Is the banking system really gonna fall apart?

Originally posted by Jean Paul Zodeaux
reply to post by 00nunya00

 

What is legal is not necessarily lawful. If what is legal is not lawful then this legality is merely a mystical incantation that has as much force as any shamans ooga booga nonsense. It matters not what nation we are talking about, there is a rule of law and there is "rule by law". The rule of law begins with the inherent political power belonging to the people, and all governments are established to protect and defend the rights of individuals. "Rule by law" is the reverse, where governments assert that only they can grant rights and that the people exist solely for their pleasure.

Very true, and important to remember, but it's also important to remember that the people who did these transactions are the very same ones bankrolling the legislators and judges that will be deciding if it's fraud or not. Kind of hard to expect that Goldman isn't going to get paid when Obama (and all the other presidents) has stocked his cabinet with them and taken vast amounts of donations from them.

In terms of electronic transferals, no this is not "cold hard cash". Cold hard cash would actually be coins minted with some precious metal that reflects the value of the coin. Fiat currency is not "cold hard cash" it is money build upon confidence instead of backed by actual wealth. If I take out a loan based upon confidence then what do I have? If I take out a loan backed by say gold, what do I have?

Ah, I see where' you're coming from on that, and I agree. Gold has an intrinsic value, whereas paper is worthless without the system behind it. I believe this is possibly why gold has been kept unrealistically low to this point while allowing a slow growth; you get the people to give up every ounce they have thinking the prices are at a temporary high and that they will take an inevitable downturn (as they always have), so they need to cash in that broken gold NOW while prices are still at "historic highs". But in reality, they are simply hoarding it with the full knowledge that paper will collapse and a new currency can only be based on intrinsic value----which they will now hold (and control) the vast majority of. Want to pan for some gold yourself? Talk to the EPA. Want to mine some? Good luck trying to afford that patch of land.

You're right; fiat is dying, and only two things can replace it: Greenback-type currency, or gold. Seeing as the banks can't control the former, its stand to reason that they will opt for the latter. We'll be fooled into seeing it as "the people's currency" but in reality, it will be the people's slavery, as they are giving over the right to coin money solely to the banks, not their government. There's no gold at Fort Knox, so the US is SOL trying to coin its own new currency without them.

reply to post by 00nunya00


Again, because it is the people who hold the inherent political power, if an act of legislation is unlawful the people have a responsibility to reject it. If an executive action is unlawful the people have an obligation to confront it. If the courts are acting unlawfully their decisions have no force or weight.

Legislation is not law, at best it is evidence of law, at worst it is unlawful. An executive, i.e. police, is not the law, they are bound by oath to uphold the law, not break it, and the courts have the same obligation. If they do break the law in favor of unlawful legislation, acquiescence to this is also unlawful.

Originally posted by unityemissions
Look, the banks run on confidence.

The banks run on money. Money runs on fear and human mistrust of humans.

reply to post by Jean Paul Zodeaux


I agree in theory, but in practice it's quite different. How many millions of people were against the bailouts and found them unlawful? What could they do about it? Zero. How many people feel the Fed is unlawful, and what can they do about it? It would be great if we were governed by our own consent, but in reality we're governed by the will of the biggest donors and lobbyists. Until we're willing to contribute vastly larger amounts of cash to our legislators than the lobbyists do, we're not governed by our consent. We are unwilling to turn off the TV and exercise our political power.

Originally posted by 00nunya00
reply to post by Jean Paul Zodeaux

 

I agree in theory, but in practice it's quite different. How many millions of people were against the bailouts and found them unlawful? What could they do about it? Zero. How many people feel the Fed is unlawful, and what can they do about it? It would be great if we were governed by our own consent, but in reality we're governed by the will of the biggest donors and lobbyists. Until we're willing to contribute vastly larger amounts of cash to our legislators than the lobbyists do, we're not governed by our consent. We are unwilling to turn off the TV and exercise our political power.

Now you speak on apathy, and other such things as "entitlement" in a "round-about" way.

People who are getting help from the government, will be in fear of said government, as their "aid" will be taken away, or so they fear.

The "unwilling to turn off the tv" group, is apathy, and an unwillingness to change their status quo. The status quo keeps them "feeling" comfy, and happy. They have their 6-pack, some cheap easy food, and dancing with the stars, or what ever else floats their boats.. (600 cable channels... there is always Something to keep them distracted) (i.e. bread and circuses).

We could not get enough people together to "buy" back our political reps. We, the little people do not have enough finances to compete with the lobbyists, and such other "hand-greasing" shadow people with "special" interests. (Let ALONE get a general consensus on WHO to buy back, but that is a WHOLE other debate / post for it's own topic thread).

The whole system is our master, and we are but "free" slaves in their plantation.. some "choose" to pick the crops, others "choose" to water the crops. other still yet "choose" to weed and prune the crops. But in essence we are all still slaves.

-Cyg

So the game gets more interesting in spain were public debt is only half the problem, the private debt
created in the mother of all housing booms indangers the spainish banks. now most people
couldn't care less about spanish banks unless you know if they defalt all those credit defalt swaps
which would have to be called in to cover it. touble right but then you look at the other problem
areas china with it's massive private debt worries and japan with it's 200+ debt to GDP ratio,
once the crack gets to there the fan will be so caked in it, that any possible comback for the system
won't be possible. the debt system has out striped the worlds capacity to pay and printing won't stop
it. once it is clear that it's starting marshal law will be introduced.

Does anyone think a 'global digital currency' will be the ultimate result? Years down the line maybe.
The other thing is even if there isn't a global collapse IMO there is surely likely to be a substantial increase in individual collapse. There will be 'winners' even in the current situation. But the great mass of people will be losers. Look at the increase in food banks in the US and UK. Look at the increasing suicides in Greece. For those of us at the sharp end, is it not 'semantics' to argue whether the situation constitutes a full scale global collapse?

Originally posted by samkent
reply to post by it4lian

 

And just what system would you replace it with?
Where do you get the money to buy a car or even a house?

You can change their name from bank to bunk if you like but it will still function the exact same way.
Someone deposits money and recieves interest.
They loan it out and charge interest.

Oh naive one... if only this were remotely true. What you describe is the theoretical ideal of how the banking system works. But it's anything but true. In order to make those loans, pay dividends to their shareholders, reward their management, cover bad decisions, etc., they need ALOT more money than what is deposited. So they charge all sorts of fees, leverage their deposits (lend a multiple of what they actually have), invest in all sorts of investment vehicles (bonds, stocks, certificates, credit swaps, etc.).

All these activities put their solvency at risk. Just look at what happened in 2008 and what has quietly been happeneing ever since (i.e., bank failures).

Originally posted by jtma508


Oh naive one... if only this were remotely true.

I agree with the rest of your post, and it's good info to spread, but when you start off your post like this it just makes your reader close their ears to everything after this opening line. Honey, not vinegar. That's how you change minds.

Originally posted by KoolerKing
Could someone please explain how the banking system will fall apart?
I understand just about everything but how does the selling of bonds hold this thing up?
I know the fed prints as much money as it wants. How come we have not had hyper inflation or devalued currency as of yet? I'm just looking for answers or something easy to read so my primitive intellect understands this situation based on solid math. Thanks. Kooler.

The banking system wont fall apart. Its near impossible for that to happen. There will be shocks to it, but no collapse. If it gets really bad, the government steps in to prevent a collapse.

There wont be any hyperinflation. The Fed isnt run by six year old kids. There is an actual science to what they do. They are fairly competent (ATS will paint a different picture though).

Is the banking system really going to fall apart?

Nope. As long as people use a medium for commerce, banks (and banking systems) will exist.

Some specific areas of the banking system will never be the same, but banking as a whole will be around for many, many more years (well outside of any of our lifetimes).

Originally posted by KoolerKing
Could someone please explain how the banking system will fall apart?
I understand just about everything but how does the selling of bonds hold this thing up?
I know the fed prints as much money as it wants. How come we have not had hyper inflation or devalued currency as of yet? I'm just looking for answers or something easy to read so my primitive intellect understands this situation based on solid math. Thanks. Kooler.

Here is the simple math. Printing money devalues the currency. if you have 100,000 in circulation and you add another 100,000 you just devalued your currency by 50% because you now have twice the money chasing the same goods and services so prices always rise to adjust to the amount of currency in circulation its a law of economics. So if you have 1000 in the bank it will now only buy half the goods and services it previously bought before more currency was added to the economy.

Ok here's what most people do not understand. Printing money is not the main way our system adds currency to the economy. Printing federal reserve notes is just the petty cash of the system. The main way currency is added is by making loans. When you take out a loan a promissory note is created and considered an asset and is traded and sold on the market it is currency. Then you have fractional reserve. So if your note is for 10,000 they can now loan another 90,000 based on the note. Where did all this money come from that they are loaning? Answer from thin air based on your signature! Can you now begin to see how they blew up the real estate bubble so huge? They do not even need to print it it is just book entry money on a computer screen.

Then there is derivatives. They take all these notes and bundle them and sell them again to investors who can buy a little piece. Well gee what about the original note owner supposedly the bank? They just sell these over and over and create new book entry money based on fractional reserve exponentially. So now you see why this bubble is the most prolific in history. However since real estate has deflated these derivatives are worthless now but they have not been flushed out of the system yet the banks are hiding them so to speak so they do not have to take the losses. They can only do this for so long.

Why has it not completely collapsed yet? Couple things. The real estate market is deflating which was the crash of 2008 this takes currency out of the system. However it has not finished deflating because those derivatives are still out their floating around and soon they will all come home to roost and then it will finish collapsing. Right now the federal reserve is inflating more by buying 60% of their own bonds because no one else will. And by the way bonds work just like promissory notes and are essentially the same thing money from nothing. Here is the rub though when our government wants money it does not print it for the most part it buys bonds from the federal reserve at interest. So we have the banking cabal creating money from nothing loaning it to government at interest which interest was never even created this further devalues the currency and adds to the national debt which they cannot pay so they borrow more money to pay the interest only. It is fiscal insanity. That would be like you borrowing money just to pay the minimum payment on your credit card perpetually you can never pay it off and you just keep racking up more and more debt. Amplify that by a thousand time and you can see why the government is trillions in debt and growing exponentially. How long do you think that can last?

So essentially government is living off a seemingly unlimited credit card. But everyone knows that credit is not unlimited. China Japan and Saudi Arabia are our major bond buyers providing the credit for our national credit card so to speak but they are cutting way back which is why the fed is buying it now. Soon though no one will buy and the credit will be cut off and it will all come crashing down and then you will see hyperinflation in essential goods and services as they try and print their way out and deflation in non essentials etc.

There is no other way it can go you cannot continue to create loans/money from nothing for ever and debase your currency it is a mathematical certainty that it sill crash. Every fiat system in history like ours has ended badly. We are at the end of the cycle. The economy is so much larger now then in the 30s and is globally connected so it takes longer for the cancer to work through the entire global system but Iceland and Greece are the first to go eventually England and America will go and the rest of the planet with us!

Those that say the banking system can't collapse and the fed reserve master know what they are doing should study some history they are delusional and buying the coolaid.

That is a nutshell version of what is happening but I could write a book on it.

Depends how you define collapse. The system will stay intact, at the expense of everyone who is subject to it. And no one really understands why or how they are getting screwed, so they wont do anything about it.

You people are DELUSIONAL, if you think the 'banks' are gonna fall apart. That system has been around, for thousands of years. Why do you think Jesus was CRUCIFIED, because HE was setting the captives free? Jesus was made a public EXAMPLE, of what happens to those, that mess with the cheddah.

Oooooooh, you thought it had something to do with religion? Yeah, well.....1 in the same!

Originally posted by hawkiye

Originally posted by KoolerKing
Could someone please explain how the banking system will fall apart?
I understand just about everything but how does the selling of bonds hold this thing up?
I know the fed prints as much money as it wants. How come we have not had hyper inflation or devalued currency as of yet? I'm just looking for answers or something easy to read so my primitive intellect understands this situation based on solid math. Thanks. Kooler.

Here is the simple math. Printing money devalues the currency. if you have 100,000 in circulation and you add another 100,000 you just devalued your currency by 50% because you now have twice the money chasing the same goods and services so prices always rise to adjust to the amount of currency in circulation its a law of economics. So if you have 1000 in the bank it will now only buy half the goods and services it previously bought before more currency was added to the economy.

Ok here's what most people do not understand. Printing money is not the main way our system adds currency to the economy. Printing federal reserve notes is just the petty cash of the system. The main way currency is added is by making loans. When you take out a loan a promissory note is created and considered an asset and is traded and sold on the market it is currency. Then you have fractional reserve. So if your note is for 10,000 they can now loan another 90,000 based on the note. Where did all this money come from that they are loaning? Answer from thin air based on your signature! Can you now begin to see how they blew up the real estate bubble so huge? They do not even need to print it it is just book entry money on a computer screen.

Then there is derivatives. They take all these notes and bundle them and sell them again to investors who can buy a little piece. Well gee what about the original note owner supposedly the bank? They just sell these over and over and create new book entry money based on fractional reserve exponentially. So now you see why this bubble is the most prolific in history. However since real estate has deflated these derivatives are worthless now but they have not been flushed out of the system yet the banks are hiding them so to speak so they do not have to take the losses. They can only do this for so long.

Why has it not completely collapsed yet? Couple things. The real estate market is deflating which was the crash of 2008 this takes currency out of the system. However it has not finished deflating because those derivatives are still out their floating around and soon they will all come home to roost and then it will finish collapsing. Right now the federal reserve is inflating more by buying 60% of their own bonds because no one else will. And by the way bonds work just like promissory notes and are essentially the same thing money from nothing. Here is the rub though when our government wants money it does not print it for the most part it buys bonds from the federal reserve at interest. So we have the banking cabal creating money from nothing loaning it to government at interest which interest was never even created this further devalues the currency and adds to the national debt which they cannot pay so they borrow more money to pay the interest only. It is fiscal insanity. That would be like you borrowing money just to pay the minimum payment on your credit card perpetually you can never pay it off and you just keep racking up more and more debt. Amplify that by a thousand time and you can see why the government is trillions in debt and growing exponentially. How long do you think that can last?

So essentially government is living off a seemingly unlimited credit card. But everyone knows that credit is not unlimited. China Japan and Saudi Arabia are our major bond buyers providing the credit for our national credit card so to speak but they are cutting way back which is why the fed is buying it now. Soon though no one will buy and the credit will be cut off and it will all come crashing down and then you will see hyperinflation in essential goods and services as they try and print their way out and deflation in non essentials etc.
[...]

Those that say the banking system can't collapse and the fed reserve master know what they are doing should study some history they are delusional and buying the coolaid.

^^^^This, this, this. Frigging excellent explanation.

Do any of you "ha ha, never gonna happen" folks care to refute this? Care to explain the way out of this one?

Originally posted by 00nunya00

^^^^This, this, this. Frigging excellent explanation.

Do any of you "ha ha, never gonna happen" folks care to refute this? Care to explain the way out of this one?

Aside from a flawed base premise and multiple detail errors, what is there to refute?

2nd.

reply to post by peck420


Oh, tut tut, you look really smart!

(Except for the part where you explain nothing about why the "premise is flawed" or refute a single detail with a fact....)

reply to post by peck420


You may as well have replied with Pfffffffttttttttttttttttttttttttttttttt!

2nd.

reply to post by gorgi


I disagree, in 2008 they really didn't know what to do, they got lucky, and if it continues down it's current path there will be no turning back. IMO there are no amount of austerity measures that can save the day now. The system is on borrowed time.

The importance of bonds in the financial markets is that if the bond interest percent becomes too high due to selling of bonds, the masses will sell their stocks to buy bonds because its of jiucy interest rates which equal "garanteed money" The fed does not want this so they aftifically make demand for U.S. bonds to keep the stock market up. The entire system is a scam.

How long will can this go on for? .01 - 2 years is my guess. By 2014 the interest on the national debt will be enough to collapse the entire system if it has not already reached that point. I am not sure what is ahead but im long silver. 30$ an ounce is a good buy now I believe. I also believe it will go lower if JPM stock goes higher. the point at which JPM stock starts to fall is the point where you want to buy.

Thats my .02, hope you found that helpfull.