What is wrong in the Western Economies?

Actually the European Central Bank could embrace quantitative easing if they thought it necessary.

 

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And they would be doing illegal activities just as America is doing and will crash and burn one day as well. America can't keep buying its own debts because eventually the dollar will be worthless because so much of it is being printed that it devalues itself out of existence.

 

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Banks create and destroy money all the time. As long as they destroy money in the future, they can print what they like. I don't see how it can be illegal when they make the laws.

 

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No, banks cannot destroy money, they send it away to the treasury which then burns it if it is old and worn out. They make the budget which is supposed to be adhered to but they always spend more than they take in and that's illegal as well but they just keep doing it. If fewer dollars were in the economy we would have much higher inflation and would see prices skyrocket upwards and that's called hyper inflation. That's a very bad thing as well if you don't realize it.

 

Of course banks destroy money. Im not talking about bits of paper. I'm talking about a few clicks on a computer.

 

Again they cannot destroy money on a computer either, they can move it, hide it or change who owns it but cannot destroy it. all money that a bank has is known by the Fed or Treasury, I forget who exactly, and it is always accounted for every quarter. So the bank can't just click away any of their money without others knowing what they did and then the bank must say why it did that. The bank isn't allowed to click away its funds for any reason.

 

No I didnt say a bank was allowed to click away its funds without reason. Everytime a bank makes a loan, eg credit card, mortgage etc they CREATE money. Then when the person pays it back they DESTROY the money and keep JUST the interest earned on it. Banks create and destory money everyday. The only contraint is how much in deposit they must have eg 10%.

So if people start paying back all their loans and stop taking out mortgages, its deflationary.

Banks create money as debt when they make loans, via fractional reserve banking. When loans are repaid, money is destroyed in the reverse process.

 

The banks use the money they have in their vaults or from income they will be receiving to issue out loans. If people pay back loans they are adding to the banks reserves to be reissued to others for more loans which helps stimulate the economy. The problem is that the banks make very bad loans at times and those who default on their payments are not able to receive any further loans from any other bank, or at least that's what's supposed to happen. Banks borrow their money from the Fed and other banks in order to get up and running which must be paid back with interest.

 

I'm sorry but this is just plain wrong.

Money paid back from a loan is destroyed (it was created by the debt in the first place). Only the interest remains which the banks keep as profit.

http://wn.com/How_Banks_Destroy_Money_via_Fractional_Reserve_Banking

 

Let us say a bank had 100.00 and it lent that to me. It then would have nothing to lend to anyone else. It then gets that money back at say 25.00 a month which it could then lend out to another person who wanted to borrow 25.00. Without the money put back into the bank it won't be able to lend anything or don't you see that?

 

Are you saying you are totally unaware of fractional reserve banking?

Seriously read up on it. If a bank has 100.00 on deposit it could go out and lend much more than 100.00 it if wanted to.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

 

I wasn't that aware of it but since you gave me that link I am now. I knew that a bank could loan out more than it had on hand but exactly how much more I didn't know.

That said I believe this is just another problem within the banking business that really shouldn't be happening and it should be stopped if possible. I understand its meaning but don't think it is a prudent way to do banking do you?

 

If you prevented fraction reserve banking, business (especially small ones) would totally struggle to get loans. Being able to get a loan for anything, even a mortgage, would be a lot lot harder.

I see nothing wrong with fractional reserve banking at all PROVIDED the banks are lending to people who actually stand a chance of paying the money back.

Lending to people with crap credit histories and no job for example, would mean the debt is likely to go bad and would impact the banks profits. Take it to the extreme and lend to lots of people who don't pay it back, and you have a bank in serious trouble. Some banks were able to package up these toxics debts and sell them to unwitting buyers who thought they were buying something good.

 

someone with a fucking brain . I can't believe it ! Pin People don't understand perceived wealth. Maybe I can be an example to enlighten the crowd . O.K. I am worth maybe 5000,000 a little more maybe less. I have made 400,000 in my life . How can that be ? Appreciation! Now there is a word for all you fools ! I will say it one more time . Appreciation .

 

So if a businessman comes to your bank and he had an excellent credit history and wanted to borrow money to start up a small pizza business you would lend him the money even if he had no collateral to use for that loan except his excellent credit history? No matter what small business that is started up there's a big chance 50/50 it will fail in the very first year because it is under capitalized no matter how good the location of product might be.

If others don't bother to investigate what they are buying then they shouldn't be in the banking business either. Because one bank can move their toxic debts out of their hands and into another that doesn't bother to know what they are actually buying then they both are very corrupt and bad businesses.

 

No, I where did I say that?

I said banks should not be lending to large numbers of people with a high risk of not paying it back. To me, thats just common sense.

 

I see that dirty word Profit in there . You know that modern connotation be bad . Can't be making any profit , Better to go belly up from insufficient funds than to make a profit in the mind set of the slave. Whip the dog into submission . There is a problemo brewing Pin . You can feel the crackle in the air . ( Crackle if you are reading this you know I still love you , you nut you , You should call Kathy . She won't call you , but she might need your services )

 

But the banks make those kinds of loans everyday. Unfortunatly the regulators can't investigate every bank loan that they make and even if they did the banks are responsible for their bad loans and should be shut down if they make to many in my opinion. There's many problems within the banking sphere and those problems just get worse and worse because more bad loans are made to get rid of the bad loans that the same people made.

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What goes up must come down spinning wheel got to go round .

Your A BANKER !! O.K. then . That was almost as traumatic as finding out Gustav was a girl . Oh holy shit the banking industry is under fire bro

 

It is the loan officer falsifying records so they can get the commission . Bad loans are a thing of the past . Come join the future bro. The crash of 2008 changed everything . Have you tried to get a loan as of late ? Hell the Bankers can't keep up with the new regs. It is a friggen nightmare in La La land