How to get out of debt - funny

That was a funny one but kinda true imo. +1

It all seems well and good, but there are always the hidden costs.
Clerk -$100 (to butcher) $100 (from hooker)
The hotel clerk has to run, therefore using energy so the local supermarket takes.

Butcher -$100 (to farmer) $100 (from clerk)
The butcher needs his shop to be open to accept the $100 in the first place, so he must pay for refridgeration and knives etc.

Farmer -$100 (to co-op) $100 (from butcher)
To farm the farmer must pay his land taxes otherwise he's not farming to accept his $100.

Co-op -$100 (to hooker) $100 (from farmer)
The co-op needs to pay the agents fee who is collecting this $100.

Hooker -$100 (to clerk) $100 (from co-op)
The hooker needs to ensure her business is viable, therefore must be looking her best when the man arrives to pay his debt, so some of the money goes on clothes and makeup and shoes.

Clerk -$100 (to tourist)
The clerk realises he must pay the electricity money to have the lights working so the tourist could see inside the rooms.

Damn hidden costs, all the hidden factors must be accounted for too.

[edit on 18-2-2010 by Qumulys]

Originally posted by Rigel Kent
Economic recovery

It is a slow day in the small Minnesota town of Marshall , and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A rich tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Farmer's Co-op.

The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves town.

No one produced anything. No one earned anything... However, the whole town is now out of debt and now looks to the future with a lot more optimism.

And that, ladies and gentlemen, is how the United States government is conducting business today.

PEACE,
RK

You couldn't explain it any better, that was classic. I totally agree with you, our economy is a debt based one that moves paper to have paper and goods.

Originally posted by Rigel Kent
Economic recovery

It is a slow day in the small Minnesota town of Marshall , and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A rich tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Farmer's Co-op.

The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves town.

No one produced anything. No one earned anything... However, the whole town is now out of debt and now looks to the future with a lot more optimism.

And that, ladies and gentlemen, is how the United States government is conducting business today.

PEACE,
RK

You couldn't explain it any better, that was classic. I totally agree with you, our economy is a debt based one that moves paper to have paper and goods.

Originally posted by Rigel Kent
Economic recovery

It is a slow day in the small Minnesota town of Marshall , and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A rich tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Farmer's Co-op.

The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves town.

No one produced anything. No one earned anything... However, the whole town is now out of debt and now looks to the future with a lot more optimism.

And that, ladies and gentlemen, is how the United States government is conducting business today.

PEACE,
RK

You couldn't explain it any better, that was classic. I totally agree with you, our economy is a debt based one that moves paper to have paper and goods.

reply to post by mantic

" ....and then she gets screwed"
Oh my...that's funny. Now I wonder did you state that last line by accident or was that intentionally clever?

Great.



[edit on 2/18/2010 by texas thinker]

Originally posted by Distractions4Nothing
The hotel owner is not out $100. The bill was a deposit that he borrowed, legitimately. The hooker paid him ligitimately and he repaid the customer legitimately.

I know this was intended to be humorous, but this is exactly how debt works. Perhaps the reality of debt is humorous.

Economists talk a lot about the "velocity" of them money supply. Simply creating money does not have any widespread effect on the economy. It does not cause inflation. It's only when the money is in circulation and changing hands frequently (which is called "velocity") that it effects inflation and potentially stimulates the economy. All the people involved in this story paid off their debts and got their money back, and presumably it made them feel "wealthier". That's the power of velocity. Of course, it also causes inflation, which of course has longer-term negative consequences..

Oh, I guess you are an "economist" right? Well face it, buddy, you've been taught a bunch of lies. "Creating money does not have any widespread effect on the economy. It does not cause inflation.

Go back to economics 101 and pay attention. Tell me what you think inflation is? Some kind of force of nature, right?

This whole thread is sad. NOONE gets it. This IS exactly how the fraudulent "money" system works, but throw in interest, taxes, and inflation. Don't worry, it doesn't matter. Pay your taxes. Suck it up, inflation just "happens". Go watch some TV and have a beer. Pay your taxes. Relax. Don't question the Federal Reserve.

Originally posted by CaptChaos

Originally posted by Distractions4Nothing
The hotel owner is not out $100. The bill was a deposit that he borrowed, legitimately. The hooker paid him ligitimately and he repaid the customer legitimately.

I know this was intended to be humorous, but this is exactly how debt works. Perhaps the reality of debt is humorous.

Economists talk a lot about the "velocity" of them money supply. Simply creating money does not have any widespread effect on the economy. It does not cause inflation. It's only when the money is in circulation and changing hands frequently (which is called "velocity") that it effects inflation and potentially stimulates the economy. All the people involved in this story paid off their debts and got their money back, and presumably it made them feel "wealthier". That's the power of velocity. Of course, it also causes inflation, which of course has longer-term negative consequences..

Oh, I guess you are an "economist" right? Well face it, buddy, you've been taught a bunch of lies. "Creating money does not have any widespread effect on the economy. It does not cause inflation.

Go back to economics 101 and pay attention. Tell me what you think inflation is? Some kind of force of nature, right?

This whole thread is sad. NOONE gets it. This IS exactly how the fraudulent "money" system works, but throw in interest, taxes, and inflation. Don't worry, it doesn't matter. Pay your taxes. Suck it up, inflation just "happens". Go watch some TV and have a beer. Pay your taxes. Relax. Don't question the Federal Reserve.

Like I said, inflation eventually happens when the money starts circulating. But it's the fact that it circulates that causes it, not the creation of the money. The people in this story were all in debt, but the rich guy was holding onto his money before he walked into the motel. His money wasn't doing anything just sitting in his wallet, so it had no effect. Once it becan to change hands, it had far-reaching consequences.

A lot of people seem to be suggesting that the story doesn't make sense. But I have to disagree with that. It's a great story because it illustrates the fact that debt is just an abstraction. But that doesn't make the debt any less real. The debts were legitimate, and they were retired just as legitimately as any debt in the real world.

But I don't think it's a good allegory for the Federal Reserve because there's no fractional reserve banking involved. I'm not going to argue that the Federal Reserve is a good monetary system because I tend to agree with you that it probably isn't.

[edit on 18-2-2010 by Distractions4Nothing]

This thread got me researching debt like crazy last night.

Is anybody familiar with Tom Schauf's story? Please read this and discuss it if you have the time and knowledge.
His description of the accounting practice as laid out by general accepted rules and the description of banking definitions and money mechanics as published by The Federal Reserve itself is right on.

But does it really checkmate your banker? Or does it make him laugh and sic his lawyers on you?

PS. It is not the ''redemption'' scheme. He is simply saying that when you get a ''loan'' to buy something, your loan agreement is actually a promissory note that YOU create with your signature and lend to your banker, who in turn holds your note as an asset, uses fractional banking to inflate the money supply, and then allows you to make payments in real Federal Reserve Notes under the impression that the banker actually gave you Federal Reserve Notes in the first place when all he did was create an accounting entry. It is a case of the banker saying you own him, while you are actually in a position to say the banker owes you, so it is a wash. I am very intrigued by this revelation. Tom Schauf claims that a banker will not want to discuss this in court and will let you slither off the hook like a wise serpent.

This is the exact reason I say money is one of the most evil things in this world and the crazy part about it people are oblivious to it??????

Our whole society is an illusion, nothing really physically exists, its a clever game of charades and everyday we are guessing.

reply to post by Rigel Kent


In the UK this process has been named Quantitative Easing

This 'funny' process is the end result of QE

Valorian

reply to post by Rigel Kent


Although I really like your post it assumes a circular and "equal" debt chain. Your avatar better depicts the debt chain we have in this country, china is at the top. You and I are at the bottom. It is not circular.

Nonetheless, a great deal of circular debt does exist and this does explain how bailouts are supposed to work, at least in those circular chains.

But for the regular joe, there is no money owed. Nobody owes me money, I never lent any, I borrowed. Do you know any regular people that lend money in far greater amounts than they borrow? I thought so.



-rrr

[edit on 19-2-2010 by rickyrrr]

Originally posted by Rigel Kent
And that, ladies and gentlemen, is how the United States government is conducting business today.

PEACE,
RK

Assuming an income tax rate of 25%: The butcher now owes the government $25 in income tax. The pig farmer now owes the government $25 in income tax. The guy at the farmer's co-op owes the government $25 in income tax. The hooker owes $25 in income tax. And that's how the government steals 100% of a $100 bill.

Originally posted by qwiksilva

EDIT - sorry I am from SA, hence why I type $100 dollars (dollar sign and dollar word) even though only 1 is needed. Either the sign or the word

Given that
$x dollars = x dollars dollars = x²,

wouldn't amount to $10,000?

reply to post by Cabaret Voltaire

I am aware of this.
An interesting read is by Mary Croft: "How I clobbered every cash confiscatory agency known to man."
You can download the pdf.
Along the same lines, check out PACINLAW.org and the Red Amendment (14th) if you really want to get that eye opened.

kinda shows how silly the monetary system is...only greed and crime come from it.

If you think money is evil, consider what would happen if they lived under a barter system. Wealthy traveler pays his deposit in jars of caviar. Motel owner doesn't need caviar, but it's acceptable for a deposit. Guy he's indebted to doesn't need caviar either. So it ends there. Bummer.

Originally posted by CaptChaos
In other words, when you take out a 350,000 mortgage, (a debt) the bank puts it to their "asset" side of the ledger. Then, under LAW, they are allowed to lend out over THREE MILLION DOLLARS against that "asset"

You make several incorrect assumptions.

First: Assets do not form part of the reservable liabilities, only cash or a deposit maintained with a Federal Reserve Bank.

Second: A bank can not lend more money than has been deposited or loaned to that bank.

In your example, you appear to be using a reserve fraction of 10 percent, so in the real world, as you have not made a deposit, the bank can not lend any money.

Originally posted by CaptChaos
So by you agreeing to owe 350,000 to the bank, they now apparently HAVE
350,000 dollars that DID NOT EXIST A MINUTE AGO.

Again, assets are not reservable liabilities.

Originally posted by CaptChaos
Then, to amplify the swindle, they only need ten percent assets for the amount they "lend"

That is incorrect. A bank can only lend the money that has been deposited or loaned, and of that money they must reserve a fraction.

in other words NINETY PERCENT OF THEIR LOAN MONEY DOES NOT EXIST

This is also incorrect.

I can tell that not one single person here gets this.

Unfortunately, YOU are the one not getting it.

You are saying that banks can take deposits of $100 and then set aside the $100 as reserve and loan out $1000.

The reality is quite different. In reality, the bank will have deposits of $100, set aside $10(if the reserve requirement is 10%) and loan out the remaining $90. The same money is then deposited and lent several times through different banks, each setting aside the reserve(10%) and lending out the remaining amount, until the remaining amount becomes so small that it can not be divided any more. So in reality, the $100 in this example becomes 1000 dollars in the whole economy. The bottom line is that banks can only lend what have been deposited or loaned to them.

There is a reason why USURY was stated in the Bible, the Koran, and EVERY OTHER RELIGION as a major sin. It is simply stealing. Strangely enough, there is only one "religion" that says usury is ok. Even that devil religion states it is ok to charge interest to those of other "religions" but not to their own members of the "chosen people". Guess which religion that is?

Sigh, please stop bashing the jews.

ALL the conspiracies talked about on here by everyone are caused by this ONE SCAM. It leads to every single other swindling conspiracy we talk about here. As long as this scam is not ended, we will never get out of this mess we are in.

Well, if you absolutely positively must critisize fractional reserve banking, it would suit you well to understand what it is and how it works.

reply to post by aaa2500

It would appear that you should take issue with Murray Rothbard if you believe you understand Fractional Reserve Banking.
www.lewrockwell.com...

Originally posted by Stewie
It would appear that you should take issue with Murray Rothbard if you believe you understand Fractional Reserve Banking.
www.lewrockwell.com...

That's a silly argument. Nothing in this text contradicts my post, it is just dumbed down for 'ordinary people' to consume.

The text also goes into many other issues that I didn't go into. The post I responded to was about fractional reserve banking, not money market operations for example.

But as you link to this, I assume that you also believe that mortgages are considered reservable liabilities?