How to get out of debt - funny, page 5


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reply posted on 22-2-2010 @ 04:16 AM by Cabaret Voltaire
The reserve requirement is 10%.
A bank receives a $100 deposit. It may lend out $90 of that.
The borrower writes a check to another person who deposits $90.
The bank that receives that deposit can lend out $81... until a maximum of $1000.

$100.00 + $90.00 + $81.00 + $72.90 + $65.61 + $59.05 + $53.15 + $47.84 + $43.06 + $38.75 + $34.88 + $31.39 + $28.25 + $25.43 + $22.89 + $20.60 + $18.54 + $16.69 + $15.02 + $13.52 + $12.17 + $10.95 + $9.86 + $8.87 + $7.98 + $7.18 + $6.46 + $5.81 + $5.23 + $4.71 + $4.24 + $3.82 + $3.44 + $3.10 + $2.79 + $2.51 + $2.26 + $2.03 + $1.83 + $1.65 + $1.49 + $1.34 + $1.21 + $1.09 + $0.98 + $0.88 + $0.79 + $0.71 + $0.64 + $0.58 + $0.52 + $0.47 + $0.42 + $0.38 + $0.34 + $0.31 + $0.28 + $0.25 + $0.23 + $0.21 + $0.19 + $0.17 + $0.15 + $0.14 + $0.13 + $0.12 + $0.11 + $0.10 + $0.09 + $0.08 + $0.07 + $0.06 = $999.99

That single deposit of $100 cash has the potential to expand into a total of 72 deposits with a sum equal to $999.99. It can all be at one bank, held in 72 customer accounts, or it can be at 72 different banks.

So you can see that the existance of 1 single hundred dollar Federal Reserve Note can expand into $899.99 worth of ''fake'' deposit receipts through the action of a lot of borrowing. Let's hope we don't all rush to withdraw our cash at once! Relax. Read How Currency Gets into Circulation

Is this the 72 virgins we hear about, or is it just 1 big nasty whore of Babylon?
Either way I like it.



[edit on 22-2-2010 by Cabaret Voltaire]



reply posted on 22-2-2010 @ 08:19 PM by Stewie
reply to post by aaa2500

The deposits are not fake?
The "central banks" will make good?

I don't know your motivations. You are either pathetically misinformed (junior banker), or ....?
You tell me.

While you are "schooling" me, tell me why the American government is in debt. Cut to the chase, I won't be around for a pissing match.


reply posted on 23-2-2010 @ 01:10 AM by psyko45
reply to post by Cabaret Voltaire


The hotel owner has the hookers client list. What were not seeing is this perv thats running the whole operation. He can use this info as colateral when strongarming more people to come up with hotel building capital.



reply posted on 23-2-2010 @ 10:52 AM by sligtlyskeptical
Originally posted by kozmo
Loved your conundrum!!! Not to derail or take away your thunder, but I have a much better example of how the current system works - it's like this:

3 business men are travelling together and decide to stop for the night at a hotel. Being on a tight budget, the 3 decide to share a single hotel room. The 3 men approach the clerk and book a room for the night. "That'll be $30", states the clerk. Each of the 3 men reach into their wallets and pull out a $10 bill and hand it to the clerk. They then retire to their room for the night.

A short while later the clerk realizes that he has over-charged the men as the room rate was actually only $25 for the night. Feeling guilty, the clerk pulls 5 $1 bills out of the register and hands them to the bell-hop instructing him to go refund the money to the 3 business men.

On his way up to their room, the bell-hop struggles with how to divide the $5 up 3 ways. So he decides to refund just $1 to each of the men and pocket the other $2 dollars himself. Problem solved!

Well, not quite... After refunding $1 to each of the men, that means that each paid $9 for the room. $9 times 3 equals $27 plus the $2 dollars that the bell-hop pocketed equals a total of $29... So, what happened to the last $1!?!?

Think about that for a few minutes... what DID happen to that last dollar???

Now THAT is how the federal government and the federal reserve works!!!


Thats simple, as the room only cost $25, not $27. $25+$2 = $27 = cost of the room.

Reading this thread clarifies why our country is in the shape it is in. po\eople get mystified with simple math.


reply posted on 23-2-2010 @ 11:00 AM by sligtlyskeptical
Originally posted by Stewie
reply to post by aaa2500

The deposits are not fake?
The "central banks" will make good?

I don't know your motivations. You are either pathetically misinformed (junior banker), or ....?
You tell me.

While you are "schooling" me, tell me why the American government is in debt. Cut to the chase, I won't be around for a pissing match.



The government is in debt because they borrow money rather than print it. We need to borrow it because much of it is spent foolishly and under those circumstances would cause inflation if we simply printed it. If the money was actually spent productively we could simply print what we needed for government operations without fear of inflationary pressures. we could also eliminate taxes. But then the banking cartel would lose their hold over America.


reply posted on 23-2-2010 @ 04:52 PM by Stewie
reply to post by aaa2500

What prevents the U.S. from printing its own currency? Is it not clear to you Wilson sold this country out in a monumental scam?

I want this to be a productive exchange. I was in a bad mood the other night. I apologize. I respect your knowledge of banking.

Have your read this....

www.deepcapture.com...

It would appear that our institutions are absolutely corrupt. What do you think?


reply posted on 23-2-2010 @ 05:07 PM by Cabaret Voltaire
reply to post by aaa2500


AAA, are you talking about a bond that the bank sells, or a CD or something like that, in which the investors money is locked up for a known period of time? Or is Guarantee the name of another wholly different investment vehicle?

And the reason to do this....
because the money the bank receives for this is not a demand deposit and so has zero reserve requirement, so the bank can put all the money to work with little fear of the original investor coming back to withdraw ahead of the pre-determined time.


reply posted on 24-2-2010 @ 02:03 PM by aaa2500
Originally posted by Stewie
What prevents the U.S. from printing its own currency?


Only creative inertia... Nothing else.


I want this to be a productive exchange. I was in a bad mood the other night. I apologize.


Don't worry about it!


I respect your knowledge of banking.


Don't. Verify anything and everything I write, but please bear in mind that english is my third language.


Have your read this....

www.deepcapture.com...

It would appear that our institutions are absolutely corrupt. What do you think?


I haven't read it and don't have the time for the next few days to read it, but it seems interesting. Don't have an opinion yet.

Originally posted by Cabaret Voltaire
AAA, are you talking about a bond that the bank sells, or a CD or something like that, in which the investors money is locked up for a known period of time? Or is Guarantee the name of another wholly different investment vehicle?


Guarantees are really a class of funding sources for businesses, rather than an investment vehicle.

You are refering to surety bonds, which is one way to do it. It could also be something similar to a CD, but with the principal used to guarantee various types of liabilities.


And the reason to do this....
because the money the bank receives for this is not a demand deposit and so has zero reserve requirement, so the bank can put all the money to work with little fear of the original investor coming back to withdraw ahead of the pre-determined time.


It could, but as guarantees are VERY expensive for the bank, it is much more likely they will use it to satisfy capital requirements.

[edit on 24-2-2010 by aaa2500]
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