Comments by "Wojtek The Bear" (@wojtekthebear4958) on "The History of Paper Money - Lies - Extra History" video.

  1. No it doesn't. 87% of all foreign exchange trades are done in dollars with or without oil. Also, Saudi Arabia doesn't care about what's going on in Syria. They're more focused on fighting Iran in Yemen right now.
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  2. I'm nearly positive he meant small amount of predictable inflation like the Fed's target of 2% a year, not something as high as 10%.
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  3. And you got those numbers how?
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  4. The economy always has its ups and downs; that's just the nature of the business cycle. There's no avoiding it. the one time we thought we beat it led to the Financial Crisis of 2008.
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  5. savvageorge You do know how the government calculates inflation, right? They literally just take a basket of goods and compares their prices over the years. There's no better way of doing it. So while the Big Mac might cost more, grocery store foods have actually dropped in price (http://www.usatoday.com/story/money/nation-now/2016/09/12/stock-up-grocery-prices-have-fallen-eight-straight-months/90265872/).
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  6. Between the asset swap and the loans, the government made a pretty sizable profit (https://projects.propublica.org/bailout/). Yes, some of that was from interest on loans given to banks.
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  7. They did, they just didn't use the phrase. Whenever someone mentions how the bankers got off scot free for their role in the Financial Crisis or how they're only going to do it again, they're basically referring to the moral hazard problem.
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  8. Joe Vasicek Huh, true, I did (stupidly) misinterpret that chart, but the one above it does have the appropriate axes and does show what I was getting at indirectly. The proportions on the bar they compare the middle class too has a higher proportion of upper class people than it did in 1971. Then if you scroll halfway down the page you'll find another graph labelled "Share of Adults Living in Middle-Income Households Falling". Now unlike what I said before, it does show that the poorer households have increased as a percentage of the population from 1970, but it shows that the upper class households have grown by an even greater percentage. Together the poor households grew by about 4% while the upper class grew by 7%, not something that should easily be dismissed. So it is fair to assume that more middle class families have moved into upper class households than lower class, but about 2/1 in fact, so our modern monetary system has been a net benefit. We just have to focus it better and work out the kinks. I do apologize about the graph though. I should've be more careful in interpreting it. 
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  9. Joe Vasicek I wouldn't say the bubble in the stock market is caused by the Fed, nor would I say that the system is seizing up right now, but I can tell you with 90% certainty that we have not addressed the heart of the problem of the Financial Crisis. Basically the only thing the government did was pass Dodd-Frank. I heard that sometime after the bailout Congress said that they wouldn't bailout the banks ever again, but I have no definitive proof on that. It should be noted that the government actually made money on the original bailout (https://projects.propublica.org/bailout/) though, but as the video said, just the implications of such a bailout leads to moral hazard. Granted, the banks have been doing a pretty good job since the crisis of being more cautious with their loans and increasing the amount of reserves they have on hand so they don't have to go to the Fed in case of an influx of withdrawals, but who knows if that will last or not.
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  10. Joe Vasicek Ha, I'd love to do that, but that required using a special statistics program I normally don't have access to. Then I'd have to find an accurate source that gives me monthly data going back to 1971. It was hard enough finding the data I did without paying for it. I'm guessing there would be some significance of the relationship between oil and the USD during the OPEC embargo due to how big of a shock it was, but after that they wouldn't be so correlated.
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  11. No, the $1,000 is the limit the $100 can make as the $100 dollars keeps getting 10% of it taken as reserves every time it's deposited. Technically it won't even reach $1,000 but a number extremely close to $1,000. Once it does though, there no way to deposit more money to increase the $1,000 even more from the initial deposit.
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  12. Your rant fails at the second arrow point. The new money isn't net debt. It is impossible to create debt without creating the same amount of assets. Any accounting class will teach you this. You can also see this in a bank pretty easily. If a bank gets a $100 deposit, puts 10% as the required reserve by the Federal Reserve, and loans out $90, then that $90 is a debt they hold to the depositor and an asset they hold to the person taking out a loan. This gives you a net debt of zero.
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  13. Public debt being treasonous....and you think that why?
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  14. In terms of the net change, fractional reserve banking doesn't mess anything up. You have to remember the large scale this is being done at. Due to the Law of Large Numbers, fractional reserve banking becomes a lot safer at such a large scale. That's because there's (normally) not huge fluctuations in things like deposits or withdrawals, so banks know how much money to keep on hand to meet the withdrawal requirements for their depositors while still having money to lend out at a profit. If this was a smaller scale, the fluctuations would be much larger, making the banks have a hard time meeting the withdrawal requirements safely. I hope that made sense. If you have any question about this, I'll try to explain it better. You are right that this system does break down, but it is rare to happen and there are safeguards put in place by the central banks. First instance, the FDIC here in the USA personally guarantees up to $250,000 of any deposit at a bank. So if the bank isn't able to pay it back and goes bankrupt, the FDIC will pay it in their stead. Similarly if a bank has loaned out too much money and doesn't have enough to meet the daily withdrawal requirements of their depositors, then they can use the Federal Reserve, our central banking institution, as a lender of last resort, and ask for a loan from them. These loans have a smaller interest attached to them than a normal commercial bank gives, and they allow the bank to meet the daily withdrawals in case of an emergency. So in rare instances the system can take a beating, like the 2008 Financial Crash we were in, but normally the government has some way of alleviating the problem.
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  15. That's a VERY debatable point. 87% of all foreign exchange trades are done in the USD (http://www.bis.org/publ/rpfx13fx.pdf), is it really surprising OPEC wanted to use it to?
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  16. Hans Smirnov My point is that oil is just one of the items that the dollar is constantly traded for. Think about it, when you by something from a foreign country, there's an 87% chance that the dollar will be used somewhere in that transaction. This means that the demand for the dollar, where it gets its value on the FX market, is caused by a lot more factors than just oil.
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  17. Do they need to make a lies episode for their lies episode?
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  18. Nah, it's just because it's not economical. Buying natural gas/oil/coal is way cheaper then building windfarms, solar farms, or nuclear power plants. The latter three have some pretty high start up costs, and both windfarms and solar farms can be very finicky due to the weather. As for nuclear power, it has a huge stigma against it, though personally I don't find it justified.
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  19. Mortgage isn't a death pledge and if you think it is you've never signed one before. In the contract for a mortgage are the terms of it, including the length of payments. Usually mortgages are thirty year of fifteen year contracts. If you're fiscally responsible, you can pay it off in even less time. I have no sympathy for people who signed a contract without reading it only to cry "theft" later.
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  20. Econ majors unite!
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  21. No its not and don't even joke with yourself about that. We are the largest oil exporter in the world, and allied with the third and fifth respectively. We don't care about what one or two countries due with their oil, especially because their actions won't have much effect on the decisions of OPEC. That's like saying we're going to invade Iran  or Russia since they don't use the dollar. No, we don't give a crap. 87% of all foreign exchange trades are done in the dollar anyway (http://www.bis.org/publ/rpfx13fx.pdf).
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  22. Since trading in the good requires the dollar, the hypothesis goes that the demand for the dollar would increase due to it being necessary to buy oil, increasing the valuation of it.. That part's true, but I've yet to find a credible source that actually agree that the dollar is backed by oil.
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  23. An audit wouldn't fix it. The problem's behavioral.
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  24. The discount rate, the interest rate you are talking about, is almost always above the inflation rate. It's main use also isn't as a revenue source, but as a way for the Federal Reserve to control the interest rate banks charge, which has at least some control over the total consumption of an economy.
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  25. Yes, in a heavily indebted developing country with a not-so-strong central bank, a banking collapse can still happen.
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  26. Because Gaddafi totally wasn't ousted during the Arab revolts for being a brutal dictator, guys. All the other ones that were ousted were legit, but not Gaddafi. Need I remind you that we invaded Iraq because we thought they had weapons of mass destruction, and that we did find chemical weapons as reported by the New York Times (http://www.nytimes.com/2015/02/16/world/cia-is-said-to-have-bought-and-destroyed-iraqi-chemical-weapons.html?_r=0)? Hussein was also a brutal dictator in his own right, but that wasn't the reason we invaded Iraq.
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  27. Joe Vasicek And your proof of that is? In fact our current monetary system isn't hurting the middle class. This is evident because since 1970 the fraction of the US population that is upper class has increased (http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/). How did this happen? Well the people in the middle class earned so much money that they were no longer considered middle class. That's why it's shrinking. And no, the fraction of the poor hasn't also risen. It's actually fallen a percentage point. Finally, the middle class income also hasn't shrunk. It's gone up by a couple thousand dollars (http://www.cnbc.com/id/48754974). I know, not a lot, but you have to remember that most of the people that were once middle class are in fact upper class. Finally, average wages have increased by 3.5% last year (https://www.ssa.gov/OACT/COLA/AWI.html) So what was that about us all being serfs?
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  28. Joe Vasicek Yeah, and I already explained the title. The US middle class is shrinking because those that were once middle class are now upper class. There's no way they're getting poorer as the lower class has also decreased by a point. Of the three classes lower, middle, and upper the only one to show an increase in the percentage of the population is the upper class. What does that say about the percentage of Americans who went from middle to upper class? They also increased. You mean inflation, a measure that calculates the average increase in price of all the goods in an economy, only measures the price of all the goods in an economy? Wow, color me shocked. That means the increase in healthcare and housing are rising in price not due to inflation, but other factors. Like, I don't know, increased problems due to asymmetric information and monopolistic tendencies for healthcare insurers, or an increased demand for housing that outpaced the supply as consumer confidence increased. FYI: If you want to make a credible argument, don't link to non-reputable sources like Zerohedge. You could've just taken an article from the New York Times or the Wall Street Journal, both credible sources and the latter right-wing, about the subject, as they both have written on healthcare and housing costs.
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  29. Nanosofty And why's that?
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  30. Nanosofty Out of curiosity, what did you get from the debate? I won't judge no matter the answer.
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  31. Joe Vasicek Bored and tired of hearing about the petrodollar, I decided to try running a basic fit regression line test using the value of the dollar compared to the yen (http://www.investing.com/currencies/usd-jpy-historical-data) and euro (http://www.usforex.com/forex-tools/historical-rate-tools/monthly-average-rates) and took those numbers and compared them to the value of oil (http://www.indexmundi.com/commodities/?commodity=crude-oil&months=120) Between July 2015 and October 2016. These were monthly numbers by the way. So at 95% confidence, the test needs to give be a P value <.05 in order for me to accept the conclusion that there is a relationship between the USD's valuation and the price of oil. For it's valuation to the yen compared to the price of oil, I got a valuation of .692, which is horrible for significance and shows they aren't even close to being related. For the USD's valuation to the euro compared to the price of oil, I got a P-value of .254 better, but still not close enough to be considered significant. So, based on the statistical analysis, one is supposed to reject the alternative hypotheses that the USD is affected by the value of oil in a statistically significant way. In other words, the petrodollar doesn't exist.
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  32. Joe Vasicek The euro one only goes to 1999 and the yen one until 1986. I'm also of the belief that oil doesn't really effect the US dollar too much as, like I linked to before, 87% of foreign exchange trade are already done in the USD. This has to do with it being tied to the strongest and one of the most open economies in the world with a central banking authority that makes the dollar really stable. Countries like Zimbabwe didn't switch to the dollar because it was connected to oil, but because it was a lot more stable and abundant than their own currency. Of course oil factors into the value of the dollar, but I don't think it's by a whole lot. As my statistical analysis showed, the value of the dollar didn't significantly decrease considering the value of oil dropped by a half. This to me implies that the value of the dollar has little relation to oil. Of course it could have to do with some external factor or I could've messed up in my analysis, but looking at the raw numbers seems to support my conclusion that at the very least they're relation isn't statistically significant in the range I used. 
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  33. Joe Vasicek 1. That wouldn't break the back of the petrodollar as of the BRIC countries (and Iran) the only oil exporters are Iran and Russia. Their oil exports together equal Saudi Arabia's (https://en.wikipedia.org/wiki/List_of_countries_by_oil_exports), which is only a fraction of the total oil exports of OPEC. So they have a ways to go to compete with OPEC 2. That would go against Saudi Arabia's interests as they're only concerned about selling oil for as much as they can. They wouldn't intentionally cut the price of their largest export unless they thought they could drive away competition, which didn't happen. The US fracking industry contracted during the fall in oil, but has rebounded very well since then. Saudi Arabia has even called for the OPEC nations (and others) to stop producing so much, but, as game theory would tell us, no country wants to be the first to cut production as they'd be at a huge disadvantage against their competitors. 3. This doesn't make sense. The Iraqi government was already being influenced by the US, and already traded oil in the dollar as they are a part of OPEC. Also ISIS more had to do with the oppression of Sunni's under the Shiite Iraqi government after the Shittes were oppressed under a Sunni Iraqi government. ISIS also go its funding from Al Qaida as they were once a sect of them. 4. Restore the dollar where? Iraq? It's already used there. Syria? Already used there. Iran? They're not even close to reaching them. They are also doing a bad job at aiding ISIS considering they are supplying the Kurds, Iraqi government, and Syrian rebels to fight them. 5. That's true. More like, once the rebels in Aleppo falls, the Syrian opposition basically falls apart. That's why the Aleppo siege is getting so much media attention. Then ISIS is also falling apart under the attacks from all sides. Furthermore the petrodollar wouldn't protect us against a recession. I'm also not sure how any of this has to do with the Bretton Woods system either. Because the global economy collapses, all the nations will be forced to peg their currency to a single nation's currency which is pegged to gold? You realize that failed right? And it was enacted after WW2, a period of growth in the world economy, not a depression. Notice I never used the term petrodollar. There's a reason for that. The petrodollar just means that the USD in some way gets its value from oil. It is not some currency of its own. Also, if the USD were attached so closely to oil, the value of the USD should fluctuate with the value of oil, but as my statistical test showed, the USD and the price of oil are not correlated. For that reason, I don't think this dollar valued mostly through oil exists.
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  34. +Joe Vasicek 1. First, OPEC is an oligopoly. They are multiple countries colluding together to gain market power. That's an oligopoly. Second, it would be nowhere near enough. In fact the devaluation of oil did more to hurt OPEC as the OPEC countries weren't even following their own quotas and overproducing beyond their limits to try and make more money, leading to an oversupply of oil.   2. Their only political interest in oversupplying the market with oil and collapsing the Russian economy would be affecting Russia's influence in both Iran and Syria, but considering an economic collapse is a huge if  and Iran was already opening up to western powers like the US at the time, therefore growing no matter what happened to Russia, it makes very little sense. Then their economic interests go directly against that, so it's not hard to assume what they'd do in that situation, especially since once against they tried to call the oil exporters together to stop the overproduction of oil because they were losing so much money (http://flapship.com/2016/11/iran-pumps-more-crude-as-saudi-minister-calls-for-opec-cuts/)   3. Not so much before the rise of ISIS. They were getting all their military aid from the US and the president himself was coached by Bush on how to be a leader. They had no need to go to Iran for anything. It was only after the rise of ISIS that they needed support from Iran, so it once again doesn't make sense why the US wouldn't want to get rid of them as quick as possible. There's only so much we can do though without deploying frontline troops.   4. No, just no. The First Gulf War was caused because of the humanitarian nightmare that was Iraq invading Kuwait and installing a puppet government from Saddam's own family. Funnily enough the international community doesn't like invasions and annexations of countries. When Saddam realized the shit he got himself into, he even tried to negotiate a treaty with the US, giving us oil at a huge discount if we just let them be, and we didn't (https://www.scribd.com/document/38969813/MIDDLE-EAST-CRISIS-Secret-Offer-Iraq-Sent-Pullout-Deal-to-U-S-ALL-EDITIONS). So the war was not fought because the US was worried about oil as the Iraqis tried to use that as their way of avoiding war and failed. 5. Yeah, I know, but you don’t seem to realize what keeping the dollar means in an economic context. By having oil transactions only through the dollar, they are forces all parties to carry the dollar as you said. These means that every country demands more dollars, increasing the demand for them. This shifts the demand curve to the right, increasing the value of the dollar as shown here (http://mrski-apecon-2008.wikispaces.com/file/view/shift_in_demand_curve/41646057/shift_in_demand_curve). Just change price in that graph for value of the dollar and it’d be perfect. Once again though, my analysis showed that foreign consumers still demanded just as much of the dollar when the price of oil fell by over a half, something that shouldn’t have happened if they were significantly related. Finally, for the petrodollar system, if it existed, to be anything like Bretton Woods, the US would need to control the production of oil so that they can stabilize it to the dollar, but we can’t as we don’t control all the oil in the world. Also, again, 87% of FX trades are done using the dollar, not just oil transactions.  
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  35. Joe Vasicek 1. Producer yes, but not exporter. In terms of the petrodollar and OPEC, what the US produces without exporting doesn't matter besides lowering the value of oil. OPEC still has an oligopoly in the oil market because their are few exporters besides them, Russia, and Venezuela. I understand you disagreeing with 3, but not so much 2. I brought a sourced article with the claim that Iran was increasing its oil production even while Saudi Arabia was calling for an even harsher oil quota, and yet you still think that this overproduction of oil was caused mostly by Saudi Arabia? They obviously don't like it if they want a worse quota. Just like the petrodollar theory is new to you, regression analysis is new to me. I'm curious about the data myself though, so I'll see what I can do.
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  36. Joe Vasicek Turkey is fighting with Saudi Arabia over regional hegemony? Huh, I always thought they were a little more buddy buddy than that. As for Iran, I know that but that isn't making the overproduction of oil any better for the infantile oil industries in other countries, like fracking in the US for instance. Ironically after trying to find anything on an oil production quota for OPEC I came across this article (http://money.cnn.com/2016/06/02/investing/opec-oil-decision-saudi-arabia-iran/index.html). It basically says that in their latest conference (relative to the article), Saudi Arabia was basically the only OPEC nation to call for a quota as all the other nations are using their overproduction as a way to gain market share. It's typical game theory. That was off topic though. Actually Saudi Arabia isn't cutting production. Nor was their 2012 production any greater than usual. Here's a chart of their oil production since 1972 (http://www.tradingeconomics.com/saudi-arabia/crude-oil-production). From what I can tell, their production has remained fairly constant, with slight upward growth since 2008. This is for much a prisoner's dilemma type situation though (more game theory). Saudi Arabia won't cut production unless everyone does or else they would lose big time. If they did cut production and no one else did, then they lose out on export revenue and market share while the per barrel price of oil doesn't gain by much. The other countries on the other hand, gain from the market share and the slight uptick in oil prices. This is similar to how, while nuclear disarmament is a great idea (on paper at least), no major power wants to be the first to do it because they'd then be at a huge disadvantage. Do you have a source for the Kremlin claim? I don't know anything either way on that issue. Wow, you've lived an interesting life. All I can say is that I'm currently getting a degree in economics at a university. Nothing like what you've said.
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  37. +John Law Who wouldn't want an episode about themselves?
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  38. It's fiat actually, and there's an interesting point to mention. If there is little faith in a currency, the currency has little foreign demand, meaning that the valuation of the currency is extremely low. This can actually be good for a country though, especially a country with a developing economy. The low valuation of your currency means that your products are cheaper abroad (as the domestic currency can buy more of your own), giving your exporting industries a boast. As your economy grows, the faith in your currency will then grow, allowing you to become more consumption focused. Because of this, it is probably a better idea for an infant economy to use a lower value fiat currency than one pegged to the gold standard, especially because that would require them to actually buy gold, which can be a drain on the government's resources. That's one of the reasons China has such a great exporting industry. They have been intentionally devaluing their currency in order to make their exports cheaper abroad. Now that their economy is great though and they have started experiencing a slowdown, they have instead stopped devaluing it so much and are not allowing it to gain some value, similar to the theoretical scenario I gave above.
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  39. Raenir Salazar Actually the developed world insists on growth to increase first world living standards. Look here (https://upload.wikimedia.org/wikipedia/commons/thumb/1/10/US_GDP_per_capita.PNG/800px-US_GDP_per_capita.PNG) and here (http://static1.1.sqspcdn.com/static/f/1295701/24284524/1391005445833/ercchart0514.gif?token=fOfI0LRiXEPVR0SrK43D5Zf0dxI%3D) as proof. I also wouldn't say capitalism exports misery, at least not since the end of the age of imperialism. Since China has opened up and became a huge exporter thanks to their sweatshops, their GDP per capita has skyrocketed (http://statisticstimes.com/economy/image/world/india-china-gdp-capita.jpg). In other words, their standard of living has increased. It's no where near our levels of course, but it's better than what they were at. So this "exploitation benefits both sides. It helps the first world consumer get cheap products and developing countries to industrialize faster. China is even starting to move to a more service based economy instead of being so export driven, a huge sign of a developed nation.
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  40. Do you have a source to back any of this up?
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  41. It's backed by the government for which they were released, which in itself is backed by the country's economy. The actual valuation of it is just given by supply and demand.
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  42. Do you have proof for the first claim you made? I'm not trying to be antagonistic; I'm generally curious by where you got that from.
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  43. Silentfrowny Welp, looks like our founding fathers should all hang for their horrible crime of trying to fund the American Revolution. You do realize that the US was heavily in debt after that, right? You also realize that most economists agree that deficit spending improves the economic recovery of an economy during a downturn, right? I mean before Obama came into office Bush, a Republican, signed his own stimulus bill in 2008 (http://www.nbcnews.com/id/23143814/ns/business-stocks_and_economy/t/bush-signs-stimulus-package-law/). It's like even the two major parties believe that deficit spending helps economic recoveries.
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  44. And how would this fix any of the problems of our current financial system again? It just causes more bank panics, which leads to less consumer confidence, hurting the economy overall.
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  45. Okay, well what do you need help with here?
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  46. Chueko Loyo Uh yeah, you might want to stay away from the video. I just skimmed through it and it is very much conspiratorial and not in anyway economics. If you want a good "pop" book on economics, I recommend the undercover economist. (https://www.amazon.com/Undercover-Economist-Tim-Harford/dp/0345494016). You can probably find it at your local library. You can also try one of the "pop" economics podcasts like Planet Money by NPR or Freakonomic Radio, both are free and easy to find online, though the latter is more about thinking like an economist than economics itself. Once again though, if you have any questions about anything, feel free to ask. At the very least I should be able to point you in the right direction of an answer.
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  47. Uh, no, not true. The Fed controls inflation through open market operations, or buying and selling treasury bonds. By trying to lower inflation, they buy a bunch of treasury bonds off the market, removing money from the economy. This loss of liquidity leads to less inflation, but there's no way to determine if this money lost is "real" or not.
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  48. Technologies can't be constructed for use by society? Me thinks you just like using buzzwords. Your reply to yourself is only making that all the more obvious. It's also extremely hard for fractional reserve banking to fail the way you think it will due to central banks like the Federal Reserves, whose one of main goals is to be a banker of last resort.
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  49. But it could also be used up and there's a lot of variation on the actual supply of oil out there, so it would be all screwy with supply and demand.
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  50. +Andrew Lynch I thought it was fiat money.
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  51. Hans Smirnov Please explain how they are robbing and cheating you. See, I thought you signed a contract when you took out the loan that clearly told you the principle, interest, and time period of the loan, and that'd you'd be held liable for paying it back. Was there something I missed?
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  52. Forza Ac Milan Then nothing will please you.. You are concerned when they can do whatever they want, and still concerned when they are supervised. Someone has to manage our monetary policy to make sure we don't get inflation or high unemployment. 
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  53. Nah, many countries took back their gold as Bretton Woods was ending. Granted, the government still holds the largest reserve of gold in the world, but it's not even close to being a majority of it.
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  54. Mario D As much as they wanted. They're not longer on the gold standard, so they didn't need to hold as much gold as they used to.
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  55. Inflation is already regulated. Most central banks target about a 2% inflation rate. In the US recent inflation hasn't even reached that.
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  56. There have been several Supreme Court cases over this issue and they have all come in favor of the dollar being considered legal tender. These cases include U.S. v. Schmitz, 542 F.2d 782, U.S. v. Rickman, 638 F.2d 182, and Nixon v. Individual Head of St. Joseph Mortgage Company
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  57. thodal2000 Oh, I skimmed over it the first time and thought you were trying to say FRN aren't lawful. I am curious though, how exactly is this a problem of fractional reserve banking? Most of this seems to have little to do with the subject.
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  58. That doesn't have a concrete supply to it. As the amount of electricity produced fluctuates.
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  59. They weren't exactly forced, more like given huge incentives to do so by the government. The banks were still at fault for not properly accounting for the risks of the investments though. Basically they didn't think the loans they were offering were as risky of a default as they actually were, leading them to loan out money to disadvantaged people too liberally.
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  60. FortuitusVideo Sup, Hikigaya 
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  61. Let's not and not even say we did.
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  62. No, since nearly every currency is no longer attached to a commodity, their values are decided by supply and demand. Think about it this way, both the UK and the US use different currencies and both currencies have a different amount in supply. Similarly some countries have more faith in one currency over the other. Because the American economy is the strongest in the world, many countries are confident in its retention in value compared to a less expansive economy like the UK. This increases the demand for said currency. Then deals like OPEC only trading oil in dollars also increases the demand for the dollar. Overall, the dollar is more demanded around the world, but also has more currency in supply. They don't cancel each other out though, so the dollar has a different valuation on foreign exchange markets than the British pound. Does that makes sense?
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  63. I don't think there were regulations to stem the flow, though I could be wrong. I always heard it as Clinton (and Congress) just created a bill to increase the incentives for banks to loan out money to the more disadvantaged as he thought that the easiest way to equalize the wealth between minorities and whites was through home ownership. Bush thought that same and gave even more incentives. The banks on the other hand didn't properly account for the default risk of the loans, so they treated them as a lot safer of an investment than they really were.
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  64. Gyrre Here, I have to directly go against you. The Glass-Steagall Act would have in no way prevented the Financial Crisis as the banks that failed never really expanded into other areas. Lehman Brothers was just an investment bank. Freddie was just a mortgage lender. Washington Mutual was purely a commercial bank. Banks didn't really go into other areas of banking besides their own niche because they would then face diseconomies of scale.
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  65. Gyrre I don't know much about the act myself, but based on its FTC page it doesn't sound bad (https://www.ftc.gov/tips-advice/business-center/privacy-and-security/gramm-leach-bliley-act)
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  66. No, the $1,000 is the total money deposited from the loans. Once you get close to $1,000, the reserve requirement eats so much of the nominal value that you're only really able to loan out fractions of a cent. This is why it has an upper limit of $1,000 instead of an infinite amount.
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  67. Hans Smirnov Once again, maybe you should read the contract before you take out the loan then. Obviously they're not going to lend you money without making some sort of profit from it.
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  68. I second this. That would be a really interesting subject that I myself know very little about. Though its relevance might be put into question because I don't know how much it actually influenced anything in modern economics.
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  69. XBlueM0ndayX Your point being? I never said the loans were strict, just that they existed.
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  70. Yes, but those navies were mostly built of wood and ironcast cannons, if that, not objects that require heavy industrial use. Now our navies are built almost entirely of various metals and electronics, which do require heavy industry. There's a reason the steam engine and ironclads were only built in the 1800's and not before.
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  71. Dude, what? The industrial revolution started in Britain in the late 18th century and didn't spread to rest of the world until around the beginning of the 19th century. Similarly the steam engine wasn't reliably viable for ships until 1807, and those were nowhere near the size of warships. Of course the engine would need perfecting until it could handle a warship. The ironclad, that being shapes made entirely from iron, began construction in 1856 originally by the British. Keep in mind the first warship to use a steam engine wasn't built until 1850 by the British, so the steam engine was barely up for such a task. This is also evidenced in the first battle between ironclads in history during the American Civil War where the Union Monitor was mostly under the water and it's main gun turret was only just over the waterline. They were also both incredibly slow. Finally, most navies aren't modern? Over 140 ships are powered through nuclear energy, the UK has 74 active ships, France has 86 ships including four ballistic missile submarines (one of the most advanced ships to exist, behind aircraft carriers and nuclear submerines), China has an aircraft carrier, is building another, and is pumping out cruisers like nobody's business, India also has a crapload of ships including a nuclear powered submarine, a ballistic missile sub, an aircraft carrier, etc. Then there's Japan, which has 154 ships and over 300 aircraft dedicated to its navy, not airforce. See, this is why making sweeping generalizations is often stupid, because you come off as an ignorant idiot when you're proven wrong. Sure, countries like Egypt might not have the most advanced ships ever, but they're also not a fully developed country, nor do they have the stability to really support one when their problems are at land.
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  72. Also go military to up your tech and conquer the world.
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  73. Banks need to exist. They can only exist through fractional reserve banking, period.
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  74. Gah, really? Now I feel like most of my Money and Banking class was a waste :/.
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