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originally posted by: Jamie1
originally posted by: crayzeed
a reply to: Jamie1
You think that's a big scam? Scramble your brains on this one. The national debt of the US and UK runs into the multi TRILLIONS. Now not withstanding there ain't that much loose money in the world, the question is "who are we borrowing it off and who are we paying the repayments to"?
Please posters do not sat the world bank because that answers gives the true scam as we own the world bank so if that's the case we are borrowing of ourselves and paying ourselves back. So technically there is no debt to pay.
Not true.
The Federal Reserve is a private bank. That's the institution that has the legal authority to create the money supply, and they loan the money to large broker/dealers.
The Federal Government then issues bonds, i.e., borrows the money in exchange for a contract to repay the money, plus interest, at some time in the future. That borrowing goes on the books as debt.
The entire system relies on future flow to keep it going. The U.S. is under contract to pay the bond holders. Bond buyers loan the money because of the taxing power of the U.S. They know that the U.S. can tax workers to raise money to pay the bond holders.
If we default, the bond holders are screwed. So are we, because we will no longer have capital flowing into the U.S. and the dollar will be worthless.
Back to the point of the OP, isn't the mortgage tax deduction kind of scammy since it's really saying, "Hey, pay us less, just make sure you pay our banker friends instead of us."
It's a massive transfer of wealth born of a simple tax code. Money flows from workers to banks. Workers get to "own" where they live, which means zero if the home value doesn't go up. The home is equivalent to the principal of the loan.
For the system to make sense, it MUST have built in inflation or the entire system would come to a halt.
Is that right?
Did I miss anything?
originally posted by: Jamie1
originally posted by: arjunanda
Hi Jamie1, I think the two little bits you missed out on are:
You don't actually buy a House, you buy a Mortgage and They get The Money from The Federal Reserve at Near Zero Cost (Who Creates it out of thin air, Quantative Easing). Just my 2 cents, Peace Arjunanda. a reply to: Jamie1
Yeah, you're right.
I still haven't figured out where the money comes from to pay interest.
If they loan out $1 million, and charge 5% interest, and the entire $1,050,000 must be paid pack, where does the extra $50,000 come from?
Is this one of those questions we're not supposed to ask? This is why I always got in trouble in school.....
originally posted by: Edumakated
With a mortgage, the bank is willing to lend you the money because there is a real asset (The house) that helps mitigate their risk. If you fail to pay them back, they can foreclose on the home and hopefully recoup their money. However, in most cases, the bank loses their shirt in a foreclosure.
originally posted by: MALBOSIA
originally posted by: Jamie1
originally posted by: arjunanda
Hi Jamie1, I think the two little bits you missed out on are:
You don't actually buy a House, you buy a Mortgage and They get The Money from The Federal Reserve at Near Zero Cost (Who Creates it out of thin air, Quantative Easing). Just my 2 cents, Peace Arjunanda. a reply to: Jamie1
Yeah, you're right.
I still haven't figured out where the money comes from to pay interest.
If they loan out $1 million, and charge 5% interest, and the entire $1,050,000 must be paid pack, where does the extra $50,000 come from?
Is this one of those questions we're not supposed to ask? This is why I always got in trouble in school.....
That is the holy grail of questions right there. I asked it twice myself only with 1 less zero. Never got a straight answer. My guess is inflation has to raise the value of goods and investments in order to just keep ahead of the interest.
If the buck ever stopped and all the loans were called in, there would not be enough money to pay back the debts. Nobody has ever refuted that to me, personally.
This system of banking was instituted when the population had a 1% literacy rate. The central banking act would not pass any parliament or congress today. I think they just ratify it automatically since the entire globe would collapse in it's absence.
originally posted by: Jamie1
originally posted by: MALBOSIA
originally posted by: Jamie1
originally posted by: arjunanda
Hi Jamie1, I think the two little bits you missed out on are:
You don't actually buy a House, you buy a Mortgage and They get The Money from The Federal Reserve at Near Zero Cost (Who Creates it out of thin air, Quantative Easing). Just my 2 cents, Peace Arjunanda. a reply to: Jamie1
Yeah, you're right.
I still haven't figured out where the money comes from to pay interest.
If they loan out $1 million, and charge 5% interest, and the entire $1,050,000 must be paid pack, where does the extra $50,000 come from?
Is this one of those questions we're not supposed to ask? This is why I always got in trouble in school.....
That is the holy grail of questions right there. I asked it twice myself only with 1 less zero. Never got a straight answer. My guess is inflation has to raise the value of goods and investments in order to just keep ahead of the interest.
If the buck ever stopped and all the loans were called in, there would not be enough money to pay back the debts. Nobody has ever refuted that to me, personally.
This system of banking was instituted when the population had a 1% literacy rate. The central banking act would not pass any parliament or congress today. I think they just ratify it automatically since the entire globe would collapse in it's absence.
Inflating asset values still doesn't produce more dollar bills to repay the principal and the interest.
That money has to come from somewhere.
Let's make it REALLY simple.
Suppose it's day one of the Fed printing money. They print $1 and loan it to you. They tell you to pay in back tomorrow plus $0.01 interest.
Where do you get the penny to pay the interest?
The few who understand the system, will either be so interested from it's profits or so dependent on it's favors, that there will be no opposition from that class.
originally posted by: butcherguy
a reply to: Jamie1
Uncle Sam still continues to tax you.
If you don't pay your taxes , he takes your house.
I think Social Security is an even bigger scam.
originally posted by: MALBOSIA
originally posted by: Jamie1
originally posted by: MALBOSIA
originally posted by: Jamie1
originally posted by: arjunanda
Hi Jamie1, I think the two little bits you missed out on are:
You don't actually buy a House, you buy a Mortgage and They get The Money from The Federal Reserve at Near Zero Cost (Who Creates it out of thin air, Quantative Easing). Just my 2 cents, Peace Arjunanda. a reply to: Jamie1
Yeah, you're right.
I still haven't figured out where the money comes from to pay interest.
If they loan out $1 million, and charge 5% interest, and the entire $1,050,000 must be paid pack, where does the extra $50,000 come from?
Is this one of those questions we're not supposed to ask? This is why I always got in trouble in school.....
That is the holy grail of questions right there. I asked it twice myself only with 1 less zero. Never got a straight answer. My guess is inflation has to raise the value of goods and investments in order to just keep ahead of the interest.
If the buck ever stopped and all the loans were called in, there would not be enough money to pay back the debts. Nobody has ever refuted that to me, personally.
This system of banking was instituted when the population had a 1% literacy rate. The central banking act would not pass any parliament or congress today. I think they just ratify it automatically since the entire globe would collapse in it's absence.
Inflating asset values still doesn't produce more dollar bills to repay the principal and the interest.
That money has to come from somewhere.
Let's make it REALLY simple.
Suppose it's day one of the Fed printing money. They print $1 and loan it to you. They tell you to pay in back tomorrow plus $0.01 interest.
Where do you get the penny to pay the interest?
If you took that dollar and purchased a house, the value of that house increases to 2 dollars. You now have 95 cents to pay your interest. Somebody else had to take a loan for 2 dollars in order to buy it and now it is up to that borrower to see the value of the purchase increase in order to cover the interest. I agree that it makes no sense but inflation seems to be the only way I see them keeping this illusion going. Being pinned down to a 2.5% inflation rate is why we never seem to have enough money. Any more than that and they raise interest rates.
originally posted by: CranialSponge
I'm lost.
Is this thread about the US mortgage interest allowable tax deduction and whether or not it's a scam ?
Or is it about the feds/interest/currency/inflation and whether or not those are scams ?
originally posted by: Jamie1
Where do you get the penny to pay the interest?