Bank Managers, I need 1 hour of your time. [Archive] - Glock Talk

PDA

View Full Version : Bank Managers, I need 1 hour of your time.


Vic777
05-08-2012, 07:06
Is this true?
http://video.google.co.uk/videoplay?docid=-2550156453790090544#

aircarver
05-08-2012, 08:48
Could we have the executive summary ?

.

Vic777
05-08-2012, 11:12
Could we have the executive summary ?

.It goes like this ...
Someone Starts a Bank with $1000
That lets them lend you $10,000
You can deposit that $10,000 in another Bank
Based on your $10,000 deposit the Second Bank can lend out
$100,000.

Apparently this is exactly what's going on!

But I want an expert to watch the video and tell me if the video is true!

It kind of explains why all the Farmers etc. the only people who create wealth are in debt to the Banks and owe the Banks everything. Yet the Banks go bust and have to be bailed out by the taxpayer. Who has the money? No one, it's all Debt! You gotta watch the video!

I need a Banker to watch and comment on this.

Goaltender66
05-08-2012, 11:56
If the video is as you described then, um, no.

Who has the money? Didn't you see It's A Wonderful Life? It's in houses and businesses and inventory and all sorts of stuff.

Here's what happens. You deposit $10,000 in the bank. The bank, based on experience, knows that at no time are there demands for 20% of total deposits (In other words, people aren't withdrawing more than 20% of total deposits via debit cards, ATMs, checks, etc). Therefore, the bank loans out $8,000 of that $10k deposit and keeps the remainder as a reserve.

The books balance because the deposit is a liability of the bank (think about it...they *must* give you the $10k when you demand it) and the loan + remaining cash is an asset.

Now, if you borrowed that $10k, why in the world would you deposit it in another bank? You're paying interest on it that I guarantee is higher than the interest you'd get as a deposit. But for the sake of discussion, assume you did. The bank would look at that $10k deposit, calculate its reserve requirement (again, say 20%) and loan out $8,000. This assumes the bank's Cashier doesn't notice that the funds came from another bank as loan proceeds and is likely to leave pretty quickly.

Plus, keep in mind that the borrower is making payments on that money. The problem comes when payments don't come in, since banks rely on the payment stream to meet current cash demand requirements.

So no, you can't make $10,000 in loans based on a $1k deposit.

Gundude
05-08-2012, 13:12
It goes like this ...
Someone Starts a Bank with $1000
That lets them lend you $10,000Sorry, an hour's a long time, and I'm no bank manager, but one question, which may be answered in the video:

How does it "let" them lend you $10,000? The bank only owns $1000. Where does the other $9000 it lent you come from? Let's say you took that loan in cash. The bank simply doesn't have that cash to hand over to you. Can it electronically deposit in another bank $10000 in "money" it doesn't have? I'd assume not, but my understanding of what constitutes real money vs. electronic money is limited. I have a feeling this video isn't the one that'll explain it to me accurately.

Stubudd
05-08-2012, 13:23
Sorry, an hour's a long time, and I'm no bank manager, but one question, which may be answered in the video:

How does it "let" them lend you $10,000? The bank only owns $1000. Where does the other $9000 it lent you come from? Let's say you took that loan in cash. The bank simply doesn't have that cash to hand over to you. Can it electronically deposit in another bank $10000 in "money" it doesn't have? I'd assume not, but my understanding of what constitutes real money vs. electronic money is limited. I have a feeling this video isn't the one that'll explain it to me accurately.

http://en.wikipedia.org/wiki/Fractional_reserve_banking

Stubudd
05-08-2012, 13:30
Sorry, an hour's a long time, and I'm no bank manager, but one question, which may be answered in the video:

How does it "let" them lend you $10,000? The bank only owns $1000. Where does the other $9000 it lent you come from? Let's say you took that loan in cash. The bank simply doesn't have that cash to hand over to you. Can it electronically deposit in another bank $10000 in "money" it doesn't have? I'd assume not, but my understanding of what constitutes real money vs. electronic money is limited. I have a feeling this video isn't the one that'll explain it to me accurately.

i don't know, it might

or try this one, the first 5 minutes isn't that good but the rest is pretty good

The American Dream (Animated) - YouTube

http://en.wikipedia.org/wiki/Money_creation
http://en.wikipedia.org/wiki/Money_multiplier

Stubudd
05-08-2012, 13:41
Sorry, an hour's a long time, and I'm no bank manager, but one question, which may be answered in the video:

How does it "let" them lend you $10,000? The bank only owns $1000. Where does the other $9000 it lent you come from? Let's say you took that loan in cash. The bank simply doesn't have that cash to hand over to you. Can it electronically deposit in another bank $10000 in "money" it doesn't have? I'd assume not, but my understanding of what constitutes real money vs. electronic money is limited. I have a feeling this video isn't the one that'll explain it to me accurately.

here you go, real easy

Banking 3: Fractional Reserve Banking - YouTube

Gundude
05-08-2012, 13:51
http://en.wikipedia.org/wiki/Fractional_reserve_bankingYeah, that's what Goalie was referring to. It assumes the bank started out with a greater amount than what it lent, but only retains a fraction of it.

A bank starting out with $11000 and then only having $1000 left after lending out $10000 is very different than starting with $1000 and lending $10000.

So yeah, fractional banking increases the money supply, but not at the astronomical exponential rate suggested in Vic777's interpretation of the video, but at a slowing rate that has an upper limit based on the necessity of banks to maintain a reserve.

Vic777
05-08-2012, 14:02
How does it "let" them lend you $10,000? The bank only owns $1000. Where does the other $9000 it lent you come from?that's the main astounding "fact" of the video, it comes out of thin air ... the Government lets them do it! They only have to back 10% of their loans!my understanding of what constitutes real money vs. electronic money is limited.me too, that's why this video's claims freak me out I have a feeling this video isn't the one that'll explain it to me accurately.That's what I'm trying to find out.

Gundude
05-08-2012, 14:19
that's the main astounding "fact" of the video, it comes out of thin air ... Not so much out of thin air. Sure, the money is "multiplied," in that the depositor "has" that money in the bank, while the person who borrowed from that bank also "has" up to 80% (or whatever, depending on the bank's retention rate) of that same money in their bank, but the next person then only has 80% of that, and so on until eventually the deposit becomes so small there's no more to lend out. That's the limiting factor. It's not a license to create an unlimited amount of money, as your original description of your video suggested. It's a factor can be calculated and taken into account when determining the value of that money.

Stubudd
05-08-2012, 14:31
Yeah, that's what Goalie was referring to. It assumes the bank started out with a greater amount than what it lent, but only retains a fraction of it.

A bank starting out with $11000 and then only having $1000 left after lending out $10000 is very different than starting with $1000 and lending $10000.

So yeah, fractional banking increases the money supply, but not at the astronomical exponential rate suggested in Vic777's interpretation of the video, but at a slowing rate that has an upper limit based on the necessity of banks to maintain a reserve.

Goalie missed the point completely, or was working from a poorly stated example. The money is lent again and again, not just once. The part about why would you deposit money you just borrowed into another bank is completely missing the point or again working from a bad example- wherever or whoever you spent the money deposits it in another bank, not "you". Starting with 1k and eventually loaning 10k is almost exactly what happens, not loaning 10k out of 11k and keeping 1k. They loan the 10k, then another 9k, then 8k, then 7k, until many times more money is in the supply than the original 1k. It's the biggest scam in history, and look- even smart people don't know what's going on, just like those quotes in the first video say.

Like that last vid i posted, there was only 1k in real money to begin with, but pretty soon 20 different people have 900 or 800 or whatever in their accounts or out in the world. It's money out of thin air. That's our system. Having 10x more (i think some of the insurance companies, AIG maybe, were more like 100x more) liability is exactly what brought some of them down in 2008, some of them went down, some were bailed out with more of your money via the gov't after they went too far scamming you with your money in the first place.

This thread has made it clear one of the last quotes in the OP vid is true- it's the smaller lies that have to be covered up, the big ones are covered by public incredulity, or whatever it was the guy said.

Stubudd
05-08-2012, 14:33
Not so much out of thin air. Sure, the money is "multiplied," in that the depositor "has" that money in the bank, while the person who borrowed from that bank also "has" up to 80% (or whatever, depending on the bank's retention rate) of that same money in their bank, but the next person then only has 80% of that, and so on until eventually the deposit becomes so small there's no more to lend out. That's the limiting factor. It's not a license to create an unlimited amount of money, as your original description of your video suggested. It's a factor can be calculated and taken into account when determining the value of that money.

Well then there's that too... there is a bank with a licence to create an unlimited amount of money. That's a different story.

Stubudd
05-08-2012, 14:46
Not so much out of thin air. Sure, the money is "multiplied," in that the depositor "has" that money in the bank, while the person who borrowed from that bank also "has" up to 80% (or whatever, depending on the bank's retention rate) of that same money in their bank, but the next person then only has 80% of that, and so on until eventually the deposit becomes so small there's no more to lend out. That's the limiting factor. It's not a license to create an unlimited amount of money, as your original description of your video suggested. It's a factor can be calculated and taken into account when determining the value of that money.

And it might as well be unlimited anyway, because it never stops. It's constantly happening. By the time that $10k is done another 2 or 10 or 1000 cycles of other $10k's have begun. The limiting factors you're talking about are just in the short term- in the long term, there is no limit, and the numbers are so large it might as well be unlimited anyway. Sometimes they dump in trillions at a time. It's happening right now. We'll pay for it eventually, one way or another. We already are- the dollar is worth what, 2% what it was when the Fed was founded? Europe is paying the price right now. A huge scam on us all, with the government as intermediary. We're all gonna pay for our ignorance.

Gundude
05-08-2012, 14:52
They loan the 10k, then another 9k, then 8k, then 7k, until many times more money is in the supply than the original 1k.From the wikipedia link you referenced earlier:

The money multiplier, m, is the inverse of the reserve requirement, R

m = 1/R

Example

For example, with the reserve ratio of 20 percent, this reserve ratio, R, can also be expressed as a fraction:
R = 1/5

So then the money multiplier, m, will be calculated as:
m = 1/(1/5) = 5

This number is multiplied by the initial deposit to show the maximum amount of money it can be expanded to


So yeah, the concept of money multiplication can be disconcerting, but that "many times" is still an easily figured, limited value. As long as this is the case, what difference does it make if there are $100 or $500 in the supply? The value of the money can be calculated knowing up front the limit to which it can be multiplied.

series1811
05-08-2012, 14:55
Well, obviously, whatever they have been doing, it hasn't been working too well when it only takes 2.5 trillion dollars to prop them up and keep them from collapsing.

http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html

Stubudd
05-08-2012, 14:59
So yeah, fractional banking increases the money supply, but not at the astronomical exponential rate suggested in Vic777's interpretation of the video, but at a slowing rate that has an upper limit based on the necessity of banks to maintain a reserve.

It might as well be unlimited, but using it without limits would defeat the purpose and collapse it even faster than it already is. Instead we're just slowly squeezed, and "they" make untold billions pushing numbers around on a computer. They just try to keep a balance to it- sometimes they go too far and a wheel comes off, like in 2008. The other wheels are all wobbling as we speak, all of them, around the world. They're trying like hell to keep it going, but the big cards are already in play. Massive QE, zero interest, all that. There are people here that can explain it much better than i can, but you get the idea.

http://www.realclearmarkets.com/articles/2012/05/04/the_more_zirp_distorts_the_greater_the_disaster_99652.html

Gundude
05-08-2012, 15:05
It might as well be unlimited, but using it without limits would defeat the purpose and collapse it even faster than it already is. Instead we're just slowly squeezed, and "they" make untold billions pushing numbers around on a computer. They just try to keep a balance to it- sometimes they go too far and a wheel comes off, like in 2008. The other wheels are all wobbling as we speak, all of them, around the world. They're trying like hell to keep it going, but the big cards are already in play. Massive QE, zero interest, all that. There are people here that can explain it much better than i can, but you get the idea.

http://www.realclearmarkets.com/articles/2012/05/04/the_more_zirp_distorts_the_greater_the_disaster_99652.htmlI don't doubt that that could in fact be the situation today.

It's complex enough an issue that a lot of people can make a lot of claims on either side and the vast majority of people (including myself) simply can't independently figure out who's right and who's wrong and who's simply shoveling the BS to cause a ruckus.

Gundude
05-08-2012, 15:08
Well, obviously, whatever they have been doing, it hasn't been working too well when it only takes 2.5 trillion dollars to prop them up and keep them from collapsing.I guess your perspective would depend on how much of that 2.5 trillion ended up in your wallet...

SunGunner
05-08-2012, 15:32
Yes, Fractional Reserve Lending is 100% real.

Look at Mortgage Lending, most loans written are funded with Treasury "credits" (not dollars) from the lender's warehouse line. Mortgages show as Assets on the lenders books and can lend in multipliers between 10 & 40 x's their already written loans. The more you loans you write the more loans you can write.

Also look at the credit card industry, the credit lines are created out of thin air not by physical assets or deposits.

Stubudd
05-08-2012, 16:08
I don't doubt that that could in fact be the situation today.

It's complex enough an issue that a lot of people can make a lot of claims on either side and the vast majority of people (including myself) simply can't independently figure out who's right and who's wrong and who's simply shoveling the BS to cause a ruckus.

I am 100% certain you can figure it out. You'll never find anything on it the MSM though- it's taboo to even mention it. Here's a funny video that made the rounds a couple months ago, but turned out to be old news reposted as new news. Of course geithner long since beat whatever rap they were trying to lay on him- none of these guys can be stopped as long as they are their own regulators, eg Paulson goes from CEO of goldman to Secretary of the treasury, latest in a long direct line between those two jobs.

In the video shepard smith says he feels the same way- "i don't understand any of this", and then later says "so basically the banks run the government... kidding!". He knew he's not supposed to say stuff like that.

ยป Geithner arrested 116 major bank resignations PAY CLOSE ATTENTION TO WHATS SAID HERE !!! - YouTube

It's maximum and total corruption man. Right under our noses. The banks and the government are the same people, and the squeeze is on you, and the rest of us. You can rest assured of that, whatever you're able to decipher yourself. If you've ever wondered why romney was just the assumed nominee, why he was called the frontrunner for months before a vote had even been cast, you won't have to look far. Obama or romney, the right people can't lose. Just us.

Stubudd
05-08-2012, 16:15
Also look at the credit card industry, the credit lines are created out of thin air not by physical assets or deposits.

I was thinking about that and almost added it from my phone a few minutes ago- does anybody think when they send you a 10k credit card in the mail, like they used to do all the time, that there is 10k dollars sitting around in a bank somewhere waiting for you to maybe or maybe not spend it? Of course not.

Here lately they pushed too far, but since they own the muscle (the federal government), they really can't lose. We the people pay coming and going, because we let them do it. Not enough of us have seen enough, or really understand what is happening.

SunGunner
05-08-2012, 16:32
Currently there is $2.5T of consumer debt http://www.federalreserve.gov/releases/g19/Current/

That doesn't include the fractional reserve lending for mortgages. When you fund a transaction from your treasury warehouse line it is "credits" not dollars, it is currency created out of thin air.

NDCent
05-08-2012, 16:37
Your money's safe, pay no attention to the man behind the curtain. :whistling: There's no way a small percentage of people withdrawing all their deposited money at the same time would cause a bank run. :upeyes:

barbedwiresmile
05-11-2012, 08:08
I wonder if JPM/Chase has the "reserves" to cover their $2 billion loss from their non-existent prop trading desk?

According to some here, that loss should effect their lending, right? Let's see if they put lending caps in place based on the 'reserves' they hold to cover these 'assets'.

What the heck, they passed the 'stress test' with flying colors so we're good.

Vic777
05-17-2012, 17:36
Is this true?
http://video.google.co.uk/videoplay?docid=-2550156453790090544#

well listen to this ....

fantastic 12 yr old Victoria Grant explains how banks commit fraud.mp4 - YouTube

series1811
05-17-2012, 19:48
I wonder if JPM/Chase has the "reserves" to cover their $2 billion loss from their non-existent prop trading desk?

According to some here, that loss should effect their lending, right? Let's see if they put lending caps in place based on the 'reserves' they hold to cover these 'assets'.

What the heck, they passed the 'stress test' with flying colors so we're good.

At least we know for sure how valid those stress tests were now. That must have been some real stressful testing. :shocked:

Vic777
05-19-2012, 08:22
Facebook which "should" sell for $1.65 per share is going for $38.
This is another smooth way to create $100 Billion out of thin air.
Ya gotta have a sense of humour.
Do you have a chair for when the music stops?