newton did not make their massive contributions to society because of material self interest. While it is true that useful inventions and methods do come from the motivation for personal gain, the intent behind those creations typically have nothing to do with human or social concerns and everything to do with detached self interest and blind personal gain.Fiscal Manipulation The currency used today is fiat which means its value comes essentially from government decree. Monetary value in the fiat system is actually derived from how much money is in circulation within an economy, generally speaking. Just as with any natural resource, the more money that is in circulation the less each unit of fiat currency is worth. When less money is in circulation, it makes each unit worth more respectively. This phenomenon could be called inflation and deflation, generally speaking. Now, the increase in the supply of money available in an economy is called monetary expansion. While a decrease in the supply of money is called monetary contraction. . Generally speaking, the expansion period is usually associated with so called "economic growth," for more money is available and able to be put to use and often more jobs are thus created. Conversely, monetary contraction is often called a recession or depression for money is drying up and hence there is less money to put to use; so jobs are lost and companies fail. Economic growth is typically defined as: the increase in the amount of the goods and services produced by an economy over time. However, let it be understood that economic growth is really a zero sum game. There is no such thing as true economic growth in and of itself, for the underlying mechanism is based almost entirely on the amount of liquidity, or money in the system. In other words, if I counterfeit 100 million US dollars and give it to you to start a business, and you buy and fix up an old building, hire a team of employees and start to produce a product that the public buys this would be considered an expansion of the economy. You have invested in real estate, increased the employment rate and created new products that others buy therefore exciting the circulation of currency hence the consumption cycle. Now, what if the authorities found out that all the money you had used was actually counterfeit and thus they shut down the whole operation? This would be a contraction of the economy, for the money thus vanishes. Your employees would be laid off, the building foreclosed upon and the production halted. One should ask, "What was the real growth?" If the increase or expansion in the supply of money can result in the creation of jobs and production, while the decrease or contraction results in the loss of jobs and production, what exactly was gained and lost? What was the point? Let's now consider how money is created and regulated by the government and its central bank. For this example, we will use the United States and its central bank, The Federal Reserve. The expansion and contraction of the money supply is what really creates the so called 'business cycle' you hear about in classic economics. This cycle is largely controlled and manipulated by the central bank, by way of interest rates. An interest rate is a fee charged to a borrower for the use of credit, or an amount of money. All money in the U.S economy, and virtually every other economy in the world is created out of debt, through loans. Every dollar in someone's wallet is borrowed from the banking system. This is important to understand: All money is created out of debt. Thus the rate by which the money comes into existence depends on how much a person is willing to pay in interest to acquire that loan. The commercial banks base their interest rates on values set by the central bank. When the Federal Reserve lowers its interest rates so do the commercial banks, and credit or borrowing becomes less expensive. When the Fed raises its rates credit becomes more expensive, and hence borrowing slows. The point here is that The Federal Reserve has the power to influence the interest rates of all banks. This translates into the power to control the amount of money being borrowed, and hence the amount in circulation and, to a certain degree, control over the growth periods and recession periods known as the business cycle. Why does the Fed need to control this? It basically comes down to controlling debt and inflation. If the money supply was allowed to constantly increase or expand it is simply a matter of time before the market becomes saturated with excess liquidity, stifling the resulting economic growth. This will lead to inflation depreciating the value of the currency, raising prices. Likewise, since outstanding debt is directly proportional to the money supply because money is created out of debt, the more an economy expands, often the greater the debt that is created. This sets up an inevitable systemic crisis for the money needed to pay the interest charged on the loans does not exist in the economy outright. Therefore, there will always be more outstanding debt than money in existence; and once the debt grows larger than a person or a company can afford defaults begin, loans slow and the money supply begins to contract. This particular scenario of debt overpowering and nullifying expansion could be termed financial failure, very simply. And this leads us to the next section: In this section we will discuss the nature and ramifications of the current worldwide economic collapse and how it has been compounded by the gross selfishness and social irresponsibility of the government and corporate powers. Then more profoundly we will discuss the role technology is having in displacing workers and the powerful changes this phenomenon is going to force in the world economy at large. 1. Beyond Irresponsibility The collective external debt of all the governments in the world is now about 52 trillion dollars according to the CIA's "World Fact Book." Of the roughly 203 countries in the world today, only four do not owe others money. The United States alone has over 12 trillion of this debt as of 2009, and a study authorized by the U.S treasury in 2001 found that in order to keep servicing the debt at its current rate of growth, by 2013, income taxes would need to be raised to 65% of one's income. The whole world is basically bankrupt - but how? How can the world as whole, owe money to itself? Obviously it's all nonsense. The monetary system is nothing more than a game.