Somebody prove this wrong please.
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25-04-2013, 10:03 AM
RE: Somebody prove this wrong please.
(25-04-2013 09:30 AM)bemore Wrote:  I asked people to prove it wrong muffs. You seem to think that if you put £10 in a bank then they lend £9 out (minus the reserve) from that £10 you deposit and that is simply not the case.

They create money (from nothing) based upon your signature that you will pay them back, which is why I said we live in a debt based economy I wouldnt at all be wrong. That if all debts were to be paid off then there simply would be nothing left of the economy on the balance sheets (yes the 3% of fiat currency would exist but that would be it)

Have you actually looked at the article or watched any of the videos muffs? If so can you please specifically pick out what is wrong with the information like I have asked because on my own studies I find this to be the case, that the information isn't wrong at all.

The reserves/fractional banking is a joke. Thinking about it if all banks went belly up how would 10% cover what was once worth trillions? It wouldn't would it.

Interest free lending is not a joke, would anybody care to share where this actual "interest" exists within the system without creating more debt to pay it off (with interest) which means more debt to an interest ratio.

So the selected institutes who create money (simply from your promise to pay it back) charge you interest (that doesnt actually exist within the system) so you have to work hard and contribute to the dynamic system that is the economy and pay them extra on top!!! How the fuck is that fair???

The banks were "Too big to fail" yet they needed bailing out by government institutes, yes I understand what would happen if these banks went belly up then trillions of pounds would just "dissappear" but the banks/system DID FAIL and it has happened time after time on a cyclical basis throughout history. The system is UNFAIR and at the end of the day it only really favours the people at the top.

Of course if we had "interest free" lending then these selected institutes wouldnt be able to make profits. Maybe then they could actually do something of actual material purpose. I dont see any reason of instead of paying trillions to banks so they can hoard it (as borrowing is down) that our governments simply don't use that money to lend out interest free. They wont though because like I said our economies only grow through debt.

The banking system as we know it is indeed unfair but that isn't the fault of for profit lending or fractional reserve banking.

If I ask you to hold my gold and you agree with the stipulation that in return for holding, you reserve the right to lend it, that's a voluntary contract agreement between you and I. That's no different than me going to a storage warehouse and paying them a set fee to store goods for me. They're providing a service to me and in return, I pay them a fee.

In banking, the bank doesn't charge depositors, it pays them. This incentivises depositors which brings more money into the bank. Obviously, if the bank pays 5% interest on deposits, it will have to lend at some percentage higher than that in order to profit. Say, 10%. The bank earns 5% and the depositor earns 5% for the risk he takes in placing his money in the care of the bank. Not to mention, a borrower gains access to funds that can be utilized to increase his wealth.

It's that increase in wealth through lending that comprises the interest paid to the bank and the depositor. In a commodity based monetary system, that increased wealth might be gold that is mined through the use of borrowed money. In a currency based monetary system, that increased wealth can be currency from another bank or individual.

Either way, the increase in the supply of wealth (the interest paid or, currency) is not poofed into existence so long as those notes are backed by some tangible asset. Sadly, in our modern world there is no such thing as currency based on tangible assets and that's the problem. Instead, currency creation is monopolized by nation states and the only thing backing it is a promise to pay. In simple terms, the US dollar and the British Pound are backed by a promise that future (yet unborn even) taxpayers will create enough wealth to make it good.

If we could eliminate government issued "monopoly money" from the system, we would have a natural regulation on the supply of currency because no one in his right mind would use a bank's notes unless they had been proven to be sound.... just like no one in his right mind will hire a baby sitter for his children who can't prove a solid reputation.

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26-04-2013, 05:07 AM
RE: Somebody prove this wrong please.
(25-04-2013 08:50 AM)bbeljefe Wrote:  
(25-04-2013 01:44 AM)earmuffs Wrote:  What the fuck are you smoking? You're seriously confused on how it works.

If I put 100million into the bank. The bank can use 90million for investments, lending, etc.. and 10mill must be on standby if I want to withdraw some.

If the bank has 10mill on reserve for withdrawal then yes it can lend 90mill but only because someone put in 100mill. If I put in 10mill, then the bank would only have 9mill to use, not 90!

That's true in a world where we're only dealing in pure liquidity. But we aren't in that world. Reserve ratio requirements typically mandate that a bank hold 10% of its assets in specie, not 10% of its demand deposits. Thus, when a bank has 100 units of cash on demand deposit, it can lend 900 units of money because once that 900 unit loan is made, two entries are made on the bank's balance sheet. One for 900 in the asset column and one for 900 in the liability column. This satisfies the 10% reserve ratio because the bank shows 1000 units of assets and still retains 100 units of specie.

what? NO, you are wrong, again.
"Reserve Ratio". The regulation that sets the minimum fraction of customer deposits and notes that each commercial bank must hold as reserves.
Nothing to do with a banks assets at all.

It's extremely simply concept. If you put in $10 and the reserve ratio is 20% then the bank legally has to hold $2.

I don't know how to put it any simpler then that because that is EXACTLY how it works. Nothing to do with bank assets.
Anything that states to the contrary is W.R.O.N.G, WRONG.

Quote:I asked people to prove it wrong muffs. You seem to think that if you put £10 in a bank then they lend £9 out (minus the reserve) from that £10 you deposit and that is simply not the case.

They create money (from nothing) based upon your signature that you will pay them back, which is why I said we live in a debt based economy I wouldnt at all be wrong. That if all debts were to be paid off then there simply would be nothing left of the economy on the balance sheets (yes the 3% of fiat currency would exist but that would be it)

Have you actually looked at the article or watched any of the videos muffs? If so can you please specifically pick out what is wrong with the information like I have asked because on my own studies I find this to be the case, that the information isn't wrong at all.

No I haven't because I've seen this "conspiracy shit" before. It's based on partial truths and misses out key information.

Let em guess what it says:
The banks create money from nothing because they lend money and then that promise to pay back plus interest is then considered "in the bank" by the bank and so they can lend to someone else this new amount.
ie: A bank lends $100 at 10% interest to someone.
Once they lend this out, they then consider their coffers to be at $110 ($100 + 10%)
and so lend $110 to another person at 10%.
They then assume their coffers are at $121 ($110 +10%) and so lend out $121
etc..
etc..
All the while never receiving payment and thus "creating money from nothing"

Is this what this article is saying? I 95% guarantee it is.
Yawn, been there done that, brought the tshirt.

This doesn't prove they create money from nothing. Even if this is what they did, and they no doubt do to an extent.
Banks are limited by the pool of money put into them by their "suppliers" and their profits. They can't lend out more money then they have, it's that simple.

ie: If I put $100 into a bank and I'm the only "supplier" and say the reserve ratio is 0% (for simplicity). This means the bank has $100 to do with whatever they want.
Say they lend it out to someone at 10% interest over 7 days (for simplicity).
What you're saying is the bank will then be able to assume this $110 on day 1 and thus lend $110 to someone else at 10%.
What I am saying is that that is simply not possible because they have $100 and once they lend it out that's it.

Say I put in $100 at 0% reserve ratio.
The bank lends $10 at 100% (simplicity) over 7days.
On day1 the bank now has $90 to lend. But on day7 they will have $110.
Say the bank is pretty conservative and wants to be safe and so has an internal rule to only lend out 10% of it's projected amount after 7days.
Some comes along (still day1) and wants to borrow money.
The bank sees a projected amount of $110 on day7 so feels it is safe to lend a bit more out. It lends out $11 at 100%. Someone else comes along (same day) and the projected amount now after 7days is $122 and so the bank lends out $12.20 at 100%.
On day1 now, the bank has in its coffers $100-10-11-12.20 = $66.80.
The bank can keep lending like this, (slowly increasing the amount) BUT it is limited to only lend out $66.80 more.


Real banks can do this for what seems like they're creating money from nothing because they have a steady revenue of people paying back loans etc.. and so money is coming in which they can then lend out again.

My point is, they are ultimately limited by the amount we put into the bank and their profits, it's just because they are dealing in such large numbers and they have a lot of money the keeps coming in, that they have that money to then lend out again.
If banks truly created money from nothing inflation would be through the roof out of control, not 1% or 0.5%...

Quote:Interest free lending is not a joke, would anybody care to share where this actual "interest" exists within the system without creating more debt to pay it off (with interest) which means more debt to an interest ratio.

Huh? Interest free lending IS a joke. That interest is the price you pay to borrow that money.
Please bemore, explain to me how interest on loans is any different to the corner store adding 50c to the bottle of coke before selling it to you. That 50c was "created from nothing", that 50c does not exist, it is just a number added by the corner shop owner.

Quote:So the selected institutes who create money (simply from your promise to pay it back) charge you interest (that doesnt actually exist within the system) so you have to work hard and contribute to the dynamic system that is the economy and pay them extra on top!!! How the fuck is that fair???

Again, 50c added to a bottle of coke by the shop owner. That 50c doesn't exist but you have to work 50c more to cover it and buy that bottle of coke. "How the fuck is that fair??"

Quote:The banks were "Too big to fail" yet they needed bailing out by government institutes, yes I understand what would happen if these banks went belly up then trillions of pounds would just "dissappear" but the banks/system DID FAIL and it has happened time after time on a cyclical basis throughout history. The system is UNFAIR and at the end of the day it only really favours the people at the top.

Exactly, they can fail. Does this not mean they are limited? Unlike this concept of them seemingly creating money from thin air??
Bit of common sense bemore.

Quote:Of course if we had "interest free" lending then these selected institutes wouldnt be able to make profits. Maybe then they could actually do something of actual material purpose.

Nobody would be able to make a profit because nobody would be able to get the capital they require in order to start a business.
It would effect the poor a hell of a lot more then the rich.
These institutes offer a hugely needed service in our society and they alone are the reason why we have achieved the economic growth that we have.

Banks lend people money. People use money to build money making things like a store. The store makes money and pays off the loan.
Without that bank to begin with, or at least without lending, then the store simply would not be possible as you would have to save all of the money prior which could take years and years.
It's much like the "go to university or not" question.

Allow me to explain:
I work now for $100 a year.
I require $500 to start a store.
This store would generate $200 a year.
I would then have to 5 years to save the $500.
Say I live 10 years and work every year.

5 years of $100 and 5 years of $200 = $1000 (-$500 for business start-up)
I could work 10years at $100 = $1000
OR I could borrow the $500 on day1 and run a business for 10 years at $200 = $2000 -$500 for loan and -$50 for interest = $1450.

Can you see now why lending is necessary?




Bemore, seriously, your understanding of the economy and how things work is.. well it's wrong. Think about what I have said, if you think about it you will see it makes sense. If you choose to ignore it and continue to blame banks and rich people for the suffering of everyone with a 9-5 job, then w/e be like everyone else that bitches and complains simply because they do not, or will not bother too, understand actually how it works.

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26-04-2013, 05:09 AM (This post was last modified: 26-04-2013 05:13 AM by earmuffs.)
RE: Somebody prove this wrong please.
(25-04-2013 10:03 AM)bbeljefe Wrote:  
(25-04-2013 09:30 AM)bemore Wrote:  I asked people to prove it wrong muffs. You seem to think that if you put £10 in a bank then they lend £9 out (minus the reserve) from that £10 you deposit and that is simply not the case.

They create money (from nothing) based upon your signature that you will pay them back, which is why I said we live in a debt based economy I wouldnt at all be wrong. That if all debts were to be paid off then there simply would be nothing left of the economy on the balance sheets (yes the 3% of fiat currency would exist but that would be it)

Have you actually looked at the article or watched any of the videos muffs? If so can you please specifically pick out what is wrong with the information like I have asked because on my own studies I find this to be the case, that the information isn't wrong at all.

The reserves/fractional banking is a joke. Thinking about it if all banks went belly up how would 10% cover what was once worth trillions? It wouldn't would it.

Interest free lending is not a joke, would anybody care to share where this actual "interest" exists within the system without creating more debt to pay it off (with interest) which means more debt to an interest ratio.

So the selected institutes who create money (simply from your promise to pay it back) charge you interest (that doesnt actually exist within the system) so you have to work hard and contribute to the dynamic system that is the economy and pay them extra on top!!! How the fuck is that fair???

The banks were "Too big to fail" yet they needed bailing out by government institutes, yes I understand what would happen if these banks went belly up then trillions of pounds would just "dissappear" but the banks/system DID FAIL and it has happened time after time on a cyclical basis throughout history. The system is UNFAIR and at the end of the day it only really favours the people at the top.

Of course if we had "interest free" lending then these selected institutes wouldnt be able to make profits. Maybe then they could actually do something of actual material purpose. I dont see any reason of instead of paying trillions to banks so they can hoard it (as borrowing is down) that our governments simply don't use that money to lend out interest free. They wont though because like I said our economies only grow through debt.

The banking system as we know it is indeed unfair but that isn't the fault of for profit lending or fractional reserve banking.

If I ask you to hold my gold and you agree with the stipulation that in return for holding, you reserve the right to lend it, that's a voluntary contract agreement between you and I. That's no different than me going to a storage warehouse and paying them a set fee to store goods for me. They're providing a service to me and in return, I pay them a fee.

In banking, the bank doesn't charge depositors, it pays them. This incentivises depositors which brings more money into the bank. Obviously, if the bank pays 5% interest on deposits, it will have to lend at some percentage higher than that in order to profit. Say, 10%. The bank earns 5% and the depositor earns 5% for the risk he takes in placing his money in the care of the bank. Not to mention, a borrower gains access to funds that can be utilized to increase his wealth.

It's that increase in wealth through lending that comprises the interest paid to the bank and the depositor. In a commodity based monetary system, that increased wealth might be gold that is mined through the use of borrowed money. In a currency based monetary system, that increased wealth can be currency from another bank or individual.

Either way, the increase in the supply of wealth (the interest paid or, currency) is not poofed into existence so long as those notes are backed by some tangible asset. Sadly, in our modern world there is no such thing as currency based on tangible assets and that's the problem. Instead, currency creation is monopolized by nation states and the only thing backing it is a promise to pay. In simple terms, the US dollar and the British Pound are backed by a promise that future (yet unborn even) taxpayers will create enough wealth to make it good.

If we could eliminate government issued "monopoly money" from the system, we would have a natural regulation on the supply of currency because no one in his right mind would use a bank's notes unless they had been proven to be sound.... just like no one in his right mind will hire a baby sitter for his children who can't prove a solid reputation.



How are banks unfair?

I pose you the same question. What is the difference between a bank adding interest to its loans and a corner store owner adding 50c to that bottle of coke.

And if you're going to bitch about how at least you get to keep the coke then replace the bottle of coke with a dvd rental business.



And putting money in a bank is not comparable with putting stuff in storage.
The storage company does not use your goods for personal profit.
And besides, a bank does charge you to keep your money 'safe'. How much it charges you is the difference between it's profit of your money at the amount of interest it's giving you.
ie: A bank lends your $100 at 10% and gives you 2% interest. The 8% difference is the bank charging you for keeping your money safe and investing your money for you.
So really, you are paying the bank the put your money in there. Just the difference between profit and payment is profitable... BUT it can also be negative depending on your investment options so...

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26-04-2013, 05:47 AM
RE: Somebody prove this wrong please.
Fucking muffs. Banks are evil, and as you support them, you're evil, too. Tongue

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26-04-2013, 06:25 AM
RE: Somebody prove this wrong please.
Im in a bad mood today so I really should not be posting but hey ho... nobodys perfect and all that Jazz.

Right... in my OP muffs I stated that it wasnt conspiracy based, to say that you believe it to be so and you havent even bothered to check the links out is fucking childish and biased to fuck... so firstly grow the fuck up and lets have a reasonable debate about the subject matter (in the links that I have provided) that I have posted or fuck off.

In fact I challenge you to watch them, rip what they say to fucking shreds and prove how much of a fucking numpty I am for posting it, I did after all entitle the whole fucking thread as "Somebody prove this wrong please"

Also whilst your at it, explain where this "interest" that everybody pays is... seeing as it isnt even in the fucking system as it hasnt even been fucking created yet without making more money.

Read the links, watch the videos, fill yer boots and take as much satisfaction in blowing me out of the water as you like if its bullshit.

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You are your own emphasis.
So I say nothing.

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26-04-2013, 08:12 AM
RE: Somebody prove this wrong please.
(26-04-2013 06:25 AM)bemore Wrote:  Im in a bad mood today so I really should not be posting but hey ho... nobodys perfect and all that Jazz.

Right... in my OP muffs I stated that it wasnt conspiracy based, to say that you believe it to be so and you havent even bothered to check the links out is fucking childish and biased to fuck... so firstly grow the fuck up and lets have a reasonable debate about the subject matter (in the links that I have provided) that I have posted or fuck off.

In fact I challenge you to watch them, rip what they say to fucking shreds and prove how much of a fucking numpty I am for posting it, I did after all entitle the whole fucking thread as "Somebody prove this wrong please"

Also whilst your at it, explain where this "interest" that everybody pays is... seeing as it isnt even in the fucking system as it hasnt even been fucking created yet without making more money.

Read the links, watch the videos, fill yer boots and take as much satisfaction in blowing me out of the water as you like if its bullshit.

Read what I posted.
That is how banks work. I do not need to read your links because how I said is how a bank works and whatever those links contain is pointless and a waste of my time.

You obviously haven't read my posts, if they had you'd see they're "proving you wrong" as you so asked.
And also that second to last paragraph clearly shows you did not read or even bother to think about my question I posed to me.

Get back to me when you calm down and decided to switch your brain on. Don't waste my time until you do, because contrary to what you think, I am not wasting yours. I have tried to explain to you how the system works many a times yet you are either unwilling or unable to comprehend. I am giving you the benefit of the doubt that you are simply "stuck in your ways" and are unwilling, but if you still do not understand what I am trying to teach you then perhaps my opinion will change to that you are simply unable upon which I wont bother wasting my time "teaching" you this again in the future.

Your choice bemore, think about how I am telling you the system truly works, or stay deluded and don't and continue to bitch about how "banks are unfair".

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26-04-2013, 08:39 AM
RE: Somebody prove this wrong please.
Banks are unfair. Sadcryface2

You two are a couple of fundamentalists on this topic. Tongue

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26-04-2013, 09:57 AM
RE: Somebody prove this wrong please.
(26-04-2013 05:09 AM)earmuffs Wrote:  How are banks unfair?

I pose you the same question. What is the difference between a bank adding interest to its loans and a corner store owner adding 50c to that bottle of coke.

And if you're going to bitch about how at least you get to keep the coke then replace the bottle of coke with a dvd rental business.



And putting money in a bank is not comparable with putting stuff in storage.
The storage company does not use your goods for personal profit.
And besides, a bank does charge you to keep your money 'safe'. How much it charges you is the difference between it's profit of your money at the amount of interest it's giving you.
ie: A bank lends your $100 at 10% and gives you 2% interest. The 8% difference is the bank charging you for keeping your money safe and investing your money for you.
So really, you are paying the bank the put your money in there. Just the difference between profit and payment is profitable... BUT it can also be negative depending on your investment options so...

I never said banks are unfair.

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26-04-2013, 12:37 PM
RE: Somebody prove this wrong please.
(26-04-2013 09:57 AM)bbeljefe Wrote:  
(26-04-2013 05:09 AM)earmuffs Wrote:  How are banks unfair?

I pose you the same question. What is the difference between a bank adding interest to its loans and a corner store owner adding 50c to that bottle of coke.

And if you're going to bitch about how at least you get to keep the coke then replace the bottle of coke with a dvd rental business.



And putting money in a bank is not comparable with putting stuff in storage.
The storage company does not use your goods for personal profit.
And besides, a bank does charge you to keep your money 'safe'. How much it charges you is the difference between it's profit of your money at the amount of interest it's giving you.
ie: A bank lends your $100 at 10% and gives you 2% interest. The 8% difference is the bank charging you for keeping your money safe and investing your money for you.
So really, you are paying the bank the put your money in there. Just the difference between profit and payment is profitable... BUT it can also be negative depending on your investment options so...

I never said banks are unfair.

2 points.

1) You didn't answer my question.

2) yes you did. "The banking system as we know it is unfair". Line 1.
You can say "no I said the system not the actual bank" but cut the word play, the "banking system" is what banks are. They operate and make up "the banking system".

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26-04-2013, 01:03 PM
RE: Somebody prove this wrong please.
bemore and el jefe,

I feel both of you'ns are right from idealists perspective. However men are greedy. People with power will always use that power to retain or increase their power, or at least do their best to. I am all for abolishing the Federal Reserve though, by whatever means.

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