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Author Topic: How the rich got rich and stayed rich without lifting a finger.  (Read 3639 times)
Ozziecoin
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May 12, 2014, 12:00:30 AM
 #41

Fractional Reserve Banking naturally exists, and unless it is outright banned (which would be a violation of freedom) it always will exist. Ironically, most debt is based off of banking, and without debt, you have huge currency volatility. Debt ensures future demand which actually stabilizes a currency.

The problem is with US FRACTIONAL RESERVE BANKING which is where money created with through the fractional reserve process is identical to "normal" money, due to a combination of the FDIC and the FED, especially when the FED gets its instructions from the government and from a coallition of big banks, guaranteeing it will lend to both almost infinitely.

We are ok with; one to one lending.  We are NOT ok with:

1. Banks or exchanges like MT Gox that create off Blockchain coins.  This is just FRB in crypto form.

2. Shadow banking type arrangements in its various forms.

If everything stays on the Blockchain, FRB will effectively be eliminated.


FRB is completely unavoidable given a somewhat stable currency.

1) Stable currency gives lending less risk, requiring a < 100% reserve requirement.
2) With < 100% reserve requirement, banks can pay interest to depositors while forcing investors to take minimal risk (maximum interest = their interest rate ( 1 - 1/reserve requirement)
3) Investors accept interest for minimal risk originally in the form of bonds/CDs.
4) Since there's minimal risk, bond/CD notes become as effective a store of value as normal money.
5) Merchants begin to accept bonds/CDs in lieu of "base currency" because there isn't any downside to doing so (they were going to buy bonds/CDs anyway because they have minimal risk and provide interest, and accepting bonds/CDs increases the supply of tender available with which to buy merchant's products, increasing demand for merchant's products, creating more sales == more profits).

And a fractional reserve system is born.

The answer to this is the Blockchain.  On blockchain = money; off blockchain = not money.

Non-technical coin. Use OZC to intro coins to everyday aussies: http://ozziecoin.com
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Ozziecoin
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May 12, 2014, 12:02:27 AM
 #42

Nobody gets rich without lifting a finger except lottery winners.

Banks take on a lot of risk to give loans.  If the lender doesn't pay the banks can go insolvent

Mate: TBTF - it's still there.  http://www.zerohedge.com/news/2014-05-09/tim-geithner-admits-too-big-fail-hasnt-gone-anywhere-and-thats-way-he-likes-it

So what?  And lots of smaller banks became insolvent throughout history.  Most people rather give bail out than Great Depression 2.0. 

Dont get your point.  You act like FRB is some big secret.  Then you conclude banks make money "without lifting a finger".  Either cause you don't understand what the business is or you're trying to scare suckers into your Ozzie coin

Wealth inequality buddy. FRB steals from everyone except the 1%.

Non-technical coin. Use OZC to intro coins to everyday aussies: http://ozziecoin.com
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May 13, 2014, 07:42:46 AM
 #43

Looks like the opposition beat a hasty retreat from the conversation. They have no evidence.

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May 15, 2014, 02:45:23 AM
 #44


http://www.ft.com/intl/cms/s/0/7f000b18-ca44-11e3-bb92-00144feabdc0.html


"What is to be done? A minimum response would leave this industry largely as it is but both tighten regulation and insist that a bigger proportion of the balance sheet be financed with equity or credibly loss-absorbing debt. I discussed this approach last week. Higher capital is the recommendation made by Anat Admati of Stanford and Martin Hellwig of the Max Planck Institute in The Bankers’ New Clothes.

A maximum response would be to give the state a monopoly on money creation. One of the most important such proposals was in the Chicago Plan, advanced in the 1930s by, among others, a great economist, Irving Fisher. Its core was the requirement for 100 per cent reserves against deposits. Fisher argued that this would greatly reduce business cycles, end bank runs and drastically reduce public debt. A 2012 study by International Monetary Fund staff suggests this plan could work well."

We say: Use the Blockchain to ensure 100% per cent reserves and zero FRB.  The Blockchain was designed to do this exactly.



Non-technical coin. Use OZC to intro coins to everyday aussies: http://ozziecoin.com
Ozziecoin
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May 17, 2014, 06:01:41 PM
 #45

Quote
Lord Adair Turner, formally the UK's chief financial regulator, said "Banks do not, as too many textbooks still suggest, take deposits of existing money from savers and lend it out to borrowers: they create credit and money ex nihilo – extending a loan to the borrower and simultaneously crediting the borrower’s money account".

Martin Wolf, noted economist and writer for the Financial Times, said "Printing counterfeit banknotes is illegal, but creating private money is not. The interdependence between the state and the businesses that can do this is the source of much of the instability of our economies. It could – and should – be terminated."

Therefore, on the blockchain = money.  Not on the blockchain = NOT money.

Non-technical coin. Use OZC to intro coins to everyday aussies: http://ozziecoin.com
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