is this how it works?

[Low_five]

so I was thinking about it because I just dont understand how this all works, and this is what I came up with.

customer comes in to bank to get a loan in the amout of n
bank doesnt have money to lend
bank borrows n from fed at x percent
bank lends n to customer at x+y interest
customer pays back n at x+y percent
bank keeps y percent
fed keeps x percent


so, the customer has to pull x+y out of his ass, basically.

yeah, even a monkey can see where thats going to end up.

[wildcard]

A license to rob.

I'm no financial wiz. Most of what I've learned has been from Max Keiser, who speaks in a manner I can understand. From what I gather, what you have listed above is for banks that have no capital. They can borrow working capital from the fed.

Now banks that have capital from years of profits are sometimes paid to leave their capital on deposit at the fed. Sometimes paid more than the bank could make if they loaned that money out to you and I or a business. Holding credit hostage and drying up everything.

I could be way off and will gladly accept knowledge.

*also the spectre of being shut down has been making banks leave their capital at the fed so they are solvent. What's that fancy word they've been using lately?

[wildcard]

http://www.youtube.com/watch?v=ze9A8dggyP8

http://www.rense.com/general79/collapse.htm


The Coming Collapse Of
The Modern Banking System
Staring Into the Abyss
By Mike Whitney
12-17-7

Stocks fell sharply last week on news of accelerating inflation which will limit the Federal Reserves ability to continue cutting interest rates. On Tuesday the Dow Jones Industrials tumbled 294 points following the Fed's announcement of a quarter point cut to the Fed Funds rate. On Friday, the Dow dipped another 178 points when government figures showed consumer prices had risen 0.8 per cent last month after a 0.3 per cent gain in October. The stock market is now lurching downward into a "primary bear market". There has been a steady deterioration in retail sales, commercial real estate, and the transports. The financial industry is going through a major retrenchment, losing more than 25 per cent in aggregate capitalization since July. The real estate market is collapsing. California Gov. Arnold Schwarzenegger announced on Friday that he will declare a "fiscal emergency" in January and ask for more power to deal with the $14 billion budget shortfall from the meltdown in subprime lending.

Economists are beginning to publicly acknowledge what many market analysts have suspected for months; the nation's economy is going into a tailspin.
Morgan Stanley's Asia Chairman, Stephen Roach, made this observation in a New York Times op-ed on Sunday:

This recession will be deeper than the shallow contraction earlier in this decade. The dot-com-led downturn was set off by a collapse in business capital spending, which at its peak in 2000 accounted for only 13 percent of the country's gross domestic product. The current recession is all about the coming capitulation of the American consumer - whose spending now accounts for a record 72 percent of G.D.P.

Most people have no idea how grave the present situation is or the disaster the country will face if trillions of dollars of over-leveraged bonds and equities begin to unwind. There's a widespread belief that the stewards of the system - Bernanke and Paulson - can somehow steer the economy through this "rough patch" into calm waters. But they cannot, and the presumption shows a basic misunderstanding of how markets work. The Fed has no magical powers and will not allow itself to be crushed by standing in the path of a market-avalanche. As foreclosures and bankruptcies increase; stocks will crash and the fed will step aside to safety.

In the last few weeks, Bernanke and Paulson have tried a number of strategies that have failed. Paulson concocted a plan to help the major investment banks consolidate and repackage their nonperforming mortgage-backed junk into a "Super SIV" to give them another chance to unload their bad investments on the public. The plan was nothing more than a public relations ploy which has already been abandoned by most of the key participants. Paulson's involvement is a real black eye for the Dept of the Treasury. It makes it look like he's willing to dupe investors as long as it helps his d Wall Street buddies.

Paulson also put together an "industry friendly" rate freeze that is supposed to help struggling homeowners avoid foreclosure. But the plan falls well short of providing any meaningful aid to the estimated 3.5 million homeowners who are facing the prospect of defaulting on their loans if they don't get government assistance. Recent estimates by industry experts say that Paulson's plan will only help 140,000 mortgage holders, leaving millions of others to fend for themselves. Paulson has proved over and over that he is just not up to the task of confronting an economic challenge of this magnitude head-on.

Fed chief Bernanke hasn't done much better than Paulson. His three-quarter point cut to the Fed's Funds rate hasn't lowered interest rates on mortgages, stimulated greater home sales, stabilized the stock market or helped banks deal with their massive debt-load. It's been a flop from start to finish. All it's done is weaken the dollar and trigger a wave of inflation. In fact, government figures now show energy prices are rising at 18.1 per cent annually. Bernanke is apparently following Lenin's supposed injunction ÂÂ* though there's no conclusive evidence he actually said it -- that "the best way to destroy the Capitalist System is to debauch the currency."

On Wednesday, the Federal Reserve initiated a "coordinated effort" with the Bank of Canada, the Bank of England, the European Central Bank, the and the Swiss National Bank to address the "elevated pressures in short-term funding of the markets." The Fed issued a statement that "it will make up to $24 billion available to the European Central Bank (ECB) and Swiss National Bank to increase the supply of dollars in Europe." (Bloomberg) The Fed will also add as much as $40 billion, via auctions, to increase cash in the U.S. Bernanke is trying to loosen the knot that has tightened Libor (London Interbank Offered Rate) rates in England and reduced lending between banks. The slowdown is hobbling growth and could send the world into a recessionary spiral. Bernanke's "master plan" is little more than a cash giveaway to sinking banks. It has scant chance of succeeding. The Fed is offering $.85 on the dollar for mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) that sold last week in the E*Trade liquidation for $.27 on the dollar. At the same time, the Fed has promised to keep the identities of the banks that are borrowing these emergency funds secret from the public. The Fed is conducting its business like a bookie.
Unfortunately, the Fed bailout has achieved nothing. Libor rates---which are presently at seven-year highs---have not come down at all. This is causing growing concern among the leaders of the Central Banks around the world, but there's really nothing they can do about it. The banks are hoarding cash to meet their capital requirements. They are trying to compensate for the loss of value to their (mortgage-backed) assets by increasing their reserves. At the same time, the system is clogged with trillions of dollars of bad paper which has brought lending to a halt. The huge injections of liquidity from the Fed have done nothing to improve lending or lower interbank rates. It's been a flop. The market is driving interest rates now. If the situation persists, the stock market will crash.

Staring Into the Abyss

One of Britain's leading economists, Peter Spencer, issued a warning on Saturday:

The Government must suspend a set of key banking regulations at the heart of the current financial crisis or risk seeing the economy spiral towards a future that could make 1929 look like a walk in the park.

Spencer is right. The banks don't have the money to loan to businesses or consumers because they're trying to raise more cash to meet their capital requirements on assets that continue to be downgraded. (The Fed may pay $.85 on the dollar, but investors are unwilling to pay anything at all.)Spencer correctly assumes that the reason the banks have stopped lending is not because they "distrust" other banks, but because they are capital-strapped from all their "off balance" sheets shenanigans. If the Basel regulations aren't modified, money markets will remain frozen, GDP will shrink, and there'll be a wave of bank closings.

Spencer said:

The Bank is staring into the abyss. The Financial Services Authority must go round and check that all banks are solvent, and then it should cut the Basel capital requirement level from 8pc to about 6pc. ("Call to Relax Basel Banking Rules, UK Telegraph)

Spencer confirms what we already knew; the banks are seriously under-capitalized and will come under growing pressure as hundreds of billions of dollars of mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) continue to lose value and have to be propped up with additional capital. The banks simply don't have the resources and there's going to be a day of reckoning.

Pimco's Bill Gross put it like this: "What we are witnessing is essentially the breakdown of our modern day banking system." Gross is right, but he only covers a small portion of the problem.

The economist Ludwig von Mises is more succinct in his analysis:

There is no means of avoiding the final collapse of a boom brought on by credit expansion. The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

The basic problem originated with the Federal Reserve when former Fed chief Alan Greenspan lowered interest rates below the rate of inflation for 31 months straight which pumped trillions of dollars of low interest credit into the financial system and ignited a speculative frenzy in real estate. Greenspan has spent a great deal of time lately trying to avoid any blame for the catastrophe he created. He is a first-rate "buck passer". In Wednesday's Wall Street Journal, Greenspan scribbled out a 1,500-word defense of his actions as head of the Federal Reserve, pointing the finger at everything from China's "low cost workforce" to "the fall of the Berlin Wall". The essay was typical Greenspan gibberish. In his trademark opaque language; Greenspan tiptoes through the well-documented facts of his tenure as Fed chief to absolve himself of any personal responsibility for the ensuing disaster.

Greenspan's apologia is a masterpiece of circuitous logic, deliberate evasion and utter denial of reality. He says:

I do not doubt that a low U.S. federal-funds rate in response to the dot-com crash, and especially the 1 per cent rate set in mid-2003 to counter potential deflation, lowered interest rates on adjustable-rate mortgages (ARMs) and may have contributed to the rise in U.S. home prices. In my judgment, however, the impact on demand for homes financed with ARMs was not major.

"Not major"? 3.5 million potential foreclosures, 11-month inventory backlog, plummeting home prices, an entire industry in terminal distress pulling down the global economy is not major?

But Greenspan is partially correct. The troubles in housing cannot be entirely attributed to the Fed's "cheap credit" monetary policies. They were also nursed along by a Doctrine of Deregulation which has permeated US capital markets since the Reagan era. Greenspan's views on how markets should function were -- to great extent -- shaped by this non-interventionist/non-supervisory ideology which has created enormous equity bubbles and imbalances. The former-Fed chief's support for adjustable-rate mortgages (ARMs) and subprime lending shows that Greenspan thought of himself as more as a cheerleader for the big market-players than an impartial referee whose job was to monitor reckless or unethical behavior.

Greenspan also adds this revealing bit of information in his article:

The value of equities traded on the world's major stock exchanges has risen to more than $50 trillion, double what it was in 2002. Sharply rising home prices erupted into major housing bubbles world-wide, Japan and Germany (for differing reasons) being the only principal exceptions." ("The Roots of the Mortgage Crisis", Alan Greenspan, Wall Street Journal)

This admission proves Greenspan's culpability. If he knew that stock prices had doubled their value in just 3 years, then he also knew that equities had not risen due to increases in productivity or demand.(market forces) The only reasonable explanation for the asset inflation, therefore, was monetary policy. As his own mentor, Milton Friedman famously stated, "Inflation is always and everywhere a monetary phenomenon". Any capable economist would have known that the explosion in housing and equities prices was a sign of uneven inflation. Now that the bubble has popped, inflation is spreading like mad through the entire economy.

Greenspan is a very sharp man. It is crazy to think he didn't know what was going on. This is basic economic theory. Of course he knew why stocks and housing prices were skyrocketing. He was the one who put the dominoes in motion with the help of his printing press.

But Greenspan's low interest credit is only part of the equation. The other part has to do with way that the markets have been transformed by "structured finance".

What's so destructive about structured finance is that it allows the banks to create credit "out of thin air", stripping the Fed of its role as controller of the money supply. David Roache explains how this works in an excerpt from his book "New Monetarism" which appeared in the Wall Street Journal:

The reason for the exponential growth in credit, but not in broad money, was simply that banks didn't keep their loans on their books any more-and only loans on bank balance sheets get counted as money. Now, as soon as banks made a loan, they "securitized" it and moved it off their balance sheet.

There were two ways of doing this. One was to sell the securitized loan as a bond. The other was "synthetic" securitization: for example, using derivatives to get rid of the default risk (with credit default swaps) and lock in the interest rate due on the loan (with interest-rate swaps). Both forms of securitization meant that the lending bank was free to make new loans without using up any of its lending capacity once its existing loans had been "securitized."

So, to redefine liquidity under what I call New Monetarism, one must add, to the traditional definition of broad money, all the credit being created and moved off banks' balance sheets and onto the balance sheets of nonbank financial intermediaries. This new form of liquidity changed the very nature of the credit beast. What now determined credit growth was risk appetite: the readiness of companies and individuals to run their businesses with higher levels of debt. (Wall Street Journal)

The banks have been creating trillions of dollars of credit (by originating mortgage-backed securities, collateralized debt obligations and asset-backed commercial paper) without maintaining the proportional capital reserves to back them up. That explains why the banks were so eager to provide mortgages to millions of loan applicants who had no documentation, no income, no collateral and a bad credit history. They believed there was no risk, because they were making enormous profits without tying up any of their capital. It was, quite literally, money for nothing.

Now, unfortunately, the mechanism for generating new loans (and fees) has broken down. The main sources of bank revenue have either been seriously curtailed or dried up entirely. (Mortgage-backed) Commercial paper (ABCP) one such source of revenue, has decreased by a full-third (or $400 billion) in just 17 weeks. Also, the securitization of mortgage-backed securities is DOA. The market for MBSs and CDOs and other complex bonds has followed the Pterodactyl into the history books. The same is true of structured investment vehicles (SIVs) and other "off balance-sheet" swindles which have either gone under entirely or are presently withering with every savage downgrade in mortgage-backed bonds. The mighty juggernaut that was grinding out the hefty profits ("structured investments") has suddenly reversed and is crushing everything in its path.

The banks don't have the reserves to cover their downgraded assets and the Federal Reserve cannot simply "monetize" their bad bets. There's no way out. There are bound to be bankruptcies and bank runs. "Structured finance" has usurped the Fed's authority to create new credit and handed it over to the banks.

Now everyone will pay the price.

Investors have lost their appetite for risk and are steering clear of anything connected to real estate or mortgage-backed bonds. That means that an estimated $3 trillion of securitized debt (CDOs, MBSs and ASCP) will come crashing to earth delivering a violent blow to the economy.
It's not just the banks that will take a beating. As Professor Nouriel Roubini points out, the broker dealers, the investment banks, money market funds, hedge funds and mortgage lenders are in the crosshairs as well.

Non-bank institutions do not have direct access to the Fed and other central banks liquidity support and they are now at risk of a liquidity run as their liabilities are short term while many of their assets are longer term and illiquid; so the risk of something equivalent to a bank run for non-bank financial institutions is now rising. And there is no chance that depository institutions will re-lend to these to these non-banks the funds borrowed by central banks as these banks have severe liquidity problems themselves and they do not trust their non-bank counterparties. So now monetary policy is totally impotent in dealing with the liquidity problems and the risks of runs on liquid liabilities of a large fraction of the financial system. (Nouriel Roubini's Global EconoMonitor)

As the downgrades on CDOs and MBSs continue to accelerate, there'll likely be a frantic "flight to cash" by investors, just like the recent surge into US Treasuries. This could well be followed by a series of spectacular bank and non-bank defaults. The trillions of dollars of "virtual capital" that were miraculously created through securitzation when the market was buoyed-along by optimism will vanish in a flash when the market is driven by fear. In fact, the equity bubble has already been punctured and the process is well underway.

[wildcard]

so I was thinking about it because I just dont understand how this all works, and this is what I came up with.

customer comes in to bank to get a loan in the amout of n
bank doesnt have money to lend
bank borrows n from fed at x percent
bank lends n to customer at x+y interest
customer pays back n at x+y percent
bank keeps y percent
fed keeps x percent


so, the customer has to pull x+y out of his ass, basically.

yeah, even a monkey can see where thats going to end up.


I think this is what Hypertiger said, but with fewer morons and cherished delusions. Top feeds on the bottom.

[wildcard]

So the stress tests are still going on? Which is why we see several bank failures per week?

[wildcard]

http://www.youtube.com/watch?v=qvZRVNZ5zeY&feature=player_embedded#!

[steveoc]

It gets worse ....



so I was thinking about it because I just dont understand how this all works, and this is what I came up with.

customer comes in to bank to get a loan in the amout of n
bank doesnt have money to lend
bank borrows n/10 from fed at x percent
bank lends n to customer at x+y interest
customer pays back n at x+y percent
bank keeps y percent
fed keeps x percent


so, the customer has to pull x+y out of his ass, basically.

yeah, even a monkey can see where thats going to end up.


Thats about right.

Note that the bank only needs to have a fraction of the amount on hand in order to create a loan. Hence the term fractional reserve banking.

Banks create money out of thin air. The principal of the loan is extinguished as the loan is paid off, and all that is left on the books is the interest that remains in circulation. This interest amount eventually ends up in the bank's pocket, and so over time the banks own a larger and larger slice of an ever growing pie.

With every new loan made to enact a purchase ... more interest is created out of thin air, the banks get a little richer and the people get a little poorer.

So every time another person signs a loan document, or takes out their credit card to pay for their groceries .... the real value of the dollar in your pocket shrinks just a little bit more through no fault of your own. This is why I keep an ounce of silver or 2 in my pocket ..... other people can go ahead and borrow as much as they like, but my ounce of silver remains an ounce of silver regardless.

Credit can be easily expanded or contracted at will, giving the banks the power to control the money supply with ease. Pricing becomes completely artificial.

By providing easy credit, prices for items rise. This has been going on for long enough now that prices for items such as houses and cars require the average Joe to take out a loan in order to make a purchase ... simply because there is not enough currency in circulation otherwise. As spending and demand increases during periods of easy credit, businesses need to extend their overdrafts in order to expand both their stock and payroll costs to meet growing customer demand.

By contracting the money supply (making loans harder to qualify for), prices dive as there are fewer and fewer dollars chasing the same goods. This creates recessions / depressions, and provides buying opportunities for those with access to the cash. In other words - the banks can now swoop in and buy up the farms, businesses and houses for pennies on the pound.

Boom, bust, inflation, deflation - are all integral aspects of the game, and loans and interest rates are just a tool for controlling the timing of this ebb and flow. The end goal of the game is to expand political influence. Any state with access to credit can finance a war at a huge advantage against any state without access to credit. Think about that for a moment .........

[wildcard]

PDF

http://www.hrillc.com/RJ/FedUp/WhyFiatSystemsFail.pdf

[wildcard]

http://www.youtube.com/watch?v=_doYllBk5No

http://www.youtube.com/watch?v=pp7tiySCyb4&feature=related

http://www.youtube.com/watch?v=lG7Jjb0cw9o&feature=related

http://www.youtube.com/watch?v=0-O_yGEI_0U&feature=related

http://www.youtube.com/watch?v=6MwHgpFSQMo&feature=related

http://www.youtube.com/watch?v=vH1M1QaM6SY&feature=related

http://www.youtube.com/watch?v=4GH4OElpZtM&feature=related

http://www.youtube.com/watch?v=iqeTComdm5A&feature=related

[Bigjon]

For some reason, unknown to me there are people who insist on pushing the false story that because the money to pay the interest is not created at the time of the origination of the loan, the loan can never be paid off without additional money borrowed into existance.


This was one Hypertiger's main tenants.

IT IS A LIE.

And most people are suckered in on it.


Today's fractional reserve system is based on the size of each banks demand deposit accounts. The bank needs $0.00 reserves for the first $6,000,000.00 and a reserve of 3% from 6 million to 56 million and 10% for demand deposits (checkbook money) totaling over 56 million. Usually you the customer provides all the cash they need to meet the reserve requirement plus a profit to the bank. On a $100,000.00 loan a down payment of 10% gives them the 3000 reserve they need to create a deposit in your account of 100,000 which is just a ledger entry in their account book.

You are now on the bankers treadmill, using your labor to return all the money created out of thin air plus interest. It is a slave system.

Now backto my main point with this simple illustration of how your labor returns all the interest money to the system.

Assume an island with only two people, one with nothing and one with all the wealth. The wealthy man has various tools, all the land and assets including 100 gold coins which are the only coins on the island.

Suppose the man with nothing makes a deal with the wealthy man in the hopes of bettering himself. He takes a loan from the wealthy man for 100 gold coins with a promise to pay back 110 gold coins in 5 years. Now it might seem to some that the poor man was fooled because the island only has 100 gold coins and to pay back the loan it would seem there needs to exist 110. However there is actually no problem because work itself has value.

Here is how the impossible loan payback happens:

The man uses his 100 coins loan productively to buy land, tools, etc. from the rich man. He works and produces food and other things of value which he sells to the rich man for 23 gold coins a each year. Each year he pays 22 coins toward the loan and keeps 1 himself. The number of coins always remained the same yet in 5 years the man paid off his 110 coin debt and owns land, tools, and 5 gold coins. The rich man has 95 coins plus the items of value the man produced with his work. The poor man's work added value into the closed island system that makes up for the loan interest plus more.

People forget that the coins are only representations and storage of work/value--in the end work is what produces the real value.

The little story is also a good example of how not all debt is bad. Productive debt can be good.

If you haven't noticed by now this is a pet peeve of mine, mainly from reading all the bullsh*t crap that hypertiger wrote.












c

[Ash_Williams]

so I was thinking about it because I just dont understand how this all works, and this is what I came up with.

customer comes in to bank to get a loan in the amout of n
bank doesnt have money to lend
bank borrows n from fed at x percent
bank lends n to customer at x+y interest
customer pays back n at x+y percent
bank keeps y percent
fed keeps x percent


so, the customer has to pull x+y out of his ass, basically.

Here's how it works:

-Customer comes in to bank to get a loan in the amount of $n
-Bank agrees
-Customer signs document saying that they will pay $n + $y over the next few years. This is the key. The customer has promised to deliver this money - that promise is what gives the bank the power to say they have $n and to allow that $n to be spent.
-There essentially are no reserve requirements so this doesn't really matter.
-The seller's bank accepts the $n from the buyer's bank.
-Buyer pays back $n over the years plus the $y. The $y represents profit for the bank *after* defaults and expenses. The $n no longer exists after the loan is repaid.

[Bigjon]

In the real world the fed's reserve requirements can be found here:

Link to Information (http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=f5a6916f3fca3389f7a7e6ff668c07dd&rgn=div8&view=text&node=12:2.0.1.1.5.0.2.4&idno=12)



EDIT: Changed long link to named link to prevent page scrolling. -Gaillo

[Book]

In the real world the fed's reserve requirements can be found here:


In the real world the FED is never audited...lol.

:D

[Bigjon]

In the real world the fed's reserve requirements can be found here:


In the real world the FED is never audited...lol.

:D


Touche!

so true, but they pretend to have rules. I'll bet the goyim have to follow the rules.

[jedemdasseine]

For some reason, unknown to me there are people who insist on pushing the false story that because the money to pay the interest is not created at the time of the origination of the loan, the loan can never be paid off without additional money borrowed into existance.


This was one Hypertiger's main tenants.

IT IS A LIE.

And most people are suckered in on it.


Today's fractional reserve system is based on the size of each banks demand deposit accounts. The bank needs $0.00 reserves for the first $6,000,000.00 and a reserve of 3% from 6 million to 56 million and 10% for demand deposits (checkbook money) totaling over 56 million. Usually you the customer provides all the cash they need to meet the reserve requirement plus a profit to the bank. On a $100,000.00 loan a down payment of 10% gives them the 3000 reserve they need to create a deposit in your account of 100,000 which is just a ledger entry in their account book.

You are now on the bankers treadmill, using your labor to return all the money created out of thin air plus interest. It is a slave system.

Now backto my main point with this simple illustration of how your labor returns all the interest money to the system.

Assume an island with only two people, one with nothing and one with all the wealth. The wealthy man has various tools, all the land and assets including 100 gold coins which are the only coins on the island.

Suppose the man with nothing makes a deal with the wealthy man in the hopes of bettering himself. He takes a loan from the wealthy man for 100 gold coins with a promise to pay back 110 gold coins in 5 years. Now it might seem to some that the poor man was fooled because the island only has 100 gold coins and to pay back the loan it would seem there needs to exist 110. However there is actually no problem because work itself has value.

Here is how the impossible loan payback happens:

The man uses his 100 coins loan productively to buy land, tools, etc. from the rich man. He works and produces food and other things of value which he sells to the rich man for 23 gold coins a each year. Each year he pays 22 coins toward the loan and keeps 1 himself. The number of coins always remained the same yet in 5 years the man paid off his 110 coin debt and owns land, tools, and 5 gold coins. The rich man has 95 coins plus the items of value the man produced with his work. The poor man's work added value into the closed island system that makes up for the loan interest plus more.

People forget that the coins are only representations and storage of work/value--in the end work is what produces the real value.

The little story is also a good example of how not all debt is bad. Productive debt can be good.

If you haven't noticed by now this is a pet peeve of mine, mainly from reading all the bullsh*t crap that hypertiger wrote.












c



Bad example. Who disputes that the loan cannot be repaid? Simple interest with real money? No problem. It's merely moving money around, not borrowing it into existence, not using compound interest with off balance sheet accounting, not using IOUs as money, etc.

One cannot use gold as an example, because gold is real money, or that which extinguishes debt, whereas FRN's and other fiat money are selfsame instruments of debt. For, every FRN that is used to repay a debt must be borrowed into existence elsewhere. Gold is different. Gold has no counterparty.

The current absolute capitalistic hierarchial food powered make work enterprise will be replaced by the next absolute capitalistic hierarchial food powered make work enterprise....
:D

[Quantum]

Modern banking is witchcraft, sorcery. In the days of the Bible, these demons would have been cut down.

It's called "Mystery Babylon" for a reason - most people don't understand it, and it's direct from Babylon.

http://www.jrbooksonline.com/PDF_Books/the_babylonian_woe.pdf

[jedemdasseine]

Modern banking is witchcraft, sorcery. In the days of the Bible, these demons would have been cut down.

It's called "Mystery Babylon" for a reason - most people don't understand it, and it's direct from Babylon.

http://www.jrbooksonline.com/PDF_Books/the_babylonian_woe.pdf

Looks interesting. Saved to hard drive and can't wait to read it!

[Bigjon]

Bad example. Who disputes that the loan cannot be repaid? Simple interest with real money? No problem. It's merely moving money around, not borrowing it into existence, not using compound interest with off balance sheet accounting, not using IOUs as money, etc.

One cannot use gold as an example, because gold is real money, or that which extinguishes debt, whereas FRN's and other fiat money are selfsame instruments of debt. For, every FRN that is used to repay a debt must be borrowed into existence elsewhere. Gold is different. Gold has no counterparty.

The current absolute capitalistic hierarchial food powered make work enterprise will be replaced by the next absolute capitalistic hierarchial food powered make work enterprise....



Just because you don’t understand it doesn’t make it a bad example.

The video that Wildcard posted makes the claim that the interest can’t be paid without bringing in more money by borrowing more into the system.

When you borrow fiat it works the same way as gold. The amount to be paid back exceeds the amount created. With your labor you get paid and then with a portion of your pay every month you make your payment to the banker, he takes his cut (the interest portion) and spends it back into the economy. The other portion goes back to money heaven (thin air) and that portion of the debt is paid.

The money spent for interest stays in the system until the debt is paid.

It is real simple.

[jedemdasseine]

Bad example. Who disputes that the loan cannot be repaid? Simple interest with real money? No problem. It's merely moving money around, not borrowing it into existence, not using compound interest with off balance sheet accounting, not using IOUs as money, etc.

One cannot use gold as an example, because gold is real money, or that which extinguishes debt, whereas FRN's and other fiat money are selfsame instruments of debt. For, every FRN that is used to repay a debt must be borrowed into existence elsewhere. Gold is different. Gold has no counterparty.

The current absolute capitalistic hierarchial food powered make work enterprise will be replaced by the next absolute capitalistic hierarchial food powered make work enterprise....



Just because you don’t understand it doesn’t make it a bad example.

The video that Wildcard posted makes the claim that the interest can’t be paid without bringing in more money by borrowing more into the system.

When you borrow fiat it works the same way as gold. The amount to be paid back exceeds the amount created. With your labor you get paid and then with a portion of your pay every month you make your payment to the banker, he takes his cut (the interest portion) and spends it back into the economy. The other portion goes back to money heaven (thin air) and that portion of the debt is paid.

The money spent for interest stays in the system until the debt is paid.

It is real simple.


I remember Skyvike posting your exact example on GIM1, and the refutations were accurate and grand, but he seemed unpersuaded and still pissed off at Hypertiger. Remember that?

Anyway....

Without context, your example if fine.

But you're attempting to contextualize your example in terms of our current monetary system.

Your definition of money is flawed. It doesn't matter if the debt exceeds the amount created if the money in your example is gold, but if it's FRNs, things change. Debt cannot be extinguished with more debt. Using gold as an example is not applicable to our present monetary system, because gold is that which extinguishes debt, whereas FRNs are inherently instruments of debt. Apples and oranges.

You seem unconvinced, so no use debating this further.

[Mouse]

Two guys are on an island, one is a jew.

Who ends up with all the money?


So the ONE guy makes the other guy think he has all the resources and sets up a bank, writes a little sign and sticks it in the ground next to his chaise lounge.

The other goy, comes in, and, needing a safe place to keep his money, gives the banker ten papayas to keep safe for him, while he is away on the other side of the island. The banker gives him a bill of lading, indicating 10 papayas payable to bearer, upon demand.

The goy goes to the other side of the island and discovers that natives live there, and that they have a thriving economy, but they don't have any papayas. Goy gets big idea to start papaya farm and do business with the natives.

He needs to buy land to farm the papayas and the natives have very nice, fertile land. The natives will sell him five acres of farmland for 100 papayas. He doesn't have a hundred, only a piece of paper indicating the ten.

He goes to the banker and asks "How can I buy the land when I only have the ten papayas?" The banker stirs his margarita, takes a sip and says "I will lend you the papayas at a rate of interest of only 10%" The goy thinks it over, calculates the profit and agrees to the loan.

The banker writes him a bill of lading indicating 100 papayas, payable to bearer upon demand, and off he goes to trade for land with the natives. The natives accept his note in payment and give him the land. They go to the banker and demand two papayas. They are satisfied with the deal and let the banker store the other 98 papayas in safe keeping.

The Goy farms the land, very hard work, and grows 50 papayas per year. He eats some of them, trades some of them with the natives, and pays his loan with the rest. Each year he pays 11 papayas to the banker as principle (10) and interest (1). Let's ignore compounding interest, since this jew is not as smart as the rest.

The natives only occasionally draw down their balance of papayas, and since the Goy trades them papayas for services and goods, they actually have deposited more papayas with the banker, so they have a surplus of receipts for papayas. They trust that all these papayas are there, and many of them also take loans from the banker for other productive uses.

At the end of ten years, the Goy will have paid the banker 110 papayas for his loan of 100 papayas, based on his good credit and initial deposit of 10 papayas. The banker will now have not only the original ten papayas that were deposited free and clear, but also the tribute payments of any of the natives that did business with him.

He takes another sip of his margarita.

It's good to be the jew.

[Ash_Williams]

But you're attempting to contextualize your example in terms of our current monetary system.

Your definition of money is flawed. It doesn't matter if the debt exceeds the amount created if the money in your example is gold, but if it's FRNs, things change. Debt cannot be extinguished with more debt. Using gold as an example is not applicable to our present monetary system, because gold is that which extinguishes debt, whereas FRNs are inherently instruments of debt. Apples and oranges.

You seem unconvinced, so no use debating this further.

Back on GIM1...

http://webcache.googleusercontent.com/search?q=cache:hi7jyssyIpcJ:www.goldismoney.info/forums/showthread.php%3Fp%3D2172025+site:goldismoney.info


I lend you $100 (all the cash in existence in our tiny world) with the agreement you make 12 payments of $10 over the next year. I don't know why you even want $100 because we're in some crazy hypotethical world where there's no other lenders or borrowers or defaulters, but you do.

I'm a good banker but a crappy fisherman, and since no one else exists, you're the only guy who catches fish for me.

The first month you pay me $10 of that $100 cash, and I pay you $1 of it back for some fish that I can eat. I have $9 and you have $91. The total cash in existence is $100.

The second month you pay me $10 and I again give you $1 for the fish. You have $82 and I have $18 The total cash in existence is $100.

The eleventh month comes and we do the same thing. You end up with $10 and I have $90.

The last month comes along. You don't bother to sell me a fish this time, you just give me the $10 you have. You now have $0 and I have $100. The loan is repaid.

The total cash in that example is always unchanged from $100 and yet you made 12 payments of $10. $100 was enough to satisfy a loan of $100 with 20% interest. The $20 in interest didn't need to exist.





At the end of ten years, the Goy will have paid the banker 110 papayas for his loan of 100 papayas, based on his good credit and initial deposit of 10 papayas. The banker will now have not only the original ten papayas that were deposited free and clear, but also the tribute payments of any of the natives that did business with him.

So the banker gambled and he won. What was stopping the lender from doing the same thing instead of being a borrower? Risk aversion? Maybe the natives had no confidence in him?

[Mouse]

The banker was smarter and took advantage of the laboring class. Same as it ever was.

[Hatha Sunahara]

Pulling x + y out of the customer's a$$ is the crux of the fractional reserve banking system. It actually comes out of the customer's productivity. That is, the customer gets to keep less of the fruits of his labor in order that some usurer should get rich.

The top feeds off the bottom. Why do so many of us expect life to be FAIR?

Hatha

[Bigjon]

Pulling x + y out of the customer's a$$ is the crux of the fractional reserve banking system. It actually comes out of the customer's productivity. That is, the customer gets to keep less of the fruits of his labor in order that some usurer should get rich.

The top feeds off the bottom. Why do so many of us expect life to be FAIR?

Hatha


While the above is true, it misses the point of our current Fractional Reserve (counterfeiting) System. If I as an individual loaned you money, I would expect to be paid for the use of that money, just like you would expect to pay me for the rent of my car, or house, or boat, etc.

The banker has special rules, which allow him to be above everyone else, because he gets to create money out of thin air and charge interest on that bogus money. That to me is usury. What is the rate of interest when the banker has no money of his own in the transaction. I think it doesn’t compute, it is off the scale somewhere near infinity.

[Hatha Sunahara]

Thank you BigJohn for pointing out how the usury is compounded in the fractional reserve banking system. The bankers pull it out of thin air, and you ave to pull it out of your a$$.

The bankers don't work. You work. Now doesn't that look, sound, and feel like a transfer of wealth in exchange for nothing? What service do banks provide? Extracting money from thin air? How much is that magic worth compared to a day of productive work? Why would anyone agree to pay interest on money that comes out of thin air? Perhaps everybody needs money and are willing to pay a big chunk of the fruits of their labors to get it. Who gave the bankers the monopoly to do that?

Hatha

[Ash_Williams]

Pulling x + y out of the customer's a$$ is the crux of the fractional reserve banking system. It actually comes out of the customer's productivity. That is, the customer gets to keep less of the fruits of his labor in order that some usurer should get rich.

The customer made his choice. Having his house NOW is worth more to him than the $y of interest he will pay. Otherwise he would be the one getting interest on his money and keeping more fruits of his labor, not the bank.

You can also take your welfare check and a pawn shop owner will be happy to give you 66% of it in cash a couple days before it can actually be cashed. Can you blame him? A demand exists for getting ripped off, so of course it ends up being satisfied.

[Bigjon]

The customer made his choice. Having his house NOW is worth more to him than the $y of interest he will pay. Otherwise he would be the one getting interest on his money and keeping more fruits of his labor, not the bank.

If American’s knew how much the banksters were ripping them off for, they wouldn’t make that choice. Not only is the bankster getting an exorbitant amount of interest he is also expanding the money supply and driving down the value of everyone’s money. Our choice to borrow from bankster’s undermines our freedom and is based on our ignorance about fractional reserve banking.

When I was young a lot of people went to private individuals to borrow money and cut the bank out of the transaction. There were a lot of people who hated the banks and what they had done in the 30’s.

[Phenix Pawn]

Do you like money?

http://www.youtube.com/watch?v=sZHCVyllnck&feature=related

"I like money." quotes Mr. Fish

[Phenix Pawn]

The banker was smarter and took advantage of the laboring class. Same as it ever was.




It's actually worse...

http://www.youtube.com/watch?v=la-z49AlcEA&feature=player_embedded

"and I asked to become a slave?"

[Phenix Pawn]

Pulling x + y out of the customer's a$$ is the crux of the fractional reserve banking system. It actually comes out of the customer's productivity. That is, the customer gets to keep less of the fruits of his labor in order that some usurer should get rich.

The customer made his choice. Having his house NOW is worth more to him than the $y of interest he will pay. Otherwise he would be the one getting interest on his money and keeping more fruits of his labor, not the bank.

You can also take your welfare check and a pawn shop owner will be happy to give you 66% of it in cash a couple days before it can actually be cashed. Can you blame him? A demand exists for getting ripped off, so of course it ends up being satisfied.


"Watch it! That's my bread and butter you are F'in with!"

[Buddha]

Thank you BigJohn for pointing out how the usury is compounded in the fractional reserve banking system. The bankers pull it out of thin air, and you ave to pull it out of your a$$.

The bankers don't work. You work. Now doesn't that look, sound, and feel like a transfer of wealth in exchange for nothing? What service do banks provide? Extracting money from thin air? How much is that magic worth compared to a day of productive work? Why would anyone agree to pay interest on money that comes out of thin air? Perhaps everybody needs money and are willing to pay a big chunk of the fruits of their labors to get it. Who gave the bankers the monopoly to do that?

Hatha




Congress, and to an extent "we the people". It has been taken away before and can be taken away again. They seem very deeply rooted however, but they have only fiat power.

[Ash_Williams]

If American’s knew how much the banksters were ripping them off for, they wouldn’t make that choice. Not only is the bankster getting an exorbitant amount of interest he is also expanding the money supply and driving down the value of everyone’s money. Our choice to borrow from bankster’s undermines our freedom and is based on our ignorance about fractional reserve banking.

The effect of inflation is hard to put into certain numbers, but as for the interest, when you take a mortgage don't they have to show you how much it is costing you? I've never taken one and never will, but I'd assume it's on the contract. I've built systems for car loans and leases and for those there was always line where the true cost of the loan over and above a cash deal had to be shown on a contract. It would say in clear terms "Your cost of borrowing is this:" with $3000 or whatever right next to it. The cost of borrowing is often higher than the cost of a used car but it never stops people from choosing to be debt slaves.

Anyway even if it's not on the contract you'd think people would be smart enough to do something like (downpayment + monthlypayment * months) - (price of house) = (amount extra this is costing me). Not exactly rocket science, pretty much anyone should be able to do that. I just can't feel bad for people that choose to be debt slaves.

[Hatha Sunahara]

Thank you BigJohn for pointing out how the usury is compounded in the fractional reserve banking system. The bankers pull it out of thin air, and you ave to pull it out of your a$$.

The bankers don't work. You work. Now doesn't that look, sound, and feel like a transfer of wealth in exchange for nothing? What service do banks provide? Extracting money from thin air? How much is that magic worth compared to a day of productive work? Why would anyone agree to pay interest on money that comes out of thin air? Perhaps everybody needs money and are willing to pay a big chunk of the fruits of their labors to get it. Who gave the bankers the monopoly to do that?

Hatha




Congress, and to an extent "we the people". It has been taken away before and can be taken away again. They seem very deeply rooted however, but they have only fiat power.


"only fiat power"? That's a lot of power. They have the power to issue 'lawful money' and a monopoly at that.

Maybe once you understand how it is a scam they are pulling off, you will start understanding how they have us all trapped. This is what Mayer Amschel Bauer Rotschild meant when he said 'Give me to power to issue the money, and I care not who writes the laws.' If you control the source of money, you control everything--even the government. The only way I can see out of this trap is for everybody to stop using their money. And that is difficult to imagine let alone see.

Hatha

[Ash_Williams]

People can't stop using their money because it is used to pay taxes and that's where force comes into play.

The less taxes there are, the more free people are to pick different types of currencies.
If the government can take $50k from you each year, even if they return it, it still means you need to have 50k, which means you're going to do your business in dollars to make sure you have it. Strictly bartering for everything won't work well when you have a tax bill that can only be paid in dollars.

[Bigjon]

If American’s knew how much the banksters were ripping them off for, they wouldn’t make that choice. Not only is the bankster getting an exorbitant amount of interest he is also expanding the money supply and driving down the value of everyone’s money. Our choice to borrow from bankster’s undermines our freedom and is based on our ignorance about fractional reserve banking.

The effect of inflation is hard to put into certain numbers, but as for the interest, when you take a mortgage don't they have to show you how much it is costing you? I've never taken one and never will, but I'd assume it's on the contract. I've built systems for car loans and leases and for those there was always line where the true cost of the loan over and above a cash deal had to be shown on a contract. It would say in clear terms "Your cost of borrowing is this:" with $3000 or whatever right next to it. The cost of borrowing is often higher than the cost of a used car but it never stops people from choosing to be debt slaves.

Anyway even if it's not on the contract you'd think people would be smart enough to do something like (downpayment + monthlypayment * months) - (price of house) = (amount extra this is costing me). Not exactly rocket science, pretty much anyone should be able to do that. I just can't feel bad for people that choose to be debt slaves.


Sure they quote the cost based on the total amount of the loan. They don’t tell you that they created this money out of thin air and they use this thin air money as if it came out of their pocket. Based of the way they figure it sounds like a reasonable deal.

It is not reasonable, it is a slave system.

[Ash_Williams]

Sure they quote the cost based on the total amount of the loan. They don’t tell you that they created this money out of thin air and they use this thin air money as if it came out of their pocket. Based of the way they figure it sounds like a reasonable deal.

But the customer has done the same thing! They've promised to pay 300k or whatever that they do not have and can't guarantee they will have. They signed a document to say "I will give to you 300k over the next 10 years." All the bank did is take that promise and made it more appetizing to the seller by ensuring they get their funds even if the buyer doesn't make his payments. Whether it is thin air or not, the bank is putting their ass on the line to guarantee the buyer his money, it is not risk free or super-profitable (although almost is when house prices are rising) and the bank failures of the last year should demonstrate that.

[Hatha Sunahara]

Sure they quote the cost based on the total amount of the loan. They don’t tell you that they created this money out of thin air and they use this thin air money as if it came out of their pocket. Based of the way they figure it sounds like a reasonable deal.

But the customer has done the same thing! They've promised to pay 300k or whatever that they do not have and can't guarantee they will have. They signed a document to say "I will give to you 300k over the next 10 years." All the bank did is take that promise and made it more appetizing to the seller by ensuring they get their funds even if the buyer doesn't make his payments. Whether it is thin air or not, the bank is putting their ass on the line to guarantee the buyer his money, it is not risk free or super-profitable (although almost is when house prices are rising) and the bank failures of the last year should demonstrate that.


The customer has put up collateral which he will forfeit if he doesn't make the payments.
Heads they win, tails you lose!

You can get a better handle on the banker's game by learning what Mayer Amschel Bauer Rothschild discovered. There is a good summary of it in Silent Weapons for Quiet Wars. http://www.conspiracyarchive.com/NWO/silent_weapons_quiet_wars.htm About 1/3 way down the page it talks about Mr. Rothschild's Energy Discovery. All the reasons why you think a bank loan is reasonable when it is not.

Hatha

[Ash_Williams]

The customer has put up collateral which he will forfeit if he doesn't make the payments.
Heads they win, tails you lose!

Sure, but lots of mortgages are underwater right now, which means the bank certainly can't win if payments stop. The bank only wins if they can sell the house for enough to cover the payments that they will not receive. This often doesn't happen.

I'm sure you wouldn't give a car loan to someone if you felt there was any risk they wouldn't pay, even if the car was collateral. If the guy stops paying you are now stuck selling a car.

[Bigjon]

Sure they quote the cost based on the total amount of the loan. They don’t tell you that they created this money out of thin air and they use this thin air money as if it came out of their pocket. Based of the way they figure it sounds like a reasonable deal.

But the customer has done the same thing! They've promised to pay 300k or whatever that they do not have and can't guarantee they will have. They signed a document to say "I will give to you 300k over the next 10 years." All the bank did is take that promise and made it more appetizing to the seller by ensuring they get their funds even if the buyer doesn't make his payments. Whether it is thin air or not, the bank is putting their ass on the line to guarantee the buyer his money, it is not risk free or super-profitable (although almost is when house prices are rising) and the bank failures of the last year should demonstrate that.



HUH!

You don’t seem to be on the same page as me.

You don’t understand how the bank expands our money supply.

I haven’t borrowed any money in a long time, but as I recall if I borrow $100,000.00, the bank first wants some earnest money down usually 10 to 20 %, then they want you to sign a lien on whatever you are buying. Using today’s reserve requirements most banks around here have demand deposit accounts totaling around 20 million so they need a 3% reserve of cash kept on account or on deposit at their Fed branch.

You now have a ledger entry that says you have $100,000.00, on which you can write the check to buy the item that has a bank lien on it. If you paid them a 10% earnest money down payment the bank now has $10,000.00 dollars that was your money and is now their money they take $3,000.00 and put it in reserve and have $7,000.00 profit left to manage the cash flow of the payments you will be making. That is all the cash they need to manage this account.

The amount over and above the $3,000.00 comes from thin air/blue sky. The bank puts up $97,000.00 worth of blue sky and charges interest on it.

The best scenario for the bank is if the item you bought is from the guy down the street who also has an account at the same bank. Then the bank can just shuffle the number from your account to his account. It gets a little more complicated if the other bank is across town, but the Fed stands ready to provide liquidity to it’s member banks from its discount window. It is just a cash flow problem.

[Ash_Williams]

I understand the expansion.

The power for them to create 100k comes from a human going in there and signing a piece of paper saying that they will come up with 100k from somewhere and give it to them. The bank can't do any blue sky acts until a human has done them. The bank is saying they have 100k because this person has agreed to give it to them. The human is the blue sky.

The reserve is a separate issue altogether. Although it limits how much they can lend, it's not the thing that gives them the power to do so. It's a human's promise to pay 100k that allows them to put a 100k asset in their ledger.

Don't forget the seller of the house now has 100k (or however much, I ddin't bother with factoring interest in) that they can spend on gold or withdrawn in cash or whatever.

If the buyer defaults immediately and the house burns down without insurance, the seller still has 100k. The bank has to make up that difference. It's not risk free.

[Bigjon]

@ash

I agree with your assesment it is not risk free, but the odds of the scenario you present are pretty far out and the bank does have that $10,000.

Most people don't draw out all their cash and most houses don't burn down and most buyers don't default.

If the game plays out the way the banker planned it he is collecting interest on blue sky money.

[Bigjon]

It gets worse ....



so I was thinking about it because I just dont understand how this all works, and this is what I came up with.

customer comes in to bank to get a loan in the amout of n
bank doesnt have money to lend
bank borrows n/10 from fed at x percent
bank lends n to customer at x+y interest
customer pays back n at x+y percent
bank keeps y percent
fed keeps x percent


so, the customer has to pull x+y out of his ass, basically.

yeah, even a monkey can see where thats going to end up.


Thats about right.

Note that the bank only needs to have a fraction of the amount on hand in order to create a loan. Hence the term fractional reserve banking.

Banks create money out of thin air. The principal of the loan is extinguished as the loan is paid off, and all that is left on the books is the interest that remains in circulation. This interest amount eventually ends up in the bank's pocket, and so over time the banks own a larger and larger slice of an ever growing pie.

With every new loan made to enact a purchase ... more interest is created out of thin air, the banks get a little richer and the people get a little poorer.

So every time another person signs a loan document, or takes out their credit card to pay for their groceries .... the real value of the dollar in your pocket shrinks just a little bit more through no fault of your own. This is why I keep an ounce of silver or 2 in my pocket ..... other people can go ahead and borrow as much as they like, but my ounce of silver remains an ounce of silver regardless.

Credit can be easily expanded or contracted at will, giving the banks the power to control the money supply with ease. Pricing becomes completely artificial.

By providing easy credit, prices for items rise. This has been going on for long enough now that prices for items such as houses and cars require the average Joe to take out a loan in order to make a purchase ... simply because there is not enough currency in circulation otherwise. As spending and demand increases during periods of easy credit, businesses need to extend their overdrafts in order to expand both their stock and payroll costs to meet growing customer demand.

By contracting the money supply (making loans harder to qualify for), prices dive as there are fewer and fewer dollars chasing the same goods. This creates recessions / depressions, and provides buying opportunities for those with access to the cash. In other words - the banks can now swoop in and buy up the farms, businesses and houses for pennies on the pound.

Boom, bust, inflation, deflation - are all integral aspects of the game, and loans and interest rates are just a tool for controlling the timing of this ebb and flow. The end goal of the game is to expand political influence. Any state with access to credit can finance a war at a huge advantage against any state without access to credit. Think about that for a moment .........


I agree with most of your comments, except about the interest remaining in the system.

If there is only one loan in the system you have taken the task of returning all of the money that was created back to where it came, which is money heaven/thin air. You have to work for the fellow you paid the loan money to and every month you have to make your payment to the bankster. The bankster takes his cut first, which is the interest for that month and spends it by buying something from the rich man who is your employer. The remainder of your payment pays down your debt and returns to money heaven. Month after month this cycle is repeated and as each month goes by there is less total money in the system. If you paid nothing down and got this loan based on your good looks, at the end there will be no money left, it will all be returned to money heaven and along the way the bankster will have gotten to spend about 1.5 times as much as you got to spend.


The bankster does have all the things your labor bought while you were the slave to the bankster and the rich man, so in a sense the bank retains the capital that your labor bought, but the cash amount of the loan plus the interest is all returned to money heaven.

[Hatha Sunahara]

The banker doesn't have to do any 'labor' for his money. He doesn't have to work for it. You do. There are two kinds of people in this world. People who have to work for a living, and usurers. (Actually there's a third--politicians--who live off the bankers). The act of living from interest payments made by others is usury--especially if the money you loaned them came out of thin air and they agree to pay you interest on the 'loan'.

Hatha

[Ash_Williams]

They do the same work as anyone else doing bookkeeping or accounting for a living, dealing with similar risks as being in insurance or running a casino. It is what it is. No one's forcing anyone to go to the casino or take a loan or buy insur... wait... they are doing the insurance one... but right now the other ones are still voluntary. I don't understand the outrage. "The banks are taking money from those poor people that are begging them to take their money."

The people aren't the innocent victims, they're the ones that will take everything from you without a second though to prop up the system that they depend on.

[Bigjon]

They do the same work as anyone else doing bookkeeping or accounting for a living, dealing with similar risks as being in insurance or running a casino. It is what it is. No one's forcing anyone to go to the casino or take a loan or buy insur... wait... they are doing the insurance one... but right now the other ones are still voluntary. I don't understand the outrage. "The banks are taking money from those poor people that are begging them to take their money."

The people aren't the innocent victims, they're the ones that will take everything from you without a second though to prop up the system that they depend on.



That may be true for some, but not all.

The banks in concert with their pals in government have created situations that require businesses to borrow in order to stay in the game. I was raised on a farm and the price to be in agriculture today requires most farmers to borrow to pay for the equipment that they need to be competitive.

Another factor is the schools teach that borrowing is good. Make sure you establish a good credit rating is one byword and the best way is to get a credit card. Then buy the biggest house you can afford.

Yes we are innocent victims, we didn’t want a central bank, that can load debt on our backs without any recourse on our part. We just watched while Paulson and company stuck a gun in congresses ear and demanded trillions to be put on the public debt for a failure of the banking system.