Bankers own the USA and the world

[se7ensnakes]

You ever wondered why you dont know anything about money?  In high school you are taught algebraic expressions but you are not taught anything about money. nearly all high school students do not know what a federal reserve note is, its relation to the treasury bond.  They dont know the difference between a United States note and a federal reserve note. Most people are more likely to use a credit card than algebraic expression.  Yet nothing is taught about credit cards, what FEDWIRE, Acquisition Bank, merchant bank, Fractional Reserve Lending.  You are kept dumb so you vote dumb.  Final Question.  Where do banks get the money to loan?  There is a global debt of 140 trillion dollars yet there is but 68 trillion dollars.  How can banks loan more money than what exist and how are governments and the public suppose to pay it back?

[CreatureofHell]

I propose a solution: Credits. You can only carry 2000 at a time though.

[/dev/humancontroller]

In high school you are taught algebraic expressions but you are not taught anything about money.

WRONG (depending on the concrete school).

Most people are more likely to use a credit card than algebraic expression.

sure, but, for example, i use algebraic expression all day, and use a credit card only once every 2-3 days.

You are kept dumb so you vote dumb.

or don't vote at all.

Where do banks get the money to loan?  There is a global debt of 140 trillion dollars yet there is but 68 trillion dollars.  How can banks loan more money than what exist?

my knowledge of economy is weak and rusty.
lending automatically creates debt on the other side, which gets added up multiple times if essentially the same debt is chained. there is a ratio (eg., 80%) limiting the amount of debt-backed-lending a bank is permitted to do, and this prevents arbitrarily high debt sums due to arbitrarily long chains of debt (in case of 80%, a unit of bank investment has a potential to create no more than 5 units of debt.

now it is your turn to clarify economy.

[RAKninja-Decepticon]

where does money come from?

well, the federal reserve ( a private bank, as federal as federal express) prints the money and sells it to the government, and charges the government interest,  so if the fed prints, say, a billion dollars - the government pays the fed 1.5 billion.  also, this is why we have an income tax.  the whole of the income tax goes to paying the interest on the money the fed prints.  not the principal, mind you.  just the interest.

furthermore, as the value of the dollar is now only regulated by the number of dollars in circulation (rather than being backed by a commodity)  the fed as been systematically devaluing (read: make worth less) our money by printing out more and more dollars every year.  for clarification, i mean to say that if they printed 1 billion last year, they will print 1.1 this year, and 1.2 the next.  they call this the rate of inflation. 

[SamOz]

Every fiat currency system used historically has eventually crashed. Except the British Pound (so far), all others lasted less than a century, most only decades. Anyway, you can always barter. 

[se7ensnakes]

most of our money is created this way:  A person deposits 200k into the bank system.  The  banks uses that money and loan 200k to someone for a house; the borrower buys a house for 200k and the seller deposits the 200K in the bank.  The banking system now has another 200k to loan. When the bank loans the 200k the the borrower goes and buys some product/service, the seller takes the 200k and deposits it in the bank.  This repeats itself expanding the money supply and weakening our paycheck.  The thing is that there is not money in circulation to pay back the loan so the economy goes into a recession/depression and everyone looses their assets.  This is called fractional reserve lending.

[/dev/humancontroller]

most of our money is created this way:  A person deposits 200k into the bank system.  The  banks uses that money and loan 200k to someone for a house; the borrower buys a house for 200k and the seller deposits the 200K in the bank.  The banking system now has another 200k to loan. When the bank loans the 200k the the borrower goes and buys some product/service, the seller takes the 200k and deposits it in the bank.  This repeats itself expanding the money supply and weakening our paycheck.  The thing is that there is not money in circulation to pay back the loan so the economy goes into a recession/depression and everyone looses their assets.  This is called fractional reserve lending.

what a crappy and WRONG explanation. you don't know jack shit. where is the "fraction" in your example?

[Snoop Doge]

And suddenly socialism looks like a good idea to everyone.

[Ingar]

most of our money is created this way:  A person deposits 200k into the bank system.  The  banks uses that money and loan 200k to someone for a house; the borrower buys a house for 200k and the seller deposits the 200K in the bank.  The banking system now has another 200k to loan. When the bank loans the 200k the the borrower goes and buys some product/service, the seller takes the 200k and deposits it in the bank.  This repeats itself expanding the money supply and weakening our paycheck.  The thing is that there is not money in circulation to pay back the loan so the economy goes into a recession/depression and everyone looses their assets.  This is called fractional reserve lending.

what a crappy and WRONG explanation. you don't know jack shit. where is the "fraction" in your example?

I actually looked this up: banks had to have about 13% of a loan in capital. (This means if the bank wants to loan you 100,000 EUR
they only have to actually own 13,000 EUR themselves). Rules may vary for your country. With the new 'thougher' banking rules this goes up to around 20%. The 'extra money' dissapears again when the loan is payed back.

Let's say the total amount of money in the world TaM is M. With a loan, money is created and the total amount of money increases to M + L. Once the loan is payed back, the TaM would fall back to M. Unfortunatly some interest I has to be payed as well, so the TaM actually decreases to M - I. So each loan just moves money from the world to the bank. To prevent the TaM from going to zero, loans have to be created faster than they're payed back.

The loan is booked as an asset. The bank puts 'you owe me 100K' on their balance sheet. This is the actual money creation step
and this is why 'money is debt'. Once the loan has been payed back, the line dissapears from the sheet.

It's somewhat more involving, but afaik that's the essence of the story.

Special translation for DevHC:

The money system is a memleak that's being fixed by adding more memory.

[/dev/humancontroller]

I actually looked this up: banks had to have about 13% of a loan in capital. (This means if the bank wants to loan you 100,000 EUR they only have to actually own 13,000 EUR themselves).

have to have a fraction before or after lending? that's a key difference. (to me, it appears that you meant "before"; whereas i gave a similar statement with "after": in case of 13%, if a bank wants to lend you 100000 EUR, it first needs to have 113000 EUR, so that after it lends 100000 EUR, it will have 13000 EUR, which is at least (in fact, exactly) 13% of 100000 EUR.)

Let's say the total amount of money in the world TaM is M. With a loan, money is created and the total amount of money increases to M + L. Once the loan is payed back, the TaM would fall back to M. Unfortunatly some interest I has to be payed as well, so the TaM actually decreases to M - I. So each loan just moves money from the world to the bank. To prevent the TaM from going to zero, loans have to be created faster than they're payed back.

when the loan is payed back, the TaM decreases instead of havings its sources being reorganized (money moves from the borrower to the bank)? in that case, TaM should have been called the total amount of money outside banks, TaMoB. also, you're forgetting the case when someone deposits certain amount of money to a bank, which would increase the TaM (TaMoB) by I. so i don't like your explanation at all. where are your references?

[RAKninja-Decepticon]

...
and this is why 'money is debt'. ...

no, money is debt because it is a fiat currency.  any dollar's value is primarily determined by the number of other dollars in circulation.  this would not be enough to mean "money is debt".  that really comes from the loans, with interest, we pay the private bank that is the federal reserve to print that money.

if the fed prints 1000 dollars, the government pays them 1200.

this is what the totality of the income tax is meant to pay.

also of note, adding numbers to computer accounts also counts as "printing" money these days.