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04-27-24 08:55 AM |
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| Main - General Chat - Debt and Equity | New thread | New reply |
| Trax |
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 Yellow Stalfos Level: 71 Posts: 451/1145 EXP: 3036022 Next: 131092 Since: 07-06-07 From: Québec Last post: 3628 days Last view: 2880 days |
Here's something:
Suppose Bob lends 20$ to Jerry. In accounting terms, we can say Jerry is at -20$ (debt of 20$) and Bob is at 20$ (equity of 20$). In other words, when anyone contracts a loan, going into negative, another party must go into the positive, to keep balance. Correct me if the terms I used are not exact... Now, my observation is this: if we take the previous principle as granted, then how can ALL countries in the world be in the negative (debt) at the same time? Most countries in the world are indebted to other countries, and vice-versa. But no country is in the positive balance, as dictacted by the previously stated (mathematical) principle. How are we supposed to repay the debts if EVERYONE is in the negative? |
| Sukasa |
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 Red Birdo Level: 92 Posts: 894/2112 EXP: 7689927 Next: 67010 Since: 02-19-07 Last post: 4449 days Last view: 3220 days |
Because you're forgetting that countries do not include the personal wealth of their residents in that calculation; The money is in the hands of private interests, not public ones.
There's your simplest answer |
| KP9000 |
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 Boomboom Level: 90 Posts: 396/1975 EXP: 6953859 Next: 234750 Since: 02-19-07 Last post: 3581 days Last view: 3205 days |
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Yellow Stalfos Level: 71 Posts: 452/1145 EXP: 3036022 Next: 131092 Since: 07-06-07 From: Québec Last post: 3628 days Last view: 2880 days |
Posted by Sukasa Interesting point. But it doesn't mean that the population is indebted towards this 1% (or whatever) of very wealthy people. It just means they hold more money. And for the sake of argument, let's just take governments debts alone. Why aren't there some countries in the - and others in the + ? If two countries own moeny to each other, you should be able to just cancel the difference, no? is there any less simple answer? If Australia owes Germany 45 billion $, and Germany owes Australia 23 billion $, why not cancel each other like this: 45 - 23 = 22 So, Australia owes Germany 22 billion $ and Germany owes Australia 0... |
| Sukasa |
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Red Birdo Level: 92 Posts: 895/2112 EXP: 7689927 Next: 67010 Since: 02-19-07 Last post: 4449 days Last view: 3220 days |
Because generally what one country owes another, and what is owed back, are in completely different categories i.e. Australia might be on the hook for x dollars for y product, but germany might be on the hook for z dollars of b product, and the companies that produce these products each want to see their share of the money.
beyond that, I believe countries like India and China are actually in the black as far as finances go. |
| blackhole89 |
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 The Guardian Moloch whose eyes are a thousand blind windows! Level: 124 Posts: 1865/4196 EXP: 21534515 Next: 302086 Since: 02-19-07 From: Ithaca, NY, US Last post: 472 days Last view: 85 days |
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Yellow Stalfos Level: 71 Posts: 454/1145 EXP: 3036022 Next: 131092 Since: 07-06-07 From: Québec Last post: 3628 days Last view: 2880 days |
And banks... Governement don't usually print money... |
| NightKev |
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 Cape Luigi Level: 131 Posts: 2969/4792 EXP: 26231954 Next: 192666 Since: 03-15-07 Last post: 3735 days Last view: 3647 days |
Posted by Trax...Uh? The banks don't print the money, the government does. ____________________ |
| Trax |
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Yellow Stalfos Level: 71 Posts: 456/1145 EXP: 3036022 Next: 131092 Since: 07-06-07 From: Québec Last post: 3628 days Last view: 2880 days |
It's an ex Bank of Canada, the Fed, Bank of Europe, etc., are not exactly government, except on paper... In day-to-day transactions, charter banks don't "print" money with a printer, but they create money in electronic form. That's what I meant by that... |
| NightKev |
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Cape Luigi Level: 131 Posts: 2971/4792 EXP: 26231954 Next: 192666 Since: 03-15-07 Last post: 3735 days Last view: 3647 days |
No they don't, they can't just put "look we have $1 trillion" into their computers and suddenly poof, they actually have that much. No, they only have what they actually, physically have. Otherwise the economy would collapse and etc etc. ____________________ |
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Yellow Stalfos Level: 71 Posts: 460/1145 EXP: 3036022 Next: 131092 Since: 07-06-07 From: Québec Last post: 3628 days Last view: 2880 days |
Then, where does the money grow? In a tree? In the ground? In a laboratory?
Where does the money come from when you contract a loan? |
| NightKev |
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Cape Luigi Level: 131 Posts: 2973/4792 EXP: 26231954 Next: 192666 Since: 03-15-07 Last post: 3735 days Last view: 3647 days |
Gold is the real money, paper money just replaces it. ____________________ |
| Xeruss |
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 Sledge Brother Compromised account. Level: 86 Posts: 479/1815 EXP: 6126224 Next: 15883 Since: 02-19-07 From: Oregon Last post: 1814 days Last view: 1813 days |
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| NightKev |
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Cape Luigi Level: 131 Posts: 2974/4792 EXP: 26231954 Next: 192666 Since: 03-15-07 Last post: 3735 days Last view: 3647 days |
If we didn't use paper money, we'd use gold. ____________________ |
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Yellow Stalfos Level: 71 Posts: 463/1145 EXP: 3036022 Next: 131092 Since: 07-06-07 From: Québec Last post: 3628 days Last view: 2880 days |
It doesn't answer my question, though. When you contract a loan, you don't receive the money in paper form or metal coins, nor do you receive ingots of gold from the bank clerk. It is usually added to your bank account, electronically. So where does this money come from? From what account? |
| KP9000 |
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Boomboom Level: 90 Posts: 401/1975 EXP: 6953859 Next: 234750 Since: 02-19-07 Last post: 3581 days Last view: 3205 days |
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Yellow Stalfos Level: 71 Posts: 465/1145 EXP: 3036022 Next: 131092 Since: 07-06-07 From: Québec Last post: 3628 days Last view: 2880 days |
And when I go to the automatic teller machine, and make a withdrawal, I receive paper money, right? It's not in electronic form anymore. Where does it come from? Does the bank have infinite money, like in Monopoly? This means they charge me interest and fees without any risk? I pay for inifinite money?
Talk about fairness... |
| Ailure |
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Hats Steam Board2 group Level: 121 Posts: 3049/3965 EXP: 19780558 Next: 276138 Since: 02-19-07 From: Sweden, Skåne Last post: 3302 days Last view: 2053 days |
Posted by NightKevAnd other valuable metals like how it was once in the time However it started becoming a hassle, and I even recall cases where coins almost became more valuable than the currency they symbolize. ____________________ AIM: gamefreak1337, MSN: Emil_sim@spray.se, XMPP: ailure@xmpp.kafuka.org
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Yellow Stalfos Level: 71 Posts: 468/1145 EXP: 3036022 Next: 131092 Since: 07-06-07 From: Québec Last post: 3628 days Last view: 2880 days |
The major difference between metals and money is that money is not [supposed to be] a merchandisable good, it's just the mean, the record of an amount of work used to buy goods. Metals are goods meant to be extracted, transformed, sold and bought... |
| Xeruss |
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Sledge Brother Compromised account. Level: 86 Posts: 485/1815 EXP: 6126224 Next: 15883 Since: 02-19-07 From: Oregon Last post: 1814 days Last view: 1813 days |
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