"Money" created out of thin air

[iamfreeru2]

This is a debate on the creation of "money" on Quatloos between Heidi Guedel and some resident gurus over there. She does a pretty good job of explaining "money" creation. Talk about stupidity!!! Those guys over there call us stupid and on the fringe. I think Heidi shows just what kind of ignoramuses there are on Quatloos.

This is for Bill.
You know I am not asking for you to be banned from our forum, but you might fare well with your kind over on that other site, don't ya think. After all they do think like you.

The money paid to the merchants or house seller is in circulation... explain how that "disappears".
The borrower gets the bank to pay sum P on his behalf.

Originally Posted by Heidi Guedel

Sum P is paid out of the money of account (liability) which was established when the borrower’s promise to pay was accepted. Sum P did not exist prior to this account’s inception and was not placed into the money of account from any other source belonging to the bank. Therefore, sum P was originated at the time the account was created.

The third party/seller receives sum P today from the bank.

Originally Posted by Heidi Guedel

Yes… paid (debited) out of the money of account originated on behalf of the borrower.

The borrower, over time, pays sum P plus interest to the bank.

Originally Posted by Heidi Guedel

Yes… the borrower pays back the newly originated sum P plus interest.

At the end of the transaction the seller has gained P,

Originally Posted by Heidi Guedel

Yes… and that newly originated money is now in circulation.

the borrower has given over P;

Originally Posted by Heidi Guedel

Yes… out of his earnings, or some other pre-existing, tangible asset.

and the bank has both paid and received the sum P

Originally Posted by Heidi Guedel

…which the bank originated out of thin air in the first place. Now it receives it all back again from the borrower. Without the borrower, the bank would not be able to keep all of this newly originated money… without the borrower, and his promise to repay, the money would not have been originated in the first place. Lending is a clever way to originate new money, spend it on someone else’s behalf (the borrower) and then receive it all back again over time, plus interest.

and has also received interest payments.

Originally Posted by Heidi Guedel

Yes. Nice profit margin. The bank receives back all of the money it originated and paid out on behalf of the borrower in the first place… plus interest.

The borrower did have use of the funds at an earlier time than if no loan had been made; but the result (when viewed over the entire time of the transaction) is that the seller has gotten what the borrower has paid. The bank has only had an increase in worth by the amount of the interest it received (leaving out any earnings during the transaction ).

Where is there any irreversible increase in the money in circulation?

Originally Posted by Heidi Guedel

The irreversible increase in the money in circulation took place when sum P was originated by the bank, placed on its books as money of account (liability) to counterbalance the borrower’s promise to repay (asset) and then spent in order to pay the seller. Presumably the seller now spends sum P in various places, or puts it into a savings account. This money did not exist prior to the borrower’s account being established. Now it is in circulation and cannot be recaptured. It does not disappear.

Heidi Guedel wrote:
Quote:

AndyK: the created money only exists as a bookkeeping entry.


Right. That is exactly what Walker Todd explained. Then that money is SPENT. Once it has been spent, it cannot disappear. It is now more than a mere bookkeeping entry... it is currency in circulation. Inflation.


AndyK: But, in the same sense, where did the money come from to retire the loan? In effect, it is taken OUT OF CIRCULATION.

Originally Posted by Heidi Guedel

WHAT??? The money to retire the loan came from the assets of the borrower. Perhaps it was paid out of the borrower’s earnings over time, or out of the equity in his home, or out of his savings account. In any case, that money which the borrower used to retire the loan was money already in existence… already in circulation. How in the world can you claim that it is taken out of circulation when it is paid back to the bank? What do you suppose the bank did with it then? Stuff it in a mattress??? Shred it???

Remember, the borrower spent all of the loan on the new house.

Originally Posted by Heidi Guedel

Exactly. And what do you suppose the seller of that house did with those loan proceeds? Perhaps the seller spent that money on another piece of property, or paid for his child’s college education, or put it in a CD to earn interest. That money is in circulation, isn’t it?

He (the borrower) then took money from his paychecks to pay off the loan.

Originally Posted by Heidi Guedel

Most likely. And the money from his paychecks was money already in circulation. The money spent by the bank to pay the seller of the house was newly originated money of account, which has now been added to the money supply because it was paid out to the seller, who presumably spends it too now – inflation! This has been described and admitted by a variety of respectable sources, including some employees of the Federal Reserve itself.

Try to THINK instead of regurgitating undigested information.

Originally Posted by Heidi Guedel

More ironic argument from intimidation. It is the info that you regurgitate which is undigested. You cannot even follow your own logic to the point of comprehending that additional money has been moved into circulation.

Boy, if you don't write any better than your thought processes indicate, ...

Originally Posted by Heidi Guedel

There you go again… the last resort of the inept debater who cannot prevail using logic and reason. That tactic is a dead giveaway. It attempts to deflect the discussion into flames because the insulting party cannot contribute anything more useful to the discussion.

[wirlwind]

I think she did an outstanding job explaining that, and why the person that was responding couldn't start to grasp it I will never understand. It isn't rocket science. But then my father is a rocket scientist, and he doesn't understand it! But he won't even listen to it. He has his mind made up, and he won't even listen to see if he could understand it. He thinks that I am a criminal, and doesn't see how he could have raised a daughter that thinks like I do.

[Bill Smith]

I actually went over there and read through some of the threads. However, in another thread Heidi admits that she really doesn't believe in these theories at all but that a friend of her got caught up in them and she was playing devil's advocate (based on what her friend was telling her) so that she could write her book showing how ridiculous the mortgage elimination stuff is.

Guess you didn't read that thread.

Oh, and feel free to ban me at any time. I decided long ago that these forums are not a real seach for the truth but just a bunch of people who have already made up their mind who are trying to convince each other that they really are right. No sweat off my butt to be banned from here, and it's obvious that nobody here wants to even hear a suggestion that they might be wrong or the "other side" of it.

[weishaupt1776]

I would bet that, without even checking, that those unreasonable stmts were from AndyK. He tries to pass himself off as if he's intelligent, but all he is is a flunkie slave. Am I right was it Andy?

[iamfreeru2]

Originally Posted by Bill Smith

I actually went over there and read through some of the threads. However, in another thread Heidi admits that she really doesn't believe in these theories at all but that a friend of her got caught up in them and she was playing devil's advocate (based on what her friend was telling her) so that she could write her book showing how ridiculous the mortgage elimination stuff is.

Guess you didn't read that thread.

Oh, and feel free to ban me at any time. I decided long ago that these forums are not a real seach for the truth but just a bunch of people who have already made up their mind who are trying to convince each other that they really are right. No sweat off my butt to be banned from here, and it's obvious that nobody here wants to even hear a suggestion that they might be wrong or the "other side" of it.

Actually Bill, I have read all her posts and know the one you speak of. She is coming around, however, to the truth. She has read the truth in black and white and quotes it on Quatloos. You can tell that from her posts on the subject.

I would never ban you. I am just suggesting you post somewhere people are like minded with you. The problem with you is that you have been shown proof of the fraud on the part of the banksters and you refuse to see it. This forum is one of the few places that the truth is spoken. Like I said though, for most people it easier to believe a lie than the truth.

[iamfreeru2]

Originally Posted by weishaupt1776

I would bet that, without even checking, that those unreasonable stmts were from AndyK. He tries to pass himself off as if he's intelligent, but all he is is a flunkie slave. Am I right was it Andy?

Weis you must be psychic.lol!! How did you know it was AndyK? Did you look into your CB?lol

[weishaupt1776]

He's such a zoid it takes only but a few reads of his uneducated drivel to see what his posts are like.

He's a programmed robot, what do you expect?

I saw ole' Demosthenes checking this thread out. I bet she haad a few laughs to herself on this one.

Originally Posted by weishaupt1776

I would bet that, without even checking, that those unreasonable stmts were from AndyK. He tries to pass himself off as if he's intelligent, but all he is is a flunkie slave. Am I right was it Andy?

I'VE VISITED THAT FORUM AND ANDYK IS A RIOT. FLUNKIE SLAVE IS RIGHT ON POINT. NICE GOING WEIS.

[iamfreeru2]

Originally Posted by weishaupt1776

He's such a zoid it takes only but a few reads of his uneducated drivel to see what his posts are like.

He's a programmed robot, what do you expect?

I saw ole' Demosthenes checking this thread out. I bet she haad a few laughs to herself on this one.

Not too many over there that aren't zoids. I was just funnin' with you man. I know it is very easy to pick his posts out. lol

[iamfreeru2]

Sometimes I laugh my arss off when I take a look over there. Some of them have a real sense of humor. None of them know how to answer with proof though, just character assassinations, like our resident Bill. One reason why I think he would fit in real well over there.