Post subject: Another 'I dont understand the banking system' Thread
Posted: Thu Nov 24, 2011 10:21 pm
LeighGionaire
International Board Member
Joined: Feb 20 2002 Posts: 1437 Location: Leigh, where else?
Just to back up my claim that banks create money from nothing - 13.40 minutes in - Economist Steve Keen on BBC's Hardtalk says "We have two sources of money in a capitalist economy. Banks can CREATE money by making loans and the government creates money by running a defecit".
He also says the general public needs a bailout of Government created 'positive money', to pay off debts and replace the 'negative' debt based money created by banks and government borrowing, which will hopefully save the system from complete collapse. Each person would recieve an equal amount - anybody with debts must use their handout to pay off debts (which helps recapitalise the banks) and anybody not in debt gets to keep their handout and hopefully spend it into the economy.
This is a must watch for anybody wanting to understand the current economic system and its fatal flaw.
His idea may not be the perfect solution but at least he's offering an alternative to the current debt based monetary system. It's a pity no politicians are picking up on it.
Just to back up my claim that banks create money from nothing - 13.40 minutes in - Economist Steve Keen on BBC's Hardtalk says "We have two sources of money in a capitalist economy. Banks can CREATE money by making loans and the government creates money by running a defecit".
He also says the general public needs a bailout of Government created 'positive money', to pay off debts and replace the 'negative' debt based money created by banks and government borrowing, which will hopefully save the system from complete collapse. Each person would recieve an equal amount - anybody with debts must use their handout to pay off debts (which helps recapitalise the banks) and anybody not in debt gets to keep their handout and hopefully spend it into the economy.
This is a must watch for anybody wanting to understand the current economic system and its fatal flaw.
His idea may not be the perfect solution but at least he's offering an alternative to the current debt based monetary system. It's a pity no politicians are picking up on it.
"If the American people knew tonight, exactly how the monetary and banking system worked, there would be a revolution before tomorrow morning."
-Abraham Lincoln
Last edited by LeighGionaire on Fri Nov 25, 2011 12:36 am, edited 1 time in total.
Post subject: Re: Another 'I dont understand the banking system' Thread
Posted: Fri Nov 25, 2011 12:48 am
LeighGionaire
International Board Member
Joined: Feb 20 2002 Posts: 1437 Location: Leigh, where else?
Dally wrote:You're nothing if not persistent!
Well people are in complete denial about how money is created, as Galbraith said -
Quote:John Kenneth Galbraith, Money: Whence it came, where it went (1975), p. 15
The process by which banks create money is so simple that the mind is repelled.
"If the American people knew tonight, exactly how the monetary and banking system worked, there would be a revolution before tomorrow morning."
-Abraham Lincoln
Post subject: Re: Another 'I dont understand the banking system' Thread
Posted: Fri Nov 25, 2011 6:49 am
handrags
Player Coach
Joined: Mar 18 2008 Posts: 1073
what i cant understand is where all this money went? if i gamble and lose the bookie gets it, so who got all the cash the banks lost? And dont say millions of people who couldnt pay the banks back, because the banks loan out only against your assets! my aunt borrowed £60,000 from northern rock against her property, she died a two years later and before i could benefit from her estate I had to pay northern rock £94,000 back before i got 1 penny. and further more if half the banks lost cash by speculating with other banks then surly the money is still in the banking system. the whole system is one giant con and we the little people are complete mugs to go along with it!
Post subject: Re: Another 'I dont understand the banking system' Thread
Posted: Fri Nov 25, 2011 10:13 am
Sandro II Terrorista
Player Coach
Joined: Jan 15 2007 Posts: 11924 Location: Secret Hill Top Lair. V.2
And The KLF burnt the rest of it.
If there is no struggle, there is no progress. Those who profess to favor freedom, and yet depreciate agitation, are men who want crops without plowing up the ground. They want rain without thunder and lightning. They want the ocean without the awful roar of its many waters. This struggle may be a moral one; or it may be a physical one; or it may be both moral and physical; but it must be a struggle.
Post subject: Re: Another 'I dont understand the banking system' Thread
Posted: Fri Nov 25, 2011 1:15 pm
Dally
International Chairman
Joined: Dec 22 2001 Posts: 14845
handrags wrote:what i cant understand is where all this money went? if i gamble and lose the bookie gets it, so who got all the cash the banks lost? And dont say millions of people who couldnt pay the banks back, because the banks loan out only against your assets! my aunt borrowed £60,000 from northern rock against her property, she died a two years later and before i could benefit from her estate I had to pay northern rock £94,000 back before i got 1 penny. and further more if half the banks lost cash by speculating with other banks then surly the money is still in the banking system. the whole system is one giant con and we the little people are complete mugs to go along with it!
It's simple - money is generally lent on the security of assets. The value of those assets is purely arbitrary eg a house is inherently almost worthless, it's value derives from what people are willing and able to pay for it. just When those asset values fall if borrowers can't repay their loans the banks take a hit.
Post subject: Re: Another 'I dont understand the banking system' Thread
Posted: Sat Nov 26, 2011 7:44 am
handrags
Player Coach
Joined: Mar 18 2008 Posts: 1073
Dally wrote:It's simple - money is generally lent on the security of assets. The value of those assets is purely arbitrary eg a house is inherently almost worthless, it's value derives from what people are willing and able to pay for it. just When those asset values fall if borrowers can't repay their loans the banks take a hit.
if that where true wouldnt house prices be at rock bottom ? and if you do default on your morgage the bank would own your house [ still a valuble asset], Yet the yanks owe trillions, and yanks rent property as do most europeans so thats not the simple answer.
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