Did you know Banks create money out of thin air? (page 3)

OneGenTwoGroups

Hillary Clinton gets paid 700k by Goldman Sachs, Trump appoints Steve Mnuchin, and the ill informed masses don't care.

Simon

This thing is conspiracy nonsense based on fundamental misunderstanding of the monetary system.

The high-street banks don't "print" money, there is a set amount of currency in circulation. The federal reserve / central bank controls this based on the instructions of the government following their monetary policy / target inflation rates.

Banks can and do run out of money - the last banking crisis was a liquidity issue: money didn't disappear but it wasn't liquid. If the banks could just invent more and lend imaginary money, why would they need bailouts?

Yes, we no longer have the gold standard where countries have reserves of gold to back up their currency value, but it's still fundamentally based on asset prices. Countries that try to "print money" themselves rich end up very very poor very very quickly.

When this happens, and you see hyperinflation, it's not that the banks are really printing more money as in 'value' in the economy (superficially, they are) it's that the value of the currency is so devalued that you need more and more of it to buy any asset of real meaning which sometimes means a loaf of bread. They print higher denominations for convenience because needing a large truck of bills to go shopping tends to be impractical.

The banks that lend us money can only lend us the money they have. They get that from deposits, borrowing from the government (to lend out at higher rates) and from the money they make providing banking services, currency transfers etc...

Simon

Banks may be the most destructive and powerful institutions still highly regarded (ignorantly) by society as a whole.

Poor banking regulation and enforcement is the issue. Banking services are an essential part of a modern economy. It's not "banks" per se that are the problem. Very often they are an important vehicle for helping economies out of recessions (and why the banking crisis was so problematic)

When politicians leave office, they make the round of financial institutions and give speeches for BIG money right out in the open.

Yes, THIS is the issue. Like most things, lobbying by people with deep pockets to have the playing field tilted in their favour. But the solution is easy and within people's grasp: don't vote for those people. Don't vote for people getting paid by lobbyists. Demand transparency.

The so-called "penalties" exacted when these institutions are caught in the spotlight are seldom if ever individual prosecutions of actual corrupt executives. No. It's simply fines which are paid from ill-gotten gain. A slap on the wrist.

I agree, they rarely pay a price and often get a reward.

One thing the democrats did is turn some of these institutions into piggy banks for their own schemes. They fine the banks, the banks pay up and still come out ahead, but the money doesn't go to the people they overcharged - it goes to groups that the politicians control as a funding mechanism. That's why some politicians love to give speeches and be seen to do things (imposing fines) but don't change the rules to truly protect people and prevent overcharging etc...

Again, voters have control over this by who they elect. It's made more difficult by the same politicians also being in cahoots with the media so you don't hear about it. That's why independent media is important but sadly, conspiracy nonsense like this is sometimes mistaken for it ... no doubt something the people who want the real truth covered up are happy to see and allow to continue. Oh, those politicians also give favours to media companies who run search engines and social networks don't they ...

TerryWalstrom

Morpheus: Terry, i generally perceive you as intelligent and thoughtful man. That perception makes it difficult for me to reconcile the man with this ridiculous anti jew Rothschild rant.
_____
Could you please quote the part where I stated anything "anti jew Rothchild"?
I'll settle for the part of my post which is counterfactual. I'll retract anything which is wrong.

Simon

The whole thing is wrong Terry and I'm probably going to delete it. It's just nonsense and has no place being disseminated.

TerryWalstrom

The Banks don't have to "print" money considering how much of daily commerce is electronic. Who else but banks issue Credit Cards? PayPal and Amazon have their own parochial credit thingy going. ATM cards are bank issued.
When I had my ATM card hacked, I offered my Chase bank manager the receipt from the most likely store where a fake card reader was situated. I was astonished that he had absolutely no use for that information. He told me it happened so often it was a cost of doing business. Really? No prosecution? No desire to press charges at the store?

It just didn't make sense.

2+2=5

If money were created from thin air inflation would be out of control. Money would become worth less until a loaf of bread could cost $3000 and physical cash weighed on a scale rather than counted out.

Like Simon said, the banks are regulated by governments or at least they should be, and it is ultimately the government who is responsible. The interest rates, lending measures, inflation pressures, employment figures and so on, this is all considered by the reserve bank, keeping the economy well lubricated is their job. Printing money or creating it from thin air doesn’t make for a viable economy.

Simon

The Banks don't have to "print" money considering how much of daily commerce is electronic. Who else but banks issue Credit Cards? PayPal and Amazon have their own parochial credit thingy going. ATM cards are bank issued.

That doesn't mean they are inventing money. They have to cover a certain amount of debt based on the rules for the country they are operating in but they can't just give everyone a $10b credit line.

When I had my ATM card hacked, I offered my Chase bank manager the receipt from the most likely store where a fake card reader was situated. I was astonished that he had absolutely no use for that information. He told me it happened so often it was a cost of doing business. Really? No prosecution? No desire to press charges at the store? It just didn't make sense.

That's because you don't know enough about the system.

The high rate of interest that people pay for revolving credit partly goes to offset losses inherent in the 'convenience' of such a system. Also, the bank likely won't lose anything and could even make a profit from the fraud - they will likely charge the store for the transaction plus reversing it so they may make $10 - $15 and have no loss.

The banks aren't law enforcement. They will no doubt work with and pass information to the police, but they don't decide whether to prosecute or how much police effort should be dedicated to it and it's unlikely that an end-user saying "I think it might have been Joe's coffee shop" is going to really help any court case - they would need hard evidence and you don't have that.

None of that has anything to do with the claims made but illustrate how being unfamiliar with a system can leave people vulnerable to incorrect and invalid claims about how it works.

Q. When you give the bank some money and they entice you to do that by offering you interest on the deposit, where do you imagine that money comes from? If they just magic-it out of thin air, why no offer crazy rates of interest to get your business? In fact, why do they need your money at all if this was all true?

_Morpheus

Terry, you didnt specifically mention the rothschild’s or jews (although people supporting you did) but you are a smart man and i find it hard to believe that you dont know where the anti banking sentiments that you have expressed come from.

It is 100% anti jew/ rothchild conspiracy theory kooks. What you have stated is fundamentally wrong. The source you cited draws from the anti jew/rothschild conspiracy playbook. It offers not one fact. It doesnt even offer a scenario under which a bank “created money from thin air”. It uses subterfuge and double speak to sound intelligent without ever giving any real information.

Banks cannot and do not make money “out of thin air”. As i noted from the start, a simple, logical proof is that banks fail. That alone is proof that they cannot and do not make money from thin air. if you want to have a discussion on economics and the foundations of modern banking and lending, im all for it, but wild assertions about private institutions “making money from thin air” is really below you.

stillin

Simon, don't delete the thread! I'm learning something.

Did you know Banks create money out of thin air?

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