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Originally Posted by Winston
I'm no expert but I think one of the major problems is that banks basically print money. Many years ago money was backed by gold reserves and thus had actual value. Banks started lending out more than they had in the volts. First twice as much, then three times and so on until today where every time you take out a lone the bank types in a number in to a computer.
Say you wanted a $10,000 lone for a car. You head down to your bank and talk to your friendly bank manager and he happily hands over the money. Now a lot of people assume that he has lent you money that the bank keeps in it's volt, money that savers keep in the bank. However this is not the case. The bank has just created the money when it added the $10,000 to your bank account. Before this time this money did not exist in the economy and there is nothing to back it's value.
Because banks can create money like this they can lend when every they want. It's easy for almost anyone to get credit from there banks and buy the things they want. The problem is this debt is never paid off, it's just past around. Lets take that $10,000 once more. You've paid the second hand car dealer he uses the money to pay for parts, cars and wages and thus the money that was created gets out in to the economy. As you can see every time the bank creates money in this way it leads to inflation as there are more Dollars floating around the economy leading to a devaluation of the currency. This will lead to an inevitable credit crunch where there it just to many dollars making them more and more worthless.
Yahoshua is on to a good idea when he says to invest in some gold. Gold will always retain monetary value and thus investing in some will protect you should currencies around the world collapse. I myself am looking in to this at the moment. I'd recommend people have a look in to how banks work and how money is crated for them selves. I think it's a very important issue.
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I back the idea on gold - the small reserves I have, are in solid gold, no "Kaufoptionen" (buying options?). tjhe latter is a oiece of paper only,.and when there is no gold on the market, your paper is useless.
However, gold is expensive currently. On the other hand, althoiugh it traditonally is an up and down for gold, in the face of raising inflation and finacial troubles and the stockmarkets being in doubt, gold maybe never will be at historical low prices anymore anyway.
But in principle: if you want a reserve, yes, go for gold indeed. It also is not immoral, like holding shares is. I admit that also has been an argument for me. If you buy gold, it is deal done-deal over, you bought something, and now it is your property, period. If yoiu buy shares, you claim the right to constantly get payed from the work of other peoiple, who additionally often get pushed and kicked and are put under pressure to increase the profit for shareholders at the end of the year, and maybe even loose their jobs for that argument. Sicne shareholders do not give back anything in return, only bear the risk of eventually loosing the money they spend in shares, profits should be limited to a total of what is equivalent to the money they spend when buying, then the share should be deleted, maybe plus a return equivalent to the interest for leadning money. And that, of course, would make the whole system of shareholding absurd.
Yes, the system of shareholding is absurd indeed. It should be allowed to hold shares only of the copmpany you are working for, eventually. But not for companies that you have nothing to deal with. Then you do not work for stranger's profit, but for your own success. You have a justified self-interest in the company'S success. If foreigners hold your shares, you partially are being possessed by them, like a master owns a slave whom he owes nothing, but benefits from.
Uh, I'm hijacking this. Sorry.