banks can get money from many sources from which to make loan. Deposits, reserve requirements, capital requirements, loan profitability, monetary policy all affect how much a bank has to loan.
We are nothing like Zimbabwe. The western world has seen an explosion of money created via private lending for decades now without inflation being an issue. As long as we all have enough stuff to buy and the money to buy it, the prices for those somethings will be subject to supply and demand and not run up by too much private or public money. Ask yourself a simple question. What really drives prices upwards? That smart phone you have in your pocket has more power in it than the computers used to get Armstrong on the moon, it costs you about 700 bucks. There are literally billions of them in circulation worldwide. You want to talk about real estate? Is your rent determined by the amount of money in circulation or other factors? No, your opinion about inflation is wrong which is why the Fed itself had to move the needle to 5% and now 4% unemployment, the Phillips Curve is pure speculation.
Sorry but money isn't created by private lending. Money is created in the mint. The Federal Reserve, The Bank of England. State banks. It is then lent to private banks. You can however still barter without the use of money. And there are more goods and services available to trade than there were yesterday. Inflation has been an issue all my life. You will find it discussed in most newspapers on most days, going back every day for decade after decade. It's an issue. There are multiple causes of inflation. Multiple causes of price rises. Scarcity of resources. Greed. Money printing. Real estate price rises. The key drivers in my economy are immigration/population growth, which causes a tightening of supply. Inflation, which causes assets to be priced higher as the value of a currency relatively declines and loose lending. The increased availability of mortgages which causes an increase in demand. Zimbabwe was nothing like Zimbabwe once. But it is the classic example of unrestricted money printing and the inflationary results of that action. So in my country the government sets targets for inflation. Typically 2%. They seek to keep it in control. The improvements of technology are typically counter inflationary. Deflationary. I get a better car for the same price. A faster computer for the same price. A flat screen TV. A wider screen TV. Cheaper mail order through Amazon.
So you mention rising prices as signs of inflation. It could be just rising prices because we have monopolies or cartels or pay higher wages or companies expect higher profits and are not under price pressure or competition. Real estate prices could be due to regulations, lack of land or space to build out, low interest rates, favorable tax policies, lack of any other good investment to make so rich people drive up prices, supply and demand...notice how none of these very likely reasons has to do with monetary policy but one, low interest rates. Do low interest rates create inflation? Why? What is inflation in an economy like ours today? It is certainly not what drove Weimar Republic into massive devaluations, they owed gold in payment for WW1. We have nothing of the sort. So, maybe we need to redefine what inflation means today.
inflation is when general price level goes up. it is caused by Fed which creates enough money to make inflation possible
You believe in ancient fairy tales. The Fed has been moving the unemployment line downwards for a long time. Go look up the Phillips Curve.
By and large I think the setting of interests rates are often used in response to these stimulae. As a lever of control over them. Yes they affect them. But the exact amount of control they effect over them is uncertain. There are too many variables involved to get an empirically correct equation. Then we have the laws of unintended consequence and so on. We can't even look back with hindsight and empirically tell if it worked or not.
All that debt proves is that the debtor, rich or poor, has unpaid bills. Wealth is proven by the ability pay in full without need of acquiring debt.
Licensed commercial banks do not lend out money deposited by customers, retained as loan income, or their own capital. They CREATE the money they lend, as the Wikipedia article I quoted states very clearly.
Sorry, but it most definitely and indisputably IS, as YOUR OWN SOURCE already informed you -- or would have if you had been willing to be informed. Any good introductory macroeconomics text will confirm that. But they account for almost none of the money people actually use. Private banks can borrow reserves to support their creation of money through lending, true. Inflation is caused by excessive issuance of money. Historically, runaway inflation is associated with excessive issuance of fiat money by governments. But excessive issuance of debt money by banks leads to asset bubbles and crashes, which prevent runaway inflation. Some truth here. Well done! Right. Prices of such products are kept up through the artificial scarcities caused by IP monopolies, etc.
That leads to the question: Which Phillips Curve? Empirical, expectations augmented, vertical etc etc? They do love to redefine!
Sorry, I won't be conceding that your proven-objectively-false beliefs are true. Consult any good (not, e.g., Mankiw's) introductory macroeconomics textbook.
I proved to readers of this thread that YOUR OWN SOURCE, which you obviously did not even bother to read, proved you wrong. And it is something people need proved to them, because erroneous understanding of banks' money creation has caused, and continues to cause, immense injustice and harm.
It's your kind of misinformation that inspires such goofy and doomed efforts. The OWS folks at least know they are being bent over and {^(|<ed up the @$$ by rich, greedy parasites; they just don't understand how, or what to do about it. I'm here to inform their choices.
Or some socialism (proper reference mind you, rather than your 'you is evil you is' imperialism-loving attitude)... "Poverty is not caused by men and women getting married; it's not caused by machinery; it's not caused by "over-production"; it's not caused by drink or laziness; and it's not caused by "over-population". It's caused by Private Monopoly. That is the present system. They have monopolized everything that it is possible to monopolize; they have got the whole earth, the minerals in the earth and the streams that water the earth. The only reason they have not monopolized the daylight and the air is that it is not possible to do it. If it were possible to construct huge gasometers and to draw together and compress within them the whole of the atmosphere, it would have been done long ago, and we should have been compelled to work for them in order to get money to buy air to breathe. And if that seemingly impossible thing were accomplished tomorrow, you would see thousands of people dying for want of air - or of the money to buy it - even as now thousands are dying for want of the other necessities of life. You would see people going about gasping for breath, and telling each other that the likes of them could not expect to have air to breathe unless the had the money to pay for it. Most of you here, for instance, would think and say so. Even as you think at present that it's right for so few people to own the Earth, the Minerals and the Water, which are all just as necessary as is the air. In exactly the same spirit as you now say: "It's Their Land," "It's Their Water," "It's Their Coal," "It's Their Iron," so you would say "It's Their Air," "These are their gasometers, and what right have the likes of us to expect them to allow us to breathe for nothing?" And even while he is doing this the air monopolist will be preaching sermons on the Brotherhood of Man; he will be dispensing advice on "Christian Duty" in the Sunday magazines; he will give utterance to numerous more or less moral maxims for the guidance of the young. And meantime, all around, people will be dying for want of some of the air that he will have bottled up in his gasometers. And when you are all dragging out a miserable existence, gasping for breath or dying for want of air, if one of your number suggests smashing a hole in the side of one of th gasometers, you will all fall upon him in the name of law and order, and after doing your best to tear him limb from limb, you'll drag him, covered with blood, in triumph to the nearest Police Station and deliver him up to "justice" in the hope of being given a few half-pounds of air for your trouble."
The quote you offered is from a socialist character in a novel, but I can find nothing in it to disagree with. That tells me it is not a socialist statement. As indeed it is not. It justly decries the uncompensated, forcible removal of people's liberty rights to use what nature provided for all, but does not try to make an analogous (but inevitably fallacious) case regarding privately produced production goods, which is the hallmark of socialism. Having a right to use what would otherwise have been available for use is entirely different from forcibly taking what others have produced. Moreover, the injustice of bottling up the earth's atmosphere and charging people for air to breathe is just as possible under socialism as capitalism. The air would just be monopolized by the "workers' collectives" rather than private capitalists. Indeed, the history of socialism shows that collective owners of natural resources are just as eager to deprive individual workers of their liberty to use what nature provided for all as private landowners under capitalism.
No. Because both are based on invalidly conflating capital with land. The socialist pretends capital is land to justify stealing capital; the capitalist pretends land is capital to justify stealing land.
Speaking of debt, Republicans Are Planning To Blame Democrats For Debt They Created & The Media Is Silent
