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Old November 12th, 2015, 02:27 PM   #51
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Originally Posted by RNG View Post
And gold is just a commodity so effectively it is a fiat substance too, only worth what someone thinks it is worth.
Commodities like gold are not fiat substances. The gummit or large corporations or banks can't issue trillions of troy ounces of gold out of thin air. They actually have to find it and pay to get it out of the ground and hopefully what they get out is worth more than it cost to get it out.
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Old November 12th, 2015, 02:27 PM   #52
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Up until the end of 1964, our curency was sorta backed by silver. You could exchange paper money for dimes, quarters and halves that were 90% silver. I can't remember the exact number, but I think a dollar of such coins had .72 troy ounces of silver then. A troy ounce of silver today is around $14.50.
In 1964 a gallon of gas cost about a silver quarter. today that silver quarter will buy a little more than a half gallon of gas.

The size of the economy being too large for gold or silver in pure form, coins could be diluted. That is instead of being 90% like they were before 1865, they could be say 20% silver and the rest copper. The advantage of having a currency backed in metal is that it puts constraints on government preventing them from spending so much on warfare and such.

But a debt based economy can have advantages too if run responsibly and honestly...cough cough. The devil is in the details.

The current system works kinda like this:
RNG borrows 200K to buy a home. He gets a 30 year loan. Interest and principal on 200K over 30 years comes to 600K. As the principal and interest is paid to the bank (banking system), they "retire" the principal and pocket the interest.
So...
We trust the banks to retire (remove from circulation, destroy)the 200K principal and let them keep the 400K for the service of preforming minor bookkeeping tasks.

As you can see, the banks are roughly pocketing 2/3 of the debt economy.

Multiply this by the number of Americans who have loans and you're talking some serious coin.

Now there is federal spending too. Congress agrees to borrow say 500 billion. Instead of going to the treasury and having them issue the money into circulation, they go to the banksters and the banksters go to the treasury and it's issued into circulation then RNG and Pilgrim pay the banksters interest on it.
There has never been enough coinage in circulation to cover all the paper money floating around, let alone all the wealth in banks, investments and so on, so that was not even close to a backing of the currency.

As to the banks. First, they don't pocket it, they use that money in part to pay interest to others so they can get money to lend me. They also use that money to lend to others. And it isn't anywhere that bad. Banks do make profits, but not out of line with other industries.

As an aside, removing the regulations separating commercial and investment banking was butt-ugly stupid. That is where a lot of money went down the rabbit hole, but again that is nothing to do with whether you have a fiat currency or not.
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Old November 12th, 2015, 02:34 PM   #53
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As to the banks. First, they don't pocket it, they use that money in part to pay interest to others so they can get money to lend me. They also use that money to lend to others. And it isn't anywhere that bad. Banks do make profits, but not out of line with other industries.
We have fractional reserve banking. That means if a bank has one million in deposits (not their money, depositors money) they can loan ten million. The interest on that ten million ends up in bankster pockets.
Banks do not lend their own money. the only thing they spend their money on is payroll and the building. I'm not sure if they pay the interest to depositors with their own money, but at a ten to one ratio, who cares?
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Old November 12th, 2015, 02:49 PM   #54
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We have fractional reserve banking. That means if a bank has one million in deposits (not their money, depositors money) they can loan ten million. The interest on that ten million ends up in bankster pockets.
Banks do not lend their own money. the only thing they spend their money on is payroll and the building. I'm not sure if they pay the interest to depositors with their own money, but at a ten to one ratio, who cares?
I'm sourcing you on that one.
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Old November 12th, 2015, 02:55 PM   #55
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I'm sourcing you on that one.
Which one? Fractional reserve banking? https://search.yahoo.com/yhs/search;...bct=0&pstart=8



Or this:
The Federal Reserve explains it this way:

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.
http://www.learningmarkets.com/under...anking-system/

edit: Reserve ratio explained: http://www.stopprintingmoney.com/Lea...serve_Banking/
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Old November 12th, 2015, 03:10 PM   #56
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Which one? Fractional reserve banking? https://search.yahoo.com/yhs/search;...bct=0&pstart=8



Or this:
The Federal Reserve explains it this way:

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.
Understanding the Fractional Reserve Banking System

edit: Reserve ratio explained: Fractional Reserve Banking > Learning
No, the banks do not lend their own money part.
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Old November 12th, 2015, 03:35 PM   #57
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No, the banks do not lend their own money part.
I apologize for my poor explanations. I's been over a decade since I sourced any of this convoluted bankspeak. I'm having to relearn this myself.

We have a debt based monetary system. Debt is the creation of money (private loans excluded). All new money enters the economy as debt. Debt is newly created money. Newly created, not old money out of bankster pockets.

This site explains things much better than I can.
Fractional Reserve Banking > Learning

A video here: https://www.youtube.com/watch?featur...&v=8Fm5NSeVPog
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Old November 12th, 2015, 04:00 PM   #58
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Originally Posted by Pilgrim View Post
I apologize for my poor explanations. I's been over a decade since I sourced any of this convoluted bankspeak. I'm having to relearn this myself.

We have a debt based monetary system. Debt is the creation of money (private loans excluded). All new money enters the economy as debt. Debt is newly created money. Newly created, not old money out of bankster pockets.

This site explains things much better than I can.
Fractional Reserve Banking > Learning

A video here: https://www.youtube.com/watch?featur...&v=8Fm5NSeVPog
That much is true, but not all loans are money being created.

And further, this reenforces the stupidity of decreasing regulations on banking, as was displayed by the need (arguably) for the huge waste of taxpayer money bailing the fucking crooks out.
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Old December 1st, 2015, 03:54 AM   #59
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Bank
Roger LowensteinNovember 29, 2015Image: Getty Images

Paul Moritz Warburg, a German-Jewish immigrant who was one of the founding fathers of the U.S. Federal Reserve, had a fervent wish that his creation would be seen as one of America’s great monuments — “like the old cathedrals of Europe.”

Warburg’s dream that “the Fed” would become a cherished American institution has never looked more in doubt. The Federal Reserve, which was enacted by Congress in 1913 and set up shop the following year, is today an institution under siege. More surprising perhaps is that the Fed is refighting partisan and ideological battles that Warburg and the other founders thought they had settled a century ago.

Congress today is rife with bills to restrict the Fed’s independence or subject its decisions on monetary policy to real-time Congressional review. (This would require Janet Yellen and the other Federal Open Market Committee members to conduct deliberations on interest rates in open political theater.) Another bill, by Congressman Kevin Brady (R-Texas), would charter a commission to study the Fed and recommend an overhaul.

Congress’s ire stems largely from libertarians who disdain the Fed as a meddling Washington bureaucracy. Rand Paul and Ted Cruz, if either lands in the White House, clearly intend to downsize the Fed’s charter. But on the left, Sen. Elizabeth Warren (D-Mass.) has co-sponsored a bill to prevent the Fed, in some future financial crisis, from administering the remedies it pursued in 2008–09, including propping up the markets for credit cards and auto loans vital to households. Sen. Warren has criticized the Fed for being too cozy with banks; apparently her anger at banks trumps her well-advertised empathy for consumers.

Anger at Washington? Anger at banks? Warburg once wrote, in despair of ever launching a central bank, that an “abhorrence of both extremes” — that is, of Washington and of Wall Street — “had led to an almost fanatic conviction” in favor of extreme decentralization.

Warburg was born into a wealthy banking family, proprietors of M.M. Warburg, in Hamburg in 1868. The third of five brothers, he was groomed to run the bank, yet found the details of commerce tedious, and was repelled by the coarser elements of banking, such as stock speculation. Introspective and brooding, he became active in a local commercial court and in the city council — evidence of his latent interest in politics.

In 1895, Warburg married Nina Loeb, scion of the Kuhn, Loeb banking family in New York. They settled in Hamburg, but Nina yearned to be near her parents. In 1902 they relocated to New York, with Warburg joining his in-laws’ firm. Warburg was stunned by the primitive condition of American banking. Not long after he arrived, interest rates in New York’s chaotic money market soared to 100 percent. “I was not here but three weeks,” Warburg said, “before I was trying to explain to myself the roots of the evil.”

Warburg quickly concluded that the fault lay in America’s lack of a central bank. Most other industrialized nations had a central bank, which acted as a storehouse of reserves (or surplus credit) for the entire nation. In addition, the central bank acted as a lender of last resort, supplying liquidity in times of stress.

In America, by contrast, each bank was responsible for its own reserve. In times of financial stress, each bank — seeking to protect itself — would pull back on credit, accentuating the general scarcity, causing interest rates to soar. Money shortages and panics were common; depressions were not infrequent.

After his arrival, Warburg wrote a paper, calling for a central bank similar to the one in his native Germany. Jacob Schiff, Warburg’s brother-in-law and senior partner at Kuhn, Loeb, showed the paper to James Stillman, head of National City, the country’s biggest

Read more: The Jewish Story Behind the U.S. Federal Reserve Bank - Culture ? Forward.com
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