Banking

I just wanna keep all of my money with me. And don't lose any of it.

Fractional reserve banking is fraud, bankers were hanged for it back in the day; and for good reason. It is legal today, but it is still fraud.

All the people who voted fractional reserve should go watch "Money as Debt".

[QUOTE="sonicare"][QUOTE="surrealnumber5"] but our current system caused the banks to need a bailout, the thread has evolved so saying you agree with our current system you agree with 10% reserves surrealnumber5

Fractional reserve banking is fraud, bankers were hanged for it back in the day; and for good reason. It is legal today, but it is still fraud.

All the people who voted fractional reserve should go watch "Money as Debt".

AnnoyedDragon

[QUOTE="rawsavon"]

[QUOTE="surrealnumber5"] the easy answer is with capitol investment, though not many would have large breaths of monitary capitol if there were no safe heaven for it

KungfuKitten

I could see it working for large scale projects though.
-better ROI
-better proposal for funds
-easier to recoup money

EDIT: correct/clarify poor wording on my part

What exactly is fraudulent about it?

cybrcatter

Lending other people's money and charging interest on it? Hmm, I wonder...

What you have to remember about banks is they started out as a place people stored their money for safety, money back then being gold and silver. People paid to store their money in a bank because it was a service, renting usage of their vault and security. The banks would then give people a IOU in the form of a bank note, which could be redeemed in gold and silver.

However bankers got greedy. Since people used the more convenient to carry IOU bank notes; rather than the gold itself, people rarely redeemed their IOUs for their precious metals. So they started loaning other people's money and charging interest on it, so long as everyone didn't try to redeem their IOUs at the same time (a bank run) then no one would be the wiser.

It was criminal and fraudulent, they were paid to take care of people's money; and they lent it out for personal profit. Of course, inevitably, too many people redeemed their IOU bank notes; and people realized they were being scammed by the bankers.

Today such a thing sounds perfectly legitimate, even though when it started out; they killed the crooks.

Today such a thing sounds perfectly legitimate, even though when it started out; they killed the crooks.

AnnoyedDragon

I definitely don't support fractional reserve banking. It only allows the bastards at the top to come out like bandits. Full reserve banking would be fine with me. I personally have not used a bank account for about 6 or 7 years and I have got along just fine without one. Screw the banks, you don't really need them, though they have tricked the mass majority into believing they do.

This is a cool video that came out recently about fractional reserve banking, it's a good watch if you have about 30 minutes.

http://www.youtube.com/watch?v=hCH0_4kdwG0&feature=youtube_gdata

[QUOTE="cybrcatter"]

What exactly is fraudulent about it?

AnnoyedDragon

Lending other people's money and charging interest on it? Hmm, I wonder...

What you have to remember about banks is they started out as a place people stored their money for safety, money back then being gold and silver. People paid to store their money in a bank because it was a service, renting usage of their vault and security. The banks would then give people a IOU in the form of a bank note, which could be redeemed in gold and silver.

However bankers got greedy. Since people used the more convenient to carry IOU bank notes; rather than the gold itself, people rarely redeemed their IOUs for their precious metals. So they started loaning other people's money and charging interest on it, so long as everyone didn't try to redeem their IOUs at the same time (a bank run) then no one would be the wiser.

It was criminal and fraudulent, they were paid to take care of people's money; and they lent it out for personal profit. Of course, inevitably, too many people redeemed their IOU bank notes; and people realized they were being scammed by the bankers.

Today such a thing sounds perfectly legitimate, even though when it started out; they killed the crooks.

AnnoyedDragon

jer_1

So are you advocating that we stick with the social norms of the past?rawsavon

Am I advocating killing them? No. But that doesn't change that modern banking was born from fraud, that it is a evolution of ripping people off.

It's sad that it has gone on for so long; that people don't see the problem with it. Even though they are spending your money; and then paying you back with someone elses, hoping that not too many people withdraw their money to notice.

[QUOTE="rawsavon"] So are you advocating that we stick with the social norms of the past?AnnoyedDragon

Am I advocating killing them? No. But that doesn't change that modern banking was born from fraud, that it is a evolution of ripping people off.

It's sad that it has gone on for so long; that people don't see the problem with it. Even though they are spending your money; and then paying you back with someone elses, hoping that not too many people withdraw their money to notice.

How do you guys plan on fueling economic growth? -things like housing, new small businesses, car loans, etc Surely you do not think capital investment will cover 'small' things like that...things that drive the economyrawsavon

No one is saying that they don't reinvest deposits. Banks have to disclose, at least to a certain degree, what their funds are being used for.

cybrcatter

Know what the sad thing is? I lied. At least, I played along with modern assumptions.

Because the truth about fractional reserve banking is so ludicrous, so disgusting, so criminal in the eyes of the average person; that they would likely instantly discard what is said upon hearing it. Because it's just that bad.

Again, I recommend that people watch the "Money as Debt" documentry, which explains just what modern fractional reserve banking is.

i don't like the idea of the banks loaning out money it doesn't have and then collecting interest on it.

I'd just keep it in my own vault like i currently am

Know what the sad thing is? I lied. At least, I played along with modern assumptions.

Because the truth about fractional reserve banking is so ludicrous, so disgusting, so criminal in the eyes of the average person; that they would likely instantly discard what is said upon hearing it. Because it's just that bad.

Again, I recommend that people watch the "Money as Debt" documentry, which explains just what modern fractional reserve banking is.

[QUOTE="rawsavon"] So are you advocating that we stick with the social norms of the past?AnnoyedDragon

Am I advocating killing them? No. But that doesn't change that modern banking was born from fraud, that it is a evolution of ripping people off.

It's sad that it has gone on for so long; that people don't see the problem with it. Even though they are spending your money; and then paying you back with someone elses, hoping that not too many people withdraw their money to notice.

[QUOTE="rawsavon"]How do you guys plan on fueling economic growth? -things like housing, new small businesses, car loans, etc Surely you do not think capital investment will cover 'small' things like that...things that drive the economyAnnoyedDragon

No one is saying that they don't reinvest deposits. Banks have to disclose, at least to a certain degree, what their funds are being used for.

cybrcatter

Know what the sad thing is? I lied. At least, I played along with modern assumptions.

Because the truth about fractional reserve banking is so ludicrous, so disgusting, so criminal in the eyes of the average person; that they would likely instantly discard what is said upon hearing it. Because it's just that bad.

Again, I recommend that people watch the "Money as Debt" documentry, which explains just what modern fractional reserve banking is.

You did not answer anything that was posed to you :? 1. How will you fuel growth 2. How is it fraud You just diverted the questions with your statementsrawsavon

1. If you look up American history, you will find savings fueled growth. You couldn't have capital investment without savings, which allowed new businesses to be created and hence growth. This was the traditional American system. But that has changed over time, so now it is debt that fuels growth; and savers are treated as leaches on growth.

2. Searched for the specified documentary on YouTube.

And of course I cannot avoid saying, so I will.

Fractional reserve banking does not lend from deposits, it creates money from deposits. When they talk about a 40:1 ratio, and you deposit $100 into the bank, they can create $4000 worth of money to be loaned out from that despot.

Fractional reserve banking creates money out of thin air and lends it with interest. When a new loan is created the money comes from nowhere, they just type a higher figure into your bank account. It's fraud, but it is the rules and regulations created over the centuries; that turn fraud into a legitimized system.

AnnoyedDragon

[QUOTE="rawsavon"]You did not answer anything that was posed to you :? 1. How will you fuel growth 2. How is it fraud You just diverted the questions with your statementsAnnoyedDragon

1. If you look up American history, you will find savings fueled growth. You couldn't have capital investment without savings, which allowed new businesses to be created and hence growth. This was the traditional American system. But that has changed over time, so now it is debt that fuels growth; and savers are treated as leaches on growth.

2. Searched for the specified documentary on YouTube.

And of course I cannot avoid saying, so I will.

Fractional reserve banking does not lend from deposits, it creates money from deposits. When they talk about a 40:1 ratio, and you deposit $100 into the bank, they can create $4000 worth of money to be loaned out from that despot.

Fractional reserve banking creates money out of thin air and lends it with interest. When a new loan is created the money comes from nowhere, they just type a higher figure into your bank account. It's fraud, but it is the rules and regulations created over the centuries; that turn fraud into a legitimized system.

So how would you propose the average American purchase a home?

-would you have them save for all their lives while paying rent and then maybe be able to afford one upon retirement

Would you want people to be able to purchase every car upfront? rawsavon

That's the Chinese way: you don't have the money, you don't buy it.

Having said that, I don't think theUS is willing and able to adapt tosuch a system/mentality at this point. We have enjoyed a debt-fueled economy for far too long to be able to put a stop to it in any meaningful way

[QUOTE="AnnoyedDragon"]

[QUOTE="rawsavon"]You did not answer anything that was posed to you :? 1. How will you fuel growth 2. How is it fraud You just diverted the questions with your statementscybrcatter

1. If you look up American history, you will find savings fueled growth. You couldn't have capital investment without savings, which allowed new businesses to be created and hence growth. This was the traditional American system. But that has changed over time, so now it is debt that fuels growth; and savers are treated as leaches on growth.

2. Searched for the specified documentary on YouTube.

And of course I cannot avoid saying, so I will.

Fractional reserve banking does not lend from deposits, it creates money from deposits. When they talk about a 40:1 ratio, and you deposit $100 into the bank, they can create $4000 worth of money to be loaned out from that despot.

Fractional reserve banking creates money out of thin air and lends it with interest. When a new loan is created the money comes from nowhere, they just type a higher figure into your bank account. It's fraud, but it is the rules and regulations created over the centuries; that turn fraud into a legitimized system.

[QUOTE="rawsavon"] So how would you propose the average American purchase a home?

-would you have them save for all their lives while paying rent and then maybe be able to afford one upon retirement

Would you want people to be able to purchase every car upfront?

That's the Chinese way: you don't have the money, you don't buy it.

Having said that, I don't think theUS is willing and able to adapt tosuch a system/mentality at this point. We have enjoyed a debt-fueled economy for far too long to be able to put a stop to it in any meaningful way

[QUOTE="rawsavon"] So how would you propose the average American purchase a home?

-would you have them save for all their lives while paying rent and then maybe be able to afford one upon retirement

Would you want people to be able to purchase every car upfront? ariz3260

That's the Chinese way: you don't have the money, you don't buy it.

Having said that, I don't think theUS is willing and able to adapt tosuch a system/mentality at this point. We have enjoyed a debt-fueled economy for far too long to be able to put a stop to it in any meaningful way

So how would you propose the average American purchase a home? -would you have them save for all their lives while paying rent and then maybe be able to afford one upon retirement Would you want people to be able to purchase every car upfront? OR Would you expect businesses to set up their own loans (you buy a house basically on a loan from the manufacturer) -thus opening up the public and businesses to huge unregulated risks rawsavon

Once upon a time, people could afford to purchase a home by saving up over years. This seems ridiculous by today's standards, as house prices have ballooned out of control; and are unaffordable on most people's income.

What happened is people became impatient. Instead of saving up money, they loaned it at interest; so that they could live in the house now. However, this created higher demand. As we know, demand outstripping supply leads to higher prices. But in a world where people can simply take out loans to acquire houses, demand was maintained; regardless of how much house prices rose. You just had to take out bigger and bigger mortgages to pay for it.

As a result, we get the ridiculous house prices today. Their value insanely inflated by the consistent demand enabled by loans, no matter now expensive they became. Needless to say, it became impossible to get a house without a mortgage, making the debt self justified.

However, as we all know, this created a housing bubble; which has now burst. Ironically by the banking system, which allowed its greed to cause the sub-prime mortgage crisis.

You have still not answred either question asked of you:
1. How will you fuel growth NOW (not in the past)
2. How is anything done 'fraud'rawsavon

I have already answered these questions above.

Of course, there is a major flaw in fueling growth with debt. Which is debt borrows from future growth; plus interest. You have to pay back everything you loaned with extra.

Again, it's not fraud. Money creation is a fundamental part or banking. It means giving loans to folks so they can do something with it: buy a car, start a business, etc.. No one is deceiving anyone here.

The banks aren't creating money and giving it directly to the shareholders.

cybrcatter

I get the impression you haven't fully grasped the absurdity of this system, because it sounds like you are arguing in defense of it.

[QUOTE="cybrcatter"]

[QUOTE="AnnoyedDragon"]

1. If you look up American history, you will find savings fueled growth. You couldn't have capital investment without savings, which allowed new businesses to be created and hence growth. This was the traditional American system. But that has changed over time, so now it is debt that fuels growth; and savers are treated as leaches on growth.

2. Searched for the specified documentary on YouTube.

And of course I cannot avoid saying, so I will.

Fractional reserve banking does not lend from deposits, it creates money from deposits. When they talk about a 40:1 ratio, and you deposit $100 into the bank, they can create $4000 worth of money to be loaned out from that despot.

Fractional reserve banking creates money out of thin air and lends it with interest. When a new loan is created the money comes from nowhere, they just type a higher figure into your bank account. It's fraud, but it is the rules and regulations created over the centuries; that turn fraud into a legitimized system.

fillini

[QUOTE="fillini"]

[QUOTE="cybrcatter"] Again, it's not fraud. Money creation is a fundamental part or banking. It means giving loans to folks so they can do something with it: buy a car, start a business, etc.. No one is deceiving anyone here.

The banks aren't creating money and giving it directly to the shareholders.

Edit
Also, for anyone wondering, that $4000 doesn't happen in one step. It happens as the limit of re borrowing approaches infinity. If it's a reserve requirement of 10%, then out of $100 they can only give out $90. If that $90 is reinvested, only $81 can be lent out, and so on.

cybrcatter

[QUOTE="cybrcatter"]Again, it's not fraud. Money creation is a fundamental part or banking. It means giving loans to folks so they can do something with it: buy a car, start a business, etc.. No one is deceiving anyone here.

The banks aren't creating money and giving it directly to the shareholders.

AnnoyedDragon

I get the impression you haven't fully grasped the absurdity of this system, because it sounds like you are arguing in defense of it.

[QUOTE="rawsavon"]You have still not answered either question asked of you:
1. How will you fuel growth NOW (not in the past)
2. How is anything done 'fraud'AnnoyedDragon

I have already answered these questions above.

No...you have not. You gave a history of what has happened.
YOU HAVE NOT SAID 1. HOW YOU PLAN TO FUEL GROWTH NOW OR 2. HOW THE CURRENT SYSTEM CONSTITUTES FRAUD

I know how we got to where we are. That is why I did not ask you that question.
I asked how you plan to fuel growth from here on out and asked that you validate your assertion that it (the current system) is fraud.
You keep saying that you have addressed these issues, but you have not...you have only diverted my requests in the form of a history of the system

I agree that the savings rate in the U.S. has been far too low for quite some time. Unfortunately this side of the picture is cultural. Unless laws are passed that makes saving compulsory (which would never happen) I don't see the pattern changing significantly any time soon. cybrcatter

Yeah, and it is quite sad indeed. People view graduating from college without any debt as an achievement, something that is easily achieved elsewhere in the world. But that's an entirely different discussion altogether

[QUOTE="cybrcatter"]

[QUOTE="fillini"]Can you define what type of reinvest you are talking about here?

fillini

No...you have not. You gave a history of what has happened.
YOU HAVE NOT SAID 1. HOW YOU PLAN TO FUEL GROWTH NOW OR 2. HOW THE CURRENT SYSTEM CONSTITUTES FRAUD

I know how we got to where we are. That is why I did not ask you that question.
I asked how you plan to fuel growth from here on out and asked that you validate your assertion that it (the current system) is fraud.
You keep saying that you have addressed these issues, but you have not...you have only diverted my requests in the form of a history of the system

rawsavon

How can I explain how the existing system is fraud when you have ignored what I have said; and the references I have made in regard to this system? Have you watched the Money as Debt video? No, you haven't. Cybrcatter's flawed explanation of the fractional reserve system also further confirms that people have not been listening.

I can only turn to the past when referring to how to fuel a economy, because the current economy is running on a system that cannot be fixed. It's going to crash, there is no way of fixing it; because it was never meant to be sustainable. The only way to even begin to build a system not reliant on constant debt injections; is for the current system to die first. A legitimate system cannot be built on the current one.

Honestly... you lot of depressing me. I have outright said that the banks are loaning people money they don't have, money they created out of thin air, and you are aggressively defending that system. How are you not furious? I cannot help but get the impression people have not grasped the absurdity of what they are defending, of what exactly I have said.

Let's try another one that should be sending off alarm bells.

Total debt exceeds the total money supply, as the currency supply was created from debt; and the interest added on top of that debt does not exist. Therefore, it is impossible to pay off total debt, as every dollar created is owed to a banker; plus interest.

[QUOTE="fillini"]

[QUOTE="cybrcatter"]By that I mean the $90 is eventually deposited back into the same bank., thus allowing them loan out $81 from that. In reality, this doesn't occur so perfectly. The cycle could just as easily end if the loaned money is used to buy something, and the recipient of that money simply puts it under his bed, etc..

[QUOTE="cybrcatter"]

[QUOTE="fillini"] Actually our system now allows the loan to be placed on the banks books, creating a "phantom" asset, the bank can then in turn lend more. (thank you Capital Markets 411), i can find the technical term for it if you like.

fillini

AnnoyedDragon

[QUOTE="fillini"][QUOTE="cybrcatter"] Ahh yes, and LTCM will be our poster child for that.

cybrcatter

any accountants out there?fillini

[QUOTE="fillini"]any accountants out there?rawsavon

[QUOTE="cybrcatter"]

[QUOTE="fillini"] Just read the story on LTCM. Made me think of "Wall Street: Money Never Sleeps". any I'm not talking about straight debt leverage. and undo risk taking. its more along the Fed and Banks relationship works. Its kind of an accounting trick, thats allowed. any accountants out there?fillini

[QUOTE="rawsavon"][QUOTE="fillini"]any accountants out there?fillini

Finally you at least answered half the question. Though you in no way showed how the current system is a fraud (per the definition i posted). You at least said how you will fuel growth. You should have said from the beginning that you wanted to crash the system and start over...if you had done that, we could have avoided all of this. Young people say these things all the time. It is part of youth. Once you get a little older, you will realize that you just want to be able to retire...not crash a system over ideals and be left with nothing. Idealism gets replaced by selfish desiresrawsavon

I didn't say I wanted to crash the system, I said the system IS going to crash. If you had watched that documentary I have repeatedly referred to; you would know why. Our money is created from debt, it is debt. The only thing stopping this entire system from crashing is the delay between the creation of new loans and their repayment.

In other words the entire world economy is running on a giant ponzi scheme, and as we know; all ponzi schemes eventually come to an end. Ask anyone on the street and they would call it criminal, but you are going by the textbook definition of fraud; so you don't see it as criminal. If it's the officially recognised system, it is not criminal, regardless of its origin and what it does.

Americans of all people should consider this system illegitimate, as it is specifically stated in their constitution that money is not to be created in this way. Money is to be issued by the elected representatives of the country, not private banks.

All this system does is create perpetual debt that can never be repaid. And world economies rely on perpetual growth in order to service this debt, despite the resources of this world being finite.

Fractional reserve banking. The specific minimum reserves I will leave to those more knowledgeable on the subject than I to determine. Don't know **** about banking numbers.

AnnoyedDragon

becuase i just started an account at my bank they allow me to take out the full amount.

I prefer our current system.

[QUOTE="surrealnumber5"][QUOTE="sonicare"] There were a lot of factors that caused some banks to need a bailout. Most of them centered around the housing industry and toxic loans. I suspect just smarter regulation and better accountability of those issuing loans would solve that.cybrcatter

People who vote fractional reserve banking don't know what fractional reserve banking is. Most likely, they are voting for it solely because they don't want to pay fees to store money in the bank; and don't care about the details...

They are essentially saying "I like that my money is worth less so that the banks can profit".

As I have said before. Fractional reserve banking CREATES money from deposits, it does not loan from deposits; like many people in this thread seem to believe. The resulting increase in money supply, independent from a increase in products and services, creates inflation. This inflation is what gives the newly created money value, it takes value away from the existing money supply by diluting it.

So every time they create new money, your money is worth slightly less.

And they do this repeatedly over centuries/decades, until you end up with your currency looking like this.

And let's have a look at the current dollar supply shall we?

And we are back to where we started. How do you plan on promoting growth for ME...right now. I could care less what happens to the rest of the world (outside of its effects on me). By doing what you say, I am going to be f***ed...bye bye retirement...bye bye everything. I don't give two s****s if it crashes the second after I die. I just want to make my money...have my money make money...and retire to a beach by age 55. In these threads I think of you guys as politicians. Your platform has not changed my voterawsavon

Asking me how to replace the current system; is not a end all counter argument to the absurdity of the existing system. It isn't even a counter argument, it's just distracting from the negatives being pointed out; by arguing "oh yeah, well offer a better alternative or be quiet".

Honestly, you sound exactly like the people who caused the sub-prime mortgage crisis. You don't care about the consequence; so long as you get your money and it "hopefully" doesn't affect you.

Mortgage Broker: I don't care if these people are a high credit risk. All I have to do is refer them to a mortgage lender, take the commission, and it becomes their problem.

Mortgage Lender: I don't care if these people are a high credit risk. I'll just sell the mortgage to a investment banker, and it becomes their problem.

Investment Banker: I don't care if these people are a high credit risk. I'll just turn the mortgages into a CDO, sell it to investors, and it becomes their problem.

Of course we all know how that turned out. The high credit risks defaulted in mass. The market was flooded with supply, which drove down house prices. This caused even more defaults as people with negative equity walked away from their homes, driving down house prices even more. This leads to losses on the investment bankers balance sheets, as the value of the asset (house) is lower than what he paid for it, and he loaned millions; sometimes billions to buy all of these houses as leverage.

The credit system freezes as toxic mortgages clog the system, and we get the current crisis.

People who think like you create the crisis's that hurt everyone else. The sad thing is it does affect you, it affects you on a daily basis. You just don't care enough to learn how it does.