Your life, work, debt, and how money is created

[Turner]

Steve...

You do worry dont you?. It seems to be cyclic with you


Turner

[ausguy]

Where you GUNNA go Turner when the SHTF ?

[Azim]

From my understanding on banking laws STEVE is right BANKS CREATE MONEY FROM NOTHING. This is how money get's created from nothing:

Customer A:  Deposits 100,000.  The bank looks at the customer's previous spending pattern. The customer uses 10-20% of that on a regular basis. Which means they need 10,000 to 20,000 in liquid to satisfy this customer. They now have 90,000 - 80000 in surplus to play with.

Customer B: Applies for a loan:  The Bank's are smart and that's why we feel out applications as to why we need the money. From the spending habits of this customer again 10% to 20%. Which means if the bank lends this customer money, they need 10%- 20%. Which turns out to be 8000 to 16000 in liquid. now they have a new balance of 82,000 to 64 000 to play with.

This is based on customer A and B are same BANK A.

The process goes on and on. Till that last 10% is lent to someone who is going to spend it all.

Coming form the same angle this is the same way mortgages are approved:
You make a deposit on your mortgage or buying price of 10-25%. Do the math and start using 5% towards the calculation of borrowing power you will see the total adds up to your buying power.
Going back to mortgages, that's one of the reasons why when you put down 25%+ as your down payment they let you borrow more.


What happens when the Customer B gets his loan approved, and pays to Customer C who in turn now has a different BANK B.

The payment goes to the clearing house(GOVERNMENT OWNED TREASURY) that now allows BANK A to be overdraw money to pay BANK B.

BANK B: Does the same thing with it's money.

NOW YOU HAVE same 100,000 which has been lent to 10 people.
Do the math: 100000 * 10% = 10000  Balance 90000.
                     90000 * 10%   = 9000   Balance 81000
                     81000 * 10%   = 8100   Balance   72900

Do you really think or thought bank had that much money sitting around?

It's called what Steve says making money from free money.


This are the Banking laws for countries in the COMMON WEALTH.

USA IS NOT AND DONT THINK IT EVER WAS PART OF THE COMMON WEALTH.

That's one of the reasons why USA is going financially under. By Just printing money as they need it. The WORLD BANK all these years has been using US$ as their main money.
With US printing money as they please have dropped the value of money.

[Turner]

Where you GUNNA go Turner when the SHTF ?

Ausguy...im not going anywhere. Im already there in UK. I dont see the panik here...only the press panik

[ausguy]

Azim - Your figures & financial dealings examples just don't stack up. If they were correct then the Australian Government debt (Treasury) would be higher than the USA Govt. debt.

This in reality is not the case. The USA Govt. debt is close to a humungous $17 trillion & the Aust. Govt. debt is around $1/2 a trillion. Transpose that to the population ratio of about 13 : 1 & that shows the USA at $17 trillion VS Aust. at $6 1/2 trillion & about 38.2%.

As you've already mentioned the USA Treasury has been endlessly printing money out of thin air, increasingly so since the GFC of 2008. The Aust. Govt. has not, thus the difference.

As I already said in my last post, combined OZ bank loan funding is close to $1.5 Trillion PER YEAR. Using your loan percentages, then in around 15 years OZ Treasury loan debt would now exceed that of the USA's when in fact it's only near to 3 %.

Azim, I'll ask you the same question I asked Steve - If the banks can create money out of nowhere then why do the need to borrow about $1. 5 trillion each year to fund loans ? Keep in mind OZ has a population of 24 million. To appreciate how much $1 trillion actually is just Google it & view the animated display of 10,000 x $100 million dollars stacked on pallets, extremely thought provoking.   

[ausguy]

Turner - Sure there's no panic because the mother of all financial collapses hasn't happened yet because the US Congress keeps deferring the tough decisions.

Their FISCAL cliff debt is still there. The STALEMATES between the Republicans & the Democrats continues on from last year.

If they continue deferring then it will be business as usual for most people. If you had to live off the land UK & Europe would be a tough place to be.

What will you do when there's no food in the shops. no petrol for your car, no electricity for your home or trains ?  A collapse in law & order, mass riots &
murder everywhere, a dog eat dog World. 

In OZ I'd be ok as by going "bush" it would be easy to live off nature due to plenty of wide open spaces. Plenty of animals & fish, easy to grow crops in a more temperate climate & a low population to land area ratio.

As with a Tsunami you'll get very little warning.

[Steve]

When I saw that I asked myself how old is steve, 14 years old? Finance and banking is not your strong side, no offence

jjfx, my sources include THE FEDERAL RESERVE's book called "Modern Money Mechanics" (link:://lisgi1.engr.ccny.cuny.edu/~makse/Modern_Money_Mechanics.pdf), and the Treasurer (ex) of Australia, Peter Costello (link:://:.petercostello.com.au). Yes, finances arent their strong side, right? No offence, do better research next time.

Ausguy, you quoted the following:

In order to support their lending banks source their funds from * customer deposits ** wholesale markets (domestic & international)

This is a very broad statement and the interpretation is: When a customer deposits $10,000 with us, as per the law, banks can then loan out $100,000 because it holds 10% of the loaned amount.

Anyway we dont need to argue this point. Just look at what Costello himself said:

"Banks grow the money supply every time they claim to lend money. I say claim to lend money, because banks do not really lend money. When money is borrowed from a bank, the bank actually creates new money or credit out of nothing. It credits a loan account it has set up on its books with a deposit which can be drawn upon by the borrower. As banks must pay out deposits on demand this is a liability for the bank which is entered in the debit side of its ledger. On the credit side of the ledger, because the bank charges interest on this created money, this is an asset for the bank earning it income. Everyone sub-consciously knows banks do not lend money. When you draw on your savings account, the bank doesn't tell you you can't do this because it has lent the money to somebody else. You would be pretty irate if this happened because it would amount to theft."

And read "Modern Money Mechanics".

You asked:

IF AS YOU SAY BANKS CREATE MONEY FROM NOTHING FOR LOANS WHY DO THEY NEED TO BORROW AROUND $1 1/2 TRILLION DOLLARS EVERY YEAR

You are probably referring to the amounts loaned by the Federal Reserve. When you take a bank loan, the federal reserve loans the funds to the bank, and the bank loans it to you. But there is no real loan of anything. This is the actual creation of money they just call "loans".

Turner, you said:

You do worry dont you?. It seems to be cyclic with you

My concern is for the billions of people who are being told the truth, and when the full force of what hits arrives, these same people will be asking "wtf? Who did this?". And when they finally realize the truth, it will be too late for them and they'll be asking "why didn't anyone tell us?".

If you see lots of people walking off a cliff, and you keep telling them and warning them, and they look at you wondering what you're on, then you'll understand why I have lots to say about it.

Turner, the UK is a populated area. What is going to happen will be much worse than the great depression.

Look at what happened in Greece.

Banks have already acted to seal off the amount of the levy â€" a 6.75% tax on deposits under (euro)100,000 and 9.9% on those above â€" so depositors can’t access it.

Imagine having $100,000 in your bank, safe and sound, then overnight you are forbidden from withdrawing your funds, and the government steals around $7000, all "legally". Would you be pretty pissed off? This is what happened already in Greece, but there is much more to come.

The USA will never recover from its debt. And when it finally crashes, some options are:

1. Go into default, in which case it will be legally obligated to be owned by other nations
2. Steal from the citizens, like what happened in Greece
3. Major cut back on services, to the point where the country is in chaos. Yes, but the USA can still afford to spend trillions on wars in countries a world away.

There is no peachy outlook for the USA. It is about to go into chaos. But it will have a ripple affect on other nations and currencies.

Again the end goal of the people doing it is having a global government and currency, and microchipping us all like cattle. Yeah Steves been smoking something funny, right? Here are the Obama's goons saying "oh gee we didnt say you had to get an implant..... its only that we "tried" to make it mandatory....." link:://obamacarefacts.com/obamacare-microchip-implant.php

Many things are being done step by step, to get us accustomed to things like being monitored. They are accelerating their plans though before enough of us wake up. The NSA is only part of it. Again this is not conspiracy stuff. It is what is actually being done and if you think it's just not reasonable for a bunch of criminals in high places to covertly control us, then you are rather naive and need to do better research.

[amk]

Is it not a possibility that things will be "relatively" "okay" "longterm"? and eventually get better.....

If the answer is no, then you do not believe that the Light can be wiser then the dark.

[Steve]

I believe that everything eventually finds balance. I also believe what we perceive to be important things are actually quite trivial, but you better "see" this as you grow.