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Taking $900 of person A's $1,000 deposit and lending it out to person B (fractional reserve lending) does NOT create $900 in new money. It just does not. Period. The exact same $1,000 still exists, nothing more. There is NOT now $1,900.
As the one article clearly states... if banks can just create assets with “dollars that did not previously exist,” why is it that Citibank has required so many bailouts over the last thirty years?"
No it does not. We are trying to tell you that is not how it works in practice.
All of that deposit is still there as money. The loan is new money and didn't need that deposit.
That deposit is still there + the loan deposit.
No it does not. We are trying to tell you that is not how it works in practice. All of that deposit is still there as money.
If that were true, banks would never need to be bailed out.
Quote:
The loan is new money and didn't need that deposit.
That deposit is still there + the loan deposit.
Then how is the loan funded?
Quote:
"Mortgage lenders use funds from their depositors or borrow money from larger banks at lower interest rates to extend loans. The difference between the interest rate that the lender charges homeowners for extending a mortgage and the rate the lender pays for replacing the money borrowed is the yield spread premium (YSP). For example, the lender borrows funds at 4% interest and extends a mortgage at 6% interest, earning 2% in interest on the loan."
The exact same concept applies to interest paid to depositors when depositors' money is loaned out. The bank earns the difference between the rate they charge borrowers and the rate they're paying depositors.
The funding has to come from somewhere. Banks don't just create new money.
If we want to get off track a bit, this lifelong Republican voter also thinks it's obscene for Exxon-Mobil to report an $18B dollar profit for the 2nd quarter of this year when fuel prices are where they are.
There is just so much wrong there across both statistics, finance and economics....
Since I entered the working world, I've heard that it's useless to pay into SS because you'll never see it back.
Guess what.
You are correct. It is a Ponzi scheme. Had I been able to invest $1,000 per month over my lifetime verses the significantly higher amount I actually contributed to SS I would have retired at 55 with 1.5 million more than what I have now. I nor you will never come close to seeing the value of the contributions we make. Mine have all been given to someone else and you’re paying mine.
People that say it’s their money don’t understand basic Ponzi schemes let alone how investing in the market over time is a solid investment and the return much higher than SS.
If they ever give you the option to get out take the money and run. Invest it thru a qualified investment counselor.
Stop and imagine what your tax rate will be when your time to withdraw comes..
You are correct. It is a Ponzi scheme. Had I been able to invest $1,000 per month over my lifetime verses the significantly higher amount I actually contributed to SS I would have retired at 55 with 1.5 million more than what I have now. I nor you will never come close to seeing the value of the contributions we make. Mine have all been given to someone else and you’re paying mine.
People that say it’s their money don’t understand basic Ponzi schemes let alone how investing in the market over time is a solid investment and the return much higher than SS.
If they ever give you the option to get out take the money and run. Invest it thru a qualified investment counselor.
Stop and imagine what your tax rate will be when your time to withdraw comes..
Everyone needs to take SS the minute they are eligible, before it collapses.
Taking $900 of person A's $1,000 deposit and lending it out to person B (fractional reserve lending) does NOT create $900 in new money. It just does not. Period. The exact same $1,000 still exists, nothing more. There is NOT now $1,900.
As the one article clearly states... if banks can just create assets with “dollars that did not previously exist,” why is it that Citibank has required so many bailouts over the last thirty years?"
This explains it simply and correctly.
It's shocking that people would think that banks don't loan real cash out for mortgages. The cash has to be there, and if it's not liquid enough, that's when bank runs can happen.
Some think, while it may seem like dems are ignoring the problem - they really are working hard to fix it. Not in the way most suspect however. Leaders of all countries - especially socialist countries - know that their economies are collapsing with the weight of programs and benefits promised but which can never possibly be delivered - so they are working hard to collapse everything to wipe out those promises. They are doing this under the guise of war, climate change emergencies, pandemics that shut down trade, and threats by those who want to remove them from control. They hope to wind up with everything and with more power when all is said and done - unless people wake up and realize what is happening. Socialism is great until you run out of other peoples money.
Does anything make sense these days? It does when you look at it through this lens. Has happened numerous times throughout history. War is the main release valve which is why the US refuses to talk peace.
Every dollar in your bank account is a debt owed by someone (govt), and the only way they can repay it is by creating more debt that is sold to someone else. That is unsustainable and the definition of a ponzi scheme.
Some think, while it may seem like dems are ignoring the problem - they really are working hard to fix it. Not in the way most suspect however. Leaders of all countries - especially socialist countries - know that their economies are collapsing with the weight of programs and benefits promised but which can never possibly be delivered - so they are working hard to collapse everything to wipe out those promises. They are doing this under the guise of war, climate change emergencies, pandemics that shut down trade, and threats by those who want to remove them from control. They hope to wind up with everything and with more power when all is said and done - unless people wake up and realize what is happening. Socialism is great until you run out of other peoples money.
Does anything make sense these days? It does when you look at it through this lens. Has happened numerous times throughout history. War is the main release valve which is why the US refuses to talk peace.
Every dollar in your bank account is a debt owed by someone (govt), and the only way they can repay it is by creating more debt that is sold to someone else. That is unsustainable and the definition of a ponzi scheme.
Great post!
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