If the money is in control of a private unaccountable corporation who can print as much as they fucking well like and can even charge interest on it (and they are the sole source of this intial money) and then you have dozens of other private corporations who can print out 10 times as much on the back of it when its deposited with them out of thin air and also charge interest on it
Does this happen, does everyone agree this happens, is there any evidence for it happening?
'Fractional-reserve banking is the practice whereby banks retain only a portion of their customers' deposits as readily available reserves (currency or deposits at the central bank) from which to satisfy demands for payment. The remainder of customer-deposited funds is used to fund investments or loans the bank makes to other customers.[1] Most of these loaned funds are later redeposited into banks, allowing further lending. Since bank deposits are usually considered money in their own right, fractional-reserve banking permits the money supply to grow to a multiple of the underlying reserves of base money originally created by the central bank.[2][3] The important fact is that these deposits do not disappear. They are in some deposit accounts at all times. All banks together have $10,000 of deposits and reserves that they did not have before. However, they are not required to keep $10,000 of reserves against the $10,000 of deposits. All they need to retain, under a 10 percent reserve requirement, is $1,000. The remaining $9,000 is "excess reserves." This amount can be loaned or invested.'
'Most central banks and other monetary authorities regulate bank credit creation, imposing reserve requirements and other capital adequacy ratios.'
WHICH THEY OBVIOUSLY DID NOT DO.
This limits the amount of money creation that occurs in the commercial banking system,[3] and helps ensure that banks have enough funds to meet the demand for withdrawals. To mitigate the risks of bank runs (when a large proportion of depositors seek withdrawal of their demand deposits at the same time) or, when problems are extreme and widespread, systemic crises, the governments of most countries regulate and oversee commercial banks, provide deposit insurance and act as lender of last resort to commercial banks.[2][3] Fractional-reserve banking is the current form of banking in all countries worldwide.[4]
The Fractional reserve bit is the second part of the opening post, the first is:
"If the money is in control of a private unaccountable corporation who can print as much as they fucking well like"
your quote from wiki contradicts this:
Most central banks and other monetary authorities regulate bank credit creation, imposing reserve requirements and other capital adequacy ratios.'
This limits the amount of money creation that occurs in the commercial banking system,[3] and helps ensure that banks have enough funds to meet the demand for withdrawals
I don't see any explanation of why Promissory notes are bad in that wiki link?
The Fractional reserve bit is the second part of the opening post, the first is:
"If the money is in control of a private unaccountable corporation who can print as much as they fucking well like"
your quote from wiki contradicts this:
Most central banks and other monetary authorities regulate bank credit creation, imposing reserve requirements and other capital adequacy ratios.'
This limits the amount of money creation that occurs in the commercial banking system,[3] and helps ensure that banks have enough funds to meet the demand for withdrawals
I don't see any explanation of why Promissory notes are bad in that wiki link?
Because they don't have the reserves anymore thats why they failed.
“Fascists are not human. A snake is more human.” - Hugo Chávez
businesses and shit exist from the outside in. like the workers and stuff, they get things done but as you move higher up the food chain, things fall apart.. in the center is brain dead old man talking about butterflies and croutons. elevator doors open and blood falls out etc.
like terry gilliam cartoons. only real.
my limbless friend will die alone
a torso of flesh upon the throne
Violence is not the answer, it is the question. the answer is yes.
it's a known fact Banks create money from nothing Where doe the 9x fractional reserve to lend come from? They create money out of thin air. The promissory note is deposited in an account as an asset and viola they can no lend 9x the value of the note. They cannot lend their on credit and they have no real money Federal reserve notes are debt instruments hence credit.
No its NOT a known fact that "banks create money from nothing" because they don't. Again, you are bastardizing the fractional lending concept. No one "creates" money. The federal reserve takes in money by putting US bonds on the market. The funds from the proceeds of those bonds (whose interest rates are so low that were actually making money off them) are used to loan to banks.
Banks receive that money in the form of low interest loans. They then LEND it at a higher rate. Lets say the bank gets $1.00 from the federal reserve at a rate of 2%. They now owe the fed $1.02. The bank loans $1.00 to you at a rate of 5% via a mortgage. That interest spread is their profit. No money is created from the bank, no one creates any money in fact the $1.00 originally came from whoever bought the bond.
That private banks create money whenever they make a loan is being pushed by a large number of otherwise sincere monetary theorists.
Perhaps they can be forgiven for their error. After all, the measurement of base money circulating around and around, moving from person to person measures a nation’s GDP and is called the money supply. But you can follow the money you spend, watch where it is spent each time, take note that each time it is spent it increases the GDP, but at all times it is the same dollar (base money that had been created by the central bank) circulating.
Private banks can only increase circulation, they can never create money because they can no longer add a credit without accounting for a debit as they did for centuries under the goldsmith theory of banking. Today only the Fed can credit without debiting and they can only do so under the authorization of Congress who give them that authorization in big blocks such as the $2 trillion authorized 2008 to early 2009 to support the shaky banking system.
Though they are many times the formal activator of the process, the Treasury cannot create money either because they can neither debit nor credit anybody’s account. They can only request (by check) such debiting and crediting just as you and I do.
But that is old theory. This crisis has taught us that the Treasury can, under Congressional authority, print treasuries, give them to bankrupt banks, and all without debiting or crediting anyone’s bank deposit. Since it adds to a bank’s net equity balance, that is creation of money.
We leave aside that many books have not been balanced by massive infusions of money. Those unbalanced books eventually show up as a cost to you, me, and every other American. The managers of this financial crisis only have their fingers crossed that the economy will turn around, values will rise, leverage ratios will rebalance, and those banks will repay those soft loans.
Every monetary textbook carefully describe how the Federal Reserve, a central bank, creates base money and the circulation of that base money is known as the money supply. Not taking a serious look and sloppy use of words has created a large following that believes private banks create money when all they do is maintain, or accelerate, the speed money is circulating.
The faster it circulates, the more money an economy has even though base money has not increased. These theorists cannot mention base money when they make the claim that “private banks create money.” To do so, would destroy their theory...
it's a known fact Banks create money from nothing Where doe the 9x fractional reserve to lend come from? They create money out of thin air. The promissory note is deposited in an account as an asset and viola they can no lend 9x the value of the note. They cannot lend their on credit and they have no real money Federal reserve notes are debt instruments hence credit.
No its NOT a known fact that "banks create money from nothing" because they don't. Again, you are bastardizing the fractional lending concept. No one "creates" money. The federal reserve takes in money by putting US bonds on the market. The funds from the proceeds of those bonds (whose interest rates are so low that were actually making money off them) are used to loan to banks.
Banks receive that money in the form of low interest loans. They then LEND it at a higher rate. Lets say the bank gets $1.00 from the federal reserve at a rate of 2%. They now owe the fed $1.02. The bank loans $1.00 to you at a rate of 5% via a mortgage. That interest spread is their profit. No money is created from the bank, no one creates any money in fact the $1.00 originally came from whoever bought the bond.
Andyh how would you debunk the second statement?
By stating the obvious.
That banks loaned far far MORE than their fractional reserve limit. Otherwise they wouldn't need bailing out would they?
Also where does the money come from to pay the banks back the money they loaned?
Money trees in peoples back gardens perhaps? There's only 1 place it can come from and that is via MORE loans.
There is always more debt than there is money in circulation, failure is a mathematical certainty.
Lets quote wikipedia again:
'Reserve requirements
The currently prevailing view of reserve requirements is that they are intended to prevent banks from:
generating too much money by making too many loans against the narrow money deposit base;'
And again
'Reserve requirements
The currently prevailing view of reserve requirements is that they are intended to prevent banks from:
generating too much money by making too many loans against the narrow money deposit base;'
And again
'Reserve requirements
The currently prevailing view of reserve requirements is that they are intended to prevent banks from:
generating too much money by making too many loans against the narrow money deposit base;
“Fascists are not human. A snake is more human.” - Hugo Chávez
That private banks create money whenever they make a loan is being pushed by a large number of otherwise sincere monetary theorists.
Perhaps they can be forgiven for their error. After all, the measurement of base money circulating around and around, moving from person to person measures a nation’s GDP and is called the money supply. But you can follow the money you spend, watch where it is spent each time, take note that each time it is spent it increases the GDP, but at all times it is the same dollar (base money that had been created by the central bank) circulating.
Private banks can only increase circulation, they can never create money because they can no longer add a credit without accounting for a debit as they did for centuries under the goldsmith theory of banking. Today only the Fed can credit without debiting and they can only do so under the authorization of Congress who give them that authorization in big blocks such as the $2 trillion authorized 2008 to early 2009 to support the shaky banking system.
Though they are many times the formal activator of the process, the Treasury cannot create money either because they can neither debit nor credit anybody’s account. They can only request (by check) such debiting and crediting just as you and I do.
But that is old theory. This crisis has taught us that the Treasury can, under Congressional authority, print treasuries, give them to bankrupt banks, and all without debiting or crediting anyone’s bank deposit. Since it adds to a bank’s net equity balance, that is creation of money.
We leave aside that many books have not been balanced by massive infusions of money. Those unbalanced books eventually show up as a cost to you, me, and every other American. The managers of this financial crisis only have their fingers crossed that the economy will turn around, values will rise, leverage ratios will rebalance, and those banks will repay those soft loans.
Every monetary textbook carefully describe how the Federal Reserve, a central bank, creates base money and the circulation of that base money is known as the money supply. Not taking a serious look and sloppy use of words has created a large following that believes private banks create money when all they do is maintain, or accelerate, the speed money is circulating.
The faster it circulates, the more money an economy has even though base money has not increased. These theorists cannot mention base money when they make the claim that “private banks create money.” To do so, would destroy their theory...
The banks clearly DID create money without accounting for it against deposits, or again they wouldn't need bailing out would they?
Is this not captain obvious?
Why the need for rocket science?
How do you make a profit when the money does not exist in circulation to meet that profit?
The only answer is to loan more money
If you loan more money you devalue the currency, prices go up.
If we didn't borrow money then the system would cease to function.
“Fascists are not human. A snake is more human.” - Hugo Chávez
There really isn't any point in discussing it any more. If you don't understand it by now, you never will. Just give up.
That's increased by $500,000,000,000 since the last time I posted it, which was two months ago. No-one even has a bad plan to ever even conceivably reduce that debt. It's not a CT, it's not pot smokers, or any of the other tired cliches. It's from the economically conservative Economist:
There is no conceivable way that there will be an economic recovery. You could raise taxes to 99% and have austerity until you're blue in the face, and it won't make a rat's arse of a difference. It's a mathematical impossibility. Anyone else can believe whatever they want, it's irrelevant. If people don't understand why this is happening by now, they never will.
The true measure of a man is not his intelligence or how high he rises in this freak establishment. The true measure of a man is this: how quickly he can respond to the needs of others and how much of himself he can give - Philip K. Dick.
That's increased by $500,000,000 since the last time I posted it, which was two months ago. No-one even has a bad plan to ever even conceivably reduce that debt.
About a month and a half ago i came across a prominent financial advisor to corporations (and the gillard governement) talking up the economy in Australia, despite a long run of interest rate cuts by the Oz Fed which indicate otherwise.
He was prominent on twitter pushing his case, and well the cynic in me figured he was helping his mates try and convince the masses to take on more debt. Because the thing is, the people here are taking on less and less at the moment. (hence the drop in the cash interest rate, to convince them otherwise)
So i pulled out the economist debt clock and he didnt have much to say after that!
I found this article and what the author had to say interesting, and btw they manage investments in the 'The Economist'
Evelyn and I worry that the resulting pessimism – even cynicism – about our economic system is undermining its very existence. Indeed, according to one recent survey by the Boston Consulting Group, only 21 per cent of Americans and 28 per cent of Britons believe their children will have a better life than them. This could lead to any number of negative consequences.
You could raise taxes to 99% and have austerity until you're blue in the face, and it won't make a rat's arse of a difference. It's a mathematical impossibility.
Exactly.
And novum the bankers worry if people do not borrow money because it means that they cannot then pwn the planet.
What is undermining its existence....is its existence. When people get their heads around this then we will win.
“Fascists are not human. A snake is more human.” - Hugo Chávez
And novum the bankers worry if people do not borrow money
of course they do lol, their desperation in the media was amusing me, people just arent borrowing as much and 'they' will put out anything to convince them otherwise.
they even got blackrock inc to come out and issue a statement about the 'strength' of the Australian economy. Ofc its strong for blackrock, its fucking blackrock lmao, the corporations they have holdings in (all of them) just get bailed out by governments when they fuck up (its not really a fuck up, its calculated, but lets go with fuck up as thats the official line). And yes its strong if you are a shareholder of a resource company like Gina lol, and you dig shit out of the ground and sell it to China, but if not, there is pessimism and cynicism, lynn is 100% correct
Evelyn and I worry that the resulting pessimism – even cynicism – about our economic system is undermining its very existence.
That's increased by $500,000,000 since the last time I posted it, which was two months ago. No-one even has a bad plan to ever even conceivably reduce that debt.
About a month and a half ago i came across a prominent financial advisor to corporations (and the gillard governement) talking up the economy in Australia, despite a long run of interest rate cuts by the Oz Fed which indicate otherwise.
He was prominent on twitter pushing his case, and well the cynic in me figured he was helping his mates try and convince the masses to take on more debt. Because the thing is, the people here are taking on less and less at the moment. (hence the drop in the cash interest rate, to convince them otherwise)
So i pulled out the economist debt clock and he didnt have much to say after that!
I found this article and what the author had to say interesting, and btw they manage investments in the 'The Economist'
Evelyn and I worry that the resulting pessimism – even cynicism – about our economic system is undermining its very existence. Indeed, according to one recent survey by the Boston Consulting Group, only 21 per cent of Americans and 28 per cent of Britons believe their children will have a better life than them. This could lead to any number of negative consequences.
The people that defend what's going on and think it's going to get better by following some sort of economic policy are mentally ill. I don't know how obvious it would have to be before they realised that there are no redundant 'free market' economic theories that are going to make any difference to the current situation. It's got so bad that this is being seriously floated:
The bank's deputy governor Paul Tucker tells MPs a negative interest rate could get borrowing back on track.
Every single 'solution' to the problem is 'let's create more debt', or 'let's get banks lending again', or 'let's restructure the debt in some way'. It's very hard for me to understand why people can't see how futile this is. It should be obvious to people in the street, never mind so-called 'economists'. Everyday people have the excuse of trying to get through life, which is obviously going to get harder and harder. I'm not sure what excuse economists have when they supposedly spend a large amount of their time studying economics.
The true measure of a man is not his intelligence or how high he rises in this freak establishment. The true measure of a man is this: how quickly he can respond to the needs of others and how much of himself he can give - Philip K. Dick.
Fascinating stuff guys still wondering exactly what's so bad about promissory notes?
A couple of youtubes, and a nice picture of how much debt there is doesn't really do it?
Promissory notes are generally associated with todays central banking system.
It is possible to have promissory notes that are backed up with genuine gold/silver cash in value and it is also possible for a government to print its own money at 0% interest without using a central bank and to not have a fractional reserve system at all.
Such a thing does not exist though...any country that tried it will find itself at war. So a promissory note remains what it is today, unbacked privatised vapourware.
“Fascists are not human. A snake is more human.” - Hugo Chávez
Fascinating stuff guys still wondering exactly what's so bad about promissory notes?
A couple of youtubes, and a nice picture of how much debt there is doesn't really do it?
As I say, if you don't understand it by now, you never will. There isn't any point in discussing it any more. If you're getting hit over the head with a hammer, and afterwards need someone to explain to you what a hammer is, there really isn't any point.
The true measure of a man is not his intelligence or how high he rises in this freak establishment. The true measure of a man is this: how quickly he can respond to the needs of others and how much of himself he can give - Philip K. Dick.
The people that defend what's going on and think it's going to get better by following some sort of economic policy are mentally ill. I don't know how obvious it would have to be before they realised that there are no redundant 'free market' economic theories that are going to make any difference to the current situation.
Perhaps in the example i linked to, they are pulling a hyacinth (keeping up appearances) whilst knowing something entirely different is happening and they want it to happen... who knows.
Yes i heard about the -ive rates a few days ago.
This is evelyn again in the papers talking about the BoE a little while back
Earlier this week, the Treasury committee released its report on the accountability of the Bank of England with Andrew Tyrie, the chairman, calling for "radical overhaul" of the Bank's "ramshackle governance." It is undeniable that the Bank must take steps to improve its transparency. Regrettably, however, the report steps out of bounds by threatening to place the Bank under extensive prior scrutiny and control of Parliament.
This is a dangerous and categorical violation of the Bank's independence. More care must be given to rethink how we can hold the Bank accountable without jeopardising its sovereignty.
The complex and cross-cutting nature of today's financial sector will indeed require greater collaboration between Bank officials and members of Parliament. But it must be done in a way that respect's the Bank's inalienable independence while addressing the concerns of the public to hold the Bank accountable. The newly created Financial Stability Oversight Council in the United States, chaired by the Treasury of Secretary and joined by the Governor of the Federal Reserve, shows such a compromise is possible.
Proper financial regulation is a delicate balancing act. The long-term health and stability of our economy requires great care to safeguard both the independence of the Bank and the interests of the public.
Perhaps in the example i linked to, they are pulling a hyacinth (keeping up appearances) whilst knowing something entirely different is happening and they want it to happen... who knows.
I'm sure there is an element of this going on, but some genuinely seem to believe that essentially everything is fine economically, and the last few years have just been a bit of a blip.
The true measure of a man is not his intelligence or how high he rises in this freak establishment. The true measure of a man is this: how quickly he can respond to the needs of others and how much of himself he can give - Philip K. Dick.
Perhaps in the example i linked to, they are pulling a hyacinth (keeping up appearances) whilst knowing something entirely different is happening and they want it to happen... who knows.
I'm sure there is an element of this going on, but some genuinely seem to believe that essentially everything is fine economically, and the last few years have just been a bit of a blip.
Inflation is a tin foil hat conspiracy theory obviously lol..I mean banks don't inflate the money (and therefore debt) supply right...
“Fascists are not human. A snake is more human.” - Hugo Chávez
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