Meanwhile, back in reality, where did you get the capital to create that machine? If you didn’t have millions in R&D cash lying around, chances are to had to take out a loan. Now where did that loan come from?
In reality, you don’t inherit machines from god. It takes money to make money, and one of the vital roles that banks pay is providing services to help keep cash flowing. Without starting capital (which none but the obscenely rich can offer out-of-pocket), your idea will remain just that - an idea.
Yeah, it’s a shame that, in capitalism, the banks are a necessary and expensive middle-man. But they are definitely necessary in any capitalistic system, and without them the economy would absolutely grind to a halt.
We could call your magical machine a “deus ex machina” or, more simply, a sawmill. And these people who are buying your logs to build their houses, how do they afford it? Most people don’t have the money needed to build a house in one lump sum. So instead perhaps another person (let’s call him a “moneylender” or a “banker”) gets the idea to “lend” money to them, which the new homeowner pays back over time. Without the banker, just how many logs do you think you’ll sell?
And don’t think you’re somehow morally superior in all this. Your hypothetical wealth comes from cutting down trees in the forest, thereby depriving birds and squirrels of a place to live and people of a source of shade.
But why is it necessary for me me to sell the logs at all? I have been given something from god, a machine that can be run very cheaply and produce things worth many times the cost it takes to run. Like 100 times more. Or maybe even 1000 times more. This machine has immense power.
If I had more machines like this, perhaps it would be possible to build a city.
Why sell them? Why not use the logs I have accumulated to build houses where people can live. For free. No rent, no mortgage, no bullshit. Just use the logs the build houses and let people live in them.
And then possibly, maybe, in the long-distance future, if I was smart enough, build another machine capable of doing the same thing, basically replicate the machine.
I agree with you 100% about the environment, by cutting down the forest I am robbing the plant and animal life of a home. To build a home for human beings. That is a moral dilemma, something that I must deal with.
I uh… I’m not entirely sure what the point of this thought exercise is. Is it to try to demonstrate that there’s something wrong with capitalism? Or do you need an ELI5 on how the economy works?
Well, people don’t usually like sleeping and sitting on a dirt floor. Or not having a door to keep out the forest creatures looking for a home now that someone cut down theirs. Or heat in the winter. Or a kitchen in which to prepare their meals and a toilet in which to expel the results of those meals. In short, the many, many things not provided by your magical sawmill. Plus all of your mill workers quit to go work for the other guy who actually pays them in actual money.
I’m not against capitalism, simply trying to understand the economic system.
What I’m saying that the way wealth is created is by EXCESS PRODUCTION. That’s what America was built on, when America was more honest and had more honest leaders.
The skyscrapers of Manhattan represent the wealth of America, REAL WEALTH, not numbers on a computer screen. What’s the point of having $5,043 in bank account, when you know that probably all of that money has been lended out, not currently available? That money is making a banking executive rich, not you.
What would you rather own, a Manhattan skyscraper or the amount that the skyscraper is worth in dollar bills? I would rather own the skyscraper, because what it made out of, brick, stone, steel has real lasting value. Not peices of paper money which can be made worthless.
Also, you absolutely can withdraw your whole bank account balance in almost all cases. That’s because the bank is also holding on to at least 10% of everyone else’s money. So barring a bank run where everyone decides at once to withdraw everything (something that stopped happening after the creation of the federal reserve), you absolutely can reinvest every penny in your bank account in, say, gold bars to stash under your mattress.
Btw, I think that 40 Wall Street, a skyscraper that Donald Trump owns, is by far his best business enterprise, generating something like 2000% profit.
All his other buildings and business enterprises, trump steaks, trump casino, trump golf course, trump university, etc generate far less profit or have gone bankrupt.
You think the owners of buildings in Chinese ghost cities have it good? You think the value of a skyscraper can’t go down?
Having the money means you can diversify your investment portfolio. Having a skyscraper means all your assets are in one basket.
Wow. You really are all over the place in this thread. First, you’re asking about libertarian attitudes towards the Federal Reserve System, then you’re taking about the profitability of the banking business, then about a magical sawmill with which you can build houses for no cost, then you’re on about Donald Trump and his real estate investments.
Well the Chinese are building buildings without any tenants to occupy them right? Kinda like what happened with the Empire State Building. The company that built the ESB was heavily in debt when the building opened in 1931, as it had to borrow trenendous amounts from the banks to get the need funds for all the building materials.
However the depositors, the people who have their money to the bank to support the loans needed, lost confidence while the building was still under construction, and all of them tried to pull their money out at once. However the bank didn’t have their money, because they loaned it all to the builders so that they could buy the necessary building materials.
When the building opened in 1931 they couldn’t get any tenants because nobody could afford to rent out a floor of the Empire State Building. Since all the people/companies who could afford it had lost all their money in the crash of ‘29.
And the reason the crash happened in the first place was people lending their money to support a giant building boom which couldn’t be afforded to be paid back!!
So the banks are a kind of weird middle man who create/prolong boom and bust cycles in the economy.
And the FED basically adds fuel the the fire by not allowing them to fail.
Wow. So you’re just ignoring all of the many replies to your thread that have attempted to explain things like whether the “FED” is public or private? Good to know. I’m sure any threads you start in the future will get a similar amount of attention.
Maybe the FED should have a clear mission statement and explain itself to the American people, including who owns it, what it does, why it’s needed? And who are it’s board of directors and its relationship with other countries?
I think your average American understands what a bank is, but most have no clue about the FED.
