!!Why it is all absurd and we should wake up!!

dryhat

Thrugelmir wrote: »

Bartering has a few years head start.

You think barter and bitcoins are the same thing?

boltneck123

Ok Antrobus,

Suddenly David needs some help to put a new roof on his house, so he employs Michael, Michael is relieved because now he can earn some money and start to make payments back to John.

However John wants 1000 coins + interest, paid back to him at 101 coins a week for ten weeks. It just so happens that David is going to pay Michael 125 coins a week, but he only needs Michael to work for 8 weeks. At the end of the 8 weeks David has exhausted all his coins and Michael now has 1000 coins, however he needs to pay the bank back 10 more on top of the original 1000 coins. The interest does no exist, now what?

CLAPTON

boltneck123 wrote: »

No it isn't an banking system, I am not referring to as one. It is just meant to represent the system in its absolute simplest form, based on that of Antrobus. Often looking at something in its simplest form can enable us to find flaws and faults.

Would you like me to make it a bank system...? Ok.

Jonn has 1000 coins and decides to set up a bank called "John's Bank". His first customer through the door is Michael, John is so excited about this that he approves a loan for 1000 coins (this is subsequently all that he has and now the bank has nothing in it, right? Because banks don't just make money from thin air do they?).

Michael goes over to David's and promptly buys the car for 1000 coins. Now, David doesn't trust John's new Bank and decides that he thinks the money is better off in his safe and there it shall remain, he does not need to pay out anything. He grows his own food, produces his on energy and has all the tools and equipment he will ever need to survive (all be it not in luxury) for the foreseeable future.

Michael is aware that he needs to pay up to John's Bank, but since there is now no money in the economy her cant get any to pay back John. Where does he get it?

fractional banking requires a multiplicity of money sources i.e. there must be a lot of people all with money

so a (fractional) banking system can't really start until there is a lot of money about distributed amoungst a lot of people

if one wanted a guarantee that one's money would always be available then one would need the original trustee banking system i.e. one that made no loans and charged you for the safe keeping of your money

dryhat

There's nothing wrong with loans if the lender actually has the money to lend.

CLAPTON

dryhat wrote: »

There's nothing wrong with loans if the lender actually has the money to lend.

what does that mean ?

dryhat

CLAPTON wrote: »

what does that mean ?

Exactly what I said.

antrobus

boltneck123 wrote: »

No it isn't an banking system, I am not referring to as one. It is just meant to represent the system in its absolute simplest form, based on that of Antrobus. ....

Of course it's not a "banking system", it's just a simple example to try and explain the point that money is created by the process of borrowing and lending money. You either get it or you don't.

boltneck123 wrote: »

Ok Antrobus,

Suddenly David needs some help to put a new roof on his house, so he employs Michael, Michael is relieved because now he can earn some money and start to make payments back to John.

However John wants 1000 coins + interest, paid back to him at 101 coins a week for ten weeks. It just so happens that David is going to pay Michael 125 coins a week, but he only needs Michael to work for 8 weeks. At the end of the 8 weeks David has exhausted all his coins and Michael now has 1000 coins, however he needs to pay the bank back 10 more on top of the original 1000 coins. The interest does no exist, now what?

I guess you don't.

antrobus

dryhat wrote: »

There's nothing wrong with loans if the lender actually has the money to lend.

If lenders don't have the money to lend, then they can't lend.

dryhat

antrobus wrote: »

If lenders don't have the money to lend, then they can't lend.

... and you say I don't understand?

mmm

CLAPTON

dryhat wrote: »

Exactly what I said.

does that include fractional lending or not?