Google "Economy Slowest in Three Years" 1272

On Sat, 4 Feb 2006, drocillo

OK, I suppose you can have business expand (meaning dollars spent per person per day) if you have inflation match population growth. This also means the money supply (meaning dollars available per person) has to expand, too. This happens if the Treasurey increases the debt ceiling, which means the Mint prints more money. And, also if banks allow debt to expand (i.e. you want to buy a house and they loan you the money TODAY that you will pay back later and with a lot more money called interest). All the people (in the banks) will make more money if the population expands AND the money (total amount) expands (as it has to) along with the population. Or, if the population stays constant, then how do you get expanding economies (in the developed countries) without more money? Do you think it happens if people spend more money per day per person? Then they go into debt because they have to.

I left out a lot of things above, but it gets very complicated if you start thinking about where money goes when it gets spent, and its like magic at the bank when you deposit $1,000 and the next day they loan out $900 of that money and give you a piece of paper that says you have $1,000 in the bank, but in reality your $1,000 (or most of it) is gone. And, the only thing keeping you from asking for that $1,000 back is that you are confident that it is there when you ask for it. Its all OK if only a few people ever pull their money out, but you have to put money in the bank because your meny is losing (depreciating) value if you don't (because the bank pays you interest maybe only slightly less than inflation). So, basically, all the banks in the world that operate on what is called "fractional reserve banking" are creating money every time you make a deposit AND they loan out most of that deposit the next day. Its not hidden from view, either, they all will tell you that but how it plays a dirty trick on everyone because the system has this built in inflation which makes your money lose value at about the rate of inflation if you put it under the pillow instead of in the bank.

And, thus, all of our amazing progress, growth in standard of living, material possessions are all supported by this expansion in loans, debt, "money out of thin air" mechanism. I read all this from Griffin's book "The Creature from Jekyll Island." I'll have to say, again, it's the top book I've read in the last 20-25 years. And, if you don't like the rich powerful people now, then after you read the book, you will hate them even more. They run everything. No democracy. All plutocracy.

So, if the population is decreasing (less people in a country), then who will buy houses, cars, furniture and keep the economy going if there really are less people next year compared to this year? The less people will buy less stuff. Less people will need less loans to build-buy houses, cars, etc. Net money will come out of the banks and they will shrink. Less need for lawyers, they will become unemployed. It will all spiral down.

Am I wrong?