The debt hoax ...

[Foolmewunz]

Wrong, at least from here. Fractional banking is not the problem, the bankers are the problem ... but don't take my word for it ... here is 15 minutes of analysis from William Black, one of the prosecutors in the Savings and Loan hoax ... he spells it out for you.

http://www.youtube.com/watch?v=N_AuvLTJNh0

That video doesn't play over here. Why don't you summarize for me? (I know Dr. Black's work and I don't find that much fault with it. I'm more curious to hear how you spin it because I do not think his overall conclusions are that all banks and banking are evil. He specifically, in fact, targets the regulators and politicians in most of his work.)

 

[Anders Lindman]

That's nice - but wrong - you avoided answering the question. It was about the banks not the Fed, please try again.

The banks lost money because of manipulating the rating of their assets. They created artificial collections of poor assets and boosted the ratings of those assets too much.

 

[Anders Lindman]

Nonsense.

So you believe the overall debt in a fractional reserve banking system can ever be repaid. Do you care to show how that can be done?

I can show you the opposite, that debt + interest > debt. A simple mathematical formula that says that to pay existing debt plus interest, new debt has to be created. Not as an example of a particular debt, but as a fact about the total debt in the fractional reserve banking system.

 

[Sceptic-PK]

The interest that banks charge does not magically disappear out of the economy. Interest is used to pay depositors, employ people, invest, keeps the lights on, pay dividends etc. For your idea to be accurate banks would have to a) create all the money in the economy & b) remove the interest they charge from the economy. They do neither.

 

[Anders Lindman]

The interest that banks charge does not magically disappear out of the economy. Interest is used to pay depositors, employ people, invest, keeps the lights on, pay dividends etc. For your idea to be accurate banks would have to a) create all the money in the economy & b) remove the interest they charge from the economy. They do neither.

Of course. But the interest adds to the total supply of money. If the total amount of money in an economy is say 100 billion dollars, then with fractional reserve banking essentially all of that money is debt and to pay interest on that debt requires new money to be created which leads to an increase of the money supply and more debt. With an interest of 1% the total amount of money in the economy needed to pay that interest is 101 billion dollars? Where did that extra 1 billion dollar come from? It had to be created as new money of course, as new debt. The same is true for any moment in time. There will never be enough money at any given time to pay both the debt and the interest.

 

[Sceptic-PK]

I really don't know if I can put it any simpler.

 

[Anders Lindman]

Bitcoin is a very interesting way of creating money as a peer-to-peer open source cryptocurrency without centralized control. Bitcoins are created by very fast computers doing digital 'mining' of finding the next correct crypto information that specifies bitcoin. Here is a short clip about bitcoin mining: http://www.youtube.com/watch?v=2nDTBN_cPs0

Could fractional reserve banking be replaced by some similar principle?

 

[LSSBB]

Bitcoin is a very interesting way of creating money as a peer-to-peer open source cryptocurrency without centralized control. Bitcoins are created by very fast computers doing digital 'mining' of finding the next correct crypto information that specifies bitcoin. Here is a short clip about bitcoin mining: http://www.youtube.com/watch?v=2nDTBN_cPs0

Could fractional reserve banking be replaced by some similar principle?

Covered in another thread.

 

[Anders Lindman]

Covered in another thread.

Good. I like the idea of Bitcoin being promoted. Something like that could come to replace today's currencies.

 

[Sceptic-PK]

Something like that could come to replace today's currencies.

 

[Anders Lindman]

In fact, Bitcoin is perhaps a pilot project for testing this new type of decentralized currency. Created by the NSA?

 

[timhau]

In fact, Bitcoin is perhaps a pilot project for testing this new type of decentralized currency. Created by the NSA?

You might be on to something. Provided that NSA stands for Non-Sane Anarchists, that is.

 

[Anders Lindman]

You might be on to something. Provided that NSA stands for Non-Sane Anarchists, that is.

I don't see why a good pilot project for cryptocurrency must be done by anarchists.

 

[ref]

But the bank can only monitor its own transactions. How does one bank know that money sent electronically from another competing bank is real money?

There is this thing called SWIFT

http://www.swift.com/

 

[psionl0]

I think that in SaggyWorld, that means you're neither a nation nor an individual, which makes you a Jew.

I just checked - this IS the CT forum.

 

[psionl0]

The interest that banks charge does not magically disappear out of the economy. Interest is used to pay depositors, employ people, invest, keeps the lights on, pay dividends etc. For your idea to be accurate banks would have to a) create all the money in the economy & b) remove the interest they charge from the economy.

One of your better pieces of reasoning.

They do neither.

Darn! You spoiled it.

 

[Horatius]

With an interest of 1% the total amount of money in the economy needed to pay that interest is 101 billion dollars? Where did that extra 1 billion dollar come from? It had to be created as new money of course, as new debt.

And once again, you're focussing merely on the money counting, and not on the actual wealth creation enabled by that 100 billion dollar loan. If that 100 billion dollars creates 102 billion dollars worth of economic activity, in the form of new wealth creation, then we're actually 1 billion dollars ahead.

If we're falling behind, it's because we're not lending to the correct wealth producers, not because of some nefarious Banker's Plot.

 

[Saggy]

That video doesn't play over here. Why don't you summarize for me? (I know Dr. Black's work and I don't find that much fault with it. I'm more curious to hear how you spin it because I do not think his overall conclusions are that all banks and banking are evil. He specifically, in fact, targets the regulators and politicians in most of his work.)

He specifically, in fact, targets the regulators and politicians in most of his work.

Nonsense.

Why don't you summarize for me?

Here are the opening remarks ... paraphrasing ....

In the S&L crisis, which was 1/70 the size of the current crisis, Black's organization made over 10,000 CRIMINAL referrals, and there were more then 1000 convictions of ELITES for felony crimes......

The recurrent crises result from EPIDEMICS OF FRAUD led by the C suite, the CEO's and the CFO's.

Criminal fraud at the top is invariably a part of every large failure.

In the current crisis Black's former organization has made ZERO criminal referrals, and there have been ZERO convictions.

And, he's just getting started. Try to get access to this, it's a classic.

Another snippet ...

We can prosecute these frauds. The Federal Finance and Housing Administration has just filed criminal complaints saying that 17 of the largest banks in America committed massive fraud.

Of course, Wall St. makes the laws in the first place, and even then it cannot adhere to them, and so to date, they are simply waived by the compliant administration.

 

[LSSBB]

There is this thing called SWIFT

http://www.swift.com/

Funny, looking at SWIFT, I wonder how I never hear CT proponents talk about it.

 

[Anders Lindman]

There is this thing called SWIFT

http://www.swift.com/

But that's just for communication. What if one bank sends $100 to another bank without reducing their own reserve? The reserve is just numbers stored in computers stored locally at each bank, or is that information stored globally somewhere?