Banking - the greatest scam on earth?

[FxTrader]

The definition of money-

1.A current medium of exchange in the form of coins and banknotes; coins and banknotes collectively. In video Ben Bernake clearly stetes that Treasury Bills are not money.

You are missing the point again with a myopic focus on strict definition. A Tbill is issued to pay for govt expenses (money is issued to the creditor) and creates a liability that is paid back with money that is created by the FED. Listen carefully, I did not say a Tbill is money but it is part of the money creation/supply process. What part don't you understand here?

You're quoting helicopter Ben here!!! The clown that is debasing the dollar and buying trillions of US govt debt, monetizing it. To him, money is just something that is printed or created with a keystroke on a computer at the Fed. He's made so many gaffes, misstatements and incorrect forecasts that he is just an embarrassment and disgrace to his position. I have no respect for anything he has to say these days. He's an incompetent economic vandal, is leading the U.S. to financial ruin and should have been sacked the minute Obama took office.

 

[Happy]

...
Gates is going to spend the seocond half of his productive life giving away the fortune in the most rational value for money way he can.

Great, but this is my money he is going to give away, that I shouldn't have paid for his product that is obvious to me was grossly overpriced.

 

[Tysonboss1]

Great, but this is my money he is going to give away, that I shouldn't have paid for his product that is obvious to me was grossly overpriced.

Well then don't pay it, Don't use his products.

Like any product, only spend your money on it if you think it is going to generate more value for you than holding the cash does.

I don't think their products are over priced, It would work out at a couple of cents per use if you worked out how much you use it.

If fact buying a news paper from a news agent would work out more expensive per use.

 

[Tysonboss1]

You are missing the point again with a myopic focus on strict definition. A Tbill is issued to pay for govt expenses (money is issued to the creditor) and creates a liability that is paid back with money that is created by the FED. Listen carefully, I did not say a Tbill is money but it is part of the money creation/supply process. What part don't you understand here?

You're quoting helicopter Ben here!!! The clown that is debasing the dollar and buying trillions of US govt debt, monetizing it. To him, money is just something that is printed or created with a keystroke on a computer at the Fed. He's made so many gaffes, misstatements and incorrect forecasts that he is just an embarrassment and disgrace to his position. I have no respect for anything he has to say these days. He's an incompetent economic vandal, is leading the U.S. to financial ruin and should have been sacked the minute Obama took office.

the original question was whether a $20 IOU was money, you said yes and then used the TBill as an example.

An IOU or T Bill is not money, it can be sold or redeemed for money. But it is not money.

 

[mazzatelli]

An IOU or T Bill is not money, it can be sold or redeemed for money. But it is not money.

In financial statements what are T-bills usually classified as? Is it cash and cash equivalents?

 

[FxTrader]

the original question was whether a $20 IOU was money, you said yes and then used the TBill as an example.

An IOU or T Bill is not money, it can be sold or redeemed for money. But it is not money.

You still don't get it, let me repeat once again for the last time. A Tbill is not money (never claimed it was if you read carefully), it can however create money when the means to pay it back doesn't exist other than to create money out of thin air, and hence increases money supply when issued for reasons already explained. I can't be any clearer than this so please don't bore me by misrepresenting what I've said here and restating the obvious.

 

[Tysonboss1]

In financial statements what are T-bills usually classified as? Is it cash and cash equivalents?

They would make up the "cash equivalent" component of the "cash and cash equivalent line" because they can be redeemed for cash very easily.

But that does not mean it is cash,

Just like when an oil company reports production as "Oil and oil equivalents" the natural gas, condensate and LPG that make up the equivalents are not actual oil.

But the original question was, Is an IOU from forum member "tothemax" Money, I would suggest his IOU would find it's way to the " other financel asset " line of the balance sheet.

I personally have never seen any body enter a shop and try and spend a Tbill, or gold for that matter,

 

[McLovin]

In financial statements what are T-bills usually classified as? Is it cash and cash equivalents?

Not the best yardstick to use. Preferred stock can be classfied as cash and cash equivalents if it redeems within three months.

 

[McLovin]

You are missing the point again with a myopic focus on strict definition. A Tbill is issued to pay for govt expenses (money is issued to the creditor) and creates a liability that is paid back with money that is created by the FED.

That's not necessarily true.

 

[FxTrader]

That's not necessarily true.

Not always but it certainly is at the moment. The fed is the biggest purchasor of US govt debt (well over a trillion dollars from memory), where do you think all that money comes from, the member banks? No, it's created by the Fed.

Check out this vid called Fiat Empire...

http://video.google.com/videoplay?docid=5232639329002339531&q=fiat+empire+site%3Avideo.google.com&total=23&start=0&num=10&so=0&type=search&plindex=0

 

[Mr Z]

The definition of money-

1.A current medium of exchange in the form of coins and banknotes; coins and banknotes collectively

LOL yeah right... the revised modern dickshunary definition of money... look up inflation, those definitions are about as accurate. I'm sorry but dictionary collators tend to totally lose the subtleties in economic definitions! That is one potential form of money and is by no means an exclusive or exhaustive definition. Try again...

 

[McLovin]

Check out this vid called Fiat Empire...

http://video.google.com/videoplay?docid=5232639329002339531&q=fiat+empire+site%3Avideo.google.com&total=23&start=0&num=10&so=0&type=search&plindex=0

No thanks.

 

[wayneL]

OK lets suppose the monetary system collapses and I dig up my Krugs because I need to go to the shop to by a loaf of bread, a bottle of woobla and a 30-30 to guard my gold with now that the cat is out of the bag that I have a cache; the Krug I smuggly flip out of my pocket is now worth $37k but the items add up to only $3000 (30-30s now selling at a huge premium : )

How does that work?

 

[FxTrader]

No thanks.

No worries, you have refuted nothing I've said then or mounted a credible argument in support of your brief statement. Thanks for your thoughtful contribution to the debate here.

 

[Mr Z]

I personally have never seen any body enter a shop and
try and spend a Tbill, or gold for that matter,

and that defines money how? You are still rattling on about currency and calling it money and yet you have known nothing but FIAT currency... a government decreed currency but not a natural money, it is a currency by decree and force of law.

Central banks hold gold because it is a natural money, its value starts where the government decrees run out and it is dependent on no man or law for its value. The key difference between currency and money... money just is, it is defined by human nature and its physical properties not by some political body. Ultimately the best money is the most negotiable good on the planet, that is gold, it has value anywhere and everywhere unlike our beloved paper currency's and bills.

You really need to get your head around that... central banks don't collect it for fun.

As for T'bills and US notes... they are in effect the same thing in the US system. One does not exist with out the other and the are both negotiable enough to serve as cash for most practical purposes in the financial system. They are both government paper back by the same full faith and credit of the US gov! Flight to safety and flight to cash IS a flight to US gov paper in that system and in most circumstances TBills rate over 'green backs' for practical purposes when parking significant funds. Anything more than you can fit in a suit case is safer in US gov paper than any US currency account ---> so really cash depends on how much you have to move and park, over 250K in the US and cash is TBills as they are the most liquid, secure and negative instrument you can hold.

You are thinking like a guy with a 100K not a guy with a few billion!

 

[FxTrader]

OK lets suppose the monetary system collapses and I dig up my Krugs because I need to go to the shop to by a loaf of bread, a bottle of woobla and a 30-30 to guard my gold with now that the cat is out of the bag that I have a cache; the Krug I smuggly flip out of my pocket is now worth $37k but the items add up to only $3000 (30-30s now selling at a huge premium : ) How does that work?

Good question, I suppose that you would progressively redeem your Krugs as necessary into a currency that has some purchasing power where you reside to purchase the goods you require.

 

[Mr Z]

OK lets suppose the monetary system collapses and I dig up my Krugs because I need to go to the shop to by a loaf of bread, a bottle of woobla and a 30-30 to guard my gold with now that the cat is out of the bag that I have a cache; the Krug I smuggly flip out of my pocket is now worth $37k but the items add up to only $3000 (30-30s now selling at a huge premium : )

How does that work?

Melt it and pour it into water.... pick up the grain and measure it out and give it to the man! Swap it for silver and pay in silver... crikey of all the problems you could have in that scenario that would be the least of your concerns!

 

[wayneL]

So silver is money too?

How about my copper plumbing... the huge pile of aluminium beer cans I have out the back... the two tonnes of used horseshoes (steel)?

Is that money too?

 

[Mr Z]

Wayne... it all depends on what is available. Gold is the best form of natural money we have found but that does not make it exclusively money.

An ideal money meets certain criteria naturally and perfectly, in the absence of an ideal money the next best fit fills the role. That as been a number of things in human history and silver is one of the prominent choices.

In short money is what ever a society chooses it to be, and absent force (governmental decree) the best choice is made according to merit. It has been silver, gold, salt and even eight foot round stones BUT while and where we have gold we tend to choose it.

Yes copper could conceivably serve as money as it has many of the properties required and is only really lacking in the economic scarcity department.

 

[RandR]

So silver is money too?

How about my copper plumbing... the huge pile of aluminium beer cans I have out the back... the two tonnes of used horseshoes (steel)?

Is that money too?

meh, people can hoard gold if they want, or silver or whatever the hell picks there fancy if they think it will honestly save them in some financial/societal collapse. Because Im trained in weaponry and im bad enough to use it to get anything i'll ever need