WEB OF DEBT BLOG

Mysterious Prison Buses in the Desert

51 Responses

1. 

   Dan, on January 23, 2009 at 4:36 pm said:

   The system will collapse. It is only a matter of timing. Unless, of course, the proper diagnosis is made and freedom is restored to the people, as in to the INDIVIDUAL, not to government, for the government does not mean the “people”.

   I say this because the majority opinion here is that somehow power to the government is power to the people. On the contrary! Government is a negation of liberty. We therefore must only delegate to it the power to enforce law and order for the sake of protecting the individual from the initiation of force by others.

   Government today is not performing this subordinate role. Quite the opposite, it has seized ownership over our lives and property. Government today is taking money (by force) from some in order to benefit others. No “democracy” can morally justify this. A vote does not make it right. We should not be able to vote one’s life, liberty, or property away.

   What you describe in your article, is exactly the outcome of not realizing the nature of government and the only true realization of freedom. What is occurring with our monetary policy is a result of government power. We must not grant government more power, but take it away from it. Therefore, we must not nationalize the banks or anything, since that is the granting it even more power.

   Do not be fooled by the mixed-privatized scheme. National Socialism (NAZI) and Italian Fascism were both realized through the illusion of private property. In fact they were both systems of Socialism.

   The more power it has, the more buses you will see.

   Reply
2. 

   Cato minimus, on January 23, 2009 at 7:35 pm said:

   Curious definition of Socialism, Mr Dan, since National Socialism and Italian Fascism were intrinsically about as anti-social as a popular political movement can get.

   Perhaps that’s your point? If so, it’s illustrative of what I call “Limbaugh-creep,” which is the ad hominem process of tagging labels for leftists with manure. The word “liberal” has in fact become so negatively affected by Limbaugh and his ilk that true liberals have been forced to adopt the term “progressive” to define themselves. One forgets that this country was founded by people who were considered radical liberals by the power elite of the time.

   Socialism by definition is a system in which aggregate profits are shared among all citizens, in some degree. The Nazis pretended to be socialists because it was the flavor of the moment when their public idmage was crafted in the early ’20s. Their idea of socialism was cheap vacations for the masses (“Strength through joy”); however, profits under the Nazi economic model remained with Big Business, with whom they colluded to control Germany.

   I agree with you completely that: the only reason the US gov’t can play these DHS games is that they have too easy access to taxpayers’ wallets. That needs to be restricted. A lot. I do not intend to be another bozo on that bus in the desert.

   Reply
3. 

   Jacob, on January 23, 2009 at 9:51 pm said:

   Dan

   You are a paranoid anarchist!

   As a historian I can tell you no civilization has ever not had a government not in control. You are very confused by the past events of the last twenty years. The Republicans in this county have mislead you and others into being paranoid about the government so that they could convince you to trust corporations, big business and the bankers.

   Get your head out of the sand. I personally would rather have government control things that are actually responsible to “we the people” rather than the chaotic world you propose.

   Reply
4. 

   moneycreation, on January 23, 2009 at 10:10 pm said:

   So private companies are inherently good and government inherently bad. I know this belief is embedded deeply within you but I think it’s rather black or white kind of thinking. For me government can be good or bad, and companies can be good or bad.

   How about companies that benefit from economies of scale – they will be powerful and eventually have unproportional power and how are you going to regulate them when they become a state within a state? This will most certainly be the case regarding banks for instance. How big do you estimate that a company can grow before it gets unproportional power? 10 000 employees? 100000? 1000000? How much of the economy do you think is unproportional for a company?

   For me the answer is that small business should be allowed to basically unregulated but the bigger the companies get, and hence can be a government within the government , the more democracy and publish transparency is needed in both the government and the companies benefiting from economies of scale. So the things that needs to expanding is the democracy, and the public power to regulate both government and large companies. The unproportional power both in companies and government should be accountable to the people and the democratic process and the economies of scale factor should benefit all .

   Reply
5. 

   Dan, on January 23, 2009 at 11:17 pm said:

   moneycreation,

   The only reason that a company can grow so big without being economically sound(such as our big banks), is by special priveleges granted by government that keep out competitors and grant special protections and government assurances. Such is the case with our banks.

   If a company grows in a free market, it is doing so only by meeting consumer’s demands better then its competitors. thus it is more successful. Economic of scales is not a bad thing, it brings more goods and services to consumers at cheaper and cheaper prices. No producer can coerce you into buying its product in a free market. Thus, if Wal-Mart is expanding, it is only by consumers choice.
   Who is the beurocrat or politician who thinks he is smarter then everyone and overule the choice of the consumers. That is not a consumer advocate, but a dictator ready to abuse his powers.
   The free market rewards the successful and efficient. The losers are forced to either compete or do something else. That is how wealth is continuously created and increased.

   moneycreation,

   The only reason that a company can grow so big without being economically sound(such as our big banks), is by special privileges granted by government that keep out competitors and grant special protections and government assurances. Such is the case with our banks. That’s why they are “too big to fail”.

   If a company grows in a free market, it is doing so only by meeting consumers’ demand better then its competitors, making it more successful. Economic of scales is not a bad thing, it brings more goods and services to consumers at cheaper and cheaper prices. No producer can coerce you into buying its product in a free market. Thus, if Wal-Mart is expanding, it is only by means of consumers’ choice.

   Who is the politician who thinks he is smarter then everyone and overrule the choice of the consumers. That is not a consumer advocate, but a dictator ready to arbitrarily decide for all of us. The idea of protecting the “corner” store, for example, is nothing more then forcing consumers to buy where they have chosen not to, thus penalizing them into paying higher prices. Economically, it is fallacious, because it suggests stagnation. We’d all still be farmers. But morally it is wrong, for it is nothing more then using force to get something that was unattainable by fair competition.

   The free market rewards the successful and efficient. The losers are forced to compete, do something else, or free up their resources for the more efficient and other producers in demand. That is how wealth is continuously created and increased.

   You are wrongly imagining a company growing without proportion, as if it were able to force itself upon us, and compel us to buy its products against our will. But in fact, that scenario is only possible by the means of government granted special privileges. Look around you. The only monopolies that extort their fees and coerce you into business are either government programs, or mixed systems where government is in bed with private companies, e.g. Banking, health care, etc… In a true free market (unregulated and with free entry to any competitors, where government only enforces contract obligations and anti-fraud laws), every incentive is working against your scenario. It is likely that large successful companies only grow out of consumer satisfaction. Free entry by new competitors into any sector will always ensure that the consumers are protected in the long run. There is no small or big business, and there are no limits to size as long as you maintain the principle of voluntary-exchange. Producers must meet consumer demand for them to profit. This is only true in a free market. Not in any of your government schemes involved in the economy.

   Reply
6. 

   Dan, on January 23, 2009 at 11:19 pm said:

   moneycreation, (forget the last post)

   The only reason that a company can grow so big without being economically sound(such as our big banks), is by special privileges granted by government that keep out competitors and grant special protections and government assurances. Such is the case with our banks. That’s why they are “too big to fail”.

   If a company grows in a free market, it is doing so only by meeting consumers’ demand better then its competitors, making it more successful. Economic of scales is not a bad thing, it brings more goods and services to consumers at cheaper and cheaper prices. No producer can coerce you into buying its product in a free market. Thus, if Wal-Mart is expanding, it is only by means of consumers’ choice.

   Who is the politician who thinks he is smarter then everyone and overrule the choice of the consumers. That is not a consumer advocate, but a dictator ready to arbitrarily decide for all of us. The idea of protecting the “corner” store, for example, is nothing more then forcing consumers to buy where they have chosen not to, thus penalizing them into paying higher prices. Economically, it is fallacious, because it suggests stagnation. We’d all still be farmers. But morally it is wrong, for it is nothing more then using force to get something that was unattainable by fair competition.

   The free market rewards the successful and efficient. The losers are forced to compete, do something else, or free up their resources for the more efficient and other producers in demand. That is how wealth is continuously created and increased.

   You are wrongly imagining a company growing without proportion, as if it were able to force itself upon us, and compel us to buy its products against our will. But in fact, that scenario is only possible by the means of government granted special privileges. Look around you. The only monopolies that extort their fees and coerce you into business are either government programs, or mixed systems where government is in bed with private companies, e.g. Banking, health care, etc… In a true free market (unregulated and with free entry to any competitors, where government only enforces contract obligations and anti-fraud laws), every incentive is working against your scenario. It is likely that large successful companies only grow out of consumer satisfaction. Free entry by new competitors into any sector will always ensure that the consumers are protected in the long run. There is no small or big business, and there are no limits to size as long as you maintain the principle of voluntary-exchange. Producers must meet consumer demand for them to profit. This is only true in a free market. Not in any of your government schemes involved in the economy.

   Reply
7. 

   Mike, on January 24, 2009 at 1:17 am said:

   Whether it is civil unrest or something more prosaic, Wackenhut Corp is never up to good.

   Think of the perverse incentives created when you make a PROFIT MOTIVE for security.

   Well, you need INSECURITY to be increasing 10% year over year if you want to stay in the game of whatever security you are selling.

   Wackenhut = blackwater = Lockheed Martin.

   As for the purpose of Wackenhut’s mystery bus base, one surely wonders. The proximity to Davis-Monthan (home of Evergreen Air…) and other issues is cause for deep concern….

   Reply
8. 

   moneycreation, on January 24, 2009 at 10:58 am said:

   Dan
   I haven’t said that economies of scale is a bad thing I’ve said that companies that grows to large will have unproptional power over the society.

   I will argue that they actually will be more and more like a society internally. What’s actually the different between a the way a company with lets say 300000 employees are runned and a government? There’s the same hierarchical structure, basically the same bureaucracy, basically the same central planing of utilizing the resources, the same tendency to let people with a psychopathic mindset rule at the top. Sorry to say, but if you think these companies won’t dictate the rules for the rest of the society if we just get rid of the government, you are extremely naive.

   The only thing different between the government and the big companies benefiting by the economies of scale is that government can influenced by democracy and have some transparency, That’s the way it should be anyway. So the way to go is to open up both government and big companies for more transparency and democratic influence (the small business should basically go unregulated).

   Big companies are given the economies of scale because the falling prices per units in large production series. They are extremely capital intense and require that enormous amount of capital are accumulated. An accumulation that will influence the rest of the society and hence ought to be under public scrutiny and not kept within locked doors in mega companies ruled by psychopaths just thinking in terms of profit and totally ignoring the human costs.

   Reply
9. 

   moneycreation, on January 24, 2009 at 11:59 am said:

   Forgot to mention that the initial entrance ticket, getting into economies of scale prevent your so called “free entry to any competitors” – another reason they should be under public scrutiny. Or do you really thinks there’s a “free entry to any competitors” regarding for instance Intel microchip production? You really think that you from scratch will be able to compete with Intel?

   Economies of scale in effect kills the theorem of “free market”

   Reply
10. 

    Dan, on January 24, 2009 at 4:12 pm said:

    Moneycreation,

    Are you offering to punish the successful at the expense of the unsuccessful? A company grows out of success by providing service. What do you want exactly?, to intentionally take its advantage away by using government as a “club”? free entry means free entry! No regulations or special privileges! You can’t preach “competition” and then offer to regulate it.

    It is better to learn a little about how a free market works before you advocate to destroy it. Or worse, at least don’t learn about it from its enemies.

    How do you think a business profits and grows? By consumers “vote” on ever purchase or non purchase. The are all free to choose. I’d say that’s democratic! Of course in your democracy… You want a majority to vote for a representative , and then that representative to arbitrarily start to overrule the wish of consumers.

    Difference between government and a large private business in a free market, is that government initiates force and fear in order to get the individual to comply, while a business obviously cannot initiate the use of force, but only incentives! it’s involuntary and force Vs. voluntary exchange! I’d say that’s a big difference.

    There are a lot of things you take for granted. I wish you learned a little more about free markets and basic sound economics before you advocate to hamper it.

    Reply
11. 

    moneycreation, on January 24, 2009 at 6:33 pm said:

    Can you explain to me how you are going to make Intel microchip production into a “free entry to any competitors”?

    I admire your utopian point of view but it’s a bit to obvious that they are very, very naive.
    Try to read again what I wrote. Perhaps something will slip through your barrier of repeating mantras.

    Reply
12. 

    Dan, on January 24, 2009 at 10:58 pm said:

    Moneycreation,

    Please don’t disappoint me. Don’t use the “Utopian” argument when you can’t logically refute the arguments.

    AMD, Texas Instruments, Motorola, Cypress, Microchip technologies, Atmel, Freescale, and there are more…

    All of these are big multi-billion dollars companies located all over the world that are in the microchip business. Perhaps Intel has captured most of the PC market, But look around you.. .almost anything that is digital today has a computer inside, and Intel doesn’t own those markets. Your car has many microchips, but they are not likely to be Intel.

    But this is not the point! Intel as far as I’m concerned can try to capture other markets as well, but as long as there is a free market it can only be done by consumer choice. That market will never be guaranteed to be secured for them as long as there is a free market. For if they start to slack off, then their days are numbered. They can never lower their guards down! For if they do, you know that others (like AMD) will capture their market. They can’t even afford to loose reputation. The size doesn’t matter!

    What exactly is your objection to “Intel”. That they own in their possession a great amount of capital, knowledge, technology, that enables them to be so successful, and therefore hold an advantage over others. How did they acquire such capacity? Did they steal it? I don’t think so. They created it! They had earned it! If Intel is successful they don’t need to apologize for it, and neither is anyone else who is successfully. Success is not a right! It is earned!

    There is always a threat of competition to any company in a free market. As long as they can’t keep out competitors by force, smart people (could have even been prior Intel employees) may always try to enter the market.

    I’m sorry, but you can be rational about this argument or mystical. It’s your choice. But the only way a company or anyone can become too large and powerful, is if they hold a “legal” monopoly, and that is only possible with government help. It’s not a matter of size or market share, it’s a matter of whether the size is achieved via free market, or by “force”, with government help.

    Please, the “Utopian” (or “ideal”) argument doesn’t reinforce your position, nor does it refute my. Nobody said that a free market is a “Utopian” ideal. I’m sure you’re intelligent enough to make an abstraction to reality from the “ideal” that is used to explain a system or model.

    Don’t start to do what you had criticized someone else of doing a few days ago.

    Reply
13. 

    moneycreation, on January 24, 2009 at 11:15 pm said:

    So you actually think that there’s an free ticket into the micro processor market! A “free entry to any competitors” in your words. I can’t help you from seeing that that’s not the case. The entering ticket is in the billion dollar size. But you actually think you have a free entry in your cellar producing processors competing with Intel? Are you going to compete with Boing from your cellar to?

    Good luck! (As I said: it’s a bit to naive thinking for me but I do admire your utopian mind)

    Reply
14. 

    Dan, on January 25, 2009 at 1:09 am said:

    So because I don’t have the capital to compete with Boing or Intel, then there is no free entry? Is there a “natural” right to “wealth” so you can compete with players who have built their wealth over years and years?

    You start from the bottom! You compete for small products in the beginning, one that you think you can offer a competitive advantage. There are literally hundreds and thousands of smaller companies that Boing or Intel work with. Some are big, and some are as small as 4 people.

    Please, spare the lame argument about Utopian nonsense! There is no Utopia here. only reality!

    Competitive advantage is not coercion! It’s simply an advantage, one that is acquired by the sheer ability of successful people, who didn’t use coercion, extortion, or any form of violence. That cannot be said for your interventionist system of government, where you would advocate to have some who have unearned gain at the expense of those who have earned. I don’t think you mean this intentionally. You simply don’t quite understand the implications of what you are saying.

    I think we’ve said enough on this issue.

    Reply
15. 

    moneycreation, on January 25, 2009 at 10:08 am said:

    Ok, I won’t call you an utopian. I’ll call you Jesus instead – starting with two empty hands from your basement you are able to compete with Intel.
    Good luck!

    It’s always hard to speak with some religious people. But I defend your right to believe what ever you want. Actually debating with you is a lot like debating with an anarchist (Mises left wing cousin).

    Reply
16. 

    Zarepheth, on January 26, 2009 at 11:35 pm said:

    moneycreation is right.

    Most of our society’s economic problems are a result of two few people gaining too much power over other people.

    I understand that economies of scale can reduce productions costs on a per-unit basis. But I’ve also seen that the larger an organization gets, the less competition it has. The less competition it has, the more power it has to set its prices where it wants.

    As an example, let’s take Microsoft. The have an effective monopoly over desktop computer operating systems and desktop computer office productivity software. Their prices reflect this. If there were any competing operating systems that ran the software I use and didn’t require a long, lengthy, learning curve, I make purchase it instead. In fact, I could download Linux for free. I don’t use Linux because it does not support my computing needs. For me, Microsoft _is_ a monopoly. I either purchase from them or go without – there are no other providers for the services I want. If Microsoft had real competition to their products, I’m quite sure that their operating systems, development platforms, and office productivity software would cost one quarter of the current price.

    This is the end game of all “free” markets, when there is no regulation.

    moneycreation’s idea of regulating organizations in proportion to their size would put an upper limit on how large companies can get. It would level the playing field between me and the large corporations from whom I must purchase the necessities of my life and our nation’s “middle-class” standard of living. If I don’t submit to those organization’s terms when purchasing their products and services, I will end up homeless as I cannot get those products and services anywhere else!

    Reply
17. 

    Zarepheth, on January 26, 2009 at 11:39 pm said:

    Continued…

    So no, those large organizations do not need to put a gun to my head to control me. They control access to the products and services I need, or want. In order to get those products and services, I either serve the organizations on their terms or I get nothing.

    If I brought food to a town of starving people, I could command them to do whatever I wanted and they would do it, so long as I also gave them some food. They are controlled just as effectively as if I had a loaded gun pointed at their heads, and maybe more so.

    Reply
18. 

    Dan, on January 27, 2009 at 7:28 am said:

    Zarepheth says:

    “If I brought food to a town of starving people, I could command them to do whatever I wanted and they would do it, so long as I also gave them some food. They are controlled just as effectively as if I had a loaded gun pointed at their heads, and maybe more so.”

    Nonsense! You don’t “owe” them anything, although it is certainly your “choice” to engage in charity if you are in any position to do so.

    You acknowledge yourself that their initial condition of starvation has nothing to do with you. You had provided them with food (assuming out of a profit motive), but as long as what ever exchange that takes place between you and the “starving” people is based on a mutual voluntary consent, then they, by definition, are better off as a result of that exchange. The fact that the starving people have no better alternative, does not make you (the business man) an exploiter or an aggressor, or whatever. For how can that be the case if you had provided them with the better alternative, when in fact their condition prior to your arrival was starvation. Your assertion is well known but it is simply illogical and ultimately false. Any attempt to regulate yourself (the business man), in order to improve the conditions that you offer (perhaps increase wages or shorten working hours) to the hypothetical starving people, would come at the expense of the “competitive” advantage that you had obtained by originally going to such a place to set up your business. The results are always the same. You will not be able to hire as many starving people, leaving more of them to starve, or perhaps if you go too far with the regulations (as they are often), you will abandon your business there altogether, for it will not be advantageous anymore over hiring more skilled and higher waged (not starving) workers somewhere else. Now your starving people are back to their original and only alternative of starvation. What the regulators themselves were obviously never able to achieve, they had at least succeeded in hampering and destroying what the business man had achieved (out of his own self interest).

    This is what a distortion of reality will do. This is what not understanding the difference between coercion and freedom, or worst, reversing the two. In fact, force never works!

    Unless you are willing to take in about 50 starving people into your warm house so they can live off ate the expense of you and your family for the rest of your life, stop hampering with the only possible method that builds wealth. The gradual accumulation of capital, ie, Capitalism.

    Your complaints about MS are simply absurd. You talk is if you have a “right” to something that you had absolutely contributed nothing to. You are free not to purchase any MS products. You can spend more money on an iMac or something. All wealth is created by somebody and is therefore owned by somebody. You have no right to that wealth once it is created. They are not your slaves. If they were, do you honestly think that wealth would have been created in the first place. If you use government to initiate force against them, as you are proposing by your regulations, then you are nothing but a thief.

    Reply
19. 

    moneycreation, on January 27, 2009 at 12:31 pm said:

    Dan
    You actually believe you are Jesus!
    There’s not a comment from your part where you don’t set up a superior pose (which actually shows your real religion). Even when your logic is totally flawed you still continue with lecturing the same mantras – saying that the opponent don’t understand anything, talk nonsense, distort reality, are absurd and so on.

    You are actually making a total fool of yourself even if your are not able to see that. Or don’t care – perhaps is a better description. Because I actually think you have an agenda with your never ending reading the eternal truth Mises got from God written in stone. Mises, Moses and the group you represent has a common denominator and that groups interest have always been to distort reality gaining their own group. The same group, by the way, have always controlled and manipulated the supply, demand and the mining of the gold Mises say is the only “sound money” – what a coincidence!

    You see, I known your game, I’m part of the same group so I think your superiority is quite amusing!

    Reply
20. 

    Dan, on January 27, 2009 at 4:27 pm said:

    Cato minimus,

    This country was indeed founded by “radical liberals”, but don’t misunderstand such “labels”. “liberalism” then was what today is libertarian. They were “classical liberals” in the sense that they believed in Individual Rights. Today’s “liberals” are nothing of that kind, while the “conservatives” are even worst!

    Please don’t attribute to me your own ideas about what a “conservative” is or whatever, because I’m not a conservative. I believe in freedom, and freedom can only be achieved through the “individual”. My rights are derived from nature and not from government. If government grants me such rights, then it can also take them away. I am therefore, by definition, not a “free man”, but a property of the state.

    Any use of the term freedom in any other way is nothing but euphemism, i.e, “FREEDOM IS SLAVERY IGNORANCE IS STRENGTH”, Orwell from 1984

    Reply
21. 

    Christine Baker, on January 28, 2009 at 3:22 am said:

    These sure are strange comments here. Ellen asked many good questions in this article and I’ve spent a few hours looking for answers, but I found NONE.

    Unfortunately, I don’t have the resources to file FOIA requests and to conduct a serious investigation.

    When I just read about HR645, I thought I wasn’t seeing right, see http://trado.info/node/204 for more info.

    This legislation to establish FEMA camps was introduced on 1/22/09, 1 day prior to Ellen’s article.

    What timing!

    Reply
22. 

    Daniel Winsor, on January 30, 2009 at 5:39 pm said:

    Hi Ellen,

    This post isn’t directly related to your most recent article, but I wasn’t sure where else to put it.

    Yesterday, Time magazine online published an article are our banking system. They gave a breif description of how banks operate which appears to be totally different than the description you have been telling us about through your book and articles. The article is http://www.time.com/time/business/article/0,8599,1874702-1,00.html

    In short, it states:

    “…To understand why nationalization may be inevitable, you have to get a handle on the true source of the banks’ problems. The banking business — at least the way George Bailey practiced it in It’s a Wonderful Life — was all about deposits and loans. You take in deposits, on which you pay a relatively low interest rate, say 2%. Then you lend that money to other people at a higher interest rate, say 7%. Pocket the difference. Repeat. But starting in the early 1970s, banks began funding less of their lending with old-fashioned deposits. Bank deposits backed 90% of all loans four decades ago; today they back 60%. Where does the rest of the loan money come from? From the bank’s past earnings and the money given to it by its investors. Using the house’s money has generated higher profits — with significantly higher risks…”

    This makes it sound like the banks are loaning out money that actually exists, rather than creating the money out of thin air. I’m not quite sure what to make of this. Time Magazine is such a prominent Main Stream Media outlet. Perhaps there are some other details in this article that help to complete a more accurate picture of our monetary system, but I find this article grossly misleading. When you have a chance, I’d appreciate your feedback on the veracity of this article. Is Time blatently publishing inaccurate descriptions of our monetary system?

    Dan

    Reply
    • 

      Ellen Brown, on February 1, 2009 at 5:49 am said:

      Hi, I’m traveling at the moment — just arrived in Malaysia — so haven’t had a chance to respond to this blog. The Time article does appear to be very misleading. Many authorities, including the Chicago Federal Reserve in “Modern Money Mechanics,” attest that ALL the money banks lend is new money, backed by “reserves” only in the sense that the bank’s original reserves determine how much new money it can make.

      Reply
23. 

    moneycreation, on January 30, 2009 at 7:36 pm said:

    No, they don’t. It’s a common misconception that new credit is created out of deposits. It’s far more simple. Made an video about this. It’s sort of an open video project on money creation and the first video deals with this miscoception.

    The project is opened for all to participate in the development of the video and contribute in a constructive manner.

    http://moneycreation.wordpress.com/

    Reply
24. 

    Brock Moore, on January 30, 2009 at 7:43 pm said:

    Dan, thanks for referencing this Time article.

    Let me try to make sense out of some of it.

    George Bailey’s bank was a savings and loan, not a commercial bank that keeps checking deposits. Savings and loans pay interest on time deposits and charge interest to borrowers. A commercial bank may pay interest for deposits, but does not relend those deposits, as do savings and loans. Deposits are created when commercial banks lend. When they lend the totality of commercial bank checking deposits increase, assuming the economy is growing. Their purpose in paying interest on their deposits is to avoid losing deposits to other banks, because when those deposits go away the bank’s own deposits at the central bank go away. For this reason the commercial bank tries to gain a dollar in deposits from other banks for every dollar in deposits it loses to other banks. If there were perfect coordination between the banks in this matter, there would be no need for any commercial bank to keep reserves, and reserves could be zero. But because coordination is not perfect, banks must try to avoid depleting their reserves, which are clearing balances between banks. I think the statement that deposits back 60% of loans and 90% four decades ago refers to loans from the entire financial industry, not just the commercial banks. Deposits back 100% of the loans from savings and loans and other non-commercial bank lending institutions. So the current 60% would be the average for all lending institutions, not just the commercial banks.

    Brock

    Reply
25. 

    Christine Baker, on January 30, 2009 at 8:01 pm said:

    I posted here a few days ago because I’m very interested in this article about the prison buses.

    And I subscribed to email notifications of posts in this thread.

    YOUR posts have absolutely NOTHING to do with Wackenhut prison buses and your disruptive off topic rants are a nuisance.

    If I set up a forum just for you, will you go there and leave this site alone?

    Reply
26. 

    moneycreation, on January 30, 2009 at 8:03 pm said:

    Brock wrote:
    “For this reason the commercial bank tries to gain a dollar in deposits from other banks for every dollar in deposits it loses to other banks. If there were perfect coordination between the banks in this matter, there would be no need for any commercial bank to keep reserves, and reserves could be zero.”

    Banks coordinate their transactions between themselfs through their reserves via the central banks clearing function. My next video will deal with the misconception that banks transact money directely between each other.

    When a bank makes a loan both sides of the balance sheet (almost wrote balance cheat 🙂 ) expands – as shown on my video:

    Beyond “Money as debt”1

    Reply
27. 

    Daniel Winsor, on January 30, 2009 at 11:03 pm said:

    Hey Brock and Moneycreation,

    Thanks for the replies. That helps a bit. I’m still under the impression that Time is, at the very least, putting a spin on this topic that is less than honest. Big surprise, I know.

    And to Christine Baker….
    You have got to be one of the rudest people on Ellen’s blog. This site doesn’t belong to you. We’re all guests here. I might heed some suggestions like that from Ellen but not from you. Just how much could I have inconvenienced you by posting a legitimate question about a topic in Ellen’s area of expertise? If that’s all it takes to get you fired up, then you need to reevaluate your life.

    All the best,

    Dan

    Reply
28. 

    Daniel Winsor, on January 30, 2009 at 11:47 pm said:

    Here’s a recent article detailing HR 645.
    http://www.infowars.com/new-legislation-authorizes-fema-camps-in-us/
    Also note the links given right after the article. These links point to articles that reportedly confirm that FEMA is anticipating Martial Law and a Police State.

    There is one article which discloses a confidential document circulating Congress, dubbed the “C and R” document. C-conflict, R-revolution. The contents of this document apparently outline how FEMA will use it’s new powers to retain order in the event of Conflict with China,Russia etc, or with a national Revolution.

    Dan

    Reply
29. 

    Christine Baker, on January 31, 2009 at 1:19 am said:

    I unsubscribed.

    I’ll continue to recommend Web of Debt as at http://creditfactors.com/resistance/viewtopic.php?f=2&t=24 (1096 reads) with links to Amazon and I might link to Ellen’s articles at OTHER sites, but I won’t link to this site anymore.

    Unlike most of the people here, I’m busy DOING and I sure don’t want to waste my readers’ time on countless nonsensical off topic rants.

    Sorry, Ellen!

    Christine

    Reply
    • 

      Ellen Brown, on February 1, 2009 at 5:57 am said:

      Okay. I’ll miss you! Interesting point about the FEMA camp legislation. I’ll look into it when I get back from my travels. Ellen

      Reply
30. 

    Reyanne, on February 2, 2009 at 10:33 pm said:

    Hello Ellen,

    We will be appearing on CBC for another interview this week. We are launching a $100M lawsuit as well. If you give me a number or email address where you can be reached, we would love to contact you.

    Reply