A peek inside the SA Reserve Bank

[wynn]

Anne Rice has quit Christianity see http://www.thedailybeast.com/blogs-a...=hp:mainpromo7

[tec0]

That is the point, what if this really is the only chance we get to be able to think and do? What if there is no afterlife? See I honestly think this is it; everyday is effectively Armageddon for someone. When life is lost, there is no replacing it. That much I know is true.

As for an afterlife, anything is possible but to some degree improbability must be factored in. Now if this is your only life would you really want to fight wars and work as a slave? What is the point of life if you cannot enjoy it?

See all the bad things in the world exist because bad people want to oppress and hurt others to get what they want. Now intelligence has given humanity the ability to say no. I don’t feel like working for 40 years of my life just so that I can go and rot on my old day in some retirement home.

I would rather be satisfied having little and enjoy life as our only gift, because at any point our bodies can and will fail “without the help of a bullet” and we will lose it all. So there is no point it screaming conspiracy, these wealthy powerful people can only control you and your life for as long as you let them.

Fact is simplicity is nature’s way, as complicated as our bodies might be, it is still the product of simplicity. So it comes down to what we do need and that is to live and enjoy life. Because what we don’t need is more death...

When people finally realise that it doesn’t matter in what you believe, the simple truth is, life is temporary...

[Frankincense]

"life is temporary..."

Only Physical life is temporary....forget ye the spirit shall live forever if found in righteousness?

[msmoorad]

regarding iterest

these are 2 short pieces from henrymakow.com . its a very good site- nice to visit3-4 times weekly as they always update their articles:

by Anthony Migchels
(excerpt by henrymakow.com)
anthony.migchels@gelre-handelsnetwerken.nl
Let's say you want to buy a house and go the bank and get a loan. Say 200k. The simple truth is, after thirty years you will have payed back 600k. 200k for the principal and 400k (!!) in interest.

Now this might be ok, or at least somewhat understandable, if you were borrowing this money from somebody else, who has been saving it. But as we know, this is not the case. The money is produced the moment the loan is granted by the bank. In a computer program. By pressing a few buttons.
So basically you pay 400k interest for pressing a button. Granted, the bank needs to manage the loan during the time it is being repaid. But the cost for this is still only a fraction of the income they get through the interest.

Now, we could stop here, because it is clear that the bank is ripping us off, also in legal terms, although they make the laws themselves, because there is no realistic service being delivered for the money.

But there is so much more, we must continue.

When the bank creates some money by giving you a loan, it takes the money out of circulation when you repay. Repaying debts means a diminishing money supply. The banks only provide the principal, in our previous example 200k. But after thirty years, 600k has been repaid and only 200k was created. So how can this be? How can 600k be repaid by 200k?

It can't. Somebody else needs to get into debt to create sufficient liquidity to pay the 400k interest. And the borrower of the original loan must start competing for this liquidity with everybody else to obtain that, intrinsically scarce, cash.

This means that because of the combination of debt and interest, the money supply must grow forever. But we know that a growing money supply is the definition of inflation and that inflation is closely linked to rising prices.


So inflation is inherent in the system. This sounds strange, because Central Banks raise interest rates to lower inflation, reasoning less credit will be issued because of rising prices for it. But the higher the interest rates go, the more money must be created to pay for this interest.

Just one of the perverse side effects of interest in the current wealth transfer system we call 'finance'.


So what of it you think. I was raised to be conservative in these matters and one should simply not get into debt, so you won't pay interest.


Wrong. Not only because if nobody went into debt, there would be no money, but because companies go into debt to finance their production. They pay interest (capital costs) over these loans. And like any cost this must be calculated into the prices they ask for their goods and services.

And what percentage of prices can be related to interest? It depends on the kind of business, particularly how capital intensive it is. Going from 12% for garbage collection to 77% for renting a house. All in all about 40% of prices can be traced back to costs for capital. These figures have been corroborated by an independent study done by Erasmus University, Rotterdam, the Netherlands under the supervision of STRO, a leading monetary think tank in the Netherlands.

So, you lose 40% (!!!!) of your disposable income to interest through prices.

Interest is being paid by people borrowing money and received by people having loads of it. So it is per definition a wealth transfer from poor to rich.

It transpires, that about 80% of the poorest people pay more interest than they receive to the richest 10%. The next richest 10% pay as much as they receive. This means the vast majority is losing a substantial part of their money to interest. The richest own the banks or have a lot of money there.

We must keep in mind that this is totally for nothing, since most of the money is printed at the time it is loaned out.

How much money are we talking about? I have only figures for Germany, but reason suggests it is basically the same everywhere.

In Germany the poorest 80% pay 1 billion Euros in interest to the richest 10% PER DAY. Yes, that's right, one billion euros per day. That is a grand total of 365 billion euro's per year. That is one seventh of German GDP and extrapolating this to America, the poorest 80% must be paying at least a trillion a year.

It conclusively explains the old adage that the rich get richer and the poor get poorer.

This is the hidden tax that nobody is talking about.

This is the yoke that we carry.

This is the worst kind of slavery, because it is slavery without even realizing it.

This is interest and let it never be forgotten.

This is our mortal enemy and let us never take our eyes of it again, until it is thrown into the fire of hell, together with the usurers enslaving us with it.

--Complete article can be found here:

"On Interest" by Anthony Migchels

Related:

A History of Usury

(While in Toronto recently, I met Sydney White who told me about Prof. John Hotson who was a leading Canadian exponent of banking reform. He died under suspicious circumstances during an operation in 1996. This is an excerpt from an article entitled "Understanding Money" which he wrote shortly before his murder. Needless to say, he has no Wikipedia entry.)


by John H. Hotson
(EXCERPT BY HENRYMAKOW.COM)

The financial system the world has evolved on the Bank of England model is not sustainable. It creates nearly all money as debt. Such money only exists as long as someone is willing and able to pay interest on it. It disappears, wholly or partially, in recurring financial crises. Such a system requires that new debt must be created faster than principal and interest payments fall due on old debt.

A sustainable financial system would enable the real economy to be maintained decade after decade and century after century at its full employment potential without recurring inflation and recession. By this standard, a financial system that creates money only through the creation of debt is inherently unsustainable.

When a bank makes a loan, the principal amount of the loan is added to the borrower's bank balance. The borrower, however, has promised to repay the loan plus interest even though the loan has created only the amount of money required to repay the principal-but not the amount of the interest.


Therefore unless indebtedness continually grows it is impossible for all loans to be repaid as they come due. Furthermore, during the life of a loan some of the money will be saved and re-lent by individual bond purchasers, by savings banks, insurance companies etc. These loans do not create new money, but they do create debt.

While we use only one mechanism - bank loans - to create money, we use several mechanisms to create debt, thus making it inevitable that debt will grow faster than the money with which to pay it. Recurring cycles of inflation, recession, and depression are a nearly inevitable consequence.

If, in the attempt to arrest the price inflation resulting from an excessive rate of debt formation, the monetary authorities raise the rate of interest, the result is likely to be a financial panic. This in turn may result in a sharp cutback in borrowing.


Monetary authorities respond to bail out the system by increasing bank reserves. Governments may also respond by increasing the public debt- risking both inflation and growing government deficits.

FOUR COMMON SENSE RULES:

Governments got into this mess by violating four common sense rules regarding their fiscal and monetary policies. These rules are:

1. No sovereign government should ever, under any circumstances, give over democratic control of its money supply to bankers.

2. No sovereign government should ever, under any circumstances, borrow any money from any private bank.

3. No national, provincial, or local government should borrow foreign money to increase purchases abroad when there is excessive domestic unemployment.

4. Governments, like businesses, should distinguish between "capital" and "current" expenditures, and when it is prudent to do so, finance capital improvements with money the government has created for itself.

A few words about the first two of these rules...

1. There is persistent pressure from central bankers and academic economists to free central banks from the obligation to consider the effects of their actions upon employment and output levels so that they can concentrate on price stability.


This is a very bad idea indeed. Dominated by bankers and economists, central banks are entirely too prone to give exclusive attention to creditor interests to the exclusion of worker interests. Amending central bank charters to give them independence from democratic oversight, or to set up "price stability" as their only goal would complete their subjection to banker interests. Canada's own Mackenzie King said it all, "Without Government creation of money, talk of sovereignty and democracy is futile."

2. Anyone who understands that banks create the money they lend can see that it makes no sense for a sovereign government, which can create money at near zero cost, to borrow money at high cost from a private bank.

The fact that most governments do borrow from private banks is one of the greatest errors of our times. If a government needs money created to pay for public spending it should create the money itself through its own bank; or spend the money debt and interest free as the United States did during the Revolution and again during the Civil War. If a government does not wish to "monetize" its deficits during periods of unusual need such as wartime, it should either make up the deficit with higher taxes or borrow only from the non-bank public-which cannot create the money it lends to the government....

When the Bank of Canada encourages the Canadian government, provinces, and municipalities to borrow in New York and Tokyo, it is a betrayal of Canada. Where should they borrow when new money is needed for government spending? They should borrow at the government owned Bank of Canada, paying near zero interest rates-just sufficient to cover the Bank's running expenses.

Related: 420 Banks "Demand" World Currency







John H. Hotson was professor emeritus of economics University of Waterloo and executive director of the Committee on Monetary and Economic Reform (COMER), a Canadian based network of economists working for economic and monetary reform. This article is based on a series he published in the October 1994, November 1994, and January 1995 issues of Economic Reform, the COMER newsletter, Comer Publications, 3284 Yonge St., Suite 500, Toronto, Ontario, M4N 3M7, fax (416) 486-4674. He gave the PCDForum permission to use this material only five days before his untimely death on January 21, 1996 following heart surgery.

[irneb]

This is the leverage method of money creation. Although it's extremely covert, it's also the most pervasive. We all think of money as the cash paper (and coins) made by the various institutions allowed to (be they government as you'd expect, or more likely privately owned reserve banks, etc.). That is simply the tip of the money iceberg, it's called M0: there's 3 more "overall" definitions of money, M1 M2 & M3 ... each defining more broadly what is seen as money.

These generally explain in better terms just how much monetary inflation (note not price inflation) is in existence. It's gotten so bad recently that the US has (a few years ago) stopped recording M3, otherwise the figures would be just stupid - or more so than it is now.

There's even more problems than just the leverage. What about fractional reserves? This mean the banks may lend out more money than they already have (as given to them, or rather lent them by savers). I.e. the bank only has 20k (from deposits), but lends 200k to you, who then pays back 600k - now do you get just how pervasive (not to mention destructive) banks are? These are the main causes of monetary inflation. The actual printed notes are only a fraction of this pervasive influence.

People these days don't seem to realize that money is also governed by the same Demand-Supply laws of other goods & services. I.e. the more money there is means its value (compared to other stuff) tends to diminish. That is how monetary inflation generates (over time) price inflation. Governments generally love inflation (both money & price). With monetary inflation it's as if they're obtaining a free loan. With price inflation their tax revenues climb accordingly. There's probably more reasons, but these are the 2 foremost in my mind at the moment. Therefore the reserve bank will at best call lip-service to "curb" inflation, they actually want inflation as it benefits them. Apart from the obvious disorientation caused by inflation - price wise - there's a few other problems.

The 1st problem with inflation is - it's like deferred tax - the gov (and the banks) make profit now, while you pay for it later (interest adjusted of course). So you pay more later than they get now - i.e. they get even more in due course.

The 2nd problem with inflation is it causes an over abundance of liquidity. This in turn tends to produce / consume "spurious" goods and services, i.e. goods & services which have little to no benefit for the economy as a whole. It also tends to drive out more productive goods & services, an example is how the US has changed from a mainly industrial-production country to a nearly completely services oriented (especially financial & administrative) country. This in turn causes skilled labour to become less "valued" and therefore less supplied (in favour of e.g. administrative labour), which means there are less people to actually do the productive work while there's more and more people available to do the already over supplied administrative work. This is the constant refrain from westernised countries: "Skilled labour is in short supply."

The 3rd problem is that money loses two of its functions: i.e. a store an measure of value. The loss of the store of value is what we generally feel, by seeing how it becomes more and more expensive to live. The loss of measurement causes imbalances in things like stock profitability, e.g. it may "seem" to be a good idea to invest in the stock market - but only if you don't adjust the possible gains backward to the prevailing inflation.

The 4th is the rearrangement (as shown in your post) of wealth from the poor (but even more so from the middle class) to the rich.

The 5th is that it's a self sustaining - logarithmic phenomenon. The more inflation there is at present, the more is needed to just keep the status-quo. Otherwise fears of "deflation" spring up as these spurious goods and services start becoming less demanded. That's why we now see levels of "Quantitative Easing" measured in trillions - a few decades ago a billion was nearly unheard of, now it's just small change.

The 5th is what causes inflation to break the dam - i.e. the loss of money's remaining function: a tool of trade. When it becomes so exasperatingly stupid, people loose confidence in money itself. Which in turn causes even greater price-inflation, since the demand for money drops drastically as their confidence drops. This is how hyper-inflation starts. Generally it is something which destroys the money in total, and causes anarchical economies (even reverting to barter systems) until something else is found in its place. If it only happens in one country you usually find people reverting to neighbouring (unaffected) currencies. What'll happen if the global currencies all go the same route? And what if this happens during a depression (i.e. lack of investment and grown sustained for the long term)? If hyper-inflation happens during or directly after a boom, it generally takes just a couple of years to re-orient itself (e.g. Wiemar Germany 1920-22). If the economy & prevailing geopolitical atmosphere is not strong at the time it occurs, it takes a "bit" longer (e.g. Zim). If the economy is in nose-dive mode ....

[wynn]

See the two latest 'Noseweeks' to see what the reservebank is hiding,
apparently hundreds of billions of cash and gold in foreign countries going back to the old Nat government and the ANC, and it belongs to the fiscus, they are trying to steal it for themselves.

[Dave A]

OK - so which is better for the guy in debt - inflation or deflation?

[tec0]

OK - so which is better for the guy in debt - inflation or deflation?

What about a stable economy? Oh... oops that doesn’t exist anymore, but one thing is clear as day, inflation and the massif job losses that we had, NOT a good mix...

Simple truth we cannot afford to live in our own country anymore...

[AndyD]

Deflation scares the living hell out of most economists.

[Dave A]

Pretty interested in ms's opinion on that one

Here's another question - if inflation causes an excess in money supply, what causes inflation?

If you confuse cause and effect, it's little wonder you start arriving at the wrong conclusions.

[irneb]

Here's another question - if inflation causes an excess in money supply, what causes inflation?

Shouldn't that be the other way round? Or is that what you meant by the "confusion" phrase?

An excess in money supply (i.e. too much printed, or too much generated through interest and other measures) causes a monetary inflation (i.e. too much cash liquidity), which over time causes a price inflation (i.e. the value of money becomes perceived to be less compared to physical goods and services).

So first you get extra money generated --->> then it is called Monetary Inflation --->> this in turn creates Price Inflation (it could be a lag time of 1 year to a couple of decades before this happens in the same proportion though).

[irneb]

OK - so which is better for the guy in debt - inflation or deflation?

Definitely inflation (if there's nothing else happening). Inflation means he's paying less value, while deflation would mean he'd be paying more value from his pocket.

The converse is also true, the lender would want deflation. Note the banks aren't the lenders, they simply take the deposits borrowed by them and then re-lend it out.

So if there's a deflation: advise keep all your cash under your bed, you'll get more value appreciation that way. If there's inflation, spend it all as fast as possible, buying up assets which would then keep their value while appreciating in comparison to the depreciating cash.

That's if there's nothing else happening, like you losing your job, getting a salary cut, the bank repossessing the house (because they simply want the cash NOW!!), the governement increasing the capital gains tax so you lose the bit of value gained by keeping it in assets rather than cash, etc.

[wynn]

Inflation happens when too much money chases too few goods.
Deflation happens when there are more goods than cash.

If the Gubbemunt print more paper money it just increases inflation by making more money chase fewer goods.

Then we get into the whole exchange rate thing???

[irneb]

And just as an example that there should be no fear of deflation at all: http://www.usdebtclock.org/index.html

[msmoorad]

hello all
just another thing i always think about;
if anyone invests in anything, they expect more than what they initially invested. if i invested R1000 in some fund/scheme etc, i wont be expecting R1000 in return but quite a bit more.
now, ever day on the news we hear aboput the importance of attracting foreign investment and that how so & so company is investing so much money in your country...
we all are told how much these people are putting in but how come nobody says anythng about how much they are taking out of the country? what retuns they receive.
thats why i dont really believe that foreign investment is a good thing.- im no economist but this is what i sincerely believe.
with the Zionist banker manufactured global economic crisis, South Africa was relatively unscathed- well thats what the media says- it made no difference to me.
i also believe that we were not so affected because we dont have so much of a link with Europe & N. America as these 2 continents have between themselves.
not to be too tied in and be too deeply invested in the economies of the rest of the world is a good thing and too much foreign investment in SA is a bad thing.
maybe im wrong- if so, please correct me but dont use big, complicated words and phrases.
the game is rigged and if you play by the rules, the only one who is guaranteed a win are the owners of the game- Zionist bankers & industrialists.
call me anti semite, paranoid, whatever.