billvon 2,406 #26 January 12, 2012 >that's what a mortgage is duh... Yep. A mortgage is where someone gives you money to buy a house, then you pay it back. But there was no money left in the system for houses - so no one got mortgages, I guess. Well, that's a relief. And to think we thought there was a subprime mortgage crisis! Quote Share this post Link to post Share on other sites
dreamdancer 0 #27 January 12, 2012 Quote>that's what a mortgage is duh... Yep. A mortgage is where someone gives you money to buy a house, then you pay it back. But there was no money left in the system for houses - so no one got mortgages, I guess. Well, that's a relief. And to think we thought there was a subprime mortgage crisis! there was never the dollars to pay back with (you do know banks can lend out more than they take as deposits) - that's why trillions more had to be pumped into the system when the 1% crashed it...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
billvon 2,406 #28 January 12, 2012 >there was never the dollars to pay back with . . . So let's see: The banks loaned the money The people took the money and bought big houses The people didn't have the dollars to pay back their loans Good summary! But sort of disproves your "it's all the evil banker's fault!" thing. Quote Share this post Link to post Share on other sites
dreamdancer 0 #29 January 12, 2012 Quote>there was never the dollars to pay back with . . . So let's see: The banks loaned the money The people took the money and bought big houses The people didn't have the dollars to pay back their loans Good summary! But sort of disproves your "it's all the evil banker's fault!" thing. the banks loaned money they didn't have (that's what they do). nice work if you can get it...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
billvon 2,406 #30 January 12, 2012 >the banks loaned money they didn't have . . . They gave out money they didn't have? Then how did people buy homes with the nonexistent money? Quote Share this post Link to post Share on other sites
dreamdancer 0 #31 January 12, 2012 Quote>the banks loaned money they didn't have . . . They gave out money they didn't have? Then how did people buy homes with the nonexistent money? they didn't - their wasn't enough dollars to pay back the banks fictional loan money because the 1% have syphoned it all off for their fancy palaces in the sky. hence the crash...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
billvon 2,406 #32 January 12, 2012 >>vThen how did people buy homes with the nonexistent money? >they didn't - Ah, cool. So there's no subprime housing crisis, and no evil bankers, since they didn't loan out that money. So what have you been complaining about for the past two years, again? Quote Share this post Link to post Share on other sites
dreamdancer 0 #33 January 12, 2012 they tried to loan out money they didn't have (please don't make me explain how banks work again). when they were caught out the 1% turned to the taxpayer to bail them out...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
billvon 2,406 #34 January 12, 2012 >they tried to loan out money they didn't have . . . Yeah, you said that. So if they didn't have it, the mortgage applicants didn't get it, and none of this happened. Again, what have you been complaining about? Quote Share this post Link to post Share on other sites
dreamdancer 0 #35 January 12, 2012 the ones doing the complaining are the 1% and their banker friends. they crashed the system by 'creating' more fictional money than the real economy could pay. they complained so much they got us to bail them out...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
billvon 2,406 #36 January 12, 2012 >they crashed the system by 'creating' more fictional money than the real >economy could pay. And then . . . they paid that nonexistent money to mortgage applicants? You have managed to confuse even yourself. Quote Share this post Link to post Share on other sites
dreamdancer 0 #37 January 12, 2012 Quote>they crashed the system by 'creating' more fictional money than the real >economy could pay. And then . . . they paid that nonexistent money to mortgage applicants? You have managed to confuse even yourself. tell me when you understand how banks work - otherwise you're just talking for the sake of talking. they did indeed pay that nonexistent money out, and expected real money with interest back as a result. unfortunately not enough real dollars in the system to do that - hence crash. no need for you to get confused...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
Gravitymaster 0 #38 January 12, 2012 QuoteQuote>they crashed the system by 'creating' more fictional money than the real >economy could pay. And then . . . they paid that nonexistent money to mortgage applicants? You have managed to confuse even yourself. tell me when you understand how banks work - otherwise you're just talking for the sake of talking. they did indeed pay that nonexistent money out, and expected real money with interest back as a result. unfortunately not enough real dollars in the system to do that - hence crash. no need for you to get confused... Weren't the builders of those homes pissed when they got paid by the banks with money that didn't exist? Quote Share this post Link to post Share on other sites
billvon 2,406 #39 January 12, 2012 >tell me when you understand how banks work I do. In fact, I've gotten two mortgages. Let me explain how it works since you seem to have confused yourself. 1) You apply for the mortgage. 2) The bank decides if they want to give you the loan. 3) If they agree you are approved. Then: 4) You sign an agreement, agreeing to pay them back via a specific schedule. 5) They send you the money. This is actual money. Generally it goes into an escrow account that you have set up. 6) The seller then gives you the title. You give them the money. Again, it's real money. The seller could get it in cash if they wanted to, in which case they would get it in piles and piles of cash. That's inconvenient so usually it goes into their bank account. See? No imaginary money. No fiction. Real money that you can see as piles of cash. (Or, more commonly, as a new house.) I can understand how someone who never got a mortgage might not understand the process because it's easier nowadays. But once you get the money it is anything BUT imaginary. Quote Share this post Link to post Share on other sites
dreamdancer 0 #40 January 12, 2012 Quote>tell me when you understand how banks work I do. i suspect not... have a think about this: QuotePhysical currency In modern economies, relatively little of the money supply is in physical currency. For example, in December 2010 in the U.S., of the $8853.4 billion in broad money supply (M2), only $915.7 billion (about 10%) consisted of physical coins and paper money. The manufacturing of new physical money is usually the responsibility of the central bank, or sometimes, the government's treasury. Contrary to popular belief, money creation in a modern economy does not directly involve the manufacturing of new physical money, such as paper currency or metal coins. Instead, when the central bank expands the money supply through open market operations (e.g. by purchasing government bonds), it credits the accounts that commercial banks hold at the central bank (termed high powered money). Commercial banks may draw on these accounts to withdraw physical money from the central bank. Commercial banks may also return soiled or spoiled currency to the central bank in exchange for new currency. http://en.wikipedia.org/wiki/Money_creationstay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
billvon 2,406 #41 January 12, 2012 >In modern economies, relatively little of the money supply is in physical currency. Correct. In my case it is in the form of a house, which I exchanged money for. It's a real house - you can touch it, paint it and repair it (which it needs all too often.) That's because it was paid for with real money. Quote Share this post Link to post Share on other sites
dreamdancer 0 #42 January 12, 2012 Quote>In modern economies, relatively little of the money supply is in physical currency. Correct. In my case it is in the form of a house, which I exchanged money for. It's a real house - you can touch it, paint it and repair it (which it needs all too often.) which is neither here nor there. just a bit of blather from you. you do understand that if all the banks' customers were to withdraw their deposits the banks don't have enough currency to pay out...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
masterrig 1 #43 January 12, 2012 QuoteQuote>In modern economies, relatively little of the money supply is in physical currency. Correct. In my case it is in the form of a house, which I exchanged money for. It's a real house - you can touch it, paint it and repair it (which it needs all too often.) which is neither here nor there. just a bit of blather from you. you do understand that if all the banks' customers were to withdraw their deposits the banks don't have enough currency to pay out... ...and the banks lock their doors because they have no money to loan. Which is what they do with money deposited by their customers. Chuck Quote Share this post Link to post Share on other sites
billvon 2,406 #44 January 12, 2012 >you do understand that if all the banks' customers were to withdraw >their deposits the banks don't have enough currency to pay out... Actually any one bank does - FDIC insurance is one way this is ensured. (At least for deposits up to $250,000.) But why are you worried about that? Even if every single person withdraws their money from every bank in the US, the banks will just pay with your "imaginary money!" Problem solved. Quote Share this post Link to post Share on other sites
dreamdancer 0 #45 January 13, 2012 thinking cap on... (i know you can do it) QuoteTypically, an account provider will not hold the entire sum in reserve, but will loan the money at interest to other clients, in a process known as fractional-reserve banking. It is this process which allows providers to pay out interest on deposits. By transferring the ownership of deposits from one party to another, they can replace physical cash as a method of payment. In fact, deposits account for most of the money supply in use today. For example, if a bank in the United States makes a loan to a customer by depositing the loan proceeds in the customer's checking account, the bank typically records this event by debiting an asset account on the bank's books (called loans receivable or some similar name) and credits the deposit liability or checking account of the customer on the bank's books. From an economic standpoint, the bank has essentially created economic money (although obviously not legal tender). The customer's checking account balance has no dollar bills in it, as a demand deposit account is simply a liability owed by the bank to its customer. In this way, commercial banks are allowed to increase the money supply (without printing currency, or legal tender). http://en.wikipedia.org/wiki/Bank_depositsstay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
dreamdancer 0 #46 January 13, 2012 QuoteEven if every single person withdraws their money from every bank in the US, the banks will just pay with your "imaginary money!" Problem solved. or whine that the system is crashing (those stupid people wanting their own, real money back) and get the taxpayer to bail them out...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
masterrig 1 #47 January 13, 2012 Quote Quote Even if every single person withdraws their money from every bank in the US, the banks will just pay with your "imaginary money!" Problem solved. or whine that the system is crashing (those stupid people wanting their own, real money back) and get the taxpayer to bail them out... Zoooooooooooommm... Chuck Quote Share this post Link to post Share on other sites
billvon 2,406 #48 January 14, 2012 >or whine that the system is crashing (those stupid people wanting >their own, real money back) Why give them real money? Give them the fictional imaginary money that you talk about all the time. If it can buy houses it can certainly buy groceries. Quote Share this post Link to post Share on other sites
dreamdancer 0 #49 January 14, 2012 they gave out loads of 'bank' money - and the system crashed. that's why we had to bail them out with 'real' money. now you want to crash the system again. keep banging that head against that wall...stay away from moving propellers - they bite blue skies from thai sky adventures good solid response-provoking keyboarding Quote Share this post Link to post Share on other sites
winsor 186 #50 January 14, 2012 Quotethey gave out loads of 'bank' money - and the system crashed. that's why we had to bail them out with 'real' money. now you want to crash the system again. keep banging that head against that wall... To refer to fiat currency as "real" money demonstrates an insurmountable level of ignorance. Not to suggest that this is a bad thing, mind you... Quote Share this post Link to post Share on other sites
