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The Fed Just Acknowledged Its Too Big To Jail Policy

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posted on Nov, 22 2014 @ 08:11 PM
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a reply to: Sovaka

Because for the most part in the world... Investments are a pyramid scam taking advantage of the unfortunate.
We are talking about loans. A loan is not an investment.

A loan is an agreement between two parties which says one party will provide capital to another. That capital will be repaid with interest (or a fixed fee).

An investment is an agreement in which one party offers capital to another. There is no agreement that that capital will be repaid but there is an agreement that if the investment is profitable the profits will be shared with the investor.

An investment has inherent risks. If it is not profitable capital is lost.
A loan requires (by law) that the capital is returned along with the agreed upon interest (or fee).

A pyramid scheme is neither an investment or a loan. It is an illegal activity in which payments by later victims are paid to earlier victims.

edit on 11/22/2014 by Phage because: (no reason given)




posted on Nov, 22 2014 @ 08:15 PM
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a reply to: Phage

LMAO!

Yesterday in another thread I asked you specifically about TECHNICAL JARGON versus dumbing it down for the plebs.

And you made the point that it was fine to use the less technical definition.

However, now that the OP of this thread brings up the term 'usury' and you are holding them to a very fine line or either point 1 OR 3 and completely ignoring that point 2 in the dictionary.


2
: the lending of money with an interest charge for its use; especially : the lending of money at exorbitant interest rates


... clearly qualifies as not 'archaic' and is broad enough to include any interest level at all.

And you ignored my point that it is still an opened ended trap for the unwary and we as a society can not afford to be dealing with such dangerous things, because compound interest is more powerful than the atomic bomb!


This seems a bit hypocritical to me.

Why defend the robber barron's





posted on Nov, 22 2014 @ 08:19 PM
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originally posted by: Phage
a reply to: stirling




Interest bearing loans should be considered usury.....

Why?
Why would should I loan you money (capital) which could be earning me money (investment), for free?



Why Not?
The Too Big To Fail Banks got free money via bailouts.
And even now, they get near interest free money from the FED.

Plus, they sell their worthless MBS to the government for the orginal full market price.



posted on Nov, 22 2014 @ 08:20 PM
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a reply to: Phage

I never disputed that... I quoted your post where you made the assertion that you have the right to loan someone money for interest because you'd otherwise "invest" it to make a similar sum of money.

It's good to know that you know that a pyramid scheme is wrong.



posted on Nov, 22 2014 @ 08:21 PM
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a reply to: MarsKingAQuestion




because compound interest is more powerful than the atomic bomb!

Can you show me an example of a loan which entails compound interest? Mortgages don't compound interest. Credit cards don't compound interest.



Why defend the robber barron's
I'm not.


edit on 11/22/2014 by Phage because: (no reason given)



posted on Nov, 22 2014 @ 08:21 PM
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a reply to: jacobe001


The Too Big To Fail Banks got free money via bailouts.


No. They didn't.



posted on Nov, 22 2014 @ 08:27 PM
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a reply to: Phage

Rather than dallying on the definition of usury would you address this:

FTA -


Until May, large financial institutions investigated for wrongdoing had dodged criminal prosecution under the Obama administration, despite evidence from federal regulators and prosecutors showing that big banks had, for instance, laundered money for suspected terrorists and drug cartels; manipulated interest rate benchmarks; rigged various commodities markets; mislead investors in mortgage-linked securities; duped homeowners into taking out expensive mortgages; manipulated municipal debt markets; and broke state and federal rules when attempting to seize homes after borrowers fell behind on their payments, a scandal that became known as "robosigning."


www.abovetopsecret.com...



posted on Nov, 22 2014 @ 08:29 PM
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a reply to: AlaskanDad



Rather than dallying on the definition of usury would you address this:

Sure.
I'm against illegal activity by banks (or most anyone else).

Interest bearing loans are neither usury or illegal.

Got anything on those loans with compounding interest?


edit on 11/22/2014 by Phage because: (no reason given)



posted on Nov, 22 2014 @ 08:30 PM
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originally posted by: Phage
a reply to: jacobe001


The Too Big To Fail Banks got free money via bailouts.


No. They didn't.


They didn't?

Can you expand on that? I was under the impression there were large bailouts issued? What is a bailout if not free money?
edit on 22-11-2014 by DeadSeraph because: (no reason given)



posted on Nov, 22 2014 @ 08:31 PM
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a reply to: DeadSeraph
Low interest loans.
They have been repaying those loans. With interest. Low interest, granted. But then, I have a very low interest mortgage as well.
www.mcclatchydc.com...


edit on 11/22/2014 by Phage because: (no reason given)



posted on Nov, 22 2014 @ 08:34 PM
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a reply to: Phage

Thanks!

Interest bearing loans are usury, and yes they are legal; but are they moral?



posted on Nov, 22 2014 @ 08:35 PM
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originally posted by: Phage
a reply to: stirling




Interest bearing loans should be considered usury.....

Why?
Why would should I loan you money (capital) which could be earning me money (investment), for free?


I'm curious, why do you think the interest-based model is superior to one based on a flat fee for borrowing? One opens to the door the massive abuses, the other slams it shut, or at the very least gives the customer an ACCURATE representation of how much they will pay for their borrowed money?

You seem to be oversimplifying the issues, interest is NOT some clearly written or understood concept that only fools don't understand. There are many different ways of calculating, applying, and dealing with interest that make that system rife for abuse. Not to mention the rate changes.

Supporting systems that are easily abused, and proven to be abused reeks of selfish agenda. Sorry to say that phage, but there's not much logical about your arguments here, unless the logic is to perpetuate debt-slavery.

Those that allow themselves to be abused are also to blame, people need to be more responsible with their money, but just because someone did something that opened themselves up to the possibility of being abused, doesn't at all take away from the actions of the abusers.



posted on Nov, 22 2014 @ 08:35 PM
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a reply to: AlaskanDad



but are they moral?

Why would should I loan you money (capital) which could be earning me money (investment), for free? So that you can earn money off of my capital? Is that "moral?"

edit on 11/22/2014 by Phage because: (no reason given)



posted on Nov, 22 2014 @ 08:35 PM
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originally posted by: Phage
a reply to: jacobe001


The Too Big To Fail Banks got free money via bailouts.


No. They didn't.


Banks Repaid Fed Bailout With Other Fed Money: Government Report
www.huffingtonpost.com...


But 48 percent of the banks that have repaid the CPP used money they'd gotten from other federal programs, according to the GAO report



projects.propublica.org...


The Bailout Scorecard

Last update: Nov. 5, 2014

Altogether, accounting for both the TARP and the Fannie and Freddie bailout, $613B has gone out the door—invested, loaned, or paid out—while $388B has been returned.



Is it ok if you loan me 10,000 Bucks on Tuesday and I'll pay you back with 10,000 bucks you gave me earlier earmarked for a different cause.



posted on Nov, 22 2014 @ 08:36 PM
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a reply to: Phage

Thanks for the link. From reading it, I get the impression that the government lent money it borrowed from banks, to banks. The article claims the government made money on the interest, which then goes towards paying off it's own debt to, well...banks. How does that make any sense? If that isn't the definition of free money I don't know what is. It's also tax payer money.



posted on Nov, 22 2014 @ 08:37 PM
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a reply to: Phage

Compound interest: Monthly amortized loan or mortgage payments


Monthly amortized loan or mortgage payments
See also: Mortgage calculator § Monthly payment formula

The interest on loans and mortgages that are amortized—that is, have a smooth monthly payment until the loan has been paid off—is often compounded monthly. The formula for payments is found from the following argument.
Exact formula for monthly payment

An exact formula for the monthly payment is

P= \frac[Li][1-\frac[1][(1+i)^n]]

or equivalently

P= \frac[Li][1-e^[-n\ln(1+i)]]

This can be derived by considering how much is left to be repaid after each month. After the first month L_1=(1+i) L - P is left, i.e. the initial amount has increased less the payment. If the whole loan was repaid after a month then L_1=0 so L=\frac[P][1+i] After the second month L_2=(1+i) L_1 - P is left, that is L_2=(1+i)((1+i)L-P)-P. If the whole loan was repaid after two months L_2=0 this gives the equation L = \frac[P][1+i]+\frac[P][(1+i)^2]. This equation generalises for a term of n months, L = P \sum_[j=1]^n \frac[1][(1+i)^j] . This is a geometric series which has the sum

L=\frac[P][i]\left(1-\frac[1][(1+i)^n]\right)

which can be rearranged to give

P= \frac[Li][1-\frac[1][(1+i)^n]]=\frac[Li][1-e^[-n\ln(1+i)]]

This formula for the monthly payment on a U.S. mortgage is exact and is what banks use.

In Excel, the function PMT() function is used. The syntax for the PMT function is:

= - PMT( interest_rate, number_payments, PV, [FV],[Type] )

See office.microsoft.com... for more details.

For example, for interest rate of 6% (0.06/12 p.m.), 25 years * 12 p.a., PV of $150,000, FV of 0, type of 0 gives:

= - PMT( 0.06/12, 25 * 12, 150000, 0, 0 )

= $966.45 p.m.


Online Compound Interest Calculator



posted on Nov, 22 2014 @ 08:38 PM
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originally posted by: Phage
a reply to: AlaskanDad



but are they moral?

Why would should I loan you money (capital) which could be earning me money (investment), for free? So that you can earn money off of my capital? Is that "moral?"


You loan me money, we agree "hey, I'll pay you back an extra $100 on top"

That's how moral people conduct themselves. And you still get to profit.
edit on 22-11-2014 by James1982 because: (no reason given)



posted on Nov, 22 2014 @ 08:39 PM
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a reply to: Phage

Maybe money should not be loaned is the moral here.



posted on Nov, 22 2014 @ 08:40 PM
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a reply to: jacobe001



Is it ok if you loan me 10,000 Bucks on Tuesday and I'll pay you back with 10,000 bucks you gave me earlier earmarked for a different cause.

Are you blaming the banks or the government? But maybe you should look at more recent information.
www.washingtonpost.com...

What do you think would have happened if the banks had not been provided capital? Do you think the recession would have not been as bad as it was?


edit on 11/22/2014 by Phage because: (no reason given)



posted on Nov, 22 2014 @ 08:40 PM
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originally posted by: Phage
a reply to: DeadSeraph
Low interest loans.
They have been repaying those loans. With interest. Low interest, granted. But then, I have a very low interest mortgage as well.
www.mcclatchydc.com...



Tell the Man what the low interest loans was.
Was it 17% like they charge us?
Was it 10%, or even 4%?

Nope. And the Bailouts did not just consist of Tarp either:


www.thenation.com...#

Fed's 'Backdoor Bailout' Provided $3.3 Trillion in Loans to Banks, Corporations


“We now know that the Fed loaned trillions of dollars at zero or near-zero interest rates not only to the largest financial institutions in this country, but also to many of our largest corporations—including GE, McDonalds and Verizon. Most surprising, the Fed also lent huge sums of money to foreign private banks and corporations” says Sanders, who since the 1990s has, with Texas Congressman Ron Paul, Florida Congressman Alan Grayson and a handful of others, been an ardent critic of the Fed’s secrecy, unaccountable financial manipulations and coziness with Wall Street.




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