How the rich got rich and stayed rich without lifting a finger.

[Ozziecoin]

The bank itself may become insolvent, but the rich people running it maintain their wealth. Ozziecoin's article is fine IMO. My only problem is with pre-mining and the very real possibility of taking the "coins for aussies" and selling for personal gain.

These are valid concerns.  We acknowledge them.  We are not your run of the mill altcoin creators.  We understand how important this is to the Australian economy.  

Our primary objective is fair distribution.  We will announce a fair transparent checking mechanism on the distribution process after ozziecoin is listed on a crypto exchange.

Ozziecoin was created to touch the 99.98% of Australians who do not own any bitcoins.  This is an initiative to get the Blockchain to the community in a people friendly manner via emailing ozziecoins. It's the first step - we are the training wheels.

We suggest people mine and email these coins to everyone.

[Ozziecoin]

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.

[Ozziecoin]

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

I can name at least three groups that get rich without lifting a finger:

1. The aristocracy/landlords

2. The resource owners - oil, water, various monopolies and oligopolies (who are also often owned by the aristocracy)

3. Bankers who basically shuffle paper to create loans and money out of thin air

Seriously, it does not take a genius to calculate credit scores and lend out money.  All that infrastructure was built decades ago.

[Ozziecoin]

The reason why this happens is because the rich stay within a network to help each other out, like my freinds boss was a dentist owner and his freind sold dental supplies so they worked hand to hand to keep getting rich while the other comeptitors cant compete cause everyone helps each other within there network.  I hope that makes sense.

This happens all the time.  We agree it is totally unfair.  However, fractional reserve banking is worse than that. 

It steals by inflation and fast rising property prices.  Property price growth in Australia has totally outstripped inflation and wage growth over the last two decades in Australia.

It is untenable.

[twiifm]

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

I can name at least three groups that get rich without lifting a finger:

1. The aristocracy/landlords

2. The resource owners - oil, water, various monopolies and oligopolies (who are also often owned by the aristocracy)

3. Bankers who basically shuffle paper to create loans and money out of thin air

Seriously, it does not take a genius to calculate credit scores and lend out money.  All that infrastructure was built decades ago.

Ha!  You think it's easy to be any of these things?  Keep dreaming.  I own 3 apt buildings and it's a lot of work.  I have to maintain my property, chase down late rent, taxes, stressing about about my mortgages and falling real estate prices.  I deal w all kinds of unexpected sh*t.

If you think its so easy nobody is stopping you from going out and doing the same

Satoshi created BTC out of thin air and convince you all its worth $400.  I don't see anyone here bitching about that.  One thing you don't understand about banking is that loans are risk.  The bank is making money off the interest but they take the risk of credit.  If I default my loan the banks would be stuck w my 3 buildings that I haven't yet paid off the mortgage.  Thats a lot of risk

[theonewhowaskazu]

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.

[TaunSew]

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

I can name at least three groups that get rich without lifting a finger:

1. The aristocracy/landlords

2. The resource owners - oil, water, various monopolies and oligopolies (who are also often owned by the aristocracy)

3. Bankers who basically shuffle paper to create loans and money out of thin air

Seriously, it does not take a genius to calculate credit scores and lend out money.  All that infrastructure was built decades ago.

Ha!  You think it's easy to be any of these things?  Keep dreaming.  I own 3 apt buildings and it's a lot of work.  I have to maintain my property, chase down late rent, taxes, stressing about about my mortgages and falling real estate prices.  I deal w all kinds of unexpected sh*t.

Are you a slum lord in Detroit or something?

There's many people here on Bitcointalk (and in society as a whole) who either own rental units or buildings, and nobody shares your opinion.  If you hate chasing down junkies who are late on their payment, then get a building manager.  As for taxes - most of here are presumably adults and file taxes (including tax on rental income).  If you hate doing your taxes then seek a CPA or tax accountant like a normal sane person.


Though if Bitcointalk is any indication - there's always been a minority of money nutters here who think of crazy ways to save money, when they're only stressing themselves out over a few bucks.  

[twiifm]

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

I can name at least three groups that get rich without lifting a finger:

1. The aristocracy/landlords

2. The resource owners - oil, water, various monopolies and oligopolies (who are also often owned by the aristocracy)

3. Bankers who basically shuffle paper to create loans and money out of thin air

Seriously, it does not take a genius to calculate credit scores and lend out money.  All that infrastructure was built decades ago.

Ha!  You think it's easy to be any of these things?  Keep dreaming.  I own 3 apt buildings and it's a lot of work.  I have to maintain my property, chase down late rent, taxes, stressing about about my mortgages and falling real estate prices.  I deal w all kinds of unexpected sh*t.

Are you a slum lord in Detroit or something?

There's many people here on Bitcointalk (and in society as a whole) who either own rental units or buildings, and nobody shares your opinion.  If you hate chasing down junkies who are late on their payment, then get a building manager.  As for taxes - most of here are presumably adults and file taxes (including tax on rental income).  If you hate doing your taxes then seek a CPA or tax accountant like a normal sane person.


Though if Bitcointalk is any indication - there's always been a minority of money nutters here who think of crazy ways to save money, when they're only stressing themselves out over a few bucks.  

WTF? You going on about.  I own 3 building in Brooklyn.  My point is if he thinks being a landlord is "a guy who makes money w/o lifting a finger", then he is a naive child.  Being a landlord is A LOT of work.

[Ozziecoin]

WTF? You going on about.  I own 3 building in Brooklyn.  My point is if he thinks being a landlord is "a guy who makes money w/o lifting a finger", then he is a naive child.  Being a landlord is A LOT of work.

Sorry mate, you do not even rate on the scale of landownership: http://www.businessinsider.com.au/worlds-biggest-landowners-2011-3?op=1

Below those people are the aristocrats.  Below them are other very large land owners.  Then maybe you fit in below them.  Then the ordinary workers who have zero chance of getting anywhere.

Please, less personal insults.  It's a sign of maturity.

[TheDoors]

It is always so in market economy. The rich gets richer and poor gets poorer. As big companies try to monopolize the market they receive more money. As poor people try to save money they just inflate. It always will be so, until totally new approach of creating money will be released.

[Ozziecoin]

It is always so in market economy. The rich gets richer and poor gets poorer. As big companies try to monopolize the market they receive more money. As poor people try to save money they just inflate. It always will be so, until totally new approach of creating money will be released.

You're in luck mate.  We are releasing such a coin: ozziecoin.com

[makebitcoin]

Interesting article and it was easy for me to understand even though English is my second language. Really explained to me what fractional banking is about. Thank you.

[twiifm]

WTF? You going on about.  I own 3 building in Brooklyn.  My point is if he thinks being a landlord is "a guy who makes money w/o lifting a finger", then he is a naive child.  Being a landlord is A LOT of work.

Sorry mate, you do not even rate on the scale of landownership: http://www.businessinsider.com.au/worlds-biggest-landowners-2011-3?op=1

Below those people are the aristocrats.  Below them are other very large land owners.  Then maybe you fit in below them.  Then the ordinary workers who have zero chance of getting anywhere.

Please, less personal insults.  It's a sign of maturity.

Who said I was an aristocrat?  You say landlords don't need to work.  I'm saying they do.

Banks also take risk when they create loans.  There is few instances where people make money without lifting a finger. Maybe BTC speculators can be said to do that.  But they'll tell you they are taking risk as early adopters

You just sound envious

[Ozziecoin]

WTF? You going on about.  I own 3 building in Brooklyn.  My point is if he thinks being a landlord is "a guy who makes money w/o lifting a finger", then he is a naive child.  Being a landlord is A LOT of work.

Sorry mate, you do not even rate on the scale of landownership: http://www.businessinsider.com.au/worlds-biggest-landowners-2011-3?op=1

Below those people are the aristocrats.  Below them are other very large land owners.  Then maybe you fit in below them.  Then the ordinary workers who have zero chance of getting anywhere.

Please, less personal insults.  It's a sign of maturity.

Who said I was an aristocrat?  You say landlords don't need to work.  I'm saying they do.

Banks also take risk when they create loans.  There is few instances where people make money without lifting a finger. Maybe BTC speculators can be said to do that.  But they'll tell you they are taking risk as early adopters

You just sound envious

Banks take risk? Heard of TBTF? Give us all a break.  I rest my case. 

[twiifm]

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

[theonewhowaskazu]

WTF? You going on about.  I own 3 building in Brooklyn.  My point is if he thinks being a landlord is "a guy who makes money w/o lifting a finger", then he is a naive child.  Being a landlord is A LOT of work.

Sorry mate, you do not even rate on the scale of landownership: http://www.businessinsider.com.au/worlds-biggest-landowners-2011-3?op=1

Below those people are the aristocrats.  Below them are other very large land owners.  Then maybe you fit in below them.  Then the ordinary workers who have zero chance of getting anywhere.

Please, less personal insults.  It's a sign of maturity.

Who said I was an aristocrat?  You say landlords don't need to work.  I'm saying they do.

Banks also take risk when they create loans.  There is few instances where people make money without lifting a finger. Maybe BTC speculators can be said to do that.  But they'll tell you they are taking risk as early adopters

You just sound envious

I don't think you understand. Banks do take risk when they make loans, this is true. The problem comes from the fact that the managers/owners of the bank don't take much of that risk, and the laws & regulations that are supposedly making a more stable economy really serve to reduce this risk.

Let me quickly explain how banks work these days: There's three "tiers" really, of ownership that is. Managers, who run the bank, and whose job is basically to make the bank as risky as possible; creditors & investors, whose job is to provide the bank with capital, and depositors, whose job it is to be screwed.
The
Managers try to get the bank to be as risky as possible because with more risk, comes more reward. This causes higher profits for the bank, which means bigger bonuses for him. Then there's the investors and creditors, who get a relatively fixed cut of the bank's profit. Finally there's the depositors, who just get a percentage far less than what the bank is making, even during good economic times. The moment there's a problem, borrowers default. Depositors think they will be out of money, but the government steps in, prints them some money to pay them back. The investors and creditors lose some money, and the managers don't lose anything.

What's the result? Depositors think they haven't lost anything, but in reality they've lost to inflation. Creditors and investors have made a bit more than inflation, but lost most of that profit when the bank experienced problems and the government bailed it out. Over the long run they should end up in profit a bit relative to inflation. And the managers made the most, because they got the bonuses proportional to the profits of the company (like an investor) without taking any of the investors' loss when the company went under.

[odolvlobo]

http://ozziecoin.com/index.php/fractional-reserve-banking-explained

The dilution of the value of money (inflation) is caused by central banks. FRB is just a multiplier. A central bank could create $100,000 with no FRB or $10,000 with 10% FRB, and the result is the same.

[Ozziecoin]

http://ozziecoin.com/index.php/fractional-reserve-banking-explained

The dilution of the value of money (inflation) is caused by central banks. FRB is just a multiplier. A central bank could create $100,000 with no FRB or $10,000 with 10% FRB, and the result is the same.

Well the multiplier is out of the control of central banks because it is in private hands. The central bankers admit this themselves.

I don't think printed funds end up in the economy. I think they end up mostly as bank reserves that the Fed pays interest on.

[Ozziecoin]

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

Actually, maybe I'm wrong. Perhaps Banks do lift a pinky. See what they do: http://t.ritholtz.com/bigpicture/#!/entry/53700120025312186c0577e9?origin=http%3A%2F%2Fwww.ritholtz.com%2Fblog%2F2014%2F05%2F6-years-after-financial-crisis-big-banks-are-still-committing-big-crimes

[Ozziecoin]

Interesting article and it was easy for me to understand even though English is my second language. Really explained to me what fractional banking is about. Thank you.

FRB is theft in plain sight. Everyone needs to understand exactly how it works. Use the article and inform others.