Understanding the Parasite

[CoinCube]

Do you believe that banks will tell you the truth that they print money to buy assets around the world?
...
If you follow this path, you will never understand bitcoin, just like if you follow the FRB path, you will never understand money creation  

johnyj I think you mean well but you are not quite following the post. The wikipedia article you link and are pushing is the banker propaganda.
The article I posted for you to read is an admission of how the system actually works. It is a glimpse behind the curtain that shows how the system actually works and how financial interest use it to basically steal from productive members of society.

@ CoinCube
If you have a particular argument for parasitic behaviour, I will be interested to
read it.

Between predator and parasite I would argue parasite is the better analogy because the banks (most of the time) don't actually want the loans they issue to default. They make more money if they pick the winners in the economy and their loans are paid in full then they do if they have to foreclose and seize assets. Parasites like banks prefer strong healthy hosts capable of supporting them and their offspring. If possible they prefer their host not die/go bankrupt.

However, there may be a better biological model then that of parasitism one that more closely describes the behavior of finance. I comment on this at the end of Part III.

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[CoinCube]

Finance Part III is finished. See link at the bottom of the first post.

[johnyj]

johnyj I think you mean well but you are not quite following the post. The wikipedia article you link and are pushing is the banker propaganda.
The article I posted for you to read is an admission of how the system actually works. It is a glimpse behind the curtain that shows how the system actually works and how financial interest use it to basically steal from productive members of society.

If you think money creation is a complex thing, you must have misunderstood it

Just like digging out gold from ground created gold money supply, creating numbers in central bank's account created fiat money supply, it is as simple as that, no loan, reserve or any other fancy word involved here

Who get the ownership of newly created money? What have they done for getting that ownership? If you could answer these 2 questions, you don't need any more explanations from banks

Banks are slaveholders, not parasite, they print money, you work, this is not stealing but robbery

[Joerii]

There is no secret regarding modern money creation, I like the explanation on wikipedia:

http://en.wikipedia.org/wiki/Money_creation

Only central bank can create money, any other banks are just playing with those money created by central banks. Commercial banks can't create money through FRB, they just created lots of checkbook numbers (M1/M2). If they could create money out of nothing, then no banks would going bankrupt during financial crisis

The problem is the ownership, those who create the money get the ownership of those money (they can't lend out any money that does not belong to them), so all the money originally belongs to central banks. This is a very big difference after the gold standard has been removed, means central banks secretly created lots of money out of nothing and bought huge amount of assets on the planet. Under a gold standard, they must create gold first, which has a similar production cost as its value

OK, this is a really old post that i'm replying to, but I had to, to point out you are dead wrong.

The vast majority of money is NOT created by central banks, but by regular banks who loan out money that doesn't exist.
The simply move numbers around in their records, creating debt out of thin air.

Check out Simon Dixon's book "Bank to the Future" http://www.amazon.com/Bank-Future-Protect-before-Governments/dp/1907720375/ref=sr_1_2?ie=UTF8&qid=1447995496&sr=8-2&keywords=simon+dixon

( that's the founder of the crowdfunding platform bnktothefuture.com by the way, I make their videos )

[EggShells]

Good stuff!  I look forward to reading part II, etc.

There is an even more generalized view of the parasitic condition: top politicians and banks get together and use state power to artificially inflate the values of financial assets (which include almost everything, even  stocks and real estate in an indirect fashion, via interest rate policy.)  The state contributes power, and the bankers contribute brains.  The state rewards banks mainly by using public money to guarantee their debt, etc.  The banks reward the state by helping to prop up money and public debt (by increasing demand for them.)

(As alluded just above, financial asset inflation benefits the elites not only because they issue some of the assets, but also by creating demand for other assets issued by the elites.  E.g. when interest bearing bank deposits are "safe guarded" by state power, you are less likely to go to gold and more likely to hold paper money which you give to banks.)

Fractional reserve banking deposits are one of the assets being propped up.  The general phenomenon has been around since the early 1600s (when the Bank of Amsterdam began to issue Europe's first paper money); Fractional reserve banking started somewhere near the end of the classical international gold standard, probably late-19th or early-20th century.

What this means is that, we, the public in democratic countries, are a crucial part of the problem, by allowing our elected politicians not only to allow the theft, but actively to form an alliance with banks to perpetrate it, by establishing the central bank, whose real purpose is to ensure the survival of the state-bank alliance by holding each party to its bargain.

[iamnotback]

Banks create money by making loans, but this process is not in any way constrained by reserves, deposits or a money multiplier. Banks do not need deposits to make loans. The idea that banks somehow lend out grandma’s savings is propaganda. Instead banks simply create money via accounting wizardry. When a bank approves a loan they simultaneously create a deposit in the borrower’s bank account and voilà new money is created. Banks do not function by lending out deposits. Instead the act of lending creates more deposits. This is the reverse of the sequence taught in almost all economic textbooks.  Banks create deposits at will.

Economic texts often state that banks are constrained by reserve requirements. This is another lie. There does exist a number called reserve requirements.

The vast majority of money is NOT created by central banks, but by regular banks who loan out money that doesn't exist.
The simply move numbers around in their records, creating debt out of thin air.

And my limited understanding of the Basel rounds is that Tier 1 reserve capital requirements will gradually become more strict, thus enabling TPTB to collapse the global banking system so they can usher in their NWO and SDRs.

[BobK71]

Great post, thank you.

You might try reading 'Fragile by Design.'  (The system is designed to fail from day one.)

The cleanest, most rigorous way I can find of describing the world system is:

'The alliance between politicians and bankers, anchored by the central bank, extract wealth from the rest of society by artificially propping up money, debt, and other financial assets with state power, benefiting themselves who issue the assets.  When some thus-overvalued asset must crash, the entire economy suffers from loss of wealth and thus demand.  This loss is especially intensified by the distortions in demand that set in during the asset inflation period.'

[Xester]

Its not called parasitism but vampirism. Parasites stick to us without us knowing and feed from us but banks is more than that they are actually vampires. Vampires first seduced you by some kind of hypnosis that your money is safe in the banks and loans is good. After biting us with interest from loans they will be able to control us like the vampires can control their victims via telepathy. Banks now control the society, when you withdraw a big amount you will wait for how many days but if they will ask for loan payments they want it on the scheduled date otherwise suffer huge interest.

Banks live using our money and use our money against us. 

[zend7]

Great post, thank you.

You might try reading 'Fragile by Design.'  (The system is designed to fail from day one.)

The cleanest, most rigorous way I can find of describing the world system is:

'The alliance between politicians and bankers, anchored by the central bank, extract wealth from the rest of society by artificially propping up money, debt, and other financial assets with state power, benefiting themselves who issue the assets.  When some thus-overvalued asset must crash, the entire economy suffers from loss of wealth and thus demand.  This loss is especially intensified by the distortions in demand that set in during the asset inflation period.'

Perfect definition. In such system I agree with people who say any economy who is based on crediting is destined to fail by day one. Why ? Because not everyone can pay the credit(loans) they get so these are called "bad loans" and someone else have to take their burden. Who is/are someone else? Everyone of us, raising interest rates on loans happens only from such thing in the beginning. Remove the "bad loans" and the economy will keep flourishing, no matter in which country you are.
What I want to say is that "bad loans" is the biggest parasite in modern economy.

I have taken for granted that corruption and bribery doesn't exist (which is not true in 100% of the world) to simplify my reasoning.

[BobK71]

Perfect definition. In such system I agree with people who say any economy who is based on crediting is destined to fail by day one. Why ? Because not everyone can pay the credit(loans) they get so these are called "bad loans" and someone else have to take their burden. Who is/are someone else? Everyone of us, raising interest rates on loans happens only from such thing in the beginning. Remove the "bad loans" and the economy will keep flourishing, no matter in which country you are.
What I want to say is that "bad loans" is the biggest parasite in modern economy.

I have taken for granted that corruption and bribery doesn't exist (which is not true in 100% of the world) to simplify my reasoning.

Thank you.  Banks have the incentives to make bad loans, since bank debt (deposits) are propped up by the establishment in one way or another (bailouts, deposit insurance, media under-reporting of problems, etc.) While the elites can hold the system stable, it is in the bank's interest to make bigger gambles than under a true free market.  Any bank not doing this will be less profitable than competitors and their officers eventually replaced.

But all banks doing this means there will be more bad debts, and eventually the values of deposits will implode.  What happened in 2007-8 was essentially a shadow-bank version of this bank run.

A healthy system would be honest: depositors would agree in advance to take the loss of any bad loans.  The 'problem' with an honest system is that people would put a fraction of the money into banks they do today, and the politicians and bankers would't benefit nearly so much.