Comment by tiatia | Hacker News Reader

Comment by tiatia | Hacker News Reader

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It is very easy. If you speak German I actually could send you an excellent PDF.

Debt is a law like gravity. You can have it explained by Ludwig von Mises. It is a reward for risk and saving. Discounted cash flow is actually the opposite and the reason why a cash creating asset, let's stay farmland, still has a finite price but theoretical unlimited future income.

To serve debt you have to create more in the future. Do you know how all our debt will be paid back? With more debt. Once the expected return is 0 then there is no reason to give credit anymore. Every capitalistic system relies on these unfortunate facts.

I like Mises a lot,even if I think his idea of money is plain wrong. But it was Keynes who always saw the end coming. He also gives some ideas in "The death of the rentier".

This is also an interesting post: Wealth And Energy Consumption Are Inseparable http://www.declineoftheempire.com/2012/01/wealth-and-energy-...

or here:

There is No Steady State Economy (except at a very basic level) http://ourfiniteworld.com/2011/02/21/there-is-no-steady-stat...

I am afraid you are the bullshitter, not me.

The BS part was meant w.r.t. the theories because, unlike theirs, your opinion is not forced upon the people, so sorry if I left room for the misunderstanding.

I disagree in particular to the "to serve debt you have to create more" because creating more debt is incompatible with a capitalistic system because someone has to take the other side of the trade (the creditor).

A rational creditor wouldn't loan more debt and this is why the PIIGS don't get money on the bond market anymore. Therefore the CBs have to "print" the money or take it from somewhere else (ESM, OMT, QE ...) but none of these measures is voluntary but instead forced.

Therefore we have no capitalistic system but planned economy which was the original point.

Debt can also reduced via default. And this happens regularly with many companies and is ok. What is not ok is when these defaults get deferred, for instance, because a defaulting entity has the monopoly on creation of legal tender.

"to serve debt you have to create more" This is actually a well known fact.

"creating more debt is incompatible with a capitalistic system" Wrong. It is the basis of the capitalistic system.

"because someone has to take the other side of the trade' Yes. All debts have corresponding claims.

"A rational creditor wouldn't loan more debt and this is why the PIIGS don't get money on the bond market anymore." The game may have come to an end already. The only thing that delays a "jubilee" is the state as the lender of last resort. It is the last thing that will fail but it will fail. A "jubilee" is only a mid-term solution. The underlying problems (limited energy, exponential growing interest, debt based economy) may not be solved. We are running into a trap at a very fast speed. Even things like thorium reactors or fusion can only delay the sun set.

"Therefore the CBs have to "print" the money or take it" It does not make a difference for the problems if you use FIAT money or an asset based currency.

" from somewhere else (ESM, OMT, QE ...) but none of these measures is voluntary but instead forced." You may think a gold based currency may prevent this problems. We may only have collapsed faster (small collapse, "jubilee", not the big collapse).

"Therefore we have no capitalistic system but planned" yes we do have one. And we had a very good time with it. Unfortunately capitalism needs growth. And only madman and economists believe in infinite growth in a finite world.

Actually, the line Debt is a law... Should be Interest is a law...

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