The Banks Are Dead.!

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Re: The Banks Are Dead.!

Post by merman » Sun Jun 24, 2012 2:37 pm

The Angry Jock wrote:
merman wrote:I'm not saying New Labour were perfect or did things right. But I'd rather have more Labour than a Tory government that ... caps the rate for families and forces them to move out of areas where they are established.
My views on this subject are well publicised on this site. You obviously believe that we live in some sort of Labour created eutopia where anyone can do what ever they please and the exchequer should just stick it on tick for eternity ... it's this benefit loving, success punishing mindset that makes me agree with James A and consider emigration, we're tired of being bent over by semi-socialists who couldn't run a bath let alone a government.
merman wrote:The Tories were forced into raising tax thresholds by their Coalition partners. But they continue to raise indirect taxation at the same time as taking money away from the vulnerable. The spending cuts will hurt our public services for generations, while the Tories trumpet about increased choice.
Public services have got out of hand and need brought under control otherwise future generations may not have any.
Future generations won't have any public services because the Tories will have ruined them by trying to run them as a business. And they sure as hell won't solve the banking crisis or introduce the tough legislation that is needed - because they are the party of "enterprise" and won't do anything to harm the profitability of their rich chums. Even this week's "moral" stance on tax avoidance will be forgotten by the time the Finances Bill comes to be drafted.

The NHS, social care, pensions... None of them are safe with Tories in power. I've never said that the Government should borrow more than is responsible but the current policies of the Tories are prolonging the economic problems not solving them.

And worst of all, those who genuinely need benefits and support from the State will now be scapegoats and told "get up and work". The Tories of the Eighties created the generation who now live on benefits in deprived areas and cannot escape.

Had enough of this thread now...
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Re: The Banks Are Dead.!

Post by The Angry Jock » Sun Jun 24, 2012 2:53 pm

merman wrote:Future generations won't have any public services because the Tories will have ruined them by trying to run them as a business.
This country and every other country in the world survive because of business, why shouldn't public services be run like a business...spend within it means and be more accountable to those who pay for it...us!

I don't understand this blank cheque mentality people have towards the public sector.
merman wrote:Had enough of this thread now...
Because your idealogical "solution" has no place in reality...
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Re: The Banks Are Dead.!

Post by Ferret Oxide » Sun Jun 24, 2012 3:17 pm

pratty wrote:So here I think is the confusion, you're saying the bank can still only lend £81 (90% of new £90 deposit), where as I thought they could now lend £171 (90% of the £190 total)?
Yeah, this thread has made me think, and I hope I haven't come across as too hostile.In the example above, you're right, but for the reasons I've stated. :D

The deposit from the proceeds of the house sale is separate from the mortgage loan (even though they're both sides of the same thing). The deposit of money from the sale is actually a cash deposit (presumably into a saving account of some description) and it is generated by the sale of a product (in this case the house). The mortgage value is credit expected to be repaid. Either the mortgage gets repaid or the house is repossesed and resold, so the sum there is covered. So because failure to repay the mortgage would not impact the money deposited by the seller, they are treated as completely unrelated.
I hope that makes sense.

You are right that a growing population requires an economy to grow alongside it (or the cost of living to decrease). Normally this doesn't require the production of more money because you don't get 100% usage of the full amount of money in circulation and because economic growth doesn't mean the same thing as the amount of money in circulation any. That's something I'd leave to the experts to explain, though, as it is outside my own area of knowledge I'm afraid. :?

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Re: The Banks Are Dead.!

Post by pratty » Sun Jun 24, 2012 3:41 pm

Ferret Oxide wrote:Yeah, this thread has made me think, and I hope I haven't come across as too hostile.
Not at all, it's been a good debate/discussion, I've really had to think myself, and re-consider my position. :)

By the way, did you see the bit I added?
pratty wrote: But what she didn't mention was the possible scenario where the original home owner, deposits the money from the sale of the house in the same bank. The bank now has records of two deposits of roughly the same amount. The bank can now lend money from that new deposit too. So an intial deposit of say £100, creates a £90 loan (10% left in reserve), which creates a new £90 deposit. The bank now has £190 in total on deposit from that initial £100.

So here I think is the confusion, you're saying the bank can still only lend £81 (90% of the new £90 deposit), where as I thought they could now lend £171 (90% of the £190 total)?

Edit:
My thinking is if the bank makes a second loan of £171 then the bank stands to make an additional £90, plus interest. The bank still owes £90 (plus of course any interest) to the initial depositor, but that will come from the mortgage borrower repaying the first loan, so that cancels that out. The bank owes £81 (plus any interest) to the second depositor leaving roughly £90 to the bank plus the interest from the second loan. So, the bank only stands to gain the interest (as you'd expect) from the first loan, but on the second hypothetical loan it could earn £90 plus interest simply by making it.

What I'm struggling to work out is where has the £90 that the bank has made come from? Has the bank drawn it out of already existing money in the economy, or effectively created it into the economy first when it made the second loan (£171)?
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Re: The Banks Are Dead.!

Post by Ferret Oxide » Sun Jun 24, 2012 4:41 pm

It's taken from existing money somewhere, specifically wherever the person repaying that loan had obtained the money (e.g. from their savings, from profit through business or from wages). It goes back to my example with the £10 loaned to a business and what I think Obama was getting at. The money is being utilised rather than existing as capital etc.

It's important to bear in mind that all money in the economy exists in either a bank account or an individual's wallet (aside from the people who don't use banks so keep cash in a biscuit tin or whatever).

All that's happening when money is 'made' by a bank in the form of profit on credit is that someone has repaid them from money that was in a different account (either theirs, their customers' or their employer's through the sources I mentioned above).

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Re: The Banks Are Dead.!

Post by merman » Sun Jun 24, 2012 5:38 pm

The Angry Jock wrote:
merman wrote:Future generations won't have any public services because the Tories will have ruined them by trying to run them as a business.
This country and every other country in the world survive because of business, why shouldn't public services be run like a business...spend within it means and be more accountable to those who pay for it...us!

I don't understand this blank cheque mentality people have towards the public sector.
merman wrote:Had enough of this thread now...
Because your idealogical "solution" has no place in reality...
Yet again you ASSUME I am saying "spend regardless". I am not.

Society cannot leave the poor and the sick behind. But the Conservatives would have you believe it's every man for themselves and free enterprise will save the day. It quite clearly is not. The banks are not lending to support business. Thousands of public sector jobs ate bing cut and not replaced by the private sector. And how can people afford services when inflation and pay cuts/freezes put them out of reach? We can't even buy into the idea of being a homeowner and living off rising house prices.

In Lincolnshire, police office services are being privatised to save money. Hundreds of jobs have been lost. And now the company is expanding while cutting more jobs to remain profitable.

Or another example. Lincolnshire schools and hospitals cannot attract staff, because there are too few jobs for the partners./families And now the Tories want to cut pay further for public sector workers, saying they should get less in areas of the country like Wales, Scotland and the North. So it will be even harder to recruit staff in those areas and the quality of service will go down. The budget sheet may balance, but health and education WILL suffer.

Do you want more riots? Let the Tories keep running things.
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Re: The Banks Are Dead.!

Post by pratty » Sun Jun 24, 2012 5:58 pm

Ferret Oxide wrote:It's taken from existing money somewhere, specifically wherever the person repaying that loan had obtained the money (e.g. from their savings, from profit through business or from wages). It goes back to my example with the £10 loaned to a business and what I think Obama was getting at. The money is being utilised rather than existing as capital etc.

It's important to bear in mind that all money in the economy exists in either a bank account or an individual's wallet (aside from the people who don't use banks so keep cash in a biscuit tin or whatever).

All that's happening when money is 'made' by a bank in the form of profit on credit is that someone has repaid them from money that was in a different account (either theirs, their customers' or their employer's through the sources I mentioned above).
I see, thanks for clearing that up. You can see where that confused me though right? Because that leaves a situation that from loans a bank can "make" money on top of the interest it charges, simply by loaning the same money on deposit over and over again, as in my example. Is that right?

I mean you'd expect the interest from the loan to come from existing money, but when the bank makes the additional £90 it does make you go "eh?"

If someone gave me money to look after for a while, but said I could lend it out in the meantime, I couldn't then lend it twice. Because it's cash if I lend it once, it's gone, and I'd have to wait for repayment to lend it again. Where as the bank simply keeps a record of the deposit when the money is lent out, but then still uses that record of deposit to lend more money before repayment of the initial loan.

We would accept they're entitled to make their interest, which is drawn from the repaying borrower. But if they also make an additional £90 as I demonstrated in my example, then isn't that wrong? So rather than "creating" the money out of thin air, would it be more accurate a criticism to say they are making more money than they should be entitled to?
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Re: The Banks Are Dead.!

Post by SJ_Sathanas » Sun Jun 24, 2012 6:23 pm

merman wrote:
The Angry Jock wrote:
merman wrote:I'm not saying New Labour were perfect or did things right. But I'd rather have more Labour than a Tory government that ... caps the rate for families and forces them to move out of areas where they are established.
My views on this subject are well publicised on this site. You obviously believe that we live in some sort of Labour created eutopia where anyone can do what ever they please and the exchequer should just stick it on tick for eternity ... it's this benefit loving, success punishing mindset that makes me agree with James A and consider emigration, we're tired of being bent over by semi-socialists who couldn't run a bath let alone a government.
merman wrote:The Tories were forced into raising tax thresholds by their Coalition partners. But they continue to raise indirect taxation at the same time as taking money away from the vulnerable. The spending cuts will hurt our public services for generations, while the Tories trumpet about increased choice.
Public services have got out of hand and need brought under control otherwise future generations may not have any.
Future generations won't have any public services because the Tories will have ruined them by trying to run them as a business. And they sure as hell won't solve the banking crisis or introduce the tough legislation that is needed - because they are the party of "enterprise" and won't do anything to harm the profitability of their rich chums. Even this week's "moral" stance on tax avoidance will be forgotten by the time the Finances Bill comes to be drafted.

The NHS, social care, pensions... None of them are safe with Tories in power. I've never said that the Government should borrow more than is responsible but the current policies of the Tories are prolonging the economic problems not solving them.

And worst of all, those who genuinely need benefits and support from the State will now be scapegoats and told "get up and work". The Tories of the Eighties created the generation who now live on benefits in deprived areas and cannot escape.

Had enough of this thread now...
Haven't you been paying attention ? Even the previous chancellor admitted there's no money left. People won't work for free. The things people want or need can't be had for free. Where's the money going to come from ? Borrow even more ?
Labour squandered 10 years of economic growth and your still trying to blame the Tories ?
Why should public sector workers remain insulated while everyone else has to take pay cuts, accept lower value pensions etc ?

TBH it probably doesn't matter. Tories, Labour, LibDem; things would probably have turned out the same regardless. The whole western world was drunk on cheap credit.

Can we atleast agree staying out of the Euro and retaining control of our own Interest rates turned out to be a good thing ?

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Re: The Banks Are Dead.!

Post by James A » Sun Jun 24, 2012 7:50 pm

After the last election one of the political commentators summed it up nicely. Whoever wins they won't get back in power for a generation after inheriting this mess that the last government left and then having to take the decisions to sort it out.
merman wrote:
The Angry Jock wrote:
merman wrote:Future generations won't have any public services because the Tories will have ruined them by trying to run them as a business.
This country and every other country in the world survive because of business, why shouldn't public services be run like a business...spend within it means and be more accountable to those who pay for it...us!

I don't understand this blank cheque mentality people have towards the public sector.
merman wrote:Had enough of this thread now...
Because your idealogical "solution" has no place in reality...
Yet again you ASSUME I am saying "spend regardless". I am not.

Society cannot leave the poor and the sick behind. But the Conservatives would have you believe it's every man for themselves and free enterprise will save the day. It quite clearly is not. The banks are not lending to support business. Thousands of public sector jobs ate bing cut and not replaced by the private sector. And how can people afford services when inflation and pay cuts/freezes put them out of reach? We can't even buy into the idea of being a homeowner and living off rising house prices.

In Lincolnshire, police office services are being privatised to save money. Hundreds of jobs have been lost. And now the company is expanding while cutting more jobs to remain profitable.

Or another example. Lincolnshire schools and hospitals cannot attract staff, because there are too few jobs for the partners./families And now the Tories want to cut pay further for public sector workers, saying they should get less in areas of the country like Wales, Scotland and the North. So it will be even harder to recruit staff in those areas and the quality of service will go down. The budget sheet may balance, but health and education WILL suffer.

Do you want more riots? Let the Tories keep running things.
And would you rather we run into a Greek style situation where no one will lend us money because we are in that much debt? Im sure that will cause plenty of riots as well. End of the day Labour spent way too much and wasted billions on glorified projects. When the banks nearly went under they had to nearly bankrupt the country to bail them out. Thats no one elses fault but Labours for keeping some back for a rainy day. Hell it would have helped if Gordon Brown hadn't sold most of our gold reserves when it was at a record low price, we could have cleared our debt now if he'd kept hold of that lot now its at a record high price.
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Re: The Banks Are Dead.!

Post by The Angry Jock » Mon Jun 25, 2012 3:10 am

merman wrote:Yet again you ASSUME I am saying "spend regardless". I am not.
But all you talk about it ending the cuts and helping the "poor", how can this be done without increased spending?
merman wrote:Society cannot leave the poor and the sick behind.
They aren't being left behind, the poor and the sick. The further up the scale of wealth you go the less you get, the problem is that people do get given too much (from top to bottom), there should be caps on child tax credits and housing benefits because at the moment they are virtually unlimited, I couldn't care less if you feel they have to live in an area they're "established" in when I (and millions of others) have to use my heavily taxed income to buy where I can afford...how is that in any way fair?
merman wrote:Do you want more riots? Let the Tories keep running things.
All the riots did was highlight the greed running rampant throughout society, the I deserve something for nothing mentality....it's sickening, and you're fooling yourself if you think it's about the poor being browbeaten by the rich.
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Re: The Banks Are Dead.!

Post by The Angry Jock » Mon Jun 25, 2012 3:15 am

CIH wrote:Can we atleast agree staying out of the Euro and retaining control of our own Interest rates turned out to be a good thing ?
I think we should go a step further and pull out of the EU altogether.
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Re: The Banks Are Dead.!

Post by psj3809 » Mon Jun 25, 2012 4:21 am

The Angry Jock wrote:
merman wrote:Do you want more riots? Let the Tories keep running things.
All the riots did was highlight the greed running rampant throughout society, the I deserve something for nothing mentality....it's sickening, and you're fooling yourself if you think it's about the poor being browbeaten by the rich.
Totally agree, the riots werent down to the tories, just loads of scum trying to get what they want.

The tories years back werent great but 'New Labour' i thought did a terrible job, after such a promising start Labour went downhill, even more so under Brown.

I'm not pro-any party, if a party does a bad job i want someone else in, if they do a bad job i'll vote for someone else. I'm no tory boy, but its ridiculous how people can support Labour after what they did with the country. You shouldnt give them a 'pat on the back' and vote for them at the last election as thats like praising total failure. If any government does a terrible job then vote for someone else. Sadly some people are so pro-Labour they wanted to keep them in no matter how bad the mess the country is in. Scary

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Re: The Banks Are Dead.!

Post by The Angry Jock » Mon Jun 25, 2012 4:35 am

I'm a floating voter like you PSJ, I've never voted Tory but I'm thinking I'm going to have to in the next election because Labour do not deserve to get in. People have very short memories except when it comes to bleating on about Thatcher.

I can just imagine in 30 years all these foagies sitting in retirements homes, instead of saying "during the war..." it'll be "during the Thatcher years..." :lol:

The mess this country is in will require far longer than 1 term of office to fix.
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Re: The Banks Are Dead.!

Post by psj3809 » Mon Jun 25, 2012 4:54 am

^Exactly. Forget the old tories, labour were terrible and had to be replaced. Now its tough as Cameron and co are making some big cuts to try and cut this deficit instead of burying their head in the sand with it like Labour.

If in x amount of years the countries in a huge mess, benefit system even worse, more chavs with kids, immigrants, prices rising etc then i'll give Labour Mk III under Milliband a chance.

But i think the worst voters are the ones who bury their heads in the sand, at the last election no way did Labour deserve to stay in power as you might as well say 'yeah its fine to mess up as you can carry on...'

Like you say it will take longer than one term to fix, think sadly many people will want to switch straight away as theyre not happy with the cuts. Was always going to be tough.

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Re: The Banks Are Dead.!

Post by resident paul » Mon Jun 25, 2012 5:29 am

All this political arguing has strayed from point of the thread that the banks have caused the world recession & still struggling because of it!
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