Do you know how money is created?

pqdvdplayer

thelad95 wrote: »

Or you can work hard like a lot of them did to get to their level.

In my opinion society now is at the most civilised it ever has been and possibly ever will be. If you look back a couple of hundred years society was chaotic. Technological advancement was non-existent, life expectancy was half what it is now and you were likely to die either by torture or some debilitating disease.

Without the banking system society would possibly return to the above. It's not perfect and it certainly isn't in any way secure but it's what holds society together in a capitalist economy.

You're delusional, end of story.

RFOLEY1990

pqdvdplayer wrote: »

I don't mean physically, but do you understand the way in which the value of the money is actually created. I know exactly how, but I am just curious to see if people on here also know about the biggest scam known to mankind (not really, because the majority of mankind doesn't have a f*****g clue)

deposit ratio in banks

pqdvdplayer

bluewolf wrote: »

Yeah those bank tellers are real rich people in charge of everything

You're not at their mercy. You don't have to get a mortgage or use their system if you really don't want to

You forgot to mention the fact that we pay over half of our income in tax to the banks

pqdvdplayer

Iwasfrozen wrote: »

Except no one ever forces you to take out a loan.

They do force you to pay taxes though,( the majority of which makes its way to the banks through debt servicing) They even put you in jail if you don't!

NewCorkLad

pqdvdplayer wrote: »

You couldn't be more wrong. Do you understand that if the banks stopped creating money, the cost of the houses and cars would also fall, therefore rendering the borrowing of large amounts of money pointless.

Im sorry but thats just stupid, a correction like that would lead to countries shutting down and anarchy.

pqdvdplayer

NewCorkLad wrote: »

Im sorry but thats just stupid, a correction like that would lead to countries shutting down and anarchy.

How? People could still borrow money.. They just couldn't borrow non existent money.

NewCorkLad

pqdvdplayer wrote: »

You forgot to mention the fact that we pay over half of our income in tax to the banks

Yes lets all stop paying our taxs who needs hospitals, schools, police, roads etc

Buzz Killington the third

pqdvdplayer wrote: »

How? People could still borrow money.. They just couldn't borrow non existent money.

And what happens when the banks don't have enough money then? Because it will run out very fast!

pqdvdplayer

NewCorkLad wrote: »

Yes lets all stop paying our taxs who needs hospitals, schools, police, roads etc

Hah, you're clueless. The government BORROWS money to fund public services. The taxpayer then pays back the borrowed money to the banks.

Iwasfrozen

the culture of deference wrote: »

You create the money you borrow when you sign the legally binding contract to unconditionally repay a specified amount within a defined time frame.

Which is absolutely irrelevant to my point.

pqdvdplayer

Buzz Killington the third wrote: »

banks don't have enough money

Really?

ScumLord

pqdvdplayer wrote: »

You couldn't be more wrong. Do you understand that if the banks stopped creating money, the cost of the houses and cars would also fall, therefore rendering the borrowing of large amounts of money pointless.

I don't see how that could happen, if people can't take out loans and they don't have the savings to buy a new car outright the car companies won't want to bring out new car ranges, they may not cant to produce that many cars either as they would see their consumer base reduced.

If anything I think it could lead to everything going up in price as new things stop being made.


I'm very much anti the current banking system, I think it's been hijacked by a certain class of people and that it doesn't work in the interests of the general public. Any republic should seriously look at putting a leash on the banks so they are beneficial services rather than a mob that suck money out of the state and it's citizens.

But the fact is our fictional banking system has given us the confidence to design and produce all kinds of things that would be pretty unattainable. It's not a great system but all you have to do is look at the world around you to see it's allowed for some fantastic developments.

pqdvdplayer

If you think that we directly fund education, roads, hospitals etc. through taxation then you need to do some reading.

Iwasfrozen

pqdvdplayer wrote: »

They do force you to pay taxes though,( the majority of which makes its way to the banks through debt servicing) They even put you in jail if you don't!

Ugh, are you still spouting this rubbish. As I've said before:

"The Irish government put €54,576,917,000 into the economy last year. The vast majority of this was raised debt free from tax payers and invested debt free into the economy."

So all money does not come from debt thus it is possible to pay down one's loans through saving without creating more debt.

NewCorkLad

If everything was suddenly de valued in the way u believe it would be. 1 of 2 things would have to happen. Either no one would build cars or houses anymore because it wouldnt be worth their while which would lead to mass unemployment in these industries which would have a knock on effect to other industries. Or 2 the cost of the manufactorying and the materials would have to come down in value in order for everyone to still turn a profit. Which would lead to people across the board having less money in their pockets which would mean they would still be going to the banks to borrow money for their own houses and cars and while yes it would be less it real terms its all the same thing.

Buzz Killington the third

pqdvdplayer wrote: »

Really?

If someone deposits a million to a bank and a bank loans 5 people 200k then the million is gone, and the bank has no money. Then if the depositor wanted to withdraw their million, or even a tenner for that matter, what does the bank say to them?

Think a bit more before posting such rubbish!

SeanW

ScumLord wrote: »

I don't see how that could happen, if people can't take out loans and they don't have the savings to buy a new car outright the car companies won't want to bring out new car ranges, they may not cant to produce that many cars either as they would see their consumer base reduced.

Ireland's property bubble was almost entirely down to an influx of cheap money. "Record low interest rates!" "120% mortgage over 40 years" and so on. A clear case of cheap money > debt > chasing limited resources > driving up the cost.

The reverse is also true, I suspect. Car companies wouldn't go out of business, they'd just have to make cheaper cars. Gov't would likely need to abolish VRT and limit other motoring taxes as well. Same for housing.

Money would still be available for useful borrowing, albeit at a higher rate, because real loanable funds would come from personal savings.

It is precisely this system, under gold backed currency, that allowed the Industrial Revolution. Production machines had been sitting in inventors workshops lying idle, but then laws on usury were repealed and so entrepreneurs were able to borrow the savings of others - en masse - to start the first factories. It can work. We just have to believe that freedom works and that individuals should be rewarded for thrift and industriousness.

Seaneh

Iwasfrozen wrote: »

Ugh, are you still spouting this rubbish. As I've said before:

"The Irish government put €54,576,917,000 into the economy last year. The vast majority of this was raised debt free from tax payers and invested debt free into the economy."

So all money does not come from debt thus it is possible to pay down one's loans through saving without creating more debt.

The Irish government put that money into the economy through collection of taxes (debt), the issuing of bonds (debt) and drawing loans from the troika.

They didn't create debt free money, they used money, created through issuing of debt, to pay for things.

pqdvdplayer

Buzz Killington the third wrote: »

If someone deposits a million to a bank and a bank loans 5 people 200k then the million is gone, and the bank has no money. Then if the depositor wanted to withdraw their million, or even a tenner for that matter, what does the bank say to them?

Think a bit more before posting such rubbish!

That's why I previously mentioned that the government should be in control of the banks. They should take over the natural resources to back the currency. Do people ever listen or do I have to keep repeating myself?

Iwasfrozen

Seaneh wrote: »

The Irish government put that money into the economy through collection of taxes (debt), the issuing of bonds (debt) and drawing loans from the troika.

They didn't create debt free money, they used money, created through issuing of debt, to pay for things.

Only a % of that 54 billion came from debt. The vast majority comes debt free from taxpayers and is spent into the economy debt free.

renegademaster

NewCorkLad wrote: »

Yes lets all stop paying our taxs who needs hospitals, schools, police, roads etc

fine, let's all pay the same rate of taxes the corporations pay!!

Seaneh

Iwasfrozen wrote: »

Only a % of that 54 billion came from debt. The vast majority comes debt free from taxpayers and is spent into the economy debt free.

No, all of it came from debt. The money used to pay the debt is created by the issuing of debt.

It's how money is created in the Euro Zone, the Irish government doesn't have the ability to create debt free money, because debt free money does not exist in our financial system.

You keep saying "not all money is created from debt" but you've not given a single real world example of this yet. You mention taxes, where did the money to pay for the taxes come from? Seriously, think about what you are actually saying.

Buzz Killington the third

pqdvdplayer wrote: »

That's why I previously mentioned that the government should be in control of the banks. They should take over the natural resources to back the currency. Do people ever listen or do I have to keep repeating myself?

I still fail to see how this would keep money in the banks.

Titzon Toast

The Backwards Man wrote: »

New car, caviar, four star daydream
Think i'll buy me a football team

But if you ask a pay rise, it's no surprise that they're giving none away....away....away

Cienciano

pqdvdplayer wrote: »

That's why I previously mentioned that the government should be in control of the banks. They should take over the natural resources to back the currency. Do people ever listen or do I have to keep repeating myself?

I think you'll find they're called "sheeple"

topper75

pqdvdplayer wrote: »

You couldn't be more wrong. Do you understand that if the banks stopped creating money, the cost of the houses and cars would also fall, therefore rendering the borrowing of large amounts of money pointless.

Your theory V. empirical fact -

Credit crunch? Remember that? Lending was all but halted in the Irish housing market. We were virtually down to cash buyers only for a few years (as you wish it to be). Yes, prices fell. But what did they fall to? A €350K house might have fallen to €215. But what are househunting people supposed to do now that they can't borrow - they are not going to pull 215K out of the back pocket.
The house asking price will never drop to the levels where the average Joe can be a cash buyer because the house owner will always seek to hold their asset and instead let it for monthly rental income, which can indeed be afforded from average peoples' current account funds. The househunters are stuck.

Summary: no credit from banks = no housing market. Credit is a necessary evil. Sorry. I know you want to fix the world.

take everything

OP, if you really want to give us nightmares, tell us about credit default swaps.
Fractional reserve lending is so 2008.

coffee_cake

pqdvdplayer wrote: »

That's why I previously mentioned that the government should be in control of the banks. They should take over the natural resources to back the currency. Do people ever listen or do I have to keep repeating myself?

Socialising private debt was the problem in the first place. Letting the govt take more of our money to pump into them when they mismanage them is not the answer.

Caliden

All I know is that if anyone who had savings in the bank requested to take them out at the same time, the entire system would collapse as there simply isn't enough money. 90% of the wealth in existence is a number in a computer, there's only 10% of the wealth floating around in paper form.

Maximus Alexander

Why would the system collapse? Would the not just say "Sorry you can't withdraw any cash at the moment because we don't have any on hand"?