We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Debate House Prices


In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

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

1234579

Comments

  • dryhat
    dryhat Posts: 1,305 Forumite
    CLAPTON wrote: »
    does that include fractional lending or not?

    ........ not
  • antrobus wrote: »
    If lenders don't have the money to lend, then they can't lend.

    Same system with Barclays isn't it?

    They can't lend if they don't have the money. It's the cash they don't have.

    Nothing wrong with that.
  • antrobus
    antrobus Posts: 17,386 Forumite
    dryhat wrote: »
    ... and you say I don't understand?

    mmm

    Well you obviously don't, if you don't understand that you can't lend money unless you've got the money to lend. It's not exactly a difficult concept to grasp. It's like saying you can't lend someone a car, unless you've actually got a car to lend.
  • antrobus
    antrobus Posts: 17,386 Forumite
    Same system with Barclays isn't it?

    They can't lend if they don't have the money. It's the cash they don't have.

    Nothing wrong with that.

    Correct.

    Of course, if Barclays really want to lend someone money, they can get it simply just by borrowing it from someone else. (Which is, after all, what banks do - they borrow money from one set of people, and lend it to another.) And if you have a functional inter-bank market, that's not that difficult to do. (And which is why not having a functional inter-bank market - something seen in recent times - can be regarded as a problem.)
  • What don't I get Antrobus?

    Please tell me, the money to pay interest has to come from somewhere are someone to paid on a loan given to someone.

    It does not matter if it is 3 people, 3000 people or 3 million (I could go on). If there is an amount of money all shared between them, and some owe the bank money + interest, that interest i.e. additional cash has to be in existence to be paid down. Otherwise, someone or some people at sometime for a short or long period have to be in debt in order for there to be the spare cash to pay the interest.

    I know that you think I don't get it. However, I will tell you that I do get it, if you choose to believe me, then that is up to you.

    In the example we discuss, all be it small, shows a fundamental principal, that someone has to be in debt. David could decide that he wants a new fence and cannot wait, so he goes and gets a loan from the bank for 300 coins and pays Michael 125 for another weeks work. Now Michael can pay the bank the interest he owes, but now David is in Debt and owes the bank 300 coins. It does not matter how you look at it, how you try to work it, someone, somewhere has to be in debt.

    Scale it all up, small, medium, big, even huge. It is all the same. Even multiple sources, I refer to your comment Clapton, I could introduce another source of funds into that example, increase the population from 3 to 6 and still show that someone has to be in debt. There would have been growth, but still debt.
  • antrobus
    antrobus Posts: 17,386 Forumite
    What don't I get Antrobus?
    ....

    The fact that the process of borrowing and lending money, leads to an increase in the money supply. i.e. 'creates money'.
  • dryhat
    dryhat Posts: 1,305 Forumite
    antrobus wrote: »
    Well you obviously don't, if you don't understand that you can't lend money unless you've got the money to lend. It's not exactly a difficult concept to grasp. It's like saying you can't lend someone a car, unless you've actually got a car to lend.

    Are you serious or are you taking the p155?

    Are you suggesting that a bank only lends money that they already have?
  • dryhat
    dryhat Posts: 1,305 Forumite
    antrobus wrote: »
    The fact that the process of borrowing and lending money, leads to an increase in the money supply. i.e. 'creates money'.

    Dear me.

    He's obviously not taking the p155.

    I can't find a facepalm photo big enough.
  • Really? So simply lending money out, and then letting someone pay it back + interest makes more money... .No, money does not just simply multiply in peoples pockets, it is not a biological organism like a bacteria.

    The lender will have more money, once they have been paid + their interest, but more money has not been 'created' someone has less of it. Unless of course you want to refer to the examples of how the banking system works featured on the Positive Money website, which is a good way of simply 'creating money' by simply tapping numbers into a computer. However, again that does not create enough money to pay the interest on the loans, the process only creates the original loan amount, so there still has to be someone in debt, to free up the cash for someone else to earn to then pay off their loan + interest. You are deluded to think that 'money grows on trees'
  • dryhat
    dryhat Posts: 1,305 Forumite
    antrobus wrote: »
    Correct.

    Of course, if Barclays really want to lend someone money, they can get it simply just by borrowing it from someone else. (Which is, after all, what banks do - they borrow money from one set of people, and lend it to another.) And if you have a functional inter-bank market, that's not that difficult to do. (And which is why not having a functional inter-bank market - something seen in recent times - can be regarded as a problem.)


    Jees.

    They say a little knowledge is dangerous.. but this....... ?
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.1K Banking & Borrowing
  • 253.6K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.8K Mortgages, Homes & Bills
  • 177.5K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.