An alternative way of banking

KyussBishop · 12-04-2013 8:40pm

The OP is pretty much on the ball here, in recognizing the insane situation of having private banks that can generate money from nothing, and who profit from that.

It is taught that banking works through 'fractional reserve lending', but that is actually not a valid description of how it works, money is actually 'endogenous', and it is explained well here:
http://www.businessspectator.com.au/article/2012/10/22/commodities/myth-money-multiplier

Here is another good introduction:
http://www.webofdebt.com/excerpts/introduction.php

This is part of a much wider issue: We have a monetary system that is controlled by private banking interests, and all the money in our economy is debt-based (which, as private-debt grows in proportion to GDP, becomes inherently unsustainable); banks put money into the economy with loans, and take it back out through debt repayments and interest.

There is no reason why this should be the exclusive power of private banks though; if governments took back control over central banks, which are typically run by people previously from private finance/banking institutes, then government could put money into the economy through public spending, and take it back out with taxes.
This money would not be debt-based either, so would not be inherently unsustainable over time like the debt-based money private banks put out; in the EU such reforms are not likely to happen while the Euro remains though.

When this potential for government to make use of money creation, instead of private banks, is pointed out, it invariably leads to right-wing economic types scaremongering over hyperinflation, even though government is perfectly capable of limiting spending by inflation targets.
What this ignores, is that private banks add/remove money to/from the economy, and create inflation in doing that as well (such as with our property bubble); to them, inflation caused by the private sector is acceptable, but the mere potential for inflation from public spending (even when that is strictly limited by inflation targets), is totally unacceptable.

This rhetoric you get from them though, has no interest in economic fact; these people invariably try to claim a 'higher authority' in economic knowledge, to ridicule opposing views, and the entire right-wing economic narrative they use is (whether they know it or not) actually constructed for the purpose of protecting private monied interests (not surprising when you see that most of the narrative, originates from US Republicans/Libertarians, and their scores of morally bankrupt think-tanks/propaganda-institutes).

It is actually a huge issue, because public vs private use of money creation, completely changes all of economics and politics, because if government takes control over money creation and denies private banks access, then government is not constrained by money, only inflation (undermining most privatization and anti-welfare/labour narrative), and private banks can't load the economy with debt.

This is huge, because it is nothing less than private banking, financial and business interests, trying to protect their rent-seeking abilities over the rest of society;
once they lose power over money creation, that will lead to the destruction of most private rent-seeking powers, because government will then be able to afford to provide any services that can be used to engage in rent-seeking behaviour.

The ultimate rent-seeking behaviour as well, is private banks and the interest they charge on debt (from money created out of nothing); if there is going to be interest charged on debt, then there is no reason at all the profits should not go into public hands, through a public bank.

Chuck Stone · 12-04-2013 9:09pm

I find it quite depressing when people with alternative ideas and those who seek a new or better way of doing things are shouted down and mocked.

These 'chicken licken conservatives' have a quasi-religious belief in the status quo and imo an unconscious contempt for anyone who doesn't march in line and sing from the the hymn sheet.

Greentopia · 12-04-2013 9:23pm

studiorat wrote: »

No I don't believe it does. The argument of inflation I believe is concerned with banking across the whole system.

Here's some links about them and ethical banking :

http://jak.se/english/english

http://www.jak.se/sites/default/files/international/dokument/Ethical%20Banks.pdf

I hope you find it interesting.

I saw how that operated when I lived there and always wished they would open branches here. So far no luck

Apologies if this has been talked about, haven't read the whole thread, but would love to see some UK Co-Operative branches open in this country too. We sorely need ethical banking in this country!

KyussBishop · 12-04-2013 9:33pm

Chuck Stone wrote: »

I find it quite depressing when people with alternative ideas and those who seek a new or better way of doing things are shouted down and mocked.

These 'chicken licken conservatives' have a quasi-religious belief in the status quo and imo an unconscious contempt for anyone who doesn't march in line and sing from the the hymn sheet.

Indeed, and it is rather hard to tell sometimes, whether they are conscious of this or not; I suspect a lot of them are, but just don't care, and use it as a means to justify their own personal goals, and ignoring the consequences that has on other people (probably why quite a lot of them you encounter online, work in finance).

I think it's pretty important for people (everyone) to realize, is that economics as it is currently taught in college etc. ('neoclassical', to put a label on it, is the current dominant school), actually has almost no credibility left.
Practically no economists schooled in 'neoclassical' economics saw this crisis coming, when all they had to look at was a graph of 'private debt vs GDP'; their theory is flawed in fundamental ways, yet this is the type of economics almost all countries are run on.

The problem with neoclassical economics, is that it ignores evidence/data that conflicts with theory, and tries to work around that; other theories, like Austrian economics (what hyperinflation scaremongers usually espouse) aren't any better in this regard, and some of them even explicitly reject evidence.

Out of all the alternatives, the main one I've found that actually has a proper respect for science/empiricism, and which actually tries to find theory that best fits reality (rather than asserting reality fits their pet theory, flying in the face of evidence), is the Post-Keynesian crowd; among them, are some of the only people, like Steve Keen, to both predict and model the economic crisis before it happened.

Three Seasons · 12-04-2013 9:35pm

KyussBishop wrote: »

The OP is pretty much on the ball here, in recognizing the insane situation of having private banks that can generate money from nothing, and who profit from that.

It is taught that banking works through 'fractional reserve lending', but that is actually not a valid description of how it works, money is actually 'endogenous', and it is explained well here:
http://www.businessspectator.com.au/article/2012/10/22/commodities/myth-money-multiplier

Here is another good introduction:
http://www.webofdebt.com/excerpts/introduction.php

This is part of a much wider issue: We have a monetary system that is controlled by private banking interests, and all the money in our economy is debt-based (which, as private-debt grows in proportion to GDP, becomes inherently unsustainable); banks put money into the economy with loans, and take it back out through debt repayments and interest.

There is no reason why this should be the exclusive power of private banks though; if governments took back control over central banks, which are typically run by people previously from private finance/banking institutes, then government could put money into the economy through public spending, and take it back out with taxes.
This money would not be debt-based either, so would not be inherently unsustainable over time like the debt-based money private banks put out; in the EU such reforms are not likely to happen while the Euro remains though.

When this potential for government to make use of money creation, instead of private banks, is pointed out, it invariably leads to right-wing economic types scaremongering over hyperinflation, even though government is perfectly capable of limiting spending by inflation targets.
What this ignores, is that private banks add/remove money to/from the economy, and create inflation in doing that as well (such as with our property bubble); to them, inflation caused by the private sector is acceptable, but the mere potential for inflation from public spending (even when that is strictly limited by inflation targets), is totally unacceptable.

This rhetoric you get from them though, has no interest in economic fact; these people invariably try to claim a 'higher authority' in economic knowledge, to ridicule opposing views, and the entire right-wing economic narrative they use is (whether they know it or not) actually constructed for the purpose of protecting private monied interests (not surprising when you see that most of the narrative, originates from US Republicans/Libertarians, and their scores of morally bankrupt think-tanks/propaganda-institutes).

It is actually a huge issue, because public vs private use of money creation, completely changes all of economics and politics, because if government takes control over money creation and denies private banks access, then government is not constrained by money, only inflation (undermining most privatization and anti-welfare/labour narrative), and private banks can't load the economy with debt.

This is huge, because it is nothing less than private banking, financial and business interests, trying to protect their rent-seeking abilities over the rest of society;
once they lose power over money creation, that will lead to the destruction of most private rent-seeking powers, because government will then be able to afford to provide any services that can be used to engage in rent-seeking behaviour.

The ultimate rent-seeking behaviour as well, is private banks and the interest they charge on debt (from money created out of nothing); if there is going to be interest charged on debt, then there is no reason at all the profits should not go into public hands, through a public bank.

Banks don't create money out of nothing. They take in deposits and lend a proportion of it.

Three Seasons · 12-04-2013 9:42pm

KyussBishop wrote: »

Indeed, and it is rather hard to tell sometimes, whether they are conscious of this or not; I suspect a lot of them are, but just don't care, and use it as a means to justify their own personal goals, and ignoring the consequences that has on other people (probably why quite a lot of them you encounter online, work in finance).

I think it's pretty important for people (everyone) to realize, is that economics as it is currently taught in college etc. ('neoclassical', to put a label on it, is the current dominant school), actually has almost no credibility left.
Practically no economists schooled in 'neoclassical' economics saw this crisis coming, when all they had to look at was a graph of 'private debt vs GDP'; their theory is flawed in fundamental ways, yet this is the type of economics almost all countries are run on.

The problem with neoclassical economics, is that it ignores evidence/data that conflicts with theory, and tries to work around that; other theories, like Austrian economics (what hyperinflation scaremongers usually espouse) aren't any better in this regard, and some of them even explicitly reject evidence.

Out of all the alternatives, the main one I've found that actually has a proper respect for science/empiricism, and which actually tries to find theory that best fits reality (rather than asserting reality fits their pet theory, flying in the face of evidence), is the Post-Keynesian crowd; among them, are some of the only people, like Steve Keen, to both predict and model the economic crisis before it happened.

Morgan Kelly predicted everything to a tee.

KyussBishop · 12-04-2013 9:48pm

Three Seasons wrote: »

Banks don't create money out of nothing. They take in deposits and lend a proportion of it.

You are just asserting this, ignoring my post in the process; check the links. Banks put out loans first, and fix up their reserves afterwards.

Banks have a 'window' (a period of time) for fixing up their reserves if they find themselves in breach of their reserve limits, and they will go to the interbank market to fix this (by borrowing money from other banks), and if that fails, they will go to the central bank, who will create the money for them and exchange that in return for bank assets.

Central banks never refuse to fix up reserves like this, because doing so would create a rather silly mess as banks recall loans. This effectively means banks can create money from nothing, and that this happens all of the time in the current private banking system.

coffee_cake · 12-04-2013 9:48pm

Three Seasons wrote: »

Morgan Kelly predicted everything to a tee.

Peter schiff did too
And he's an austrian

KyussBishop · 12-04-2013 9:52pm

Three Seasons wrote: »

Morgan Kelly predicted everything to a tee.

He didn't predict the world economic crisis, he predicted the Irish property bubble; Steve Keen predicted the world economic crisis long in advance, and was even able to model it in advance.

bnt · 12-04-2013 10:14pm

As already pointed out several times, there already are "banks" that operate on a non-profit basis: credit unions. There used to be building societies in Ireland too, but now they're just a memory and a link to Wikipedia.

However, they don't pay much in the way of interest. It was the search for higher interest rates that got money pouring in to Iceland some years ago, and in to Cyprus more recently. If you don't offer a decent interest rate, you don't attract investment ... but if you do offer a decent interest rate, how can you pay it? You have to lend the money back out at even higher rates of interest. In other words, you have to make risky investments. The Cyprus banks bought Greek government bonds, which fit the bill nicely. And the Greek government promptly partly defaulted on those bonds, almost a year ago, leaving the Cypriot banks with huge holes in their balance sheets.

So, if you step back and look at the big picture: just who did what to whom? Who forced savers to put their money in high-interest offshore accounts that could only be supported by risky investments that backfired?

If you go to a casino, or invest in the stock market, the standard advice is "only use money that you can afford to lose". Putting your money in a "high interest" account is, in effect, gambling. You might make more profit ... or you might lose your shirt. For years now, it's seemed that everyone except certain "boring" governments have been playing that game.

KyussBishop · 12-04-2013 10:24pm

This is less about interest though, and more about private banks being able to (effectively) create money; it's less an issue of banks profiting off of money people deposited with them, but instead of profiting off of interest on money created from nothing.

Iwasfrozen · 12-04-2013 10:25pm

Chuck Stone wrote: »

I find it quite depressing when people with alternative ideas and those who seek a new or better way of doing things are shouted down and mocked.

These 'chicken licken conservatives' have a quasi-religious belief in the status quo and imo an unconscious contempt for anyone who doesn't march in line and sing from the the hymn sheet.

Often because people exposing said alternatives are naive in the extreme. Now I don't claim to be an economics expert but if inflation is 2.5% and interest rates are 0% I'm sure as hell not putting my money in a bank. No savings means no loans, no loans means no banks. Unless you want the government to fund the banks which is fine as long as they don't waste too much money, and oh yes, expect 10% inflation every election year. :rolleyes:

Noreen1 · 12-04-2013 11:05pm

Iwasfrozen wrote: »

Often because people exposing said alternatives are naive in the extreme. Now I don't claim to be an economics expert but if inflation is 2.5% and interest rates are 0% I'm sure as hell not putting my money in a bank. No savings means no loans, no loans means no banks. Unless you want the government to fund the banks which is fine as long as they don't waste too much money, and oh yes, expect 10% inflation every election year. :rolleyes:

Sometimes people who propose alternatives are naive.

Having said that, how many more recessions and/or bailouts need to happen
before the economic "experts" realise that the system is not fit for purpose?

The monetary system was created to serve people, by making "barter" convenient.
Now, the tail wags the dog - because debt is socialised, and everyone pays to keep the system that the "experts" claim must work according to specific rules - even though those rules don't always work for the benefit of society. (Society being all the people who use the system.)

I'm no economist, nor do I pretend to have the solution to our economic woes.
I do know this much, though.
If a piece of equipment keeps breaking down, and costing me money to repair, then I replace that equipment with something that's fit for purpose.

Sooner or later, a new system will have to be devised.
Fair play to anyone willing to at least try to come up with alternatives - naive, or otherwise.

Three Seasons · 13-04-2013 12:06am

KyussBishop wrote: »

You are just asserting this, ignoring my post in the process; check the links. Banks put out loans first, and fix up their reserves afterwards.

Banks have a 'window' (a period of time) for fixing up their reserves if they find themselves in breach of their reserve limits, and they will go to the interbank market to fix this (by borrowing money from other banks), and if that fails, they will go to the central bank, who will create the money for them and exchange that in return for bank assets.

Central banks never refuse to fix up reserves like this, because doing so would create a rather silly mess as banks recall loans. This effectively means banks can create money from nothing, and that this happens all of the time in the current private banking system.

Central banks can create money out if nothing, not banks, the banks have to exchange assets for the cash.

Fukuyama · 13-04-2013 1:03am

KyussBishop wrote: »

The OP is pretty much on the ball here, in recognizing the insane situation of having private banks that can generate money from nothing, and who profit from that.

It is taught that banking works through 'fractional reserve lending', but that is actually not a valid description of how it works, money is actually 'endogenous', and it is explained well here:
http://www.businessspectator.com.au/article/2012/10/22/commodities/myth-money-multiplier

Here is another good introduction:6
http://www.webofdebt.com/excerpts/introduction.php

This is part of a much wider issue: We have a monetary system that is controlled by private banking interests, and all the money in our economy is debt-based (which, as private-debt grows in proportion to GDP, becomes inherently unsustainable); banks put money into the economy with loans, and take it back out through debt repayments and interest.

There is no reason why this should be the exclusive power of private banks though; if governments took back control over central banks, which are typically run by people previously from private finance/banking institutes, then government could put money into the economy through public spending, and take it back out with taxes.
This money would not be debt-based either, so would not be inherently unsustainable over time like the debt-based money private banks put out; in the EU such reforms are not likely to happen while the Euro remains though.

When this potential for government to make use of money creation, instead of private banks, is pointed out, it invariably leads to right-wing economic types scaremongering over hyperinflation, even though government is perfectly capable of limiting spending by inflation targets.
What this ignores, is that private banks add/remove money to/from the economy, and create inflation in doing that as well (such as with our property bubble); to them, inflation caused by the private sector is acceptable, but the mere potential for inflation from public spending (even when that is strictly limited by inflation targets), is totally unacceptable.

This rhetoric you get from them though, has no interest in economic fact; these people invariably try to claim a 'higher authority' in economic knowledge, to ridicule opposing views, and the entire right-wing economic narrative they use is (whether they know it or not) actually constructed for the purpose of protecting private monied interests (not surprising when you see that most of the narrative, originates from US Republicans/Libertarians, and their scores of morally bankrupt think-tanks/propaganda-institutes).

It is actually a huge issue, because public vs private use of money creation, completely changes all of economics and politics, because if government takes control over money creation and denies private banks access, then government is not constrained by money, only inflation (undermining most privatization and anti-welfare/labour narrative), and private banks can't load the economy with debt.

This is huge, because it is nothing less than private banking, financial and business interests, trying to protect their rent-seeking abilities over the rest of society;
once they lose power over money creation, that will lead to the destruction of most private rent-seeking powers, because government will then be able to afford to provide any services that can be used to engage in rent-seeking behaviour.

The ultimate rent-seeking behaviour as well, is private banks and the interest they charge on debt (from money created out of nothing); if there is going to be interest charged on debt, then there is no reason at all the profits should not go into public hands, through a public bank.

There is so much wrong with this I dont even now where to begin.

The Malaysian Debit crisis occured in a country with a government controlled central bank. They then had to prop themselves up with stringent economic policies as a result of this control. Sure they stopped the further ****ing up of their currency but only in name. Why? Because their money didnt float freely or compete.

Ugh. Seriously the 'alternatives' are easily destroyed with simple, recent, examples.

Also the banking system wasn't exactly to blame for the economic crisis. Over lending was. A human flaw called greed caused this which no economic system has ever been able to stop.

StewartGriffin · 13-04-2013 1:14am

Iwasfrozen wrote: »

Often because people exposing said alternatives are naive in the extreme.

Imagine, for example, you are self building your own house. How naive do you look when you take that first scoop of muck out of the big empty field?

The first step off the path is always naive - (why would anyone go there into the rough?) but with work it develops.

highfive · 13-04-2013 1:24am

smash wrote: »

I saw an ad on TV for a new reality show, can't remember what station but I think it was called 'the bank of Dave' or something like that. A guy in the UK set up his own bank and was issuing loans etc. within a week he was getting cease and desist letters from natwest and other lenders.

Yeah it was on channel 4. I think it was that he then got a letter from the regulator to stop doing it. Then he kinda got around it by matching the loans with deposits so that he wasn't using any money that he didn't have. I think he was a building society or something and not a bank. Still a great idea for someone to do.

I remember reading an article about it and someone saying that it's nearly impossible to create a new bank without licking the arse of loads of important people and institutions - basically a closed shop of an industry!! Fecking messed up situation if you ask me, but then you see people go out and spend money on stupid things and get massive loans for things they dont need. People ask for it, being honest. All you can do is keep your head down and live a good life cause the banks aren't going anywhere and people have free will to do stupid things!!

end of rant!(sorry if it was off topic)

KyussBishop · 13-04-2013 1:51am

Three Seasons wrote: »

Central banks can create money out if nothing, not banks, the banks have to exchange assets for the cash.

Actually on checking over this again more closely, private banks don't even need to exchange assets in this case, they just pay a higher rate of interest on money borrowed in this fashion, from the central bank.

The main point, is that central banks won't refuse to shore up private bank reserves; it's the extending of loans by private banks, that later on leads to the money creation by the central bank (and that is only to fix up reserves; the money from the loan is already out there, in the economy).

A bank creating a loan also creates deposits in another bank, because as soon as the loaned money is spent, it is usually eventually placed into another bank account, increasing the reserves of the overall system; this means that by extending a loan, a bank may already get a share of the deposits that creates (helping it to fix up its reserve ratio), and is creating more deposits in other banks, that it can borrow on the interbank market (before ever needing to consider going to the central bank).

This actually means (and if responding to this, address the wider arguments, not selectively pick at this) that investments create savings, not the other way around, as is commonly taught; it's all explained at length, here:
http://www.businessspectator.com.au/article/2012/10/22/commodities/myth-money-multiplier

Here also is the US federal reserve debunking the fractional-reserve/money-multiplier theory:
http://www.federalreserve.gov/pubs/feds/2010/201041/201041pap.pdf

KyussBishop · 13-04-2013 2:09am

Dean0088 wrote: »

There is so much wrong with this I dont even now where to begin.

The Malaysian Debit crisis occured in a country with a government controlled central bank. They then had to prop themselves up with stringent economic policies as a result of this control. Sure they stopped the further ****ing up of their currency but only in name. Why? Because their money didnt float freely or compete.

Ugh. Seriously the 'alternatives' are easily destroyed with simple, recent, examples.

Also the banking system wasn't exactly to blame for the economic crisis. Over lending was. A human flaw called greed caused this which no economic system has ever been able to stop.

You don't know where to begin, so you throw out a red herring (Malaysian debt crisis), which doesn't apply to my post.

This fits the template, for the usual offhand dismissals thrown out over any proposed alternatives; complete with the veneer of condescension such dismissal depends upon.

Chuck Stone · 13-04-2013 2:18am

KyussBishop wrote: »

This fits the template, for the usual offhand dismissals thrown out over any proposed alternatives; complete with the veneer of condescension such dismissal depends upon.

Indeed. Your post was quoted in full length (lazy page cluttering and utterly pointless) and given a couple of one liners and a plate of vomit as a 'rebuttal'.

hatrickpatrick · 13-04-2013 3:13am

This is why I love bitcoin so much. For all its flaws, it's unique in that its physically impossible for more of it to be owed than actually exists in currency. Nobody can create credit or anything like that if the bit coins don't actually exist, and they can ONLY be created by mining, which creates them as actual circulating currency, no interest or anything like that attached.

Guernsey has a similar currency. Central Bank issues it without interest, so you can't owe more back to the central bank than actually exists in circulation. Incidentally, they haven't had a major recession in something like 60 years.

Our system is a crackpot Ponzi scheme. The only people who benefit are the people who control the system itself.

EDIT: Before someone comes in and defends the interest based currency system, right now we have thousands of homeowners struggling desperately with arrears and repayments.

Who the f*ck benefits from an increase in their interest rates? How does it serve the economy'sbest interests or even society's best interests for these people to be hit even harder than they originally were? Who does this help? Who gains anything from it apart from the financial system itself? How does it facilitate any sort of greater good?

It makes no economic or LOGICAL sense whatsoever. Reducing consumer confidence further by removing more money from these people has no possible outcome other than f*cking the system up even more.

So why is it happening? Which vested interests are driving that particular madness?

IM0 · 13-04-2013 6:46am

Three Seasons wrote: »

How do banks create money out of nothing, they don't have money printers.

They lend money. That's not creating money out of nothing.

You also think there is no reason to profit from lending. You won't mind lending me money then at 0 % interest.

You don't have a clue what you're talking about. It's basically a rant which stems from a feeling of powerlessness in this world directed at those who you think have power.

by a system called fractional reserve lending

banks only ever have 1/10 of the money they say they have

the venecians invented it centuries ago and its being going strong ever since

look it up!

Three Seasons · 13-04-2013 7:25am

IM0 wrote: »

by a system called fractional reserve lending

banks only ever have 1/10 of the money they say they have

the venecians invented it centuries ago and its being going strong ever since

look it up!

They don't claim to have all the cash to match deposits.

They lend it out.

smash · 13-04-2013 7:41am

Three Seasons wrote: »

Banks don't create money out of nothing. They take in deposits and lend a proportion of it.

Three Seasons wrote: »

Central banks can create money out if nothing, not banks, the banks have to exchange assets for the cash.

Three Seasons wrote: »

They don't claim to have all the cash to match deposits.

They lend it out.

Make up your mind, you're all over the place. Yet still consistently wrong so I guess it doesn't matter.

Just listen to what everyone has said to you!

Edit: it might be conspiracy stuff, but it explains fractional reserve banking quite well: http://youtu.be/vm3DixfL9o0

IM0 · 13-04-2013 7:44am

Three Seasons wrote: »

They don't claim to have all the cash to match deposits.

They lend it out.

a banks balance sheet is made up of debt, someone borrows money then they put that money down on their balance sheet in full, they dont have that money but they have a claim to it, and because of that they lend out that 'money'

actually the more I think about it a phrase a wise man once said comes to mind when he was talking about something else

"its not a perfect system but its the best we have"

I think that sums most things up to be honest..

its one thing bashing systems which have worked for centuries, its another giving an ALTERNATIVE which works on the whole just as well!

Three Seasons · 13-04-2013 7:47am

smash wrote: »

Make up your mind, you're all over the place. Yet still consistently wrong so I guess it doesn't matter.

Just listen to what everyone has said to you!

Edit: it might be conspiracy stuff, but it explains fractional reserve banking quite well: http://youtu.be/vm3DixfL9o0

Those quotes are the same, what are you talking about.

smash · 13-04-2013 7:48am

Three Seasons wrote: »

Those quotes are the same, what are you talking about.

You keep saying they don't create money from nothing. They do, it's how money creation works!

Three Seasons · 13-04-2013 7:50am

smash wrote: »

You keep saying they don't create money from nothing. They do, it's how money creation works!

Explain how banks create money from nothing. Not central banks.

Printing new money is "creating money". Banks can't print money, only central banks.

smash · 13-04-2013 7:52am

Three Seasons wrote: »

Explain how banks create money from nothing. Not central banks.

Printing new money is "creating money". Banks can't print money, only central banks.

Even central banks rarely print money yet every day billions are created globally. Look at the video I posted!

IM0 · 13-04-2013 7:57am

hatrickpatrick wrote: »

This is why I love bitcoin so much. For all its flaws, it's unique in that its physically impossible for more of it to be owed than actually exists in currency. Nobody can create credit or anything like that if the bit coins don't actually exist, and they can ONLY be created by mining, which creates them as actual circulating currency, no interest or anything like that attached.

Guernsey has a similar currency. Central Bank issues it without interest, so you can't owe more back to the central bank than actually exists in circulation. Incidentally, they haven't had a major recession in something like 60 years.

Our system is a crackpot Ponzi scheme. The only people who benefit are the people who control the system itself.

EDIT: Before someone comes in and defends the interest based currency system, right now we have thousands of homeowners struggling desperately with arrears and repayments.

Who the f*ck benefits from an increase in their interest rates? How does it serve the economy'sbest interests or even society's best interests for these people to be hit even harder than they originally were? Who does this help? Who gains anything from it apart from the financial system itself? How does it facilitate any sort of greater good?

It makes no economic or LOGICAL sense whatsoever. Reducing consumer confidence further by removing more money from these people has no possible outcome other than f*cking the system up even more.

So why is it happening? Which vested interests are driving that particular madness?

mainly because they made a ****e investment, who in their right mind takes out a mortgage for what they cant afford, no one smart thats for sure, sorry but truth is a bitch isnt it.

now I hear your reply coming " so burn the bondholders then!!"

well the reality is the bondholders keep society afloat in many ways, they are the ones who fuel the system and FUND the banks, its people who buy stuff THEY CANT AFFORD!! who make a mockery of the banking system and society as a whole.

taking out a loan for a TV isnt the same thing as taking out a mortgage for a house of 100's of thousands yet they pretty much treated it the same way

An alternative way of banking

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