spooky3 Posted February 9, 2012 Share Posted February 9, 2012 Banks can't create money from nothing? What about quantative easing? Soon to be over £100 billion. Do you ever sell things for a profit? Link to comment Share on other sites More sharing options...
Longcol Posted February 9, 2012 Share Posted February 9, 2012 Banks can't create money from nothing? What about quantative easing? Soon to be over £100 billion. Ahhhh - now we come on to the debts of the government. Now were does the government borrow all its money from - because most governments for hundreds of years have spent more than they have received in taxes etc. Link to comment Share on other sites More sharing options...
Hairyloon Posted February 9, 2012 Share Posted February 9, 2012 The global economy is built on foundation s of sand. Sooner or later a complete collapse is inevitable. Link to comment Share on other sites More sharing options...
Longcol Posted February 9, 2012 Share Posted February 9, 2012 The global economy is built on foundation s of sand. Sooner or later a complete collapse is inevitable. A foundation of borrowing would be far more accurate. This is not altogether a bad thing - until people can't repay their debts. Link to comment Share on other sites More sharing options...
epiphany Posted February 9, 2012 Share Posted February 9, 2012 Should loans be free? The trust and management is what you are paying interest for. No I do not think loans should be free, but the system needs to have a degree of self correction for it to be sustainable. Link to comment Share on other sites More sharing options...
epiphany Posted February 9, 2012 Share Posted February 9, 2012 It is a fallacy that banks create money from nothing. They can only lend (around 90%) of money deposited with them - "savings" is probably the easiest term to use. So the chief economics editor of the Financial Times is wrong when he says "The essence of the contemporary monetary system is the creation of money, out of nothing, by private banks' often foolish lending"? Firstly, banks do not loan deposits. They create new money every time they loan. Take a look at the research done by the Positive Money campaign (link in my sig). Secondly, the explanation of "banks need to make profit...." still doesn't answer the question of how society can ever repay its debt if only the principal is loaned into existence. Nearly every pound in circulation has been loaned into existence by private banks (NEF - Where Does Money Come From?). That's a lot of interest. So how does society repay it? By borrowing more interest laden money. The result is compound interest and unrepayable debt. Unless of course someone can explain to me when the system self corrects within this process... Link to comment Share on other sites More sharing options...
Phanerothyme Posted February 9, 2012 Share Posted February 9, 2012 Unless of course someone can explain to me when the system self corrects within this process... Oh that's easy. Everyone defaults on their debt and we start again. Link to comment Share on other sites More sharing options...
syne Posted February 9, 2012 Share Posted February 9, 2012 I owe 30 grand? Now i won`t sleep at night. I wish you had not told me that. it's not a real 30k though. rest easy. Link to comment Share on other sites More sharing options...
Longcol Posted February 9, 2012 Share Posted February 9, 2012 So the chief economics editor of the Financial Times is wrong when he says "The essence of the contemporary monetary system is the creation of money, out of nothing, by private banks' often foolish lending"? Firstly, banks do not loan deposits. They create new money every time they loan. Take a look at the research done by the Positive Money campaign (link in my sig). Secondly, the explanation of "banks need to make profit...." still doesn't answer the question of how society can ever repay its debt if only the principal is loaned into existence. Nearly every pound in circulation has been loaned into existence by private banks (NEF - Where Does Money Come From?). That's a lot of interest. So how does society repay it? By borrowing more interest laden money. The result is compound interest and unrepayable debt. Unless of course someone can explain to me when the system self corrects within this process... The idea that a private bank creates money every time it makes a loan is wrong. Anyone who has done basic double entry bookeeping will tell you that. The only banks that create new money are central banks like the Bank of England or the Federal Reserve in the USA. Private banks only circulate money - albeit at an ever increasing pace due to technology. If private banks could create new money then surely they could have created the money to plug the holes in their balance sheets and not needed intervention from governments - and the drain on the taxpayer. The problem created by the banks has not been money creation - it has been loaning investors money to people unable to repay the loans. A good analysis is available here; http://www.ied.info/articles/an-honest-bank-is-so-simple-you-can-run-it/logical-reasons-proving-private-banks-do-not-create-money Link to comment Share on other sites More sharing options...
goggles Posted February 9, 2012 Share Posted February 9, 2012 Rothchilds own anything and everyone. Who owns Federal Reserve? Who are the shareholders? Who owns the Bank of England? Who are the share holders? These are private companies. Link to comment Share on other sites More sharing options...
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