Ireland bails out its banks and now Ireland's bust. Is there a lesson?
Dave
bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the
problem here? Would more damage have been done in the long run by
letting nature take its course? (Contagion is a powerful word here.)
Why did the Irish state have to take the bank debt onto its own
balance sheet? As a sovereign entity couldn't it just write the debt
off, or let the central bank create the money? Is there a Central
Bank in Ireland which can "magic up billions" like the Bank of
England?
The share price graph looks interesting. Should have bought in Feb.
09 and sold at the start of Sept. same year.
DVH
"Dave" <dwic...@yahoo.com> wrote in message
news:0c150ebe-9969-475d...@q18g2000vbm.googlegroups.com...
>I don't understand why the Irish government didn't let its banks go
> bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the
> problem here?
They allegedly did so because the Irish financial system was about to seize
up. They needed to give other banks confidence that Irish banks were good
for short term (overnight) lending. So, much the same problem as everyone
else at the time.
Elsewhere, there are claims that AIB's Austrian subsidiary was involved in
naughty extra-mural activities, which made it imperative that it be dumped
cheaply despite its excellent cash reserves. But those claims will never see
the light properly, so they're not even worth discussing.
> Would more damage have been done in the long run by
> letting nature take its course? (Contagion is a powerful word here.)
No idea.
One could speculate either way.
>
> Why did the Irish state have to take the bank debt onto its own
> balance sheet? As a sovereign entity couldn't it just write the debt
> off, or let the central bank create the money? Is there a Central
> Bank in Ireland which can "magic up billions" like the Bank of
> England?
Not really. The government can sell bonds to the banks and get cash in
return. But a) the market isn't currently giving much for Irish state bonds,
and they're expensive for the government to maintain. b) The government
don't really need cash at this precise moment. Their problem, as you suggest
above, is the unfeasible guarantee they made in 2008.
Mel Rowing
> I don't understand why the Irish government didn't let its banks go
> bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the
> problem here? Would more damage have been done in the long run by
> letting nature take its course? (Contagion is a powerful word here.)
>
> Why did the Irish state have to take the bank debt onto its own
> balance sheet? As a sovereign entity couldn't it just write the debt
> off, or let the central bank create the money? Is there a Central
> Bank in Ireland which can "magic up billions" like the Bank of
> England?
Euros can only be issued against the assets of the European Central
Banks just as £'s can only be issued against the assets of the BoE.
Ireland does not have its own currency.
Banks are businesses and just like any other business they are bust
whenever liabilities exceed assets. Of course signs that this
situation is in danger of arising are apparent before it materialises.
Its at that point that banks seek interventions either by investors or
governments.
If they fail of course then they reach the point where they must cease
trading. That would be calamitous. Not only would savers lose access
to their money (even a government guarantee takes time to put into
effect) but worse than that companies would lose their operating cash
and reserves. They would not be in any position to pay either their
bills or wages. They would soon be following their bank into
insolvency.
It's for this reason that governments really have no alternative but
to intervene. They intervene either by loaning money (usually at
punitive rates of interest) or by buying shares in the bank specially
created for the purpose (diluting the holdings of existing share
holders) . Ultimately the banks will recover their profitability and
the loans will be repaid. The improved fortunes of the bank
should enhance the value of its shares which can then be sold back to
the market at a profit.
Chris Blunt
wrote:
>I don't understand why the Irish government didn't let its banks go
>bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the
>problem here? Would more damage have been done in the long run by
>letting nature take its course? (Contagion is a powerful word here.)
>
>Why did the Irish state have to take the bank debt onto its own
>balance sheet? As a sovereign entity couldn't it just write the debt
>off, or let the central bank create the money? Is there a Central
>Bank in Ireland which can "magic up billions" like the Bank of
>England?
What I don't understand is that earlier in the year the EU carried out
stress tests on 91 banks throughout the EU. These were supposed to
find out whether any banks were in a precarious enough position to be
at risk if there was a further deterioration of the economic
situation. Of those, only 7 failed the test, and they were in Germany,
Greece, and Spain. None of the Irish banks failed the tests.
So here we are, just a matter of weeks since those test results were
released being told that there are huge problems with Irish banks.
Just how much can we believe anything we're being told?
Chris
abelard
wrote:
>On Mon, 22 Nov 2010 13:34:46 -0800 (PST), Dave <dwic...@yahoo.com>
>wrote:
>
>>I don't understand why the Irish government didn't let its banks go
>>bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the
>>problem here? Would more damage have been done in the long run by
>>letting nature take its course? (Contagion is a powerful word here.)
>>
>>Why did the Irish state have to take the bank debt onto its own
>>balance sheet? As a sovereign entity couldn't it just write the debt
>>off, or let the central bank create the money? Is there a Central
>>Bank in Ireland which can "magic up billions" like the Bank of
>>England?
>
>What I don't understand is that earlier in the year the EU carried out
>stress tests on 91 banks throughout the EU. These were supposed to
>find out whether any banks were in a precarious enough position to be
>at risk if there was a further deterioration of the economic
>situation. Of those, only 7 failed the test, and they were in Germany,
>Greece, and Spain. None of the Irish banks failed the tests.
imv the simple answer is they were faked
>So here we are, just a matter of weeks since those test results were
>released being told that there are huge problems with Irish banks.
>Just how much can we believe anything we're being told?
not much
--
web site at www.abelard.org - news comment service, logic, economics
energy, education, politics, etc over 1 million document calls in year past
--------------------------------------------------------------------------------
all that is necessary for [] walk quietly and carry
the triumph of evil is that [] a big stick.
good people do nothing [] trust actions not words
only when it's funny -- roger rabbit
--------------------------------------------------------------------------------
abelard
wrote:
>I don't understand why the Irish government didn't let its banks go
>bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the
>problem here? Would more damage have been done in the long run by
>letting nature take its course? (Contagion is a powerful word here.)
>
>Why did the Irish state have to take the bank debt onto its own
>balance sheet? As a sovereign entity couldn't it just write the debt
>off, or let the central bank create the money? Is there a Central
>Bank in Ireland which can "magic up billions" like the Bank of
>England?
there is a bank of ireland...but it's position is not clear...
the irish state don't own the euro currency...
the irish state issues debt in euros....but doesn't control
the euro...issuing debt is a form of issuing money...
as i'm saying, it is an unclear muddle...that is a central
part of the chaos/muddle...
issuing debt in a currency you don't control is very much
more dangerous than issuing currency in a currency you do
control...
it gets more complicated...but that's a start
>The share price graph looks interesting. Should have bought in Feb.
>09 and sold at the start of Sept. same year.
>
>http://uk.finance.yahoo.com/echarts?s=AIB.IR#symbol=aib.ir;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
1)the banks are part of the washing machine whereby governments
exercise their power...
2)the banks are not normal capitalist businesses....banks are heavily
controlled by the rulers....the state owns the printing presses..
3)the ecb and the euro are a thorough-going mess...there is no clear
or certain control...
4)the banks owe each other money in a complex web...if one goes
down, others don't get their money back...then they can't pay
either...(here is your word, 'contagion')
Redman
"Mel Rowing" <mel.r...@btinternet.com> wrote in message
news:a05c00e9-8849-437c...@k11g2000vbf.googlegroups.com...
Money from thin air, a true account of how banks manipulate the system for
their own nefarious greed and I don't buy into the bullshit that the banks
were ever in any trouble in this country or any other, it's a scam, smoke
and mirrors illusion. I hope you take on board Melanie the piece below and
how ALL banks around the world less the Islamic ones operate
Banking is a SCAM at Every Level
Kevin Boyle - No One To Vote For November 20,2010
A doubt or two has been expressed which I have forwarded to Mr O'Dea. His
response is posted at the end of this article here*. Also, his evidence is
clearly placed before us( see below). This whole saga beautifully reveals
the scam at the very heart of all bank lending.
The Personal: Darrell O'Dea
My mother came to over to London from County Longford, father from Co.
Donegal. I read a book yesterday 'The Blank Of Ireland', free online here,
that made me proud to be Irish.
Darrell O'Dea begins with a tirade of heartfelt rage against the Bank of
Ireland and the disastrous effects its parasitical practices had on
generations of his own family. He found himself in the familiar 'death grip'
('mortgage') to the tune of hundreds of thousands of Euros (by the end of
the process he entertainingly describes).
His beginning was a decision to try to take control of his own affairs
rather than continue to roll over and passively comply with the demands of
the devouring beast tormenting him.
Darrell did not refuse to pay his mortgage.
Instead he wrote a letter to the Bank containing the following:
We will be happy to pay any financial obligation that we might lawfully owe
as soon as we receive the three documents listed below:
1) Validation of the debt- the actual accounting.
2) Verification of your claim against us, i.e. a sworn affidavit or invoice.
3) A copy of the contract binding both parties.
What Darrell understood was that it was highly unlikely that the bank would
be prepared to comply with this entirely reasonable request because the very
fundamentals of money created as an interest-bearing debt are a FRAUD.Black's
Law dictionary (9th Edition)
"A knowing misrepresentation of truth or concealment of a material fact to
induce another to act to his or her detriment."
When anyone takes out a mortgage of £100,000 (say), as soon as the mortgage
papers are signed the £100,000 is written into the banks books as an ASSET,
an asset which can be used by the bank as a basis for future increased
lending.
(The fractional Reserve system allows banks to lend approximately £10 for
every £1 that exists as assets in their books [can we be surprised that
international banks blow huge bubbles that repeatedly 'pop'?]).
So, if the full sum of the mortgage is IMMEDIATELY paid into the bank (which
it is) why should anyone be asked to pay interest on a debt that debt never
really existed as a loss to the bank in the first place?
This is the whole money-out-of-thin-air banking scam in a nutshell.
Needless to say, the Bank of Ireland failed to forward the requested
documents and Mr. O'Dea refused to make his payments until they did so.
The bank employed all the usual steps of legal intimidation, bailiffs etc.,
but all to no avail. Mr.O'Dea's responses were legally based at every stage
and demonstrated to the third parties that their intervention in a private
dispute was a contravention of the law. The bailiffs (and others) backed
off.
The full story, all taking place between February and October of this year
is a highly comical read in places. As Mr. O'Dea's mortgage ballooned
because of all the extra fees the banks were charging for their intimidatory
actions, he took some aggressive steps of his own. "Darrell O'Dea"
registered his name as a trademark and charged the bank 10,000 Euros every
time they used it (i.e. every time they sent him a letter).
Near the end of the dispute Mr.'ODea 'owed' the bank in excess of 700,000
Euros and the bank 'owed' Mr.O'Dea 2,032,000 Euros.
The comical thing is that Mr.O'Dea's charges have a sounder legal standing
than the bank's.
However, to cut a long story short, the rather excellent outcome was that
'The Bank of Ireland' simply cancelled his mortgage.
Redeemed.
Gone.
Here's the letter they sent him.
What a result!
Darrel you have won my everlasting respect.
I'm sorry if I have 'given away' your story but I think many who will not
bother to read an 80-page book might read a short article and get the very
important point.
THERE IS A GOOD REASON WHY MONEY-LENDING AT INTEREST WAS BANNED BY CHRISTIAN
SOCIETIES FOR THE GREATER PART OF THE LAST TWO MILLENNIA.
1) IT IS A FRAUD AGAINST THE BORROWER.
2) IT DELIVERS MONSTROUS POWER INTO THE HANDS OF THE LENDER.
Our ancestors understood something that we have been conditioned into
forgetting.
Please open this pdf, save it and read at your leisure. In principle there
is no reason why the criminal banking system cannot be brought down by large
numbers of people taking exactly the same actions as Mr. O'Dea. In practice,
one wonders if the courts would honestly follow the law.
It should be understood that the principles involved here apply not just to
mortgages but to ALL loans taken out with banks.
The loan appears as an asset immediately on the banks books so the charging
of interest on a non-loss is, again, fraud. As Mr.O'Dea says in an interview
given here (and below), if you write a letter to the bank with which you
hold the loan requesting to close your account with that bank and request an
invoice for that loan, they will never send you such an invoice.
If they were to send you such a document it appears that their actions move
from being mere deception (a civil matter) to extortion (a criminal matter).
(I know..
..you couldn't make it up).
The National: Government Bonds
Again, when our government 'borrows' money, it hands over 'Bonds' to the
value of the money created (out of nothing) by the bank. This Bond is
immediately written as an asset into the bank's balance sheet.
So, again, the bank gets all its money back the moment it 'lends' it.
Therefore, why do we pay interest (that might take a full century to 'pay
back' in the case of the massive sums involved over the last two years). Our
children (and maybe another 3 generations after them) will pay back many,
many times the sum we didn't really borrow in the first place.
The International: Ireland's (and everyone else's) Current Bail-Out
Speculators, mostly based in the US, are attacking the Euro to keep the
dollar strong. The financial mafia have decided that Ireland's banks needs
to be 'bailed-out' again. It is possible to argue that Ireland's balance
sheets are little different from many other European countries but common
wisdom created by the political/media class is that Ireland must take the
money to prevent collective Euro disaster. It will not stop there. The
bail-outs will move from one country to another until every country is
irreversibly in the pitiless and iron grip of the global central banks.
These 'loans' do not go to the countries involved, they go to the banks that
hold the various national debts of those countries.
THIS WHOLE SCAM IS SIMPLY A TRANSFER OF WEALTH FROM THE POOR TO THE RICH.
Wealth and power is being transferred to a tiny oligarchy before our eyes.
READ THE PROTOCOLS OF ZION. EVERYTHING THAT IS HAPPENING IS IN THERE.
These people already own us, as current events demonstrate, but what chance
do future generations have when every aspects of their lives, and therefore
their thinking too, will be controlled (through the media and the education
system) to serve the interests of those who OWN EVERYTHING.
Start demanding invoices for debts.
Bring down the banks.
Start thinking about realistic alternative systems like 'Social Credit' or
'return to the greenback'.
Better that savers lose their deposits than we throw our children helpless
into the fiery pit that these international criminals have prepared for
them.
Kevin,
Respectfully; nobody is here or exists to give
You or anyone else re-assurances. That sort
of thinking lets you and everyone else off the
responsibility hook.
The sceptics you mention, have through their
own fears, pressurised you into removing your
work on this subject matter. Their fear has you
suppressing yourself . ironic or what?
Ask your Lawyer friend if he has even stood his
ground in court and challenged a bank or a judge
on Contract or Constitutional Law or on the basis
of the European Convention of Human Rights?
You already know the answer to that.
Who knows why the bank let this one go.
Seriously: Why not ring up the bank of Ireland?
Ask to speak to Richie Boucher, Finbarr Murphy
or Aine McInerney, ask them directly why they
let this fish get away ?
All the best for now,
By: Darrell: of the Ancient Clan O'Deaghadh
Ophelia
"Chris Blunt" <ma...@nospam.com> wrote in message
news:851me6dc2f5rlr7hj...@4ax.com...
I don't believe a damned thing that comes out of the EU:(
--
--
https://www.shop.helpforheroes.org.uk/
broadssailor
> On Mon, 22 Nov 2010 13:34:46 -0800 (PST), Dave <dwickf...@yahoo.com>
> wrote:
>
> >I don't understand why the Irish government didn't let its banks go
> >bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the
> >problem here? Would more damage have been done in the long run by
> >letting nature take its course? (Contagion is a powerful word here.)
>
> >Why did the Irish state have to take the bank debt onto its own
> >balance sheet? As a sovereign entity couldn't it just write the debt
> >off, or let the central bank create the money? Is there a Central
> >Bank in Ireland which can "magic up billions" like the Bank of
> >England?
>
> there is a bank of ireland...but it's position is not clear...
>
> the irish state don't own the euro currency...
> the irish state issues debt in euros....but doesn't control
> the euro...issuing debt is a form of issuing money...
>
> as i'm saying, it is an unclear muddle...that is a central
> part of the chaos/muddle...
>
> issuing debt in a currency you don't control is very much
> more dangerous than issuing currency in a currency you do
> control...
>
> it gets more complicated...but that's a start
>
> >The share price graph looks interesting. Should have bought in Feb.
> >09 and sold at the start of Sept. same year.
>
>
> 1)the banks are part of the washing machine whereby governments
> exercise their power...
> 2)the banks are not normal capitalist businesses....banks are heavily
> controlled by the rulers....the state owns the printing presses..
> 3)the ecb and the euro are a thorough-going mess...there is no clear
> or certain control...
> 4)the banks owe each other money in a complex web...if one goes
> down, others don't get their money back...then they can't pay
> either...(here is your word, 'contagion')
>
> --
> energy, education, politics, etc over 1 million document calls in year past
> --------------------------------------------------------------------------------
> all that is necessary for [] walk quietly and carry
> the triumph of evil is that [] a big stick.
> good people do nothing [] trust actions not words
> only when it's funny -- roger rabbit
> --------------------------------------------------------------------------------
But the banks are central to the religion of Capitalism. Anything else
is, surely, Socialism?
Mel Rowing
> "Mel Rowing" <mel.row...@btinternet.com> wrote in message
> When anyone takes out a mortgage of £100,000 (say), as soon as the mortgage
> papers are signed the £100,000 is written into the banks books as an ASSET,
> an asset which can be used by the bank as a basis for future increased
> lending.
God Pinkman you're daft to the point of depression!
One would think that after all these years on this earth you would
have learned something.
Anyway your £100000 asset is used to balance £100000 worth of
liabilities.
The £100000 lent originally comes from customers deposits. Deposits
represent liabilities since at some time in the future depositors are
going to demand their money bank.
The loan created by the deposit represents an asset since at some time
in the future that loan is going to be repaid back to the bank.
[Homework: Learn the difference between an asset and a liability which
are opposites]
Banks also hold reserves. These bridge any gap there might be between
the aggregate values of liabilities over assets.
Money is a means of exchange and repository of value and as such
passes from hand to hand.
[Now learn the difference between cash and a debt. It's very simple.
You cannot spend a debt!]
The £100000 borrowed in this case (creating the debt) will be passed
onto the house seller but the debt will stay behind to be discharged
usually over time. The £100000 will then presumably be with the
sellers bank. He has exchanged his house for £100000 cash. The £100000
is now available to be lent to someone else and the sequence repeated.
This is no different from your employer buying your services for cash
(wages) and then you going along an swapping that same cash for a
basket of groceries.
Cash passes to and fro between the banking system and individuals as
well as from individual to individual as transactions are negotiated.
Debts remain exactly where they are with the debtor until discharged
when of course they simply disappear.
Banks can and do create debt. They can't and don't create cash.
Your story is bullshit.
When you take out a mortgage or negotiate any other form or credit
from a bank you enter into a credit agreement enforceable at law. You
get a signed copy the bank keeps one. You cannot duck out of this
obligation by making yourself a nuisance. If you do not meet your part
of the agreement the bank will take action. In the case of a mortgage
they will foreclose and unless you pay up all you owe including
interest they will take your house. Even in the case on an unsecured
loan a distressed creditor can apply to a court for an order to sell
your assets up to the value of the loan plus the cost of recovering
it. In extreme circumstances, this could even include your house.
abelard
>But the banks are central to the religion of Capitalism. Anything else
>is, surely, Socialism?
1)the banks in modern states are creatures of those states...
that is socialism, not capitalism
2)the ecb (the euro central bank) is highly anomalous...it has
no clear structure or control
--
web site at www.abelard.org - news comment service, logic, economics
broadssailor
Those of the ilk of the ECBetc - agreed
> 2)the ecb (the euro central bank) is highly anomalous...it has
> no clear structure or control
By extension - agreed
>
> --
> web site atwww.abelard.org- news comment service, logic, economics
> energy, education, politics, etc over 1 million document calls in year past
> --------------------------------------------------------------------------------
> all that is necessary for [] walk quietly and carry
> the triumph of evil is that [] a big stick.
> good people do nothing [] trust actions not words
> only when it's funny -- roger rabbit
> --------------------------------------------------------------------------------
Banks need the Government and Governments need the banks - thus it
has ALWAYS been . Socialism of the most basic kind . Ergo, Capitalism
depends on Social;ism for its vey existence!
abelard
> Banks need the Government and Governments need the banks - thus it
>has ALWAYS been . Socialism of the most basic kind . Ergo, Capitalism
>depends on Social;ism for its vey existence!
it hasn't always been...
until fairly recently banks were free and issued their own currencies.
until fairly recently taxes were a few percent....now they are over
half your earnings under socialist 'new' labour...
the king used to borrow from money lenders and send his mates
to come and steal your pigs and wives..
--
web site at www.abelard.org - news comment service, logic, economics
Ivan Grozny
> bust. (e.g. Bank of Ireland, Allied Irish) What exactly would be the
> problem here? Would more damage have been done in the long run by
> letting nature take its course? (Contagion is a powerful word here.)
>
The Euro is now in free-fall. It has to be.
a) To gain some original parity that it had with the USD.
b) To make Chinese and Indian services and goods more expensive. They
have to be.
The Germans are really livid that irresponsible governments have got
away with it.
broadssailor
> On Tue, 23 Nov 2010 04:36:06 -0800 (PST), broadssailor
>
>
>
That's when the King was the Government - for pig stealers -now read
'HMRC'
abelard
reasonable
Harry Merrick
Hmmm! Are you sure about creating cash? The Northern Irish bank, the
Northern Bank seems to do so. They have their own notes. As does the Ulster
Bank, the Bank of Scotland and the RoI banks as well.
>
> Your story is bullshit.
Heh!
>
> When you take out a mortgage or negotiate any other form or credit
> from a bank you enter into a credit agreement enforceable at law. You
> get a signed copy the bank keeps one. You cannot duck out of this
> obligation by making yourself a nuisance. If you do not meet your part
> of the agreement the bank will take action. In the case of a mortgage
> they will foreclose and unless you pay up all you owe including
> interest they will take your house. Even in the case on an unsecured
> loan a distressed creditor can apply to a court for an order to sell
> your assets up to the value of the loan plus the cost of recovering
> it. In extreme circumstances, this could even include your house.
Sadly, this is so. Such a pity that bankers are not, like gamblers, which
they of course are, liable for the debts that they incur due to their own
bad judgement. The only time that banks are held fully responsible for a bad
debt seems to be when the make loans to 3rd World countries and get let
down. However, it is always the customers of said banks who pay for the
banking errors in the end, due to high tarrifs and loan charges being
imposed. Very unfair.
--
Harry Merrick.
Mel Rowing
Absolutely!
Issuance of banknotes outside of England by the 7 authorised banks
used to be regulated by the Stamp Office (since 1845) under the
direction of the BoE. In 2009 the power was placed directly with the
BoE Similarly with regard to notes issued in the Channel Islands.
I.O.M Gibraltar and the Falkland Islands, St Helena and Tristan da
Cuhna.
The Bank of Bermuda issues a Bermudan dollar which is pegged par with
the $US
> > Your story is bullshit.
>
> Heh!
> > When you take out a mortgage or negotiate any other form or credit
> > from a bank you enter into a credit agreement enforceable at law. You
> > get a signed copy the bank keeps one. You cannot duck out of this
> > obligation by making yourself a nuisance. If you do not meet your part
> > of the agreement the bank will take action. In the case of a mortgage
> > they will foreclose and unless you pay up all you owe including
> > interest they will take your house. Even in the case on an unsecured
> > loan a distressed creditor can apply to a court for an order to sell
> > your assets up to the value of the loan plus the cost of recovering
> > it. In extreme circumstances, this could even include your house.
>
> Sadly, this is so. Such a pity that bankers are not, like gamblers, which
> they of course are, liable for the debts that they incur due to their own
> bad judgement. The only time that banks are held fully responsible for a bad
> debt seems to be when the make loans to 3rd World countries and get let
> down. However, it is always the customers of said banks who pay for the
> banking errors in the end, due to high tarrifs and loan charges being
> imposed. Very unfair.
Except that banks never would lend money to third world governments
unless such loans were underwritten by the government. For gamblers,
banks certainly seem to edge towards the one way bet.
The biggest losses banks suffer are though personal and commercial
lending and this is reflected in the rates they charge.
Redman
On Nov 23, 7:40 am, "Redman" <redman1...@btinternet.co.uk> wrote:
> "Mel Rowing" <mel.row...@btinternet.com> wrote in message
> When anyone takes out a mortgage of £100,000 (say), as soon as the
> mortgage
> papers are signed the £100,000 is written into the banks books as an
> ASSET,
> an asset which can be used by the bank as a basis for future increased
> lending.
God Pinkman you're daft to the point of depression!
One would think that after all these years on this earth you would
have learned something.
Anyway your £100000 asset is used to balance £100000 worth of
liabilities.
The £100000 lent originally comes from customers deposits. Deposits
represent liabilities since at some time in the future depositors are
going to demand their money bank.
The loan created by the deposit represents an asset since at some time
in the future that loan is going to be repaid back to the bank.
[Homework: Learn the difference between an asset and a liability which
are opposites]
Oh dear you're just spouting the same shite the banks want you too, you've
been caught hook line and sinker, did you read any of that, seems you've
glossed over it best of luck but I won't be back to hold your hand as I know
how the banks operate, you just regurgitate the same tired BS they do, as
I've said it's all smoke and mirrors, they don't have enough deposits from
the likes of you and I to payout for mortgages etc that alone should tell
you it's a scam
Redman
abelard
<home...@hotmail.com> wrote:
>Hmmm! Are you sure about creating cash? The Northern Irish bank, the
>Northern Bank seems to do so. They have their own notes. As does the Ulster
>Bank, the Bank of Scotland and the RoI banks as well.
they can only produce notes under the direct control of the boe....
it is the boe that control what really matters...the total numerical
quantities of currency supply
john bennett
Careful!,you might wake him up:-)
abelard
you use the words 'they don't have enough deposits'....
who do you mean by 'they'?
each bank does have enough....
collectively they don't 'have enough'..
the essential bridge is that the money paid out by bank one
to buy the house....is then put back into bank two** by
the seller...
bank two can then lend it again to another would-be house buyer...
minus a percentage called the reserve ratio....
this seems to be an idea that mel finds difficult
(** bank two can be the same bank as bank one)
see the link below if you seriously want to understand the reality
> that alone should tell
>you it's a scam
depends on what you mean by 'a scam'
http://www.abelard.org/sums/fractional_banking_sum_of_a_geometric_sequence.php
Mel Rowing
> ... best of luck but I won't be back to hold your hand ...
Thank heaven for small mercies!
Mel Rowing
> the essential bridge is that the money paid out by bank one
> to buy the house....is then put back into bank two** by
> the seller...
> bank two can then lend it again to another would-be house buyer...
> minus a percentage called the reserve ratio....
>
> this seems to be an idea that mel finds difficult
Well it may be true I have a firmer grasp of quadratic equations but:
Since the required reserve ratio in this country is 0%
http://www.worldlingo.com/ma/enwiki/en/Reserve_requirement#Reserve_ratios
It hardly seems worth while bringing the complication into the
argument.
However, in practice, banks keep to a ~3% ratio.
All this means is that 3% or the total banks' holdings on deposit is
unavailable at any one time for lending. Deposits are made in cash and
the amount of cash in circulation does not vary wildly (in fact hardly
at all) The idea that as cash bounces around the system the
proportion of it actually available for lending falls is a clear
nonsense. If I sell a house fro £300000 then £300000 is what I put
into my account regardless of whether my buyer withdrew it from his
savings, borrowed or even stole it.
The reason banks need a reserve ratio, the reason that a requirement
was introduced back in the 19th century, is primarily to smooth out
variations in customer deposit and withdrawal patterns. To ensure that
when you go into a bank to draw money out or slip your card into an
ATM the cash is there. It can't be in two places at once.
abelard
<mel.r...@btinternet.com> wrote:
>On Nov 23, 6:53 pm, abelard <abela...@abelard.org> wrote:
>
>> the essential bridge is that the money paid out by bank one
>> to buy the house....is then put back into bank two** by
>> the seller...
>> bank two can then lend it again to another would-be house buyer...
>> minus a percentage called the reserve ratio....
>>
>> this seems to be an idea that mel finds difficult
>
>Well it may be true I have a firmer grasp of quadratic equations but:
that's not likely to help you
>Since the required reserve ratio in this country is 0%
if that were the case there would be no constraint on the
quantity of money
the control is not directly by %age in the uk at present...it is
via capital requirements supervised by the boe...
basel 2 and 3 and 3+ are now being implemented over time
by the boe...
it still amounts to a reserve ratio though it has some flexibility
the control of the reserve ratio is operated by two or three
mechanisms including control of the total money supply via
what you will probably call central bank rates or interest
rates(of which there are several)
central bank reserves have been operated more flexibly and
with more sophistication over time...but that isn't equivalent to
them being zero...
of course you could try using quadratic equations to work it out
regards
>http://www.worldlingo.com/ma/enwiki/en/Reserve_requirement#Reserve_ratios
>
>It hardly seems worth while bringing the complication into the
>argument.
>
>However, in practice, banks keep to a ~3% ratio.
>
>All this means is that 3% or the total banks' holdings on deposit is
>unavailable at any one time for lending. Deposits are made in cash and
>the amount of cash in circulation does not vary wildly (in fact hardly
>at all) The idea that as cash bounces around the system the
>proportion of it actually available for lending falls is a clear
>nonsense. If I sell a house fro £300000 then £300000 is what I put
>into my account regardless of whether my buyer withdrew it from his
>savings, borrowed or even stole it.
>
>The reason banks need a reserve ratio, the reason that a requirement
>was introduced back in the 19th century, is primarily to smooth out
>variations in customer deposit and withdrawal patterns. To ensure that
>when you go into a bank to draw money out or slip your card into an
>ATM the cash is there. It can't be in two places at once.
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