Forum Post: OWS Objective #1 - Fractional Reserve Lending Is A Crime (Theft) - Recoup False Profits
Posted 12 years ago on Oct. 24, 2011, 12:55 p.m. EST by FreeRadical
(157)
This content is user submitted and not an official statement
A Process Recount of Fractional Reserve Lending - the Biggest Economic Scam
Since most do not need all their deposits at one time, banks lend out the deposits to generate profit for themselves.
The current reserve ratio for US banks is approximately 10%, although it has been much lower and more lucrative, and here is how it works.
Given a 10% reserve requirement and a $100 deposit, a bank can loan $90 to a borrower to cover a payment debt.
Conceivably, the receiver of the payment could deposit the $90 back into a bank, after which $81 could be loaned to a borrower to cover some other debt.
The deposit and lending process could continue until the $100 is exhausted and only $100 remains in the banks.
Although no new money was physically created in addition to the initial $100 deposit, new commercial bank money is created through loans.
When the reserve rate is 10%, as in the example above, the maximum amount of total deposits that can be created is $1000 and the maximum increase in the money supply is $900.
For simplicity, assuming the maximum benefit for a $100 deposit, banks have the potential to earn - nearly guaranteed - usury interest on $900 ! !
Is there any wonder how banks make $35 billion a quarter?
Had the original $100 been tagged and the $90 loaned been tied to the tag so that it could not be loaned repeatedly thereby creating imaginary money, then fractional lending may represent a legitimate establishment.
But as it stands, usury interest from fractional lending is acquired through the creation of imaginary commercial money, which is literally taking something from others (interest) based upon something that is not the bank's money in the first place (imaginary commercial money) and that is theft - it is a crime.
Usury interest on $900 is for a 10% reserve, however in the recent past the reserve rate has been as low as 5% and close to 2% so imagine usury interest on nearly $2000 or $4000 or $5000 from a $100 deposit - money from nothing is a basis of counterfeit (fraud - theft).
An Establishment of Opportunistic Crime Legitimized by Law and Perks of Marauders
http://online.wsj.com/article/SB10001424052970203914304576628873340076918.html
Five Groups Who Should be Mad at Wall Street by BRETT ARENDS "5. Anyone investing in banks You have to laugh when people slam "greedy" Bank of America. Have you seen the stock price lately? For stockholders, this is a nonprofit. The only ones making money are the management and staff. It's the same at all the other banks. In the past five years, public filings show, the employees of Goldman Sachs have pocketed $80 billion in pay and benefits, including bonuses and other goodies. Over the same period, stockholders have lost $25 billion."
DOES ANYONE ELSE SEE A CLEAR ISSUE TO ADDRESS?!!
Without a doubt.
i agree with this, please by all means add it to the issues on the wiki.
http://occupythiswiki.org/wiki/Main_Page
http://www.followthemoney.org/?gclid=CMbY87bB-qsCFUPt7Qod9HE8mQ
http://maplight.org/us-congress/guide/data/money?9gtype=search&9gkw=list%20of%20campaign%20donations&9gad=6213192521.1&9gag=1786513361&gclid=CP61oYbB-qsCFQFZ7AodcTF0jw
http://www.opensecrets.org/
http://occupywallst.org/forum/non-violence-evolution-by-paradigm-shift/
Thanks gawdoftruth,
I have attempted to add comments to wiki topics before and the curators have been tough.
I will see what they allow me post.
i can't speak for anyplace else. this wiki was put up expressly at my request and i will do everything in my power to make sure it is moderated fairly.
all i ask is that people stay sincere, create pages inside of the organization structure on which to land their ideas, and contribute something positive instead of trolling.
Good work, thanks!
This should be a top demand for sure.
It should be the torch ! !
It is for many..Why are people not marching on the fed..Isnt new york fed only a few blocks away?
I have made phone calls to at least 8 politician's comments line today and not one person minding the phone even knew how fractional lending works.
Then I had to fill out the forms with links.
As soon as the press is compelled to disclose the FRL vagrancies, the lights will come on for the public and the history of deeds will be infamously scrutinized.
Kudos to you..The bankers own the media corporations control policy in universities and government..Its up to alternative media and word on the street.
Today I phoned in to Street Talk on 700 am KSEV in Houston and was able to get the message on the air.
Lance Roberts has always been polite and understanding of my comments; his concerns are less about towing the partisan line and more about real world.
Some of the other KSEV hosts tend to be argumentative and defensive of partisan policy, but I keep feeding them.
The story is good so everyone will tell their friends.
Keep looking for outlets, eventually there may be one person who tells another who can actually exact an affect.
This is a great objective. Fractional Reserve Banking is what creates the rapid inflation that is destroying our economy and theft is a great way to describe it (fraud is also an excellent description). However, it is very difficult for Fractional Reserve Banking to exist without a central bank. Objective #1 (or another top objective) should also include getting rid of our central bank a.k.a. The Federal Reserve.
http://lewrockwell.com/rothbard/frb.html
trob888, thanks for the response and please take a look at my response to joerauh below for a further explanation as to why the Central Bank can and should be preserved.
Fractional lending can be continued with restrictions on banking profits, where the Central Bank continues its role in setting interest rates and insuring deposits, while commercial bank profits in excess of legitimate earnings is tendered to a form of privatized social security.
This circumvents the special and unjustified providence that banks have bestowed upon themselves, which is based upon their lending money and creating debt - literally out of nothing - and upon moneys that is not theirs in the first place.
I agree with most of this. You're right about Fractional Reserve Banking being the root of the problem. We could put an end to it and still allow a central bank to exist. I just think eliminating the central bank could be the easiest solution, but there are definitely others.
One thing I don't really agree with you on is allowing the central bank to set interest rates. When the Federal Reserve holds interest rates lower than they should be, it causes an expansion in the money supply which leads to inflation. Inflation is the same problem that Fractional Reserve Banking creates. It's a hidden tax on our poor and middle class.
The central bank staves off economic catastrophe if there is ever a run on the bank. It assures that there is a cash reserve, hence the federal reserve.
A financial advisor recently told me that the bond market could manage the interest rates without the need for inputs by the Federal Reserve bank chairman.
Low interest rates were blamed for the housing collapse because it allowed too many TEASER rates for Adjustable Rate Mortgages (ARM) through Mortgage Backed Securities only available through INVESTMENT banks which provisioned and encouraged sub-prime lending.
The sub-prime lending practices perpetrated by INVESTMENT BANKS is known as predatory lending. The abuses of predatory lending that led to the economic collapse were provisioned in part by 1999 Gramm-Leach-Bliley Act which prevented SEC oversight of the derivatives (securetized) market, whereby banks repackaged sub-prime loans via credit default swaps and unloaded them into the stock market as VALUED assets.
The market would not have been able to absorb the loans if it had not been possible for banks to unload them through fraud.
Another contributor was that, although Freddie Mae and Fannie Mac could not issue MBS loans as they were under GSE restrictions to account for loans and only make 30 year fix rate mortgages with low down payment, HUD - under both Clinton and Bush encouraged an allowance from the 1972 Community Reinvestment Act that gave FM and FM the ability to buy back unsecure loans - namely the MBS loans that the investment banks had been issuing.
The right wing press ultimately uses CRA and those "idiot borrowers" as their scape goat excuse in order to avoid having to answer for predatory lending and the1999 GLB Act.
"The central bank staves off economic catastrophe if there is ever a run on the bank. It assures that there is a cash reserve, hence the federal reserve."
This is actually a bad thing. If a bank is supposed to fail, it should fail. Having the Federal Reserve around as a lender of last resort creates moral hazard and gives the banks incentive to take huge risks that they wouldn't ordinarily take if they didn't have the Fed to bail them out.
Ultimately, getting rid of the central bank will restrict credit as a higher reserve rates at lending banks will be needed. It would reduce a bank's usury interest earned from counterfeit money, however it will not correct the base issue that bank entitlement to the entirety of usury interest on counterfeit money is unjustified.
The US has operated without a central bank in the past and the advantages versus disadvantages for whether disadvantages should be mitigated, rather than obsoleting the system, would require further review. The ability for banks to borrow from other banks is still possible.
What's wrong with restricting credit? Isn't debt the reason we're in this mess in the first place?
There may or may not be anything wrong with restricting credit.
Consider that other countries practice fractional lending, with their own currency, and all of these global monetary systems are interrelated, so that the affects upon the strength and value of one's currency is affected by policies of other countries.
It is best, in my mind, to emphasize and maintain strict focus on the illegitimate method of earnings, to limit the net earnings of banks and bank employees, and to apply the difference from net and gross earnings to privatized citizen accounts.
I am not convinced that the Federal Reserve itself has to go.
It has a basic purpose of handling the transactions to convert between government treasuries and money.
The Federal Reserve manages the interest rates to control the price of treasuries and therefore the money supply, perhaps that should not be left up to government.
Perhaps there should be an entity separate from government that thinks on behalf of the free market and earnings, although I am not asserting that the Federal Reserve has done that well in the past.
By keeping interest rates artificially low, Alan Greenspan has been blamed for the housing bubble, because it allowed investment banks to issue teaser loans with adjustable rate mortgages (ARM) in the sub-prime market that were then fraudulently distributed to the stock market as over valued assets through the use of credit default swaps.
By lowering interest rates, supposedly US treasury bonds become more expensive to the private investor who earns less interest, which is supposed to inhibit government spending, where the idea is that investors would rather put their money in other markets, however it is currently not working since 2% backed by the US government is better than nothing.
Alternately, by raising interest rates, US treasury bonds become less expensive to the private investor who earns more interest. Higher interest rates is supposed to attract more private investors, that allows government spending, although it may also inhibit government spending since the government is disinclined to accept the higher debt due to the interest.
A 6% cut of the overall interest earned through interbank lending may be high.
This is a rational response.... the first I've seen thus far ! At least SOMEONE understands why the Constitution says "...coin money, regulate the value thereof..." I disagree with some of your other statements, however, so perhaps we can talk a bit.
First, a minor clarification which I'm sure you already know... the POLICY making body of the Federal Reserve, the Governing Board, IS comprised of US Government appointees approved by Congress. I suspect you are talking about why they operate WITHOUT a lot of political input (like Supreme Court justices) when you say it's good the government doesn't control them. I agree 100%, and so did the folks who wrote Article 12 paragraph 3 of the Federal Law establishing the Fed... they SAW how much damage could be done if politicians got direct control of the money supply. Also, the SUBORDINATE organizations BELOW the Governing Board ARE from the private sector, and the provide input to the board from the perspective of the free markets much as you suggest. Minor clarifications.
The biggest disagreement I have with your statements is with those attributing the bubble to monetary policy alone. Perhaps you didn't mean to do so. In my opinion, there are three primary root causes of the bubble and all others, like the easy money policy of the Fed are secondary at best.
First, we the people got caught up once gain in the idea that "you can't lose money in [ fill in the blanks ]" This kind of thinking caused the Dot.Com bubble as well as the Dutch Tulip Panic, France's Louisiana Land bubble, and France's Louisiana Land bubble. Note the last three occurred under the gold/silver standards. Whever the public gets into this kind of frenzy, they tend to make really poor financial decisions.
Second, each time a new communications policy emerges, we see a revolution in finance (as well as politics). Bankers now move money at the speed of light, and let computers do much of their work. Our ability to regulate all the resulting "innovations" in the financial sector caused one key "innovation" to go unchecked... the nifty idea that debt can be bundled into blended packages with lower statistical risk. The clever statistics behind this "innovation" fall apart in a system-wide down-turn but, in the meantime, banks found they could collect origination fees then bundle the risk off onto someone else. As a result, they stopped caring about risk.
Finally, the banks would not have been ABLE to resell all those bundles without concern for risk had the primary check value, the Debt Rating Agencies, been doing their job. Apparently, however, they were getting so many of them coming through that they started to use computer algorithms to grade the debt, and they had a built in assumption that mortgage debt was predicable without any consideration for system-wide downturns. Yet another "innovation" that slipped through without review or oversight.
I don't buy into the idea of that the Banks somehow MADE people buy into loans they couldn't afford. We make everyone sign a Federal Truth in Lending Act Statement designed to expose any terms hidden in fine print or deceptive statements made by the lender specifically so people KNOW what they're signing up to. As I have told many here, the LAST guy you listen to when considering a major purchase is the SALESMAN, whether he be a guy selling a car on Craigslist or a banker trying to sell you a loan. Maybe folks thought "since the bank thinks I can afford it, it must be OK because otherwise they'd lose their money." I could see this, but either way, the number of mortgages that were blindly signed suggests people need better financial education. Perhaps a High School graduation requirement?
In the end, I think the root cause problems were lack of financial education over the general population and a system that allows "innovation" to occur without oversight. In my opinion, we should LOCK DOWN the financial system and practices to INHIBIT "innovation" until such time as the "innovation" has been properly reviewed and the proper regulatory oversight put in place.
Just one guy's opinions... I'm not sure ANYONE fully understands everything that happened !
Finally,
It is my opinion that you are responsible for the return of your own property.
There are people everywhere in want or need who would gladly borrow anything that you might lend them and they may or may not have any intention of returning your property.
And there in lies the problem because while Fannie Mae and Freddie Mac were responsible to recover their sub-prime loans and had strict 30 year fixed mortgage rates.
Alternately, investment banks with predatory lending and an ability to rapidly unload any responsibility for the recovery of the mortgage backed securities by passing, in addition, fraudulently soliciting them at other than face value to the stock market violates the first premise of who is ultimately responsible for recovery of loaned property.
I do not blame those who accepted the loans and teaser rates with adjustable rate mortgages, GSE agencies were restricted from doing it; hence, the principle blame to levy is against Gramm-Leach-Bliley Act that allowed it to happen by its deregulation that consolidated commercial bank and investment bank services.
Please read http://occupywallst.org/forum/what-is-money/
Take action! Adopt Bitcoin!
While full reserve lending may be possible through electronic tracking of money, it would be unsettling to have anyone know where every monetary transaction has occurred.
We are working on that - it's called "Open Transactions". That gives you the best of both worlds - the reserves are transparent and auditable and transactions that are desired to be private are in fact untraceable.
Does the plan satisfy Revelation 13:16 and 13:17?
"And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name."
:<)
What affect will there be on available credit if fractional lending is disallowed?
Be sure to reprove the profit margins from fractional lending (should it be continued) to account for counterfeit.
Absolutely not!
No bio-chips?
heeheeheehee
It is not an evil plan. :)
Defiantly, just put up a small banking example: http://occupywallst.org/forum/how-you-get-to-be-in-the-1/#comment-272980
While I agree that your example is relevant, to most it is simply the cost of doing business through the borrowing of money.
Your example does not demonstrate that fractional reserve lending is not subjectively, rather objectively, a process of counterfeit - fraud - theft.
Thus, your example would do well to include an additional element that, for a 10% fractional reserve requirement, the interest from each loan represents only one ninth of the money collected.
I agree, there are enough posts on the details, I just wanted to post a simple example. The fact that the bank makes that much money from a book entry, will no doubt infuriate anyone who has a moral bone in their body. Interest on a derivative on a derivative of a fractional amount of debt puts us into debt slavery....
in the uk some top finance leaders have seen an increase of 49% in the last year on pay!, also one of them earnd 4.5 mil in 2010 through wages and expenses!
It must be stopped! The earnings are theft - counterfeit - criminal, because the usury interest is acquired from money (created from nothing) that does not belong to the banks!
And although the fractional reserve system is beneficial for providing credit, the usury interest does not belong to the banks! and the usury interest (above a base net earnings) should be turned over to the private funds of citizens.
The original premise is not correct. The textbooks lie when they explain fractional reserve banking the way you just did. The situation is actually FAR WORSE than you describe. Banks don't loan their reserves. That would be fine. There's an understanding that if you deposit money the bank can use it, (that's why they pay you interest), provided it keeps some money in reserve just in case you come demanding your money. Reserve requirements are thought to limit the amount of depositors money a bank can loan, but that is not what really happens.
Banksters figured out a clever idea. They don't loan out ANY of their depositors' money. They keep that money in reserve and loan out "checkbook" money, fictional money. Counterfeit money. Money that did not exist before the borrower took out the loan.
THAT is what the problem with fractional reserve banking is. The banks create money out of thin air and get to collect interest on that. The result is a tenfold increase in the profit that the banks can get, and of course economic turmoil.
Banks issue debt based upon money that is deposited in their bank.
When a debtor pays a bill by borrowing money from a bank, the collector of that bill may deposit the payment into a bank, perhaps the same bank.
The bank can then loan money based upon the payment that has been deposited into the bank by the bill collector.
Banks create money out of nothing because the payments that they issue are far in excess of any original deposit that ever existed.
The payments issued far in excess of any original deposit are based upon combinations of debt - usury.
Yes the banks issue debt based on the money that is deposited, but it's not limited to the amount that is deposited. The money is limited to money MULTIPLIER.... note the word multiplier. The word is multipler, not divider.
Loans MULTIPLY the money supply, literally!
http://en.wikipedia.org/wiki/Fractional_reserve_banking#Money_multiplier
If the method and accounting are not explained properly, others will be mistaken in understanding for how money is multiplied.
If one states that banks can loan 9 times the amount of money deposited, another will easily and readily dismiss the assertion as untrue, by simply referencing that banks can only lend all but a percentage.
Without completely explaining how the money multiplier works others will not reason beyond the initial deduction - that it seems fair - and ignore the further implications.
You're using the bought and paid for wikipedia for a source? How about using an objective source?
Oh wait. There aren't any.
Anyway, Wikipedia didn't even refute my statement. Look at their examples:
"The money multiplier, m, is the inverse of the reserve requirement, R
m=1/R
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."
Wikipedia actually confirms my statement! The money multiplier MULTIPLIES the amount of money in circulation.
No, it does not confirm your statement. http://en.wikipedia.org/wiki/Fractional_reserve_banking#Example_of_deposit_multiplication
"The amounts in each step decrease towards a limit. If a graph is made showing the accumulation of deposits,... The actual increase in the money supply through this process may be lower, as (at each step) banks may choose to hold reserves in excess of the statutory minimum, borrowers may let some funds sit idle, and some members of the public may choose to hold cash, and there also may be delays or frictions in the lending process.[26] Government regulations may also be used to limit the money creation process by preventing banks from giving out loans even though the reserve requirements have been fulfilled.[27]"
For undisputed fact, studies have shown that wikipedia is as reliable as any news agency, or encyclopedia; their curators abide by strict guidelines and if you have ever posted anything with them you would know that it is not a trivial issue.
Read more carefully. This section of the article is describing what the bank does with CENTRAL BANK money, not deposits made by people.
See?
"Although no new money was physically created in addition to the initial $100 deposit [by the central bank], new commercial bank money is created through loans."
And the chart is misleading. Each step must be added to the previous. The money from column B is the same exact money going into column A. So at each step the available money to be loaned out might decrease, but the overall amount of money loaned out is MUCH higher than the initial deposit.
357.05 of that 457.05 deposited money is created out of thin air.
Believe me, I know all too well how militant the Wikipedia staff is. I tried adding a link once to an article making the article more balanced and was silenced and rebuked.
Also, go ahead and try to put in an article about Tax Honesty Movement. They will ban you.
Right. it's much more complicated than simple fractional lending because we let the banks BORROW their reserves at the Federal Funds Window. We ALSO have the Treasury in cahoots with the Fed under Quantitative Easing. See my comment on this at http://occupywallst.org/forum/what-is-money/#comment-222602
Money is, however just a token we use to facilitate commerce, and it has no intrinsic value. The real value is in the goods and services being traded, not the token. People who obsess over these tokens, whether they be the rich obsessed with accumulating them or folks here who ascribe so much value and power to these tokens, are a bit delusional. If we did NOT treat money as tokens that we can print as needed to sustain commerce, we'd be in REAL trouble right now... China and the wealthy hold a LOT of them, and there wouldn't be enough remaining to facilitate commerce ! See my original post at http://occupywallst.org/forum/what-is-money/
I started to reply, but it got long, and I decided it was good information for a lot of folks in general, so I posted it in a separate thread.
See http://occupywallst.org/forum/what-is-money/
Money As Debt (how the same works to steal money from Main St and give it to the rich)
http://www.youtube.com/watch?v=Dc3sKwwAaCU
http://occupywallst.org/forum/the-1-how-they-get-our-money-and-how-to-stop-them/
News from the right continues to state that OWS does not have a poignant objective.
People, this is it!
http://occupywallst.org/forum/wall-st-jobs-make-up-only-14-of-the-top-1-of-earne/
Given that there are "How many banks?" and "How many total wage earners in that 1%?" it seems that 14% is exceptionally high!
Thanks, this is good information.
http://www.themultitude.org/forum/viewtopic.php?f=4&t=366
I disagree. Fractional reserve lending is the only reason people can loan out money. Without it, there are no loans, nothing to help businesses start. But we should raise the minimum reserve requirement to 20% or so.
"Get money out of politics" is the main issue to me. It's somewhat vague, but it was the original call to action and is a solution to many problems.
Actually, I think the minimum reserve requirement IS around 20%. Banks, however, are allowed to BORROW their reserves at a rate set by the Governing Board of the Federal Reserve (all appointed by the President subject to review by Congress). The rate charged at the windows is, in fact, the routine tool used by the Fed to regulate the money supply... if they set it higher than Banks think they can get by lending, they are conservative in calculating their reserves. If they think they can lend the money for a rate higher than they can get at the window, they borrow their reserves. If they mantain ZERO reserves and manage to loan their money out to the penny, the M1 supply approaches infinity. If the rate is high and they adhere to the 20% "minimum" and mange to lend to the last penny, then each dollar on deposit turns into $5.02 in in M1.
I agree with your get the money out message. In fact, I say the rally call should be "WE WANT OUR GOVERNMENT BACK!" See my post at http://occupywallst.org/forum/one-percenter-ready-to-join-if/ and my proposal at http://occupywallst.org/forum/we-the-people-in-order-to-a-proposal/
Thanks for the info! I didn't know they could borrow their reserves - another bit of ridiculousness that is above the layman's understanding which we trust our politicians to get right. Maybe not above our understanding, just a concept that is more visual but is obfuscated by putting it into words.
I like your proposal too. I have seen several proposals but I like the wording on yours a lot - it's written like a paradigm shift, by considering any money given to a politician a bribe. BTW, this similar proposal has 230k signatures right now: http://www.getmoneyout.com/ .
In the end, it really doesn't matter all that much if done right. See my post at http://occupywallst.org/forum/what-is-money/ . Money is just a token with no intrinsic value. The VALUE in the system is in the goods and services moving through commerce.
The campaign finance objective is not an issue that the public at large will focus on and insist that a candidate swear to enforce before gaining support from the voters to win.
The campaign finance goal does not justify an assertion that the public has been severely wronged, while the depravity of theft from fractional reserve lending elaborates and magnifies a clear and pervasive institution that prides itself on a special and privileged exception through which obvious and egregious disparities between social classes have been established.
Challenging the lack of ethics inherent within the fractional reserve system holds the entire system accountable and inspires the public by convincing them that others do in fact have a reason to adhere to their concerns!
Yeah, the banking system is easier to point at and say they were wrong. Especially the scam of re-labeling junk as AAA bonds, which if I recall was the central reason for the bailouts. Regardless, I think the fractional reserve lending is a big part of the problem, part of what makes our economic system so fragile.
I feel that getting the money out of politics would make it harder for banks to influence laws that allow tiny reserves. I don't think people realize just how much influence corporations (including banks) have on our politicians and other things.
BTW, I guess you have heard of Islamic banking? Also Bitcoins? Both of these things make fractional reserve lending harder.
I agree that the Rating Agencies deserve a large part of the blame. I can't find any information on how or IF they are regulated. Do you know ?
See my long post above at http://occupywallst.org/forum/ows-objective-1-fractional-reserve-lending-is-a-cr/#comment-222339
I agree that there are money influences but money also knows how to make money.
I do not think that occupying the capital and attempting to modify their money games would have the same effect as occupying wall street.
The fractional reserve lending system is simply offensive and anyone that understands it seems to agree.
Wall street pulls the puppet strings, so keep an eye on the puppeteer.
Washington would consider the protests inconsequential unless it were tied to votes while banks are concerned with losing real property due to class action lawsuit.
I doubt the banks can pay their way out of a populous scrutiny and things will change after banks are stripped of their improprieties.
I have heard that ishmaelism banking rules prohibit the earning of interest from ishmaelites.
Bitcoins is unsettling as I would not want big brother knowing that money was in my hands and where it was spent.
If you read further, removal of the fractional reserve lending system has not been advocated, only that the net earnings of the banks be adjusted.
"Challenge that current bank profits gathered through fractional reserve lending are and have been illegitimate.
Banks are not entitled to profits from usury interest on moneys that is not theirs and literally created out of nothing, any more than any citizen can open their front doors and issue cash on more money than they have in hand.
Preserve the Fractional Reserve system to control the economic variables such as inflation and the money supply by adjusting interest rates through an independent and private agency from the government.
Preserve the Central Bank to insure deposits and to provision the fractional reserve system.
Limit the net earnings of banks to a justifiable level and transfer the excess from gross profits to a privatized social security system - aka Public Private Trust - based upon collectivism and not communism."
That's for sure - sorry I didn't read thoroughly. The banks should let the lenders share the profit instead of taking it all for themselves. Capitalism SHOULD have made this happen, but it didn't. I guess you've heard about the banks getting investigated for anti-trust practices regarding the debit card fees?
Do you mean that the banks (lenders?) should share the profits with the depositors (lenders?)?
Consider that credit cards are loans upon which banks make usury interest and the fees are added insult.
The main issue to be brought to light is that for a 10% reserve requirement, on $100, banks can gain usury interest on $900 - literally imaginary money!
(Btw, we're having 2 conversations :D)
Yeah, they should share the profits. Charge 5% interest, give back 4.5%, not this insulting 1%.
Some economist was telling me the sum of geometric series doesn't quite add up for interest charged (no pun intended). In other words, they don't actually end up charging interest on the $900, even though this money technically exists. I'm a math type of person so I will figure this out myself :).
The formula is here - http://en.wikipedia.org/wiki/Fractional_reserve_banking#Money_multiplier
The $900 commercial money is based upon an ideal situation for a 10% reserve and $100 deposit.
The reserve ratio has been much lower in the past equating almost literally with issuing debt based upon nothing but imagination - http://www.federalreserve.gov/monetarypolicy/reservereq.htm
Thank you. One of my hobbies over the years has been researching economics and banking and I have developed a good understanding of how the system works. With that said it amazes me how many people out there couldn't tell you what fractional reserve lending means, the Fed's function and that it's a private bank, why interest is charged and many other things. Hell, many people don't even sit back to understand money itself and they use it everyday. We need more posts like this that educate people on things that they otherwise would have never thought about.
Wrong. The Federal Reserve is NOT private. See http://occupywallst.org/forum/what-is-money/
Are you retarded or just trying to get a reaction. Take your business elsewhere.
I, unlike many here, provide links to facts supporting my opinions so the reader can evaluate my opinion for themselves. I do not ask them to accept my opinion by "fiat".
I quote from the Encyclopedia of Business and Finance, 2nd ed. which you can read at http://www.encyclopedia.com/topic/Federal_Reserve_System.aspx#2-1G2:1552100128-full
'Designed by Congress and subject to congressional authority, the Fed is a politically independent and financially self-sufficient federal agency ... The Fed's primary policy-making group is the seven-member Board of Governors. Appointed by the president and confirmed by the Senate, members serve for one fourteen-year term only. A member who is appointed to fill an unexpired term may be appointed for an additional full term. From among the seven members, the Board's chairman and vice chairman are also appointed and confirmed by the president and the Senate for four-year terms."
If you like, you can also read Title 12 paragraph 3 of the Federal Code that created the Fed at http://www.law.cornell.edu/uscode/12/usc_sup_01_12_10_3.html . It says the same thing in legalese.
Though the member banks of the Federal Reserve System ARE private, the Governing Board sets POLICY. We The People control the Federal Reserve. This relationship where a regulating agency works closely with the industry being regulated is replicated in the FCC, the FDA, etc. In ALL cases, We the People set policy, and the regulated companies have just as much influence over policy as we decide their input merits.
Sue I can agree with the fact that Fed policy is set by legislation. But after that, Congress has nothing to do with the daily business of the Fed. If they were truely a Federal institution they would be bounded by the same checks and balances as other Federal Departments. This is why so many people are asking for the Fed to be brought under the jurisdiction of the Treasury so they are held accountable. The Fed's business is to make a profit and the government has no rights to that profit. That is a private corporation.
What "checks and balances" do you think are in effect at the IRS ? It was the real controversial agency as it holds vested powers from all THREE branches of government. It gets to make law, enforce law, and adjudicate law.
I don't promote the IRS either, that's a different subject. Do we somewhat agree on the Fed though? If we can see some common ground on the Fed I would love to discuss taxation as well.
You are wrong. The Fed is owned by shareholders (all private) and member banks from the cartel, which are also owned by private shareholders. When the Fed was created, America's money supply was privatized. That was in 1913. We need to abolish the Fed and take our money supply (nationalize our money as the constitution mandates).
I quote from the Encyclopedia of Business and Finance, 2nd ed which can be seen at http://www.encyclopedia.com/topic/Federal_Reserve_System.aspx#2-1G2:1552100128-full
"Designed by Congress and subject to congressional authority, the Fed is a politically independent and financially self-sufficient federal agency... The Fed's primary policy-making group is the seven-member Board of Governors. Appointed by the president and confirmed by the Senate, members serve for one fourteen-year term only. A member who is appointed to fill an unexpired term may be appointed for an additional full term. From among the seven members, the Board's chairman and vice chairman are also appointed and confirmed by the president and the Senate for four-year terms."
You might also want to read Title 12, Chapter 3 of the Federal Code which is available at http://www.law.cornell.edu/uscode/12/usc_sup_01_12_10_3.html . The Federal Law is, of course, the more concise of the two references, but it's darned hard to read through ! I have. The easier-to-digest encyclopedia material is accurate.
Article 1 Section of the Constitution gives Congress the power "... coin Money, regulate the Value thereof ..." What exactly do folks think that "regulate the value thereof" clause MEANS if not that we are to have an elastic money supply ?
I know what it is and your link is even misleading.
If anyone wants to know what the Fed is they can learn right here:
http://video.google.com/videoplay?docid=6507136891691870450
LOL ! I send people to a reference encyclopedia and the federal law while YOU send them to a video that is editorial in nature. I sure hope folks can still tell the difference between a REFERENCE and a supporting OPINION ! If not, we're HOSED.
Thanks!
This issue has been hiding in plain sight.
http://en.wikipedia.org/wiki/Talk:Criticism_of_fractional-reserve_banking#Proposed_Bullet_on_.22Ethics_of_Earnings_from_Fractional-Reserve_Banking.22_Within_General_Criticisms
Wikipedia does not engage in ethical challenges or opinion unless it is a documentation of ethical challenges or opinion - http://en.wikipedia.org/wiki/Criticism_of_fractional-reserve_banking barely
Force this issue before the press! It is too obvious!
http://www.themultitude.org/forum/viewtopic.php?f=4&t=366
Imagine being able to loan as much money as you wish while not actually having a single penny against which to make the loan.
Relatively speaking, that is exactly what the federal reserve lending system allows banks to do!!
Banks earn usury interest from imaginary money that is not theirs in the first place! ! !
The resolution is to correct the improprieties by curtailing the net profits of banks to a justified and legitimate level and rendering the difference from the gross earnings to a privatized social security fund - a public private trust.
Gross distortion. See http://occupywallst.org/forum/what-is-money/
END THE FED. That is the root of frac
The issue to be raised is to address the unethical and special exceptions that banks have provisioned for themselves.
It is true that banks earn usury interest on money that is not theirs which is categorically theft in every sense of the word.
However, the Federal Reserve system and the Central Bank have a purpose and should be kept in place.
The plan is to curtail the net earnings from the banks and allocate the difference from the gross earnings to a privatized social security system.
Lending money that you don't have.
End the frac!
Challenge that current bank profits gathered through fractional reserve lending are and have been illegitimate.
Banks are not entitled to profits from usury interest on moneys that is not theirs and literally created out of nothing, any more than any citizen can open their front doors and issue cash on more money than they have in hand.
Preserve the Fractional Reserve system to control the economic variables such as inflation and the money supply by adjusting interest rates through an independent and private agency from the government.
Preserve the Central Bank to insure deposits and to provision the fractional reserve system.
Limit the net earnings of banks to a justifiable level and transfer the excess from gross profits to a privatized social security system - aka Public Private Trust - based upon collectivism and not communism.
Under closer scrutiny I don't actually like those ideas.... First 2 paragraphs are ok, using an entirety to control economic variables does not work. Insuring deposits increases moral hazard and allows more bank speculation. I'm not for limiting anyone's earnings as long as they increase earnings by providing a valuable service to the consumer, which in turn rewards them.....
I do not consider earning usury interest on multiples of moneys to be fair, honest, or ethical.
An individual venture capital investor receives one for one leverage on their money.
Banks DO NOT leverage money one to one, in fact they multiply the money and leverage it many times.
The practice is known as counterfeiting and is a category of fraud!
If the fractional reserve lending system must exist as a necessary evil to provision the liquidity of money then, as is similar to other excise or sin taxes levied against vices, damn it all, the fractional reserve lending institution deserves to be treated any less.
My proposal is not to render the unrealistic from source method of earnings to any communist government institution rather to render those ill gotten gains back to the private sector at large!
I agree making money on money that doesn't exist is criminal genius. What about banks returning to how they were before the fed? Each lending money based on what it cost them to run, interest rates being set by an individual banks business costs? When they actually provided a service and weren't back stopped by the fed?
http://en.wikipedia.org/wiki/Panic_of_1907 - They were not back stopped by the federal reserve and there were runs on banks and bankruptcy filings.
"The panic may have deepened if not for the intervention of financier J. P. Morgan, who pledged large sums of his own money, and convinced other New York bankers to do the same, to shore up the banking system. At the time, the United States did not have a central bank to inject liquidity back into the market."
The federal reserve and central bank should reasonably remain in place.
Perhaps a peculiar concept, although not unlike a sin (excise) tax, given that fractional lending is based upon counterfeit (theft) and also a necessary evil, the illegitimate gains should be used to rectify the vices of the system.
In that respect, banks do not deserve unmitigated access to the earnings from the system, which is an unbalance reward for a criminal vice, and should only receive compensation for the basic operation and management of the lending system.
I'd just like to give FreeRadical some credit. Finally a good idea (or at least a meaningful one). I'd also note that I would NOT support a more broad first objective. Once something this specific is put in place, broader objectives can be raised.
I should also note that I don't agree with this. But we all don't have to, so still, credit for an idea.
Thanks for the accolade.
My propositions are somewhat notorious for requiring time to sink in.
don't you think that the first objective should be a bit more broad??? Get money out of politics should be the first objective.
Getting money out of politics is not supported by any majority since money knows how to make money and the philosopher king theory is nonsense.
The best that can be hoped is for open disclosure of political contributions.
The fact that the DoJ will not prosecute the criminal activities on Wall Street is concrete, real, and is rejected by both the left and right.
The right dismisses OWS and states that it does not have an agenda, but the right also disagrees with the ethical premises of fractional reserve lending and its ill gotten gains including a desire to hold them accountable, so ignoring the suggestion is probably not an intelligent move.
None in OWS has proposed a general class action lawsuit against the banks and government to reprise the social impact of the banks, while the SEC and FDIC lawsuits on behalf of the government are a farce.
Sometimes heard OWS calls for violent revolution are moronic and the modern method of reprisal and accountability for wrongs occurs within the court system, apparently OWS cannot muster a champion that is competent to render such a civil action.
None in OWS has propose impeachments of the politicians for that repealed Glass-Steagall act as it is itself a violation of FDIC underwriting.
None has proposed those things except myself, and while the right has agreed with me, it also states that my agenda is not part of OWS.
It seems that the right is correct in its analysis of OWS as direction less and pointless, since the left cannot seem to muster any relevant leader and cannot seem to stipulate relevant leverage points upon which to forward any social change beyond whining.
I think you are wrong.
This is not rocket science - this movement is about the growing polarization of class structure.
When did this start? Around 1980.
How did it start? The funding of political candidates using private funds began at this time, and taxes on the rich began to decrease.
How do we fix it? Stop funding/lobying political candidates using private funds, increase taxes on the rich to pre-1980s levels.
With the financial sectors funds out of politics, their influence on financial regulations will be reduced. Your objective will be possible at this time.
Not rocket science...
You need to review http://en.wikipedia.org/wiki/Campaign_finance_reform_in_the_United_States as there is not much to establish your assertion that funding of political campaigns using private funds changed in 1980 and the McCain-Feingold Act of 2002 was ruled unconstitutional.
You would probably enjoy this article http://www.conservapedia.com/Fiscal_conservatism since it differs from the standard cock and bull story of those referring to themselves as "conservatives".
Fiscal Conservatism was rhetorically promoted during the presidency of Ronald Reagan (1981-1989). ... However, by the end of Reagan's second term the national debt held by the public rose from 26% of GDP in 1980 to 41% in 1989, the highest level since 1963. By 1988, the debt totaled $2.6 trillion. The country owed more to foreigners than it was owed, and the United States moved from being the world's largest international creditor to the world's largest debtor nation as investors around the world rushed to send their money to the U.S.[8]
Fiscal conservatism may also support limited periods of higher taxes in order to lower the public debt. It can include any or all levels of government, federal, state and local. Fiscal conservatism is typically justified in terms of economic efficiency (it assumes the private sector is more efficient than the public sector), and in moral terms with high spending, budget deficits, and high debt seen as indicators of corruption.
The assumptions underlying are that that government is less capable than businesses and individuals in spending money.
The campaign finance objective is not an issue that the public at large will focus on and insist that a candidate swear to enforce before gaining support from the voters to win.
The campaign finance goal does not justify an assertion that the public has been severely wronged, while the depravity of theft from fractional reserve lending elaborates and magnifies a clear and pervasive institution that prides itself on a special and privileged exception through which obvious and egregious disparities between social classes have been established.
Challenging the lack of ethics inherent within the fractional reserve system holds the entire system accountable and inspires the public by convincing them that others do in fact have a reason to adhere to their concerns!
um, banks lending out more money than they have on reserve is a good thing -- a good thing which can become a bad thing if it isn't regulated.
you wanna outlaw credit in the US, you'll see a heck of a lot more unemployment, really fast.
I agree that outlawing credit in the US is a bad thing, I am opposed to rendering profits out of thin air to banks and their employees! The majority of profits are gathered through theft and are not in any way related to the standard one to one exchange of capital in a corporation by private investors.
normal bank lending did not cause this crisis. haphazard lending with out-of-control leverage did.
left unregulated, banking can get out of control.
doesn't mean we should outlaw debt.
not sure where you would draw the line, exactly?
We do not have to outlaw debt, but we do not have to endow those who issue the debt an ability to earn usury interest base upon abstract possession.
The line of profits for banks is to be drawn at full reserve lending, such that for a $100 deposit with 10% reserve, interest can only be earned on $90 and not $900, as would any other capital investor!!
A question is what to do with the balance of earnings and it is not to return it to the government because that is communism!
sorry, but the $900 you're referring to is just from your hypothetical example, right? and it represents the total money supply hypothetically created by one $10 reserve? by multiple banks? as you said, "conceivably"?
not sure how you would possibly go about tracing or outlawing this.
not sure how society would benefit.
i can definitely see how society would suffer however.
Yes, $900 commercial is the hypothetical maximum for a 10% reserve and a $100 deposit. Recent reserve values are lower than 10% - http://www.federalreserve.gov/monetarypolicy/reservereq.htm, which means that the hypothetical maximum was greater.
I agree with your assessment that tracing the money would be difficult and likely impossible, however the question remains, "What entitles these institutions to earn interest on loans with money that does not exist and that is literally not theirs?"
My ideas have been to preserve the current function of the central bank to control interest rates. The Central Bank only keeps 6% of all earnings from interbank lending and tenders the remainder to the government for the national debt. Therefore, it is possible to continue fractional lending with reasonable interest rates.
However, it is necessary to reduce the earnings entitlements of banks to levels of legitimacy, which would require the legitimate disposition of profits in excess of allowable earnings entitlements.
I have some ideas regarding the excess of the profits and fundamentally disagree that it should be rendered to any form of communist government institution.
My proposition would be to tender the funds to a private collective institution, such as privatized social security system, a.k.a a Public Private Trust - http://www.debatepolitics.com/blogs/monk-eye/178-empowering-americans-foundry-public-private-trust.html.
It is readily necessary to make a distinction between communism and collectivism. Communism is like a public park, or social security, or Medicare, whereby all have equal access to the resources.
Collectivism is similar to a coop where each owns fractions of the whole, by title that may be willed to an heir, sold, or traded.
Banks must be prevented from issuing loans irresponsibly to overcome the earnings limitations and to assure that loans issued to optimize economic efficiency and earnings.
It's like the 1% are allowed to be loan sharks and bookies, nobody else is. It's a terrible system.
Only 14% of the 1% are from the financial institutions and that seems to be a high incidence.
Loan sharks can only loan the money they have on hand through a one for one exchange.
Banks can conceivably loan far in excess of the money on hand, multiples of money, through counterfeit - fraud - theft.
I think the first issue should be putting an end to corporate lobbying. If we have separation of church and state, we should also have a separation of business and state.
I keep hearing it from the right and I continue to agree, OWS has no idea what it wants to achieve.
Campaign finance reform and lobbying are trifling objectives.
Those are not core issues about which American citizens are going to rally, the right, the general public, and the press are going to laugh at you and then ignore you.
There is a clear legal and ethical offence that is the Fractional Reserve Lending System - the LIBERTARIAN despises it, the LEFT objects to it but is clueless as to why, and the RIGHT is clueless but defends it as a foundation of capitalism which it is not, but ultimately the public has not been informed of it - so act on it.
There is no such thing as separation between state and business because money makes the world go round, I suggest you get some and stop presuming that everyone is out to get you.
Maintain a focus on ACTUAL CRIME and you will get much further.
I do agree with you that Fractional Reserve Banking is the devil's tool to enslave us all but we will never be able to get that sucker passed without cleaning up Washington first. And if we don't clean up Washington, banking reform isn't going to help. It's a detour. We have to clean up Washington anyway. It's going to be hard whether we do it first or second. But if we do clean it up, then fixing banking will be 100000% easier!!!
Just imagine this... If private for profit business is forbidden from influencing politics, what happens to the private for profit corporation known as the Federal Reserve Bank? Hmmmm??
If you are worried about getting public support, doesn't the OWS movement have some of that built in? If we use our clever heads I'm sure this group could come up with something to get public support for booting Wall Street from Washington. Remember, we have to do it anyway. And if we do THIS FIRST, the rest become a cakewalk.
There is hardly a consistent objective amongst parties to "clean up Washington" other than to under regulate or over regulate and, of the two parties vying for the option, neither party deserves to do it and hopefully neither party will have the votes to do it. I like that congress is the opposite of progress - slow and steady change, thanks.
http://en.wikipedia.org/wiki/Dodd-Frank_Wall_Street_Reform_and_Consumer_Protection_Act and the http://en.wikipedia.org/wiki/Volcker_Rule were implemented to address the excesses of Wall Street, "As the finalized bill emerged from conference, President Obama stated that the bill included 90 percent of the proposals.[11]" You want more, is there already enough?
The http://en.wikipedia.org/wiki/Federal_Reserve is not actually a for profit institution, while commercial banks that implement fractional lending are.
"The U.S. Government receives all of the system's annual profits, after a statutory dividend of 6% on member banks' capital investment is paid, and an account surplus is maintained. In 2010, the Federal Reserve made a profit of $82 billion and transferred $79 billion to the U.S. Treasury.[16]"
The government has a role to establish a http://en.wikipedia.org/wiki/Non-aggression_principle however the exact meaning of non aggression varies within contexts.
Aggression, for the purposes of the NAP, is defined as the initiation or threatening of violence against a person or legitimately owned property of another. ...NAP is held by its supporters to lead to the moral condemnation of theft, vandalism, assault, and fraud.
I can clearly see theft and fraud within the fractional reserve lending system.
What do you expect to result form "booting Wall Street from Washington" and what egregious examples of influence can you reference?
Where do you see aggression where Wall Street meets Washington?
Really? You want to use Wikipedia to support your position that the FED isnt for profit?
Last I checked, 82 billion - 79 billion = 3 billion. Where did that profit go? That's OUR money.
I have stated in another reply that 6% may be too much for their services. Many congressman have unsuccessfully called for an audit of the Federal Reserve. Mary Landrieu sent me an e-mail today indicating her previous request for an audit. This issue can break the ice and other things will follow. There are already some high profile persons after the institution however none of them can explain it simply and so none pay attention. Too many people understand too little that banks earn their money through counterfeit (fraud - theft).
Abolish money alltogether. Remove the moneychagers from our temple, our planet, just like Jesus did. Just look at this mess they made. Free your minds... start thinking outside the box. Their box, their prison.
Count your blessings and do not destroy your own property, especially if will need to be replaced.
Quit addressing the symptoms! The #1 Objective of OWS should be to get the money out of politics. I'm advocating the single demand of PROHIBITING PRIVATE SPENDING ON PUBLIC CAMPAIGNS. This issue will have the most wide reaching impact, gain the broadest support, and will allow the 99% to participate meaningfully as both candidates and voters. If we actually had a functioning democracy (republic), we'd be able to change these laws instead of just putting a band aid on them. Right now I can only think of two ways to get there www.lobbydemocracy.com and www.getmoneyout.com
Fractional reserve lending is not the symptom it is likely the cause!
The campaign finance objective is not an issue that the public at large will focus on and insist that a candidate swear to enforce before gaining support from the voters to win.
The campaign finance goal does not justify an assertion that the public has been severely wronged, while the depravity of theft from fractional reserve lending elaborates and magnifies a clear and pervasive institution that prides itself on a special and privileged exception through which obvious and egregious disparities between social classes have been established.
Challenging the lack of ethics inherent within the fractional reserve system holds the entire system accountable and inspires the public by convincing them that others do in fact have a reason to adhere to their concerns!
There's no doubt that fractional reserve lending is a HUGE issue...but I'd rather reform the framework that makes these policies, rather than just the address one of the individual policies. Campaign finance reform, publicly funded campaigns would put in place a framework to address these policies, which aren't going to get much traction when the politicians have to decide whether to bring up the issue and lose their funding, or talk about a soft issue and keep the $ from big business.
Campaign finance reform does not represent an actual crime, whereas fractional reserve lending is very much a crime of counterfeit (fraud), by which banks acquire money illegitimately, and for which the populous at large would be outraged if informed.
Fractional reserve lending therefore establishes that the claims of impropriety are justified but campaign finance does not!
Campaign finance reform does not represent an actual crime, whereas obstruction of justice from the Department of Justice does for its failure and obstinance to prosecute wall street crimes is, for which grand juries need to be convened to establish a reprisal against the criminal participants in the banking system collapse and the Department of Justice itself. - http://chat.lawinfo.com/legal_question_regarding-t222989/index.html
Campaign finance reform will not forward a class action lawsuit against the government, banks, and bank employees seeking restitution of wrongs orchestrated and perpetrated through fraud, deception, or malfeasance that resulted in personal and financial loss to the well being of multitudes.
Campaign finance reform does not concern politicians as much as a public hell bent on impeaching (posthumously) them and taking their precious benefits.
Campaign finance reform does not represent a principle issue of outrage, upon which a demand to accountability for crimes can be rendered and upon which a focussed movement is to be based.
Information is contagious and these issues are clear and obvious they only need to be pushed forward.
I also do not have an issue with businesses and suggest others to get one and forward their own agenda.
1st, the fact that our current system of buying politicians does not represent an actual crime is a principle issue of outrage. I have a friend who actually sells democracy in DC (aka political fundraiser) and the fact that it is allowed is appalling. We live in the best democracy money can buy.
I am not hell bent on impeaching anyone, but rather creating a democracy where the public has the opportunity to participate in the decision making process on any or all of our laws and policies. It does sound like you are hell bent on punishing/holding accountable Wall Street (i don't disagree with you on that) but why just tackle one issue, when a change to our electoral system would be able to do the same if people wanted it to.
I guess it just feels like everyone is addressing these grievances on the street, where we should be thinking longer term and be trying to change a currupt system that allows these laws to pass unnoticed to begin with.
After all that was uncovered with the partial audit of the Federal Reserve, clearly a -FULL- audit is now warranted, so the people can learn precisely why the Fed should be abolished.
Abolishing the Federal Reserve Review Board is different than abolishing the Federal Reserve banking system.
Interest rates may be a somewhat useful regulator for the market and getting rid of fractional lending would severely impact money liquidity.
The conclusion thus far is to preserve fractional lending and curtail the net profits of banks, due to the illegitimacy of their earnings model (usury interest with absurd earnings on multiplied money that is not theirs) and, although inconclusive, establish a privatized social security system (heir, sell, trade) with the excess.
All who know about federal reserve lending agree that its lending and earnings are corrupt.
I wonder if anyone here even has the ability to understand it.
Occupy Wall Street is finished if it cannot address the unethical principles of the fractional reserve system.
Really, what other institution IN ACTUAL FACT practices a system of earnings that is not based upon the sacrifice that corporations make to earn money, rather IT IS BASED UPON THEFT!!
Hint, hint, fractional reserve lending is theft!
Would anyone like to make profits by loaning 9 times the money they have on hand?!
"Bank Profits and Bonuses Tied to Fractional Rate"
An Hypothetical Example
Consider an ideal situation where a bank made short term loans with an average rate of 4% on $900 commercial from a $100 deposit - that is 36% interest on a deposit!
Thus, $36 is made from the $900; although one needs to subtract the 0.1% annual interest earned on the $100 deposit equalling 1$, for a grand total of $35 profit on a $100 deposit.
The bank deposits are insured by the federal government.
Give Me More
Congress sells treasury bonds to cover its debts or to fund its spending programs and then the Federal Reserve prints a volume of cash equivalent to the purchased bonds.
Banks receive the deposits from the government spending programs that it can then fractionally lend for usury interest.
http://www.themultitude.org/forum/viewtopic.php?f=4&t=366
If one or more angel investors pooled their money to form a corporation their capital would be leveraged ONE to ONE but that is not how banks earn their money!!
The angel investor does not invest their money and have it leveraged at NINE TIMES its value!!
Bank profits are not DIVIDED BY NINE on the back end!!
Free Radical you are a pleasure to read and thank you so much for the insight. Makes alot of sense what your saying I think it just needs time to sink in for many of us. My question would be once you allocate the finds differently that banks make on investments you propose opening up a collective account that we all share correct? Why not just have a non interest private funded bank that caters to people with bad credit and default mortgages? Put the money back to helping the less fortunate because in the end that money goes back to the system no?
I am uncertain of the meaning of your phrase "opening up a collective account that we all share". It is not a shared account. Community property is like a public park that all have free access to use, that is the basis of communism - social security and Medicare are communist programs. Collective property is like a COOP where each individual owns real and tangible property and that is the premise of privatized social security, the public private trust, and the recommended disposition of the difference between allowable net and gross earnings of the banks.
Within the introduction to the public private trust it is suggested that various corporations could be owned and distributed by means of the public private trust paradigm including banks. For example, a public private trust be formed around pharmaceutical manufacturing of standard medicinal drugs that are out of patent, whereby the public at large would be literally paying themselves when they purchase medications.
The original premise of the public private trust was to stop corporate welfare. It was argued that bequeathing disproportionate endowments to a select few within a corporation, such as through a direct grant, was not any more of a fair social system than is the view towards egalitarianism - both are unfair systems.
And so the premise was to balance one unfair system against another by requiring that direct grants to corporations occur through an exchange of stock tied to the corporate title and stock. Since the government should not own that stock - communism - the proposal was to fractionally distribute the acquired shares (once at the time of purchase) to each individual taxpayer who may buy, heir, trade, or sell them in the future as part of their private 401k.
false profits? you mean like Mohamed?
There is a difference between ishmaelism (qurayshism) and fictional ishmaelism.
To the top of the stack again!
recycle the message
Can anyone say counterfeit?!
Can anyone say dishonest living?
Can anyone say theft!?!
make it happen!
number one focus!
Definitely counterfeit!
Ignorance has allowed everyone to be complacent with the crime of fractional reserve lending.
OWS has access to the national press and none has brought this issue up - pathetic.
This issue is number one for ever American and even the world!
tackle this issue
next up
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http://www.themultitude.org/forum/viewtopic.php?f=4&t=366