Global capitalism and 21st century fascism
- Thread starter CUBert
- Start date
I see you're getting closer to admitting my posts were bang on, and banks do not create 'money' out of thin air. Keep going, you're almost there. It won't kill you to say you misspoke.
Did you give up trying to convince me Daly wasn't a nutter?
How the money is created from thin air is through the loan to the business or individual taking on the responsibility of repayment which he will supply through his labour or whatever income he generates.
He/she/they are committing their future labour income or business income as the asset that creates the money today.
The product purchased or product to be developed are the assets aka the debit that creates the credit for the bank to lend and the BOC is there to supply any necessary currency that might be required along the way.
There is no longer a cap on how much a bank can lend out which gives them unlimited potential to loan out to as many viable proposals or personal purchases someone makes.
They (Private Financial Institutions) are SUPPOSED to be the ones taking liability but we've seen recently that this is not necessarily the case.
Any questions?
He/she/they are committing their future labour income or business income as the asset that creates the money today.
The product purchased or product to be developed are the assets aka the debit that creates the credit for the bank to lend and the BOC is there to supply any necessary currency that might be required along the way.
There is no longer a cap on how much a bank can lend out which gives them unlimited potential to loan out to as many viable proposals or personal purchases someone makes.
They (Private Financial Institutions) are SUPPOSED to be the ones taking liability but we've seen recently that this is not necessarily the case.
Any questions?
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The accounting entry is "created" but as soon as the loan recipient begins to transact with the borrowed monies, that cash becomes fully tangible.
There is a maximum on this amount that is based on the leveraged asset base of the lender.
By in large, there are relatively few examples of banks/financial institutions going titters and excepting outright frauds like Bernie Madoff et al, the Northlands Banks and Lehman Brothers of the world are rarities. Regardless, these groups fall because of issues related to corporate solvency. Lehman still has assets which are in the process of being dissolved and distributed to the creditors although there will certainly be a net loss for many/most.
This most recent downturn was an extreme example of institutions that flew too close to the edge of the insolvency cliff.. Quite a few went over. However, this episode should highlight the reality that a bank is unable to create money only from an accounting entry, hell they could have loaned themselves out of trouble had this been the case.
The liability is the asset that drives the accounting entry to "create' the money out of thin air....
An idea (an asset) is turned into a liability by creating money to build that idea into a tangible asset.
It was the liabilities behind the derivatives that pushed them over the cliff. Loaning themselves money is how it all collapsed, they got caught and now we got stuck picking up those liabilities.
They were jerking off a dog that didn't exist to feed a cat that did.
I got over a trillion american taxpayer dollars and and 500 billion canadian taxpayer dollars that say different.
Does that mean we're liable for an honest mistake from a group who used the revolving door of democracy to enter and exit politics to keep lowering the regulatory bar?
Nahhhhh.
Honest mistake...thats a good one.:lol:
These guys new they were running a big ponzi scheme and they used big money lobby to change the regulations to allow it to start and continue and then they had this brilliant idea of convincing govt there company was 'too big to fail' and should be saved at the expense of every taxpayer.
So yes, you and me are liable since all the bail-outs in Canada and the US are funded by taxpayer dollars.
I realize you are probably being fecetious but I just lose it over the whole situation. Makes me want to load the gun and do some hunting!
You're probably right. We even have two GoldmanSucks assholes running the BOC.
If you ever do go hunting make sure you "take care of" all those who were stupid enough to fall for this **** too. Even Mormons didn't fall for this one.
As examples of institutions/banks that went titters?
Great list 'em
Show me an example of a loan that is 100% collaterized by the asset.
Fact is, no money is "created" at the institutional/retail level. Only the BOC can pledge currency.
No ifs andds or buts on this.
You have said absolutely nothing here... But I'll still play along. If the banks can create money out of thin air, based on an accounting entry (or an idea), how was it possible for Lehmans, Bears Stern, et al to actually go under?... All they needed to do was provide an accounting entry to bail tehmselves out.
Your logic makes no sense.
Nope... It was the borrowed money that was used to buy extremely highly leveraged assets that submarined the derivatives traders.
What, are you a moron?
1.5 trillion taxpayer dollars made sure they didn't go belly up. I am sure you could have found many, many examples if the govt didn't give that money away.
Funniest thing about it all is that if the govt had given all that dough to people to pay off their loans the banks would still have wound up pretty flush. Only difference being hardly anyone would owe them money. Under this wonderfully designed system of bail-outs we the people get to pay them twice, once through our loan agreements and once through our taxes.
I am sure you will come up with some inane reason that these businesses who were fiscally irresponsible and were going to go bankrupt should get money to save them so lets hear it.
Another example of cubby's superior debate skills...
Post #1428782 - Re: Global capitalism and 21st century fascism Bad CUBert
Post #1428782 - Re: Global capitalism and 21st century fascism Bad CUBert
Learn to read Einstein. You said you had all these damning examples, show show 'em.... Quoting a dollar amount means nothing... So, put up or shut up and move on.
... Or there is another solution; when you take out a loan from a bank, pay the f*cking thing off yourself, just like you agreed to.
BTW - I especially like the myopic comment about the bail-outs... Time to put 2 and 2 together on this Nick... If the subprime mortgages weren't bailed-out, the banks would foreclose and sell those assets and the homeowners would be out on the street.
The businesses were no different than the many of people that made an irresponsible choice in signing onto a mortgage and other debt facilities that they couldn't afford.
Is that simple enough for ya?
It was created out of thin air, wasn't it?
So it really wasn't money that was lost at all.
Oooh, kind of aggressive, did I hit a raw nerve??? I only ever said that the bail-out money was the proof that banks were going to fail. Of course you have yet to understand fractional reserve lending and admit it exists so what's the point.
Actually the bail-outs were because even if the banks foreclosed and sold all the assets they couldn't balance the books and would have become insolvent and declared bankruptcy, a direct result of fractional reserve lending and CMFs and CDO's and derivatives. To put it simple there wasn't enough assets to cover everything, even though you believe every loan has collateral assets. Bank runs would start happening and since there is only about 2/10ths of the nations money in actual currency almost every bank would fail as people tried to withdraw their cash and couldn't. Of course this situation doesn't exist in your mind. :roll:
So the businesses (banks) should be foreclosed upon too right???? Instead they got over 1.5 trillion bucks from the taxpayers. Take a stand man, if I loan someone money who can't afford to pay it back why should you cover my losses.
The conflict between your logic and reality is founded in your selective choice of facts in your analysis... In the end, if your assertion that "banks can create money out of thin air" via an accounting entry, they could have added in the necessary accounting entries to remain solvent.... Ultimately, you are the one that insists that banks can loan out infinite amounts of self-created cash.
So, which is it Nick? Are the banks able to fabricate $$ through an accounting entry or are they constrained by the underlying and indirect policies of the BOC requiring reserve (assets in some form) to remain solvent?
The banks could have foreclosed, sold the assets and remained solvent (or closer to it)... The principle reason that they got in trouble is that their customers (ie loan recipients) become insolvent when the asset that they acquired morphed into a negtive equity situation.
The banks would have remained solvent had their customers remained solvent.
The bail-out of the banks (on sub prime issues) was effectively a bail-out of the homeowner.... That said, you want to foreclose on the banks, you foreclose on their customers.... You decide what is the best course of action.
Nice try but they can't loan money to themselves to remain solvent, or for any other purpose. Not allowed in a fractional reserve system or any other system I know of. You are still confusing currency with money and have yet to admit there is a zero reserve policy in Canada or that fractional reserve even exists so arguing YOUR logic is impossible.
Wrong, in the US AIG, who held most of the derivatives on the CMFs would have gone bankrupt almost immediately. Since the windfall from the payout on those derivatives was a big asset to the banks and used to leverage purchase many of their assets as soon as that stream of revenue dried up most of the banks would have followed AIG within days if not hours. If it were as you keep claiming that the banks all have hard assets to back up the loans they may have taken a loss but a lot of them probably would have remained solvent with share values reaching almost zero, but that was not the case, they would have gone under completely because they lent far past any assets to cover the loans.
Canada was a bit different. Due to the fact that CMHC guarantees most of the mortgages that were failing we faced a situation where it would have probably bankrupted CMHC and had some huge ramifiations to the government putting Ottawa itself in trouble. What happened here was the govt, through CMHC, bought up roughly $500 billion in extremely high-risk or failing mortgages from the banks so the banks could, I love this part, extend more credit to the people. How Harper and his crew thought that giving more credit to people who were sinking in debt was going to help our economy is beyond me.
Once again you prove to be a retard. They were effectively bailing out the homeowner???? Funny how all the houses were still foreclosed upon while the banks showed record profits and their CEOs got huge bonuses.
It would have been far better if the homeowners were given the money to pay on their loans which would still have saved the banks by filling their coffers and removing a huge percentage of the loans from their books or even if the banks had been forced into bankruptcy where every homeowner could have bought out their mortgage for pennies on the dollar under bankruptcy laws.
Hey, I really believe F*CK the banks, their own mismanagement and trying to take advantage of the rules on lending and their creation of the derivative market was what caused all this and now with huge handouts from the taxpayer they have managed to come out of this even wealthier than before.
Not that that addresses what he actually said...
You stated that banks can create money infinitely, upto trillions of dollars, over and over, and not once have you acknowledged that a Canadian Charter Bank, has limitations to it's lending and money multiplier percentages. As regulated and set by the OSFI.
By your logic, a bank could effectively bail itself out.
Which is likely why you have chosen to ignore my posts, that explain how Canadian banks are heavily regulated and monitored by the OFSI, and how those regulations directly affect how and how much a Canadian bank can lend and multiply currency, using M1, M2, M3 and M2+. And chosen instead to jump back and forth between the US banking system and the Canadian banking system, in order to try and look like you know what you're talking about.
.... Ohhhh, I see... They are too heavily regulated to loan themselves money, but not not so aggressively reagualted such that they can "create money out of thin air" as they deem necessary.
As for the zero reserve policy in Canada, as I have indicated literally dozens of times now, the BOC has a reserve requirement and if they deal with the institutional banks in any way via loans, then by extension, the institutional banks have that policy heaped upon them indirectly.
BTW - I highlighted one of the important distinction for ya... Now, it is up to you to apply some critical analysis in working through the logic on this.... What the hell am I saying; you haven't been wearing your hockey helmet consistently... You have no logic.
If you are capable of answering these basic questions, you may begin to understand the issue:
Why did AIG almost go titters (technically, they were bankrupt)?
What was AIG's primary role in the real estate market? (related to Q1).
Generate a comprehensive understanding of the issue and things will become clear. Your biggest problem is that you read words on a page, apply your own narrow interpretation and consider it to be unrelated to any of the other multiple variables in the equation.
Actually, your biggest problem is recurring head trauma that could easily be prevented by wearing your hockey helmet, but we know that you won't go that far in wearing this protective head gear..
Got a link to this, or is it your imagination at it again?
I am baffled that you are unable to see this most basic issue.
I want you to go back to return to whatever match-box post secondary institution that you attended, demand a full refund and then slap your econ/finance instructors.
Lastly, never, under any circumstances, ever believe that a uni education can be provided out of the back of a 1972 Chevy Impala by a guy that sells sushi to passers-by on the street... They may tell you that they are uni professors, but chances are they ain't.
Of course you believe that Nick.. You despise anyone or any group that accomplishes and "has" more than you... That is the socialist in you which envies accomplishment and shuns individual responsibility.