Posted 2 years ago on Feb. 28, 2021, 1:16 p.m. EST by agkaiser
from Fredericksburg, TX
This content is user submitted and not an official statement
How is money inserted into the economy and what gives value to money?
We can only speculate about the historical origins of money. But we can agree that money represents the goods for which it's traded. As such, money is the promise of material goods of comparable value. Whether paper bank notes or metal coins (preferred by those who value pretty metals or stones of little practical value) money in the end is a debt instrument that may be traded for real goods and material services. None of this discussion answers the question: how is money created and added to circulation in real time?
I could talk about how private banks, including the FED, create debt on their ledgers or FED "quantitative easing" and how these contribute to inflation of real estate, stock and other prices. I might also note that these things create no real goods or material services. But that should be obvious. So I'll leave that to digest and ask more questions.
Where does the leverage originate to conduct corporate raiding and asset stripping Wall St. activities? Is its source found in investment banks and FED "quantitative easing?"
Who benefits the most from real estate price inflation? Where does the money come from that fuels it? Well, the banks get the biggest interest payments in the first years of a mortgage. Remember, if a 30 year loan is completely paid off in that term, one will pay for the real estate 3 times over with the principal and interest. If you upgrade more often, the interest paid will increase. The banks will make more from each property. How does the increase in the price of real estate compare to the interest the bank collects?
Other important considerations: How do high speed trading and other destructive "investment strategies" contribute to the economy? How have we come to believe that the prosperity of Wall St. does not increase the poverty of everyone else?
Conservative judges, since the rise of the Neo Liberal threat to the human race, have redefined efficiency to serve the ideology of their owner-operators on Wall St. Neither Pareto Efficiency nor any real math work for the cons. https://www.ineteconomics.org/uploads/papers/WP_149-Glick-and-Lozada.pdf
Pareto Efficiency essentially states the obvious: all of economics, in fact all of reality, is zero sum. If y = x, y - x = 0 ie. the amount taken from x is equal to the amount taken by y. https://en.wikipedia.org/wiki/Pareto_efficiency
Video link https://youtu.be/0RgzQemp4c4