Am I the only one who thinks Aus bank profits are insane ?
- Thread starter trew
- Start date
If banks don't create money out of thin air then why is there far more debt in the system than money to pay it back?
Willrocks
EVERY one of those is a separate transaction., It is NO different to the man that buys an hours worth of a 'ladies' time and pays her $50.
She takes the $50 and pays her bar bill at the pub. The publican takes the $50 and pays on his account. The bookie goes to the 'lady' and buys an evenings pleasure.
ALL for the SAME $50 note!!!!!
NONE are 'loans' earning interest.
OC
EVERY one of those is a separate transaction., It is NO different to the man that buys an hours worth of a 'ladies' time and pays her $50.
She takes the $50 and pays her bar bill at the pub. The publican takes the $50 and pays on his account. The bookie goes to the 'lady' and buys an evenings pleasure.
ALL for the SAME $50 note!!!!!
NONE are 'loans' earning interest.
OC
Old Codger said:
Firstly the scenario you describe is a single $50 note circulating. The money supply remains static at $50.
If I kept going with the $1 scenario from post #40 the original $1 deposit would increase to $9.64 in deposits $8.64 in loans and $0.95 in reserves. ALL resulting from a $1 deposit.
If you fail to comprehend this you're either willfully ignorant or mathematically challenged.
They create credit that is as good as money and they can use that ability to monetise previously unencumbered assets (or the unencumbered parts of assets whose nominal values have inflated.Results not typical said:
It's "as good" if it is accepted as final payment for a transaction. Which it is.
Money's accepted, credit's notwrcmad said:Yet it is accepted in exchange for PM's in the sales thread in this forum.adze67 said:How is "credit as good as money" when it is created out of thin air, loaned out as debt and then "interest" charged on it?
It's not even real in the first place
Yet this money is only currency that represents debt created from the imaginary credit...
The good thing about bashing your head against a brick wall is that it feels good when you stop.
I have stopped.
OC
I have stopped.
OC
trew said:
When I was a kid banking was all about savings. I never knew anyone who's parents had a credit card. Occasionally you'd see the Bankcard signs in some shops. But that was about it.
Today banking is about loans and credit. And they're pushing debt from every conceivable angle.
When you realize it is a corrupt system. It's not bizarre banks are making profits in a declining economy. In fact it should be expected until people's borrowing capacity is reached, or 0% interest rates. Then we can expect loans being called in, falling profits, bail-ins, and a bunch of idiot investors with WTF written over their faces.
trew said:
A declining economy is irrelevant, it's a transaction based industry. No different to PM dealers, they make money on a falling, steady or rising markets, it's based on margins.
Correct. There is no difference.adze67 said:Money's accepted, credit's notwrcmad said:Yet it is accepted in exchange for PM's in the sales thread in this forum.adze67 said:How is "credit as good as money" when it is created out of thin air, loaned out as debt and then "interest" charged on it?
It's not even real in the first place
Yet this money is only currency that represents debt created from the imaginary credit...
So indirectly, credit is accepted.
Old Codger said:
The Banks have some high profit lines too OC.
There is the Credit Cards, money borrowed at 5%. lent out at 18%, Personal loans 5%../14% and car loans around 10%.The days are long gone when the banks rely solely on borrowing and lending of money! Derivatives is the new game in town, just like a casino for bankers with no risk built in. Use the Martens system of gambling and you will be a high end bank trader in no time at all.
The US banking system is the lot worst compared to Australia but give us time. Bring in the Bank In laws then all shareholders in banks will be risk free.
Banking is no longer Capitalism, it is an ISM of another kind.
Regards Errol 43
wrcmad said:
I think you see socialists under every bed and around every corner.
corrupt
1. guilty of dishonest practices, as bribery; lacking integrity; crooked: a corrupt judge.
2. debased in character; depraved; perverted; wicked; evil: a corrupt society.
The banks take a cut from every transaction that passes through them, it is the ultimate manifestation of rent seeking. What this does is geometrically increase the amount of debt in the world every year without producing anything of intrinsic value to offset that debt. The result the massive debt load of the world that far exceeds the amount of money available to pay it back. You can apologise for the banking system as much as you want but the results of fractional reserve banking are right in front of our faces. Loaning money for interest is a pyramid scheme that will always eventually collapse.
Banks don't "create money out of thin air", they create "debt out of thin air" and then loan out that debt repeatedly, effectively perpetually re-hypothecating the funds on their balance sheets.
Creating "debt out of thin air" and then loaning out that debt over and over is functionally the same as "creating money out of thin air".
Banks don't "create money out of thin air", they create "debt out of thin air" and then loan out that debt repeatedly, effectively perpetually re-hypothecating the funds on their balance sheets.
Creating "debt out of thin air" and then loaning out that debt over and over is functionally the same as "creating money out of thin air".
AngloSaxon
Active Member
trew said:
You've never heard of hedging?