When you die, you are worthless. Try again.
Quick look into how the banking system works
- Thread starter hanimmal
- Start date
Your being charged interest on something that does not exist. they just put numbers in an account and make you pay interest. While depositors over time will ALWAYS lose money because of inflation. Remember that thing about CONSIDERATION?
When we talk about CPI, remember that the government does not use the same formulas that we used before Clinton. In fact almost all the numbers have been reformulated to make things look much better than they really are.
For instance if we compute unemployment the exact same way they did in 1933, then we currently have 22% unemployment not 10%. 4% more and we will exceed the great depression numbers. According to the Govt Numbers, price inflation for 2008 was 2%, but if we calculate it the way they used to we come up with 8.4%. I keep my food receipts from the grocery store and I can confirm that my expenditures for food have increased by 7-8% YoY. Gasoline has also increased in price. Food and Gasoline are pretty much essential, you aren't going to make it long without them and you have almost no choice to forgo their purchase. Some people can get by without gasoline, but the vast majority of us cannot. No one can get by without food.
401K is basically a scam IMO. The big banks control the markets with their huge leverages and can bring the whole market to its knees in a short period, amazing how we get the 401 put into effect at around the same time that the Baby Boomers are all starting careers, then just before the majority can retire, they pull the rug out and take massive profits while the boomers have lost 50% of their wealth. Then they goose the market and entice the maximum amount of people back into equities and just when most people figure they made some of their loss back and are starting to grow their accounts, BOOM they pull the rug out from under you again. As of right now, the last 10 years of investing have yielded zero income. the future looks very bleak. At some point Gold will decouple from the market and will go for a moon shot. Insiders over the last year have sold 25 times more often than the Buyers ( Majority of peeps with 401K). Remember that the 401K is inherently designed for the long haul, you cannot short the market with a 401k, only go long. therefore you are at the mercy of the market when it tanks and cannot make profit. If your a trader you can short the market and make alot of money when things go bad and stocks drop in price.
When I said they can do it many times, I meant they can do it with every loan they give. Banks do give out more than 1 loan, many have hundreds of thousands among many different people and businesses. So lets say you have 200,000 home loans for an average of $200K each and they are all at 5% interest. Over 30 years the banks will garner a profit of 37.2 billion in profit, of course they will actually profit substantially more than that , but you see how it works. If I could make 38 billion off of nothing and make it 100% risk free by having Freddie, Fannie back it all, I will never lose money, because the public will always backstop me. ALSO if I insured some of these mortgages through AIG, I can and will get paid double for everyone of them. Especially if I am Goldman Sachs. See how easy it is for Banks to make 130 billion dollars just to hand out as bonuses? And do it in 6 months to boot. And its all thanks to the citizen, we are all too dumb to realize whats going on and has been going on for many decades.
hanimmal
Well-Known Member
Ok, first, can we at least agree this is more of a qualitative issue for you and not so much a quantitative? Because the problem is I can agree that Gold is a fine money, but can prove quantitatively that it has the same properties as any other commodity.
Second, I will 100% disagree with you, because the best investment is what is going to get you the most return on your money.
If you think that investing in anything else will garner more returns on a more consistent and proven basis than a college education, you will have to have some mighty good charts to back that up.
When I die, all the wealth that I have built up in my life is not destroyed, it is moved to the people that get it. And if during my life which is going to build me more wealth education or some commodity, education wins hands down every time.
It may seem nitpicky, but this is seriously a big part of the disagreement. They are not just moving nothing into the account, the money gets moved in the Fed (or even in principle if they leave the money inside their account). When the guy that got the loan cashes that check the bank loses that money, so it is not imaginary.
And I agree that in a regular economy inflation will be higher than the deposit is, but it is better than the zero you would get if you kept it in cash.
About laws that protect people who buy things (under contracts)?
I actually used to think this way too, until I questioned my professor on it, disagreeing with the numbers we use today.
The numbers we use to calculate CPI, inflation, ect, is a basic formula that associates the two numbers together, finding a common thread price and quantity. Once they get those numbers for inflation, we can multiply everything by the base year and actually have an accurate measurement to compare them.
Because as you know inflation is a reality with anything (even gold as more is found there is inflation).
Same goes for unemployment, remember the way we used to look at things like unemployment was completely different than they are now.
Fun read about the unemployment rates in 1930's: http://edgeofthewest.wordpress.com/2008/10/10/very-short-reading-list-unemployment-in-the-1930s/
This maybe we wait until later to deal with.
So then, we can say that we have gained 3 years worth of growth in just 4 months.
This is exactly why I dumped all the money I could get my hands on into bank stock in march.
You do know that the problem started with the shadowbanking industry right? They found the loopholes and just drove a bus through them.
But I again disagree and say that banks cannot lend more money (for more than a week or so maybe they can avoid it) than the original deposit. That money goes out into the other checking accounts. So it is all based on the original deposit. And that a mortgage will not count as a deposit, so they cannot lend based on that.
You dont read much? Read my question again and pay particular attention to how it is worded. Then reanswer the question under those terms please. If you were a student and I the Professor you would have gotten an F for failing to follow instructions.
You still haven't quite grasped the concept, your almost there, but haven't made that last little leap.
Look up the word "Consideration" in the dictionary so you understand what it means, because as of now you don't.
This made no sense to me whatsoever, you asked your professor and he said what ? He told you that it was all done the same and the numbers correspond exactly?
Here try this site http://www.shadowstats.com/ Educate yourself, then show your prof. that you know more than he does. You'll get an "A".
and about to lose it all again, thats if inflation doesn't make it all worthless.
The shadowbanking industry is the fed reserve and all commercial banks and central banks in existence.
and again you just don't understand the facts presented, how you cannot understand this line is beyond me.
Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts.
What part of that are you not comprehending? or do you just ignore it? Do you ignore it because it clearly proves my whole argument?
This wasn't made up by some gold site, it was made by the very people who run the entire banking system.
Now look up the definition of a promissory note and then come back and tell me a mortgage isn't one and I'll get 10 million links to prove it is.
School is going to be out of session soon, hopefully you have learned a great deal and have begun to awaken.
In your defense of the unemployment numbers you forgot to find out just exactly what "Emergency Work" is. Emergency work was nothing more than state payment for labor that did not produce wealth. IE the gov't employs 100 people, 50 of them dig a hole and 50 fill those holes back in. NO WEALTH CREATION, May as well just have called it unemployment and had the sate just hand out checks because no actual work that helped anything was being done for the most part. You not helping anything doing a job no one needs done just for a handout.
Now painting murals is all fine and dandy, and im sure the painters were happy to get a paycheck, but a mural did not help 1 thing get better all it did was allow someone to suck up more taxpayer dollars for wealth destruction. Now maybe it helped the paint sales industry get by a little better, but the money was squandered and the citizens got nothing in return.
Now painting murals is all fine and dandy, and im sure the painters were happy to get a paycheck, but a mural did not help 1 thing get better all it did was allow someone to suck up more taxpayer dollars for wealth destruction. Now maybe it helped the paint sales industry get by a little better, but the money was squandered and the citizens got nothing in return.
hanimmal
Well-Known Member
Sorry I have been crazy busy the last couple days, and still have the next two days that are going to be busy.
But I thought I would jump on before I get started.
1. Asked a couple professors about mortgages and if they are able to have a second loan built ontop of them, and they are not able to.
They did a little mathematic jui-jitsu with the 105% loans by giving them essentially a personal line of credit for that portion(the 5% over the value of the home), which was allowed after some regulation was dropped, but it was still tied to a deposit.
So the parts of your theory fall apart there. The RR is taken out of the deposit, and the bank loans the 90% and it shrinks from there. So at no point (other than dealing with float) can there be more cash out of the system than the original deposit amount.
You really need to (just for about 10 minutes) forget all you think you know, and try to figure it out like you are the bank, and the Fed is there telling you that you need to keep at least 10%.
Then actually imagine the guy on the fork lift physically moving money into different compartments in the Fed's vault (I know they don't but visualization helps) that represent the different banks. And how each time a check is deposited they move the money from the bank issuer to the bank depositor.
Because without understanding this, you should be scared shitless, because what you believe is scary, it is also not true at all.
Yup some wiki for you because it is centralized and easy to find:
What the calculations (like (CPIt-CPIt-1)\CPITt-1) do is just offer a accurate way to figure out the relative prices. So if we are investigating say the price of a gallon of milk today, and comparing it to the gallon of milk in 1980, you have a way to relate them. And vise versa we can figure out old prices in terms of how much it would cost today.
Because making $15,000 in 1950 would not have the same spending limitations of making $15k today, the buying power is different, and there needs to be a way to accurately measure it to compare and analyze.
Those people that are filling a hole, they are not building wealth, but they are working and earning a wage. If they were instead on unemployment, they would have had more opportunity to find a different job, or learn a skill to help them find one. But instead of that, they wasted their time in order to not give something for nothing.
But to all the people that depend on their paycheck where the money comes from doesn't matter, to them they are employed.
I don't understand how you can imagine that someone getting a wage from painting a mural and getting paid is not good for the economy.
Think deeper about it, when they get that check they pay rent, which means the landlord gets to now use that money to buy his stuff that moves around the economy touching everyone while it does and helping to stimulate the economy in its small amount.
When they buy groceries, that is helping the grocer pay his employees and farmers that bring the food to him, on and on.
Just thinking that the money ends with the painter is not logical, it is all the industries that the money then moves into that gets the benefit from the government hiring him/her to paint the mural. And that is why in a economic downturn the government is the one that needs to pick up the slack that the businesses and people leave behind while they are saving up for the next big economic push.
Anyway I am off to get some shit done.
Really think about the ramifications that your idea of mortgages being able to have loans built off of them has, because it immediately ends all this money expansion that you believe is happening.
But I thought I would jump on before I get started.
1. Asked a couple professors about mortgages and if they are able to have a second loan built ontop of them, and they are not able to.
They did a little mathematic jui-jitsu with the 105% loans by giving them essentially a personal line of credit for that portion(the 5% over the value of the home), which was allowed after some regulation was dropped, but it was still tied to a deposit.
So the parts of your theory fall apart there. The RR is taken out of the deposit, and the bank loans the 90% and it shrinks from there. So at no point (other than dealing with float) can there be more cash out of the system than the original deposit amount.
If you were my professor and I was your student, I would most likely be at an online school that is not accredited, so it wouldn't matter if you gave me an F or not, because it would be worthless to get an A.
All this is wrong, because you are wrong about mortgages having the ability to get new loans attached to them, they cannot. Only deposits can. The reason why I did not comprehend it is not that I did not know what you were saying, it is because it is wrong. And with a mistake that large, it fogs up all other points to your theory of how banks are some evil machine keeping us on a treadmill.
You really need to (just for about 10 minutes) forget all you think you know, and try to figure it out like you are the bank, and the Fed is there telling you that you need to keep at least 10%.
Then actually imagine the guy on the fork lift physically moving money into different compartments in the Fed's vault (I know they don't but visualization helps) that represent the different banks. And how each time a check is deposited they move the money from the bank issuer to the bank depositor.
Because without understanding this, you should be scared shitless, because what you believe is scary, it is also not true at all.
Nope.
Yup some wiki for you because it is centralized and easy to find:
Neat website, I will look it over, not worried about the online "A", but find this interesting none the less.
What the calculations (like (CPIt-CPIt-1)\CPITt-1) do is just offer a accurate way to figure out the relative prices. So if we are investigating say the price of a gallon of milk today, and comparing it to the gallon of milk in 1980, you have a way to relate them. And vise versa we can figure out old prices in terms of how much it would cost today.
Because making $15,000 in 1950 would not have the same spending limitations of making $15k today, the buying power is different, and there needs to be a way to accurately measure it to compare and analyze.
Do you mean this question?
If so I will still go with investing in yourself. But now I am curious, how about you answer this because it really is not in the form of a question, unless you are talking about some other question.
You want to explain why your so hung up on this word?
And you failed to see that it was more that the reason the numbers are different is that the way things were understood at that time and up until about the 70's were pretty arcane. Not very precise. I was using this to show you that the reason the numbers are different is due to innovations of things like a better communication network, and better math that is now able to more accurately measure the impact things are going to have.
Those people that are filling a hole, they are not building wealth, but they are working and earning a wage. If they were instead on unemployment, they would have had more opportunity to find a different job, or learn a skill to help them find one. But instead of that, they wasted their time in order to not give something for nothing.
But to all the people that depend on their paycheck where the money comes from doesn't matter, to them they are employed.
I don't understand how you can imagine that someone getting a wage from painting a mural and getting paid is not good for the economy.
Think deeper about it, when they get that check they pay rent, which means the landlord gets to now use that money to buy his stuff that moves around the economy touching everyone while it does and helping to stimulate the economy in its small amount.
When they buy groceries, that is helping the grocer pay his employees and farmers that bring the food to him, on and on.
Just thinking that the money ends with the painter is not logical, it is all the industries that the money then moves into that gets the benefit from the government hiring him/her to paint the mural. And that is why in a economic downturn the government is the one that needs to pick up the slack that the businesses and people leave behind while they are saving up for the next big economic push.
Anyway I am off to get some shit done.
Really think about the ramifications that your idea of mortgages being able to have loans built off of them has, because it immediately ends all this money expansion that you believe is happening.
Your professors are either stupid, misinformed, ignorant, or lying to you. You should really bring ammo with you when you come to the debate
1) Home Equity Line of Credit .....http://www.mtgprofessor.com/a%20-%20second%20mortgages/what_is_a_heloc.htm
2) second mortgage.....http://en.wikipedia.org/wiki/Second_mortgage
Now it needs to be noted that second mortgages for the most part are non-recourse
3) Promissory note....http://en.wikipedia.org/wiki/Promissory_note
In it simplest terms, a promissory note is a written promise to repay a loan or debt under specific terms - usually at a stated time, through a specified series of payments, or upon demand.
I can run circles around your professors, are you sure your not just attending some online class from China or something? Your wasting your money, your being taught 100% wrong things.
I cannot possibly be wrong, I didn't make that line up, it comes from the Federal Reserve.Maybe you should call them and let them know that they have been doing it wrong for the last 39 years.
When it comes to legal contracts common law insists that you must give at least the consideration of a peppercorn to have a legally binding contract. Figure out what that means and you will have figured out what the word Consideration means in contract law. When you just add credit to a transaction account you are actually doing nothing but typing numbers into the account, IE there is no Peppercorn of value. I can write numbers on a piece of paper, does it make the paper more valuable when I do that? Would you sell a $200K house to me for a piece of paper with $200k written on it ? There is no value for the piece of paper, therefor you cannot have a legally binding contract. Somehow the Banks get away with this, and thats how money is created. If they just loaned out the depositors money there would never be an increase in the money supply. To have a Fiat Currency survive you must constantly inflate it, eventually it inflates to zero value. No fiat currency has ever lasted, they all eventually return to the mean..zero value. Every Fiat currency tried has failed, currently the USA is on its 4th Fiat currency. We have had 2 non fiat currencies in between ( Greenback and Gold standard).
I know you have very limited knowledge in this field, It shows quite clearly as you do not understand a great many of the terms, nor even how loans are made. Heck I bet up until the other day you had no clue that a Mortgage was also a Promissory note. In fact almost all money we use, the credit cards, the checks we write are all just promises, paper promises called Dollars.
Since Clinton the CPI figures are fudged, thats what im talking about. How do I know this? Well when you really think about rising prices, what do you do when food prices go up? You pay them because the only other choice is to starve to death. So if food prices are increasing by 7-8% every year, how long will it take to double? 10 years about.(power of the exponential function) Guess what? the Official Government CPI figures do not include weighted food commodity prices. WTF that is THE MOST IMPORTANT inflation number to know, it DIRECTLY affects your quality of life. Guess what the inflation on food prices was in the last 10 years? about 7-8% and your dollar only buys half the amount of food it did a decade ago, hope your getting pay raises every year. Last years "Official" CPI figure was -2.1% negative two point one percent! Did you see the prices of food go down? Nope they increased. Retail prices on staple American foods rose by double-digit percentages in the last year, according to new data from the federal Bureau of Labor Statistics (BLS). The cost of milk rose 26 percent, and egg prices grew by 40 percent.Thats just 2 of thousands of examples.The Government contradicts itself so much, its so big and unwieldy the left hand doesn't know what the right hand is doing.
Instead of conglomerating all the shit we use in life into one big heap which only serves to give big ticket items like 10 ton dump trucks, big ticket jewelry and such as much weight as oranges and Electricity is ridiculous. You can live without a giant diamond necklace or a dump truck, but food is no choice, neither is energy. So when electrical rates rocket up by 20% the official figure gets knocked down because of all the cars they sold during the CforC program. And then they give you this Negative number and you say" Wow I can afford another credit card YAHOO"! When in actuality your going to spend even more money this year than you did last year supplying your basic no choice gotta have it items.
Or you can just take your professors word for everything and go along with the illusion until you find yourself kicked to the curb.
If you only answer one thing please answer this.
Why do we have less buying power for each dollar today than we did 60 years ago?
hanimmal
Well-Known Member
Not one of those links show that the banks are not holding a reserve requirement, or talk about where the money for the loan came from.
You are wrong man, the deposit is the only place a loan can be made from, somebody has had to put that money into the bank before they can lend it. They are not holding mortgages and making loans based on it like you said.
yeah, "Um, hi Fed. There is this guy on this weed website that insists banks can make mortgages into reserve requirments and make loans off of them, I know this is not the truth, but can you please get them to stop this practice anyway, thanks."
They cannot and do not.
The deposit is there, someone takes out a loan and the bank moves the funds from the depositors account into the new customers account to be drawn upon, where it then goes to bank2 and the funds are moved to that bank. It is really simple stuff.
Banks do move the money, that is why people cannot sue them on this conspiracy theory.
And I guess you still have not taken a step back and looked at it. At no point they cannot have more money in the economy than what was deposited. When that person withdraws from his original account, the bank will tell him he has to wait a couple days for them to get a loan, or just use excess reserves to pay him off.
I love how you are dead wrong, have been all along on this, and will not take a minute to look at it. And then come at me, when you are again wrong.
Your funny man, you have no clue that banks cannot make a loan 10x the amount of the deposits and you keep calling me stupid. You really are way off on your numbers, and it is starting to become a joke if you refuse to look into it on your end.
You are dead wrong on this. You cannot make a loan off a mortgage, and you cannot as a bank have a $100 deposit and turn it into a $1,000 loan. This is not reality.
Your understanding of the relative or real prices is severely limited.
If you would not be so paranoid you would see that it is just a way to see how much change relative to the year you are researching is. It is a way to compare like terms. See in 1980 they may have bought 6 eggs at their price, but in 1995 they may have went with a dozen, so you need to compare the same levels.
And same with the inflation rate, if there is 300m more currency in the system, the prices you buy things for will adjust too, so you account for it when your looking at different things over a very long period of time.
Inflation is just a matter of life man, shit next year will always cost more than today, even under the gold standard, people will dig more out. And different things will change in price due to supply and demand, like gas prices which everything really is dependent on, when gas goes up food goes up, when gas goes down, guess what food goes down.
I again am left unsure why you are so freaked out about the system, but then again as soon as I realize the fundamental errors that you believe and refuse to look into because you may be aware that they are not true (If you could show me a law or government document that shows 1. The fed doesn't move money into the accounts of cashed checks, and 2. That the banks are able to make loans off of a mortgage, I would actually believe it).
If you could actually find these claims that you feel make everything such a ponzi scheme I would believe it, but you have not. You continue to ridicule me, and I have yet to not be accurate on how the system works (I said Fed once when I meant FDIC).
Inflation, of course.
Now for you, find something that shows banks are able to use mortgages as means to make a second loan (fyi 2nd mortgages are based on the amount of extra value (Home value - 1st mortgage = loanable amount) you have in it. And see if those are based on other deposits.
I will stick to professors, real books written by the people that have researched the industry for years and taught the people that run it, and the reality that they do not have printing presses like you seem to believe to be able to produce all this money in the back of banks.
And how do you get inflation?
hanimmal
Well-Known Member
Do you just chose not to read the rest? The whole idea that you have built up about how evil everything is, was set up on a series of falsities.
That banks can loan out 10x the deposit amount they have, that they can build new loans off of mortgages, fundamentally is wrong, they cannot do that.
And all you ask about is inflation? Do you seriously care, or am I going to just waste my time again?
That banks can loan out 10x the deposit amount they have, that they can build new loans off of mortgages, fundamentally is wrong, they cannot do that.
And all you ask about is inflation? Do you seriously care, or am I going to just waste my time again?
Oh yeah? Well I went to the local State University and looked up their most esteemed Economics and finance professors and they all agreed that you have been ill informed and that all of my info is indeed correct.
Some more great quotes by people who know more about banking than all of us combined.
The international bankers have succeeded in doing more than just controlling the money supply. Today they actually create the money supply, while making it appear to be created by the government. This devious scheme was revealed by Sir Josiah Stamp, director of the Bank of England and the second richest man in Britain in the 1920s. Speaking at the University of Texas in 1927, he dropped this bombshell:
The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin . . . . Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again. . . . Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. . . . But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit
Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, wrote in 1934:
We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon.
Graham Towers, Governor of the Bank of Canada from 1935 to 1955, acknowledged:
Banks create money. That is what they are for. . . . The manufacturing process to make money consists of making an entry in a book. That is all. . . . Each and every time a Bank makes a loan . . . new Bank credit is created -- brand new money.
Robert B. Anderson, Secretary of the Treasury under Eisenhower, said in an interview reported in the August 31, 1959 issue of U.S. News and World Report:
The international bankers have succeeded in doing more than just controlling the money supply. Today they actually create the money supply, while making it appear to be created by the government. This devious scheme was revealed by Sir Josiah Stamp, director of the Bank of England and the second richest man in Britain in the 1920s. Speaking at the University of Texas in 1927, he dropped this bombshell:
The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin . . . . Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again. . . . Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. . . . But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit
Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, wrote in 1934:
We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon.
Graham Towers, Governor of the Bank of Canada from 1935 to 1955, acknowledged:
Banks create money. That is what they are for. . . . The manufacturing process to make money consists of making an entry in a book. That is all. . . . Each and every time a Bank makes a loan . . . new Bank credit is created -- brand new money.
Robert B. Anderson, Secretary of the Treasury under Eisenhower, said in an interview reported in the August 31, 1959 issue of U.S. News and World Report:
[W]hen a bank makes a loan, it simply adds to the borrower's deposit account in the bank by the amount of the loan. The money is not taken from anyone else's deposit; it was not previously paid in to the bank by anyone. It's new money, created by the bank for the use of the borrower.