Problems with money

Context

Should we ban lending money for interest like Christians and Muslims did in the middle ages?

  • Pros if we do: No bank runs. No credit crunches.
  • Cons if we do: Shortage of money to go to war (taxes aren’t enough in an emergency), and other public welfare projects. Nobody will risk lending such large sums to the government unless they get interest for it.

Should it be backed by (have constant exchange rate with) gold/silver? Should the total supply be constant?

  • Pros if it is: Supply of money cannot be changed to make a few politically connected people (e.g. goldman sachs ) to become rich enough to influence the king/government.
  • Cons if it is: Interest rates will be higher with a constant supply of money because there is fewer money to go around, so even kings will have to collect more taxes to pay off loans borrowed by the government. Since supply of money only changes with new metal, money is hoarded by irrational actors in the economy, until there is not enough invested or lend out to make economic activity happen.

Should money supply change when central banks or governments want?

  • Pros if supply changes: The king/government has a source of low interest money to go to war, or do welfare and other legitimacy building projects, if the need arises.
  • Cons if supply changes: Supply of money can be changed to make a few politically connected people (e.g.court Jews and government contractors ) to become rich enough to influence the king/government.

Elites do not need our consumption to be rich

There is a common assumption among the Marxists/Socialists/Communists/Social Democrats/Technostists/Basic Income Advocates etc, that the elites need the consumption of the plebs in order to be rich. This is wrong.

What does getting rich mean? Getting rich means being be able to afford the labor and ingenuity of other people. Example: you are rich to the extend that you can afford the labor of your waiter and chef at a restaurant. A richer person will be able to afford the labor of a better waiter and a better chef.

With better automation, being rich means being be able to afford better automation.

With better automation, The rich people today will simply start affording automated labor, and they will start consuming the products of such labor directly. They wouldn’t increasingly need plebeian consumption much like they don’t increasingly need plebeian labor.

The rich would certainly fear our rebellion if we were large in number, but thanks to panopticons, contraceptives, abortion and low marriage rates, that problem will fix itself.

Teleological Obsession

Modern humans i.e. the ones since the advent of religions practiced today, have a tendency for teleological reasoning. As such, it takes considerable intellectual discipline to override this with logic.

Most of these modern humans cannot function without some sort of worldview whereby teleological reasoning is applied, even though teleological reasoning is inconsistent with how the universe actually functions.

Religions provide a systematic and semi-coherent worldview that appeals to the teleological reasoning of the human mind. How well or poorly the particulars of a religion cleave to reality is irrelevant. What matters is natural selection, on the civilization level. Those religions that reinforce functional behaviors within a society are selected over those which do not.

It is not therefore surprising that a few religious traditions (Abrahamic, Confucian, Hindu) have come to dominate. Though none of these religions provide believers with any real understanding of the universe, they do provide societies with a set of norms that lay the foundation for sustained growth.

What you see in slow-motion collapsing civilizations, from Rome to the US, is a rejection of the norms that brought them success in the first place. It is based upon a flawed belief by intellectuals (in modern terms this includes both leftists and libertarians) that, once freed from religion, the populace will somehow magically become a beacon of logic and reason.

As those of us here all know, all that happens is that the established religion is simply replaced with another one. However, the upstart dogma has not been subject to the selective pressures of the more ancient one, and is almost always degenerate. Thus, instead of heroes like Hercules and martyrs like Jesus, whose stories (true or not) exemplify the better aspects of human nature, you instead get Columbia’s Mattress Girl, whose tale is nothing short of glorification of vice.

Basic income is just code for human domestication.

Do you really think the elites will keep us plebs around if they do not need us? The only reason we plebs exist is because they need our labor/ingenuity, and perhaps use us a crucible from which new elites are born. Once they do not need us due to longevity, automation and AI, our reproductive capabilities will be severely limited in the name of reproductive freedom, and us plebs will be slowly made extinct except for an obedient few. The elites will go on to become a superior species either through artifice or natural evolution. That is how universe works.

Here is why SJWs and democracy lovers are desperate.

The Internet did to ideas what biology and medicine did to genes. It cross pollinates them and makes them replicate longer and more often.

Unpopular ideas and bad genes don’t die anymore.

So social justice warriors are desperate to kill off politically incorrect ideas or at least drive them away into the underbelly of the Internet in the middle of all this cross pollination and virality.

Democracies for the first time have to eat their own shit. They can’t amplify opinions of elites anymore, because the plebs are more viral.

Hand me the popcorn. This is going to be an interesting century.

How to deal with labour unions and democratic forces?

People need a leader, and since most leaders are corruptible or sociopaths, we need to document evidence for corruption, or sexual deviancy (which are common among the sociopaths). If they do not engage in such despicable activities, then we must tempt them to engage in such activities.

Then we need to invest money in the media, in-order to appoint editors and directors. When the labor union leaders or democratic leaders misbehave, these editors and directors will be used to amplify the evidence for their deviancy in the media.

Once we attack the reputation of these leaders, the people will do the rest, while we get to engage in what the leaders prevented us from doing.

I propose that we form a secret society for this sort of action.

History of Money

In the beginning there was no money, there was just barter. But if you were a rich coconut farmer who wanted a Lamborghini, you had to find a person who needed that many coconuts and had a Lamborghini to pay for the coconuts with. And this was very hard to do.

Over thousands of years, people decided on bartering for certainly commonly-desired non-perishable easily-dividable hard-to-adulterate commodities like gold/silver which became world currency.

But gold and silver was hard to carry, and not secure enough, so people deposited their gold with trustworthy vault owners, and got a bearer’s receipt instead. Anyone who held the receipt could get back the gold from the vault owner. Soon people started paying each other in these receipts (which became known as notes) since anyone with the receipt could get back the gold.

Since only very few people came back to collect the gold with their receipts, The vault owners also got into the business of lending money deposited in their vaults. Although the Catholics and Muslims thought lending money for interest was evil, after the protestant movement, the Calvinists (and eventually all Christians), started believing a low interest rate was a good thing. But society was still against high interest rates.

Soon the vault owners (now called banks) started lending almost all the deposits they had for interest. Occasionally all the depositors would come with their receipts (also called notes) to withdraw their deposits, and the vault owners did not have enough gold to pay the depositors with because it was all with the borrowers.

After many such incidents of vault owners not being able to pay the depositors back (such incidents were called bank runs), governments decided to step in and allow certain banks (called central banks) to print notes (not backed by gold or silver) to lend to banks experiencing bank runs. The normal banks could then safely lend out all of their deposits, and Governments also got a source for newly minted low interest money, which they could use to engage in vote securing (legitimacy building) projects like welfare and wars which also made the government contractors happy.

In USA, the current central bank chartered to print money (without having gold) is called Federal Reserve, which profit by, among other things, lending money to banks which run out of money to pay their depositors. The Federal Reserve also lends newly minted money at very low interest to the US government which is why US government wants them to exist.

For every dollar print and lend by the Federal Reserve to the US government, the government contractors get paid with it and they deposit it in normal banks who lend it out for more interest which the normal banks lend to the people and to US government, until there is upto 9 more dollars owed by banks, governments and people to each other (as promises to pay). This is called money multiplier effect, and is used to “stimulate” the economy.

Unlike in the old days when people decided that gold/silver was currency, now people indirectly accept that what we owe to each other (as promises) is money. Theoretically there is no limit to what we can owe each other, as long as we know we can meet those promises, and as long as we can keep track of those promises and measure it in money.

Governments are widely believed to be capable of meeting any promises they make (through their threat of tyranny). They can promise to pay back the Federal Reserve a quintillion dollars, after borrowing from them, but they have to be careful not to create runaway inflation with it, e.g. runaway food prices, during high unemployment, or else the governments will face widespread civil disobedience. This is also why governments make sure they don’t run into civil disobedience scenarios by controlling what is shown in media, and Facebook walls.

So this is why governments end up borrowing so much money because they believe they can secure their legitimacy, avoid civil disobedience, through welfare and wars, by making promises to pay back what they borrowed from banks, promises which the govts plan to keep through a threat of tyranny (taxes and guns). Besides the government contractors, i.e. Health Insurance companies, and weapons manufacturers also like this arrangement.

How demand for a currency is maintained in international markets

Money that is not backed by gold or silver, presents a new challenge for a nation. How does it maintain demand of their currency in the international markets? This is how it is done:

Countries possessing superior technology, products or services offer these to nations which do not have them. These superior nations also lend their currency to poorer nations for interest, so that the poor nation can pay for the technology. The lender nations also create new money so that borrower nations can buy it with their local currency and pay the interest with it. The local currency is held as ransom by the lender nation. If they borrower defaults or if there is an unsustainable trade deficit, the lender sells the borrower currency until the exchange rate between the borrower’s currency and lender’s currency changes.

This way plenty of borrower nations maintain a constant demand for the lender’s currency in order to pay of debts. This makes lender’s currency more valuable in international markets.