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2009-12-16 17:34:54
Dilbert_X
The X stands for
+1,810|6107|eXtreme to the maX
Regulation:
Banks should only lend a certain multiple of their equity.
If you hand money to someone they should invest it, not pocket it.
People running financial institutions should be held accountable for their decisions in some way.
Русский военный корабль, иди на хуй!
2009-12-16 17:45:01
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Dilbert_X wrote:

Regulation:
Banks should only lend a certain multiple of their equity.
If you hand money to someone they should invest it, not pocket it.
People running financial institutions should be held accountable for their decisions in some way.
They do only lend to a certain amount of their equity.
Do you invest every non-necessary penny you earn?
They are. You don't have to deposit money with them, accept their credit cards, nor invest in them. You have all the power in the world to protect yourself from the evil, evil bankers.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 18:02:10
Dilbert_X
The X stands for
+1,810|6107|eXtreme to the maX
They do only lend to a certain amount of their equity.
Wrong, its part of how we got into this mess, some of them were lending 30-40 times their equity.

I do expect money I lodge with a bank will be returned to me if I want it.
Not sure how I can protect myself better other than putting it all in a shoebox under the bed.
Русский военный корабль, иди на хуй!
2009-12-16 19:05:15
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Dilbert_X wrote:

They do only lend to a certain amount of their equity.
Wrong, its part of how we got into this mess, some of them were lending 30-40 times their equity.

I do expect money I lodge with a bank will be returned to me if I want it.
Not sure how I can protect myself better other than putting it all in a shoebox under the bed.
All deposits up to $1,000,000 are fully insured. You will get your money back.

I'm not going to go into how the reserve system works when deposits are received and loans issued, because frankly, it's over your head and it would be a complete waste of my time to explain it to you.

Last edited by JohnG@lt (2009-12-16 19:05:42)

"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 20:52:29
Dilbert_X
The X stands for
+1,810|6107|eXtreme to the maX
I'm not going to go into how the reserve system works when deposits are received and loans issued, because frankly, it's over your head and it would be a complete waste of my time to explain it to you.
Says the 29 year old electrical engineering undergraduate.

Last edited by Dilbert_X (2009-12-16 20:52:49)

Русский военный корабль, иди на хуй!
2009-12-16 21:04:01
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Dilbert_X wrote:

I'm not going to go into how the reserve system works when deposits are received and loans issued, because frankly, it's over your head and it would be a complete waste of my time to explain it to you.
Says the 29 year old electrical engineering undergraduate.
I spent 3 years earning a business degree before I switched. Economics is my passion. EE is going to pay the bills.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 21:06:03
FEOS
Bellicose Yankee Air Pirate
+1,182|6412|'Murka

JohnG@lt wrote:

Dilbert_X wrote:

I'm not going to go into how the reserve system works when deposits are received and loans issued, because frankly, it's over your head and it would be a complete waste of my time to explain it to you.
Says the 29 year old electrical engineering undergraduate.
I spent 3 years earning a business degree before I switched. Economics is my passion. EE is going to pay the bills.
Then there was that time you spent serving your country...getting shot at and stuff.
“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular
2009-12-16 21:08:37
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

FEOS wrote:

JohnG@lt wrote:

Dilbert_X wrote:

Says the 29 year old electrical engineering undergraduate.
I spent 3 years earning a business degree before I switched. Economics is my passion. EE is going to pay the bills.
Then there was that time you spent serving your country...getting shot at and stuff.
And? I've been out of the army for five years now. I spent my first three years in school getting a degree in International Transportation and Trade but felt it was too broad. Decided I wanted something more focused.

Oh, you were referring to my age. Yeah.

Last edited by JohnG@lt (2009-12-16 21:09:17)

"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 21:22:59
Turquoise
O Canada
+1,596|6406|North Carolina
With or without regulation, there's going to be corruption.  All that matters is what kind of corruption you're willing to accept.

Personally, I prefer the orthodox Islamic view of banking.
2009-12-16 21:28:06
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Turquoise wrote:

With or without regulation, there's going to be corruption.  All that matters is what kind of corruption you're willing to accept.

Personally, I prefer the orthodox Islamic view of banking.
Looks who's back from the dead.

Ok killer. How is a bank supposed to function if it can't charge interest? Who's going to loan any money? The Christians used to not be able to charge interest on loans so the only people loaning money were Jews.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 21:32:38
Turquoise
O Canada
+1,596|6406|North Carolina

JohnG@lt wrote:

Turquoise wrote:

With or without regulation, there's going to be corruption.  All that matters is what kind of corruption you're willing to accept.

Personally, I prefer the orthodox Islamic view of banking.
Looks who's back from the dead.

Ok killer. How is a bank supposed to function if it can't charge interest? Who's going to loan any money? The Christians used to not be able to charge interest on loans so the only people loaning money were Jews.
Maybe we should stop loaning as much as we do.  That's what I'm getting at.
2009-12-16 21:35:07
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Turquoise wrote:

JohnG@lt wrote:

Turquoise wrote:

With or without regulation, there's going to be corruption.  All that matters is what kind of corruption you're willing to accept.

Personally, I prefer the orthodox Islamic view of banking.
Looks who's back from the dead.

Ok killer. How is a bank supposed to function if it can't charge interest? Who's going to loan any money? The Christians used to not be able to charge interest on loans so the only people loaning money were Jews.
Maybe we should stop loaning as much as we do.  That's what I'm getting at.
Loans are the foundation of economic growth.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 21:41:26
Turquoise
O Canada
+1,596|6406|North Carolina

JohnG@lt wrote:

Turquoise wrote:

JohnG@lt wrote:


Looks who's back from the dead.

Ok killer. How is a bank supposed to function if it can't charge interest? Who's going to loan any money? The Christians used to not be able to charge interest on loans so the only people loaning money were Jews.
Maybe we should stop loaning as much as we do.  That's what I'm getting at.
Loans are the foundation of economic growth.
That is the current perception, but I would suggest that our current society has become addicted to the idea of credit in general.

I'm not gonna lie.  I'm no different from the average American in my lifestyle.  I buy a lot on credit.  I have a car loan.  I had student loans at one point.

We're so used to borrowing money that it blurs the lines of what we actually earn and what we borrow.

I just think that too much rests in the hands of bankers.
2009-12-16 21:44:28
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Turquoise wrote:

JohnG@lt wrote:

Turquoise wrote:

Maybe we should stop loaning as much as we do.  That's what I'm getting at.
Loans are the foundation of economic growth.
That is the current perception, but I would suggest that our current society has become addicted to the idea of credit in general.

I'm not gonna lie.  I'm no different from the average American in my lifestyle.  I buy a lot on credit.  I have a car loan.  I had student loans at one point.

We're so used to borrowing money that it blurs the lines of what we actually earn and what we borrow.

I just think that too much rests in the hands of bankers.
Personal credit is entirely different from business credit. Should loans be available to make big purchases like homes or cars? Absolutely.

I happen to think credit cards are a scam. I do not own one. Do I think they should be abolished? No, I think people should be smart enough on their own to not get sucked into them in the first place. A debit card is all you should need outside of maybe 3-4 purchases in your entire lifetime.

Last edited by JohnG@lt (2009-12-16 21:45:24)

"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 21:50:09
Turquoise
O Canada
+1,596|6406|North Carolina

JohnG@lt wrote:

Personal credit is entirely different from business credit. Should loans be available to make big purchases like homes or cars? Absolutely.

I happen to think credit cards are a scam. I do not own one. Do I think they should be abolished? No, I think people should be smart enough on their own to not get sucked into them in the first place. A debit card is all you should need outside of maybe 3-4 purchases in your entire lifetime.
There are a lot of things that "should" be, but they just aren't.  The average person isn't that bright and never will be.

The only reason we consume as much as we do is because of our culture.  Whether consciously or subconsciously, we seem to live as though you can buy happiness.

The way our banking system works only furthers this mindset.  With business credit, it's not really that different.  Sure, you take out a loan to expand a business or start a new one.  But what have you just done?  You borrowed money that technically doesn't exist because of fractional reserve banking.  Interest in and of itself creates money out of nothing more than mathematics.

To me...  that makes the basis of worth too intangible to be worth much in a practical sense in the long run.
2009-12-16 22:02:26
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Turquoise wrote:

JohnG@lt wrote:

Personal credit is entirely different from business credit. Should loans be available to make big purchases like homes or cars? Absolutely.

I happen to think credit cards are a scam. I do not own one. Do I think they should be abolished? No, I think people should be smart enough on their own to not get sucked into them in the first place. A debit card is all you should need outside of maybe 3-4 purchases in your entire lifetime.
There are a lot of things that "should" be, but they just aren't.  The average person isn't that bright and never will be.

The only reason we consume as much as we do is because of our culture.  Whether consciously or subconsciously, we seem to live as though you can buy happiness.

The way our banking system works only furthers this mindset.  With business credit, it's not really that different.  Sure, you take out a loan to expand a business or start a new one.  But what have you just done?  You borrowed money that technically doesn't exist because of fractional reserve banking.  Interest in and of itself creates money out of nothing more than mathematics.

To me...  that makes the basis of worth too intangible to be worth much in a practical sense in the long run.
You're mixing a whole lot of elements into a single post.

First you're saying we consume too much because of our culture, then you're saying it's because of the fractional money reserve.

I don't even know where to begin so I might as well start here: You prefer a reversion to the gold standard then? Fiat money is what makes fractional reserve banking work. Hell, fiat money has no intrinsic value anyway.

Yes, businesses taking out loans to expand their investment in capital is a terrible idea. Nevermind that the investment brings a return far greater than the sum of the loan and creates jobs. We should make all businesses save up their profits before they invest in capital.

Turquoise, you're extremely confused.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 22:06:34
Turquoise
O Canada
+1,596|6406|North Carolina

JohnG@lt wrote:

You're mixing a whole lot of elements into a single post.

First you're saying we consume too much because of our culture, then you're saying it's because of the fractional money reserve.
No, I'm saying it's both.  Our culture encourages materialism and living beyond your means, and our banking system encourages borrowing.

JohnG@lt wrote:

I don't even know where to begin so I might as well start here: You prefer a reversion to the gold standard then? Fiat money is what makes fractional reserve banking work. Hell, fiat money has no intrinsic value anyway.
Whether it's gold or some other commodity, something substantial is needed for stability.  Fiat money seems to be running its course at this point.

JohnG@lt wrote:

Yes, businesses taking out loans to expand their investment in capital is a terrible idea. Nevermind that the investment brings a return far greater than the sum of the loan and creates jobs. We should make all businesses save up their profits before they invest in capital.

Turquoise, you're extremely confused.
It's all a question of what you value more -- short term growth or long term growth.  In the short term, heavy borrowing produces big results.  In the long run, savings tend to go farther.
2009-12-16 22:15:58
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Turquoise wrote:

It's all a question of what you value more -- short term growth or long term growth.  In the short term, heavy borrowing produces big results.  In the long run, savings tend to go farther.
It's entirely dependent on the business we're talking about. If the potential is there for explosive growth to fill a gap in a market, you better believe you'll get better results borrowing. It all comes down to the RoI. If your return isn't going to be big enough to offset the interest you pay servicing the loan, you don't do it. You're acting like all businessmen are idiots. They're not.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 22:20:09
Turquoise
O Canada
+1,596|6406|North Carolina

JohnG@lt wrote:

Turquoise wrote:

It's all a question of what you value more -- short term growth or long term growth.  In the short term, heavy borrowing produces big results.  In the long run, savings tend to go farther.
It's entirely dependent on the business we're talking about. If the potential is there for explosive growth to fill a gap in a market, you better believe you'll get better results borrowing. It all comes down to the RoI. If your return isn't going to be big enough to offset the interest you pay servicing the loan, you don't do it. You're acting like all businessmen are idiots. They're not.
True, I'm not saying they're all idiots.

I know what you're saying, but it just seems that the same problems keep arising with this system.  We've seen banking grow more restricted then less that way and then back.

Historically, it seems that whenever we ease off regulation, more disastrous results occur.  Two cases where this happened were the Stock Market Crash and the S&L crisis.
2009-12-16 22:22:06
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Turquoise wrote:

JohnG@lt wrote:

Turquoise wrote:

It's all a question of what you value more -- short term growth or long term growth.  In the short term, heavy borrowing produces big results.  In the long run, savings tend to go farther.
It's entirely dependent on the business we're talking about. If the potential is there for explosive growth to fill a gap in a market, you better believe you'll get better results borrowing. It all comes down to the RoI. If your return isn't going to be big enough to offset the interest you pay servicing the loan, you don't do it. You're acting like all businessmen are idiots. They're not.
True, I'm not saying they're all idiots.

I know what you're saying, but it just seems that the same problems keep arising with this system.  We've seen banking grow more restricted then less that way and then back.

Historically, it seems that whenever we ease off regulation, more disastrous results occur.  Two cases where this happened were the Stock Market Crash and the S&L crisis.
Yes, because it's human nature to push boundaries. If the regulation hadn't existed in the first place they would've known when to back off from experience.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 22:25:02
Cybargs
Moderated
+2,285|6717

JohnG@lt wrote:

Turquoise wrote:

JohnG@lt wrote:


It's entirely dependent on the business we're talking about. If the potential is there for explosive growth to fill a gap in a market, you better believe you'll get better results borrowing. It all comes down to the RoI. If your return isn't going to be big enough to offset the interest you pay servicing the loan, you don't do it. You're acting like all businessmen are idiots. They're not.
True, I'm not saying they're all idiots.

I know what you're saying, but it just seems that the same problems keep arising with this system.  We've seen banking grow more restricted then less that way and then back.

Historically, it seems that whenever we ease off regulation, more disastrous results occur.  Two cases where this happened were the Stock Market Crash and the S&L crisis.
Yes, because it's human nature to push boundaries. If the regulation hadn't existed in the first place they would've known when to back off from experience.
Nope the cycle will repeat, because every 15 years there will be new assholes coming in and not learning the lessons of the past.
https://cache.www.gametracker.com/server_info/203.46.105.23:21300/b_350_20_692108_381007_FFFFFF_000000.png
2009-12-16 22:26:30
Turquoise
O Canada
+1,596|6406|North Carolina

JohnG@lt wrote:

Yes, because it's human nature to push boundaries. If the regulation hadn't existed in the first place they would've known when to back off from experience.
When the Stock Market Crash occurred, it had been preceded by a long period of hands-off government policies regarding banking.  Bankers had several decades of unbridled experience to work with before the crash.  Clearly, they didn't know their limits of their own accord.

EDIT: Cybargs makes a good point as well.

Last edited by Turquoise (2009-12-16 22:27:01)

2009-12-16 22:27:47
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Turquoise wrote:

JohnG@lt wrote:

Yes, because it's human nature to push boundaries. If the regulation hadn't existed in the first place they would've known when to back off from experience.
When the Stock Market Crash occurred, it had been preceded by a long period of hands-off government policies regarding banking.  Bankers had several decades of unbridled experience to work with before the crash.  Clearly, they didn't know their limits of their own accord.

EDIT: Cybargs makes a good point as well.
Cybargs didn't make a single good point. He wants protectionism.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2009-12-16 22:29:05
Turquoise
O Canada
+1,596|6406|North Carolina

JohnG@lt wrote:

Turquoise wrote:

JohnG@lt wrote:

Yes, because it's human nature to push boundaries. If the regulation hadn't existed in the first place they would've known when to back off from experience.
When the Stock Market Crash occurred, it had been preceded by a long period of hands-off government policies regarding banking.  Bankers had several decades of unbridled experience to work with before the crash.  Clearly, they didn't know their limits of their own accord.

EDIT: Cybargs makes a good point as well.
Cybargs didn't make a single good point. He wants protectionism.
Protectionism is no less a valid position than pure free market policies.

Historically, a balance of the two has been shown to work best in most countries, including this one.
2009-12-16 22:33:06
Jay
Bork! Bork! Bork!
+2,006|5359|London, England

Turquoise wrote:

JohnG@lt wrote:

Turquoise wrote:

When the Stock Market Crash occurred, it had been preceded by a long period of hands-off government policies regarding banking.  Bankers had several decades of unbridled experience to work with before the crash.  Clearly, they didn't know their limits of their own accord.

EDIT: Cybargs makes a good point as well.
Cybargs didn't make a single good point. He wants protectionism.
Protectionism is no less a valid position than pure free market policies.

Historically, a balance of the two has been shown to work best in most countries, including this one.
Protectionism has been debunked as worthless economic policy numerous times.

http://en.wikipedia.org/wiki/Mercantilism#Criticisms

There, read that. I'm off to bed.

Edit - I'll never understand how people can call themselves liberals while embracing such ultra-conservative economic thought like socialism and mercantilism.

Double edit - In case you're confused, mercantilism is the same as protectionism.

Last edited by JohnG@lt (2009-12-16 22:36:40)

"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat

 

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