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Happy 1st Birthday!

May 1st, 2012 by The Fashionable Philosopher

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Today is the first Anniversary of this blog going live! I should probably post on it more often…



Happy 4th of July!

July 4th, 2011 by The Fashionable Philosopher

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Happy 4th of July!



Summer!

June 22nd, 2011 by The Fashionable Philosopher

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Welcome to the first full day of Summer!



Happy Father’s Day

June 19th, 2011 by The Fashionable Philosopher

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Happy Father’s day to all those fathers out there!



The Boogeyman: The Modern Banking System

June 4th, 2011 by The Fashionable Philosopher

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I found some pretty good you tube videos that describe the central banking system around the world in a very understandable way.

Part 1

Part 2

Part 3

Part 4

Part 5

Each is a few minutes long, but if you don’t have time to watch them let me give you the “low down”

Banks are allowed by the government to create money out of thin air when they give out a loan. This may sound strange, but the way this works is they are borrowing from you in order to lend it to you. They are allow to write a check that has nothing backing it, essentially creating money, with the anticipation that the money will be paid back by you. The principal part of the payment is thrown away negating the money they lent you to begin with and they keep the interest. Wouldn’t it be great if we could write ourselves these checks with imaginary currency, and just throw a few hundred bucks in the trash every month to make up for it? We are paying the bank interest on money we will be giving them because they already gave it to us. It surprises me that such a system could be legal! Basically since you are paying them interest on money they never really had, you are paying them for doing absolutely nothing.

A system like this can’t grow forever because there is constantly a growing supply of fake money in the system, more fake loan money is needed to cover the fake loan money already in the system. So if more and more people aren’t getting loans all the time, the amount of money in the system decreases and the whole things slows down and/or crashes. Like the great depression or the recent banking meltdown. Recently when this happened with the housing bubble the government replaced this fake money with real money (quantitative easing). The big problem is to get rid of the real money in the system the Fed will have to raise interest rates to suck the real money back in, or inflation will go wild. Anyway once global growth stops the whole system will freeze up because you need more and more new money to cover the old money. This will happen in a few decades when the Earth’s population maxes out at about eight billion. Better get you money into safe harbor assets by then.