Why bankers rule the world

Jegersmart

CLAPTON wrote: »

I've already explained to you that BoE can and does simply print notes and can and does mint coins. Theses aren't 'debt' in any reasonable definition.

The creation of money by fractional banking generates both 'savings' and 'debt' so that 'total savings' = 'total debt';
so by your definition 'saving= money' which is wrong but just in the same way as 'debt = money'.

You are wrong, the BOE can and does increase money supply. As already stated, once "new money" (forget coins and actual notes) are deposited in banks then money is further expanded through loans. That is why all money is debt.

J

CLAPTON

Jegersmart wrote: »

You are wrong, the BOE can and does increase money supply. As already stated, once "new money" (forget coins and actual notes) are deposited in banks then money is further expanded through loans. That is why all money is debt.

J

I have previously explained to you how the BoE creates money.

Why forget note and coins?

All money is savings; don't you agree?

CLAPTON

Thrugelmir wrote: »

The lender has lost an asset. However the lender still has a liability.

I'm the depositor that wants their money back.

So who pays me?

Without the money I'm unable to settle a debt I owe.

I'm not sure what you mean or if you are asking a question.

But if a bank lends money to some-one and they default (something that happens every day), the bank can still pay its own debts out of the margin it makes due to the difference between what it pays to people who lend to it and the charges the people to whom it lends.

But you know that already.

Jegersmart

CLAPTON wrote: »

I have previously explained to you how the BoE creates money.

Why forget note and coins?

All money is savings; don't you agree?

Forget notes and coins because they make up a tiny portion of "money". How much of your "wealth" do you have in actual cash? 2%? Come on, the point you make about actual physical legal tender is just a red herring.......

Savings are what banks borrow off you (paying interest to you) and then lending out to others (charging interest) - but they lend out 8-9 times as much as they "borrow" from you. All money is interest bearing in one way or another, it is all debt. What is so difficult to understand?

How is money created? Shall we go back to that?

J

Thrugelmir

CLAPTON wrote: »

I'm not sure what you mean or if you are asking a question.

But if a bank lends money to some-one and they default (something that happens every day), the bank can still pay its own debts out of the margin it makes due to the difference between what it pays to people who lend to it and the charges the people to whom it lends.

But you know that already.

If that's the case. Then debt does not equal saving.

CLAPTON

Jegersmart wrote: »

Forget notes and coins because they make up a tiny portion of "money". How much of your "wealth" do you have in actual cash? 2%? Come on, the point you make about actual physical legal tender is just a red herring.......

Savings are what banks borrow off you (paying interest to you) and then lending out to others (charging interest) - but they lend out 8-9 times as much as they "borrow" from you. All money is interest bearing in one way or another, it is all debt. What is so difficult to understand?

How is money created? Shall we go back to that?

J

do you agree that total bank lending is equal to total bank borrowings

roswell

All money is is a system to keep track of the score.
Example
Stobart group have a common share paying a dividend.
Stobart group offer out bonds to the public (normally offered to institutional investers)

Stobart borrow at a issued % interest, they pay %+x to the bond holder.
Stobart share price rises because they have used the public to finance what should be a institutional borrow by a cheaper public option.

Assuming they don't go bust everyone wins, if they go bust bond holders have first claim and share holders have a empty purse.

This is just an example no indication of any future events but bonds will be the next bubble till shares come back into flavour and the top 1% own both :-)

It is exactly like monopoly if you own everything you can't loose :-)

Jegersmart

CLAPTON wrote: »

do you agree that total bank lending is equal to total bank borrowings

No, but why do you ask?

"In most legal systems, a bank deposit is not a bailment. In other words, the funds deposited are no longer the property of the customer. The funds become the property of the bank, and the customer in turn receives an asset called a deposit account (a checking or savings account). That deposit account is a liability of the bank on the bank's books and on its balance sheet. Because the bank is authorized by law to make loans up to a multiple of its reserves, the bank's reserves on hand to satisfy payment of deposit liabilities amounts to only a fraction of the total which the bank is obligated to pay in satisfaction of its demand deposits."

CLAPTON

Jegersmart wrote: »

No, but why do you ask?

"In most legal systems, a bank deposit is not a bailment. In other words, the funds deposited are no longer the property of the customer. The funds become the property of the bank, and the customer in turn receives an asset called a deposit account (a checking or savings account). That deposit account is a liability of the bank on the bank's books and on its balance sheet. Because the bank is authorized by law to make loans up to a multiple of its reserves, the bank's reserves on hand to satisfy payment of deposit liabilities amounts to only a fraction of the total which the bank is obligated to pay in satisfaction of its demand deposits."

I'm interested in the economic consequences of our financial system whilst you are playing word games which I donot wish to join.

Jegersmart

CLAPTON wrote: »

I'm interested in the economic consequences of our financial system whilst you are playing word games which I donot wish to join.

Sure you don't want to play games - it took 3 or 4 posts from me to you to get you to answer some simple questions relating to the BOE where you responded with one or two words only in each reply...and now you say I am the one playing word games?

The consequences are that because all money is debt based there is always more money owing than exists to pay it back. This benefits the banking system primarily and can be regarded as a hidden tax. Debt is very important to our society in a monetary-based system because labour is the only thing that really underpins the system. If even 25% of the total workforce globally just stopped working and paying taxes then this would collapse the system quite quickly. Because there is less money in the system than is needed to pay it back, you and I are forced to compete for labour which we need to perform to survive in order to service debts. Personally I don't have any debts but still need "money" to survive and because of the competition due to scarcity I am forced to try to best you (or whoever) to get that job, to earn more money than others. As I do so, others are earn less and owe more and sink deeper into the mire - there is no incentive for us to get together and unite - the system divides us.

I really hope that you see that I am not trying to score points here or win a debate - but there is a reason why debt spirals ever higher on every level year after year. It is because it is built into the system, along with defaults due to competition and scarcity. We may not agree on the wording or points that we have discussed so far, but my only motivation here is to highlight the issue as I see it for the benefit of everyone potentially.

There are some quotes here:

http://my.telegraph.co.uk/mattsta/mattsta/4045411/Great_Quotations__On_banking_money_freedom_and_liberty/

Obviously all these may have been written by conspiracy theorists but if you look at how the system works there are serious problems as I am sure you can see.

IIRC, the Banking Act of 1844 or something states that the BOE are the only bank that can print "notes" and all the notes that it prints have to be backed by Gold or Government debt. Clearly, gold is not in the equation any longer, and it is difficult to track the further banking acts that have been enacted in the late 1800's, 1939 and some as late as 2009 (to allow the nationalisation of banks in effect)......

Something smells, and as taxpayers are the only foundation of this system the much-used phrase "wealth transfer" takes on a certain crystalline property that I cannot shake....:)

J