Global capitalism and 21st century fascism

[captain morgan]

Yes the bank has to have assets to make the loan against, but what you overlook is they list your promise to pay as the asset to offset the loan amount. When they give you the money it does not reduce their hard assets in any way, they dont sell $25k of gold on the market to give you $25k in cash. They enter you PTP as an asset and make the loan against it, that is why it has 2 accounting entries in the general ledger, one is a credit and the other is the balancing debit and therefore they will not have a negative balance sheet from lending. If they used an existing asset to monetize the loan it would devalue that asset by the amount of the loan and it would not be long before they had no assets or the ones they did have were worthless.

The asset (real estate) is partial security against the loan, included in that is the down payment that is a reflection of the risk factors (incl the loan recipient), however, these monies are (in whole or part) employed to keep the bank's reserve component balanced at the BOC level.

The money changes hands between me and the seller to complete the contract of sale. The banks and lawyers may handle the transaction but it is a private contract. We have a binding contract where both parties have given valuable consideration, I gave money, they gave real estate. Where I got the money has nothing to do with how legitimate or binding that contract is. It is the contract with the bank that lacks valuable consideration on one side and is theoretically unenforceable. Does this theory pan out in an actual courtroom? I only know of the 1 case in Minnesota and the records are sealed so it is hard to find out where the jury made it's determination.

This is an oversimplification of the role of the banker. Yes, they are a kind of pseudo-broker on the financing end of the transaction, however, they are also providing the resources to the buyer necessary to complete the transaction (ie the mortgage money). That money to complete the sale and offer consideration to the seller is then an asset that can be deployed at the discretion of the seller (cash proceeds from sale)... The original point that I made in my earlier post on this was that this money - now in the possession of the seller - is a tangible asset and therefore the money was never "created out of thin air" .

That said, the banks can't; and don't; create their own money in any way shape or form.

I did read it, there is no clause in the Bank Act that mandates requisite reserve ratios or reserves period. If you think it's there, then post the relevant section.

It's been gone since 1994...

Gosh... I wonder how you could have missed it?.. Pay special attention to the fact that the effective date is 2011.

Bank of Canada Act (R.S.C., 1985, c. B-2)


Current to 2011-04-28

RESERVE FUNDS


Reserve fund

​

27. The Bank shall establish a reserve fund and, after making the provision that the Board thinks proper for bad and doubtful debts, depreciation in assets, pension funds and all other matters that are properly provided for by banks, the ascertained surplus available from the operations of the Bank during each financial year is to be applied by the Board as follows:


( a) if the Bank’s reserve fund is less than the paid-up capital, one third of the surplus is to be allocated to the reserve fund, and the residue is to be paid to the Receiver General and form part of the Consolidated Revenue Fund;


( b) if the reserve fund is not less than the paid-up capital, one fifth of the surplus is to be allocated to the reserve fund until the reserve fund reaches an amount five times the paid-up capital, and the residue is to be paid to the Receiver General and form part of the Consolidated Revenue Fund; and


( c) if the reserve fund is not less than five times the paid-up capital, the whole of the surplus is to be paid to the Receiver General and form part of the Consolidated Revenue Fund.
R.S., 1985, c. B-2, s. 27; 2007, c. 6, s. 395(E).


Amazing, that they make so many references and spell-out the parameters to something that you insist doesn't exist.

 

[Tonington]

Gosh... I wonder how you could have missed it?.. Pay special attention to the fact that the effective date is 2011.

Bank of Canada Act (R.S.C., 1985, c. B-2)

Maybe you should pay attention, this is the Bank of Canada Act....The Bank of Canada, our central bank, of course has to keep reserves. They couldn't be the "lender of last resort" otherwise.

The Bank of Canada Act does not govern the lending practices of private institutions, like for example your local Scotiabank branch.

The Bank Act, does, and there is no requirement for private banks to maintain a reserve, or reserve ratio. None.

Amazing, that they make so many references and spell-out the parameters to something that you insist doesn't exist.

I'm amazed at what you're able to convince yourself of to keep from admitting you're wrong. Politicalnick was right and you were wrong. Move on...

 

[CDNBear]

I am having a great deal of trouble getting them as they were sealed at the banks request. If they remained open in the public record everyone would be using them to get out of every loan and mortage in the US. I have a couple of different opinions from Canadian lawyers as to whether this may be a functional argument in Canada. From what I understand there have been a couple of attempts but lower court judges seem disinclined to hear the cases and simply dismiss without prejudice and the cost of taking it to the SCC is probably a lot more than paying the loan.

Do you have a link to the story at least?

They certainly want to make it too complicated for most to understand as it make it easier to fleece the unknowing public.

That's not why it's complicated.

The simple point being that it is your signature on the loan document that assigns it the element of value which is in turn used to fund the loan. You as the lendee are giving value to both sides of the contract by assigning a value to the PTP and accepting their fiat currency as value for your signature.

The simple point being, they don't just make money out of thin air.

Politicalnick was right and you were wrong. Move on...

He was right about Canada's zero reserve system, full stop.

 

[captain morgan]

Maybe you should pay attention, this is the Bank of Canada Act....The Bank of Canada, our central bank, of course has to keep reserves. They couldn't be the "lender of last resort" otherwise.

The Bank of Canada Act does not govern the lending practices of private institutions, like for example your local Scotiabank branch.

The Bank Act, does, and there is no requirement for private banks to maintain a reserve, or reserve ratio. None.

If you replace the word fund for asset, it may help you in understanding this issue. I think that you are stuck on fund being exclusively defined as paper currency.

I'm amazed at what you're able to convince yourself of to keep from admitting you're wrong. Politicalnick was right and you were wrong. Move on...

Did you get that info from the salmon today?

 

[Tonington]

He was right about Canada's zero reserve system, full stop.

Yes, I clarified my involvement in this discussion a while ago, but thanks for repeating in case the slow learner didn't take note :lol:

 

[captain morgan]

Can you tell us all again how banks can create money out of thin air Toni?

 

[PoliticalNick]

The asset (real estate) is partial security against the loan, included in that is the down payment that is a reflection of the risk factors (incl the loan recipient), however, these monies are (in whole or part) employed to keep the bank's reserve component balanced at the BOC level.

The BOC and commercial banks operate by different rules hence the 2 different acts. If you have a few days read the bank act here.

Bank Act

The BOC has reserve requirements, the commercial banks do not. Even if they did have say a 10% requirement they could loan out roughly $900 for every $100 of assets. The $800 difference doesn't come from the BOC or from gold or currency, it is created by the loan agreement. So please do offer your explanation of where this $800 appears from.

Fractional-reserve banking - Wikipedia, the free encyclopedia

Having a zero reserve requirement means they could loan $150 trillion dollars over and over if they chose too with no assets. All that is required is a charter to operate under the bank act and the willingness to take the risk.

This is an oversimplification of the role of the banker. Yes, they are a kind of pseudo-broker on the financing end of the transaction, however, they are also providing the resources to the buyer necessary to complete the transaction (ie the mortgage money). That money to complete the sale and offer consideration to the seller is then an asset that can be deployed at the discretion of the seller (cash proceeds from sale)... The original point that I made in my earlier post on this was that this money - now in the possession of the seller - is a tangible asset and therefore the money was never "created out of thin air"

.
Until you can grasp the concept that my contract with the seller of the property is separate from my contract with the bank there is no point in arguing. One may very well be dependant on the other, I cannot fulfill my part of the contract of sale without establishing my contract with the bank which is why there is always a 'subject to financing' clause in real estate contracts, it allows me to back-out of the sale if I cannot raise the money. In the end though they are 2 separate contracts and have no bearing on each other if disputed in court apart from the 'subject to financing' clause.

That said, the banks can't; and don't; create their own money in any way shape or form.

Oh yes they do....

Money creation - Wikipedia, the free encyclopedia

Through fractional-reserve banking, the modern banking system expands the money supply of a country beyond the amount initially created by the central bank.[4] .....

2) commercial bank money (money created in the banking system through borrowing and lending) - sometimes referred to as checkbook money[7]
When a commercial bank loan is extended, new commercial bank money is created. .... Because of this money creation process by the commercial banks, the money supply of a country is usually a multiple larger than the money issued by the central bank; that multiple is primarily determined by the reserve ratio set by the relevant banking regulators in the jurisdiction.

Oops on you!!! As we have a zero reserve they can create as much as they want.

Gosh... I wonder how you could have missed it?.. Pay special attention to the fact that the effective date is 2011.

Bank of Canada Act (R.S.C., 1985, c. B-2)

Because you are not reading the right document.....see link above to the 'Bank Act'

Amazing, that they make so many references and spell-out the parameters to something that you insist doesn't exist.

And yet there are multiple sources that say otherwise if you refer to commercial banks instead of BOC.
Reserve requirement - Wikipedia, the free encyclopedia
"Canada - none"
CanadaNone
Canada’s Private Banks have no Reserve Requirements. Gilligan's Corner
"Canada’s Private Banks have no Reserve Requirements."

Google

 

[CDNBear]

Having a zero reserve requirement means they could loan $150 trillion dollars over and over if they chose too with no assets. All that is required is a charter to operate under the bank act and the willingness to take the risk.


Oh yes they do....

Money creation - Wikipedia, the free encyclopedia

Oops on you!!! As we have a zero reserve they can create as much as they want.

Bullsh!t. The OSFI would revoke their charter in a heartbeat.

And that doesn't mean that banks can create new money on a whim. The over all performance of a bank as determined by OSFI, is what affects each charter banks ability to multiply an initial hard cash deposit, via M1, M2, M3, and M2+. It's far more complicated and heavily regulated to control market volatility and promote predictability.

Regulations for charter banks and processes like LVTS, which makes virtual settlement instant. Whereas ACSS is more paper based, as in chequing.

That's a very over simplification, of a fairly complicated system. And that was not what he said, he qualified his opinion with a story about money having no value. Which is consistent with other conspiracy nuttery.

As Captain Morgan has already mentioned, banks do not have vault cash reserves, but they must have solvent sustainability and the power to support their lending. There are checks and balances, regulations, and limits to the ability to lend. That are dependent on a banks strength and holdings, as determined by the OSFI. Each bank can only lend a specified percentage, greater then their total assets. Assets are not a reserve, but what makes the institution strong enough to have the ability to lend. That alone isn't the only mitigating factor in the OSFI's determination of how much a bank can lend. A bank must also be able to show an institutional policy that is sound.

They are still accountable to the BOC, and OSFI, for any monies they may "create" and must show they have the ability to cover it's value. Thus, no money is actually created. As the loan is backed by a physical element of value.

If it were as simplistic as you have made it out to be, there would be economic chaos, and rabid inflation.

 

[mentalfloss]

I'm happy to know i'm part of the richest people on this planet.

Now I just need to figuer out how to get those guys out of my pockets

YouTube - CapitalOne Hands in Pocket Campaign

Great plug for Mastercard.

 

[PoliticalNick]

Do you have a link to the story at least?

Jerome Daly v 1st National Bank of Montgomery.

Jerome Daly: The Man Who Humbled the Federal Reserve | Ron Paul 2012 | Sound Money, Peace and Liberty

I have read and seen the story in other sources too. His argument was basically that since the reserve requiremnet allowed the money borrowed to be created from his signature on the documnet the bank did not give 'valuable consideration' on their side of the contract. The jury agreed and so did the judge!

 

[CDNBear]

Jerome Daly v 1st National Bank of Montgomery.

Jerome Daly: The Man Who Humbled the Federal Reserve | Ron Paul 2012 | Sound Money, Peace and Liberty

I have read and seen the story in other sources too. His argument was basically that since the reserve requiremnet allowed the money borrowed to be created from his signature on the documnet the bank did not give 'valuable consideration' on their side of the contract. The jury agreed and so did the judge!

I'll have to do some digging, your link only has a small portion of the story.

Did you miss post #48?

 

[captain morgan]

The BOC and commercial banks operate by different rules hence the 2 different acts. If you have a few days read the bank act here.

Bank Act

There is only 1 BOC and it operates by rules exclusive to the BOC.. There are a handful of Charter banks that operate by a separate, yet parallel set of rules.

Thanks for the link on the Bank Act.... You might go back to page one where I provided it originally for the benefit of Mr. Science who relies on working papers for his info.

The BOC has reserve requirements, the commercial banks do not. Even if they did have say a 10% requirement they could loan out roughly $900 for every $100 of assets. The $800 difference doesn't come from the BOC or from gold or currency, it is created by the loan agreement. So please do offer your explanation of where this $800 appears from.

Fractional-reserve banking - Wikipedia, the free encyclopedia

Having a zero reserve requirement means they could loan $150 trillion dollars over and over if they chose too with no assets. All that is required is a charter to operate under the bank act and the willingness to take the risk.

The BOC maintains reserve requirements and by extension, they are applied directly to the Charters in the form that they must provide security against their position with the BOC... The BOC doesn't offer unlimited funds to any commercial institution just for sh*ts and giggles. The Charters/Commercial banks must collateralize/securitize their position against assets in their possession. Further, any deficiencies in the account from the perspective MUST be settled within a (relatively) short period of time. All this does is allow the Charter to come up with the funds via liquidating assets or making private arrangements with other institutions.

None the less, the reserve requirement by the BOC is directly extended to the Charters through the above described mechanism. You can point to the written words on the page and not dissect or analyze them like Tonnington chooses, but that is just willful ignorance.

If you are unable to comprehend this direct relationship, then there is no point in addressing this issue any further.

.

Until you can grasp the concept that my contract with the seller of the property is separate from my contract with the bank there is no point in arguing. One may very well be dependant on the other, I cannot fulfill my part of the contract of sale without establishing my contract with the bank which is why there is always a 'subject to financing' clause in real estate contracts, it allows me to back-out of the sale if I cannot raise the money. In the end though they are 2 separate contracts and have no bearing on each other if disputed in court apart from the 'subject to financing' clause.

You don't own a home, do you Nick?

In the event that you do, and you have a mortgage, you will understand that the bank owns the home and you only have title to the equity until such time that the mortgage is satisfied.

Regardless, if you wish to debate the intricacies of real estate contract law, we can pursue that ends in another thread. The reality is, no matter how you cut it, the funds must exchange hands and those funds are real and tangible; read, they were not "created out of thin air".

Oh yes they do....

Money creation - Wikipedia, the free encyclopedia

Oops on you!!! As we have a zero reserve they can create as much as they want.


Because you are not reading the right document.....see link above to the 'Bank Act'

The BOC does not "create" money, they issue currency and that currency is essentially a first charge against the corporation of Canada... You want to flood the market with CAD, then expect similar results that the Germans had after WW1 and WW11.

And yet there are multiple sources that say otherwise if you refer to commercial banks instead of BOC.
Reserve requirement - Wikipedia, the free encyclopedia
"Canada - none"
CanadaNone
Canada’s Private Banks have no Reserve Requirements. Gilligan's Corner
"Canada’s Private Banks have no Reserve Requirements."

Google

By the way, thanks for the references wiki, Gilligans Corner on the issue. I'll bet that the higher-ups in the world of finance the various federal reserves and monetary policy depend on it as much as you do.

 

[Machjo]

Global capitalism and 21st century fascism
The global economic crisis and the attack on immigrant rights are bound together in a web of 21st century fascism.

The TCC has unloaded billions of dollars into food, energy and other global commodities in bond markets worldwide [GALLO/GETTY]

The crisis of global capitalism is unprecedented, given its magnitude, its global reach, the extent of ecological degradation and social deterioration, and the scale of the means of violence. We truly face a crisis of humanity. The stakes have never been higher; our very survival is at risk. We have entered into a period of great upheavals and uncertainties, of momentous changes, fraught with dangers - if also opportunities.


Global capitalism and 21st century fascism - Opinion - Al Jazeera English

Fascism is identified by four necessary components:

1. nationalism
2. authoritarianism
3. militarism
4. autarky

While we can debate the first three points, the last point especially is completely opposed to global capitalism, since fascists are very much opposed to free trade.

So I don't see how you can reconcile global capitalism (which by definition is global in nature and thus dependent on at least somewhat open borders) and fascism (which aims at national economic self-sufficiency). I'm sure you can see the incompatibility there.

 

[CUBert]

Fascism is identified by four necessary components:

1. nationalism
2. authoritarianism
3. militarism
4. autarky

While we can debate the first three points, the last point especially is completely opposed to global capitalism, since fascists are very much opposed to free trade.

So I don't see how you can reconcile global capitalism (which by definition is global in nature and thus dependent on at least somewhat open borders) and fascism (which aims at national economic self-sufficiency). I'm sure you can see the incompatibility there.

someone didn't the read the article !
!!

 

[Machjo]

OK I've skimmed it now. So if it's about a trend away from global capitalism to fascism, that's a possibility. We are witnessing more talk of protectionism, militarism has undoubtedly risen over the last few years, likewise with anti-immigration, a rise of nationalism, and more centralization of government powers, such as granting permission to torture in Guantanamo.

Sure none of these individually amount to fascism, but should they all continue to rise, then without a doubt we will see a risk of fascism.

What do we turn to however? The left has become quite nationalist itself. Just look at how protectionist the left itself has become.

If we are to fight the potential rise of fascism, it's not enough to just blame the right. The left has to show an worthy alternative too.

Just listen to even the left and how it talks about protecting jobs, and about 'the Chinese' taking all our jobs, etc. Sounds just as bad as the accusations they throw to the right about being racist and such.

 

[PoliticalNick]

There is only 1 BOC and it operates by rules exclusive to the BOC.. There are a handful of Charter banks that operate by a separate, yet parallel set of rules.

Separate and quite different, somewhat parralell in some regards and far from it in many others.

The BOC maintains reserve requirements and by extension, they are applied directly to the Charters in the form that they must provide security against their position with the BOC... The BOC doesn't offer unlimited funds to any commercial institution just for sh*ts and giggles. The Charters/Commercial banks must collateralize/securitize their position against assets in their possession. Further, any deficiencies in the account from the perspective MUST be settled within a (relatively) short period of time. All this does is allow the Charter to come up with the funds via liquidating assets or making private arrangements with other institutions.
None the less, the reserve requirement by the BOC is directly extended to the Charters through the above described mechanism. You can point to the written words on the page and not dissect or analyze them like Tonnington chooses, but that is just willful ignorance.

If you are unable to comprehend this direct relationship, then there is no point in addressing this issue any further.

If you are unable to see that the loan/mortgage agreement is considered as an asset on the balance sheet and that it is used to monetize the loan there is no point. You don't believe fractional reserve exists and you don't believe canada has a zero reserve in effect so no point in going further. You seem to think that we have a full-reserve system and banks can't loan past their real assets, feel free to continue believing that but you are wrong.

You don't own a home, do you Nick?

More than 1

In the event that you do, and you have a mortgage, you will understand that the bank owns the home and you only have title to the equity until such time that the mortgage is satisfied.

You kind of have it backwards, I have full title to the property and the bank has a registered charge against it. Have you ever looked at the title to you home.

Regardless, if you wish to debate the intricacies of real estate contract law, we can pursue that ends in another thread. The reality is, no matter how you cut it, the funds must exchange hands and those funds are real and tangible; read, they were not "created out of thin air".

You didn't bother to read anything did you? Try again.

Money creation - Wikipedia, the free encyclopedia
2) commercial bank money (money created in the banking system through borrowing and lending) - sometimes referred to as checkbook money[7]
When a commercial bank loan is extended, new commercial bank money is created.

The money is created from your signature on the repayment agreement which gives it value as an asset to the bank. I don't expect you to try to actually understand it since you would have to admit your error

By the way, thanks for the references wiki, Gilligans Corner on the issue. I'll bet that the higher-ups in the world of finance the various federal reserves and monetary policy depend on it as much as you do.

1,830,000 results in the google search. If you want to go through them all to prove yourself wrong go ahead, but here are a couple for your consideration.
Publications and Research - Bank of Canada


The elimination, between 1992 and 1994, of reserve requirements on all bank accounts in Canada has removed the need for banks to discriminate between demand ...
www.bank-banque-canada.ca/en/review/.../djoudad.html - Cached - Similar

<LI class=g>
[PDF] Reserve Requirements: History, Current Practice, and Potential Reform

File Format: PDF/Adobe Acrobat - Quick View
Canada has also begun to phase out reserve requirements, and by 1994, their requirements will be completely eliminated. These countries have taken different ...
www.federalreserve.gov/monetarypolicy/0693lead.pdf - Similar




<LI class=g>
Reserve requirement

Some countries (including the UK and Canada) have eliminated reserve requirements altogether or lowered them to negligible levels. ...
moneyterms.co.uk/reserve-requirement/ - Similar



If the BOC and the US Federal Reserve aren't good enough sources for you you are obviously beyond hope.

 

[CDNBear]

I am having a great deal of trouble getting them as they were sealed at the banks request. If they remained open in the public record everyone would be using them to get out of every loan and mortage in the US.

Really?

It took me all of ten minutes to find the transcripts, the appeal, the final nullification of the verdict, and the disbarment proceedings of Daly.

Would you like a link?

I have a couple of different opinions from Canadian lawyers as to whether this may be a functional argument in Canada.

I hope they told you, you were nuts.

From what I understand there have been a couple of attempts but lower court judges seem disinclined to hear the cases and simply dismiss without prejudice and the cost of taking it to the SCC is probably a lot more than paying the loan.

It doesn't pass the lower court, because it's a ridiculous defence.

You seem to think that we have a full-reserve system and banks can't loan past their real assets..

No he doesn't, he believes the same as me, and you...

Yes the bank has to have assets to make the loan against,

Money creation - Wikipedia, the free encyclopedia
2) commercial bank money (money created in the banking system through borrowing and lending) - sometimes referred to as checkbook money[7]
When a commercial bank loan is extended, new commercial bank money is created.

The money is created from your signature on the repayment agreement which gives it value as an asset to the bank. I don't expect you to try to actually understand it since you would have to admit your error

Does this mean I can say that you don't understand my posts? Since you continuously ignore the ones I addressed this in, twice.

 

[Tonington]

Can you tell us all again how banks can create money out of thin air Toni?

By giving loans when they don't have the full reserve...or even any of it.

 

[PoliticalNick]

Really?

It took me all of ten minutes to find the transcripts, the appeal, the final nullification of the verdict, and the disbarment proceedings of Daly..

You mean the decision not the transcripts. The appeal that the original Justice said was invalid, the verdict wasn't actually nullified anagreement was reached before trial at the appeal, Daly was disbarred for tax evasion and nothing to do with this case.

Of course the original JURY verdict remains and has never been challanged legally, even the appeal was based upon the authority of the Justice to void the contract.

It doesn't pass the lower court, because it's a ridiculous defence.

Until a court actually hears it you can't make that judgement. I could at this point go into how the bankers own the govt and therefore the courts but I won't.

No he doesn't, he believes the same as me, and you...

Way to clip quotes to enable your argument. I know the asset that backs the loan is the promise to pay (loan agreement), you guys think the bank has real, tangible assets to back the loan.

 

[Tonington]

By giving loans when they don't have the full reserve...or even any of it.

Maybe a simple example will show you...

I deposit $100 in my bank account, a bank where Bear is also a customer. Because we have no requirement for that bank to keep a percentage as reserves, they loan $90 of it to Bear, who against our better advice has decided to buy the Captain Morgan book of economics for dumb asses. You deposit his money in your bank, a few blocks down from ours. So, my $100 deposit has turned into $190 in the wider economy.

Now suppose they could only loan money they have in reserve. Bear doesn't have the money, and I withdrew $90. They can't loan Bear $90, because they don't have it at the moment. Instead, I buy your book, because I like a good laugh when I'm on the john. I have $10 left, and now you have $90. The wider economy has $100.

Giving loans when they don't have all of the reserve has created money. In this example, the economy is wealthier by $90 when banks can grant loans without having the reserve. Creating money.