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Rigged Economy

  
 
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16:39 / 11.08.07
I just read this, and, well.....this doesn't make any sense does it?

This part for instance :

"The US Federal Reserve intervened twice during the day, adding $38bn to the banking system, the largest amount since it intervened in the days following the attacks on New York and Washington on 11 September, 2001.

Japan's central bank had earlier pumped one trillion yen ($8.5bn; £4.2bn) into the financial system to boost liquidity."

'adding $38bn', 'pumped one trillion' etc, can't this whole thing be rigged? They can just mess with computer systems can't they and fuck around with numbers until it looks ok? I read something related to this a while ago, but don't want to spend hours trawling through all kinds of crap on the net if some of you guys know a lot more about this and can direct me to some better links, or explain some of the ideas behind this a little better, so.....what do you think about the idea that the whole economy could be rigged?

The most powerful countries aren't just going to let everything slip away from them that easily are they? So how could they/do they fix the economy to stop all their power from falling away fom them?
 
 
Mistoffelees
17:31 / 11.08.07
It´s not as if those billions are a present for the banks. They have to pay the money back with interest.
For example, the European central bank offered 61,05 billion € yesterday, with a period of three days until repayment and at least 4% interest.

The central banks just help the private banks out, because in the recent days there was an emergency. The market is very volatile these days, and if the banks can´t serve their customers, because they aren´t liquid anymore, they would turn to drastic measures and the situation could enter a vicious circle. And noone wants to relive the aftermath of 1929 again, just because the banks don´t have enough cash to hand to move through this rough phase.

I can´t give you any links, because all this stuff has terms where I can´t find equal english links for (for example, I can´t find anything for "Schnelltender", which is the term for those shortterm credits).
 
 
petunia
20:06 / 11.08.07
Ahh, good old Schnelltender.

Soft, but fast.
 
 
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04:46 / 12.08.07
Thanks Mist, that's interesting.

What about theories by people that say that there's only the illusion of physical cash then, but in reality it's all numbers, computers and credit cards, and they're just leading us on?

I'll probably go google soon, and see if I can find anything.
 
 
Mistoffelees
07:46 / 12.08.07
What about theories by people that say that there's only the illusion of physical cash then, but in reality it's all numbers, computers and credit cards, and they're just leading us on?

Money is only worth something, as long as people believe in its worth. If you have a lot of it, you better make sure to buy something that will help you stay wealthy in times of crisis (for example: land, corporations, stocks, infrastucture). Even investments like gold and art work on the same principle. If you find noone who wants your van Gogh or your chest of bouillon, then it doesn´t matter if it´s officially worth millions of $. Almost anything can be turned into a currency. For example, after the second World War, cigarettes were used as a currency in Berlin.

You can read here about the infamous tulip mania. For a short while, tulip bulbs in the Netherlands were turned into a currency and the increasing frenzy went to the extreme that one bulb could be worth as much as a house, and it lead into the first crash.

But I would not call money an illusion since it´s vital for life beyond the iron age. The only known alternative is bartering. And what would you give for a ride on the subway, for your daily groceries and what would you accept for a day or a month of work?

The problem is not the money itself but our greedy nature. Just as the brokers in the Netherlands lost all perspective, the recent crisis is due to greed. People tried to make money by giving people credit that they possibly couldn´t afford to pay back. This could only work for a limited amount of time and having parallels to a pyramid scheme like the tulip mania was bound to go belly up.

There´s something to the "leading us on" part, though. Many people end up with a lot of debt and they pay it off with salaries from not self-employed work. Here in Germany for example, not self-employed work means all your salaries including june go to the government, and from somewhere on in july it´s your money to spend. Only it isn´t really, since a lot of it goes off to paying insurance, rent and debt. Only if you can minimise all these factors, can you make the most of your money by investing it, so that you become less dependent on having to work for someone else in the long run.
 
  
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