Quote:
Originally Posted by legoman
Bankers create money out of thin air and loan it to you at interest.
You then have to pay the principle and interest back out of your work, blood, sweat, and tears.
This is nothing short of slavery.
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Quote:
Originally Posted by Earlyretired
Uhh yes they do, its called fractional reserve banking...
You deposit $100 and they loan out $1000 they just created $$$ out of thin air...
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Quote:
Originally Posted by Earlyretired
It comes from thin air, they loan out more than they have they are creating new $$$...
Ever heard of a bank run???
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Quote:
Originally Posted by logline
Sorry pknopp, you're dead wrong. Look up "fractional reserve banking" and see how it works. There are plenty of short youtube videos which explain it. Banks DO create money (debt) out of thin air.
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Quote:
Originally Posted by logline
Finally! A topic that conservatives and liberals alike can all agree on. Believe it or not, this was the crux of some of the more cool-headed people in the Tea Party and the Occupy movement.
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Quote:
Originally Posted by Bideshi
I can't say you're wrong.
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You're wrong.
I don't give a goddam how many videos are on Useless Tube.
Quote:
Originally Posted by pknopp
Sorry, you have to start your argument with a factual position or the entire thing falls apart. "Bankers" do not create money out of thin air.
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Quote:
Originally Posted by whogo
Newsflash: Throughout history, even with sound money, usury has been charged. It is the rental price of money.
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Well, this is encouraging. At least two people understand.
I'll explain this.....
Banks have depositors. Suppose a bank has $1 Million in deposits, and suppose the Fractional Reserve System was outlawed like the morons on Useless Tube want.
How much money can the bank loan out?
What happens if the bank loans out all $1 Million in deposits? You go to the ATM to withdraw cash and the ATM gives you a nasty-gram saying it cannot complete the transaction.
Who does not understand that?
It's pretty straight forward.
Suppose a law or just plain common sense limits the bank to loaning no more than 50% of its average daily deposits, and say that happens to be $1 Million. The bank can loan out $500,000, and then keep $500,000 on hand for people like you who want to use their ATM cards, because their just happens to be an ATM machine calling their name.
Where do you think you'll be on the waiting list?
Waiting list? Yeah, you know, there's 2,000 people who want a mortgage and the bank can make two mortgage loans of $150,000 each...for 30 years....you'll have to wait until one of those mortgages are paid off so the next person ahead of you on the list can get their mortgage.
Same with auto loans. The bank set aside $250,000 for mortgages, and $200,000 for auto loans. There's 1,371 people competing for one of the 5 to 8 possible auto loans the bank gives every 5-7 years.
You're number 914 on the list, so you might as well just save your money and pay cash for a car, right?
I'm guessing the bank-tards on Useless Tube forgot to mention those minor details.
How do we get around this problem?
Fractional Reserve Banking.
A central bank backs the commercial banks. In the US, the central bank happens to be called the Federal Reserve, um, you know, since the US is a federal republic, so the National Bank of the United States would be an oxymoron (and so would Federal National Bank).
The Fractional Reserve System allows banks to loan more money than they actually have in deposits.
So let's talk about deposits.
Where do deposits come from? Do the fall out of the sky and land in the bank? No, they come from people, business, industry and many different types of groups and associations, some philanthropic, some not.
Why do deposits remain in a bank?
I got $5 Million in cash sitting around. Give me one good reason to deposit my $5 Million in cash in your bank.
What are you going to do for me?
I deposit $5 Million in your bank, and you're going to loan part of that out, and I don't even get so much as a "by your leave?"
Fred's Bank will pay 5 5/8% interest and Jill's Bank will pay me 6 3/8% interest to deposit my $5 Million.
I guessing the bank-tards on Useless Tube forgot to mention that minor trivial detail.
So, you say, "
(Sob)(Sniffle)But the bank doesn't pay me interest (Sob)."
Why would they?
The measly $600 you deposit every week is gone in 30 seconds. Video games, Starsux, McDonald's, iTunes, and an host of other crap that you don't really need, but it does satisfy those infantile urges that rule your brain.
You make the bank do so much work chasing around your transactions and your over-draws, they ought to charge you money.....and they do...that's what the fees are for.
What, you thought it was free? Oh, you're right, it is totally free. People come home from work, change clothes, then go volunteer at the bank for 6 hours each evening balancing books, ensuring compliance with silly-ass State and federal regulations....and the volunteers work for free.
Is that what you thought? No, sorry, hate to ruin your pipe-dream, but the bank has paid employees.
Back to deposits.
Where does the bank get the money to pay the interest to maintain is deposits?
The bank gets that by charging interest on loans. The bank loans you money, charges you 9 3/4% interest then out of that 9 3/4% pays me my 6 3/8% and keeps the rest as revenues/profits.
I'm guessing the bank-tards on Useless Tube forgot to mention that as well.
But, of course! Telling the truth destroys their stupid arguments.
The banks do not create money out of thin air.....they loan money based on the deposits they have, and the deposits they have cost money to maintain.
Doesn't the house, the car, or the clothes you buy already exist? Of course. Money is just a medium of exchange. You could trade a dozen horses or so to another for cash, then take the cash and buy the car, but it would be easier to buy the car and pay for it using your future income.
If anyone is creating money out of thin air, it is you, not the banks.
Monetarily...
Mircea
Quote:
Originally Posted by Magritte25
If I am not mistaken, I believe this is the basis of the FIRE economy. FIRE = Finance, Insurance, Real Estate
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You are mistaken. Fractional Reserve Banking existed long before idiots came up with the idea that the entire US economy could run on Finance, Insurance and Real Estate.
Basically...
Mircea
Quote:
Originally Posted by Bideshi
What do you think we can do about it?
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Nothing.
You're too weak and pathetic to do anything about it. It is the nature of people to do absolute nothing as slowly as possible. Besides, you couldn't live on the Gold Standard for more than 3 seconds before you'd be on your knees begging to go back to fiat currency.
Quote:
Originally Posted by pknopp
The Federal Reserve bank does under the guidance of the government.
Your problem here is not with the banks but rather the government. I suspect you might have a problem with placing the blame where it belongs.
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Uh-huh, except
you are the government. "
We the people..." and all that.
Quote:
Originally Posted by InformedConsent
Usury? Yes. Making a profit on creating money out of thin air like the Federal Reserve does because it has a government-granted monopoly on doing so? Not so much.
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The Federal Reserve does not make a profit, and any money that might happen to be made is immediately turned over the US Treasury Department.
Quote:
Originally Posted by InformedConsent
A bank simply cannot take a $100 deposit and lend someone else $1,000 without that other $900 coming from somewhere. Think about it...
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It comes from future income. The bank assesses your ability to repay the loan based on your credit worthiness, and the same for businesses.
Quote:
Originally Posted by pknopp
To argue though, if the Greenspan's and Bernanke's were unable to see the obvious massive fraud the banks were committing one has to question why we even bother. And no, the end of Glass-Steagall did not make the fraud legal.
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What fraud?
I'm still waiting for someone to show me evidence of fraud (after like 8 years already).
Quote:
Originally Posted by Earlyretired
At interest... And when they make loans to people that cant pay it back we bail em out....
Moral Hazard...
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As stupid a policy as it might be, that is what
you wanted.
You are the government. The clowns in government didn't get beamed to Planet Earth from a distant space-ship....you put them there.
If you want to make some changes, then two effective changes would be...
1] if you insist upon government-backed mortgages, then bar mortgage holders from having an HELOC, or obtaining 2nd/3rd Mortgages.
If you study the collapse of the housing bubble, the issue was not the primary mortgage, rather it was HELOCs, and 2nd/3rd Mortgages. Homeowners burned up their equity getting a 2nd Mortgage to consolidate their credit card debt, then stupidly ran up their credit cards....then lost their job, but got another....at a lower wage....household income declining....people refused to make adjustments to their life-style and standard of living -- because, um, you know, they're "entitled" to it --- and then they defaulted on their HELOC or 2nd/3rd Mortgage, not the primary mortgage.
2] better yet, do away with government backed mortgages.....the banks can obtain their own mortgage insurance and pass the cost onto home-buyers in the form of higher interest rates, or let the home-buyer obtain their own mortgage insurance (which is preferable because it gives the consumer choices).
I don't see why people who have no interest in owning homes -- yeah, I'm talking about apartment dwellers -- should be coerced into bank-rolling the failed mortgages of home-owners.
Quote:
Originally Posted by NHartphotog
Those holding precious metals for trade, necessary commodities like food and medicine, and shelter/defense, will survive.
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Why would I want precious metals?
Quote:
Originally Posted by NHartphotog
The only question is when the house of cards collapses.
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Never.
It burns down, falls over, and sinks into a swamp, but it never just collapses.
Quote:
Originally Posted by InformedConsent
Because all he did was live up to an agreement Countrywide signed with HUD, which enabled Countrywide to accept "nontraditional credit" and other faulty qualifications from low-income and/or high risk borrowers for loan approval because the GSEs (Fannie and Freddie) agreed to buy the high risk loans that Countrywide originated.Case Study: Countrywide Home Loans, Inc.
published by Fannie Mae Foundation, 2000
http://fcic-static.law.stanford.edu/...%20Markets.pdf
Which is why it will happen again, in the name of affordable housing.  |
For those whose memory isn't as good as InformedConsent's.....this disaster was brought to you by Blow Job Bill.....
White House Press Briefing, Office of the Press Secretary (Dec. 8, 1993)
MR. RUBIN: Hi. I'm Bob Rubin, the Assistant to the President for Economic Policy, and I'm going to introduce today's topic.
The President, as you know, has a broad, comprehensive strategy for dealing with the economic problems of the country for putting the country back on the right track for the long-term. A lot of the legislative and executive actions that have taken place in 1993 have been pursuant to that long-term economic strategy of the President's.
[I guess Clinton's long-term economic strategy was a recessionary economy.]
An important component of that strategy is to deal with the problems of the inner city and distressed rural communities -- pursuant to his belief that we must make real progress in those areas if this country is going to be successful in the future for all of us. The reform of the Community Reinvestment Act is an essential building block in the efforts I've just mentioned. In July the President asked the four banking regulators to reform CRA, to reduce paperwork in process and reward performance, and to get that done by January 1, 1994
SECRETARY BENTSEN: In a nutshell, what we're proposing to do is to make it easier for lenders to show how they're complying with the Community Reinvestment Act. For those who aren't familiar with the area of banking law, the changes we're proposing are important because banks now have a very clear, quantitative standard by which their compliance can be judged.
MR. LUDWIG: Ken, you know that it's hard to give a hard and fast rule, particularly on a system where we want to be flexible, we don't want to have credit allocation or quotas.
At the same time, the CRA, for all its flaws, since 1977 it is generally agreed has increased lending in low and moderate income areas by tens of billions of dollars. We're all convinced that this is a material step forward. So it's very safe to say billions of dollars.
The entire CRA reform is very much built on rebuttable presumptions, so that you don't have odd anomalous cases which we found around the country, where a bank had done a good job but somehow got rated poorly, or vice versa.
Q Will you be gathering information just on loans, or on applications, as well, for small business?
MR. LUDWIG: We will be gathering data as proposed on the basis of applications, denials and actual loans.
Q Does this mean that if I am a banker with branches in the inner city, I no longer have to have an employee keeping pins on the map of town to show where the loans are, that it's now going to be judged on dollars and cents and how much money goes where?
MR. LUDWIG: Dollars and cents, and we'll keep the pins. The data will be publicly available and the banker will not have to have a crazy map with pins all over it, which has just characterized this whole process, and spending huge amounts of time documenting every time it meets with a community group and being judged on how many documents it has. It will be judged on where the loans are.
[Emphasis Mine ]
Collaterialized Debt Obligations [CDOs) and Structured Investment Vehicles (SIVs) were created in response to Clinton's demand to issue more mortgages or be financially penalized and suffer legal action and scrutiny at the federal and State level, and also in the Media.
Collaterally....
Mircea
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