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the_duke_of_hazzard

Banking Explained For Idiots Like Me

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It is indeed excellent (but too long to watch in one sitting). Is it downloadable anywhere?

You can download it from google videos. You need to have the google video app to do this, but it is worth it.

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http://video.google.com/videoplay?docid=-9050474362583451279

Don't worry - it's not patronising; but it is nice and clear and entertaining to watch.

Entertaining but kind of wrong on quite a few points....before literally believing everything in it, you should take a read of this and form your own opinion:

http://en.wikipedia.org/wiki/Fractional_reserve

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Which points is it wrong about?

Primarily the idea that money is created out of thin air by the banks - a bank can only create money when someone wants to borrow it and, even then, it's not 'created' as such since it has to be paid back this canceling out, eventually to 0. The video gives the impression that banks can create X amount of currency from nowhere at no cost, this isn't true since any money deposited has interest paid on it. A quick example:

Bob deposits 100 GBP at 5% interest

Bank lends the maximum 90 GBP at 7% interest to Fred

Bob thinks he still has 100 (in fact he has 10 and the bank, if it's able to, owes him the other 90) and Fred thinks he has 90. All in, people think they have 190 except that, once all debts are repaid, there's still only 100 of real money around. The bank, in the meantime, makes its profit on the difference between 7% interest on 90 vs 5% interest on 100.

The video gives a very different impression by implying that, because the bank only has 10 in the vault vs 90 lent out, it's somehow multiplied the original by 10, which of course it hasn't. It might be that the 90 lent out is redposited with the same bank (more likely another) but the bank still has to pay interest on it and make money on the same spread.

The wikipedia article is a much more accurate reflection of the standard economics view of all of this btw, it's very similar to what you'll find in any economics textbook. There's another good article here:

http://en.wikipedia.org/wiki/Debt-based_monetary_system

You might also want to read http://www.lifeboatnews.com to see where the distributors of the video are coming from.

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Primarily the idea that money is created out of thin air by the banks - a bank can only create money when someone wants to borrow it and, even then, it's not 'created' as such since it has to be paid back this canceling out, eventually to 0. The video gives the impression that banks can create X amount of currency from nowhere at no cost, this isn't true since any money deposited has interest paid on it. A quick example:

Bob deposits 100 GBP at 5% interest

Bank lends the maximum 90 GBP at 7% interest to Fred

Bob thinks he still has 100 (in fact he has 10 and the bank, if it's able to, owes him the other 90) and Fred thinks he has 90. All in, people think they have 190 except that, once all debts are repaid, there's still only 100 of real money around. The bank, in the meantime, makes its profit on the difference between 7% interest on 90 vs 5% interest on 100.

The video gives a very different impression by implying that, because the bank only has 10 in the vault vs 90 lent out, it's somehow multiplied the original by 10, which of course it hasn't. It might be that the 90 lent out is redposited with the same bank (more likely another) but the bank still has to pay interest on it and make money on the same spread.

The wikipedia article is a much more accurate reflection of the standard economics view of all of this btw, it's very similar to what you'll find in any economics textbook. There's another good article here:

http://en.wikipedia.org/wiki/Debt-based_monetary_system

You might also want to read http://www.lifeboatnews.com to see where the distributors of the video are coming from.

>cough<

If the £90 is put back into the same bank or put in another bank then there is now £280.

£100 - liability

£90 - asset

£90 again - asset

£100 in legal tender, £180 in bank tender, or Liar's money.

When you take a loan from the bank they consider the form you sign to be an asset. You give them the value of the loan and then they ask you to pay them back even though they never lent you anything. People fall for this fraud in droves.

The only limit to the amount of money is the amount of suckers.

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It is indeed excellent (but too long to watch in one sitting). Is it downloadable anywhere?

Yes, you can download it as a Torrent.

Also, this vids been in my sig for ages now. :)

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You give them the value of the loan and then they ask you to pay them back even though they never lent you anything.

They borrowed money from someone else on which they have to pay interest. They lend 90% of that out to you and you in turn pay them some interest. The difference between what they pay the person who deposited the money and you pay them is their profit. What's so hard to understand about that?

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You might also want to read http://www.lifeboatnews.com to see where the distributors of the video are coming from.

Oh dear, I have just looked at their site, can somebody explain the "Earth Crash" section to me. I can't really say I'd go with anything these guys may pedal!

Edited by Back Seat Crasher

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They borrowed money from someone else on which they have to pay interest. They lend 90% of that out to you and you in turn pay them some interest. The difference between what they pay the person who deposited the money and you pay them is their profit. What's so hard to understand about that?

No they didn't. If they did that, it wouldn't be fractional reserve lending. Money isn't legal tender and bank credit isn't legal tender, remember? I make a promise to pay, the bank makes a promise to pay, no legal tender changes hands...why do you think there would be a debt?

Bob gives bank £100 of his credit - bank gives Bob it back. Where is the loan in this scenario?

Even if they do get the funds from a third party, they STILL haven't lent anything, because someone else has valued the loan form as being equivalent in value as the amount loaned. That is, the banks books are balanced the second the "borrower" withdraws his money.

This is leaving aside the fraud aspect - i.e. never telling the customer what they are doing.

Unless you are going to tell me that there is anyone on the face of the earth who would voluntarily pay someone £100+ interest on top of giving them an asset worth £100 in exchange for nothing.

i.e. I give you a car and then because I feel obliged to you for accepting it, I give you another car and fill the fuel tank.

:lol:

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No they didn't. If they did that, it wouldn't be fractional reserve lending. Money isn't legal tender and bank credit isn't legal tender, remember? I make a promise to pay, the bank makes a promise to pay, no legal tender changes hands...why do you think there would be a debt?

Bob gives bank £100 of his credit - bank gives Bob it back. Where is the loan in this scenario?

Even if they do get the funds from a third party, they STILL haven't lent anything, because someone else has valued the loan form as being equivalent in value as the amount loaned. That is, the banks books are balanced the second the "borrower" withdraws his money.

This is leaving aside the fraud aspect - i.e. never telling the customer what they are doing.

Unless you are going to tell me that there is anyone on the face of the earth who would voluntarily pay someone £100+ interest on top of giving them an asset worth £100 in exchange for nothing.

i.e. I give you a car and then because I feel obliged to you for accepting it, I give you another car and fill the fuel tank.

:lol:

Refer to my signature file for my answer to that! Seriously, buy any standard textbook on economics to see how this actually works rather than believing some, admittedly well presented, but most fallacious propaganda put about by an organisation that peddles all sorts of stuff that I'm sure you would fine totally insane if you went and read it in detail.

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No they didn't. If they did that, it wouldn't be fractional reserve lending. Money isn't legal tender and bank credit isn't legal tender, remember? I make a promise to pay, the bank makes a promise to pay, no legal tender changes hands...why do you think there would be a debt?

Bob gives bank £100 of his credit - bank gives Bob it back. Where is the loan in this scenario?

Even if they do get the funds from a third party, they STILL haven't lent anything, because someone else has valued the loan form as being equivalent in value as the amount loaned. That is, the banks books are balanced the second the "borrower" withdraws his money.

This is leaving aside the fraud aspect - i.e. never telling the customer what they are doing.

Unless you are going to tell me that there is anyone on the face of the earth who would voluntarily pay someone £100+ interest on top of giving them an asset worth £100 in exchange for nothing.

i.e. I give you a car and then because I feel obliged to you for accepting it, I give you another car and fill the fuel tank.

:lol:

I find your faith in 'legal tender' very quaint given that the 'legal' part refers to exactly the same legal system that underpins the whole thing. The central bank can print as much legal tender as the economy requires and this can go up or down depending on how much cash is being used. Do you think it's theft when the Bank of England takes notes out of circulation and doesn't replace them?

Edited by thecrashingisles

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Refer to my signature file for my answer to that! Seriously, buy any standard textbook on economics to see how this actually works rather than believing some, admittedly well presented, but most fallacious propaganda put about by an organisation that peddles all sorts of stuff that I'm sure you would fine totally insane if you went and read it in detail.

I haven't watched the video.

I asked questions at my bank. I read some loan agreements. You are completely off the mark and have fallen for well presented but fallacious propaganda that doesn't stand up to any rational analysis or the evidence of your two eyes- i.e. from VI, banks and the rest of the parasitical growth that hangs off this simple con.

The essence of the con is getting you to think that only banks are "special people" who can create credit money or promissory notes. The lie to this is that they cash Joe Public's promissory notes in all day every day when they make "loans" or get legal tender from the bank of bumwad.....I mean england.

And yes, the other stuff, it's bobbins.

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I find your faith in 'legal tender' very quaint given that the 'legal' part refers to exactly the same legal system that underpins the whole thing. The central bank can print as much legal tender as the economy requires and this can go up or down depending on how much cash is being used. Do you think it's theft when the Bank of England takes notes out of circulation and doesn't replace them?

Oh. I see. HSBC et al actually have all the cash in pound coins lying around do they?

I had no idea. I thought they were engaged in fractional reserve lending. Why is this discussion here, again?

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Oh. I see. HSBC et al actually have all the cash in pound coins lying around do they?

I had no idea. I thought they were engaged in fractional reserve lending. Why is this discussion here, again?

I didn't say that at all.

Why is this discussion here? Because you don't get it and instead of bothering to learn you 'ask questions at your bank'. WTF? You might as well go into Tesco and ask them about crop cycles. :(

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I didn't say that at all.

Why is this discussion here? Because you don't get it and instead of bothering to learn you 'ask questions at your bank'. WTF? You might as well go into Tesco and ask them about crop cycles. :(

Ok. So if your bank, natwest or whatever haven't go tthe pound coins they say they do and advance you a loan..what exactly have they given you, and where did they get it from?

How did they get it?

What of their own is involved in this process?

Why is asking my bank where they get their money from and how stupid, when I wanted to find out where they got their money from and how?

Seems to me you don't get it. You are probably one of the peopel who thinks that pretending to do something is the same as doing it, if you can get away with it. It isn't.

Edited by Injin

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Ok. So if your bank, natwest or whatever haven't go tthe pound coins they say they do and advance you a loan..what exactly have they given you, and where did they get it from?

How did they get it?

What of their own is involved in this process?

Why is asking my bank where they get their money from and how stupid, when I wanted to find out where they got their money from and how?

Seems to me you don't get it. You are probably one of the peopel who thinks that pretending to do something is the same as doing it, if you can get away with it. It isn't.

You seem to think that the pound coins or notes have some intrinsic value. The metal in the coins is worth less than the face value so why don't you have a problem with that? It's fraud, no?

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From what I remember fractional reserve lending can only be done with "high power"

money, i.e. that coming straight from the BOE/Govt transaction part of the money-creation process.

Even wikipedia admits in its simplest form this means $100 deposit means the bank can make $400 loans

in the first instance.

If you think about it tbats and others, there would be no need for reserve requirements if FRB

worked the way you say it does.

Edited by Dr Doom

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You seem to think that the pound coins or notes have some intrinsic value. The metal in the coins is worth less than the face value so why don't you have a problem with that? It's fraud, no?

You seem to have a problem in thinking that the loan form that Bob signs has some intrinsic value...why don't you have a problem with that?

Stuff only has a value once it's sold or someone assigns it value through an action. In this case, the bank has by it's action assigned the value of £100 to Bob's loan form, and paid him for it. (Or someone else has without Bob's knowledge which is definitely fraud). Why would Bob then fork out another £100 +?

Seriously, I am all ears. I may have this wrong, am perfectly willing to accept it if it makes sense. Money is important, as is my ability to discern physical reality via my senses. Last thing I want to do is make an error.

Value is subjective I am well aware. Once someone has made a value judgement, they are stuck with it though, until we invent time machines.

Ofc, you haven't answered any of my questions and have sought to move the argument on. Could you answer my previous questions as well please?

Thanks!

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