You're not wrong about the printing money, but it has nothing to do with money lending is what im saying. money lending existed back when they used wheat as a form of trade. its a separate matterpegembara wrote: ↑Tue Jan 10, 2023 1:15 am
Isn't that why the central banks gave up the gold standard and decide to print/make money out of thin air? The US printed trillions and gave out to its people during the pandemic. Isn't this free money?
How it does this is by coercing the Saudis to only accept USD when they sell oil. The USD becomes the defacto world currency.
Now with all this money sloshing around, prices go up and the only way to slow down the inflation is to increase the interest rates.
Money should be used in exchange for products and services.
When I invest and get dividends, that seems legit.
But if I invest in crypto, it is more a case of money pursuing more money ie. speculative activity.
If I lend you money and expect to get interest, that too is a case of pursuing possessions with possesions, like collateral loans etc.
And no, the central banks did not give up the gold standard, only the US central bank did. After WWII currencies were pegged to the dollar and the dollar was pegged to gold. But the US could not mine gold fast enough to keep up with the growing population/economy and need for more dollars so we cheated and printed more dollars than there was gold reserves. Other countries were taking advantage of us when we they found out and started trading in thier dollars for gold, draining our gold reserves from fort knox. America wasnt willing to put up with it, especially since it was countries like France doing it, which American tax payers literally foot the bill to rebuild mostly for free after saving them in WWII since we were the only major power not destroyed after the war. so we switched to fiat. to prop up our currency we made a deal with Saudi arabia that we will protect them and supply them with military equipment in exchange for them only taking US dollars for oil, it was not coercion but a voluntary treaty. The only reason america saved kuwait in Desert Storm was because the saudi royal family literally asked us to in accordance with our treaty because saddam hussien didnt like the saudi royal family and he was dangerously close to them after taking kuwait.
The US controlling the worlds reserve currency and being able to print a lot more than any other country without negative consequences has benefits, its essentially the same as if the world was on the gold standard and one country controlled all the worlds gold mines. Gold is not some magical thing that has inherent value, its value comes from supply and demand just like fiat currency and everything else. But id much rather have america control the worlds gold mines than Russia or communist china, even if i wasnt American. Im sure south korea, taiwan, australia and all of free europe prefer the keys be in our hands than russia or chinas as well. Also, thats also not relevent to the free money thing. im pretty sure other rich countries gave thier citizens free money during the pandemic as well, mostly thru bond financing partially paid for by printing the money.
I agree with you that crypto is speculative and essentially relies on the greater fool theory, that someone else is stupider than you and will pay a higher price for a worthless asset than you did, and is probably wrong livelihood, which is why i shy away from crypto. I do not see the difference between investing in a business and getting dividends and lending money to businesses at interest. either way your trading money for money. The businesses only give you the dividends because when you buy thier stock your lending them money to grow thier business. I see literally no difference between investing in dividend stocks and money lending other than the terms of how the lender gets the money back with profit. Even islamic finance is the same as money lending, muslim banks still make a profit, they lend you money with the promise that you pay a larger fixed amount back to them or that they get some kind of profit sharing on your business. I dont see how interest in particular is especially nefarious when all other forms of capital trading are fine.