# News & Current Events > Economy & Markets >  5 Reasons NOT to Pay Your Credit Cards

## bobbyw24

Are you one of the millions of Americans trying to decide between paying your credit card bills and eating?   

John Galt -- Activist Post


We live in a matrix that goes to unspeakable expense to nurture us from the teat to be good consumers. You are issued a tax collection number at birth (SS#), another artificial number for your credit worthiness (FICO), and then you're extended a certain amount of tokens to play "life" based on those numbers.  This virtual currency, not unlike your earned Farmville coins, only has value because you give it value.  

It is a brilliantly designed game:  the banksters create a unit of money out of thin air; lend it to people with interest attached; get them to buy real items; then raise the rates, force people to work harder, hover like a vulture until expected default occurs, and rake in the forfeited assets.  Best of all, when the whole Ponzi scheme comes crashing down because they drunkenly gambled with your interest payments, the very people who destroyed you get bailed out by you with tax money.  And they call you the thieves when you can't pay them back.  The game is rigged for the house and it's always a Win/Win for them and a Lose/Lose for you.

Sure, you get to "rent" a flat-screen TV, a car, or a home from them, making life in the matrix almost worth it.  But, ultimately, you only temporarily use that stuff at great expense to you and massive profits to the banks.  After years and years of paid interest, you still never truly own anything.  The TV is now obsolete and worthless; you still must pay increasing property taxes and insurance on your homes and cars, even when your done paying the bank three times their value, all while they bought your years of servitude with nothing real or tangible.


For the many who are contemplating dropping out of the corrupt debtor system, the least impact from the mafia will occur by ignoring your unsecured credit cards.  Before you take this action, be warned that you may have to return the signing bonus gift you received when got your contract to play in the big leagues. 

Here are the top five reasons not to pay your credit cards:
1.If you owe $6,000 on a credit card with a 20 percent interest rate, and you only pay the minimum payment each time, it will take you 54 years to pay off that credit card.  During those 54 years you will pay $26,168 in interest rate charges in addition to the $6,000 in principal that you are required to pay back (Source).
2.Under the legal fractional reserve banking system, the banks NEVER actually had the fake money for the credit they extended you in the first place.  They added you to their stable of debt slaves with a simple accounting key stroke.
3.The cartel of the large private banks are a proven criminal entity at the heart of most global problems including, but not limited to:  wars, genocide, famine, and resource plundering.  It's immoral to continue to support such a system on any level.
4.You won't need a good credit score to live outside of the matrix. It's a place in your mind where it is okay to not ever "use" anything with bank financing for the rest of your life.
5.Not paying your credit cards may be one of the only ways to make the matrix feel the weight of your protest without drawing too much oppression.
Since the foxes guard the chickens on Wallshington Street, the citizens may have to take justice into their own hands through peaceful resistance -- by simply dropping out of the matrix.  In other words, don't pay your phony debts to criminal banksters.  By not paying your debts, you should expect the system's goons to rain down fear by way of phone calls and mail to you.  Additionally, you will certainly risk losing your esteemed Farmville status and, these days, you may even win a free trip to one of the oligarchy's private jails. 

However . . . you could just wind up gaining some independence from your manufactured stress and servitude.

http://beforeitsnews.com/story/116/4...dit_Cards.html

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## Romulus

great article.

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## Paleo

Wish I could transmit that directly to 200M brains

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## brandon

Not paying your credit card bills when you have the means is nothing but theft. The good news is we have FICO scores that will stop these people from ripping off more creditors.

This is a really stupid article.

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## bobbyw24

> Not paying your credit card bills when you have the means is nothing but theft. The good news is we have FICO scores that will stop these people from ripping off more creditors.
> 
> This is a really stupid article.


Nothing but Theft? How do you define theft?

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## MelissaWV

> Nothing but Theft? How do you define theft?


While I disagree with the tone of what was said, that's also how I see it.  People didn't have a problem with accepting this money and entering into agreements.  Will they be returning the items financed with that money?  Unlikely, and if they did it would not be worth the money that was paid for it in the beginning, either.

I know several people, in passing, whose credit card debt is into the five-digit-number range.  That's insane to me.  It's more than a lot of people take home after taxes in a year.  It's sitting in their homes in the form of clothing, furniture, and electronics.  Some of it will never be seen again, consisting largely of frivolous food purchases and the like.  One of these charming individuals is "not paying" because it's "unfair" that the cards charge interest.  Her interest rate has gone up!  She said to me the other day that the credit card companies "know I can't pay this back anytime soon" to which I said "didn't you know that when you charged $20,000 worth of stuff?"  She got really, really quiet.

Go for it, and "screw the system" if you'd like, and rage about how it's unfair... but if we hopped in a time machine back to when you were spending the money, I doubt someone was twisting your arm to spend yourself into a hole.

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## brandon

> Nothing but Theft? How do you define theft?


What's the difference between me going into best buy and stealing an hdtv, and me charging it to a credit card that I plan on just defaulting on? The only difference is the party that is being victimized. Just because you happen to not like one party doesn't mean it's not theft.

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## Danke

It is not "money."

And the digits are of your creation by your signature anyway.

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## Danke

> What's the difference between me going into best buy and stealing an hdtv, and me charging it to a credit card that I plan on just defaulting on? The only difference is the party that is being victimized. Just because you happen to not like one party doesn't mean it's not theft.


You think the bank is a victim in this case?  Really?

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## bobbyw24

> What's the difference between me going into best buy and stealing an hdtv, and me charging it to a credit card that I plan on just defaulting on? The only difference is the party that is being victimized. Just because you happen to not like one party doesn't mean it's not theft.


it's not theft--could be fraud but it's not theft

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## MelissaWV

> It is not "money."
> 
> And the digits are of your creation by your signature anyway.


It was certainly "money" when the person was using it to buy things.  To be more technical, it was a promise to pay.  Those who break promises can be fine with that, but the sugar-coating is just silly.

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## brandon

> You think the bank is a victim in this case?  Really?


Did the cardholder sign an agreement with them that stated how and when they would repay any revolving debt they accumulate?

Yes.

No one made you take that credit card and go buy a vacation to Jamaica.

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## bobbyw24

> Did the cardholder sign an agreement with them that stated how and when they would repay any revolving debt they accumulate?
> 
> Yes.
> 
> No one made you take that credit card and go buy a vacation to Jamaica.


Brandon--which bank do you work for?

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## brandon

> it's not theft--could be fraud but it's not theft


semantics....but okay. I'll give that to you. Fraud, breach of contract, whatever. It's still sleazy in my book.

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## dannno

What it's doing is bidding up the prices on goods and services.. that is the only 'stealing' that is going on.

The difference is that some people believe the fairytale that is presented to them and they accidentally default when they figure out they can't pay their debt off.. and then there are others who know the true nature of the banks.. so are people who know the true nature of the banks just supposed to sit back and let everybody else devalue the currency? Sure, they can if they want to, but why should they be punished?

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## dannno

> It was certainly "money" when the person was using it to buy things.  To be more technical, it was a promise to pay.  Those who break promises can be fine with that, but the sugar-coating is just silly.


Promises to pay money back to somebody who never had the money in the first place... THAT'S silly..

It would be like deciding whether or not paying a counterfeiter back is moral.. the problem is the entire society is based on counterfeiting, so it's really impossible to live within society in an advantageous way without doing it.

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## bobbyw24

> semantics....but okay. I'll give that to you. Fraud, breach of contract, whatever. It's still sleazy in my book.


If that consumer files bankruptcy that debt may not be discharged since it might be fraudulently inurred.  11 U.S.C. 523(a)(2)

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## brandon

Banks are great. I'm going to buy my first home next year. I wouldn't be able to do that for decades if it weren't for banks extending me credit. Credit is an extremely important part of a free market economy. Just because collusion between banks and government is undesirable, doesn't mean banks themselves are undesirable.

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## Lovecraftian4Paul

Stop paying the credit cards and all loans but mortgages (especially student loans). It is time to kill this credit system that does nothing but drive up the costs of goods and services. Make the lender suffer for lending to the irresponsible (they are going to suffer in any case).

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## MelissaWV

> What it's doing is bidding up the prices on goods and services.. that is the only 'stealing' that is going on.
> 
> The difference is that some people believe the fairytale that is presented to them and they accidentally default when they figure out they can't pay their debt off.. and then there are others who know the true nature of the banks.. so are people who know the true nature of the banks just supposed to sit back and let everybody else devalue the currency? Sure, they can if they want to, but why should they be punished?


But how does the person who's going to default escape your ire?  Aren't they participating in this very same fairy tale, and making it even easier for it to go on perpetually?

You know what's better?  Don't go into debt, except perhaps for the big one or two purchases in your life.  Nah.  That's not right.  Everyone should just rush out and get into debt and default on it.  That's the honest, American way!

/s

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## WaltM

this is not 5 reasons.

it's really 2, 

a) don't pay what you can't get out of
b) if you dont care about credit, dont pay

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## Danke

> It was certainly "money" when the person was using it to buy things.  To be more technical, it was a promise to pay.  Those who break promises can be fine with that, but the sugar-coating is just silly.


Nope.  It is not money.

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## WaltM

> Not paying your credit card bills when you have the means is nothing but theft. The good news is we have FICO scores that will stop these people from ripping off more creditors.
> 
> This is a really stupid article.


this!

except this kid thinks he can stir wrath of the matrix and live outside of it, good luck with that.

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## WaltM

> Nope.  It is not money.


what is it, and what would make it money?

if somebody calls it money, and another doesnt, clearly something (such as a deal) can't be made.

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## WaltM

> What it's doing is bidding up the prices on goods and services.. that is the only 'stealing' that is going on.


so you agree stealing doesn't require physical transfer of objects?

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## WaltM

> Stop paying the credit cards and all loans but mortgages (especially student loans). It is time to kill this credit system that does nothing but drive up the costs of goods and services. Make the lender suffer for lending to the irresponsible (they are going to suffer in any case).


you can do that by not taking out new loans, but I don't encourage stiffing what you promised to pay. 

mortgage too, was overpriced, and should be modified (but that's an agreement both sides can make, an collateral is involved)

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## Travlyr

It would be all different if we had a sound money system but we don't.  

The fraudulent debtor system ruins lives if you let it.  How?  

A bank issues a credit card.  The bank creates the money out of thin air when the borrower "charges" against the credit limit (because they have been granted the authority to counterfeit money by the banking cabal).  This causes all prices to rise because more money in the form of credit is chasing fewer goods.  That in itself is fraudulent.

Then, banks loan money to people to buy a house that they know cannot pay it back (liar loans.. subprime) again more fraudulent money chasing fewer goods causing increased prices.  The banks cannot maintain this level of fraud for long because the real world insists that borrowers pay back loans.  So after a while... fewer people can afford to buy a home, and mortgage giants can no longer lend money.

The failure of the banks causes huge losses in industries such as home building, mortgage banking & real estate sales brokerages which disappear.  Unemployment grows and more well meaning people cannot pay their obligations because of the bank fraud.

The banks hit the taxpayer bailout trough, THEN foreclose on the homes (double dipping) AND sue the credit card borrowers (again double dipping).  

The banks end up owning massive real estate holdings and garnering huge bonuses... all on the backs of good taxpaying citizens who simply wanted a good life and a home in which to live.

The whole system is a fraud that redistributes money and ruins lives... all based on dishonest fiat money.

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## Paleo

> Banks are great. I'm going to buy my first home next year. I wouldn't be able to do that for decades if it weren't for banks extending me credit. Credit is an extremely important part of a free market economy. Just because collusion between banks and government is undesirable, doesn't mean banks themselves are undesirable.


Bull$#@!.  Its the fiat magic playdoh that makes the house so expensive that you CANT buy it without their funny money loan.

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## Bossobass

The problem with siding with CC companies is that they first flood you with every manner of fraudulent advertising, kickback schemes, 0% interest rates, fraudulent merchandise discounts schemes and credit limits.

They pay token cash donations to colleges to allow them to set up booths at those colleges and staff them with people who are specifically trained to bull$#@! kids into the CC scheme.

Once they hook you, they increase your limits by a mathematical program designed to keep you perpetually in debt while still able to make the minimum payments.

Then, they squeeze the stuffing out of you by criminally raising the interest rates through paying off your representatives to allow them to charge mobster rates.

Somewhere in this process they change the format of their statement so that Einstein couldn't read it.

The minimum payments laws are completely ignored while they lobby to get those laws changed... retroactively.

They are then allowed to illegally sell out to the 5 banks that own this country, grabbing golden parachutes that the Queen of Sheba would envy.

The 5 banks then collude to rape the US Treasury in a "too big to fail" bull$#@! story that my cat wouldn't buy.

What happens next will astound every conscious American...

Stay tuned.

Bosso

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## Carson

One reason too.

You gave your word.

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## Jordan

This forum loves contractual obligations...until they involve a bank.

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## WaltM

> This forum loves contractual obligations...until they involve a bank.


or a corporation like Apple

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## WaltM

> Bull$#@!.  Its the fiat magic playdoh that makes the house so expensive that you CANT buy it without their funny money loan.


nobody's forcing you to buy.

he might not be able to buy it without a loan, but he's able to buy it with the loan.

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## Jordan

> or a corporation like Apple


Exactly.  It seems that everyone forgets that publicly traded companies are held by the *gasp* *public*.  

The public includes ordinary people like those who frequent this forum.  The only difference is that instead of bitching about "the man" that keeps them down, the public is more concerned about doing something that betters their own standard of living. 

Complaining only goes so far.  A little *action* goes a long way.

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## Jordan

Grab your slice of the American Dream:

http://finance.yahoo.com/q?s=cof
http://finance.yahoo.com/q?s=AXP
http://finance.yahoo.com/q?s=DFS
http://finance.yahoo.com/q?s=V

Lookie there! Instead of being a debtor, you can be a creditor/financier/business owner.  Crazy, I know.

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## dannno

> Exactly.  It seems that everyone forgets that publicly traded companies are held by the *gasp* *public*.  
> 
> The public includes ordinary people like those who frequent this forum.  The only difference is that instead of bitching about "the man" that keeps them down, the public is more concerned about doing something that betters their own standard of living. 
> 
> Complaining only goes so far.  A little *action* goes a long way.


Uhh, nobody is forcing you to buy shares of Monsanto 

If you have a lot of shares, then consider it my mission to devastate you economically.

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## DamianTV

Anyway...  Arent all these debts that people get with credit cards and whatever other loans they decide to take out insured?  IE, they default, not only does the bank get paid by the insurance company, they get to sell that debt off to someone willing to buy it and attempt to recollect on it.

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## Rancher

> This forum loves contractual obligations...until they involve a bank.


Appropriately so?




> Anyway...  Arent all these debts that people get with credit cards and whatever other loans they decide to take out insured?  IE, they default, not only does the bank get paid by the insurance company, they get to sell that debt off to someone willing to buy it and attempt to recollect on it.


And bailout by the taxpayers too.

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## MelissaWV

> This forum loves contractual obligations...until they involve a bank.


You should be used to it by now, and so should I, yet it still smacks of hypocrisy.    Don't forget, those contractual obligations also don't count if they're made with any agent of the Government (defrauding a cop is good!) or with, basically, anyone the person disagrees with or doesn't like.

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## bobbyw24

> You should be used to it by now, and so should I, yet it still smacks of hypocrisy.    Don't forget, those contractual obligations also don't count if they're made with any agent of the Government (defrauding a cop is good!) or with, basically, anyone the person disagrees with or doesn't like.


I think it's funny when people get upset about the government impairing contracts. That Constitution thing says that states may not impair contracts but the Federal Gov't sure as hell can. 

So file bankruptcy if you need a fresh start--just like those evil dead white males who drafted the Constitution suggested in Art. I Sect. 8

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## MelissaWV

> I think it's funny when people get upset about the government impairing contracts. That Constitution thing says that states may not impair contracts but the Federal Gov't sure as hell can. 
> 
> So file bankruptcy if you need a fresh start--just like those evil dead white males who drafted the Constitution suggested in Art. I Sect. 8


I'm not talking about the Government impairing contracts.

I am talking about so-called liberty folks, who on any other thread would be touting the efficacy and importance of contractual obligations, deciding contracts are null because they don't like the person or group they made the contract with.  It's nothing new, but it still makes me  .  "Hey Bobby could you loan me $1,000?  I will pay you back $100/mo for a year (meaning you'll get $200 interest) and I'll even sign this paper contract with you and give you all kinds of personal information, which should make you feel secure that you can come after me if for some reason I fail in my obligation."  *Two months later*  "Melissa... why aren't you making payments?"  "Oh, that.  I've always thought you smelled funny.  I spent all the money already, and I have no intention of paying you back, because you smell.  Go Ron Paul!"

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## bobbyw24

> I'm not talking about the Government impairing contracts.
> 
> I am talking about so-called liberty folks, who on any other thread would be touting the efficacy and importance of contractual obligations, deciding contracts are null because they don't like the person or group they made the contract with.  It's nothing new, but it still makes me  .  "Hey Bobby could you loan me $1,000?  I will pay you back $100/mo for a year (meaning you'll get $200 interest) and I'll even sign this paper contract with you and give you all kinds of personal information, which should make you feel secure that you can come after me if for some reason I fail in my obligation."  *Two months later*  "Melissa... why aren't you making payments?"  "Oh, that.  I've always thought you smelled funny.  I spent all the money already, and I have no intention of paying you back, because you smell.  Go Ron Paul!"


Yes, I know--my response was not clear. But you do have a point.

I guess being a bankruptcy lawyer for many years has made it seem like no big deal to me where the debtors cannot pay credit card bills.

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## Paleo

> nobody's forcing you to buy.
> 
> he might not be able to buy it without a loan, but he's able to buy it with the loan.


Its their fault that it cant be bought without a loan, it benefits them, not him.

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## MelissaWV

> Its their fault that it cant be bought without a loan, it benefits them, not him.


These things people are buying with loans... how many of them absolutely cannot wait?  There are some things that people finance which point to bigger problems.  I do know folks who finance medical bills, for instance.  Almost everyone who gets into a new car purchase is going to finance some of it, but you always have the option of a used car.  Even then, you might not have thousands of dollars sitting around right that second, so a loan ensues.  A house is the "biggie" that people finance, of course, but most of us don't live in that dream home all our lives.  People move around a lot more than they used to, which is greatly connected to statistics you can find pertaining to how long people stay with one company for their job.  You are very unlikely to be able to put down cash for a house, and that's been the case basically since people stopped building them.  

It used to be that you'd go to family and friends and your community for the little bit of help you might need to get that car purchased, or furniture, or other things of that nature.  Certainly my parents are always talking about the money family members gave them, which allowed them to get into their first house and buy the furniture we still have in our living room (since 1973, and all it will need is some covering on a couple of corners).  

How much, precisely, of credit card debt on a national basis is "needs" and how much is "wants"?  

I think we've come right back to "people are stupid" again.

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## bobbyw24

Credit card issuers are partially at fault here.

I can recall when it was very hard to get a credit card--one had to have a good income and good credit.

Then the banks lowered their standard and assumed the risk that less creditworthy people would default.

These banks expect a 3-5% default ratio. However, even with  that rate now above 10%, these issuers are still making a killing on fees. Aw, those poor banks

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## WaltM

> Its their fault that it cant be bought without a loan, it benefits them, not him.


so keep blaming, that won't get you a house, some people prefer to pay the bank, live how you like.

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## WaltM

> Credit card issuers are partially at fault here.
> 
> I can recall when it was very hard to get a credit card--one had to have a good income and good credit.
> 
> Then the banks lowered their standard and assumed the risk that less creditworthy people would default.
> 
> These banks expect a 3-5% default ratio. However, even with  that rate now above 10%, these issuers are still making a killing on fees. Aw, those poor banks


what they make is none of my concern, either you agree and do it, or you don't.

you may be in tough situations when you're essentially 'forced' to take a loan, but even then, it's nobody else's fault.

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## WaltM

> Yes, I know--my response was not clear. But you do have a point.
> 
> I guess being a bankruptcy lawyer for many years has made it seem like no big deal to me where the debtors cannot pay credit card bills.


you're a lawyer?

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## MelissaWV

> Credit card issuers are partially at fault here.
> 
> I can recall when it was very hard to get a credit card--one had to have a good income and good credit.
> 
> Then the banks lowered their standard and assumed the risk that less creditworthy people would default.
> 
> These banks expect a 3-5% default ratio. However, even with  that rate now above 10%, these issuers are still making a killing on fees. Aw, those poor banks


This sounds like an excellent reason to go back to doing things as debt-free as possible, rather than fall into a "free money" trap.  It doesn't sound like an excellent reason to enter into agreements and then break them.

There's an assumption here that those of us who aren't advocating walking away... are somehow "pro-bank."  You are correct to point out the default ratio.  Here's the thing, though, about banks and credit card companies and the like (yes, I know they're all the same thing under different names).  When they say "we have x number of customers," you're included.  Even if you just got a credit card to default on it and feel smug, you're contributing to the problem.  You're not really sticking it to anyone.  You're just going back on your word and, no offense to Bobby, funding bankruptcy lawyers   You're also ensuring, in the case of loans, that you don't really own what you think you own.

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## Carson

> I think it's funny when people get upset about the government impairing contracts. That Constitution thing says that states may not impair contracts but the Federal Gov't sure as hell can. 
> 
> So file bankruptcy if you need a fresh start--just like those evil dead white males who drafted the Constitution suggested in Art. I Sect. 8





MMmmmmm. Fresh start.

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## bobbyw24

> no offense to Bobby, funding bankruptcy lawyers


None taken--I work for a welfare agency and get a salary

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## NiceGoing

> Are you one of the millions of Americans trying to decide between paying your credit card bills and eating?   
> 
> John Galt -- Activist Post
> 
> 
> We live in a matrix that goes to unspeakable expense to nurture us from the teat to be good consumers. You are issued a tax collection number at birth (SS#), another artificial number for your credit worthiness (FICO), and then you're extended a certain amount of tokens to play "life" based on those numbers.  This virtual currency, not unlike your earned Farmville coins, only has value because you give it value.  
> 
> It is a brilliantly designed game:  the banksters create a unit of money out of thin air; lend it to people with interest attached; get them to buy real items; then raise the rates, force people to work harder, hover like a vulture until expected default occurs, and rake in the forfeited assets.  Best of all, when the whole Ponzi scheme comes crashing down because they drunkenly gambled with your interest payments, the very people who destroyed you get bailed out by you with tax money.  And they call you the thieves when you can't pay them back.  The game is rigged for the house and it's always a Win/Win for them and a Lose/Lose for you.
> 
> ...


Hmmm - oughta *always* read the fine print, guys.

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## WaltM

> None taken--I work for a welfare agency and get a salary


you're a lawyer?

i thought at first you were advocating people stick it to the man, the post read like a person who doesnt understand responsibility and finances.

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## bobbyw24

Yes I understand responsibility [like that of GM, AIG, Bear Stearns and Lehman Bros]  and finances. And I am a lawyer. 

By filing bankruptcy people can "stick it to the man." 

*As RON PAUL would say, if you are failing financially, FILE BANKRUPTCY*

I just posted the controversial piece to start a conversation and looks like it worked

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## bobbyw24

Oh yeah: WALT Disney filed Bankruptcy in 1923 and he turned out OK

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## bobbyw24

_[IF IT'S OKAY FOR BIG COMPANIES, IT'S OKAY FOR PEOPLE AS WELL]_

The distraction on Capitol Hill this week has to do with the jackpot bonuses that executives at AIG recently received.  The argument is over a relative drop in the bucket.  The total amount of bonuses given out was $165 million.  The government has put $170 billion into AIG so far.  Many now are demanding we get this money back.   We ought to be spending our time and effort doing something more worthwhile, like figuring out how the Federal Reserve is handling the trillions of dollars they are creating and pumping into the economy, and how that is affecting the purchasing power of dollars in your pocket.

The big mistake was appropriating the TARP funds in the first place.  A Johnny-come-lately bill of attainder won’t stop the spending epidemic.  This whole situation is a perfect demonstration of why “doing nothing” and letting failing companies fail would have been much better than sinking valuable money and resources into them.  

When a company makes a profit, it is a signal that it is taking resources and increasing their value while controlling costs.  When a company operates at a loss, it is a signal that it is decreasing the value of its resources or letting out-of-control costs outstrip any value it has created.  A company operating at a loss is therefore an engine of wealth destruction.   Bankruptcies are a net positive for the economy because more productive competitors are rewarded by opportunities to buy up remaining assets at bargain prices to strengthen their operations.  In an economy that allows this kind of growth and change, any jobs lost by bankruptcy are soon replaced by new ones as the most efficiently managed businesses gain access to more assets and expand.  

Bankruptcy was the stimulus that we needed in the case of AIG. More bankruptcies would clean out malinvested resources and enable economic growth again.

AIG, by losing money and maneuvering their operations to the brink of bankruptcy, was telling us that they were inefficient.  So what did we do?  We forced the taxpayer to assume the losses, and now we are supposed to be shocked that it is not working out.  Had AIG gone bankrupt, it would have been impossible to hand out these bonuses.  The taxpayer would have been fleeced for $170 billion less last year.  Had they gone bankrupt, the world would not have come to an end, it would just continue on with one less engine of wealth destruction.

We should have learned from Japan.   The 1990’s is referred to as Japan’s “lost decade” because of the zombie banks kept on life support by the Japanese government.  Any productivity was redirected through these engines of wealth destruction, resulting in long term stagnation.  We should and can avoid this outcome if we come to our senses.  

A recession should be a time of strengthening and regrouping for an economy. But as long as the government insists on maintaining the status quo by propping up failed institutions, we will continue to dig a bigger hole for ourselves.

http://www.house.gov/htbin/blog_inc?...ngdetail.shtml


Posted by Ron Paul (03-23-2009, 11:00 AM) filed under Monetary Policy

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## RideTheDirt

I agree that if you are failing financially you should file for bankruptcy. No sense in being a slave for the rest of your life. If you got into this position by putting to much on your plate then you need to take this as a lesson and be more conscious about any debt you take on. If you got into this position by purposely defrauding people then you are a scumbag. I don't like banks and I see the scams that so many people fall for. That's why I stay the hell away from scams! If you don't understand the contract DON'T SIGN IT !

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## Rancher

> *You should be used to it by now, and so should I, yet it still smacks of hypocrisy.*    Don't forget, those contractual obligations also don't count if they're made with any agent of the Government (defrauding a cop is good!) or with, basically, anyone the person disagrees with or doesn't like.


If we had an honest money system, you would be right.  But we don't.  Our fiat money system is a fraud.  Full disclosure is required when entering into a contract.  Most people who use a credit card believed they were borrowing money.  That is the fraud.  They are not borrowing money, the credit card company had secretly made a deal with the central bank to create money out of thin air... and they did not tell the customer that information.  That is quite different than borrowing money... and it distorts the price of goods upward making it impossible to repay.  Many more honest good meaning indebted folks are soon to find this out for themselves first hand.  It's fraud through and through.  And the system will fail.  

Name one other industry (besides banking) that is allowed to operate fraudulently.  If you can, then those contracts are equally void as well.

----------


## bobbyw24

Just months after historic legislation banned certain billing practices, card issuers have dreamed up new ones designed to trip up consumers.

By JESSICA SILVER-GREENBERG 

Whomever President Barack Obama taps to head the new Bureau of Consumer Financial Protection could find it difficult to keep ahead of the credit-card industry. 

The Credit Card Accountability Responsibility and Disclosure Act of 2009, known as the Card Act, was intended to reshape the contours of consumer finance. Among other things, it forces card issuers to give customers more notice about interest-rate increases and restricts certain controversial billing practices such as inactivity fees. 



The Card Act forces issuers to give customers more notice about interest-rate increases, and restricts certain controversial billing practices such as inactivity fees.


Yet some of the biggest card issuers in the U.S., including Citigroup Inc., J.P. Morgan Chase & Co. and Discover Financial Services, are already rolling out a slew of fees designed to recapture some of their lost income, in part by skirting the new rules. Some banks may even be violating the law outright, say consumer advocates. 

"Card companies are figuring out how to replace old fees with new ones," says Victor Stango, an associate economist with the Federal Reserve Bank of Chicago and a professor at the University of California, Davis, who has been analyzing how the Card Act will affect consumer banking. "It's a race between regulators writing ever-more-complex laws and credit-card companies setting up ever-more-complex fees." 

The banks have a big gap to fill. The Card Act is expected to wipe out about $390 million a year in fee revenue, according to David Robertson, the publisher of industry newsletter Nilson Report. On July 16, during its second-quarter earnings call with analysts, Bank of America Corp. Chief Financial Officer Charles Noski warned that the Card Act and other regulatory changes would prompt the bank, the nation's largest in assets, to write off up to $10 billion in the third quarter.

"If you have every major issuer saying that we are losing our shirt, then that speaks volumes," Mr. Robertson says. "Proportionately, these fees should be understood as almost inconsequential compared to the losses."

So the banks are getting aggressive. According to a July 22 report from Pew Charitable Trusts, a nonpartisan research group, the industry's median annual fee on bank credit cards jumped 18% to $59 between July 2009 and March 2010. At credit unions, annual fees soared 67% to $25. During the same period, the median cash-advance and balance-transfer fees jumped by 33%. 

All of these increases are perfectly legal, of course. Banks and other issuers would have a difficult time extending credit to consumers, even at high interest rates, if they couldn't augment those revenues with fee income. "We're coming out of a deep recession that issuers are still working through," says Peter Garuccio, a spokesman for the American Bankers Association.

But some banks may be going too far. In a July 7 letter to the Office of the Comptroller of the Currency, which regulates many of the biggest U.S. banks, a coalition of consumer groups including the National Consumer Law Center, the Consumer Federation of America and Consumer Action flagged several "potential violations of the Credit Card Act." 

Other banks are ramping up their marketing of so-called professional cards. These are like corporate cards but can carry the same terms as consumer cards—and aren't covered under the new law. In the first quarter of this year, issuers sent out 47 million professional-card offers to U.S. households, up from 13.2 million in the corresponding period last year, according to research firm Synovate. 

"This can be a very easy way around the Card Act," says Josh Frank, a senior researcher at the Center for Responsible Lending, a consumer group. 

The upshot: Borrowers must be more vigilant than ever—even before they make their first charge on a new credit card. 

'Saddled With Late Fees'

http://online.wsj.com/article/SB1000...WhatsNewsForth

----------


## james1906

Using Lending Club or something similar.  It keeps out the banks as much as possible.  This means lower interest rates for borrowers and higher interest rates for lenders.

----------


## heavenlyboy34

> You should be used to it by now, and so should I, yet it still smacks of hypocrisy.    Don't forget, those contractual obligations also don't count if they're made with any agent of the Government (defrauding a cop is good!) or with, basically, anyone the person disagrees with or doesn't like.


Indeed.  People on this forum need to read Money, Credit, and Economic Cycles.  It explains contracts as well.

----------


## Paleo

> Using Lending Club or something similar.  It keeps out the banks as much as possible.  This means lower interest rates for borrowers and higher interest rates for lenders.


And since the money being lent is 'real' money to those who are lending it, in that event, I can see the morality of doing your best to repay, even when it is difficult or requires some hardship.

----------


## bobbyw24

*Ron Pauls opposition to Bankruptcy Reform is hypocrisy

by Chip Parker, Jacksonville Bankruptcy Attorney* 

http://www.bankruptcylawnetwork.com/...-is-hypocricy/

NOTE-on a second vote, Ron Paul voted FOR this law to ALLOW homeowners to cram down mortgages on their homesteads.

----------


## Paleo

> *Ron Paul’s opposition to Bankruptcy Reform is hypocrisy
> 
> by Chip Parker, Jacksonville Bankruptcy Attorney* 
> 
> http://www.bankruptcylawnetwork.com/...-is-hypocricy/
> 
> NOTE-on a second vote, Ron Paul voted FOR this law to ALLOW homeowners to cram down mortgages on their homesteads.


There is no reason not to approve a cramdown provision in the existing market, the wealth was non existent in the first place except for the additional interest revenues it provided for the banksters.  This is the problem.  Ultimately nobody but the banks profit from these low interest fiat currency loans.  Forcing the banks to accept a cramdown minimizes disruption and takes currency out of the market that should have never been created in the first place.  In fact, assuming that the borrower is capable of repaying, the bank will ultimately profit by accepting the current market price rather than having to take possession, endure costs of sale, and then only get the 80c on the dollar that repos ultimately sell for...  Everyone wins. 

Im suprised that Paul voted against it at all.

----------


## angelatc

> It was certainly "money" when the person was using it to buy things.  To be more technical, it was a promise to pay.  Those who break promises can be fine with that, but the sugar-coating is just silly.


I like life so much better when we agree.  

It doesn't matter if it's money or credits or chickens or pebbles.  When you take the TV out of the store, you agreed to pay the bank back in dollars.  

Whether or not the bank had the money, or whether the money is real money, to give to the vendor isn't and never was your concern in this transaction.

----------


## Paleo

> I like life so much better when we agree.  
> 
> It doesn't matter if it's money or credits or chickens or pebbles.  When you take the TV out of the store, you agreed to pay the bank back in dollars.  
> 
> Whether or not the bank had the money, or whether the money is real money, to give to the vendor isn't and never was your concern in this transaction.


And THAT boys and girls, is how the banksters expect you to think.  As they rob you silly.   Whatever you do, do NOT look behind the curtain... listen to the wizard.  Pretend that the money is real and everything will be juuust fiiinnne....

----------


## angelatc

> I think it's funny when people get upset about the government impairing contracts. That Constitution thing says that states may not impair contracts but the Federal Gov't sure as hell can. 
> 
> So file bankruptcy if you need a fresh start--just like those evil dead white males who drafted the Constitution suggested in Art. I Sect. 8


That's a risk that both parties are aware of going in. Lenders especially realize that there is a chance the money might stop coming back, and that the borrower might soon be legally protected from collection efforts.  Even in a free market they would factor that into their risk calculations.

----------


## angelatc

> And THAT boys and girls, is how the banksters expect you to think.  As they rob you silly.   Whatever you do, do NOT look behind the curtain... listen to the wizard.  Pretend that the money is real and everything will be juuust fiiinnne....


And THAT, boys and girls, is why libertarians don't win elections with their smug know-it-all platforms.  Nobody understands anything better than you, obviously. So when somebody disagrees with your position on an issue, you can just essentially call them stupid, because obviously they are!

Here's the bottom line: Nobody is robbing me silly, but thanks for checking.  I have even less interest in robbing somebody else. Again, if I want to buy a TV using nothing but fictional debits and credits, it is really absolutely none of your business.

----------


## MelissaWV

> And THAT boys and girls, is how the banksters expect you to think.  *As they rob you silly.*   Whatever you do, do NOT look behind the curtain... listen to the wizard.  Pretend that the money is real and everything will be juuust fiiinnne....


See above, where I talked about not getting into debt except perhaps for the "biggie" purchases that many of us will make and, even then, being incredibly careful about it.

Whatever you do, don't depend on wizards.  That's better advice.

----------


## MelissaWV

> ...
> Name one other industry (besides banking) that is allowed to operate fraudulently.  If you can, then those contracts are equally void as well.


Then don't enter into those contracts.

This isn't rocket science, is it?

----------


## angelatc

> Then don't enter into those contracts.
> 
> This isn't rocket science, is it?


I can't figure out how it is fraud.  I buy a TV, and tell the credit card I will send them $50 fiat dollars every month until it paid off.  They give $3,000 fiat dollars to the store that sold me the TV. 

This is how the economy expands in our monetary system. Just because some people don't think the monetary system is sustainable does not mean the system is fraudulent.

----------


## MelissaWV

> I can't figure out how it is fraud.  I buy a TV, and tell the credit card I will send them $50 fiat dollars every month until it paid off.  They give $3,000 fiat dollars to the store that sold me the TV. 
> 
> This is how the economy expands in our monetary system. Just because some people don't think the monetary system is sustainable does not mean the system is fraudulent.


Right, but take it as a given for a moment that you DO think it's a fradulent/invalid contract on its face.  Why would you enter into it?  People are still justifying things, saying the contract is invalid, because they don't like the other party.  Why would they enter into agreements with people/organizations/companies they dislike?

* * *

Is it because some on the board like the idea of getting something for nothing, but to say it outright would sound too Obama~esque, so they cloak it under "sticking it to the man"?  It's sure what it sounds like 

Stay away from credit cards... and that should go double if you already think it's a bad contract.

----------


## angelatc

> Stay away from credit cards... and that should go double if you already think it's a bad contract.


Exactly.  Start trading in silver and gold if you want - I'll probably join you.  But you can't tell a guy that you're going to pay him in fiat dollars then demand that that he take your gold - that's fraud, unless you specified the terms of the deal first.

That would be like me showing up at Best Buy to pick up the TV that I special ordered, and demanding they take my car as payment.   (Well, maybe not my car....but you know what I mean.)

----------


## jake

> Exactly.  Start trading in silver and gold if you want - I'll probably join you.  But you can't tell a guy that you're going to pay him in fiat dollars then demand that that he take your gold - that's fraud, unless you specified the terms of the deal first.
> 
> That would be like me showing up at Best Buy to pick up the TV that I special ordered, and demanding they take my car as payment.   (Well, maybe not my car....but you know what I mean.)


agree 100% - you put charges on a Credit Card, you are obligated to pay it off - if the contract says you must pay the issuing bank 1 golf ball for each fiat dollar charged to the card, that is what you should morally and legally, do.

----------


## Paleo

> And THAT, boys and girls, is why libertarians don't win elections with their smug know-it-all platforms.  Nobody understands anything better than you, obviously. So when somebody disagrees with your position on an issue, you can just essentially call them stupid, because obviously they are!
> 
> Here's the bottom line: Nobody is robbing me silly, but thanks for checking.  I have even less interest in robbing somebody else. Again, if I want to buy a TV using nothing but fictional debits and credits, it is really absolutely none of your business.


Actually, it kind of is my business.  The Constitution makes it my business.  Your buying $#@! with fictional money that is pulled out of the ass of a banker makes everything I buy more expensive, and denies me the ability to compete without borrowing this fictional ass money as well.

----------


## heavenlyboy34

> And THAT, boys and girls, is why libertarians don't win elections with their smug know-it-all platforms.  Nobody understands anything better than you, obviously. So when somebody disagrees with your position on an issue, you can just essentially call them stupid, because obviously they are!
> 
> Here's the bottom line: Nobody is robbing me silly, but thanks for checking.  I have even less interest in robbing somebody else. Again, if I want to buy a TV using nothing but fictional debits and credits, it is really absolutely none of your business.


No-the reason libertarians don't win elections is because of election laws that effectively kill any 3rd party's chance of winning.  (FYI, there are plenty of elected libertarians-just mostly in smaller local offices)  BTW, you know RP is a lifetime member of the LP and a libertarian himself, yes?

----------


## heavenlyboy34

> I can't figure out how it is fraud.  I buy a TV, and tell the credit card I will send them $50 fiat dollars every month until it paid off.  They give $3,000 fiat dollars to the store that sold me the TV. 
> 
> This is how the economy expands in our monetary system. Just because some people don't think the monetary system is sustainable does not mean the system is fraudulent.


If you just mean consumer credit, you're right.  This is a useful thing.  (Irwin Schiff has written what you wrote, only with more elaboration) The system as it is though, is too socialized to be good.

----------


## Jeez

Like it or not our credit system is not new idea and it has been around since money come into existence and is what contributed to growth of world economy. 

What we should take away from credit bubble is that the penalty for defaulting is not severe enough, if people had lot more to loss than bunch of pts in credit score they would thought twice before signing on the dotted lines.

----------


## Mike4Freedom

This is my take on all of this. If I choose to enter into an agreement using credit, I understand that I am receiving counterfit money. When I do this I am lowering the value of the dollar by buying something with money that does not exist. 

I have a few choices here. I can decide to not use the credit and save up the money do purchase what I want and save up faster then the rate of inflation or I can use credit and have it now. With smaller purchases such as furniture or electronics its not that big of a deal. With things such as real estate getting inflated it makes it next to impossible to save up for a house. Small rental properties yes but a house that is 100K+ no.

Another problem is people who use credit that don't know how this system works. The contract they enter says nothing about the fiat currency so therefore the contract is null and void.

People have gotten thier debt taken away from this very problem. I dont know how they do it but it has been done. Soemthing about how the credit card companies cannot show the loss on their balance sheet makes the debt null.

I myself only use credit for mortgages and auto loans or buying something with a CC and paying the balance off in full that month for reward points.   

Will they change this system anytime soon? No. What I would do is this; Use your CC and pay the balance off in full, and then just use the reward points for something. That way to the CC company you are a liability and if enough people do this eventually they will end reward programs and less people will be enticed to use Credit.

----------


## roho76

> What's the difference between me going into best buy and stealing an hdtv, and me charging it to a credit card that I plan on just defaulting on? The only difference is the party that is being victimized. Just because you happen to not like one party doesn't mean it's not theft.


The HDTV existed before you stole it.

I have a hard time with this. Deception is at the core here and it's not you deceiving the bank it's the other way around. Do you really owe anybody anything after they have deceived you?

What if an retail seller of gold bullion was selling you bars of gold on credit with titanium for a core would you continue to make the payments?

Not paying them back for something they never had in the first place. Sorry for not crying.

----------


## Rancher

> I like life so much better when we agree.  
> 
> It doesn't matter if it's money or credits or chickens or pebbles.  When you take the TV out of the store, you agreed to pay the bank back in dollars.  
> 
> Whether or not the bank had the money, or whether the money is real money, to give to the vendor isn't and never was your concern in this transaction.


This is naive.  Your TV, or whatever, is only worth a fraction of what you paid.  The dollar has lost 98% of its value since 1913.  If you were borrowing money (like from your parents, friend or uncle) then that is real money and should be paid as agreed.  But borrowing from someone who represents that they are lending you real money when, in fact, they are creating money out of thin air with the blessing of a central bank is fraud and that's very different.  

Imagine that last night while you were sleeping the magic central banking genie came by and gifted you with the ability to counterfeit money without fear of imprisonment.  Now it is very easy for you to "loan" money to someone who would like to better their life.  You profit immensely while the borrower has to pay 98x as much for the goods because of the fraud.  That is what is happening.  That is also why Ben Bernanke told the Senate Banking committee last Wednesday, July 21, 2010 that "the economic outlook looks unusually uncertain."  The fraudulent fiat system is about to fail.  I am hoping to let debtors know that they are victims of fraud, and that if they cannot pay their debts as agreed...  relax. They are not worthless human beings and jumping from a high rise window is not necessary.



> Right, but take it as a given for a moment that you DO think it's a fradulent/invalid contract on its face.  Why would you enter into it?  People are still justifying things, saying the contract is invalid, because they don't like the other party.  Why would they enter into agreements with people/organizations/companies they dislike?


Because they did not know they had entered into a fraudulent contract prior to signing!  

Here is what is going on... 


YouTube - Indymac Boys Get Sweetheart Deal

----------


## Danke

It's not even a "contract."

It is a one sided _agreement_ with only one signature on it, yours.  It is _your_ agreement.  You are the creator. So modify it.

Read the Federal Reserve publications such as Two Faces of Debt and Modern Money Mechanics.

Also see:

Money Matrix

----------


## WaltM

> It's not even a "contract."
> 
> It is a one sided _agreement_ with only one signature on it, yours.  It is _your_ agreement.  You are the creator. So modify it.


what's the difference between a contract and an agreement?

Is a contract a kind of agreement? And regardless of what you call it, is it a valid, enforceable agreement?

Is it of any value if you sign it? If not, what is?

----------


## Paleo

> The HDTV existed before you stole it.
> Not paying them back for something they never had in the first place. Sorry for not crying.


This.

What the pro banksters (cant believe they are actually here) fail to realize is that the only reason that this fraudulent system exists is because Government allows it to exist.  No government means no fiat currency, means no inflation, means no interest payments on nothing.  People would be forced to trade value for value.  How is a system that requires people to trade value (promise to repay in work) for NOTHING even remotely moral?  That isnt even a contract.  For a contract to exist, there must be a value for value trade.  Putting the bankster in the middle destroys the contract, unless of course, the bankster is fronting real assets, but of course, we know that he is not.

----------


## WaltM

> The HDTV existed before you stole it.
> 
> I have a hard time with this. Deception is at the core here and it's not you deceiving the bank it's the other way around. Do you really owe anybody anything after they have deceived you?


Ignorance is your excuse? You just say "screw you" after you "felt like you've been decieved"?





> What if an retail seller of gold bullion was selling you bars of gold on credit with titanium for a core would you continue to make the payments?


That's actually an example of fraud, however, defaulting on debt is not the same thing. 





> Not paying them back for something they never had in the first place. Sorry for not crying.


They had it for all purposes that involved you, if you don't recognize that, you shouldn't enter an agreement.

----------


## WaltM

> This.
> 
> What the pro banksters (cant believe they are actually here) fail to realize is that the only reason that this fraudulent system exists is because Government allows it to exist.


Wrong, too many people benefit from it to not allow it.

You are free to live outside the banking matrix if you hate it so much, but don't play it, break rules, then cry foul. 





> No government means no fiat currency, means no inflation, means no interest payments on nothing.  People would be forced to trade value for value.


You live in fantasyland. 

What country does this? 

If none, why don't you start one, or why do you think it'll work?

If it once worked, why did it stop working?





> How is a system that requires people to trade value (promise to repay in work) for NOTHING even remotely moral?


They didn't get nothing.

They got something they agreed to, you seem to think that a raw deal isn't a deal.





> That isnt even a contract.  For a contract to exist, there must be a value for value trade.


Which is subjective.

If you value air, I can't say air is nothing.





> Putting the bankster in the middle destroys the contract, unless of course, the bankster is fronting real assets, but of course, we know that he is not.


if a bankster fronts no assets, no banks would fail, or close, banks too have limits to capital, not in a way you'd like to see it though.

either way, banks have assets, you just don't demand it. Banks front assets too, it's what you agreed to, fi you don't, it's not your contract. don't sign it then say otherwise.

----------


## WaltM

> Is it because some on the board like the idea of getting something for nothing, but to say it outright would sound too Obama~esque, so they cloak it under "sticking it to the man"?  It's sure what it sounds like 
> 
> .


that's exactly what it is, the idea that "the man" owes you something and everything is justified from there and on.

the same people who don't respect copyright, and logically cannot expect waitresses to be tipped (but I bet you they have no balls to stiff a waitress on the basis of "there is no law")

----------


## libertarian4321

> Nope.  It is not money.


It was bad enough when we were called "tin foil hatters" because some of us were into some "out there" conspiracy theories.

But now many of you sound like a bunch of liars, cheats and thieves trying to avoid responsibility.

What happened to all the decent people that once populated these forums- people who wanted to elect a good man to the Presidency?  It seems most of those left are either scam artists or conspiracy theorists (or both).

When you borrow money, you pay it back - and all the crap about "it's not money" is just a pathetic justification for irresponsible behavior- you know it, I know it, and everyone else knows it.  You sound like little kids who get caught stealing cookies then make up some outlandish justification for their bad behavior.

Grow up, folks.  If you want to be taken seriously, you're going to have to start acting like responsible adults, not a bunch of jackasses trying to "get over."

----------


## Carson

> It was bad enough when we were called "tin foil hatters" because some of us were into some "out there" conspiracy theories.
> 
> But now many of you sound like a bunch of liars, cheats and thieves trying to avoid responsibility.
> 
> What happened to all the decent people that once populated these forums- people who wanted to elect a good man to the Presidency?  It seems most of those left are either scam artists or conspiracy theorists (or both).
> 
> When you borrow money, you pay it back - and all the crap about "it's not money" is just a pathetic justification for irresponsible behavior- you know it, I know it, and everyone else knows it.  You sound like little kids who get caught stealing cookies then make up some outlandish justification for their bad behavior.
> 
> Grow up, folks.  If you want to be taken seriously, you're going to have to start acting like responsible adults, not a bunch of jackasses trying to "get over."



You make a valid point. So also do the others.

People are waking up to the way they have been scammed over their lifetimes in regards to the futility of trying to bank on the Federal Reserve Note.

Forty years ago you might receive real silver money in an exchange. Now it is fake paper being printed up to back stealth socialism among other things. 

When I started working, minimum wage was about $1.80. Over the years I received raises and thought I was really getting somewhere. Now I stand back and look at the way I've been taken. It would take over $20.00 an hour to equal the same starting pay we used to get. 



Many have thought putting your savings for retirement into stocks was the way to get ahead. Did we?



Once you account for inflation did you really make a capital gain? A lot of the gains were imaginary but the taxes on them are very real.



A couple of more things are also clear.

No matter where your Aunt Martha hides the cookie jar with her savings in it there a those that can, not only find it, but reach right in an suck the life out of it like vampires on spring break.

No matter how much real money you and your neighbors might gather together to build your country the way you want there are those that can fire up the fake money presses and print enough to get their way.

----------


## MelissaWV

> ...
> 
> Because they did not know they had entered into a fraudulent contract prior to signing!  
> ...


Reread the thread, and notice that several people on these forums are fully aware it's fraud, and saying it's cool (or even a good idea/duty) to enter into what they describe as fraudulent contracts.

----------


## MelissaWV

> This.
> 
> What the pro banksters (cant believe they are actually here) fail to realize is that the only reason that this fraudulent system exists is because Government allows it to exist.  No government means no fiat currency, means no inflation, means no interest payments on nothing.  People would be forced to trade value for value.  How is a system that requires people to trade value (promise to repay in work) for NOTHING even remotely moral?  That isnt even a contract.  For a contract to exist, there must be a value for value trade.  Putting the bankster in the middle destroys the contract, unless of course, the bankster is fronting real assets, but of course, we know that he is not.


I love how you call me pro-bank even after I posted about just that very label.  It goes to show you're not reading things, or are deliberately twisting them.

Let me simplify it even further:

Me no like bank.  Bank mean to me.  Me no be part of it.  Me still have place to live, food to eat, job, computer, and other things.  Me no need credit card.  Me no need loan.  

You don't have to be pro-bank.  You just avoid entering into those bad contracts, agreements, or whatever you want to call them in the first place.  You're not trading for "nothing," by the way, since you would not incur very much credit card debt if you never actually bought anything.  You are trading for the "power to pay with" a certain level of digital dollars.  In fact, if you write one of those checks the credit card company sends you, you can even hold the dollars in your hands before you go buy that television.  You then have a television.  

It depreciates almost immediately, to the point that selling it once you've taken it out of the box will net you nothing near what you paid for it.  The same thing happens with most big ticket items.  Of course, if you buy last year's model, it's less expensive.  If you buy a 5-year-old television, it's far less expensive.  If you don't buy a television at all, you don't spend any money on it.

If you think this is all a bad deal, then don't nab the purchasing power, and don't buy the "things" you can get with it, and then you have nothing to pay back.  How that is pro-bank, I don't understand, but good luck with that line of logic.

Do what you'd like, but excusing what is 100% obviously dishonest behavior (I get a television and you get nothing, company, because you're mean!) doesn't make it any less dishonest of you.

----------


## Danke

> But now many of you sound like a bunch of liars, cheats and thieves trying to avoid responsibility.
> 
> What happened to all the decent people that once populated these forums- people who wanted to elect a good man to the Presidency?


  Says the Obama supporter.

----------


## Working Poor

Money stopped making sence to me a long time ago as soon as I realized most of it was debt. I have tried to keep up with the numbers but they change so fast now I can't keep up with them. I knew this before I knew about Ron Paul. I know if someone like me cannot earn enough money to live on something is gone a astray I am not lazy or incapaible my beat has been turned off.

 I have few desires but that does not mean I am not willing to work. I like to work and will do it for low wage. I could careless about fashoin and fancy cars or other "look at me stuff". I used to pay cash for everything. I do and have had to ask for assistance for the past several years mostly my family and freinds help me. I hate having to ask anyone for help. I wish I could just work and make my enough money to live on. The cost of creature comforts have doubled in less than five years folks.

I know a few people who are over extended because of credit card debt they are stressed due to under employment. I tried to talk one friend into closing the CC accounts several years ago before this mess. She is having a very difficult time trying to pay these accounts. I wish she had believed me when I told her there would be a crash and her job could disappear. It does seem that since all the banks and wall street have been forgiven that the debt of the people needs to be forgiven.

----------


## Travlyr

> It was bad enough when we were called "tin foil hatters" because some of us were into some "out there" conspiracy theories.
> 
> But now many of you sound like a bunch of liars, cheats and thieves trying to avoid responsibility.
> 
> What happened to all the decent people that once populated these forums- people who wanted to elect a good man to the Presidency?  It seems most of those left are either scam artists or conspiracy theorists (or both).
> 
> When you borrow money, you pay it back - and all the crap about "it's not money" is just a pathetic justification for irresponsible behavior- you know it, I know it, and everyone else knows it.  You sound like little kids who get caught stealing cookies then make up some outlandish justification for their bad behavior.
> 
> Grow up, folks.  If you want to be taken seriously, you're going to have to start acting like responsible adults, not a bunch of jackasses trying to "get over."


Sounds like you've done just fine financially in life and don't care that the young people are stuck with the bill.  Some learning, understanding and compassion is in order.
Those conspiracy theorists and scam artists to which you refer have simply learned the truth.  Something that, so far, you refuse to do.
The fiat money system is a destructive fraudulent redistribution killing machine enriching the powerful at the expense of the taxpayer.  The evidence is clear.

The under 40 taxpayer has been taken as fools... they're not.

----------


## amy31416

What's more moral?

1. To attempt to destroy a system that is immoral, deadly, fraudulent and destructive by breaking a contract.

2. To maintain the contract when you know the above.

I can't condemn people who make either one of the choices, both make sense depending on perspective. I would, however, be suspicious of those who make choice #1, as it may only be justification for more personal material gain--and I can't say that of people who choose #2. For those who choose option 2, I may question your backbone for continuing to contribute to a corrupt system.

----------


## MelissaWV

> What's more moral?
> 
> 1. To attempt to destroy a system that is immoral, deadly, fraudulent and destructive by breaking a contract.
> 
> 2. To maintain the contract when you know the above.
> 
> I can't condemn people who make either one of the choices, both make sense depending on perspective. I would, however, be suspicious of those who make choice #1, as it may only be justification for more personal material gain--and I can't say that of people who choose #2. For those who choose option 2, I may question your backbone for continuing to contribute to a corrupt system.


Neither, on their face.  Both would require participation in the immoral, deadly, fraudulent, and destructive system.  You contribute merely by entering into the contract, whether you think you're destroying the system (and getting a bunch of free stuff, too!!!) by defaulting, or you're keeping your word by paying it back.  From my perspective, the second option is more moral, because keeping your word is important.  You gave your word, and that's on you; now keep it, or be dishonorable.  It's up to you.

If you're already stuck, pay it off, cut up the card (or keep it with a $0 balance if you feel you're going to need the credit score for a house or something later... and enter back into the aforementioned system again), and move forward.  

Selectively keeping your word based on the merits of the individual to whom you gave your word merely makes your word worth just as much as those FRNs are going to be worth in the future.

There are options other than the two presented, as crazy as that sounds.

----------


## 2young2vote

Well, Credit Cards are bad in my eyes.  The interest rates are so high that i just can not justify spending the money PLUS 18% of what i spent when i can just pay cash and not have any interest at all.  When a credit card is the easiest way of spending money (for school) i have my parents pay using their credit card and i will pay them cash back.  They then get tax benefits for paying my tuition, even though they didn't.

----------


## roho76

> Reread the thread, and notice that several people on these forums are fully aware it's fraud, and saying it's cool (or even a good idea/duty) to enter into what they describe as fraudulent contracts.



I signed up for debt before I knew what was going on. Don't get me wrong, I still pay my bills, but I can see why people would be so pissed off they stop paying their bills. I luckily didn't get in way over my head. I had a couple of cards that totaled about $2000 and I did a short sale on my house which was an agreement I made with the bank. Outside of my car note I am debt free and plan on staying that way which is how I was before trying to buy a house. 

The fact of the matter is they don't tell you on the back of a credit card application that you are being defrauded and that they are committing fraud on the world at large. It doesn't say that the money doesn't exist until you sign the paper. People assume they are getting the money from the vault which is being used from someones interest bearing account to make the loan. This is the equivalent of writing bad checks in my opinion. If I go to the bank and give them a bad check why can't I use your excuse to say well they excepted a piece of paper that was the agreement. I don't recall seeing "only redeem for Federal Reserve notes" on the front of a check. So I'll go home and print up some Eric money and give it to them. When you take out a loan for $10,000 dollars they do not tell you that you have to take out a loan for that much to buy something that used to cost $100 but because of their money manipulation the cost has gone through the roof. If they did that nobody would take out loans. It's called honesty in lending and they have none. Go into a bank some time and start talking to their customers about fractional reserve banking. If your lucky they'll ask you to leave. Most likely they'll call the thugs on you.

I can't believe people here are sticking up for central banks/credit scams. They have never given a $#@! about you or our country or it's well being but we're supposed to be the upstanding individuals and continue to take part in their scam? My goodness where has this forum gone. It is impossible to pay off the debt. That's the point. That's how they have it set up. This is not an agreement this is enslavement under the guise of credit/banking or what ever you want to call it.

----------


## amy31416

> If you're already stuck, pay it off, cut up the card (or keep it with a $0 balance if you feel you're going to need the credit score for a house or something later... and enter back into the aforementioned system again), and move forward.  
> 
> Selectively keeping your word based on the merits of the individual to whom you gave your word merely makes your word worth just as much as those FRNs are going to be worth in the future.
> 
> There are options other than the two presented, as crazy as that sounds.


You missed my point by assuming that everyone always knows exactly what they're getting into. Once you find out what you'd gotten yourself into, there is not any definite moral position to take. "Keeping your word" if you find out after the fact that you were fooled into entering a contract and now know that you're participating in something immoral, is not necessarily the higher ground to take.

And before you condemn all the stupid "little people" who don't have law degrees (which it takes to interpret plenty of basic credit card contracts), you might want to contemplate how many people have gotten a divorce after saying "til death do us part." 

Yeah. Everyone who's divorced is a worthless scumbag after finding out what their former spouse was really made of? $#@!s should have stayed married, right? They gave their word, it's a contract, dammit.

Might want to reconsider blind allegiance to a contract.

----------


## MelissaWV

> I signed up for debt before I knew what was going on.  
> Don't get me wrong, I still pay my bills, but I can see why people would be so pissed off they stop paying their bills. I luckily didn't get in way over my head. I had a couple of cards that totaled about $2000 and I did a short sale on my house which was an agreement I made with the bank. Outside of my car note I am debt free and plan on staying that way which is how I was before trying to buy a house. 
> 
> The fact of the matter is they don't tell you on the back of a credit card application that you are being defrauded and that they are committing fraud on the world at large. It doesn't say that the money doesn't exist until you sign the paper. People assume they are getting the money from the vault which is being used from someones interest bearing account to make the loan. This is the equivalent of writing bad checks in my opinion. If I go to the bank and give them a bad check why can't I use your excuse to say well they excepted a piece of paper that was the agreement. I don't recall seeing "only redeem for Federal Reserve notes" on the front of a check. So I'll go home and print up some Eric money and give it to them. When you take out a loan for $10,000 dollars they do not tell you that you have to take out a loan for that much to buy something that used to cost $100 but because of their money manipulation the cost has gone through the roof. If they did that nobody would take out loans. It's called honesty in lending and they have none. Go into a bank some time and start talking to their customers about fractional reserve banking. If your lucky they'll ask you to leave. Most likely they'll call the thugs on you.
> 
> I can't believe people here are sticking up for central banks/credit scams. They have never given a $#@! about you or our country or it's well being but we're supposed to be the upstanding individuals and continue to take part in their scam? My goodness where has this forum gone. It is impossible to pay off the debt. That's the point. That's how they have it set up. This is not an agreement this is enslavement under the guise of credit/banking or what ever you want to call it.


If it's impossible, how'd you do it?  Oh wait, you explained that... and it wasn't impossible.  Why, precisely, do you pay your bills?  It's a scam, you said; why participate?  What do you use to pay your bills?   

Anyhow, with your first sentence you already moved away from most of what I was talking about, which is those people who express all of this disdain and hatred for the banks... and then go get a loan/credit card anyhow... and then default to "stick it to the man."  Yes, it's gloriously moral to go back on your word, and you get free stuff for doing it!  All purely based on the fact you don't like the person on the other end of the contract!  

No, kids, that doesn't work that way.  I'm sorry that people are stupid.  If the contract changes out from under you, that's an entirely different story.  Of course, in order for the contract to change out from under you without warning, there generally has to be a clause along those lines in the initial paperwork you sign.  "Terms and conditions may change without notice at the discretion of..." and so on.  I used to send out term change letters to people when it came to their loans.  People get a bunch of little fliers in the mail before "major changes" to their accounts.  I have a checking account that, for the past several months, has bombarded me with requests to add overdraft protection because it won't be automatic anymore at some date in the future.  If I don't specifically request it, I won't have it.  I'm not going to request it.  When this change goes into effect, do you think everyone will be satisfied that they received notice?  Nope.  Some people will get their transactions rejected and cry out that they were never told of the changes.

People are so in over their heads in debt that they don't have the option of closing the account or moving it anymore, and when the rates go up they end up defaulting.  Whose fault, precisely, is it that the person bought all that stuff that upped the balance?

On the one hand, one can argue people aren't informed and have no idea how it all works.  People are idiots.  I get that argument.

On the other hand, you have people on these boards who know precisely what they're doing, and are only in it to get as much free stuff as possible before the card cuts them off.  What do you call that?

----------


## Danke

> You missed my point by assuming that everyone always knows exactly what they're getting into. Once you find out what you'd gotten yourself into, there is not any definite moral position to take. "Keeping your word" if you find out after the fact that you were fooled into entering a contract and now know that you're participating in something immoral, is not necessarily the higher ground to take.
> 
> And before you condemn all the stupid "little people" who don't have law degrees (which it takes to interpret plenty of basic credit card contracts), you might want to contemplate how many people have gotten a divorce after saying "til death do us part." 
> 
> Yeah. Everyone who's divorced is a worthless scumbag after finding out what their former spouse was really made of? $#@!s should have stayed married, right? They gave their word, it's a contract, dammit.
> 
> Might want to reconsider blind allegiance to a contract.


Like those soldiers who later become conscientious objectors!   Damn it private, fulfill your contract and kill me some more Iraqis (er, I mean Terrists).

----------


## MelissaWV

> You missed my point by assuming that everyone always knows exactly what they're getting into. Once you find out what you'd gotten yourself into, there is not any definite moral position to take. "Keeping your word" if you find out after the fact that you were fooled into entering a contract and now know that you're participating in something immoral, is not necessarily the higher ground to take.
> 
> And before you condemn all the stupid "little people" who don't have law degrees (which it takes to interpret plenty of basic credit card contracts), you might want to contemplate how many people have gotten a divorce after saying "til death do us part." 
> 
> Yeah. Everyone who's divorced is a worthless scumbag after finding out what their former spouse was really made of? $#@!s should have stayed married, right? They gave their word, it's a contract, dammit.
> 
> Might want to reconsider blind allegiance to a contract.


I didn't say "til death do us part" because I don't believe in getting into contracts like that, either.  

I am not talking about "forcing" people to remain in a contract, but if you're going to break your word, then be honest about that.  Many in this thread are basically saying "I gave my word, but since the other side's not nice, it doesn't matter."  Those same people are coming up with grand excuses, such as that it's not really money, or that they're breaking down the system, or whatever else.  

If you don't understand an agreement, why would you sign it?  Stupid, naive, whatever; that's fine.  Those in this thread saying they get it, but would do it anyhow, and that's the banks' fault... petty, lying, cheating children.  I would not put it past them to do the same in personal loans or anything else along those lines.  Untrustworthy.

----------


## MelissaWV

> Like those soldiers who later become conscientious objectors!   Damn it private, fulfill your contract and kill me some more Iraqis (er, I mean Terrists).


They should return their scholarship money in full.  A lot of those objectors had no trouble accepting money for schooling, housing, and other things.  It's once they realize they might have to shoot on command in a "conflict" that they balk.  Isn't that interesting timing?  "I didn't know I'd have to shoot people when I joined the military."  

But, as I just said to Amy, I'm not talking about forcing someone to fulfill a contract.  Deserters are not generally thought of in a good light by most people, especially when they took the money up front for a job they then objected to in the end.  It smacks of dishonesty.  It's not like they joined up with something called the "Peace Corps" and were shocked to find they'd have to shoot people.  No, they joined the military.  They were trained with guns and knives and hand-to-hand... that might be a hint you might have to harm someone at some point.  

This entire thread seems utterly devoted to saying "people are too dumb to read, so they shouldn't have to abide by what's in a contract, especially if they don't like the person they made the contract with."  No wonder no one takes you at your word these days; it's worthless currency.

Curse the invention of the asterisk.

----------


## Travlyr

> I am not talking about "forcing" people to remain in a contract, but if you're going to break your word, then be honest about that.  Many in this thread are basically saying "I gave my word, but since the other side's not nice, it doesn't matter."  Those same people are coming up with grand excuses, such as that it's not really money, or that they're breaking down the system, or whatever else.  
> 
> *If you don't understand an agreement, why would you sign it?*  Stupid, naive, whatever; that's fine.  Those in this thread saying they get it, but would do it anyhow, and that's the banks' fault... petty, lying, cheating children.  I would not put it past them to do the same in personal loans or anything else along those lines.  Untrustworthy.


Melissa, you must be fairly young.  The information wasn't published for most borrowers to find until very recently.  The bankers defrauded the borrowers by not disclosing the facts.

----------


## amy31416

> I didn't say "til death do us part" because I don't believe in getting into contracts like that, either.  
> 
> I am not talking about "forcing" people to remain in a contract, but if you're going to break your word, then be honest about that.  Many in this thread are basically saying "I gave my word, but since the other side's not nice, it doesn't matter."  Those same people are coming up with grand excuses, such as that it's not really money, or that they're breaking down the system, or whatever else.  
> 
> If you don't understand an agreement, why would you sign it?  Stupid, naive, whatever; that's fine.  Those in this thread saying they get it, but would do it anyhow, and that's the banks' fault... petty, lying, cheating children.  I would not put it past them to do the same in personal loans or anything else along those lines.  Untrustworthy.


You are talking about condemning people for remaining in a contract once they figure out/receive new information, not just those who knowingly do so. Don't water it down by saying that the other side is "not nice," they're murderers, thieves and liars. But I do agree that saying "it's not really money" is just a ridiculous justification.

You've never entered into an agreement where you didn't have 100% of the information? I find that really hard to believe, and if you really think that, I'd call your ability to analyze your self into question. Even the most brilliant of us are stupid and naive about plenty of things.

So when you got married, both parties intended for it to be temporary? Very progressive...

----------


## Jordan

> And before you condemn all the stupid "little people" who don't have law degrees (which it takes to interpret plenty of basic credit card contracts), you might want to contemplate how many people have gotten a divorce after saying "til death do us part."


Annual Percentage Rate -  How much interest you'll be charged per year on your balances.

Daily Average Balance - The average daily balance you keep on your credit card which is charged at a rate of the APR/365

Minimum Finance Charge - A minimum fee of usually $1 designed to cover the cost of billing/mailing statements.  

Grace Period - The amount of time after a billing cycle before your payment is due.

Annual Fee - The annual cost of having a credit card.  This annual cost is charged to the account upon signup, and every 12 months after that.

Penalty APR - The rate you pay if you miss a payment, or are late/delinquent on your account.

-----

Credit cards aren't rocket science, and you definitely don't need to be a lawyer to understand the contract.  I've got one right here, a solicitation for a card, that is a legal sheet long and includes all the above keyterms and solicitation disclosures.  

I'm 20 years old, don't have a college degree, and all of this makes perfect sense.  If you can't make sense of it, it might be best not to put your name on it.  That much everyone should know.

----------


## Paleo

> I love how you call me pro-bank even after I posted about just that very label.  It goes to show you're not reading things, or are deliberately twisting them.
> 
> Let me simplify it even further:
> 
> Me no like bank.  Bank mean to me.  Me no be part of it.  Me still have place to live, food to eat, job, computer, and other things.  Me no need credit card.  Me no need loan.  
> 
> You don't have to be pro-bank.  You just avoid entering into those bad contracts, agreements, or whatever you want to call them in the first place.  You're not trading for "nothing," by the way, since you would not incur very much credit card debt if you never actually bought anything.  You are trading for the "power to pay with" a certain level of digital dollars.  In fact, if you write one of those checks the credit card company sends you, you can even hold the dollars in your hands before you go buy that television.  You then have a television.  
> 
> It depreciates almost immediately, to the point that selling it once you've taken it out of the box will net you nothing near what you paid for it.  The same thing happens with most big ticket items.  Of course, if you buy last year's model, it's less expensive.  If you buy a 5-year-old television, it's far less expensive.  If you don't buy a television at all, you don't spend any money on it.
> ...


Again, you are missing the point.  It isnt even realistically possible to avoid the system and purchase the fundamental necessities of life.  I would agree with you that it would be immoral to enter an immoral system and then renege on your committments IF THERE WAS ANY MEANINGFUL ALTERNATIVE.

But the truth is that there ISNT any meaningful alternative.  Want to buy a house?  okay, start saving (btw, with the exact same currency the system devalues every year)... The average income is 30k a year.  Lets say you can live super frugally and save 20% of that income, after you overcome the price inflation on the consumer goods that you are supposed to buy, your rent, and your taxes which get transferred to the same banksters that run the system to pay for the public debt.  So you save 6k a year.  You can then afford to buy a 100k home in, oh, 15 years... but wait, during that same period the banksters have been busy stealing the value of the dollar youve been saving (while paying you a whopping 1% interest) and now the 100k home is worth 200k...  Half the value of your savings has been stolen from you...  

This works for medical care, for education, for vehicles, for hell, you name it... 

The entire system is rigged against you, but the only way to get the things that are necessary for modern life is to play the game.  I have ZERO problems with those playing the game when they have no meaningful choice, and then using legal means to clear the field in the event that it doesnt work out...  Rand would say the same thing.

You are suggesting what, that people only work for gold and silver?  That they rent forever (which is essentially the same problem), that they dont get educated or get medical care?  Maybe they should just build a hut out of their own boogers and squat on public land like bigfoot..

The banking system as it stands today is the monetary equivalent of the land purges of the 17th and 18th century Europe.  Because all available land was owned by the aristocracy, the commoners had no choice but to engage in the contracts they were offered in order to survive (though some here would posit that the commoners should have gone and built islands in the middle of the ocean out of their own feces), and once that system was in place, and it became more profitable to push the commoners off of the land, and force them to work in factories, or starve, that is what they had to do.  Who in that circumstance would fault the european commoners from using ANY legal means at their disposal to resist such efforts, when an elite class is allowed to wage economic warfare againt them?  To say anything to the contrary is simply ridiculous.

----------


## amy31416

> They should return their scholarship money in full.  A lot of those objectors had no trouble accepting money for schooling, housing, and other things.  It's once they realize they might have to shoot on command in a "conflict" that they balk.  Isn't that interesting timing?  "I didn't know I'd have to shoot people when I joined the military."


No room to forgive the uneducated, GED-toting, inner-city person who doesn't know anything about anything--often by design? Why would they return any money and further empower the machine that used them as a cog?




> But, as I just said to Amy, I'm not talking about forcing someone to fulfill a contract.  Deserters are not generally thought of in a good light by most people, especially when they took the money up front for a job they then objected to in the end.  It smacks of dishonesty.  It's not like they joined up with something called the "Peace Corps" and were shocked to find they'd have to shoot people.  No, they joined the military.  They were trained with guns and knives and hand-to-hand... that might be a hint you might have to harm someone at some point.


Yes. You are trained in combat. But you weren't aware that it was sold as "protecting our freedoms" and all sorts of other bull$#@!? You think this person who woke up should now feel obligated to sustain the system that used them?




> This entire thread seems utterly devoted to saying "people are too dumb to read, so they shouldn't have to abide by what's in a contract, especially if they don't like the person they made the contract with."  No wonder no one takes you at your word these days; it's worthless currency.


I volunteered at a public library. I've run into vets who could barely read, much less understand a legal contract. They aren't dumb, just pawns of the system, that doesn't make them bad people.

----------


## amy31416

> Annual Percentage Rate -  How much interest you'll be charged per year on your balances.
> 
> Daily Average Balance - The average daily balance you keep on your credit card which is charged at a rate of the APR/365
> 
> Minimum Finance Charge - A minimum fee of usually $1 designed to cover the cost of billing/mailing statements.  
> 
> Grace Period - The amount of time after a billing cycle before your payment is due.
> 
> Annual Fee - The annual cost of having a credit card.  This annual cost is charged to the account upon signup, and every 12 months after that.
> ...


That isn't what I'm talking about--I'm talking about the big picture of the US economy and how it's tied into our government's immoral actions. Know what I mean?

----------


## Jordan

You people might as well work in government, working to make accessible credit more difficult for the people who need it.  With the comments in this thread, it appears that most would approve of the new Credit Card Act.




> There's also a provision that specifically concerns young people: Under the new law, no one under age 21 can get a credit card unless a parent, guardian or spouse is willing to co-sign or unless the young adult has proof of sufficient income to cover the credit obligations.


Luckily due to the sufficient income clause I can still access the credit I need for my own business.  Otherwise I'd have to rely on my parents to co-sign to access cheap (0% for the first 12 months) interest rates I use to fulfill long dated contracts for my clients.  I need the credit, not my parents, why should they have to stake their financial reputation for my borrowing purchases?  I'm an adult, I can read, and I can fully understand 2 pages of disclosures.

There is absolutely no excuse for the financial illiteracy that runs rampant in these parts.

----------


## bobbyw24

http://www.ronpaulforums.com/showthr...29#post2820129

Another way the debt system screws Americans

----------


## MelissaWV

> ...
> 
> You've never entered into an agreement where you didn't have 100% of the information? I find that really hard to believe, and if you really think that, I'd call your ability to analyze your self into question. Even the most brilliant of us are stupid and naive about plenty of things.
> 
> So when you got married, both parties intended for it to be temporary? Very progressive...


If the contract is bound to change (as one between people for the term of "forever" is absolutely going to), I am not going to give my word.  When I give my word, I have the terms clearly spelled out, and I want it very explicitly stated that only those terms are being agreed to, and any deviation from those terms constitutes material change(s) which must be re-examined and agreed to (or rejected) by all parties involved.  

I don't sign contracts or agreements that say terms and conditions may change without notice.  

Let me put it a much, much simpler way.  If you were presented (or even if one of those naive people who have no idea how any of this works were presented) with a lease for an apartment that said your rent was $500/month, but that terms and conditions, including the minimum rental payment, could change without notice... would you sign that?  If your rent were $500/month, but the lease also said that additional fees, conditions, and obligations may be demanded from the renter without prior notice, and failure to pay these fees, meet these conditions, or fulfill these obligations within the grace period of five days, will be seen as a breach of lease that will lead to eviction procedures (all court costs to be paid by the renter)... if that were in there, would you sign it?  Would it shock you at all to find that, by the third or fourth month, you were really expected to pay $1000/month?  

This is worse.  You're taking the money up front, and you're saying "oh yeah, sure, I'll pay it back," and then you're simply not.  Reread the thread.  There are people who are saying it's fine to ENTER INTO THE AGREEMENT with that attitude.  If you're going to do that, don't be shocked when people consider you untrustworthy in the future.

----------


## bobbyw24

> There is absolutely no excuse for the financial illiteracy that runs rampant in these parts.


Ah but there is a reason--for generations no one taught this subject. Home economics and gym seemed more important

----------


## Travlyr

> Annual Percentage Rate -  How much interest you'll be charged per year on your balances.
> 
> Daily Average Balance - The average daily balance you keep on your credit card which is charged at a rate of the APR/365
> 
> Minimum Finance Charge - A minimum fee of usually $1 designed to cover the cost of billing/mailing statements.  
> 
> Grace Period - The amount of time after a billing cycle before your payment is due.
> 
> Annual Fee - The annual cost of having a credit card.  This annual cost is charged to the account upon signup, and every 12 months after that.
> ...


*Oh yeah... one more disclosure item:*
We create this money out of thin air because we are special and you're not.  You will be paying us 18 - 27% interest on this thin air because we have been granted authority by your masters.  And this set-up means that you will be paying about 100 times as much for your stuff as they would cost if we didn't have this scam going.  But that's too bad for you because we have been granted the authority to counterfeit money and you will go to jail if you try it.  If you cannot pay us back with interest and penalties then we will go to congress get bailout money and then take you to court and garnish your wages.  You are a bad person if you don't repay because you promised.  Even though our scam has caused a collapse in the economic system leaving you without employment opportunity and barely enough to eat... too bad for you... you gave your word.

----------


## MelissaWV

> *Oh yeah... one more disclosure item:*
> We create this money out of thin air because we are special and you're not.  *You will be paying us 18 - 27% interest* on this thin air because we have been granted authority by your masters.  And this set-up means that you will be paying about 100 times as much for your stuff as they would cost if we didn't have this scam going.  But that's too bad for you because we have been granted the authority to counterfeit money and you will go to jail if you try it.  If you cannot pay us back with interest and penalties then we will go to congress get bailout money and then take you to court and garnish your wages.  You are a bad person if you don't repay because you promised.  Even though our scam has caused a collapse in the economic system leaving you without employment opportunity and barely enough to eat... too bad for you... you gave your word.


And you would enter into this agreement... why?

It looks like a pretty straightforward contract.  Of course, half of that isn't in there, but the other half is.  There are resolution clauses (usually discussions about arbitration, which should be a big red flag to anyone with the internet or a working knowledge of the practice), there are interest rates, there are notification parameters, there are discussions of minimum payments, there are purchase requirements in order to get certain rewards, there are disclosures of annual fees (if any), and there are disclosures of whether or not your interest rate can magically change.

There are two distinct things being discussed when you talk about the general population and credit cards.

There are the rates and terms themselves, which could be deciphered via reading the paperwork (or not entering into a contract/agreement if you don't understand it).

There are the people who, even with ample notice, cannot get out of their credit cards because they charged WAY more than they can possibly pay back.

The people in this thread who are making excuses for themselves fall into a different category altogether, which is that they will knowingly enter into a contract they consider fraudulent (for any number of excuses) and not pay it back.  You can be snarky all you want about how that's not really breaking your word/promise/contract/agreement, but that's simply how I see it.  People love to get something for nothing, and if they can excuse it away, they will.  It's the same song and dance you'll get from people bleeding the welfare system dry, even if they never paid into it.  




> Even though our scam has caused a collapse in the economic system leaving you without employment opportunity and barely enough to eat...


If that's your situation, man that sucks.  You should consider a change in employment strategy, and probably start growing some of your own food... or cut out the middle man and help someone on a local farm in exchange for minimal produce.  I have plenty to do and plenty to eat, and no personal debt.  The national debt, which each of us winds up paying for, is a horse of a different color, and one for another thread.

For me, though, I'm out of this one.  You guys can go back and forth and make more excuses, and later on in other dicsussions you'll wonder why no one's word is ever good enough anymore.

----------


## Travlyr

> And you would enter into this agreement... why?


I wouldn't anymore. But before disclosure was required, most people thought that banks were loaning money... not creating it out of nothing.  I've only learned about that concept in the last couple of years.




> It looks like a pretty straightforward contract.  Of course, half of that isn't in there, but the other half is.  There are resolution clauses (usually discussions about arbitration, which should be a big red flag to anyone with the internet or a working knowledge of the practice), there are interest rates, there are notification parameters, there are discussions of minimum payments, there are purchase requirements in order to get certain rewards, there are disclosures of annual fees (if any), and there are disclosures of whether or not your interest rate can magically change.
> 
> There are two distinct things being discussed when you talk about the general population and credit cards.
> 
> There are the rates and terms themselves, which could be deciphered via reading the paperwork (or not entering into a contract/agreement if you don't understand it).
> 
> There are the people who, even with ample notice, cannot get out of their credit cards because they charged WAY more than they can possibly pay back.


But the disclosure still does not say, "WE ARE CREATING MONEY OUT OF NOTHING."  This is something that few people know and fewer understand.  It is undisclosed fraud.




> The people in this thread who are making excuses for themselves fall into a different category altogether, which is that they will knowingly enter into a contract they consider fraudulent (for any number of excuses) and not pay it back.  You can be snarky all you want about how that's not really breaking your word/promise/contract/agreement, but that's simply how I see it.  *People love to get something for nothing, and if they can excuse it away, they will.*  It's the same song and dance you'll get from people bleeding the welfare system dry, even if they never paid into it.  
> 
> /end.


This is exactly right.  It is also how the bankers justify their fiat system.  It is competition between banker and borrower.  Who gets to cheat who?

And it is breaking your promise... I agree.  However, if you agree to a contract and later find out that the other party is a thief that did not disclose the details... why should you feel worthless for not continuing to participate in the fraud?  You shouldn't, especially if the fraud has caused personal and worldwide economic destruction out of your control?

In a sound money system your principles are valid.

----------


## WaltM

> I love how you call me pro-bank even after I posted about just that very label.  It goes to show you're not reading things, or are deliberately twisting them.
> 
> Let me simplify it even further:
> *
> Me no like bank.  Bank mean to me.  Me no be part of it.  Me still have place to live, food to eat, job, computer, and other things.  Me no need credit card.  Me no need loan.  
> *
> You don't have to be pro-bank.  You just avoid entering into those bad contracts, agreements, or whatever you want to call them in the first place.  *You're not trading for "nothing," by the way, since you would not incur very much credit card debt if you never actually bought anything.*  You are trading for the "power to pay with" a certain level of digital dollars.  In fact, if you write one of those checks the credit card company sends you, you can even hold the dollars in your hands before you go buy that television.  You then have a television.  
> 
> It depreciates almost immediately, to the point that selling it once you've taken it out of the box will net you nothing near what you paid for it.  The same thing happens with most big ticket items.  Of course, if you buy last year's model, it's less expensive.  *If you buy a 5-year-old television, it's far less expensive.  If you don't buy a television at all, you don't spend any money on it.*
> ...


this

(hopefully the child gets it)

----------


## WaltM

> I wouldn't anymore. But before disclosure was required, most people thought that banks were loaning money... not creating it out of nothing.  I've only learned about that concept in the last couple of years.


*They WERE lending money, which they HAD (even if it was created out of nothing), the fact you agreed they can do it makes it valid.*

If you buy a house for Joe.

You ask the bank to lend you money.

Joe gets money from the bank (and accept it), it's real money to him.
You get your house in return (you accepted it), it's real money to you.

The bank DOES have assets, it's the piece of paper in which you agreed, if you can't pay up, the house is theirs, the piece of paper is all they need (legally) to protect their assets. 

They have no gold, car, land to exchange you in return, but you agreed you'll pay, not because they put up any collateral, but because they were the only people you could turn to in a loan. *The fact they made money out of thin air is NONE OF YOUR BUSINESS, you made it your business by joining the agreement (making you the co-frauder if you may).*

----------


## WaltM

> *Oh yeah... one more disclosure item:*
> We create this money out of thin air because we are special and you're not.




No they're not special, not too much.

You can work for a bank and be part of them if you wish.





> You will be paying us 18 - 27% interest on this thin air because we have been granted authority by your masters.


Not quite, you permit them ultimately.




> And this set-up means that you will be paying about 100 times as much for your stuff as they would cost if we didn't have this scam going.


Which also means you get a fatter paycheck, but you're a whiney consumer who thinks everybody owes you something and only complain when YOU pay more (not ever when you're PAID more).




> But that's too bad for you because we have been granted the authority to counterfeit money and you will go to jail if you try it.


Wrong, it's no counterfeit if it's legal.

Also, they can print all they want, if nobody uses it, it's as useless as toilet paper. 





> If you cannot pay us back with interest and penalties then we will go to congress get bailout money and then take you to court and garnish your wages.


Fair enough, but that's hardly the sole fault of the credit card companies.







> You are a bad person if you don't repay because you promised.


By your logic nobody's a bad person, because they can always argue they were scammed and mislead.




> Even though our scam has caused a collapse in the economic system leaving you without employment opportunity and barely enough to eat... too bad for you... you gave your word.


on the other hand, they have to pay somebody to enforce it, so it's becoming harder, but don't let them, or yes, too bad for you.

----------


## WaltM

> You've never entered into an agreement where you didn't have 100% of the information?


I might have, but I also don't assume, speculate, make up what I think is true.

(The only thing I assume in addition is, that if it's legal, it can't demand what's not written or not legal).






> I find that really hard to believe, and if you really think that, I'd call your ability to analyze your self into question. Even the most brilliant of us are stupid and naive about plenty of things.


and some of us don't blame other people when we too are at fault.





> So when you got married, both parties intended for it to be temporary? Very progressive...


both parties should know it's possible, but were not explicit about the intention.

----------


## WaltM

> Annual Percentage Rate -  How much interest you'll be charged per year on your balances.
> 
> Daily Average Balance - The average daily balance you keep on your credit card which is charged at a rate of the APR/365
> 
> Minimum Finance Charge - A minimum fee of usually $1 designed to cover the cost of billing/mailing statements.  
> 
> Grace Period - The amount of time after a billing cycle before your payment is due.
> 
> Annual Fee - The annual cost of having a credit card.  This annual cost is charged to the account upon signup, and every 12 months after that.
> ...


And if you think you do, DON'T DO IT, OR ASK AROUND FIRST.





> I've got one right here, a solicitation for a card, that is a legal sheet long and includes all the above keyterms and solicitation disclosures.


yep, your rights read to you.

though in today's word, if you were to go to court you probably have a peasant jury that'll sympathize with you. 




> I'm 20 years old, don't have a college degree, and all of this makes perfect sense.  If you can't make sense of it, it might be best not to put your name on it.  That much everyone should know.


you're an exceptionally smarter person (my opinion)

----------


## WaltM

> You missed my point by assuming that everyone always knows exactly what they're getting into. Once you find out what you'd gotten yourself into, there is not any definite moral position to take.


so does every crime and illegal action allow itself justified by "I didn't know that's what I did"?





> "Keeping your word" if you find out after the fact that you were fooled into entering a contract and now know that you're participating in something immoral, is not necessarily the higher ground to take.
> 
> And before you condemn all the stupid "little people" who don't have law degrees (which it takes to interpret plenty of basic credit card contracts), you might want to contemplate how many people have gotten a divorce after saying "til death do us part."


even divorce is quite consensual, and yes, some people take advantage of the financial benefits in a divorce.





> Yeah. Everyone who's divorced is a worthless scumbag after finding out what their former spouse was really made of? $#@!s should have stayed married, right? They gave their word, it's a contract, dammit.


No, only half of them. 

Divorce is always because there's ONE (at least) scumbag among the 2.





> Might want to reconsider blind allegiance to a contract.


did she say that?

----------


## amy31416

Contracts are not, nor have they ever been, sacred....even the "sacred" ones.

The other party has the right to sue over a broken contract. And I assume that the banks can sue and worse. What are we arguing here? What is honorable? That is for the individual to decide, then possibly a jury. No two cases are the same, there is no definite moral standard.

That's what I'm arguing. Melissa and Walt are arguing that there is a definite moral standard, which is just as much of an opinion as the opposing argument.

That's my opinion, for what it's worth.

----------


## amy31416

> so does every crime and illegal action allow itself justified by "I didn't know that's what I did"?


If you can prove that you were misled, a court may find in your favor.






> even divorce is quite consensual, and yes, some people take advantage of the financial benefits in a divorce.


Divorce is not always consensual.






> No, only half of them. 
> 
> Divorce is always because there's ONE (at least) scumbag among the 2.


_Always?_





> did she say that?


Implied.

----------


## Travlyr

> *They WERE lending money, which they HAD (even if it was created out of nothing), the fact you agreed they can do it makes it valid.*


You cannot agree to something for which you are not aware!  The fact that the bank hid that information from the borrower makes it void.




> If you buy a house for Joe.
> 
> You ask the bank to lend you money.
> 
> Joe gets money from the bank (and accept it), it's real money to him.
> You get your house in return (you accepted it), it's real money to you.
> 
> The bank DOES have assets, it's the piece of paper in which you agreed, if you can't pay up, the house is theirs, the piece of paper is all they need (legally) to protect their assets. 
> 
> They have no gold, car, land to exchange you in return, but you agreed you'll pay, not because they put up any collateral, but because they were the only people you could turn to in a loan. *The fact they made money out of thin air is NONE OF YOUR BUSINESS, you made it your business by joining the agreement (making you the co-frauder if you may).*


None of my business???  I'm a party to the agreement; they hid vital information.  If I knew that they were creating money out of thin air, then I would make my own money out of thin air!  I don't need them.  None of us need the modern day banker.  It's a scam.  The sooner we get to honest money, the sooner society can be honest.

----------


## Southron

Does our 'word' mean nothing anymore as long as we "get ours"?

----------


## Travlyr

> Does our 'word' mean nothing anymore as long as we "get ours"?


Oh no.  Don't misunderstand.  Without a doubt, *your word is the most valuable expression of your character!*   Always honor your promise when it's deserved!  
But allowing others to take advantage of you is not an honorable characteristic.  That concept is especially true when you know the deal is dishonest, and we now know that modern banking is dishonest.

An eye to eye confirming handshake is more valuable than your signature because both sides approach the deal with integrity.  If you are asked to sign a document without a corresponding signature from the other party, then you can be sure that the deal is dishonest and you'll lose.

----------


## angelatc

> This.
> 
> What the pro banksters (cant believe they are actually here) fail to realize is that the only reason that this fraudulent system exists is because Government allows it to exist.  No government means no fiat currency, means no inflation, means no interest payments on nothing.  People would be forced to trade value for value.  How is a system that requires people to trade value (promise to repay in work) for NOTHING even remotely moral?  That isnt even a contract.  For a contract to exist, there must be a value for value trade.  Putting the bankster in the middle destroys the contract, unless of course, the bankster is fronting real assets, but of course, we know that he is not.


Ok, you said it yourself - the government allows it to exist.  IIRC, Congress is charged with setting monetary policy. Part of that policy is allowing the banks to create money using a fractional reserve system. No real assets required, no fraud committed.

I work knowing I will get paid in fiat currency.  No fraud.  

(No government? Please - this is RonPaulForums, not AnarchyTodayForums.)

----------


## low preference guy

> Ok, you said it yourself - the government allows it to exist.  IIRC, Congress is charged with setting monetary policy. Part of that policy is allowing the banks to create money using a fractional reserve system. No real assets required, no fraud committed.
> 
> I work knowing I will get paid in fiat currency.  No fraud.  
> 
> (No government? Please - this is RonPaulForums, not AnarchyTodayForums.)


True. It's not fraud, it's coercion. They force you to not use money that can keep its value. If someone wants to trade in gold or an alternative currency, they tax the transaction and thus make the development of the alternative currency extremely difficult.

----------


## low preference guy

> Part of that policy is allowing the banks to create money using a fractional reserve system.


So what happened to "Only Gold and Silver Shall be Legal Tender"? That's in the Constitution, you know.

(I thought this was RonPaulForums, not CentralBankingApologistForums)

----------


## Travlyr

> True. It's not fraud, it's coercion. They force you to not use money that can keep its value. If someone wants to trade in gold or an alternative currency, they tax the transaction and thus make the development of the alternative currency extremely difficult.


It is bank fraud and government coercion.

----------


## angelatc

> This is naive.  Your TV, or whatever, is only worth a fraction of what you paid.  The dollar has lost 98% of its value since 1913.  If you were borrowing money (like from your parents, friend or uncle) then that is real money and should be paid as agreed.  But borrowing from someone who represents that they are lending you real money when, in fact, they are creating money out of thin air with the blessing of a central bank is fraud and that's very different.


Nobody is misrepresenting anything. I fully am aware of how fractional reserve lending works to expand the money supply as well as the economy.  I am also aware of how inflation works.  

Like it or not, fiat currency is indeed real money in America. I can take it to any store and trade it for anything they sell, provided I have enough of it. 

The central banks have the consent of the governed (through Congress) to create money using that same system.

I'd love to return to a sound money system, or at least a system of competing currencies, but this line of argument is never going to win anybody over.

----------


## low preference guy

> The central banks have the consent of the governed (through Congress) to create money using that same system.


The only problem with that is that Congress doesn't have the authority to create a Central Bank.

----------


## angelatc

> So what happened to "Only Gold and Silver Shall be Legal Tender"? That's in the Constitution, you know.
> 
> (I thought this was RonPaulForums, not CentralBankingApologistForums)


No, I think it says that the states can only use gold and silver. 

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

And I think the authority to set up the Central Bank would be part of the "Necessary and Proper" clause.

I am not apologizing for the banks. I am simply pointing out that Ron Paul is not advocating anarchy, and I am not convinced that Congress doesn't have the right to set up a fiat currency system.

I think Congress's system is tragically flawed. There is a difference.

----------


## angelatc

> True. It's not fraud, it's coercion. They force you to not use money that can keep its value. If someone wants to trade in gold or an alternative currency, they tax the transaction and thus make the development of the alternative currency extremely difficult.


Sure. That's the nature of the government's monopoly on power.   

Would transactions of gold and silver be double taxed? I'm really asking  - I've never thought about it before.

If I walk in to Bob's TV, and he agrees to give me a $1200 TV in exchange for an ounce of gold, and gold is trading at $1200 per ounce that day....he'd owe an income tax on the difference between his cost on the TV and the value of the gold. 

But if I paid him $1200 cash, he'd still owe that income tax. So that's a wash.

Now, if Bob held that gold in his desk for a year, and the value of the gold went up to $1300, and he decided to sell it, he'd owe a capital gains tax on the $100.  If the value dropped, he would not owe that tax.

So yes, I do see what you're saying.

OTOH, if Bob took that $1200 and bought stocks, he would have to pay capital gains tax on the profit when he sold them.

But on the other hand, if he kept the $1200 cash in his desk, it would likely depreciate by inflation.

----------


## Paleo

> Ok, you said it yourself - the government allows it to exist.  IIRC, Congress is charged with setting monetary policy. Part of that policy is allowing the banks to create money using a fractional reserve system. No real assets required, no fraud committed.
> 
> I work knowing I will get paid in fiat currency.  No fraud.  
> 
> (No government? Please - this is RonPaulForums, not AnarchyTodayForums.)


You are applying a double standard.  Lets assume for the argument that the constitution does authorize congress to license the current coercive and fraudulent currency and banking system. (which is simply untrue)..

Your argument is that it is a moral system because it is constitutional and the law of the land through the consent of the governed.

That's bull$#@! for two reasons.

First, nobody can consent to what they don't understand.  95% of the population has NO IDEA how money and banking really works

Second,  it is Also the law of the land that individuals may file for liquidation bankruptcy every 8 years if certain standards are met.  Congress is EXPLICITLY authorized to write bankruptcy law in the Constitution.

IF if is moral for the banks to $#@! people because it is legal to do so, it is also moral to walk  away from the banks bull$#@! fiat currency debts through bankruptcy when it is legal to do so.

----------


## angelatc

> You are applying a double standard.  Lets assume for the argument that the constitution does authorize congress to license the current coercive and fraudulent currency and banking system. (which is simply untrue)..
> 
> Your argument is that it is a moral system because it is constitutional and the law of the land through the consent of the governed.
> 
> That's bull$#@! for two reasons.
> 
> First, nobody can consent to what they don't understand.  95% of the population has NO IDEA how money and banking really works
> 
> Second,  it is Also the law of the land that individuals may file for liquidation bankruptcy every 8 years if certain standards are met.  Congress is EXPLICITLY authorized to write bankruptcy law in the Constitution.
> ...


I'm not arguing morality at this point.  I am arguing legality.  

If you are advocating that everybody should file for bankruptcy, then I probably agree with you, especially if you live in a state that allow you to keep your house. (I've never really understood how states can have different bankruptcy laws, but they do.) However, the original post didn't seem to be encouraging people to file for bankruptcy, only to stop paying their credit card bills.

The fact that nobody can consent to what they don't understand is a flawed argument though. People can and do consent to things they don't understand every day.  Every time I take my car to the mechanic, I make no pretense of understanding the repairs he is going to make. 

 When people fail to accept responsibility for their own actions, we end up with government regulation.

----------


## Paleo

K


> I'm not arguing morality at this point.  I am arguing legality.  
> 
> The fact that nobody can consent to what they don't lunderstand is a flawed argument though. People can and do consent to things they don't understand every day.   When they fail to accept responsibility for their own actions, we end up with government regulation.


If you are arguing legality you've already lost.  Bankruptcy is legal.  Further, consent without understanding is a legal nullity.  Informed consent is required in ANY contact, social or otherwise.

Expecting someone to take personal responsibility for an agreement in which half the terms are hidden from them, and which they are not allowed to change anyway is just retarded.   You might as well legalize medical agreements where a person agrees to pay for a physical and the physician gets to remove the persons spleen and sell it on the open market.  Then you can blame the patient for being stupid for not living within the terms off the agreement when he asks for his organ back.

----------


## WaltM

> You cannot agree to something for which you are not aware!  The fact that the bank hid that information from the borrower makes it void.


If you agreed to the conditions, what you're not aware is your own fault.

The bank never said "we have so much money" they said "we have what it takes to get your bills paid, take it or leave it, but you have to pay us in return".





> None of my business???  I'm a party to the agreement; they hid vital information.


Nope, they didn't hide it.

You were free to ask, and if they answer didn't satisfy you, you're free to not sign.




> If I knew that they were creating money out of thin air, then I would make my own money out of thin air!


You can, see how far you'd get.




> I don't need them.  None of us need the modern day banker.  It's a scam.  The sooner we get to honest money, the sooner society can be honest.


So go start your own bank and scam me

----------


## WaltM

I hate sounding like I'm defending banks. But for the record :

the banks* did not create new money*, at will, in their own decision. At least not within the minute you signed a loan, or applied for a credit card.

A bank is subject to banking laws and regulations, in which case, the minute they've become a bank, they've been given a limit of how much money they can lend, use, store, handle...etc. In a rare case they may overlend, *and that's FRAUD. (illegal)* 

Otherwise, the Fed & Treasury already decided how much money is to be on the market (in which case, it's not a fraud on the bank's part, they're only doing what they're allowed to do). If you feel that the fraud is so big that it's inescapable, then be part of them and benefit from it. 

The Fed & Treasury also, did NOT EVER promise they won't print more money, or back dollars in gold, so what exactly is your problem with printing money out of thin air? Who ever said it was otherwise?

----------


## osan

> Here are the top five reasons not to pay your credit cards:
> 1.If you owe $6,000 on a credit card with a 20 percent interest rate, and you only pay the minimum payment each time, it will take you 54 years to pay off that credit card.  During those 54 years you will pay $26,168 in interest rate charges in addition to the $6,000 in principal that you are required to pay back (Source).


Um... no.  The calculation in question would be an annuity with a present value of 6K amortized over 54 years @ 20%.  The payment would be $100.01 per month with a total interest payment of $58,803.43.  Total cost of the annuity at term would be $64,803.43.

----------


## WaltM

> Um... no.  The calculation in question would be an annuity with a present value of 6K amortized over 54 years @ 20%.  The payment would be $100.01 per month with a total interest payment of $58,803.43.  Total cost of the annuity at term would be $64,803.43.


and how stupid do you have to be to pay $100 at a time if you didn't have to?

----------


## Sentient Void

Whoa, whoa... I've gotta jump in here to show others in this forum that the majority in the RPF are not all cheating, lying scumbags (since a couple have expressed this concern). There has been MANY in this thread advocating people do *NOT* do what the OP has said. I'm simply another one to add to the mix - and I'm a goddamn anarchist for chrissakes (although a contractarian, propertarian one, admittedly).

A contract is a contract is a contract. Period. If you have the ability to stand by your word and/or a contract or agreement (implicit or explicit) - you DO IT, and you try to maintain it as much as you can. Much of civilization, commerce and human interaction is based on these very principles. If you absolutely can't, and are in such a financial mess that you *must* default on your cards, file for bankruptcy, etc - then so be it... there are avenues and OPTIONS even from the very private institutions you borrowed from to try and balance the situation as much as possible. 

However, advocating people default and not honor their word, agreement, contract, etc (implicit or explicit) just for the sake of it... is flat out WRONG - no matter which way you look at it. ADULTS honor their word and pay their debts - CHILDREN do not and try to find excuses (such as those mentioned) to justify their behavior. Cut it with the cognitively dissonant BS and get with the program, people.

BTW - there is *nothing wrong* with Fractional Reserve Banking in-and-of-itself (more specifically under a Free Banking System). The *problem* is because of our central bank and it's private monopoly on our currency and the 'regulatory system' built around our financial and banking system, it's corporatist relationship with the government, and the MASSIVE distortions it creates, which lead to massive other distortions throughout our economy, as well as the transfer of wealth from the general population to others. 

FRB under a *FBS* is the *most stable* financial system out there - this is backed by historical precedence and even austrian economists (not all austrians are Rothbardians you know), as well as being a free-market, natural solution to banking and money. Although I agree with Rothbard on virtually everything, his idea that FRB in and of itself was fraud (and the meme that has permeated since), IMO, was/is flat-out-wrong, and I feel that this view is based on the conflation of property and contract rights.

Also, WaltM - why do you have the Nazi SS bolt as your profile image?

----------


## bobbyw24

I  posted this to get people talking and it worked. I do not advocate people just stop paying credit cards or other debt that they are able to pay.

As for 'a contract is a contract . . .," the U.S. Constitution does permit people to break contracts. Not just entities like Lehman Bros, GM, AIG, etc. but the little people as well. Should you honor your word? Sure, but there are times when people need to break contracts.

AND--many people here on this forum who are "fiscal conservatives" have file bankruptcy * broken contracts. Perhaps we should ban them.

----------


## Sentient Void

> I  posted this to get people talking and it worked. I do not advocate people just stop paying credit cards or other debt that they are able to pay.


Glad to hear it  - You definitely got people talking... good discussion, IMO.




> As for 'a contract is a contract . . .," the U.S. Constitution does permit people to break contracts. Not just entities like Lehman Bros, GM, AIG, etc. but the little people as well. Should you honor your word? Sure, but there are times when people need to break contracts.
> 
> AND--many people here on this forum who are "fiscal conservatives" have file bankruptcy * broken contracts. Perhaps we should ban them.


Perhaps if you read my entire post you would have seen that I said, "If you absolutely can't [meet your obligations], and are in such a financial mess that you *must* default on your cards, file for bankruptcy, etc - then so be it... there are avenues and OPTIONS even from the very private institutions you borrowed from to try and balance the situation as much as possible."

My point is that it is wrong, irresponsible, childish and despicable for people to break their contracts for whatever reason if they have the ability to meet their obligations.

----------


## bobbyw24

> Glad to hear it  - You definitely got people talking... good discussion, IMO.
> 
> 
> 
> Perhaps if you read my entire post you would have seen that I said, "If you absolutely can't [meet your obligations], and are in such a financial mess that you *must* default on your cards, file for bankruptcy, etc - then so be it... there are avenues and OPTIONS even from the very private institutions you borrowed from to try and balance the situation as much as possible."


You are right--din read your whole post. My bad. I agree.

ALSO--what is Walt's symbol?? Looks like one of those old American Nazi symbols--the Thunderbolt ??

----------


## WaltM

> BTW - there is *nothing wrong* with Fractional Reserve Banking in-and-of-itself (more specifically under a Free Banking System). The *problem* is because of our central bank and it's private monopoly on our currency and the 'regulatory system' built around our financial and banking system, it's corporatist relationship with the government, and the MASSIVE distortions it creates, which lead to massive other distortions throughout our economy, as well as the transfer of wealth from the general population to others.


Actually, even being the central bank and a monopoly isn't too bad either.

You can become part of them by owning stock or doing business with the beneficiary banks.





> FRB under a *FBS* is the *most stable* financial system out there - this is backed by historical precedence and even austrian economists (not all austrians are Rothbardians you know)


I didn't know Rothbardian is but one subset of Ausrians.




> , as well as being a free-market, natural solution to banking and money. Although I agree with Rothbard on virtually everything, his idea that FRB in and of itself was fraud (and the meme that has permeated since), IMO, was/is flat-out-wrong, and I feel that this view is based on the conflation of property and contract rights.


You are right, people who say FRB is fraud, fractional reserve is fraud, have no respect for property and free expression (but they are the same people who say its OK to infringe of copyright).




> Also, WaltM - why do you have the Nazi SS bolt as your profile image?


excuse me?

did Nazis invent bolts?

if I had these, is that Nazi?




My profile image is actually a Marilyn Manson logo, google it. 
(while it may resemble Mosley's BUF logo, it's CERTAINLY NOT NAZI SS)

----------


## WaltM

> AND--many people here on this forum who are "fiscal conservatives" have file bankruptcy * broken contracts. Perhaps we should ban them.


Are you equating refusal to pay credit cards "just because i felt screwed" is the same a bankruptcy (not that there aren't intentional frauds in that camp)?

----------


## bobbyw24

> Are you equating refusal to pay credit cards "just because i felt screwed" is the same a bankruptcy (not that there aren't intentional frauds in that camp)?


No

----------


## WaltM

> No


so since, we did not say "ban credit card defaulters" what leads you to say "ban bankruptcy filers"?

----------


## bobbyw24

> so since, we did not say "ban credit card defaulters" what leads you to say "ban bankruptcy filers"?


I was joking, bro.

I would never advocate discrimination against credit card defaulters or bankrupts.

----------


## fj45lvr

> Bull$#@!.  Its the fiat magic playdoh that makes the house so expensive that you CANT buy it without their funny money loan.



right on!!

----------


## Sentient Void

> excuse me?
> 
> did Nazis invent bolts?
> 
> if I had these, is that Nazi?
> 
> My profile image is actually a Marilyn Manson logo, google it. 
> (while it may resemble Mosley's BUF logo, it's CERTAINLY NOT NAZI SS)


I know it's from Manson, I used to be a Manson fan (saw him et al in concert at least twice) and still listen to some of his stuff every once in a while myself (the symbol is off of his 'Antichrist Superstar' album, which I still have) 

Granted, no - it's not *specifically* Nazi SS lightning, it did remind me of Manson and his use of it in very nazi-esque theatrical performances I've seen, not to mention the colors used, and his association with it, Anton Lavey, Satanism, Nazism, the occult, etc...

http://www.nachtkabarett.com/LogosAndSymbology/Shock

Not accusing you of being a nazi, just wondering what significance it has for you - Manson fan? or just liked the lightning bolt symbol?

----------


## WaltM

> I know it's from Manson, I used to be a Manson fan (saw him et al in concert at least twice) and still listen to some of his stuff every once in a while myself (the symbol is off of his 'Antichrist Superstar' album, which I still have) 
> 
> Granted, no - it's not *specifically* Nazi SS lightning, it did remind me of Manson and his use of it in very nazi-esque theatrical performances I've seen, not to mention the colors used, and his association with it, Anton Lavey, Satanism, Nazism, the occult, etc...
> 
> http://www.nachtkabarett.com/LogosAndSymbology/Shock
> 
> Not accusing you of being a nazi, just wondering what significance it has for you - Manson fan? or just liked the lightning bolt symbol?


Manson fan and I also like Satanic symbolism, I dont consider myself Satanist, but I am not offended if I was called one.

----------


## Deborah K

I think it's dishonorable to charge up a card with no intention of paying it back.  But on the other hand, when a company raises your rates to 29.9% for no good reason, that is dishonorable as well, and in that case, I wouldn't blame someone for fighting their credit card co. over it, even if it means not paying it.

If you haven't seen the documentary Money as Debt, please watch it.  Our debt is monetized.  Without debt, there would be no money.  Not paying back the credit cards seems- to me- like it would contribute to the financial collapse.  I believe the system has been rigged for such a collapse.  So, the question you have to ask yourself is, do I want to contribute to the collapse?

----------


## WaltM

> I think it's dishonorable to charge up a card with no intention of paying it back.  But on the other hand, when a company raises your rates to 29.9% for no good reason, that is dishonorable as well, and in that case, I wouldn't blame someone for fighting their credit card co. over it, even if it means not paying it.


If they raised the interest rate after agreeing not to, that's cheating.

If they warned you but you agreed to it anyway, that's your fault





> If you haven't seen the documentary Money as Debt, please watch it.  Our debt is monetized.  Without debt, there would be no money.  Not paying back the credit cards seems- to me- like it would contribute to the financial collapse.  I believe the system has been rigged for such a collapse.  So, the question you have to ask yourself is, do I want to contribute to the collapse?


most people dont have time to think about what they contribute to, the easier question would be, would they want the same done to them? (something tells me people who think defaulting on debt is morally correct, are not those who donate their money to charity)

----------


## Deborah K

> If they raised the interest rate after agreeing not to, that's cheating.
> 
> If they warned you but you agreed to it anyway, that's your fault.
> 
> most people dont have time to think about what they contribute to, the easier question would be, would they want the same done to them? (something tells me people who think defaulting on debt is morally correct, are not those who donate their money to charity)


Warned.....as in putting it in the fine print that they have the right to raise the rates to no more than 29.9%?  I call bull$#@! when they do it for no good reason!  If someone pays more than the minimum every month and on time, it's usury straight up, regardless of their fine print proclamations.  If you fight them on it, you'll win.

And, to those of you who are complaining about cc cos. issuing credit out of thin air, if you knew that going in with the intention of never paying, then you helped to get ALL of us in the situation we find ourselves in now.  Shame on you!

----------


## WaltM

> Warned.....as in putting it in the fine print that they have the right to raise the rates to no more than 29.9%?


Yes, that's legal, and not fraud. 

If you had them on tape saying "that will never happen", then you have a case.




> I call bull$#@! when they do it for no good reason!


it's called respect for property, if you need a good reason, what do you believe in as far as property? Can I say what "good reason" you have for owning a car?





> If someone pays more than the minimum every month and on time, it's usury straight up, regardless of their fine print proclamations.  If you fight them on it, you'll win.


Do you know this for a fact?

Does winning always mean you are right?





> And, to those of you who are complaining about cc cos. issuing credit out of thin air, if you knew that going in with the intention of never paying, then you helped to get ALL of us in the situation we find ourselves in now.  Shame on you!


not quite, but they definitely contributed some trouble.

if they can get away with taking advantage of the system, fine, but they can't complain if they're retaliated for it.

----------


## angelatc

> K
> 
> If you are arguing legality you've already lost.  Bankruptcy is legal.  Further, consent without understanding is a legal nullity.  Informed consent is required in ANY contact, social or otherwise.
> 
> Expecting someone to take personal responsibility for an agreement in which half the terms are hidden from them, and which they are not allowed to change anyway is just retarded.


Nobody is saying that bankruptcy isn't legal. The original post didn't seem to advocate bankruptcy. It said just stop paying them.

I have no sympathy for people who can't understand credit card terms. They actually can't possibly make it much simpler than they already do.  People who don't understand them are people who don't read them.  Thanks to them, the "I'm always the victim!!!" we the responsible are stuck with big government regulations that ultimately serve to make big banks bigger.

That's what is really retarded.

----------


## angelatc

> I hate sounding like I'm defending banks. But for the record :
> 
> the banks* did not create new money*, at will, in their own decision. At least not within the minute you signed a loan, or applied for a credit card.
> 
> A bank is subject to banking laws and regulations, in which case, the minute they've become a bank, they've been given a limit of how much money they can lend, use, store, handle...etc. In a rare case they may overlend, *and that's FRAUD. (illegal)* 
> 
> Otherwise, the Fed & Treasury already decided how much money is to be on the market (in which case, it's not a fraud on the bank's part, they're only doing what they're allowed to do). If you feel that the fraud is so big that it's inescapable, then be part of them and benefit from it. 
> 
> The Fed & Treasury also, did NOT EVER promise they won't print more money, or back dollars in gold, so what exactly is your problem with printing money out of thin air? Who ever said it was otherwise?


That's it in a nutshell.

----------


## WaltM

> That's it in a nutshell.


only useful for people who want to know, if you want to be a kid and keep crying foul, I can't help,

----------


## EddieG

Credit cards are expensive, variable-rate loans. Period.  That's why wise people don't use them if they can't pay them off at the end of the month.

Run up a debt and don't pay it off... you're a criminal, and no one in their right mind would do business with you.  The fact that the fiat money system is a fraud is beside the point when it comes to this issue.  

You'd do better with materials from mises.org than the confused nonsense in Money as Debt.

----------


## Deborah K

> Yes, that's legal, and not fraud. 
> 
> If you had them on tape saying "that will never happen", then you have a case.
> it's called respect for property, if you need a good reason, what do you believe in as far as property? Can I say what "good reason" you have for owning a car?


This is off the point that I was trying to make.    Just because they CAN raise the rates to 30% even if the cardmember has been a good customer, doesn't mean they should! I certainly do not see it as a good practice and crap like that is what gives capitalism a bad name.  And it is the reason laws were changed on this matter.





> Do you know this for a fact?


Yes.





> Does winning always mean you are right?


Not any more right than is raising rates for no reason.






> not quite, but they definitely contributed some trouble.


Oh yeah, I forgot, you're a stickler for specifics.

----------


## Deborah K

> Credit cards are expensive, variable-rate loans. Period.  That's why wise people don't use them if they can't pay them off at the end of the month.
> 
> Run up a debt and don't pay it off... you're a criminal, and no one in their right mind would do business with you.  The fact that the fiat money system is a fraud is beside the point when it comes to this issue.  
> 
> You'd do better with materials from mises.org than the confused nonsense in Money as Debt.


What's confused about it?  Are you claiming our debt isn't monetized?

----------


## WaltM

> This is off the point that I was trying to make.    Just because they CAN raise the rates to 30% even if the cardmember has been a good customer, doesn't mean they should! I certainly do not see it as a good practice and crap like that is what gives capitalism a bad name.  And it is the reason laws were changed on this matter.


isn't that like saying just because you "CAN" charge $30k for a car, or $150k for a house, doesn't mean you SHOULD or it's RIGHT?

Is it right to say what a person can charge for his property?

----------


## Deborah K

> isn't that like saying just because you "CAN" charge $30k for a car, or $150k for a house, doesn't mean you SHOULD or it's RIGHT?
> 
> Is it right to say what a person can charge for his property?


We're not talking about a person here.  You're arguing principle.  I'm arguing reality.

----------


## AmericasLastHope

What's the difference between Ron Paul earmarking Federal money for his own district and an individual practicing civil disobedience by not paying his credit card bill?

Both are saying that the system is flawed and therefore refuse to participate in the same way the Sally Soccormoms and Joe SixPack lemmings do.

The Federal Reserve will say Ron Paul is a "pork barrel spender" and the banksters will say the individual practicing civil disobedience is a "deadbeat."  

I thought Ron Paul's philosophy was if they're going to appropriate free money he might as well get some for his district.  What's the difference with an individual "appropriating" money created out of thin air for himself?  Isn't it basically the same thing as an "inflation tax credit" for an individual who is aware that the cartels are conspiring to unlawfully redistribute his wealth to the upper class who gets to spend the freshly printed money first?

----------


## amy31416

> isn't that like saying just because you "CAN" charge $30k for a car, or $150k for a house, doesn't mean you SHOULD or it's RIGHT?
> 
> Is it right to say what a person can charge for his property?


A bit off-topic:

Doesn't it get tedious claiming that the government can do whatever they want, but we have to follow all the "rules?"

Is that much different than saying that banks can do whatever they want, but we can not?

I'm opting out of everything I possibly can...this $#@!'s ridiculous. Bankers and politicians are not my masters.

----------


## Deborah K

> What's the difference between Ron Paul earmarking Federal money for his own district and an individual practicing civil disobedience by not paying his credit card bill?
> 
> Both are saying that the system is flawed and therefore refuse to participate in the same way the Sally Soccormoms and Joe SixPack lemmings do.
> 
> The Federal Reserve will say Ron Paul is a "pork barrel spender" and the banksters will say the individual practicing civil disobedience is a "deadbeat."  
> 
> I thought Ron Paul's philosophy was if they're going to appropriate free money he might as well get some for his district.  What's the difference with an individual "appropriating" money created out of thin air for himself?  Isn't it basically the same thing as an "inflation tax credit" for an individual who is aware that the cartels are conspiring to unlawfully redistribute his wealth to the upper class who gets to spend the freshly printed money first?


It's irresponsible and downright shameful to enter into an agreement with a credit card company with the intention of not paying.  HOWEVER, I don't have a problem in the world with someone refusing to pay their card when said co. inexplicably raises the rate to 29.9%.  In that case, the cardmember _should_ revolt until the co. agrees to bring the rate back down to a reasonable percentage.

----------


## WaltM

> A bit off-topic:
> 
> Doesn't it get tedious claiming that the government can do whatever they want, but we have to follow all the "rules?"


YEs, but I have the option to join them, or submit, or go to prison, it's my choice.





> Is that much different than saying that banks can do whatever they want, but we can not?


No, it isn't at all. Which is why I said earlier, if you're so pissed off at banks ripping people off, you might want to work with them. At least if you rip some people off you can put money to a good use (I assume people who cry injustice believe they're better at using money than banks and others)




> I'm opting out of everything I possibly can...this $#@!'s ridiculous. Bankers and politicians are not my masters.


if you think you can achieve the freedom, comfort and happiness without them, you're already opted out. I admire that.

----------


## WaltM

> We're not talking about a person here.  You're arguing principle.  I'm arguing reality.


i don't think I'm arguing outside of reality either.

I think banks are people too, if I were them, I wouldn't want people disrespecting my rights.

----------


## AmericasLastHope

> It's irresponsible and downright shameful to enter into an agreement with a credit card company with the intention of not paying.


Do you think it's irresponsible and shameful for Ron Paul to earmark money (enter into an agreement) for his district with the intention of not voting for the bill?

----------


## Deborah K

> i don't think I'm arguing outside of reality either.
> 
> I think banks are people too, if I were them, I wouldn't want people disrespecting my rights.


Your right to commit usury?

----------


## Deborah K

> Do you think it's irresponsible and shameful for Ron Paul to earmark money (enter into an agreement) for his district with the intention of not voting for the bill?


I don't agree with your analogy.  You are comparing irresponsible behavior (charging up a card with the intent of not paying) to a political tactic.

----------


## WaltM

> Your right to commit usury?


Short answer : YES.

Usury, in my opinion, is just a poor man's complaint from jealousy. Do you believe you have a right to be lent money? 

Either you respect property or you don't. If you say "I respect property, BUT...." then it starts to sound like you're just for what is good for you, and you'd not want the same for others.

----------


## Deborah K

> Short answer : YES.
> 
> Usury, in my opinion, is just a poor man's complaint from jealousy. Do you believe you have a right to be lent money? 
> 
> Either you respect property or you don't. If you say "I respect property, BUT...." then it starts to sound like you're just for what is good for you, and you'd not want the same for others.


Usary:  an excessive rate or amount of interest charged.  Morally reprehensible.  You are confusing two issues here.  Respect for property does not give you the right to take advantage of people.  Stick to the issue at hand:  raising interest rates w/out cause.

----------


## amy31416

> YEs, but I have the option to join them, or submit, or go to prison, it's my choice.
> 
> 
> 
> 
> No, it isn't at all. Which is why I said earlier, if you're so pissed off at banks ripping people off, you might want to work with them. At least if you rip some people off you can put money to a good use (I assume people who cry injustice believe they're better at using money than banks and others)
> 
> 
> 
> if you think you can achieve the freedom, comfort and happiness without them, you're already opted out. I admire that.


I have no interest in ripping people off, and I am far more likely to achieve happiness without them than with them--even if I'm less comfortable.

Pretty crazy concepts to most, I'm sure.

----------


## WaltM

> Usary:  an excessive rate or amount of interest charged.  Morally reprehensible.  You are confusing two issues here.  Respect for property does not give you the right to take advantage of people.  Stick to the issue at hand:  raising interest rates w/out cause.


property means "I don't need to justify what I charge"
excessive, reasonable is subjective. So is "take advantage".
I can say you're being excessive for not letting me enter your home for free.
Do you think it's determined by market? Or democracy?

If you don't have a right to be lent money, there's no such thing as excess, if there's a specific agreement or law that says you cannot, then you cannot violate such a rule. If you have a right to refuse it, it's not excess.

----------


## WaltM

> I have no interest in ripping people off, and I am far more likely to achieve happiness without them than with them--even if I'm less comfortable.
> 
> Pretty crazy concepts to most, I'm sure.


I can't tell you what makes you happy, I can only be glad you are.

----------


## Danke

People are straying far from the fundamentals.

What are the elements of a contract?

Answer that.


Then, what was supposedly "lent"?

Answer that.

----------


## WaltM

> People are straying far from the fundamentals.
> 
> What are the elements of a contract?
> 
> Answer that.


2 people agreeing to something




> Then, what was supposedly "lent"?
> 
> Answer that.


Credit, or money.
*
If I applied for a mortgage, or credit card, the lending party DID NOT CREATE NEW MONEY. They are ALREADY allowed to put such money into circulation.
*
I cannot say "hey, I didn't see the money printed in cash, so it's not there" or "it's not back by gold so it's not money".

Either you recognize they have money, or you don't (and even that hardly matters). What was "lent" was, the allocated credit, so you are paying back the allocated credit, or money,* YES, IT EXISTS BECAUSE THE BANKS SAY SO.*

When you sell a house, do you demand it be paid in cash or gold? If not, can I say you're cheated because you didn't actually see the money? Do you ever look at your bank statement and make sure the bank is ready to give you cash any minute? If not, are they cheating you?

*Banks which follow their credit and lending limits are NOT frauding. But if they DO step beyond their legal limits of lending, credit issuance, that would be fraud, and they'd be prosecuted for it.*

----------


## AmericasLastHope

> I don't agree with your analogy.  You are comparing irresponsible behavior (charging up a card with the intent of not paying) to a political tactic.


Fair enough, but one could argue that pork barrel spending is irresponsible behavior and that not paying a credit card is a political tactic as well.  I guess it all depends on the eye of the beholder and what the core of your philosophy is.

----------


## Travlyr

> What are the elements of a contract?


Elements of a Contract
A contract is an agreement reached after sufficient consideration to do, or refrain from doing, some legal action. A contract is considered valid when two or more parties with capacity make an agreement involving valid consideration to do or to refrain from doing some lawful act. If these elements exist, the contract is valid. If one or more of these necessary elements is missing, the contract is void or voidable. In other words, it is not a true contract and therefore cannot be enforced.



> Then, what was supposedly "lent"?


Air

----------


## Deborah K

> I can say you're being excessive for not letting me enter your home for free.


And you would be laughed out of town.  This is the problem with arguing philosophy versus reality.  




> Do you think it's determined by market? Or democracy?


Market of course.  Which brings me back to my original point.  If a POS cc co. decides to raise rates exorbitantly, whether it is in their fine print or not, I, as a customer, and millions like me, can tell them to f'k off until they bring the rate back down to a normal percentage.  In case you weren't aware, this actually happened.  Google debtor's revolt.  





> If you don't have a right to be lent money, there's no such thing as excess, if there's a specific agreement or law that says you cannot, then you cannot violate such a rule. If you have a right to refuse it, it's not excess


I'm not even going to try to decipher this.....

----------


## Deborah K

> I guess it all depends on the eye of the beholder and what the core of your philosophy is.


As with all things.

----------


## Zippyjuan

> Usary:  an excessive rate or amount of interest charged.  Morally reprehensible.  You are confusing two issues here.  Respect for property does not give you the right to take advantage of people.  Stick to the issue at hand:  raising interest rates w/out cause.


At what point does an interest rate become "excessive"?  If I agreed to borrow money from you at a given rate- who is to say if that rate is too high or too low? The lender was willing to loan the money if the borrower agreed to that rate which I did then it is not usury.  

Now what can be a problem is if one side has the abiltiy to change the terms of the agreement on their own such as the rate on your credit card suddenly being jacked up or your home mortgage taking a huge jump (I am not a fan of adjustable mortgages anyways). Sure you can cancel the credit card and pay off your remaining balance and maybe try to find another one.  The mortgage gets more difficult since you either have to find new financing or lose your home.  And yes, not everybody is financially sophisiticated enough to understand many loan agreements.  "Dont' worry about it- just sign right here and we will have the money for you!"  Those can be (and are) exploited.




> Then, what was supposedly "lent"?


Lent is the time leading up to Easter when Christians are supposed to self impose suffering by say giving up a favorite activity or item.

----------


## Danke

> 2 people agreeing to something


Where is the other party signing a contract?

Names, please.




> Credit, or money.
> If I applied for a mortgage, or credit card, the lending party DID NOT CREATE NEW MONEY. They are ALREADY allowed to put such money into circulation.


Really?  So you think the so-called "money" existed before your applied for the loan?  Really?

----------


## WaltM

> Where is the other party signing a contract?
> 
> Names, please.


for simplicity sake, myself being one party, the bank being another




> Really?  So you thing the so-called "money" existed before your applied for the loan?  Really?


yes. 

it may be put into circulation in a different way AFTER the loan was made, but it wasn't created the minute the loan was made. The Treasury & Fed already authorized the issuing and usage of the amount, so it for most purposes EXISTED. 

If you never took the loan, they'd still be allowed to pump it elsewhere

----------


## WaltM

> At what point does an interest rate become "excessive"?  If I agreed to borrow money from you at a given rate- who is to say if that rate is too high or too low? The lender was willing to loan the money if the borrower agreed to that rate which I did then it is not usury.  
> 
> Now what can be a problem is if one side has the abiltiy to change the terms of the agreement on their own such as the rate on your credit card suddenly being jacked up or your home mortgage taking a huge jump (I am not a fan of adjustable mortgages anyways). Sure you can cancel the credit card and pay off your remaining balance and maybe try to find another one.  The mortgage gets more difficult since you either have to find new financing or lose your home.  And yes, not everybody is financially sophisiticated enough to understand many loan agreements.  "Dont' worry about it- just sign right here and we will have the money for you!"  Those can be (and are) exploited.
> 
> 
> Lent is the time leading up to Easter when Christians are supposed to self impose suffering by say giving up a favorite activity or item.


lol, thanks.

----------


## Deborah K

> At what point does an interest rate become "excessive"?  If I agreed to borrow money from you at a given rate- who is to say if that rate is too high or too low? The lender was willing to loan the money if the borrower agreed to that rate which I did then it is not usury.


Would you consider 30% on a home loan execessive?  I don't think this is a relative question.  30% is either excessive, or it isn't.




> Lent is the time leading up to Easter when Christians are supposed to self impose suffering by say giving up a favorite activity or item


For clarity, I am not the one who wrote that.

----------


## Danke

> for simplicity sake, myself being one party, the bank being another


So why don't they identify themselves?  No other party signs any "contract" (really, it is just an agreement with one party, you, as the signer).




> yes. 
> 
> it may be put into circulation in a different way AFTER the loan was made, but it wasn't created the minute the loan was made. The Treasury & Fed already authorized the issuing and usage of the amount, so it for most purposes EXISTED. 
> 
> If you never took the loan, they'd still be allowed to pump it elsewhere


Not true, read my previous posts on how the loan was funded.

----------


## WaltM

> Elements of a Contract
> A contract is an agreement reached after sufficient consideration to do, or refrain from doing, some legal action.


If you agreed to it, it's consideration fulfilled. 

The bank NEVER EVER claimed they have the money they lend you printed in cash, or backed by gold. So what did they fail to show as consideration?




> A contract is considered valid when two or more parties with capacity make an agreement involving valid consideration to do or to refrain from doing some lawful act. If these elements exist, the contract is valid.


What if one party agrees to waive his rights to consideration?




> If one or more of these necessary elements is missing, the contract is void or voidable. In other words, it is not a true contract and therefore cannot be enforced.


if it's not a contract, can some other form of written agreement be enforced? if not is the law being invalidly forced upon me without my consent?




> Air


wrong, credit and money was lent.

Nobody ever said the money was printed on paper or backed by gold. 

it may be air to you, but if you recognized it as money, you made it money.

----------


## Zippyjuan

> Really?  So you thing the so-called "money" existed before your applied for the loan?  Really?


Loaning money is not exactly "creating" money.  The bank issuing a loan is making that loan out of money which somebody has lent to them or "deposited" with them.  I maybe want to save money for something so I put it into a bank. I earned that through my efforts in exchange for labor or goods. But I am not spending it now.  You have a need to buy something today so you would like to borrow some money to do so.  So you go to the bank.  They take some of the money I let them borrow and they in turn let you borrow it.   They are a middle man taking their cut. I could have theoretically loaned you the money myself directly but maybe you and I don't know each other.  You agree to pay back the money within a certain time.   

By depositing my money, I am forgoing consumption today in hopes of using the money to consume something in the future.  You on the other hand are trading tomorrow's consumption for today.  When you pay back the loan in the future, you don't have that money available for consumption then.  Money in circulation is the money actually being spent.  If I am not spending my money, the total supply of money which could be in circulation is reduced.  If you borrow money, the total supply of money in circulation increases.  But since the money you are spending came out of the money I was not going to spend, the total amount of money circulating is really not that different than if I had decided to spend it myself and no loan took place.  Actually it will be a little smaller since the bank is taking a cut and also keep a small portion on reserve against possible withdrawls.

----------


## Deborah K

> Loaning money is not exactly "creating" money.  The bank issuing a loan is making that loan out of money which somebody has lent to them or "deposited" with them.


Not true, as is evidenced by fractional reserve banking.  Which is why bank runs are a problem for all banks.

----------


## Danke

> Loaning money is not exactly "creating" money.  The bank issuing a loan is making that loan out of money which somebody has lent to them or "deposited" with them.  I maybe want to save money for something so I put it into a bank. I earned that through my efforts in exchange for labor or goods. But I am not spending it now.  You have a need to buy something today so you would like to borrow some money to do so.  So you go to the bank.  They take some of the money I let them borrow and they in turn let you borrow it.   They are a middle man taking their cut. I could have theoretically loaned you the money myself directly but maybe you and I don't know each other.  You agree to pay back the money within a certain time.   
> 
> By depositing my money, I am forgoing consumption today in hopes of using the money to consume something in the future.  You on the other hand are trading tomorrow's consumption for today.  When you pay back the loan in the future, you don't have that money available for consumption then.  Money in circulation is the money actually being spent.  If I am not spending my money, the total supply of money which could be in circulation is reduced.  If you borrow money, the total supply of money in circulation increases.  But since the money you are spending came out of the money I was not going to spend, the total amount of money circulating is really not that different than if I had decided to spend it myself and no loan took place.  Actually it will be a little smaller since the bank is taking a cut and also keep a small portion on reserve against possible withdrawls.


That is not how it works.

----------


## WaltM

> So why don't they identify themselves?  No other party signs any "contract" (really, it is just an agreement with one party, you, as the signer).


What do you need as identification?

The bank is a company, they hire representatives, and representatives sign on the behalf of the party.

What is your point? That you can walk away with the money and never pay anything back? I dare you try that. (Don't give me that "I don't wanna go to prison" BS, either you can do it, or you can't, I don't care if you're right, I care if you can convince enough people to not go to prison).




> Not true, read my previous posts on how the loan was funded.


why should I trust you?

----------


## WaltM

> Would you consider 30% on a home loan execessive?  I don't think this is a relative question.  30% is either excessive, or it isn't.


Not if the price on the house was a 90% depreciation from the market price.

I'd be willing to pay 30% if I borrowed a dollar to buy a drink that saved me from dehydration (and I'd pay that 30% in a day, not a year).




> For clarity, I am not the one who wrote that.

----------


## WaltM

> Not true, as is evidenced by fractional reserve banking.  Which is why bank runs are a problem for all banks.


wrong. the fact there's ANY bank runs means banks cannot create money, or else they'd never run out.

----------


## Danke

> What do you need as identification?
> 
> The bank is a company, they hire representatives, and c sign on the behalf of the party.


Show me any "representatives" signing such "contract" (agreement). 





> why should I trust you?


Why trust me, just refute any thing I have posted.

----------


## WaltM

> And you would be laughed out of town.  This is the problem with arguing philosophy versus reality.


So the town of mobs gets to decide you're not excessive for not letting me in your home? Wait until they decide otherwise, with torches and pitchforks.




> Market of course.  Which brings me back to my original point.  If a POS cc co. decides to raise rates exorbitantly, whether it is in their fine print or not, I, as a customer, and millions like me, can tell them to f'k off until they bring the rate back down to a normal percentage.


In which case you're free to switch if competitors are nice enough.




> In case you weren't aware, this actually happened.  Google debtor's revolt.  
> 
> I'm not even going to try to decipher this.....


what is google debtor's revolt?

yeah, because you can't decipher the most obvious, it'll destroy your argument.

----------


## WaltM

> Show me any "representatives" signing such "contract" (agreement). 
> 
> Why trust me, just refute any thing I have posted.


*what should I show you?*

a picture of the contract? or a picture of a person signing it?

Seriously, what's your point, what would convince you it's valid?

(lets put the "consideration" aside, what would fulfill the other party's presence requirement, according to you?)

----------


## Deborah K

> wrong. the fact there's ANY bank runs means banks cannot create money, or else they'd never run out.


huh????   Under fractional-reserve banking, banks retain only a fraction of their demand deposits as cash. The remainder is invested in securities and loans, whose terms are typically longer than the demand deposits, resulting in an asset liability mismatch. No bank has enough reserves on hand to cope with more than a fraction of deposits being taken out at once.

----------


## Danke

> Show me any "representatives" signing such "contract" (agreement). 
> 
> 
> 
> 
> Why trust me, just refute any thing I have posted.


Bueller?  Bueller?

----------


## Zippyjuan

> That is not how it works.


Perhaps you could explain it for me then.

----------


## Danke

> Perhaps you could explain it for me then.


Already did.

----------


## Deborah K

> So the town of mobs gets to decide you're not excessive for not letting me in your home? Wait until they decide otherwise, with torches and pitchforks.
> 
> 
> 
> In which case you're free to switch if competitors are nice enough.
> 
> 
> 
> what is google debtor's revolt?
> ...


Walt, your argument isn't based in reality, it's based in philosophy.  It's impossible to debate someone who refuses to stick to the issue at hand and instead wanders off on tangents like mob mentality, torches, pitchforks, dehydration, blahdee blah!  yawn.

----------


## WaltM

> huh????   Under fractional-reserve banking, banks retain only a fraction of their demand deposits as cash.


and they can't create new money, gotcha




> The remainder is invested in securities and loans, whose terms are typically longer than the demand deposits, resulting in an asset liability mismatch. No bank has enough reserves on hand to cope with more than a fraction of deposits being taken out at once.


I apologize if I thought you were implying that banks can create new money, unlimitedly.

----------


## WaltM

> Walt, your argument isn't based in reality, it's based in philosophy.  It's impossible to debate someone who refuses to stick to the issue at hand and instead wanders off on tangents like mob mentality, torches, pitchforks, dehydration, blahdee blah!  yawn.


you were the one who said I would be laughed out of town.

----------


## WaltM

> Already did.


are you actually going to say something? or just troll and ask stupid questions?

----------


## Danke

> are you actually going to say something? or just troll and ask stupid questions?


Did you spend the time and actually read and watch anything I posted in this thread?

Care to comment on that?

Who is the troll again?

----------


## Zippyjuan

> Already did.


Sorry, I have not read all 21 pages on this thread. Perhaps you could point me to which one.  Thank you.

I went back five pages and did not see it.

----------


## Deborah K

> you were the one who said I would be laughed out of town.


In response to your erroneous argument that you would call my not wanting you to enter my home for free "excessive".

----------


## WaltM

> Did you spend the time and actually read and watch anything I posted in this thread?
> 
> Care to comment on that?
> 
> Who is the troll again?


this is a long thread, can you paste again, or summarize your point?
*
or, actually, take my challenge, can you go sign one of these allegedly fake contracts (according to you) and walk away never paying it back?* (if not, I'm not interested in your self important arguments that don't convince judges, jury or prosecutors)

----------


## WaltM

> In response to your erroneous argument that you would call my not wanting you to enter my home for free "excessive".


which was in response to your claim that interest rates can't be excessive, as if it's not subjective.

----------


## Deborah K

> and they can't create new money, gotcha
> 
> 
> 
> I apologize if I thought you were implying that banks can create new money, unlimitedly.


You clearly do not understand what fractional reserve banking is.

----------


## Deborah K

> which was in response to your claim that interest rates can't be excessive, as if it's not subjective.


You wish to chase your tail.  Have at it.

----------


## WaltM

> You clearly do not understand what fractional reserve banking is.


I don't?

Is it TRUE OR NOT TRUE that banks CANNOT create unlimited new money?

If true, I think I understand it enough.

If not, then please say "fractional reserve banking means a bank can create unlimited new money at their decision" and explain why banks ever have a shortage of money.

----------


## WaltM

> You wish to chase your tail.  Have at it.


so you can't really tell me what's excessive and acceptable for interest.

I said it's subjective, even to the point where I said I'd be willing to pay 30% interest if the price is right. 

For the record, I'll pay 200% interest if the price is right for me.

----------


## Deborah K

> so you can't really tell me what's excessive and acceptable for interest.
> 
> I said it's subjective, even to the point where I said I'd be willing to pay 30% interest if the price is right. 
> 
> For the record, I'll pay 200% interest if the price is right for me.


I have stated it over and over again.  Jumping a card rate from 8 or 9% to 30% is excessive to most rational thinking people.  If you want to pay 200% for a credit card - have at it.

----------


## Deborah K

> I don't?
> 
> Is it TRUE OR NOT TRUE that banks CANNOT create unlimited new money?
> 
> If true, I think I understand it enough.
> 
> If not, then please say "fractional reserve banking means a bank can create unlimited new money at their decision" and explain why banks ever have a shortage of money.


Who said anything about *unlimited* new money??????  Get yourself caught up on fractional reserve banking.  For Pete's sake!

----------


## Zippyjuan

> You clearly do not understand what fractional reserve banking is.


In fractional reserve banking, a bank is required to keep a fraction of their deposits on hand (either at the bank itself or on deposit with the Federal Reserve) at all times.  In most cases today, that is ten percent.  They are allowed to loan out up to all of the remaining amounts.  All loans are based on money which has been deposited at the bank. Since they cannot loan out more than this amount, they cannot create "money out of thin air".  From the Federal Reserve which sets the reserve requirement guidlines: 

http://www.federalreserve.gov/moneta...reservereq.htm



> *Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities.* Within limits specified by law, the Board of Governors has sole authority over changes in reserve requirements. *Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks*. 
> The dollar amount of a depository institution's reserve requirement is determined by applying the reserve ratios specified in the Federal Reserve Board's Regulation D to an institution's reservable liabilities (see table of reserve requirements). Reservable liabilities consist of net transaction accounts, nonpersonal time deposits, and eurocurrency liabilities. Since December 27, 1990, nonpersonal time deposits and eurocurrency liabilities have had a reserve ratio of zero. 
> 
> The reserve ratio on net transactions accounts depends on the amount of net transactions accounts at the depository institution. The Garn-St Germain Act of 1982 exempted the first $2 million of reservable liabilities from reserve requirements. This "exemption amount" is adjusted each year according to a formula specified by the act. The amount of net transaction accounts subject to a reserve requirement ratio of 3 percent was set under the Monetary Control Act of 1980 at $25 million. This "low-reserve tranche" is also adjusted each year (see table of low-reserve tranche amounts and exemption amounts since 1982). Net transaction accounts in excess of the low-reserve tranche are currently reservable at 10 percent.


If they take in $1 million in deposits, they can issue up to $900,000 in loans.  The other fraction must be kept in reserve- hence the term, fractional reserve banking.  A truely full reserve bank would be required to keep 100% of deposits on hand and thus would not have money available to issue loans.

From Investopedia:
http://www.investopedia.com/terms/f/...rvebanking.asp



> Fractional Reserve Banking
> 
> What Does Fractional Reserve Banking Mean?
> A banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Most countries operate under this type of system. 
> 
> Also known as "fractional deposit lending". Investopedia explains Fractional Reserve Banking
> Many U.S. banks were forced to shut down during the Great Depression because so many people attempted to withdraw assets at the same time. Today there are many safeguards in place to prevent such an instance from occurring again, but the fractional-reserve banking system remains in place.

----------


## Deborah K

> In fractional reserve banking, a bank is required to keep a fraction of their deposits on hand (either at the bank itself or on deposit with the Federal Reserve) at all times.  In most cases today, that is ten percent.  They are allowed to loan out up to all of the remaining amounts.  All loans are based on money which has been deposited at the bank. Since they cannot loan out more than this amount, they cannot create "money out of thin air". 
> 
> http://www.federalreserve.gov/moneta...reservereq.htm
> 
> 
> If they take in $1 million in deposits, they can issue up to $900,000 in loans.  The other fraction must be kept in reserve- hence the term, fractional reserve banking.  A truely full reserve bank would be required to keep 100% of deposits on hand and thus would not have money available to issue loans.


Watch this:

Money, Banking and the Federal Reserve

----------


## Deborah K

Excerpt from Mises video:




> The Federal Reserve System adds another inflationary layer to an already unstable banking system. For example if the central bank has $100 worth of gold reserves in its vaults and a 10% reserve requirement, it can print up $1,000 of new notes in deposits, which become the reserves of the commercial banks. The commercial banks take this $1,000 and, if they're required to hold 10% again in reserve, they can multiply the $1,000 into $10,000 through fractional-reserve loans. So an inverted pyramid is created with $100 worth of gold, or real money, at the bottom and $10,000 of inflated paper money at the top. As this $10,000 of new paper money circulates in the economy, it drives prices up, therefore reducing the buying power of ordinary citizens.

----------


## WaltM

> I have stated it over and over again.  Jumping a card rate from 8 or 9% to 30% is excessive to most rational thinking people.  If you want to pay 200% for a credit card - have at it.


so 30% to start, and staying at 30% wouldn't be excessive?

I said I'll pay 200% interest on a loan if what I buy was a right price.

----------


## WaltM

> Who said anything about *unlimited* new money??????  Get yourself caught up on fractional reserve banking.  For Pete's sake!


Nobody, so I think I DO understand it.

----------


## WaltM

> Excerpt from Mises video:


and it stops there.

They cannot take the $10K they created and multiply it again.

Thus, according to the policy set forth by the Federal Reserve, the money was ALREADY CREATED. Some people may know, some people may know more, but there's still a limit to money supply. And ordinary people ONLY lose buying power because they started out with the dollar, had they either started with a house, started with a farm, or a pot of gold, they'd be GAINING purchasing power.

----------


## WaltM

> If they take in $1 million in deposits, they can issue up to $900,000 in loans.  The other fraction must be kept in reserve- hence the term, fractional reserve banking.  A truely full reserve bank would be required to keep 100% of deposits on hand and thus would not have money available to issue loans.
> 
> From Investopedia:
> http://www.investopedia.com/terms/f/...rvebanking.asp


so then, is it fair to say, the minute the policy was set, interest rates were set, the available money was already decided. (commercial banks were NOT free to issue or create new money, only put what's allowed into circulation in certain parts of the market).

Which means, banks ARE bound to Fed's interest rates (as they cannot exceed them legally or mathematically).

----------


## Zippyjuan

> Watch this:
> 
> Money, Banking and the Federal Reserve


I scanned through the video and don't see anything which contradicts what I said. Thank you for the link though.

----------


## Zippyjuan

> so then, is it fair to say, the minute the policy was set, interest rates were set, the available money was already decided. (commercial banks were NOT free to issue or create new money, only put what's allowed into circulation in certain parts of the market).
> 
> Which means, banks ARE bound to Fed's interest rates (as they cannot exceed them legally or mathematically).


No mention about interest rates. The reserve requirement is independent of interest rates.

----------


## Deborah K

> I scanned through the video and don't see anything which contradicts what I said. Thank you for the link though.


Start at 23:25.  Your claim that all loans are based on money which has been deposited at the bank is a bit misleading if you watch this segment.

----------


## WaltM

> No mention about interest rates. The reserve requirement is independent of interest rates.


reserve requirement and their inability to issue new currency FORCES THEM to lend according to Fed's interest rates, otherwise they'd be free to lend in/out at any rate if they had the issuing power of money, wouldn't they?

----------


## Zippyjuan

This can be confusing and hard to follow. I will attempt to offer an example.  

If I earn $1000 and deposit it at the bank, that is $1000 I am not spending but could have.  The potential money supply (money actually being spent and out there competiting with other money for goods and potentially leading to inflation) is reduced by $1000.  The bank has a ten percent reserve requirement which means they cannot loan out 10% of that money but can loan out 90% of that.  Say they go for the max and loan out $900 of the money.  Now instead of my spending $1000, we have somebody else spending $900 or $100 LESS than could have been spent and circulated if I blew it instead of putting it in the bank. Money at the bank is not circulating and thus not competing with other dollars for goods.  It is not productive- not doing much of anything.  It is not effecting inflation. 

OK. This person decides not to spend it today and he deposits the $900 at the bank.  True, total deposits at the bank are now $1900 which is more than we started with but we are back to zero being spent since it is all at the bank.  Of this person's $900, they can again loan out 90% or $810.  The bank is not creating this money out of thin air- it is coming from deposits- in essence they are borrowing the money from the depositors to loan to somebody else.  That money gets lent out and to keep it short, let's have this person actually spend the money.  If we took this to infinity, it could go on a long time.   So we have two loans out- from my original $1000 deposit.  But again, it is mostly just on paper at the bank or in their vault.  Of the original $1000 I could have spend, the actually money being spent is getting smaller- now down to $810.  

$1000 deposited originally-  now $1900 in deposits, $1710 in loans and $810 being spent. Money being created out of thin air, right?  So what happens if I decide that I want to take my money out and spend it? Uh oh- now we are spending $1810- that means the money supply increased, right? Not exactly. 

 The bank borrowed $1000 from me but they don't have it right now.  They have to borrow that money from somebody or someplace to be able to give it to me.  But when they borrow that money, they are taking money out of circulation again (unless they borrow from the Fed but they do still have to pay that back and get the money from someplace which does reduce the supply circulating eventually- Fed loans are typically very short term- often overnight).  I am going to spend $1000 but the bank has to borrow $1000 from somebody else. So the while I spend the $1000, the money circulatiing for goods goes up but that is offset by the bank having to borrow the same amount so there is no net change in the circulating money supply. Well, actually they still had $190 on reserve so for my withdrawl they really needed to borrow $810 but that makes their reserves now zero. 

The bank has another problem.  Their balance sheet is off. They don't have enough money on hand to meet their reserve requirements. They have loaned out $1710 and only have $900 in deposits (person #2 hasn't taken his out and spent it yet). So not only do they need the $810 to give me, they need another $171 for their vaults to meet the reserve requirements for the loans they have out (ten percent of the loans).  This reduces the money circulating even more.  But wait- shouldn't that be going up? 

The same thing would happen if person #2 were to decide to take their loan out and actually spend it- except the numbers would be smaller.  The bank has to again borrow to give the deposit to the customer as well as borrow to replenish enough reserves against their outstanding loans- the customer increased the money supply by taking out their money and spending it but the banks reduced the money supply by having to borrow the money it gave the customer. 

What about if a loan gets paid off?  Then that person takes money they would have spent in the future and does not spend it but pays the loan plus interest.  This means that this person now has less money to go out and spend at this future time.  The bank receiving the payment now has money which can be lent again and spent- but not as much as the borrower could have spent if he did not take out a loan in the first place since the bank has to keep their ten percent on hand still. #2 paid back $900 plus interest so he has that much less to spend when he makes that payment.  The money supply reduces again. 

The key here is money in circulation.  Only money in circulation - being spent- matters.  Money in the bank is not being productive. It is not inflationary.  Money under your mattress is not being productive.   It is not competing with other dollars for goods.  That only happens when it is spent.  That is when it can have an effect on inflation or have any real value.  Say I print up $1 million but keep it all to myself. Hide it in the closet or have it framed and hang it in the living room.  Paper the den with it.  Who cares.   Am I rich?  I am getting nothing for that money. I have nothing more than I did before other than the paper I printed it on.    It is just paper (or electronic bits or whatever) until it used as a medium of exchange.

----------


## WaltM

> This can be confusing and hard to follow. I will attempt to offer an example.  
> 
> If I earn $1000 and deposit it at the bank, that is $1000 I am not spending but could have.  The potential money supply (money actually being spent and out there competiting with other money for goods and potentially leading to inflation) is reduced by $1000.  The bank has a ten percent reserve requirement which means they cannot loan out 10% of that money but can loan out 90% of that.  Say they go for the max and loan out $900 of the money.  Now instead of my spending $1000, we have somebody else spending $900 or $100 LESS than could have been spent and circulated if I blew it instead of putting it in the bank. Money at the bank is not circulating and thus not competing with other dollars for goods.  It is not productive- not doing much of anything.  It is not effecting inflation.


If you spent $1000 outright, the person who received the $1000 check will deposit it, and the same happens too. 





> OK. This person decides not to spend it today and he deposits the $900 at the bank.  True, total deposits at the bank are now $1900 which is more than we started with but we are back to zero being spent since it is all at the bank.  Of this person's $900, they can again loan out 90% or $810.  The bank is not creating this money out of thin air- it is coming from deposits- in essence they are borrowing the money from the depositors to loan to somebody else.  That money gets lent out and to keep it short, let's have this person actually spend the money.  If we took this to infinity, it could go on a long time.   So we have two loans out- from my original $1000 deposit.  But again, it is mostly just on paper at the bank or in their vault.  Of the original $1000 I could have spend, the actually money being spent is getting smaller- now down to $810.  
> 
> $1000 deposited originally-  now $1900 in deposits, $1710 in loans and $810 being spent. Money being created out of thin air, right?  So what happens if I decide that I want to take my money out and spend it? Uh oh- now we are spending $1810- that means the money supply increased, right? Not exactly.


Correct, money wasn't created. Money is just being put in and out of circulation as we go. Banks were authorized from day 1 to do so, and by that moment, money was created and limited.





> The bank borrowed $1000 from me but they don't have it right now.  They have to borrow that money from somebody or someplace to be able to give it to me.  But when they borrow that money, they are taking money out of circulation again (unless they borrow from the Fed but they do still have to pay that back and get the money from someplace which does reduce the supply circulating eventually- Fed loans are often very short term- often overnight).  I am going to spend $1000 but the bank has to borrow $1000 from somebody else. So the while I spend the $1000, the money circulatiing for goods goes up but that is offset by the bank having to borrow the same amount so there is no net change in the circulating money supply. Well, actually they still had $190 on reserve so for my withdrawl they really needed to borrow $810 but that makes their reserves now zero. 
> 
> The bank has another problem.  Their balance sheet is off. They don't have enough money on hand to meet their reserve requirements. They have loaned out $1710 and only have $900 in deposits (person #2 hasn't taken his out and spent it yet). So not only do they need the $810 to give me, they need another $171 for their vaults to meet the reserve requirements for the loans they have out (ten percent of the loans).  This reduces the money circulating even more.  But wait- shouldn't that be going up? 
> 
> The same thing would happen if person #2 were to decide to take their loan out and actually spend it- the numbers would be smaller.  The bank has to again borrow to give the deposit to the customer as well as borrow to replenish enough reserves against their outstanding loans. 
> 
> What about if a loan gets paid off?  Then that person takes money they would have spent in the future and does not spend it but pays the loan plus interest.  This means that this person now has less money to go out and spend at this future time.

----------


## Paleo

xx

----------


## Travlyr

> This can be confusing and hard to follow. I will attempt to offer an example.  
> 
> If I earn $1000 and deposit it at the bank, that is $1000 I am not spending but could have.  The potential money supply (money actually being spent and out there competiting with other money for goods and potentially leading to inflation) is reduced by $1000.  *The bank has a ten percent reserve requirement which means they cannot loan out 10% of that money but can loan out 90% of that.  Say they go for the max and loan out $900 of the money.*  Now instead of my spending $1000, we have somebody else spending $900 or $100 LESS than could have been spent and circulated if I blew it instead of putting it in the bank. Money at the bank is not circulating and thus not competing with other dollars for goods.  It is not productive- not doing much of anything.  It is not effecting inflation. 
> 
> OK. This person decides not to spend it today and he deposits the $900 at the bank.  True, total deposits at the bank are now $1900 which is more than we started with but we are back to zero being spent since it is all at the bank.  Of this person's $900, they can again loan out 90% or $810.  The bank is not creating this money out of thin air- it is coming from deposits- in essence they are borrowing the money from the depositors to loan to somebody else.  That money gets lent out and to keep it short, let's have this person actually spend the money.  If we took this to infinity, it could go on a long time.   So we have two loans out- from my original $1000 deposit.  But again, it is mostly just on paper at the bank or in their vault.  Of the original $1000 I could have spend, the actually money being spent is getting smaller- now down to $810.  
> 
> $1000 deposited originally-  now $1900 in deposits, $1710 in loans and $810 being spent. Money being created out of thin air, right?  So what happens if I decide that I want to take my money out and spend it? Uh oh- now we are spending $1810- that means the money supply increased, right? Not exactly. 
> 
>  The bank borrowed $1000 from me but they don't have it right now.  They have to borrow that money from somebody or someplace to be able to give it to me.  But when they borrow that money, they are taking money out of circulation again (unless they borrow from the Fed but they do still have to pay that back and get the money from someplace which does reduce the supply circulating eventually- Fed loans are typically very short term- often overnight).  I am going to spend $1000 but the bank has to borrow $1000 from somebody else. So the while I spend the $1000, the money circulatiing for goods goes up but that is offset by the bank having to borrow the same amount so there is no net change in the circulating money supply. Well, actually they still had $190 on reserve so for my withdrawl they really needed to borrow $810 but that makes their reserves now zero. 
> ...


According to the video on the Federal Reserve, this is not the way the 10% reserve requirement works.  Your $1000 deposit gives the bank the ability to "create" $9000 out of thin air.

----------


## WaltM

> According to the video on the Federal Reserve, this is not the way the 10% reserve requirement works.  Your $1000 deposit gives the bank the ability to "create" $9000 out of thin air.


If that were true, then the banks didn't create it, or wait on you to create it.

They were already authorized to do so, which means, the money was already created and allocated, just in different parts of the market and in/out of the market time to time.

Tell me smarty, why do banks fail if they can multiply money? Don't they have a limit on how much they can multiply?

Why can't they create 9x more than the $9000 they just created?
(I already know why)

----------


## Travlyr

> If that were true, then the banks didn't create it, or wait on you to create it.
> 
> They were already authorized to do so, which means, the money was already created and allocated, just in different parts of the market and in/out of the market time to time.
> 
> Tell me smarty, why do banks fail if they can multiply money? Don't they have a limit on how much they can multiply?
> 
> Why can't they create 9x more than the $9000 they just created?
> (I already know why)


WaltM, I did not make that up.  I watched the three videos in this thread.  If you wish to learn, then listen to the experts.




> Watch this:
> 
> Money, Banking and the Federal Reserve

----------


## WaltM

> WaltM, I did not make that up.  I watched the three videos in this thread.  If you wish to learn, then listen to the experts.


just because you didn't make it up doesn't mean you're right.
So, can you answer the question or not?
Do you have any idea how much money banks can create?

----------


## Travlyr

> just because you didn't make it up doesn't mean you're right.
> So, can you answer the question or not?
> Do you have any idea how much money banks can create?


The three videos in this thread explain it all.

----------


## WaltM

> The three videos in this thread explain it all.


just answer this question : 

*CAN or CANNOT banks create unlimited money?*

If not, they essentially CANNOT create new money (and the limit to money creation has been set already)

Can you deny this at all?

If SO, then why do they fail? Why can't they created money to prevent failing?

----------


## heavenlyboy34

> just answer this question : 
> 
> *CAN or CANNOT banks create unlimited money?*
> 
> If not, they essentially CANNOT create new money (and the limit to money creation has been set already)
> 
> Can you deny this at all?
> 
> If SO, then why do they fail? Why can't they created money to prevent failing?


Commercial banks cannot create infite money, but the FED can.

----------


## WaltM

> Commercial banks cannot create infite money, but the FED can.


even though the Fed CAN, have they ever done it in any secret?

(Ok, up until they stopped printing M3 the past few years).

At least we got one thing straight, commercial banks CANNOT create new money, they're regulated by the Fed & Treasury how much they're allowed to use (circulate).

----------


## Paleo

Walt, you are kind of tired.  The 1-9 reserve requirement means the commercial banks in the aggregate can multiply money put into circulation by the fed 9 times.  Plus, since they've been largely deregulated, they've been Engaging in lots of other business.  



Banks fail despite their insane gross margins because they are likely the most inefficiently run industry on the planet.  They have no incentive to be efficient when they can take paper profits and socialize losses when their bull$#@! is finally harvested.

----------


## WaltM

> Walt, you are kind of tired.  The 1-9 reserve requirement means the commercial banks in the aggregate can multiply money put into circulation by the fed 9 times.  Plus, since they've been largely deregulated, they've been Engaging in lots of other business.


But they can't multiply it again. Which means it ends at 9x, not 81x, 729x...ad infinitum.

So, why shouldn't we just consider that the bank had 9x to begin with?







> Banks fail despite their insane gross margins because they are likely the most inefficiently run industry on the planet.  They have no incentive to be efficient when they can take paper profits and socialize losses when their bull$#@! is finally harvested.


Why do they have incentive to multiply money but not to be effecient?
Is there insane gross margin LIMITED or NOT?
If limited, then they fail, I understand, QUIT SAYING they can multiply money.
If not limited, why do they fail? They can always print more money to bail themselves out (sound retarded? It is!)

----------


## live liberty

> But they can't multiply it again. Which means it ends at 9x, not 81x, 729x...ad infinitum.


Poor, poor WaltM.  Always posting rarely learning.

----------


## WaltM

> Poor, poor WaltM.  Always posting rarely learning.


am I wrong?

----------


## Paleo

> But they can't multiply it again. Which means it ends at 9x, not 81x, 729x...ad infinitum.
> 
> So, why shouldn't we just consider that the bank had 9x to begin with?


Because they didn't have 9x to start with.  They had nothing.  The deposit isn't theirs, they rent it for 1% or so, and then get to turn around and rent it out for 5-30%, and for every 1$ in real money in the system, they ultimately create 9... so their gross profit margin is somewhere between 500% and 27000% depending on their business model....

Then they get to borrow funds from the fed at negative cost (counter rates are generally below inflation)...

Oh, this part is good... When the Treasury offers reasonable rates, the banks can just borrow from the fed and buy T-bills...   and make an infinite profit margin... since there is generally a 2 point spread between the t-billl rate and the counter rate... it is guaranteed profit... 

this list of scams they get to run just keeps going and going... 




> Why do they have incentive to multiply money but not to be effecient?
> Is there insane gross margin LIMITED or NOT?
> If limited, then they fail, I understand, QUIT SAYING they can multiply money.
> If not limited, why do they fail? They can always print more money to bail themselves out (sound retarded? It is!)


Yes, they can multiply money, and yes, there is a limit to how far they are allowed to take it... 

Ultimately, they fail because they are poorly run, and even with insane profit margins, they build big 50 story glass penises all over your local downtown, and fill them with thousands of Vice Presidents of upper butt crack... And give them all big bonuses when they take paper profits that dont really exist... 

and then when a few of their loans fail, and they have no remaining deposits to leverage into new revenue streams, or there simply are no more revenue streams immediately available... (i.e. nobody is borrowing money), they end up upside down on their revenue stream from time to time and fail here and there...  Because they are the most wasteful and parasitic 'industry' on the face of the planet.

----------


## WaltM

> Because they didn't have 9x to start with.  They had nothing.  The deposit isn't theirs, they rent it for 1% or so, and then get to turn around and rent it out for 5-30%, and for every 1$ in real money in the system, they ultimately create 9... so their gross profit margin is somewhere between 500% and 27000% depending on their business model....
> 
> Then they get to borrow funds from the fed at negative cost (counter rates are generally below inflation)...
> 
> Oh, this part is good... When the Treasury offers reasonable rates, the banks can just borrow from the fed and buy T-bills...   and make an infinite profit margin... since there is generally a 2 point spread between the t-billl rate and the counter rate... it is guaranteed profit... 
> 
> this list of scams they get to run just keeps going and going... 
> 
> 
> ...


ok, so we established the obvious, that they're limited in money creation.

Making them ultimately not money creators, just users.

Treasury & Fed already limited how much money is on the market, and if you followed THAT rather than how much you THINK is on the market (based on your paycheck and bills), then maybe you'd not be so surprised that prices aren't low.

----------


## Paleo

> ok, so we established the obvious, that they're limited in money creation.
> 
> Making them ultimately not money creators, just users.
> 
> Treasury & Fed already limited how much money is on the market, and if you followed THAT rather than how much you THINK is on the market (based on your paycheck and bills), then maybe you'd not be so surprised that prices aren't low.


Im sorry, but that made zero sense.  Are you trying out for the part of Yoda?

----------


## WaltM

> Im sorry, but that made zero sense.  Are you trying out for the part of Yoda?


what part do u want me to repeat and explain?

----------


## Zippyjuan

> According to the video on the Federal Reserve, this is not the way the 10% reserve requirement works.  Your $1000 deposit gives the bank the ability to "create" $9000 out of thin air.


That is because the video does not look at the entire situation. They ignore that the bank has to borrow if their reserves are not adequate to cover their outstanding loans.  This borrrowing reduces the money supply- by more than their lending increased it. I know this may be difficult to grasp everything that is going on. 

As long as people are borrowing money and depositing that money in the bank. the money out being spent (the real money supply) is not growing at all- even though the bank deposits are.  If all those people took out the money and spent it, the real supply does increase but the bank has to borrow from the real supply to replenish their reserves.

----------


## Travlyr

> That is because the video does not look at the entire situation. They ignore that the bank has to borrow if their reserves are not adequate to cover their outstanding loans.  This borrrowing reduces the money supply- by more than their lending increased it. I know this may be difficult to grasp everything that is going on. 
> 
> As long as people are borrowing money and depositing that money in the bank. the money out being spent (the real money supply) is not growing at all- even though the bank deposits are.  If all those people took out the money and spent it, the real supply does increase but the bank has to borrow from the real supply to replenish their reserves.


Sounds confusing.  Isn't borrowing from a bank different than borrowing from an individual?  When someone asks Uncle Joe for $10k to buy a truck, Uncle Joe has to dig into his pocket... real money.  Banks don't have to do that... do they?

----------


## WaltM

> Sounds confusing.  Isn't borrowing from a bank different than borrowing from an individual?


No, it isn't.

At least when both have a written contract and agreement to repay.

It may be less legal for an individual to charge interest, and less legal for a bank to loan out without checking credit, but you're legally obligated to pay both if you agreed to.

Banks may have more money, that's about it/




> When someone asks Uncle Joe for $10k to buy a truck, Uncle Joe has to dig into his pocket... real money.  Banks don't have to do that... do they?


Uncle Joe doesn't have it either, he just has a bank account that says he has the money. What are you asking banks to have? All money printed in paper? Or coins? Or must every dollar be backed by gold to be real money?

----------


## torchbearer

> Sounds confusing.  Isn't borrowing from a bank different than borrowing from an individual?  When someone asks Uncle Joe for $10k to buy a truck, Uncle Joe has to dig into his pocket... real money.  Banks don't have to do that... do they?


banks have permission to counterfiet money.

----------


## Zippyjuan

> Sounds confusing.  Isn't borrowing from a bank different than borrowing from an individual?  When someone asks Uncle Joe for $10k to buy a truck, Uncle Joe has to dig into his pocket... real money.  Banks don't have to do that... do they?


Two minor differences. Uncle Joe can lend out all the money he has if he wants to. The bank can only loan out 90% of the  money they have.  Second, the bank will charge fees and interest, Uncle Joe (if he likes you!) might not. 

When you borrow from the bank, you are indirectly borrowing from me since it is my money I loaned to the bank (via my deposit) they are loaning to you.  Except for the reserve requirement, the impact is the same if you had borrowed directly from me.  The bank is basically a clearing house between people with money to loan and people who want to borrow (they do have more services than that though of course).   They take a cut as a cost of their services.

----------


## WaltM

> banks have permission to counterfiet money.


No they don't.

If it's legal, it's not counterfeit.

----------


## WaltM

> Two minor differences. Uncle Joe can lend out all the money he has if he wants to. The bank can only loan out 90% of the  money they have.  Second, the bank will charge fees and interest, Uncle Joe (if he likes you!) might not.


doesn't the founding a bank mean they had to have some of "their own money" to begin with?

If so, can they lend out 100% of "other people's money" if their own is 1:9 ratio?




> When you borrow from the bank, you are indirectly borrowing from me since it is my money I loaned to the bank (via my deposit) they are loaning to you.  Except for the reserve requirement, the impact is the same if you had borrowed directly from me.


That's like saying when you get your paycheck, you're indirectly being paid by the Fed or Treasury, because they originated the money.




> The bank is basically a clearing house between people with money to loan and people who want to borrow (they do have more services than that though of course).   They take a cut as a cost of their services.


and banks will only have costs, or failures, if they have a limit to money creation (which many people here don't seem to get)

----------


## Zippyjuan

> doesn't the founding a bank mean they had to have some of "their own money" to begin with?
> 
> If so, can they lend out 100% of "other people's money" if their own is 1:9 ratio?


The reserve requirement applies to qualifying deposits (there are a few exceptions). It does not say they cannot loan out any of their own funds in addition to loaning out from deposits. 
http://www.federalreserve.gov/moneta...reservereq.htm



> Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. Within limits specified by law, the Board of Governors has sole authority over changes in reserve requirements. Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks.
> 
> The dollar amount of a depository institution's reserve requirement is determined by applying the reserve ratios specified in the Federal Reserve Board's Regulation D to an institution's reservable liabilities (see table of reserve requirements). Reservable liabilities consist of net transaction accounts, nonpersonal time deposits, and eurocurrency liabilities. Since December 27, 1990, nonpersonal time deposits and eurocurrency liabilities have had a reserve ratio of zero. 
> 
> The reserve ratio on net transactions accounts depends on the amount of net transactions accounts at the depository institution. The Garn-St Germain Act of 1982 exempted the first $2 million of reservable liabilities from reserve requirements. This "exemption amount" is adjusted each year according to a formula specified by the act. The amount of net transaction accounts subject to a reserve requirement ratio of 3 percent was set under the Monetary Control Act of 1980 at $25 million. This "low-reserve tranche" is also adjusted each year (see table of low-reserve tranche amounts and exemption amounts since 1982). Net transaction accounts in excess of the low-reserve tranche are currently reservable at 10 percent.





> That's like saying when you get your paycheck, you're indirectly being paid by the Fed or Treasury, because they originated the money.


Sorry, but that is not a valid comparison. You are indirectly being paid by the people who purchased goods and services from your employer- that would be a more valid comparison.

----------


## WaltM

> Sorry, but that is not a valid comparison. You are indirectly being paid by the people who purchased goods and services from your employer- that would be a more valid comparison.


so if the Federal Reserve stopped printing money and issuing credit, would our economy continue as it is?

----------


## torchbearer

> No they don't.
> 
> If it's legal, it's not counterfeit.


still immoral whether it is sanctioned by your overlords or not.

----------


## Travlyr

> It's not even a "contract."
> 
> It is a one sided _agreement_ with only one signature on it, yours.  It is _your_ agreement.  You are the creator. So modify it.
> 
> Read the Federal Reserve publications such as Two Faces of Debt and Modern Money Mechanics.
> 
> Also see:
> 
> Money Matrix


The way I understand it, banks create the money at the time of lending.  And when you pay it back, the bank gets to keep the new money in addition to the interest.  Watch this video.

----------


## WaltM

> The way I understand it, banks create the money at the time of lending.  And when you pay it back, the bank gets to keep the new money in addition to the interest.  Watch this video.


*
That's an ILLUSION.*

*The fact banks were authorized to create that money, means it was already created by the Fed & Treasury.*

They merely put it into circulation.

When I borrow $1M from a bank, and pay them back, neither of us ever touched the $1M in cash. It's just a number in the computer, so the mere fact banks can create, issue, lend this amount of money (and only that much, no more), means they ultimately did NOT "create money out of air", they're just using what's allowed to them.

----------


## WaltM

> It's not even a "contract."
> 
> It is a one sided _agreement_ with only one signature on it, yours.  It is _your_ agreement.  You are the creator. So modify it.


What is necessary to constitute "2 sided"?

Have you managed to sign an agreement to borrow $1M, and then "modify" it some way that would make me jealous and all people who pay back the bank stupid?

----------


## WaltM

> still immoral whether it is sanctioned by your overlords or not.


fair enough, but don't say "banks are allowed to commit crime" when they are not (unless you have your own definition of what crime means).

----------


## Travlyr

> What is necessary to constitute "2 sided"?
> 
> Have you managed to sign an agreement to borrow $1M, and then "modify" it some way that would make me jealous and all people who pay back the bank stupid?


But, but, but WaltM.  Al Wagner, CPA proves in the video Money Matrix that banks create the money out of thin air.  He seems credible.  What are your credentials?

----------


## WaltM

> But, but, but WaltM.  Al Wagner, CPA proves in the video Money Matrix that banks create the money out of thin air.  He seems credible.  What are your credentials?


I have no credentials. 

But is there a limit to how much they can "create"? if so, then it's your own fault not knowing how much they can "create".

Also, has Mr. Wagner managed to take out a loan and run with it, never pay it back? Yes or no? If not, who cares if he's right. If so, he ought to bail out everybody.

----------


## Travlyr

> *I have no credentials.*


I prefer to learn from experts.

----------


## Zippyjuan

Well if it is on YouTube it must all be true then. 

The banks are making loans from money they have on deposit- not out of thin air. If they could loan out over 100% of their deposits, they could make money out of thin air but they are not allowed to do that.  They can't even loan 100% of deposits but only 90%- that is why it is called a "reserve requirement" and "fractional reserve banking" - they are required to hold a fraction of their deposits on hand and not lend them out. If I have $100 and am allowed to loan out $90, have I created money? No.  I have merely given money I have to somebody else.  When they pay back the loan, I get to keep the money plus interest- after all, it was mine in the first place.  Did I create money? I did the same thing the bank does. 

A bank is slightly different. I loan them the $100 by making a deposit and they can loan up to 90% to somebody else- $90.   When the bank gets repaid the money, they don't keep all of it- they still owe it to me when I want to take my money out.  They do get to keep the difference between the interest (if any) they are paying me vs the interest they are charging the borrower- that is how they make a profit and stay in business and pay their employees and for their buildings, etc.  If I don't take my money out then yes they can use the money which the previoius borrower repaid and loan that money to somebody else- but it is the same money I gave to them in the first place. It is not new money created from thin air.

As for credentials, (I am aware you were not asking me) I happen to have a degree in Economics.

----------


## WaltM

> I prefer to learn from experts.


you only think money was "created" because you were ignorant it already existed.

now, from what you learned from this expert, what have you earned based on this information?

(I can tell you I save money based on what I believe)

----------


## WaltM

> I prefer to learn from experts.


how about you answer my questions?

a) is there a limit to how much can be "created"?
b) what money isn't "created"?
c) has anybody benefited from the information this "expert" has given? 
Has Danke or Wagner ever taken out a loan and never paid it back?

----------


## Travlyr

> Well if it is on YouTube it must all be true then. 
> 
> The banks are making loans from money they have on deposit- not out of thin air. If they could loan out over 100% of their deposits, they could make money out of thin air but they are not allowed to do that.  They can't even loan 100% of deposits but only 90%- that is why it is called a "reserve requirement" and "fractional reserve banking" - they are required to hold a fraction of their deposits on hand and not lend them out. If I have $100 and am allowed to loan out $90, have I created money? No.  I have merely given money I have to somebody else.  When they pay back the loan, I get to keep the money plus interest- after all, it was mine in the first place.  
> 
> A bank is slightly different. I loan them the $100 by making a deposit and they can loan up to 90% to somebody else- $90.   When the bank gets repaid the money, they don't keep all of it- they still owe it to me when I want to take my money out.  They do get to keep the difference between the interest (if any) they are paying me vs the interest they are charging the borrower- that is how they make a profit and stay in business and pay their employees and for their buildings, etc.  If I don't take my money out then yes they can use the money which the previoius borrower repaid and loan that money to somebody else- but it is the same money I gave to them in the first place. It is not new money created from thin air.


Al Wagner, CPA is quite credentialed.  Are you?  You claim that if a bank has $100 on deposit, then the bank can only loan out $90.  The experts say that if a bank has $100 on deposit, then the bank can create an additional $900.  Prove you are right.

----------


## Zippyjuan

I have explained what happens in a previous post. Prove that what I said was wrong. Show me the flaw in my description.  Having a CPA does not necessarily mean you know how the banking system works.  

Let me go to the source and show you what the Federal Reserve says about it:
http://www.newyorkfed.org/aboutthefe...int/fed45.html



> Reserve requirements are the* portion of deposits* that *banks may not lend* and have to keep either on hand or on deposit at a Federal Reserve Bank


Not much simpler than that. This means that they cannot make loans in excess of deposits so no money out of thin air.  In fact, they cannot loan out 100% of deposits becasue of this requirement.  I don't think your CPA would be considered a more authoritative voice than the Federal Reserve which has the responsibiliby of overseeing the system.

----------


## Travlyr

> how about you answer my questions?
> 
> a) is there a limit to how much can be "created"?


Commercial banks, yes. Central banks, no.



> b) what money isn't "created"?


All money is created.  Money created out of thin air is worthless.



> c) has anybody benefited from the information this "expert" has given?


 Yes



> Has Danke or Wagner ever taken out a loan and never paid it back?


I have no idea... and I couldn't care less.  But I do wish to take this opportunity to thank Danke for sharing this valuable information.

----------


## teacherone

> Al Wagner, CPA is quite credentialed.  Are you?  You claim that if a bank has $100 on deposit, then the bank can only loan out $90.  The experts say that if a bank has $100 on deposit, then the bank can create an additional $900.  Prove you are right.


This has been debunked SOOOO many times on these boards man.

It's simple math.

You are proposing that:

Bank 1-- takes in 100 from A --creates 900 to loan to B
Bank 2-- takes in 900 from B-- creates 8,100 to loan to C.
Bank 3--takes in 8,100 from C-- creates 72,900 to loan to D
Bank 4--takes in 72, 900 from D-- creates 656,100 to loan to E.
Bank 5--takes in 656,100 from E-- creates 5,904,900 to loan to f.

In five steps, you've gone from an initial deposit of 100$---> almost 6 million.

Now, I know inflation is bad now, but it ain't that bad.

----------


## WaltM

> Commercial banks, yes. Central banks, no.


Ok, so since you're not dealing with the central banks directly, you should only be concerned about commercial banks.

Since they have a limit to creation of money, then you can't say they are wrong, as you have the right to know what their limit is, if you were to do any business with them.




> All money is created.  Money created out of thin air is worthless.


So give me your worthless money, I promise I won't complain.




> Yes


How did he?




> I have no idea... and I couldn't care less.  But I do wish to take this opportunity to thank Danke for sharing this valuable information.


how is it valuable if you can't cash in on it?

----------


## Travlyr

> This has been debunked SOOOO many times on these boards man.
> 
> It's simple math.
> 
> You are proposing that:
> 
> Bank 1-- takes in 100 from A --creates 900 to loan to B
> Bank 2-- takes in 900 from B-- creates 8,100 to loan to C.
> Bank 3--takes in 8,100 from C-- creates 72,900 to loan to D
> ...





> Watch this:
> 
> Money, Banking and the Federal Reserve


Then what am I missing?

----------


## WaltM

> This has been debunked SOOOO many times on these boards man.
> 
> It's simple math.
> 
> You are proposing that:
> 
> Bank 1-- takes in 100 from A --creates 900 to loan to B
> Bank 2-- takes in 900 from B-- creates 8,100 to loan to C.
> Bank 3--takes in 8,100 from C-- creates 72,900 to loan to D
> ...


good luck getting him to listen to you when you don't have a CPA, lol

----------


## WaltM

> Then what am I missing?


a brain? Common sense perhaps?

How do your reconcile 

a) local & commercial banks have a limit to money creation
b) they can always create 9x the minute you put a dollar in
c) they still fail
d) oh, I forgot the best part, who cares? All money is created, all is worthless.

----------


## teacherone

The reality:

Bank 1-- takes a deposit of 100, creates 90 and loans it out to A
Bank 2-- takes in 90 from A and loans out 81 to B
Bank 3-- takes in 81 from B and loans out 73 to C
Bank 4-- takes in 73 from C and loans out 66 to D.
Bank 5-- takes in 66 from D and loans out 60- E.
   etc until the money runs out....

The TOTAL after the money has gone through the banking system reaches ....? do the math
But no SINGLE bank creates that amount. The system as a whole does.

Banks CANNOT create more money than their total deposits but must keep some as RESERVES.

That's why they're called reserves...get it?

----------


## Zippyjuan

> The reality:
> 
> Bank 1-- takes a deposit of 100, creates 90 and loans it out to A
> Bank 2-- takes in 90 from A and loans out 81 to B
> Bank 3-- takes in 81 from B and loans out 73 to C
> Bank 4-- takes in 73 from C and loans out 66 to D.
> Bank 5-- takes in 66 from D and loans out 60- E.
>    etc until the money runs out....
> 
> ...


And if anybody along the way does not put their money in the banks or withdraws it, this comes to a stop.  If B does not put his money in the bank but instead goes out and spends (circulates) it, then Bank#3, #4, and #5 etc don't have any deposits so they cannot make any loans at all and the growth in deposits ends.

----------


## teacherone

> And if anybody along the way does not put their money in the banks or withdraws it, this comes to a stop.  If B does not put his money in the bank but instead goes out and spends (circulates) it, then Bank#3, #4, and #5 etc don't have any deposits so they cannot make any loans at all and the growth in deposits ends.


not really... whomever B gives the money to will likely put it into a bank as well.

----------


## WaltM

> not really... whomever B gives the money to will likely put it into a bank as well.


his point is, it's possible to pull it out of circulation, such as keeping it in cash at home.

----------


## Travlyr

> The reality:
> 
> Bank 1-- takes a deposit of 100, creates 90 and loans it out to A
> Bank 2-- takes in 90 from A and loans out 81 to B
> Bank 3-- takes in 81 from B and loans out 73 to C
> Bank 4-- takes in 73 from C and loans out 66 to D.
> Bank 5-- takes in 66 from D and loans out 60- E.
>    etc until the money runs out....
> 
> ...





> a brain? Common sense perhaps?
> 
> How do your reconcile 
> 
> a) local & commercial banks have a limit to money creation
> b) they can always create 9x the minute you put a dollar in
> c) they still fail
> d) oh, I forgot the best part, who cares? All money is created, all is worthless.


I have a brain.  I have common sense.  A trillion dollars is a stack of $1000 dollar bills almost 69 miles long.  We are now spending almost a trillion dollars ever 4 1/2 months.  In our fraudulent debt system virtually everyone is indebted to society... unless you are elite.  Why?  Why should people be born into debt?  Debtor systems transfer wealth from the lower class to the upper class.  Debtor systems are cruel and equal to slavery.  It's stupid.

----------


## WaltM

> I have a brain.  I have common sense.  A trillion dollars is a stack of $1000 dollar bills almost 69 miles long.


Or a stack of $100 bills 690 miles long.

The distance from California to Maine is about 3200 miles, about 4.5x that.

So you mean you can't believe there's a trillion dollars worth of roads, land, crops, dirt between the 2 places? But somehow you can fit a stack of $100 "worthless" bills?




> We are now spending almost a trillion dollars ever 4 1/2 months.


What does that have to do with banks creating limited money?

Or paying your credit card?




> In our fraudulent debt system virtually everyone is indebted to society... unless you are elite.  Why?  Why should people be born into debt?  Debtor systems transfer wealth from the lower class to the upper class.  Debtor systems are cruel and equal to slavery.  It's stupid.


Why should people be born at all?

----------


## Mike4Freedom

Danke, your pms are full, have you had any success with the 1099-OID form for getting back the deposits that you created with your signatures?

----------


## Travlyr

> Or a stack of $100 bills 690 miles long.
> 
> The distance from California to Maine is about 3200 miles, about 4.5x that.
> 
> So you mean you can't believe there's a trillion dollars worth of roads, land, crops, dirt between the 2 places? But somehow you can fit a stack of $100 "worthless" bills?


Huh?  Where do you get your assumptions? They make no sense.  Do you pull then out of thin air?



> What does that have to do with banks creating limited money?


What do you mean: "limited money?"



> Or paying your credit card?


Given the fact that those who have studied this issue understand that fractional reserve banking as we currently must endure by law is immoral, and the fact that I wish to live within a moral & honest sound money system, then I would not blame anyone for helping to end this immoral banking system. 



> Why should people be born at all?


Me?  I like people... especially the females.  People should have the option of being born without being born in debt.

----------


## Danke

> Danke, your pms are full, have you had any success with the 1099-OID form for getting back the deposits that you created with your signatures?


Did we have a conversation about this topic?

----------


## Danke

> This has been debunked SOOOO many times on these boards man.


Debunked?  Hardly.  Read the Documents published by the Federal Reserve.

(your example is erroneous).

----------


## teacherone

> Debunked?  Hardly.  Read the Documents published by the Federal Reserve.
> 
> (your example is erroneous).


Don't tell me that you believe a 10% reserve ratio means that any individual bank can create 10X the value of its deposits.

That, my friend, is erroneous.

----------


## Zippyjuan

> Debunked?  Hardly.  Read the Documents published by the Federal Reserve.
> 
> (your example is erroneous).


Ones like this one?
http://www.newyorkfed.org/aboutthefe...int/fed45.html



> *Reserve requirements are the portion of deposits that banks may not lend and have to keep either on hand or on deposit at a Federal Reserve Bank*
> 
> The Monetary Control Act (MCA) of 1980 authorizes the Fed's Board of Governors to impose a reserve requirement of 8% to 14% on transaction deposits (checking and other accounts from which transfers can be made to third parties) and of up to 9% on nonpersonal time deposits (those not held by an individual or sole proprietorship). The Fed may also impose a reserve requirement of any size on the amount depository institutions in the United States owe, on a net basis, to their foreign affiliates or to other foreign banks. Under the MCA, the Fed may not impose reserve requirements against personal time deposits except in extraordinary circumstances, after consultation with Congress, and by the affirmative vote of at least five of the seven members of the Board of Governors.
> 
> In order to lighten the reserve requirements on small banks, the MCA provided that the requirement in 1980 would be only 3% for the first $25 million of a bank's transaction accounts, and that the $25-million figure would be adjusted annually by a factor equal to 80% of the percentage change in total transaction accounts in the United States. An adjustment late in 2006 put the amount at $45.8 million. Similarly, the Garn-St. Germain Act of 1982 provided for a 0% reserve requirement for the first $2 million of a banks deposits. This level, too, rises each year as deposits grow, but it is not adjusted for declines in deposits. As of December 2006, that level is $8.5 million.
> 
> The transactions-account reserve requirement is applied to deposits over a two-week period: a bank's average reserves over the period ending every other Wednesday must equal the required percentage of its average deposits in the two-week period ending the Monday sixteen days earlier. Banks receive credit in one two-week period for small amounts of excess reserves they held in the previous period; similarly, a small deficiency in one period may be made up with excess reserves in the following period. Banks that fail to meet their reserve requirements can be subject to financial penalties.
> 
> Reserve Requirements and Money Creation
> ...

----------


## WaltM

> Huh?  Where do you get your assumptions? They make no sense.  Do you pull then out of thin air?


Am I supposed to be surprised you don't know what I'm talking about?




> What do you mean: "limited money?"


they have a limit as to what they can legally create as money (which in turn means their credit was already determined).




> Given the fact that those who have studied this issue understand that fractional reserve banking as we currently must endure by law is immoral, and the fact that I wish to live within a moral & honest sound money system, then I would not blame anyone for helping to end this immoral banking system.


By what means do you consider acceptable of ending this "immoral" system?
Do you know people who work at a bank?
Do you benefit zero from bank services? Do you understand that slaying the dragon will most likely hurt you too (and much worse)?




> Me?  I like people... especially the females.  People should have the option of being born without being born in debt.


Option, not right?

Does the fact we have an immoral banking system discourage you from having children?

----------


## WaltM

> Did we have a conversation about this topic?


are you going to answer the question?

HAVE YOU or HAVE YOU NOT been able to get refunds or money based on your belief of "agreement" "contracts" "1099-OID" "Federal Reserve publications" which you claim to know all much better than we do.

----------


## WaltM

> Ones like this one?
> http://www.newyorkfed.org/aboutthefe...int/fed45.html


ouch.

what are they going to say next? That the Fed is lying and immoral anyway so you can't trust what their official documents say? Or we don't know how to read it as much as they do?

----------


## Travlyr

> Am I supposed to be surprised you don't know what I'm talking about?


No, it's just that I've read your posts all over this forum and you spend more time criticizing others than responding with substance.  What you post is meaningless.

----------


## WaltM

> No, it's just that I've read your posts all over this forum and you spend more time criticizing others than responding with substance.  What you post is meaningless.


You're not asking for substance, you're asking to be corrected of your errors and nonsense.

Danke has been asked whether he's actually benefited from his beliefs, no answer. (or is he afraid we'll be jealous of his earnings?)

----------


## Paleo

Seriously, Walt.  do they force you to wear a helmet on the bus?

----------


## WaltM

> Seriously, Walt.  do they force you to wear a helmet on the bus?


What's your problem? Or question?

Why do banks check your credit if they can create money and never need you to pay it back? Why do banks care if you pay them back if they can just create more every time?

----------


## Danke

> Ones like this one?


Yes exactly.  Someone has read what I have posted.

----------


## Danke

> Don't tell me that you believe a 10% reserve ratio means that any individual bank can create 10X the value of its deposits.
> 
> That, my friend, is erroneous.


K, I won't tell you that.  Why don't you spend a little time actually reading the Feds own documents.

----------


## WaltM

> Yes exactly.  Someone has read what I have posted.


How come he disagrees with you as to what it means?

Now, ready to answer the questions?

1. Have you created any money with your signature and not paid it back lately?

2. Have you gotten any money back from your 1099-OID?

3. Has any of this knowledge you know, that I don't, made you wealthier?

4. Have you defaulted on credit cards? How much? Can you keep doing it?

----------


## WaltM

> K, I won't tell you that.  Why don't you spend a little time actually reading the Feds owe documents.


He did, and we did.

We either understand it more than you, or less than you.

So why don't you correct us if we're wrong?

----------


## teacherone

Bank deposits do not grow exponentially by a power oF 10 everytime someone deposits money.  

Just imagine what would happen iF you were to win the lottery and deposit 1,000,000 into an account.

Three loans later the money supply would increase by a billion.

That's just ridiculous.

----------


## WaltM

> Bank deposits do not grow exponentially by a power oF 10 everytime someone deposits money.  
> 
> Just imagine what would happen iF you were to win the lottery and deposit 1,000,000 into an account.
> 
> Three loans later the money supply would increase by a billion.
> 
> That's just ridiculous.


Bank deposits don't grow exponentially at all.

But certainly not by a power of 10 each time (even those who think it's multiplied by 10 know that much)

----------


## Travlyr

> Bank deposits do not grow exponentially by a power oF 10 everytime someone deposits money.  
> 
> Just imagine what would happen iF you were to win the lottery and deposit 1,000,000 into an account.
> 
> Three loans later the money supply would increase by a billion.
> 
> That's just ridiculous.


Right.  That makes sense.  The way I understand it is that the FED can create unlimited amounts of money, and through the commercial banks $100 can only grow to $1000 through a series of transactions.  Money is being created out of thin air it is just not unlimited at the local level.

The system is rigged against anyone not well connected.  It's a fraudulent system designed to enrich the elite.

----------


## WaltM

> Right.  That makes sense.  The way I understand it is that the FED can create unlimited amounts of money, and through the commercial banks $100 can only grow to $1000 through a series of transactions.  Money is being created out of thin air it is just not unlimited at the local level.
> 
> The system is rigged against anyone not well connected.  It's a fraudulent system designed to enrich the elite.


it's not fraudulent, it's quite open and honest. If you were promised money would never be printed, inflated, and they did otherwise, that's fraud, but you're NOT EVER told such a thing (you're only told that every year, for how much is made every year).

If it's not unlimited at the level accessible to you, why do you care how it's created?

Also, over time, money has to stop multiplying, this when you see bank failures and foreclosures. A house doesn't cost 10x than it did 10 years ago.

And nobody would create more money unless it benefited them (if you expect them to, you should know how to invest your money to benefit at the same time).

----------


## smokemonsc

I don't post here much but I think I can help eliminate some confusion.

Walt is asking "Why do banks fail?"

I would answer - they fail if their bad debts grow to the point that they cannot cover the demand for deposit withdrawls of their customers.  The next logical question woudl be, well, why can't they meet that demand?  I think the answer is complicated, but pretty straight forward:

There are three main types of accounts that I am aware of, plus multiples of varients...

1) Checking Accounts: Money you have access to at any time, most don't pay interest, some cost you money.  It is implied that your money is always there, available for you.

2) Savings Accounts: Money you have access to at any time, but with some limitations.  For example, you can only draw on your account so many times without penalty.  It is implied that the bank will lend out part of your savings, which is why your drawing rights are limited and also the reason the bank pays you interest.

3) Certificates of Deposit:  Money that you have that you either have to pay a penalty to access or, in some cases, you cannot touch the money _at all_ until the certificate has matured.  It is implied that the bank will lend out _all_ of that deposit.  This is why your drawing rights are even more restricted w/ penalties as well as it pays a higher interest rate.

So, this all seems fine and dandy...except: banks fail when they run out of deposits right?  Well the reserve ratio is ment to protect banks from bad loans by keeping some money on hand, in the rare case that savings or COD holders will want their money.  However, in reality, checking accounts are also loaned out.  This is a problem because the depositor is supposed to have access to all of their reserves at any time.  It is impossible for a bank to pay out all of its checking account holders if it has loaned those $$'s.  This is where the accusation of fraud comes in to play.  If you, as the bank's customer believe that your money is safe in the bank and is waiting for you whenever you want it, and then the bank loans those funds out, the reality is, that money _is not there._  This is why many people consider fractional reserve banking fraud.  They are partially correct.  There is nothing inheritantly wrong with FRB, but the problem arises when what is supposed to be secured deposits gets loaned out.

There are other factors here which increase the problem which I don't have time to get in to, like the FDIC etc.  However now I can get in to a solution.

I think banks have gotten in to trouble as they morphed the two traditional types of accounts.  Cash deposits (which aren't meant to be loaned out, it is simply a safe place for you to put you money, as opposed to your cookie jar) and loan deposits, money you expect to earn interest on and accept that there is risk the loan will go bad and you will lose your investment.

As soon as you combine deposits with loanable funds, you will always run in to trouble.  Fractional Reserve banking with loanable funds is OK, and even encouraged, it's up to the bank and the market to determine what a safe ratio is.  I do not think it is OK for non-loanable funds to be loaned out, which is what is currently happening.

Hope that helps clear up some things

----------


## Travlyr

> Hope that helps clear up some things


That helps a lot.  Thank you for posting.

Another aspect of the fraud is when money is created, the first to receive the newly created money, the first in line, benefit the most.  That puts people at the end of the line in serious disadvantage because inflation has already made their dollar worth less.  A sound monetary system would eliminate this inequity.

----------


## WaltM

> I don't post here much but I think I can help eliminate some confusion.
> 
> Walt is asking "Why do banks fail?"
> 
> I would answer - they fail if their bad debts grow to the point that they cannot cover the demand for deposit withdrawls of their customers.  The next logical question woudl be, well, why can't they meet that demand?  I think the answer is complicated, but pretty straight forward:


I apologize if you thought I didn't know why banks fail, I think I do.

But it's irreconcilable with the notion that banks can multiply money (unlimitedly).





> There are three main types of accounts that I am aware of, plus multiples of varients...
> 
> 1) Checking Accounts: Money you have access to at any time, most don't pay interest, some cost you money.  It is implied that your money is always there, available for you.
> 
> 2) Savings Accounts: Money you have access to at any time, but with some limitations.  For example, you can only draw on your account so many times without penalty.  It is implied that the bank will lend out part of your savings, which is why your drawing rights are limited and also the reason the bank pays you interest.
> 
> 3) Certificates of Deposit:  Money that you have that you either have to pay a penalty to access or, in some cases, you cannot touch the money _at all_ until the certificate has matured.  It is implied that the bank will lend out _all_ of that deposit.  This is why your drawing rights are even more restricted w/ penalties as well as it pays a higher interest rate.
> 
> So, this all seems fine and dandy...except: banks fail when they run out of deposits right?  Well the reserve ratio is ment to protect banks from bad loans by keeping some money on hand, in the rare case that savings or COD holders will want their money.  However, in reality, checking accounts are also loaned out.  This is a problem because the depositor is supposed to have access to all of their reserves at any time.  It is impossible for a bank to pay out all of its checking account holders if it has loaned those $$'s.  This is where the accusation of fraud comes in to play.  If you, as the bank's customer believe that your money is safe in the bank and is waiting for you whenever you want it, and then the bank loans those funds out, the reality is, that money _is not there._  This is why many people consider fractional reserve banking fraud.  They are partially correct.  There is nothing inheritantly wrong with FRB, but the problem arises when what is supposed to be secured deposits gets loaned out.
> ...

----------


## smokemonsc

> I apologize if you thought I didn't know why banks fail, I think I do.
> 
> But it's irreconcilable with the notion that banks can multiply money (unlimitedly).


I assumed you did, but you asked the question and its a good one so it deserved an answer 

I agree, banks can't multiply money unlimitedly.  Eventually the amount increase is so low that it's insignificant.  Multiply a number by 90% and eventually you get to less than 1.

I think what some others are getting at though, is that any limitations that normal deposits (savings from people like you and me) would have on the money supply go out the window when the Federal Reserve can make deposits in any amount that they want, simply by printing it.

They may not be using the right words to get across their points, but I think this is what they are trying to say.  There was definately some confusion of terms and misapplied labels.

----------


## smokemonsc

> That helps a lot.  Thank you for posting.
> 
> Another aspect of the fraud is when money is created, the first to receive the newly created money, the first in line, benefit the most.  That puts people at the end of the line in serious disadvantage because inflation has already made their dollar worth less.  A sound monetary system would eliminate this inequity.


You're right.  When there is monetary inflation those who touch the money first have increased benefit than those who touch it last who see zero to negative benefit.

----------


## WaltM

> That helps a lot.  Thank you for posting.


What do you think I've been telling you?

By the way, he's probably not credentialed either!





> Another aspect of the fraud is when money is created, the first to receive the newly created money, the first in line, benefit the most.


Wrong again, you don't need to create money or touch it first to benefit from it. If you know money is going to be inflated or deflated, you can act accordingly with your investments.




> That puts people at the end of the line in serious disadvantage because inflation has already made their dollar worth less.  A sound monetary system would eliminate this inequity.


A sound monetary system (such as gold standard) would give automatic advantage to people and countries with gold, and keep the poor poor unless they work and pay what gold owners ask for.

----------


## WaltM

> I assumed you did, but you asked the question and its a good one so it deserved an answer 
> 
> I agree, banks can't multiply money unlimitedly.  Eventually the amount increase is so low that it's insignificant.  Multiply a number by 90% and eventually you get to less than 1.
> 
> I think what some others are getting at though, is that any limitations that normal deposits (savings from people like you and me) would have on the money supply go out the window when the Federal Reserve can make deposits in any amount that they want, simply by printing it.
> 
> They may not be using the right words to get across their points, but I think this is what they are trying to say.  There was definately some confusion of terms and misapplied labels.


No, the Fed doesn't just print money to hurt people, unless they can see a benefit to themselves. If you think they'll explode currency supply tomorrow, invest accordingly. If you can't predict their decisions, it's like any other investment. In either case, you were NEVER EVER promised that money won't be added to the supply, so the fact you didn't ask about it is your own fault.

----------


## smokemonsc

> What do you think I've been telling you?
> 
> By the way, he's probably not credentialed either!
> 
> 
> 
> 
> Wrong again, you don't need to create money or touch it first to benefit from it. If you know money is going to be inflated or deflated, you can act accordingly with your investments.
> 
> ...


I'm not credentialed, but I do consider myself pretty knowledgable in economics and banking.

Unless I misread his statement he didn't claim you need to create the money or touch it first to benefit from it.  However he did say, and is correct in saying, those who touch it first, in the line of people that touch it, benefit from it _more_ than those who touch it next, etc etc.  Obviously if you are skilled in finance you can profit more than someone before or after you in the inflationary line.  However, all else equal, the fact remains, that those who touch inflated dollars have the potential to benefit more from it than those who touch it later.  It does give an unjust advantage to those who touch it first.

A sound monetary system would benefit for those who prepared for it, yes.  That in of itself is not reason enough _not_ to move forward with some sort of standard besides fiat.

----------


## smokemonsc

> No, the Fed doesn't just print money to hurt people, unless they can see a benefit to themselves. If you think they'll explode currency supply tomorrow, invest accordingly. If you can't predict their decisions, it's like any other investment. In either case, you were NEVER EVER promised that money won't be added to the supply, so the fact you didn't ask about it is your own fault.


I didn't say they print money to hurt people, I said that by printing money, they hurt people.  Their intentions are irrelevant.  Monetary inflation is always a man made phenomenon.  

As a side note, I am investing accordingly.  I bought stock in 2009 and sold when the DOW was at 11500 to take advantage of the short term benefits of the stimulus spending.  I have now taken those profits and invested it in other avenues that I believe will make me money based on what I think the government will do, and based upon which businesses I think will prosper.  I have also taken "insurance" positions in case I'm wrong.  I think I have diversified well and it has worked for me so far.

That said, that won't stop me from exercising my right and duty to express my views to others and point out bad decisions when I think I see them.

The Federal Reserve _has_ promised price stability, high employment, stable dollar, and numerous other things.  They have failed on their promises.  Regardless, promises made nor the lack thereof is no excuse for bad policy.

----------


## WaltM

> I'm not credentialed, but I do consider myself pretty knowledgable in economics and banking.


So do I, but he dismissed me.





> Unless I misread his statement he didn't claim you need to create the money or touch it first to benefit from it.  However he did say, and is correct in saying, those who touch it first, in the line of people that touch it, benefit from it _more_ than those who touch it next, etc etc.  Obviously if you are skilled in finance you can profit more than someone before or after you in the inflationary line.


Obviously? Didn't sound obvious to him, or he'd not ask a million times the same question, and say "I only trust credentialed experts".





> However, all else equal, the fact remains, that those who touch inflated dollars have the potential to benefit more from it than those who touch it later.  It does give an unjust advantage to those who touch it first.
> 
> A sound monetary system would benefit for those who prepared for it, yes.  That in of itself is not reason enough _not_ to move forward with some sort of standard besides fiat.


aren't you ignoring that the same can be said for deflation? And the point isn't who touches the money, as much as who knows what will happen with it?

----------


## WaltM

> I didn't say they print money to hurt people, I said that by printing money, they hurt people.  Their intentions are irrelevant.  Monetary inflation is always a man made phenomenon.  
> 
> As a side note, I am investing accordingly.  I bought stock in 2009 and sold when the DOW was at 11500 to take advantage of the short term benefits of the stimulus spending.  I have now taken those profits and invested it in other avenues that I believe will make me money based on what I think the government will do, and based upon which businesses I think will prosper.  I have also taken "insurance" positions in case I'm wrong.  I think I have diversified well and it has worked for me so far.
> 
> That said, that won't stop me from exercising my right and duty to express my views to others and point out bad decisions when I think I see them.


Fair enough. 





> The Federal Reserve _has_ promised price stability, high employment, stable dollar, and numerous other things.  They have failed on their promises.  Regardless, promises made nor the lack thereof is no excuse for bad policy.


Oh, I didn't know they promised such things. 

Promises made and breaking them is fraud. Lack thereof is not, neither is excuse for bad policy, but only one warrants complaint of wrongdoing and foul play.

----------


## smokemonsc

> Fair enough. 
> 
> 
> 
> 
> Oh, I didn't know they promised such things. 
> 
> Promises made and breaking them is fraud. Lack thereof is not, neither is excuse for bad policy, but only one warrants complaint of wrongdoing and foul play.


You're right.  However I'm not convinced it's a "conspiracy" by "global elites" (not saying you say this).  There's another possibiility that it's people working for what they think is their best interests, and it's also possible that the leaders in the Fed actually think they are helping.  It's also possible it is a conspiracy.  I'm not sure yet heh.

That said here's their mission statement taken from the Fed's own website.

_"The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded. 
Today, the Federal Reserve's duties fall into four general areas:

conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates 
supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers 
maintaining the stability of the financial system and containing systemic risk that may arise in financial markets 
providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system"_

Stable dollar is not in that list, so for now I'd rescind that.  If it's in their mission statement I'd consider that a promise of intent.

P.S. I think it should've been a promise to maintain the purchasing power of the dollar.

P.S.S. There's a handbook that I don't have time to look up, it may mention something about the price of the dollar.  That may be where I got that impression from.

----------


## smokemonsc

> So do I, but he dismissed me.
> 
> 
> 
> 
> Obviously? Didn't sound obvious to him, or he'd not ask a million times the same question, and say "I only trust credentialed experts".
> 
> 
> 
> ...


We all dismiss people sometimes as a knee-jerk reaction that is unjustified.  Perhaps this is an example of that?  -- Sometimes we all need an outsider to come in to the discussion who has been following it and help us clear up confusions that are preventing understanding of whats _trying_ to be said  -- You are right about deflation, it has the opposite effect.  Those who would have touched inflated dollars first are hurt because their loans are worth less and those who have borrowed benefit.

In the end you are correct, if you know whats going on, you can profit from it.  The problem is that doesn't make it moral or right or just (in my mind of course).  If a central bank is to be with us forever, would it not be responsible for it to try to be as less intrusive as possible in order to limit the amount of artificial advantages it causes by its actions?  Especially since we both agree that inflation and deflation both have their beneficiaries and victims(for a lack of a better word)?  I would argue yes.

off to dinner but will check later tonight or tomorrow   g'night!

----------


## Zippyjuan

> How come he disagrees with you as to what it means?
> 
> Now, ready to answer the questions?
> 
> 1. Have you created any money with your signature and not paid it back lately?
> 
> 2. Have you gotten any money back from your 1099-OID?
> 
> 3. Has any of this knowledge you know, that I don't, made you wealthier?
> ...


Ten is the theoretical maximum.  There are other factors which effect how much the money grows (I actually never offered a number of how many times money can multiply).  For me, this paragraph from my NY Fed link is perhaps the most important (link is at my earlier post):



> *In practice, the connection between reserve requirements and money creation is not nearly as strong as the exercise above would suggest.* Reserve requirements apply only to transaction accounts, which are components of M1, a narrowly defined measure of money. Deposits that are components of M2 and M3 (but not M1), such as savings accounts and time deposits, have no reserve requirements and therefore can expand without regard to reserve levels. Furthermore, the Federal Reserve operates in a way that permits banks to acquire the reserves they need to meet their requirements from the money market, so long as they are willing to pay the prevailing price (the federal funds rate) for borrowed reserves. *Consequently, reserve requirements currently play a relatively limited role in money creation in the United States.*



Point is that all of this is not terribly significant in the big picture. We can argue over whether it is ten or nine times- but both are wrong and really describe nothing.   The Fed looks at the Velocity of money and that better reflects how much a dollar turns over and grows.  The more quickly that people spend a dollar they get, the higher the velocity and the faster the money supply can grow.  Right now velocity is pretty low.  If velocity was high, all that money they pumped into the system would be starting to hit as high inflation about now (lag in the system is about two years which can make timing of monetary actions difficult) but we are not experienging much with inflation.  There are many reasons but one is that velocity is very low which means the money actually out there has not gone up much despite all the money the Fed added to the system.  It is not just banks not lending either. A recent survey of businesses showed that 90% of them said they had no problems borrowing as much money as they required.  Another part is that businesses and individuals who do have the ability to spend are also not doing so.  

Info on Velocity from Seeking Alpha: http://seekingalpha.com/article/1106...ocity-of-money



> Two phrases we’re hearing constantly are the Federal Reserve Bank is printing money, and flooding the market with liquidity is non-inflationary because banks are not lending. Typically the Fed increases the money supply by purchasing treasuries, putting more cash into circulation. Conversely, the Fed reduces or tightens the money supply by selling treasuries into the market. Until recently, the majority of the Fed’s assets were treasuries so there was little friction in the Fed’s open market operations.
> 
> The Fed’s ability to create money by purchasing assets is only limited by its balance sheet. Its balance sheet liabilities consist of bank reserves held on deposit and deposits from the Treasury. Recently the Treasury sold a substantial amount of debt for the purpose of depositing the proceeds at the Fed. This allowed the Fed to double its balance sheet to about $2T. The Fed is using this extra leverage to buy assets or loan on collateral with risks much higher than treasuries. Even though Chairman Bernanke says the Fed is taking an appropriate haircut and the Fed can sit on assets until they mature, these toxic and semi-toxic assets will be far more difficult to sell when the Fed needs to unwind its liabilities.
> 
> Velocity refers to the rate of turnover in the money supply. When the Fed injects cash into banks by purchasing assets, it expects the banks to start lending the money. If the banks simply hoard the cash, the multiplier effect is 1. However, with higher velocity the Fed’s impact is much greater, both with injections and tightenings.
> 
> Let’s look at how the multiplier effect works. All banks are required to keep a certain percentage of deposits on reserve at the Fed. This prevents an infinite multiplier. For example, if the reserve requirement is 10%, banks can lend out 90% of their deposits. Let’s say the Fed injects $100 into the money supply by buying treasuries from Bank A. Bank A then lends $90 to a business that deposits it in Bank B. Bank B then lends $81 to a consumer who writes checks which are deposited in Bank C. Then Bank C lends $72.90 which is deposited in another bank. Already the Fed’s $100 injection increased the money supply by $253.90. So far the multiplier is about 2.5. The Fed is claiming that the velocity is currently very low so its moves must be more dramatic.
> 
> Now the Fed is considering issuing its own debt to further lever up its balance sheet. This would require Congressional approval since the Fed is only allowed to issue currency. Could it be that the Treasury has reached its limit (debt ceiling) in pumping up the Fed? More interestingly, what would the effect be of such Fed borrowing? It could be sterile since the Fed is taking out as much cash as it is injecting. The net effect could be that the Fed is simply moving cash from a risk adverse lender to a higher risk borrower, while assuming the credit risk itself. An example would be a money market fund indirectly buying a credit card securitization via the Fed. The likely multiplier would be 1.
> ...

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## WaltM

> Ten is the theoretical maximum.  There are other factors which effect how much the money grows (I actually never offered a number of how many times money can multiply).  For me, this paragraph from my NY Fed link is perhaps the most important (link is at my earlier post):


I think we agree on this.

Basically, SINCE there's a limit to how much commercial banks can "create" (if anything), it's no longer a valid complaint on the customer's part, he has the right to ask, and if he doesn't know, it's his own fault.

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## WaltM

> Danke, your pms are full, have you had any success with the 1099-OID form for getting back the deposits that you created with your signatures?


Danke's BS sovereignty movement conspiracy theory answered.

1099-OID is nothing magical or secret

http://www.irs.gov/taxpros/article/0...#_Toc224375608




> .................
> _ This scheme has evolved somewhat from an earlier frivolous position under which a secret bank account (sometimes referred to as a straw man account) was supposedly created at the Treasury Department for each U.S. citizen that individuals could use to pay tax and non-tax debts and claim withholding credits. Those who put forth this theory often argue that the proper way to redeem or draw on the account is to use some form of made-up financial instrument. This has frequently involved what looks like a check drawn on the United States Treasury or other similar paper instruments, e.g., bonded promissory notes.
> 
> More recently, this redemption theory asserts that persons can draw on the secret or straw man Treasury account by sending a Form 1099-OID to a creditor and the creditor can present the form to the Treasury Department and receive full payment of the debt. The proponents appear to assert that the Form 1099-OID permits them to access their secret Treasury Account for an amount equal to the face amount of the Form 1099-OID in the form of a tax refund._.........

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