bazrippa Posted February 10, 2012 Share Posted February 10, 2012 Just my view but I believe that governments have lost all control of the banks and now have to take orders from them.. How else can Tony Blair be an Advisor to J P Morgan and Chase banks after his actions brought our country to its knees?? The politicians work for the banks!! The federal Reserve bank is PRIVATE not government owned and Fractional banking is quite literally creating new money criminally while devaluing our currency. http://www.youtube.com/watch?v=8Fm5NSeVPog That is why the globe is in a crisis as the whole world is currently trading using hyper inflated US Dollars. It is a big bubble and we are being held to ransom with it IMO... Link to comment Share on other sites More sharing options...
Cyclone Posted February 10, 2012 Share Posted February 10, 2012 No I didn't, and it wasn't just my example. You're now just starting to sound like a troll, or at least someone who can't read. I posted a very specific example of the problem I've been talking about for the past few pages. Why not respond directly to that example and show me exactly how it's broken? It's a very specific example of something that is not analogous to the system we currently have and isn't an example of FR banking. Your example would prove that you couldn't pay it back, but it's a meaningless example. Link to comment Share on other sites More sharing options...
Cyclone Posted February 10, 2012 Share Posted February 10, 2012 Full reserve banking would surely mean banks would have to keep 100% of their reserves as cash or something easily converted to cash. That would suck nearly all liquidity out of the system. They could only lend up to 1* the value they had on deposit. Instead of 32 times (32 times results in a 3% capital to lending ratio doesn't it?) Link to comment Share on other sites More sharing options...
epiphany Posted February 10, 2012 Share Posted February 10, 2012 Errrrrrr - I think you are looking at things the wrong way round a lot of the time. Much wealth is created by taking raw materials, adding a manafacturing process and labour, and selling the product - which neccesitates having a "means of exchange" ie it was the wealth creation that drove the need to have "money" once we get past the stage of barter. We don't have much choice about using food, heat or water either. Are you also advocating nationalisation of power companies, water companies, farms etc. All make profits - an unecessary burden on the economy in your view? No, water, food and heat are different because the companies that control those resources aren't given a legal privilege to create them, simply by tapping a keyboard. They use existing resources to create an improved product. If you agree that banks create money from nothing (which I do, based on the Positive Banking and New Economics Foundation reports and various quotes from authority economic figures), then that is a wholly different privilege that comes before any of those companies you mentioned. They would not exist today without commercial banks. Water would exist without water companies. Food would exist without Nestle or Heinz. Banking may respond to the needs of industry, but industry would not exist without commercial loans from banks. Therefore our entire economy rests on banks lending. No loans, no money - full stop. So banks do come before anything else in the chain of production and therefore any profit they take from the process of money creation is simply an unnecessary weight on the economic activity that follows. Link to comment Share on other sites More sharing options...
epiphany Posted February 10, 2012 Share Posted February 10, 2012 It's a very specific example of something that is not analogous to the system we currently have and isn't an example of FR banking. Your example would prove that you couldn't pay it back, but it's a meaningless example. I wasn't trying to give an example of FR. It's nothing to do with the type of reserve system we have, it's to do with a mathematical discrepancy caused by interest from money creation not being returned into the real economy. Link to comment Share on other sites More sharing options...
Longcol Posted February 10, 2012 Share Posted February 10, 2012 <snip nonesense about banks creating money from nothing> Banking may respond to the needs of industry, but industry would not exist without commercial loans from banks. Therefore our entire economy rests on banks lending. No loans, no money - full stop. So banks do come before anything else in the chain of production and therefore any profit they take from the process of money creation is simply an unnecessary weight on the economic activity that follows. Banks evolved - and continue to do - alongside industry - one can't exist without the other. Economies exist on a large number of interdependencies of which banks are but one element (a large one , but by no means the only one). So effectively you are asking for banks to be nationalised if you want them to be non - profit making - or run as some sort of provident society like the co-op (who have a bank and use FRB) who make profits to re-invest in the business.? Link to comment Share on other sites More sharing options...
Longcol Posted February 10, 2012 Share Posted February 10, 2012 I wasn't trying to give an example of FR. It's nothing to do with the type of reserve system we have, it's to do with a mathematical discrepancy caused by interest from money creation not being returned into the real economy. Again - what isn't being returned to the "real economy" - whatever that is. Interest pays for staff wages, for goods and supplies purchased by the bank, taxes paid to the exchequer which provide public services amongst other things. Are these part of your "real economy"? Link to comment Share on other sites More sharing options...
epiphany Posted February 10, 2012 Share Posted February 10, 2012 Interest pays for staff wages, for goods and supplies purchased by the bank, taxes paid to the exchequer which provide public services amongst other things. Are these part of your "real economy"? Yes. But surely you're not claiming these are the only things interest pays for. Like I said before, why not create a system whereby we can close all tax loopholes and be certain that all profits are being put back into the economy to negate the discrepancy I mentioned earlier that makes our overall debt unrepayable. Cyclone seems to think this discrepancy does not apply to a FR system. I don't see how the reserve system we have is relevant to the problem. The discrepancy will exist as long as ALL interest is not returned into the real economy, or unless we can somehow devise an interest-free system. So effectively you are asking for banks to be nationalised if you want them to be non - profit making - or run as some sort of provident society like the co-op (who have a bank and use FRB) who make profits to re-invest in the business.? Effectively, yes, or at the least more social control or public stake. If you support the IED organisation you linked to earlier, I believe that is what they are also proposing, based on what the Social Credit movement originally advocated. From what I read, they didn't necessarily have a problem with FRB, yet they realised there was a problem if any interest from money creation (not any other business) wasn't somehow funnelled back into the producing economy. For fear of living up to a certain caricature, all I'm genuinely interested in at this point is an answer to the compound interest problem. Link to comment Share on other sites More sharing options...
Longcol Posted February 10, 2012 Share Posted February 10, 2012 Yes. But surely you're not claiming these are the only things interest pays for. No - it also pays interest to people who deposit money with the banks ie savers / investors. My pension for example. Get rid of interest and there is absolutely no incentive to save. This is hardly taking a long term view of the economy which is what is needed IMHO. Link to comment Share on other sites More sharing options...
Longcol Posted February 10, 2012 Share Posted February 10, 2012 But I don't want that because of any particular ideological bias (I don't for example think nationalisation is the answer for other utilities), rather because it would at the very least reduce the parasitic element in the current system, meaning more purchasing power in society and make it more sustainable in the long run. I certainly think better regulation is needed. The savers need better protection from the riskier investments and rewards for bankers need to be geared towards the long term rather than short term gambles. But we can't get rid of banks charging interest or paying it to investors. Link to comment Share on other sites More sharing options...
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