Goodbye Dubai
Join Date: Mar 2006
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Money supply theory
Warlock - maybe without realising it you have just described what actually happens with regard to the theory of money supply and velocity - which in its various forms is called things like M1/2/3.... or in your example about M10!!
This is exactly how western banks actually operate - money only exists as a mechanism to exchange goods and services and has no inherent value in itself as your example demonstrated so well..
in a similar example lets assume that an object ( car what ever) worth 100 dollars exists and owned by B. A buys the car from B for $100.
The bank makes an entry into A's account that puts him into 100 overdraft, then it makes an entry in Bs account that he has 100 in surplus when he deposits the cash.
It then charges A interest at 10% and pays ( if he is lucky) B interest at 5%.
At the end of the year A pays back his $110, B withdraws his money - $105 and the bank has , voila... made $5 for doing..... nothing.
But where is the extra $5 created from... it actually doesnt exist... except as a figment or purely as 'a numerical 'entry for bookkeeping purposes.
There is actually insufficient physical money in the world to cover all the 'numerical ' entries in IT systems..banks and such are just manipulating information .. and this is what folks are starting to realise now and hence the potential return to real money such as gold and silver ( which cannot be 'created ' by politicians..
That is why islamic financing has made a move forward over the last few years to try and address this creation of profit or return from risk and interest etc.
Of course the nakheel sukuk/bond etc has just set that programme back several decades as the confusion of where 'bond holders' sit in the line of creditors is somewhat blurred..
anyway .. I like your ponzi scheme example...!!WJA
This is exactly how western banks actually operate - money only exists as a mechanism to exchange goods and services and has no inherent value in itself as your example demonstrated so well..
in a similar example lets assume that an object ( car what ever) worth 100 dollars exists and owned by B. A buys the car from B for $100.
The bank makes an entry into A's account that puts him into 100 overdraft, then it makes an entry in Bs account that he has 100 in surplus when he deposits the cash.
It then charges A interest at 10% and pays ( if he is lucky) B interest at 5%.
At the end of the year A pays back his $110, B withdraws his money - $105 and the bank has , voila... made $5 for doing..... nothing.
But where is the extra $5 created from... it actually doesnt exist... except as a figment or purely as 'a numerical 'entry for bookkeeping purposes.
There is actually insufficient physical money in the world to cover all the 'numerical ' entries in IT systems..banks and such are just manipulating information .. and this is what folks are starting to realise now and hence the potential return to real money such as gold and silver ( which cannot be 'created ' by politicians..
That is why islamic financing has made a move forward over the last few years to try and address this creation of profit or return from risk and interest etc.
Of course the nakheel sukuk/bond etc has just set that programme back several decades as the confusion of where 'bond holders' sit in the line of creditors is somewhat blurred..
anyway .. I like your ponzi scheme example...!!WJA
Join Date: Dec 2009
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grizzled
it's a global thing that will have repercussions for all....kinda like that ABCP stuff the banks were selling here until it went down the ****ter....there is a funny spoof (I think it is on you tube) with two british comedians explaining how it all works....("Subprime crisis explanation by The LongJohns") just glad I got ALL MY MONEY out of the middle east.....
Last edited by Blackbirdman; 8th Dec 2009 at 00:46.
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It is very simple
It is all very simple. Dubai belongs to Sh Mo so he does what he wants with it.
Question is; how much money does he have left for himself and who will support him in the future. My guess is the chinese will have a go but I do not think they will be successful, thats were Saudia Arabia will come in.
I am convinced that Sh Mo does not know what happened below him. He too needs to be able to thrust people.
Thrust is of great value, that is why treason is so severely punished in the Arabic World.
To a certain extend they live from the greedy West and that gives Sh Mo the moral ground to say: "I will not pay out of my own pocket".
Do not forget he is a poet as well.
Question is; how much money does he have left for himself and who will support him in the future. My guess is the chinese will have a go but I do not think they will be successful, thats were Saudia Arabia will come in.
I am convinced that Sh Mo does not know what happened below him. He too needs to be able to thrust people.
Thrust is of great value, that is why treason is so severely punished in the Arabic World.
To a certain extend they live from the greedy West and that gives Sh Mo the moral ground to say: "I will not pay out of my own pocket".
Do not forget he is a poet as well.
Last edited by Pitch Up Authority; 8th Dec 2009 at 18:07.
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ShMo's poet eh... is that as in:
Here's to the cut that never heals
The more you stroke it the softer is feels
You can wash it in soap
You can wash it in soda
But you'll never get rid of that Billingsgate odour!
Does it not seem a rather fitting epithet?!
Here's to the cut that never heals
The more you stroke it the softer is feels
You can wash it in soap
You can wash it in soda
But you'll never get rid of that Billingsgate odour!
Does it not seem a rather fitting epithet?!
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Shamata
Just to add a bit of balance to the debate (and as an antipodean I love stickin it to the old country!) a relevant article from today's National 
The National Newspaper
The National Newspaper
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you forgot the Victa lawnmower and more importantly refrigeration using vapour compression for making beer cold after you've mowed the lawn .......you can get it mowin....matter of fact i got it now..a big strong thirst..
thread creep sorry
I see the Palm is now sinking according to Al Jazzeera English
.......you can get it mowin....matter of fact i got it now..a big strong thirst..thread creep sorry
I see the Palm is now sinking according to Al Jazzeera English
Last edited by Funk; 9th Dec 2009 at 18:15.
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Driving around MoE and Barsha today noticed roads being turned into one way system. One way instead of two way equals half way. Apply it to 'wits' and it is exceedingly appropriate to these clowns.
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Ndicho Moja.......
You forgot to add that it (DL) is also.......
So, the point that you were trying to make was?? 
You forgot to add that it (DL) is also.......
........now widely used in the USA, Europe, the Middle East and Asia