Originally posted by Aldolas@ Fractional reserve banking: How often do they want to repeat the lie? Normal banks (i.e. non-national
banks) do not create money!!! FFS They do not create money. They would love to, but they can't! That's why they fear a bank run!
@ 0%: In the interest of money scarcity you need a price on money. The usual 'supply and demand' rule. Otherwise you will have hyperinflation.
Don't take it personally, but I can't be asked to think up a good exaple for fractional banking
again so I'll just do it quickly:
Fractional reserve in this example of 10%
0. Bank has 0 money
1. you win $1 million in the lottery and take it to the bank.
2. Bank must keep 10% => 100,000
3. Bank lends all the rest (900,000) to a customer to buy a house off mr. a
4. mr. a (after having sold his house) deposits 900,000 into bank
5. Bank must keep 10% => 90,000
6. Bank lends all the rest (810,000) to another customer to buy a house off mr. b
7. mr. b (after having sold his house) deposits 810,000 into bank
8. Bank must keep 10% => 81,000
9. Bank could lend 729,000 to the next customer, but there is no customer because I can't be asked to make another one up!!!
So it's the end of the year and let's check the banks balance sheets:
REMEMBER You only deposited $1million into the bank:
The bank has $2.71 million in deposits
The bank has lent $1,71 million in mortgages
The bank can lend a further $729,000
The bank has a legally required minum of $271,000 of 'reserves'.
Did the bank create money out of thin air? NO!!!
(By the way if you continue the example then you will end up with just under $10mill in deposits, which is 10 times as much as was oriiginally
deposited.)
Now, the worst thing that can happen to a bank is a bank run: why? Well, the bank would have to call in the mortgages to pay everyone back and they
can't get the money out of the properties fast enough.
If you don't understand it, read the topic up from a non conspiracy site and/or reread the example. Don't believe the disinfo/propaganda on this
subject, PLEASE!
@ 0% and doing away with banks:
Ok, so you want to get your loans from your local government office, i.e. local council?
You'll be waiting about 5 years for the 50 page
application forms!!!
0% loans: so everybody can just go to their local council and ask for a loan for a car, house, new business etc.
Within 6 months you will be paying $ millions for a loaf of bread. Rewatch the 2nd video. Remember what happened during the war for independence(I
think it was that one)? Where someone is quoted saying: "A wagonload of money wouldn't buy a wagonload of goods!" (or read up on causes for
hyperinflation)
0% loans will not work and It is a complete nuts idea (don't take it personally) to get a loan from a qualified council penpusher as opposed to a
qualified banker!
Blessings,
Samuel
EDIT to add => I didn't want to offend any council workers, but they themselves usually understand that the burocreacy that they are bound by is a
pain in the proverbials.
p.s. Didn't proofread, so if you find spelling or grammar mistakes ]> keep 'em!
[edit on 27-2-2009 by Aldolas]