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Traktion

Do We Need Banks?

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With all the talk of saving banks, bailouts, insolvency, CDS, liquidity etc, this raises the question: why do we need to save the banking system?

Clearly, there are security reasons as we don't want to store money "under the mattress", unless we want to start fortifying our homes. Also, a degree of borrowing is needed to facilitate the buying of expensive items (such as houses), where it would be difficult to save for the whole amount quickly.

However, it seems like the banks are more like parasites these days. Governments seem to have let this happen, with lax lending regulations and now we have a huge mess unfolding which looks destined to crush currencies. Taking out the causes, whether it be massive deflation or hyperinflation, one way or another, it seems the game will soon be up.

So, should we fear this? Taking the power back from the banks, forcing change and freeing us from debt slavery must surely be a good thing, as long as we have the stomach to weather the (very?) bad times first. Yet, it seems the government is determined to bail out the banks, even if it means reducing what the currency is worth to next to nothing.

Why not let the banks implode? What are the repercussions for the average man/woman in the street? Could it result in people "owning" their homes through default (could this be enforced by policy?)? Massive deflation would obviously occur (if people aren't paying a huge mortgage, then it's not "worth" much), but would this not be a good thing anyway?

I assume it's the change we fear and the government and banks fear this more than anyone else. Why don't we look to embrace it? Gardens could be turned into vegetable patches and water can be collected - as long as we have food and can wrap up warm, we can survive (ie. the worst case); all the rest is flotsam. Are people just going to just sit back and keep getting trodden or are people going to act?

What are people's thoughts on this?

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Also, a degree of borrowing is needed to facilitate the buying of expensive items (such as houses), where it would be difficult to save for the whole amount quickly.

Do we need mortgages because houses are expensive? Or are houses expensive because we get mortgages?

Edited by rickybruce

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Do we need mortgages because houses are expensive? Or are houses expensive because we get mortgages?

A bit of both, I would say. Clearly, materials and labour need to be sourced and used, but the prices are massively inflated by the amount of credit extended to us. Having said that, labour would become cheaper if the labour doesn't need to feed their debt repayments. This same principle would ripple down the entire chain, as people no longer need such high wages to feed their debts. I'm sure a new price point would be found and whether it would be affordable without any loans may still be debatable.

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Banks are necessary in order to tax people efficiently, the greater the reliance on wages paid into banks, and payments made directly, the more difficult it is to hide taxable transactions. They should be allowed to go to the wall, lets get back to cash.

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Everyone needs somewhere safe to keep their valuables.

I say our long standing tracition of leaving our valuables and cash with people who will immediately leverage it ot the moon or run off to monte carlo with it shouldn't be touched.

In fact, I hail our banking overlords and cannot wait for the day when taking a piss in my own home requires a direct debit to be taken from my RFID chip implant with part tax going to the government and a small interest payment going to the bankers* The sooner I have a barcode tattooed on my forehead and all my transactions are given a nominal value that can be used to create even more funny money, the happier I will be.

* I really would give them the steam off my piss.

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Guest X-QUORK

Good question OP. I'd like to see banks forced to return to being much simpler organisations, there purely to look after our wonga and provide simple loans, loans which they can't sell on.

CDOs, CDSs, hedge funds...would we be in this financial maelstrom without them? Probably not.

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Shariah law suggests not only that we do not need banks (in the western sense) but proposes alternative, "ethical" economic structures that avoid the need for them.

Western style banks are key to providing liquid funding which, historically, proved effective when at war - and, in modern times, prompted rapid (if not always sensible) expansion.

Edited by A.steve

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Do we need mortgages because houses are expensive? Or are houses expensive because we get mortgages?

excellent thought/discussion point, the latter is the answer surely, as the bubbles in house prices only come around once money supply goes through a parabolic 'spurt'?

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Thank you Traktion.

I have been wondering exactly the same thing, as I suspect, have many others.

I'd have asked the question myself but was afraid of being derided as an imbecile. You haven't been yet, so it appears my fears were unfounded.

I await more responses with interest.

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Banks are necessary in order to tax people efficiently, the greater the reliance on wages paid into banks, and payments made directly, the more difficult it is to hide taxable transactions. They should be allowed to go to the wall, lets get back to cash.

I'm not against banks being used as a mechanism to store deposits or make some (regulated) loans, but it seems the banks have gone far beyond this now and are holding us to ransom. Their lax lending has resulted in huge personal debts, which could result in the banks not only taking their interest repayments, but also their homes too. Shouldn't the fact that they are now struggling to stay solvent, be seen as an opportunity to purge these parasites from the system?

Why not return the assets to the people and let the banks get their just deserts for taking us all to the cleaners?

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I'm not against banks being used as a mechanism to store deposits or make some (regulated) loans, but it seems the banks have gone far beyond this now and are holding us to ransom. Their lax lending has resulted in huge personal debts, which could result in the banks not only taking their interest repayments, but also their homes too. Shouldn't the fact that they are now struggling to stay solvent, be seen as an opportunity to purge these parasites from the system?

Why not return the assets to the people and let the banks get their just deserts for taking us all to the cleaners?

Because the bankers own and run the country and the government?

We have no need of banks whatsoever. Without them ther eis no inflation for a start.

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Everyone needs somewhere safe to keep their valuables.

I say our long standing tracition of leaving our valuables and cash with people who will immediately leverage it ot the moon or run off to monte carlo with it shouldn't be touched.

In fact, I hail our banking overlords and cannot wait for the day when taking a piss in my own home requires a direct debit to be taken from my RFID chip implant with part tax going to the government and a small interest payment going to the bankers* The sooner I have a barcode tattooed on my forehead and all my transactions are given a nominal value that can be used to create even more funny money, the happier I will be.

Happens already without the chip.

Sewerage charge (flushing toilet) is based on water usage (metered) linked to direct debit extracted from net earnings. Who needs to tattoo your forehead?

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Do we need mortgages because houses are expensive? Or are houses expensive because we get mortgages?

You need to ask?

I'm sure quite few simpletons are still deluded - but, really, where most properties that are sold are not new-build, the answer is pretty obvious.

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Unless you want to return to the stone age (and from what I can tell, there are few regulars in this forum who do), yes.

Did you read the first of my two posts above?

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Shariah law suggests not only that we do not need banks (in the western sense) but proposes alternative, "ethical" economic structures that avoid the need for them.

Western style banks are key to providing liquid funding which, historically, proved effective when at war - and, in modern times, prompted rapid (if not always sensible) expansion.

I'd heard about these sort of banks before. Being from Leicester originally, I was aware of a portion of the population not being allowed into debt, due to their religious beliefs. Back then, I hadn't really thought about why this was actually a really good idea. Instead, I just thought "what a strange idea", which I would imagine many others did; it's funny how age and experience brings wisdom.

I'd agree fully with the foolish rapid expansion allowed by the system too. It seems to me, a big reason why businesses come and go so quickly, why you can't get a job for life, why we live in such unstable lives is due to excessive bank lending. Risky short term business models, funded by credit, are pitted against slow and steady companies. The latter get pushed onto the ropes, while the former erodes their market share, resulting in one or both businesses going under. We seem to encourage and sponsor the hare to win the race, at expense of the steady, steely tortoise.

Clearly, funding wars with inflation is also a very nasty situation too, no doubt encouraging western countries to take to arms more readily than they should.

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Unless you want to return to the stone age (and from what I can tell, there are few regulars in this forum who do), yes.

Would a return to simpler banking really result in us being taken back to the stone age? The current system seems to be doing a fine job of doing just that, now that you mention it.

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Happens already without the chip.

Sewerage charge (flushing toilet) is based on water usage (metered) linked to direct debit extracted from net earnings. Who needs to tattoo your forehead?

Well if you want to get me to pay for using something that falls from the sky....... you don't honestly think I let people charge me for something they stole from me in the first place, do you?

Force me off the land and away from raw materials at gun ppoint and then expect me to pay for access to what I lost? ****** that sideways.

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Thank you Traktion.

I have been wondering exactly the same thing, as I suspect, have many others.

I'd have asked the question myself but was afraid of being derided as an imbecile. You haven't been yet, so it appears my fears were unfounded.

I await more responses with interest.

I tried searching for a similar thread before too as I didn't want to look like a fool either! :lol:

I just keep thinking about it and wondering "why", so I thought it was worth posting the question. I'm looking forward to reading the replies from many people and, hopefully, it will shed some light on the area (and whether I'm just missing the point!).

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Because the bankers own and run the country and the government?

We have no need of banks whatsoever. Without them ther eis no inflation for a start.

If the banks own the government, this would mean they are forcing them to bail them out? Like I said above, if they are coming cap in hand for money, isn't now the time to tell them to get stuffed and let them go to the wall? Isn't that in all our interests (from government to the man in the street) to let them fail?

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I don't really get what your saying. Are you suggesting that people should have their mortgages wiped regardless of how much they've paid back? How would that be fair? How would you make up the shortfall in the bank's balance sheet in order to pay back depositors?

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If the banks own the government, this would mean they are forcing them to bail them out? Like I said above, if they are coming cap in hand for money, isn't now the time to tell them to get stuffed and let them go to the wall? Isn't that in all our interests (from government to the man in the street) to let them fail?

Everyone who goes anywhere near the bankers little fiefdom gets ridiculed into atoms, trumped up charges filed or if that doesn't work murdered. Prime ministers, rich folks, war heroes, it doesnt 't matter.

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I don't really get what your saying. Are you suggesting that people should have their mortgages wiped regardless of how much they've paid back? How would that be fair? How would you make up the shortfall in the bank's balance sheet in order to pay back depositors?

Seeing as the depositors money is safely at the banks already and never moved anywhere anyway cancel the goddamn mortgages.

Debt is slavery. Have a heart, eh?

Edited by Injin

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If the banks own the government, this would mean they are forcing them to bail them out? Like I said above, if they are coming cap in hand for money, isn't now the time to tell them to get stuffed and let them go to the wall? Isn't that in all our interests (from government to the man in the street) to let them fail?

I don't really get what your saying. Are you suggesting that people should have their mortgages wiped regardless of how much they've paid back? How would that be fair? How would you make up the shortfall in the bank's balance sheet in order to pay back depositors?

No the suggestion is that when lenders become insolvent that existing debts are sold at auction. The idea is that those who have lent recklessly should not profit from this practice.

A consequence of this fair and equitable application of insolvency law across all sectors would have a secondary effect: It would discourage most if not all future lending... hence reducing asset prices.

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  • 395 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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