The Biggest Scam in History

[The Central Scrutinizer]

A while back I scanned Ebay for a late model R1 motorcycle and saw one for $4000. Wow here was my dream motorbike for $6000 less than everyone else was selling! Every scam works this way. You are lure by easy money. Easy credit is the cheese in the trap. For the sake of easy credit my paycheck is going to be worth less because it is going to buy less. This is very frustrating. Why should your business of borrowing $40,000 for a new car interfere with my paycheck? Why should the price of food stuff and basic necessities go up in price because someone wants easy credit? If I choose to save money I also will be penalize simply because of fractional reserve banking. All of a sudden your business becomes my business. What more, the Fractional Reserve Banking model is a tool for a few men at the top to control the ups and downs in the economy. My advice to anyone that own a business: be very careful about borrowing because you can loose everything. So what point is there in growing an economy that is strung out on credit and where bankers can intentionally pull the plug? This is why Monetary reform is the most important issue in politics today. But how can you truly have monetary reform when you have lobbyist interfering with the political process. How can you have monetary reform when the general public knows basically nothing about the relationship between the money supply and credit? How much representation does the worker have when the banking industry is contributing $300 million in campaign contributions to members of a special congressional committee who is suppose to oversee them?

How come the biggest critics of fractional reserve banking are the people who have pretty much failed at life? I'm guessing they need someone to blame.

 

[The Charnel Expanse]

No physical item has any intrinsic value. There is no such thing as "sound currency".

 

[Startz]

Thanks for the correction, whatever it was I was reading last week was obviously incorrect.

In your defense, the change to paying interest on reserves is recent. So if something was written tw or three years ago it would have said that no interest is paid.

 

[The Man]

7) The unemployment, bankrupsies and foreclosures that follow causes the money used to buy houses, and the assets to go from the public to bankers.

In case you don’t know “the money used to buy houses” goes to the sellers of said houses. As I alluded to before a lot of the buyers did not use much if any of their own money to buy a house (one of the reasons they had to pay mortgage insurance). As the market declines those houses are worth less than the money loaned to buy them, no longer an asset (at least to the lender). So your argument is that bankers, other financial institutions, investors, or some imaginary bogymen got people into houses with no, or minimal, investment from the buyer, then deliberately caused the market to collapse just so they could own a house, or crap load of houses, (probably lacking proper maintenance for some period) that are now worth less than the bank or financial institution gave to the seller? Bad plan. Not that simple though, and as I mentioned before I expected an imminent decline in the market. What I was not aware of was how those high risk loans were packaged and sold to investors as top rated investments (again due to the insurance). So you could make all kinds of high risk loans as long as you could pawn them off before they reset or the market declined (a financial game of hot potato). The ones that made out were of course the sellers, both of the houses and the high risk loans. Those that lost were some of the buyers that actually put money down, the investors and those that now own the ‘underwater’ houses, like some of the bankers you mention above. As most banks are publicly owned, the public are those bankers.

All of a sudden your business becomes my business.

If you want my business when it doesn’t make enough to pay you back the money you loaned me (even if I liquidate it), you’re in the wrong business.

My advice to anyone that own a business: be very careful about borrowing because you can loose everything.

Good advice and if your business happens to be investment or lending money ‘be careful about lending or investing because you can loose everything’.

 

[Emperor_Gestahl]

The success of Fractional Reserve Banking lies in people's inability to comprehend it fully.

You'd be right if you weren't focused on fractional reserve banking specifically. Victims are created any time players are brought into a game without understanding the rules. If the average person understood that money creation comes mostly from banks and not from the government they would know how to spot a bubble. If the people could spot a bubble forming the bubbles could be stopped in their tracks and presumably woodchucks could then also chuck wood.

This isn't so much about fractional reserve lending as it is about a lack of economics education and common sense.. Perhaps the same can be said of a ponzi scheme, but as with a ponzi scheme you not only have a perpetrator but a lot of people who could have known better had they cared to.

3) Big Banks do not just earn money, they create money. Banks are money factories, yet they are private entities. Just as what is happening today, big banks make credit easy, expanding the money supply and when they eventually limit credit it causes an economic collapse.

This isn't a case of banks deciding to limit credit. The banks in principle would have been happy to lend forever, but as creditworthy borrowers dried up a wide variety of jackals (not just big banks) materialized to lend money in the absence of said creditworthy borrowers..

When creditworthy borrowers dried up house prices should have started falling then and there, and it may have been a much tamer recession. The problem is that CMBS scams designed to capitalize on mass fraud allowed many entities to play "Weekend at Bernie's" with the housing market for years. This distortion in house prices fooled the honest banks the same way it fooled the honest homebuyers, all the "innocent bystanders" were smoking from the same bong when they realized half their bag was oregano.

Delinquent ratings agencies clapping for designed-to-fail CMBS (not dumped out only by large banks) is a white-collar crime problem or an incompetence problem (my vote is for both), not a problem with the core of the banking system. Don't get me wrong though I think that a LOT more people could stand to be in handcuffs over that debacle.

5) When these private companies magically create money out of thin air, they rely on the working public to pay for it.
6) They earn interest on the money they create out of thin air, but their actions are not irrespective of the working public because it causes their paycheck to be worth less and less and less...

Money doesn't come "from thin air", in principle it comes from "the future". The banks can't (legally) create as much money as they wish because they need people with future earnings potential who are willing to take the other sides of the transactions.

It's true that private banks have majority responsibility for the dollars in existence, but don't characterize their power as magical or limitless because it is not.

 

[Emperor_Gestahl]

If you want my business when it doesn’t make enough to pay you back the money you loaned me (even if I liquidate it), you’re in the wrong business.

Correct. Being "in the wrong business" is why the banks had to demand/beg for bailouts. You can't have it both ways, the big banks can't have both planned the whole thing and been nearly destroyed by it.

Think of it like overfishing, no individual fisherman intends/plans to destroy his fishing grounds at the outset, but under the collective assumption that "fish not caught by me will be caught by my competition anyway" the system simply cannot self-regulate and prevent the destruction of the fish population.

Of course that would only fully explain the "fraud-free" recession that could/should have happened much sooner than 2008. Crime comes from criminals. The entities who successfully got away with offloading all mortgage risk before the fall most likely didn't come remotely close to destruction or needing a bailout. Lots o' handcuffs? We'll see.. I'm not optimistic. But that's a different issue.

 

[The Man]

Correct. Being "in the wrong business" is why the banks had to demand/beg for bailouts. You can't have it both ways, the big banks can't have both planned the whole thing and been nearly destroyed by it.

Think of it like overfishing, no individual fisherman intends/plans to destroy his fishing grounds at the outset, but under the collective assumption that "fish not caught by me will be caught by my competition anyway" the system simply cannot self-regulate and prevent the destruction of the fish population.

Of course that would only fully explain the "fraud-free" recession that could/should have happened much sooner than 2008. Crime comes from criminals. The entities who successfully got away with offloading all mortgage risk before the fall most likely didn't come remotely close to destruction or needing a bailout. Lots o' handcuffs? We'll see.. I'm not optimistic. But that's a different issue.

Well, I guess you bought into my shilling hook, line and sinker!!

Just kidding. Glad someone got the point, even if it wasn’t on a hook.

Exactly, the intent is to keep those ‘hooked’ on the line and paying. So indeed, poor fishermen.

 

[Hans]

Exactly, the intent is to keep those ‘hooked’ on the line and paying. So indeed, poor fishermen.

Pretty much the 'plan' of all business men everywhere

 

[The Man]

Pretty much the 'plan' of all business men everywhere

Dang capitalists!!!

ETA:

Oh, and congratulations on your 666th post, no prize but you lose your soul!!!

 

[timhau]

No physical item has any intrinsic value.

... except gold. Shininess is inherently valuable.

 

[The Man]

 

[Emperor_Gestahl]

... except gold. Shininess is inherently valuable.

The diverse egos of this world agreed on a single thing a long, long time ago. Feel free to imagine your own reason, but the world has never changed its mind on the topic of gold. Some things never ever change, read history books to find out what they are.

 

[Hans]

Dang capitalists!!!

ETA:

Oh, and congratulations on your 666th post, no prize but you lose your soul!!!

Damn missed that. I could have evoked a demon of money belching or somethin'

 

[Belz...]

THE BIGGEST SCAM OF ALL TIME​

This is how it works:
The banks

I stopped reading there.

 

[Blue Mountain]

I stopped reading there.

You're a much more astute person than I am. I got as far as:

This is how it works:
The banks control the amount of money in circulation. Money could be currency, digital (bookkeeping entry), and checks. The Banks use a tactic known as Fractional Reserve Banking. Fractional Reserve Banking allows banks to create money out of nothing.

 

[timhau]

So banks can create money out of nothing, but do they get their chicks for free?

 

[Chaos]

I stopped reading there.

I know what you mean. It´s kind of like reading a post on a current or historical event that starts with "The Jews...".

 

[DC]

I didn't even mention that I work for one of the big banks!

work at a bank?`you have a job there, and you get a wage, but work? Honestly?

 

[timhau]

work at a bank?`you have a job there, and you get a wage, but work? Honestly?

Work honestly at a bank? Are you nuts?

 

[Skeptic]

Skeptic: Money, the creation of money, monetary reform, should be public and as transparent as possible.

Let us just say that just because you don't undestand something it doesn't mean it's not transparent. There is at least one other, far more likely, possiblity.