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In the game of life, survival is the prize, while extinction is the penalty.
And this escalated the need for multilateral usage of fiat currency. The creditor may want to sell some fraction of the bond certificate while keeping the rest of it. When the creditor was a bank, they issued banknotes.
When one or more of those conditions above are not fulfilled, the money system won't work effectively.
Someone else got resources less than what they need, but are expected to produce more resources if they are helped to fulfill their current need.
We may want to distinguish between need and want. But their differences don't seem to be clear cut. It's sometimes only about priorities and taste.
Do we need to have pleasure? Do we need to get happiness? Do we need to avoid pain and suffering?But we may also ask the question in the other direction. Do we need to stay alive? Do we need to avoid death and extinction?
The first one gives resources to the second one, with the promise of getting return in the future. The first is called creditor, while the second is called debtor. The money represents the promise.
The money represents the promise.
Investment in invention and innovation may sound like gambling. But there's one crucial difference. Gambling is a zero sum game. Someone's profit comes from the loss of someone else, and no net benefit to the society as a whole.
Quote from: hamdani yusuf on 24/05/2021 23:52:21Investment in invention and innovation may sound like gambling. But there's one crucial difference. Gambling is a zero sum game. Someone's profit comes from the loss of someone else, and no net benefit to the society as a whole.But, if gambling is a zero sum-game, why do some people set up betting shops, and casinos, to make customers come in to gamble?
Innovation is a risky business. It can give extremely high return, but it can also crash in failure. They can be shared between the investors and inventors or innovators, equally or not. When the inventors are very confident with their inventions, they can take all the risk in the hope of maximum benefits by taking a loan with fixed interest rate. On the other hand, When the investors are very confident with their investments, they can buy the invention for a fixed price. The risk can also be shared between them. So do the potential benefits. The portion of the share is determined by the deal between them.
This is not a matter of productive people benefiting from their contributions to society. This is a relatively small number of people extracting massive amounts of money through the financial system for accomplishing almost nothing.
They Create Imaginary Money That Turns RealThe world's wealth has doubled in a little over ten years. The financial industry has, in effect, created a whole new share of global wealth and redistributed much of it to itself.In the U.S., financial sector profits as a percentage of corporate profits have been rising steadily over the past 30 years. The speculative, non-productive, and fee-generating derivatives market has increased to an unfathomable level of over $1 quadrillion -- a thousand trillion dollars, twenty times more than the world economy.
The complexity of financial system can be used/misused to benefit oneself by sacrificing others without net benefit to the whole society.