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 Banking Question

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soothsayer
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PostSubject: Banking Question   Sat Aug 06, 2011 9:20 am

I have no idea how the national banking system works. I mean, the government prints money, which costs money to produce, money which is then loaned out to people with added interest. Already there is interest on something whose production cost is higher than the printed value.

Then the government charges a tax to collect money (whose face value is less than it's worth) to pay off the interest earned from it's initial production, because the government had to raise the amount which it can produce, and in so doing, incurred an interest from the national bank because the money had to come from somewhere... but the money never did come from anywhere!

The bank tells the government that they can borrow X amount of dollars, at a Y interest, which then the government produces money (remember, it costs money to make money) to pay back the interest... but everytime they produce money, the interest goes up because the banks says they have to charge it in order for the government to get it.

Shocked

I can understand a lot of things. I have a grasp of Chaos Theory. I can understand physics. I play soduko. But please, if you can answer this question on how the financial system works, especially with regards to the banking industry, I'd greatly appreaciate it.


Last edited by soothsayer on Sun Aug 19, 2012 12:24 pm; edited 1 time in total
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VaderXanth
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PostSubject: Re: Banking Question   Sat Aug 06, 2011 12:30 pm

I would like to help here, but I believe that the Admin could answer this one better. Admin, this one is all you! alien
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PostSubject: Re: Banking Question   Sat Aug 11, 2012 9:16 am

THEN there's the fact that banks take your money to borrow it out to other people, collecting a high interest rate; for ease of argument, we'll say 10%. In turn, the bank pays you a small fee for using your money; again, for ease, we'll say 1%... but that fee is only paid to you only under the condition that you do not take your money out. If you do take out your money, not only do you lose that "bonus", but you will also more than likely have to pay for the use of taking out your money (check fees, more than five withdrawals a month, having less than $100 in the account, all are met with service fees).

In other words, the banks will pay you for the use of your money, unless you yourself use your money, then you have to pay the bank.

But, where is this money? Is your money in the bank? No! Remember, your money is loaned out; fact of the matter is, no one's money is in the bank, at least not all of it. Think about it, that's how the Depression came about, how banking systems fail, how the Savings and Loans failed (Clintons, 1990s)... the bank members all tried to withdraw their money within the same time period. Banks need the thought of there being money so they can produce loans, for without the loans, they won't get a fresh supply of money coming in. People withdraw their money means no money in the bank, which leads to loans defaulting, which leads the banks into the red.

Now here is where things get interesting...

When it comes to the government, the Federal Reserve doesn't give the government money. They produce a promissory note that states the government owes them so much money; the government then spends this note, or states this much goes here, this much goes there. Budgets are made to allow for this influx of money, even though there is never any real transference of funds. Since this is, in effect, a loan, not only does the government pay back the dollar amount, but the interest as well. Sounds just like a normal bank dealing with normal people, right? Right, and that's all it is, a bank.

The interesting part is that this bank is not federally owned or operated. It also is not a reserve, there is no money there. The Federal Reserve is a privately owned organization. Let me say that again: the Federal Reserve is a privately owned organization. ALL banks are privately owned (credit unions, however, are not), and the Federal Reserve is no exception.

...

So money doesn't really exist, has no value other than what people put on it. There's this big thing about the gold standard, but that's for something else altogether. Other people are using your money, to which the bank gets a lender's fee. This interest is then used to build up the banks status and standing. The more assets the bank has, the more money it can loan out, the more interest it brings in, the more it can loan out and so on. ALL banks within the Federal Reserve's control, those with the FDIC label, feed into the Federal Reserve, which does the same with loans to the government: our banks hold this much money, so we can give you this much in return.

BUT THE LOAN ISN'T BASED ON ANYTHING. The loan is based off of the money that the bank cycled through (see the above paragraph), money that went through the loan / interest / loan cycle!

(I've been reading up on this subject lately. Rather fucked up stuff.)
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Shadowcrunch
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PostSubject: Re: Banking Question   Sat Aug 11, 2012 10:38 am

As a reply to your post about the banks... it sounds to me like you should be reading up on some of Einstein's theories on time, and why you have so fucking much of it! MYAAH! Razz

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PostSubject: Re: Banking Question   Sat Aug 11, 2012 12:56 pm

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soothsayer
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PostSubject: Re: Banking Question   Sun Aug 19, 2012 12:38 pm

Don't really care for Conspiracy Theory with Jesse Ventura, but he is entertaining.

Wall Street


This one is kind of... well, it's something you'd expect to watch in school. It's informative, but man, will it put you to sleep.
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