Originally posted by LightinDarkness
Of course, the entire theory of this video rests on the claim that banks loan out money they do not really have, instead of limiting their loans to
depositors money. This is quite simply not true, and it can be proven. The balance sheets for every single bank corporation are available, online,
and can be read by anyone who has had an accounting course. The balance sheets are not only audited by outside investors looking for where to invest,
but by the government and independent firms too. If you want to claim all of those people are in some sort of global conspiracy to lie about their
balance sheets, how is it that companies like Worldcom and Enron came down?
The reality is banks only loan money out based on the money they have. Not all of this money comes from depositors - this is true - most of it comes
from the earnings on investments banks make with other peoples money.
[edit on 10-12-2007 by LightinDarkness]
fractional reserve banking
from wiki
en.wikipedia.org...
"The fact that banks are required to keep on hand only a fraction of the funds deposited with them is a function of the banking business. Banks
borrow funds from their depositors (those with savings) and in turn lend those funds to the banks’ borrowers (those in need of funds). Banks make
money by charging borrowers more for a loan (a higher percentage interest rate) than is paid to depositors for use of their money. If banks did not
lend out their available funds after meeting their reserve requirements, depositors might have to pay banks to provide safekeeping services for their
money. For the economy and the banking system as a whole, the practice of keeping only a fraction of deposits on hand has an important cumulative
effect. Referred to as the fractional reserve system, it permits the banking system to “create” money.'[2] "
you say most of it comes from the earnings banks make from investments banks make from other people's money
talking about talking in cirlces and making a case for the OP
their earning are huge intrest payments from investments (i.e) loans they allow other's to take out. if you deposit 100 bucks, the bank now can loan
out a multiple of that (such as 7)= 700$. thus the fractional reserve tag. the multiple depends on the reserve requirement, so they can create a
loan for 700. and they get intrest on these investment's or loans, but they don't have 700, they just have the belief that people will not close
out their accounts in masse, and as long as this doesn't occur , then the payments they get from intrest on money they only held a fraction of in the
first place will continue to build their capital, from which they make more loans, should these loans for money (created out of mostly thin air i.e at
least 7 parts thin air, for every one part "real air") be unable to be paid, then they will collect the assets and then sell them. As long as
people dont demand their cash in a much higher ratio of closing out accounts, to creating new one's the game goes on to infinity. P.S also since the
dergulation of markets, banks have leveraged the deposits they receive to invest in subprime crap, as long as banks did not get too greedy making bad
bets on Sub prime junk which requires huge writedown (which shrinks their capital base) and ability to lend more then they will be ok. If they did,
then they will gather and try to orchestrate a gov't bailout which trys to socialize losses.
these spin meisters really crack me up and so does the name light in darkness for a poster that posts only darkness in light, what a joke.
some day the mods here will IMO show even more integrity and make a rule in the T & C against continually posting incorrect crap under a
condescending tone (none the less) when it is detemined (say by a majority of mods that the intent of the poster is to create arguments and
deliberately post false arguments to do so), take a long look at this crack up's posts that are a smoking gun for someone with nothing better to do
than try to derail threads, i got no problemo with differing opinion, and i got no problemo w/ ignorance (this is everyone's right if they choose)
but this poster In my strong opinion knows what he is doing, and that is harming the integrity of ATS.
ATS has stone walled these pleas under the guise of not going after witch hunts for every poster. That is a stretch and a unrealistic scenario and the
response IMO is born out of i got no idea what. This kind of rule that i suggusted would not even make a large inconvenience to moderators or
foster an atmosphere of (witch hunts) . because i believe these posters are very very much the great minority here, but their ability of a few
individuals to disrupt numerous threads harms the Integrity of the Site. It would not lead to witch hunts because i would leave my trust in the
moderators ability to snuff out these posters and not just any joe shmoe. so it would be dealt with behind the scene's and only those suspected of
these tactics would know.
[edit on 14-2-2008 by cpdaman]
