FORUMS > The Sin Bin > Money For Nothing |
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973_1515165968.gif Last edited by Ferocious Aardvark on stardate Jun 26, 3013 11:27 am, edited 48,562,867,458,300,023 times in total:d7dc4b20b2c2dd7b76ac6eac29d5604e_973.gif |
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| Why anyone would think this is news is beyond me. Any form of money IS money for the reason, and only the reason, that you can exchange it for goods and services.
What is smoke and mirrors? The example given is basically that I go to the bank for a £1000 loan, they secure it on an asset of mine and then credit my account with the money. The point being, they did not "have" £1000 to lend me.
Well, of course they did, if it is relevant. I could go to the bank tomorrow and withdraw the £1000 in cash. But that seems to me to make no difference. The bank has given me the tokens with which I can buy £1000 of goods or services. It has not created anything. It has lent me real money I can spend on whatever I want, and if I default, it will sell my asset and get its money back that way.
Tell me this- if the bank HAS "created" money out of nothing, then where does this go? Let's say I repay the loan in full, with £100 interest. Seems to me that the bank is back to square one as far as the £1000 is concerned, but it is £100 better off in respect of the cash i paid by way of interest.
If as alleged the bank had "created money" out of nothing, then where has it gone?
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International Board Member | 1437 | No Team Selected |
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Feb 2002 | 22 years | |
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995.gif "If the American people knew tonight, exactly how the monetary and banking system worked, there would be a revolution before tomorrow morning."
-Abraham Lincoln:995.gif |
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| Quote: Charlie Sheen "Do the bank get chicks for free though?'"
Yes.
They get to buy their services with their big, tax payer funded, bonus payouts. So they do indeed get the chicks for free because you are paying for them instead.
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Rank | Posts | Team |
International Board Member | 1437 | No Team Selected |
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995.gif "If the American people knew tonight, exactly how the monetary and banking system worked, there would be a revolution before tomorrow morning."
-Abraham Lincoln:995.gif |
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| Quote: Cookridge_Rhino "I agree with your explanation of fractional reserve banking but the OP doesnt, he (because he has misunderstood things he has read and heard) thinks that they need no money at all in their reserves in order to lend money, he thinks they literally lend as much money as they want because it all compeletely comes from nowhere.'"
Forget the fractional reserve system, thats from yesteryear.
Banks now just create money from nothing, then go into the interbank lending markets and loan the money needed to cover their reserve ratios. That's how Northern Rock was sunk, nobody would lend them the money.
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International Chairman | 14845 | No Team Selected |
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143_1357419061.jpg :d7dc4b20b2c2dd7b76ac6eac29d5604e_143.jpg |
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| Quote: LeighGionaire "Forget the fractional reserve system, thats from yesteryear.
Banks now just create money from nothing, then go into the interbank lending markets and loan the money needed to cover their reserve ratios. That's how Northern Rock was sunk, nobody would lend them the money.'"
They were borrowing money on the markets. That's just the same as me borrowing a fiver from you.
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Rank | Posts | Team |
International Board Member | 1437 | No Team Selected |
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Feb 2002 | 22 years | |
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Apr 2017 | Mar 2017 | LINK |
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995.gif "If the American people knew tonight, exactly how the monetary and banking system worked, there would be a revolution before tomorrow morning."
-Abraham Lincoln:995.gif |
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| Quote: tb "Haven't we done the 'let's return to the 14th Century and pretend the Lombards never existed" to death now? Can we move on from "money for nothing" and discuss the more intriguing topic of chicks for free?'"
In my opinion understanding how money is created and destroyed is the number one political question.
Why do we let private banks control the money supply? Why do governments continue to borrow debt based money from private banks when they could create the money themselves?
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Rank | Posts | Team |
International Board Member | 1437 | No Team Selected |
Joined | Service | Reputation |
Feb 2002 | 22 years | |
Online | Last Post | Last Page |
Apr 2017 | Mar 2017 | LINK |
Milestone Posts |
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Milestone Years |
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Location |
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Signature |
995.gif "If the American people knew tonight, exactly how the monetary and banking system worked, there would be a revolution before tomorrow morning."
-Abraham Lincoln:995.gif |
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