How long will the euro last?

[Alph]

This was a major feature of the economic policy of early Mesopotamian civilizations. Sumerians and Babylonians realized that in their economy people would run up debts they could not reasonably pay, and rather than turn out smallholders for borrowing to buy seed (or what have you) they absolved all debt periodically (usually on some festival or dynastic event) on the grounds that the creditors could absorb the loss, the debtors would not be ruined, and it maintained social stability.

Clearly the difference is that governments themselves were not as indebted then as now, and could afford to undermine the credit system slightly to benefit their population, people being more important in that primitive and violent time. Also, society was run by warriors and priests, whereas today it is run by bankers and businessmen. Different priorities.

The Jews used to do that too... how ironic!

And so did Solon, in ancient Greece.

If only we could get back to those good old days, when people were truly free and the modern economy really functioned well. I don't know about the rest of you guys but, I, for one, am convinced! Jubilee! Jubilee!

[Ibrahim]

This was a major feature of the economic policy of early Mesopotamian civilizations. Sumerians and Babylonians realized that in their economy people would run up debts they could not reasonably pay, and rather than turn out smallholders for borrowing to buy seed (or what have you) they absolved all debt periodically (usually on some festival or dynastic event) on the grounds that the creditors could absorb the loss, the debtors would not be ruined, and it maintained social stability.

Clearly the difference is that governments themselves were not as indebted then as now, and could afford to undermine the credit system slightly to benefit their population, people being more important in that primitive and violent time. Also, society was run by warriors and priests, whereas today it is run by bankers and businessmen. Different priorities.

The Jews used to do that too... how ironic!

What's the ironic part?

[Mr. Perfect]

As has been mentioned many times before, every piece of debt erased is the deletion of someone else's asset, so all you are asking for is another huge collapse of the capital markets. Subprime mortgage delinquencies were the borrowers forgiving their own debt, look what happened.

[Endovelico]

As has been mentioned many times before, every piece of debt erased is the deletion of someone else's asset, so all you are asking for is another huge collapse of the capital markets. Subprime mortgage delinquencies were the borrowers forgiving their own debt, look what happened.

Since total debt is equal to total credit, the end result would be neutral. No real assets would disappear, only virtual financial assets. Banks would have to be supported by the state for a while, but the benefits for the economic activity would be immense. People could spend more, firms could invest, GDP would greatly increase. A few money lenders would be hurt.

[Mr. Perfect]

We could run a little experiment, you could loan me say $50,000, then forgive it, see how it goes.

When the subprime borrowers forgave their own loans it caused a catastrophic worldwide calamity.

[Endovelico]

We could run a little experiment, you could loan me say $50,000, then forgive it, see how it goes.

When the subprime borrowers forgave their own loans it caused a catastrophic worldwide calamity.

Your example is meaningless, as it concerns an isolated situation while I'm talking about a global pardon. Most debtors are also creditors, so that the balance tends to be less than dramatic, except for money lenders. Imagine someone who owes $10 million and to whom $10 million are owed. If he can't get his debtors to pay him, he can't pay his creditors, but on balance his solvency cannot be questioned. Nevertheless his economic capacity may be impaired.

[Endovelico]

An alternative - albeit complex - to my global debt pardon would be the creation of a global clearing house. Every person or firm would calculate its balance between amounts due and amounts receivable. If the balance is negative, i.e. your debit is greater than your credit, you would pay that balance to the clearing house. After that, those with a positive balance would charge the clearing house for the balance. In the end all debts would have been settled. Some debts might have to be excluded from this, such as mortgages, because most debtors would have a negative balance too high to settle. But there might be a way around these difficulties.

[Juggernaut Nihilism]

This was a major feature of the economic policy of early Mesopotamian civilizations. Sumerians and Babylonians realized that in their economy people would run up debts they could not reasonably pay, and rather than turn out smallholders for borrowing to buy seed (or what have you) they absolved all debt periodically (usually on some festival or dynastic event) on the grounds that the creditors could absorb the loss, the debtors would not be ruined, and it maintained social stability.

Clearly the difference is that governments themselves were not as indebted then as now, and could afford to undermine the credit system slightly to benefit their population, people being more important in that primitive and violent time. Also, society was run by warriors and priests, whereas today it is run by bankers and businessmen. Different priorities.

The Jews used to do that too... how ironic!

What's the ironic part?

Jews used to do debt jubilees now they run an international banking conspira... blah forget it. Your suspicion is overcoming your ability to recognize a joke.

[Ibrahim]

Oh well.

[Parodite]

We could run a little experiment, you could loan me say $50,000, then forgive it, see how it goes.

When the subprime borrowers forgave their own loans it caused a catastrophic worldwide calamity.

If banks are not too big to fail and can go bankrupt like any business... the pain can be absorbed, remaining value restructured. Healthy competition and choice unbothered.

How was it possible that banks could become too big to fail?

I am with you on those specific government interferences creating a big sub prime real estate bubble, but it were also bankers who themselves wanted certain government interferences.. have them set or change the rules (degeregulation as a form of regulation).. create a FED.. etc.

Thought expirement: assume there is this wall of separation between the financial industry and governments. Who then make(s) the rules? Why would things have to go honky dory suddenly?

It seems to me that without government interference, the financial rules must be governed by those producing value in the economy: the workers and business owners. The biggest and most succesful bank in Holland started out that way: as a "cooperative bank" the RABO Bank.

[Mr. Perfect]

Your example is meaningless, as it concerns an isolated situation while I'm talking about a global pardon. Most debtors are also creditors, so that the balance tends to be less than dramatic, except for money lenders. Imagine someone who owes $10 million and to whom $10 million are owed. If he can't get his debtors to pay him, he can't pay his creditors, but on balance his solvency cannot be questioned. Nevertheless his economic capacity may be impaired.

Sorry endo, the net worth of the world in all categories but a few is underwater dramatically. A banker is a person like you who will react to losses the same way you would.

Subprime borrowers forgave their debts and have crashed the world economy in the process. Your solution would multiply it thousands of times over.

[Mr. Perfect]

If banks are not too big to fail and can go bankrupt like any business... the pain can be absorbed, remaining value restructured. Healthy competition and choice unbothered.

How was it possible that banks could become too big to fail?

Unlimited government insurance, the Fed, Freddie/Fannie, and FDIC. Too big to fail is an opinion BTW.

I am with you on those specific government interferences creating a big sub prime real estate bubble, but it were also bankers who themselves wanted certain government interferences.. have them set or change the rules (degeregulation as a form of regulation).. create a FED.. etc.

P, there is no question, I would not ever contend that private businesses do not lobby the government for privileges of all sorts. We all agree that happens to one degree or another. We draw different conclusions though. My observation is that when I look at government, some groups money goes a very long way while others doesn't. It is hard to find a uniform ROI for lobbying dollars in government, one has to ask why some dollars go way way further than others.

There are many answers but for today what I will bring up is that for some people the government has actual impediments toward creating those privileges, either legally or via realpolitic. What people who are currently haranguing the 1%/KillerKlowns are not doing is studying what kinds or laws or realpolitic will create the limits they think they are looking for.

Thought expirement: assume there is this wall of separation between the financial industry and governments. Who then make(s) the rules? Why would things have to go honky dory suddenly?

What a refreshing question, the first new insight on this Ive seen in a while.

The fundamental error you are operating on is the premise that we are somehow entitled to hunky dory. We are not entitled to hunky dory. We are an asteroid collision from extinction and there is no law to stop it. There is only the human mind and our ability to grasp the challenges we face in the natural world.

I do not offer hunky dory, I offer freedom and the well known efficiencies of free trade vs. state slavery and the well known impediments to prosperity found in socialism/state slavery.

That's it, that's all that's on the menu. Hunk dory is not on the menu.

It seems to me that without government interference, the financial rules must be governed by those producing value in the economy: the workers and business owners. The biggest and most succesful bank in Holland started out that way: as a "cooperative bank" the RABO Bank.

There is no need for "financial rules". Fraud is illegal and should remain illegal, no one is arguing that.

Additonally, if you want to set up a co-op I will not stop you. People don't seem to do it very often for some reason, wonder what that could be... but.

What we are arguing against are entities like the Fed, Freddie/Fannie, FDIC etc creating the illusion of riskless investment. There is no such thing so the artifices that create those illusions must go.

[Parodite]

If banks are not too big to fail and can go bankrupt like any business... the pain can be absorbed, remaining value restructured. Healthy competition and choice unbothered.

How was it possible that banks could become too big to fail?

Unlimited government insurance, the Fed, Freddie/Fannie, and FDIC.

Key people in the financial industry didn't and don't seem to mind... why is that?

Too big to fail is an opinion BTW.

What would you do in the case of Greece?

I am with you on those specific government interferences creating a big sub prime real estate bubble, but it were also bankers who themselves wanted certain government interferences.. have them set or change the rules (deregulation as a form of regulation).. create a FED.. etc.

P, there is no question, I would not ever contend that private businesses do not lobby the government for privileges of all sorts. We all agree that happens to one degree or another. We draw different conclusions though. My observation is that when I look at government, some groups money goes a very long way while others doesn't. It is hard to find a uniform ROI for lobbying dollars in government, one has to ask why some dollars go way way further than others.

Again it is law and law enforcement (rules) that decides how and to what extent private business can lobby government for ruly and unruly privileges. It seems to me that a lot of politics in the US is bought and controlled by business. The bigger the business, the more politics is bought. You think the current laws and law enforcements that manage this process are appropriate and up to the task? Societies are not static but transient and tend to become more complex in this time frame of history, so one would expect that many rules need review and revision on a regular basis.

There are many answers but for today what I will bring up is that for some people the government has actual impediments toward creating those privileges, either legally or via realpolitic. What people who are currently haranguing the 1%/KillerKlowns are not doing is studying what kinds or laws or realpolitic will create the limits they think they are looking for.

Yes, I agree. People better start 1) wanting to understand the mechanics that produced these problems, and only then 2) think of solutions. That less and less people own more and more of the total cake may not be the worst thing: but it needs to be checked what it means and not means. If however a middle class economy is being decimated that should worry, and the type of correlation between that and the filthy 1% of special interest. One might be an indicator of the other or more... Maybe the equations are not that simple and linear.

Thought experiment: assume there is this wall of separation between the financial industry and governments. Who then make(s) the rules? Why would things have to go honky dory suddenly?

What a refreshing question, the first new insight on this Ive seen in a while.

The fundamental error you are operating on is the premise that we are somehow entitled to hunky dory. We are not entitled to hunky dory. We are an asteroid collision from extinction and there is no law to stop it. There is only the human mind and our ability to grasp the challenges we face in the natural world.

Agreed. We are not entitled, but people tend to rise to power individually or as group when their felt needs are not met or when their felt rights are stamped upon. For example anger and ultimately violence is inevitable when people give their savings in good faith to banks, that then go bankrupt with their money evaporating but the managers of those banks walking away with millions. Or, as is your point, see politicians do the exact stupidest things by not solving them for you but making them worse: because those same bank managers and their usefully bribed idiots in politics don't seem to have your best interest in mind but merely their own. This volcane will erupt when another cardiac arrest as in 2008 will occur but no printing paper left to "solve" it.

I do not offer hunky dory, I offer freedom and the well known efficiencies of free trade vs. state slavery and the well known impediments to prosperity found in socialism/state slavery.

It is all matter of designing the appropriate law and law enforcement, that covers reality as it exists now. I'm not a "more rules and more restrictions" typa guy. I believe in minimal rules... just like you. But rules there will be... until Jesus come'th with only one rule left: away with all rules.

As a general idea: I think there should not be more rules and restrictions... but less things that need regulation. Simplification, less financial products... and creating a wall of separations between government and finance (included the business of bribery or "lobbying" should simply be erased) as well as reinstalling the wall of separation between low risk retail banking, high risk speculative casino banking, and insurance.

That's it, that's all that's on the menu. Hunk dory is not on the menu.

Hunky dory is what people want. Economical security, physical safety, health and happiness. People will fight whatever is in their way, be it a government, criminals who rob a bank stealing their money using a gun…or criminals who own a bank and abuse the trust of their customers by changing the win-win rule for the "I win more-you lose big time" Ponzi mentality.... In the end, the dissatisfied will change the rules one way or other reclaiming power.

It seems to me that without government interference, the financial rules must be governed by those producing value in the economy: the workers and business owners. The biggest and most successful bank in Holland started out that way: as a "cooperative bank" the RABO Bank.

There is no need for "financial rules". Fraud is illegal and should remain illegal, no one is arguing that.

Come on.. you know what I mean with financial rules. I.e. the rules and regulations that govern the financial industry. They define what is a "fraud" and what is not. And if and how fraudulent behavior is monitored detected and what the consequences are. If I buy a birthday cake in your bakery and only much too late I discover that half of it is dog pooh.. I want my money back and that you pay for my doctor as well who had to treat my kids. I hope you are not suggesting that the cooks in the financial industry are not trying to sell pooh to us and do all they can to get away with it. Their most successful strategy of course being to make the tax payer bail them out via bribable and useful idiots in our governments.

How you going to regulate that lavender? That question keeps begging itself when I talk long enough with you.

Additionally, if you want to set up a co-op I will not stop you. People don't seem to do it very often for some reason, wonder what that could be... but.

It made RABO bank a very successful bank. The rocket that launched them into space.

What we are arguing against are entities like the Fed, Freddie/Fannie, FDIC etc creating the illusion of riskless investment. There is no such thing so the artifices that create those illusions must go.

As the illusion that people will not continue to want to control and overcome what stands in their way towards health, wealth, freedom and happiness. It will not and always be "the government" or one particular party. It will just be whatever they feel is to blame when they are homeless and hungry in the streets not able to feed their kids. Especially when the channels of democracy and politics have dried out as tools to get what you need.

[Mr. Perfect]

Key people in the financial industry didn't and don't seem to mind... why is that?

Harvard Democrats in the government banking complex, I recommend that you wise up on them.

What would you do in the case of Greece?

The way Europe was structured itself is beyond my help now, you face the abyss. Sorry.

Again it is law and law enforcement (rules) that decides how and to what extent private business can lobby government for ruly and unruly privileges. It seems to me that a lot of politics in the US is bought and controlled by business. The bigger the business, the more politics is bought. You think the current laws and law enforcements that manage this process are appropriate and up to the task? Societies are not static but transient and tend to become more complex in this time frame of history, so one would expect that many rules need review and revision on a regular basis.

Well again you suffer from living in the universe of lies, in reality the US Banks were insolvent with no assets, and had no money to buy influence. You have to ask yourself how an insolvent industry with no discernible earning capability bought endless trillions in government STPN. You have to answer that question, and answer why countless other interest groups that lobby gov't never, ever, ever, ever get 1 millionth the rate of return. You have to answer that question.

Yes, I agree. People better start 1) wanting to understand the mechanics that produced these problems,

There you go.

and only then 2) think of solutions. That less and less people own more and more of the total cake may not be the worst thing:

It first needs to be understood, eg Obama campaigned on redistributing wealth, and he did, it just was the opposite of what his voters expected. They need to ask why.

but it needs to be checked what it means and not means. If however a middle class economy is being decimated that should worry, and the type of correlation between that and the filthy 1% of special interest. One might be an indicator of the other or more... Maybe the equations are not that simple and linear.

The middle class is being decimated by government, I agree, but I have this crazy idea that more government is not the answer to government destroying things.

Agreed. We are not entitled, but people tend to rise to power individually or as group when their felt needs are not met or when their felt rights are stamped upon.

Sort of. Some groups do better than others at achieving their goals. Probably worth looking into.

For example anger and ultimately violence is inevitable when people give their savings in good faith to banks, that then go bankrupt with their money evaporating but the managers of those banks walking away with millions.

In Europe, probably. In America we just give them more money and more money and more money.

Or, as is your point, see politicians do the exact stupidest things by not solving them for you but making them worse: because those same bank managers and their usefully bribed idiots in politics don't seem to have your best interest in mind but merely their own. This volcane will erupt when another cardiac arrest as in 2008 will occur but no printing paper left to "solve" it.

Yes, but then it's too late. You'd better know how live off a homestead and kill people who come onto it.

It is all matter of designing the appropriate law and law enforcement, that covers reality as it exists now. I'm not a "more rules and more restrictions" typa guy. I believe in minimal rules... just like you. But rules there will be... until Jesus come'th with only one rule left: away with all rules.

As a general idea: I think there should not be more rules and restrictions... but less things that need regulation. Simplification, less financial products... and creating a wall of separations between government and finance (included the business of bribery or "lobbying" should simply be erased) as well as reinstalling the wall of separation between low risk retail banking, high risk speculative casino banking, and insurance.

Be careful here, you are in danger of becoming a Zack Morris type guy roaming nurseries and circumcising newborns with a chainsaw.

I'm a derivatives guy. Just between you and me I am world expert on options, which are just one sort of derivative. There many, futures, options, swaps and so forth, you can google that.

Most people don't know anything about derivatives. I do. I know a whale load about derivatives. I have people that stalk me to gain my knowledge. It just came naturally to me, I view the world through the lens of derivatives.

Derivatives make the world go round. Derivatives are the oil in the economic engine. We couldn't grow near as much food as we do now without them, we couldn't trade stocks without them, we could barely operate our financial world without them. There is tremendous cost involved in altering derivative trading, and the scary thing is we have world geniuses like Paul Volcker who will tell you he doesn't know much about them but he sure knows they need regulation. Chainsaw circumciser.

And there is no point. No derivative market failed except the one related to the government created subprime mortgage market. The root cause was subprime. There was no blip in any other derivative market. Derivatives work as well now as when they were invented centuries ago.

Outlawing derivatives you want to ban or whatever variant you are proposing would do damage you can't currently comprehend, and the Zack Morrises would go from baby to baby with the chainsaw, each time with bugged out eyes "no I can really do it this time, I've got it down".

Hunky dory is what people want. Economical security, physical safety, health and happiness. People will fight whatever is in their way, be it a government, criminals who rob a bank stealing their money using a gun…or criminals who own a bank and abuse the trust of their customers by changing the win-win rule for the "I win more-you lose big time" Ponzi mentality.... In the end, the dissatisfied will change the rules one way or other reclaiming power.

History shows us rule changing has it's risks. When you make rules that run counter to natural laws, well you tend to end up in the dustbin of history. Be careful if you want to avoid that.

Come on.. you know what I mean with financial rules. I.e. the rules and regulations that govern the financial industry.

Right. There are too many of them.

They define what is a "fraud" and what is not.

If they were but limited to that. Our financial rules are a bizarre and byzantine hairball of conflicting mandates, incentives, restrictions, and horse$#!t that serve no discernible purpose except perhaps to inspire terrorism in people who read them and deal with them.

And if and how fraudulent behavior is monitored detected and what the consequences are. If I buy a birthday cake in your bakery and only much too late I discover that half of it is dog pooh.. I want my money back and that you pay for my doctor as well who had to treat my kids. I hope you are not suggesting that the cooks in the financial industry are not trying to sell pooh to us and do all they can to get away with it. Their most successful strategy of course being to make the tax payer bail them out via bribable and useful idiots in our governments.

You have to tell me how people with no money can bribe government.

How you going to regulate that lavender? That question keeps begging itself when I talk long enough with you.

Regulate what? Subprime mortgages? If we were within our constitutional limits we never would have had them. The root cause of our problem is Democrats, and people who vote for them.

I am willing to compromise with people though and abandon my free will principles and agree to an outright ban for everyone who has ever been a Democrat to any government position. Never let it be said that I won't compromise.

It made RABO bank a very successful bank. The rocket that launched them into space.

I wonder why their example was not followed.

As the illusion that people will not continue to want to control and overcome what stands in their way towards health, wealth, freedom and happiness. It will not and always be "the government" or one particular party. It will just be whatever they feel is to blame when they are homeless and hungry in the streets not able to feed their kids. Especially when the channels of democracy and politics have dried out as tools to get what you need.

Democracy and politics are never long term solutions to getting money. You have to learn how the money system works and use it to your advantage. There is no way around it.

[Endovelico]

Your example is meaningless, as it concerns an isolated situation while I'm talking about a global pardon. Most debtors are also creditors, so that the balance tends to be less than dramatic, except for money lenders. Imagine someone who owes $10 million and to whom $10 million are owed. If he can't get his debtors to pay him, he can't pay his creditors, but on balance his solvency cannot be questioned. Nevertheless his economic capacity may be impaired.

Sorry endo, the net worth of the world in all categories but a few is underwater dramatically. A banker is a person like you who will react to losses the same way you would.

Subprime borrowers forgave their debts and have crashed the world economy in the process. Your solution would multiply it thousands of times over.

A banker is a parasite, someone who lends money which he does not own, and creates money out of nothing on which he charges interest. The only money he ever risks is the value of his shares. He is the least of my problems and if he lost his money on a credit pardon he would already have made it several times over out of the bank's profits.

[Mr. Perfect]

A banker is a parasite, someone who lends money which he does not own, and creates money out of nothing on which he charges interest. The only money he ever risks is the value of his shares. He is the least of my problems and if he lost his money on a credit pardon he would already have made it several times over out of the bank's profits.

Well the government creates money out of nothing, banks multiply that number but it is a natural process, not something they invented.

And you are right, the money lost will be depositors money, who will react to the losses as you would, which is to say when you forgive people's loans you will be wiping out the accounts of unwitting depositors worldwide, impoverishing them, in addition to the losses of shareholders.

[Juggernaut Nihilism]

A banker is a parasite, someone who lends money which he does not own, and creates money out of nothing on which he charges interest. The only money he ever risks is the value of his shares. He is the least of my problems and if he lost his money on a credit pardon he would already have made it several times over out of the bank's profits.

Well the government creates money out of nothing, banks multiply that number but it is a natural process, not something they invented.

And you are right, the money lost will be depositors money, who will react to the losses as you would, which is to say when you forgive people's loans you will be wiping out the accounts of unwitting depositors worldwide, impoverishing them, in addition to the losses of shareholders.

The people actually advocating a debt jubilee don't seem to understand that ALL money is debt. A debt jubilee in our system is literally impossible. Without completely dismantling our system and creating something different. Which should be done immediately.

[Parodite]

Key people in the financial industry didn't and don't seem to mind... why is that?

Harvard Democrats in the government banking complex, I recommend that you wise up on them.

You mean those that before they started to mess around in the FED were in the board of directors of investment banks? All democrates?

As a general idea: I think there should not be more rules and restrictions... but less things that need regulation. Simplification, less financial products... and creating a wall of separations between government and finance (included the business of bribery or "lobbying" should simply be erased) as well as reinstalling the wall of separation between low risk retail banking, high risk speculative casino banking, and insurance.

Be careful here, you are in danger of becoming a Zack Morris type guy roaming nurseries and circumcising newborns with a chainsaw.

You say it is dangurous to change the rules? This turned out definately true when bankers pushed for changing the rules and succeeded. Greenspan admitted that he was wrong assuming that liberalisation of the rules the way they did would sort things out.

I'm a derivatives guy. Just between you and me I am world expert on options, which are just one sort of derivative. There many, futures, options, swaps and so forth, you can google that.

Yep. Wan't to understand them better. Please help. From this article I understand there are, in the opinion of the writer, good derivates and bad derivates. The good ones are traded in an open and controllled (regulated) environment. Indeed, they are oiling the economics machine. The bad ones are traded under the radar and contain speculative Ponzi dog lavender. Any comments on the article? Maybe it deserves a thread on derivatives.

No derivative market failed except the one related to the government created subprime mortgage market. The root cause was subprime. There was no blip in any other derivative market. Derivatives work as well now as when they were invented centuries ago.

I suppose then that people equally experienced and knowledgeable as you like the guy in the article are selling nonsense to the public? Good derivates... and bad derivates. Bankers using under the radar "commercial activity" to sell lottery tickets for their casinos and Ponzi lavender to any sucker that can be duped at the bottom of the pyramid. A 600 trillion market of bad derivates he claims...