The US mint prints money, not banks. China’s central bank prints money, yes. The US has debt, also true. Why do any of these things which have been happening for the past 30+ years (with the exception of china’s Central bank printing money) indicate that the “system is rigged”?

That is, surprisingly, not true. Literally printed money makes up a tiny minuscule fraction of all money in existence. We live in a debt based economy and banks are legally allowed to create money through debt. This is a product of fractional reserve banking.

Imagine we live in a world with a total of $100 in existence, owned by Bill. Bill deposits that $100 in a bank. With fractional reserve banking in our current system the bank only needs to keep 10% of deposits on hand. So they can legally lend out $90 of that money, even if they don't have the money to cover it. So Travis takes a loan from the bank of $90 and spends it buying stuff from Slim. Slim then spends that $90 deposits it at bank B. Bank B then keeps his $90 and lends out $81, and so on.

Think about what's happening there. You started with just $100 yet now Bill has his $100 but Slim also has $90. In the end, with a 10% fractional reserve requirement, Bill's $100 of "real" money will end up being turned into $1000. Of course in this process of this you also end up creating $1000 of debt - but that debt is not directly tied to the money it created. E.g. Slim's money is, from his perspective, debt free.

Now factor in the issue that banks not only lend out money they don't actually have, but they also charge interest on that money. Bill's $100 of "real" money will create not only $1000 of other new "real" money, but well over $1000 + interest of debt. In other words, if all money was collected into a pot, it would no longer be even remotely close enough money to pay off all debts. So old debts are only being paid off by new debts which in turn are only payable by even more debts.

This is one reason I'm not entirely sure how private banks actually make sense. This system empowers banks, private for profit institutions, to enormously profit from activities that would be of dubious legality for private individuals. Even our language has adopted this bizarre notion. For instance a 'run on the bank' has a very negative connotation today -- in reality it's just people withdrawing the money they deposited, only to find it's no longer there. And that's totally legal.

If you spoke to a supporter of what you describe they would no doubt point to the extra economic activity created by the new money that would otherwise not be there - if we strictly only lend against deposits this would mean we would all be far poorer than we are now. As long as we all believe in the new money and expect our creditors to pay us back as promised, the sleight of hand works.

That's what a supporter of the current system would say. Personally I think the whole setup stinks and any benefit the average person gets is merely a side effect of a system designed for the benefit of the rich.

It is rigged in that it's propped up by a systemic weakness directly created by public policy. "Rigged" is a semi-accurate description but still controversial because for many it implies a Dr. Evil scenario (hence the voted indignation) but the sooner people wake up to what's happening the softer the landing can be.

I would really like to invest in stocks, but I'm afraid of current valuations and cannot possibly time such an odd and manipulated market. I'm afraid of many bonds as well. Where to invest? Real estate? Maybe just carefully select stock-by-stock case-by-case? I know index funds are weird right now. Ugh.

If markets are rigged, why do they crash?

Presuming the above is true, crashes serve to depreciate the prices assets. Those that cannot ride out the crash sell for pennies on the dollar.

In the city of Detroit, whole swaths of neighborhoods could be purchased for the price of a 2 bedroom SF condo

Look at who benefits (or at least comes out unscathed) from these crashes.

They crash at the convenience of banks.

Everyone except banks hurt in 2008. Banks then went in buying everything cheap. The people could not buy at all, since everyone was robbed. But banks were bailed out, so they had the money to buy cheap stocks around the world after the crisis they themselves created.

Is it not obvious? The crashes and the pumps are architected by banks. The people who lost homes got hurt, but banks didn't. Banks made trillions of $ from the 2008 crisis.

In 2009, I bought a house from a bank for $50k less than the balance they foreclosed on, and I expect they had no recourse against the borrower. In aggregate, there were a lot of bank losses. Banks didn't expect the downturn either, or they wouldn't have made so many loans with essentially no standards. (Admittedly, they also weren't expecting to keep loans on their own books for very long)

69% of Americans have less than $1,000 in savings. If you are in debt inflation is a benefit to you so long as your wages keep pace with inflation.

>so long as your wages keep pace with inflation.

That's a big if, though, depending on your (or "you" in aggregate) market power. And if you've got less than $1K in savings, you probably don't have a lot.

It could also be that former big bankers are in the executive cabinet because the financial system is pretty important and they understand it.

The concerns about conflict of interest are certainly valid but maybe just maybe it's not a big conspiracy.

There's too much money at play for there to not be a conspiracy - of some sort. I think it's pretty hard to argue that our economy is not highly skewed towards protecting the wealth of the very rich.

I understand that perspective and I don't disagree. That certainly is the case; Many are there because they understand the financial system better than anyone else. I don't mean to suggest that there is a grand organized conspiracy. That said, I do believe there is a strong network of bankers that promote their self interest.

And it's done in full view of the public, but the public (or the media for that matter) doesn't really understand the mechanisms.

How do you feel about bitcoin then? This is happening in plain view... you don't need to assign motives and mix in nation states, bitcoin is the most obvious example of pure speculation and literally is printed money with no attachment to fiat....

Seems a bit Orwellian to suggest that bitcoin is money printed from thin air. Yes, bitcoin was instantiated at some point, but at that point it had pretty much zero value. It has a fixed rate of issuance which will eventually end, and no one can change that. It is the opposite of fiat in that respect.

Actually, developers can change the limited issuance. Some group of developers, and their interested backers, will probably hard fork in 2024 and change the protocol to permit more to be mined. There will be inevitable "that's not Bitcoin" debates, but there will be a chain with old and new bitcoins on it for a little while anyway.

That's theoretical at the moment, and it's probably unlikely that it would win out as all the current holders of bitcoin would lose value. Even if it did though, it would be based on market consensus rather than a secret meeting room.

Bitcoin supply is finite. When you say "literally printed money"; you couldn't have come up with a poorer choice of words when discussing a digital currency with limited supply.

If you look at any crypto exchange, you will see BTC-fiat currency pairs for USD, EUR, CNY, JPY, etc. Not sure what more of an "attachment to fiat" you could ask for.

Bitcoin’s market cap has three main components:

- speculation, as you say (sells outside a window)

- savings (sells after a period of time)

- float to cover transactions (sells continuously but also buys continuously, netting out to a stable holding)

They are all somewhat interrelated... speculation decreases savings value if it has volatility on a timescale bigger than typical vests. Float is constituted in part by the other two, although much of its cap is pure in/our money transfers. Speculators get most of their value from other speculators, but also react to changes in the float and savings market.

And any individual transaction will usually be some combination of the three. A saver might also be hoping for some return on top of the storage value. Someone who is moving money overseas might leave it in BTC for some additional time if they don’t have a better place to store that money.

Still, the mix of those motivations will lead to very different trading profiles. And only a small portion of those decisions are deterministic on the spot price of BTC, which is why calling them “100% speculative” is wrong.

Its not just printed, you need to expend real world resources to mint it (energy, computers)

Bitcoin has a fixed supply. Its more like a commodity. It isnt infinitely divisible and still useful (because of fees.)

It's rigged but for the time being it works. So is it really that bad?

It works? For who?

Ask the people who lost homes in 2008 if it works.

99,99% of world wealth is held by less than 1000 people.

Can you wrap your head around that? Less than 1000 people control all the wealth for the other 7 billion people who happen to be alive on this planet.

The environment is a wreck, the world is being destroyed, entire coral reefs are dying, we are pouring radiation into the sea, there are artificial islands of trash in the ocean.

We as a species will not last more than 100 more years on this planet.

What exactly "works" in your opinion? You have an iPhone built by slaves in China? Is that it? What works?

There are problems in the world but people will exist on the planet for far far longer than 100 years into the future.

Plastic in the ocean won't stop that, coral reefs dying won't stop that, global warming won't stop that, nuclear war won't stop that.

Not saying we shouldn't try to solve problems but lets keep things in perspective here.

"The ocean's dying. The plankton's dying. It's people. Soylent green is made out of people. They're making our food out of people. Next thing they'll be breeding us like cattle... for food. You've gotta tell 'em."

You've gotta tell 'em!

> 99,99% of world wealth is held by less than 1000 people.

Citation needed.

I'm not quite sure this says 99.99%, but it's bleak none the less.

https://www.theguardian.com/global-development/2017/jan/16/w...

It looks bleak, but 99.99% owned by 1000 people is deliberately misleading.

The thing is..owning capital isnt what it used to be with jewels piling up. Credit allows debt backed by that physical collateral to be used for someones tractor to be built. These people may be 'worth' a lot of money but their wealth is actually more diversified and illiquid than the average person's capital. I think its an important distinction because we can easily lose sight when we don't realize that one person's wealth isn't a zero sum loss for the rest of us. In a credit debt economy, we still lose but not binary..more like a percentage. Their money is out there doing work, helping other people. They can call it back eventually..but if someone is so rich they never actually recall their 'floating' assets, is it economically scientific to consider those assets equal to cash under a mattress? I feel like we need a new measure for almost perpetually floating assets so we dont consider ownership as relevant.

Just take a look at the massive rise in quality of life across the world. Your alarmist post is bunk. Life is getting better for everyone all the time.

Regional inequality in the US has gotten markedly worse in the last 40 years[0].

[0] https://washingtonmonthly.com/magazine/novdec-2015/bloom-and...

This is such an empty, meaningless statement that only serves to deflect from the systemic greed and exploitation in the global financial system.

A man whose standard of life was increasing at (for example) 0.01% suddenly finds it increasing at 1.0%?

Or a family of 7 in some famine-stricken, war-torn nightmare now has half a bag of rice instead of a third?

At the same time your share in the overall wealth, prosperity and power of your nation is decreasing and being consolidated in the hands of fewer and fewer people.

A gradually increasing quality of life is something that should be an absolute minimum expectation for society, short of the effects of natural disasters and war. This is not something you should be proud of or use as an excuse to avoid the discomfort of recognising the abuses and excesses of the obscenely wealthy.

Sure the GDP of any given nation might be rising, but that only tells you how wealthy it is, not who actually benefits from that wealth.

You have traded your right to the prosperity of your nation for a an absolute minimum baseline of what will keep people docile and subservient.

And this;

> Life is getting better for everyone all the time.

Is just offensively naive to the extreme.