oh right. lehman.
they had a plan in place similar to bear stearns (dice it up and sell off cheap).. england was to be responsible for 1/2 of this deal and they backed out last minute (well, the whole thing was last minute)..
regardlss, yes you're right.. a large bank can go bankrupt.. thanks for the reminder.
i'm not sure why this timing of payments has anything to do with what i said.. (krevnik also responded to me similarly).. what's the significance of
"Banks can make and loose crap loads of money over the course of the day and most of the time (for the bank at least) the end of the day is all that matters.".. what's the connection i'm supposed to be getting from the paycheck analogy?
excellent? where? explained what again?
again, you're right.. lehman bros failed.
that is one example but on the other hand, i see massive bank bailouts much more often or based around a significantly greater amount of $.
right.. the fed creates money out of then air.. this money then goes into the banks and through loans/fractional reserve system, the money is then expanded.. the fed's fraudulent money is multiplied by the banks.
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see if you find fault in the way this guy outlines the creation of money
YouTube:
video
The issue I had with your post is that you said when you buy something with your credit card the bank creates the money out of nothing. Perhaps this is us talking past one another but public banks IE JPM, Bank of America, Morgan Stanley and so on cannot create money out of nothing.
The explanation I made was to depict that the transaction is real and the bank (or who ever is paying) must send the money accordingly. This money is real money. The further explanation is just to put the whole thing into perspective.
The other poster i spoke of was krevnik who explained how and why commercial banks hold X amount of capital in retention.
Your post also seems to express a difference between currency and money. The two are exactly the same so I was confused.
When you say massive bank bailouts your talking about what happened back in 2008 right? I'm not aware of any other federal capital infusion since those major debacles.
And in your last paragraph you mention money being expanded. This sounds to me like the value of the capital can be changed witch isn't really possible. X can only ever equal X to it self. There was also mention of fraudulent money.
I think what we need to keep in mind is that money isn't anything other then an object that's used to initiate a transaction. The US dollar is literally nothing more then a piece of complicated fraud protected paper. It's magic is that merchants in the US are required to take it by law. Witch believe me makes everything so much easier. There is a cool event in new Hampshire call the Porcupine Freedom festival. It's a libertarian festival where shop owners sell goods/services without government approval or certification. Merchants also pay for said services with hard value payments like gold, silver and so on(they will not take government currency "greenbacks"). Funny thing is that folks spend all day on smart phones checking the price of these metals because they change moment by moment and thus change how much your capital is worth moment by moment. The US dollar gets rid of all that stuff for us.
The concept of credit is absolutely essential for any economy to function. Not just a modern economy but ancient economies like Venice for example. When the Government issues a bond just like in the video it's basically an IOU. You can go out and buy a government bond when ever you want. They have different maturity rates like 30 years and so on. You give the Fed money and in exchange for interest on that bond and the promise to pay it back once it's matured is how it works. That's partly how nearly every government on the planet is funded.
Some folks seem to think that this stuff shouldn't happen and relate the funding of large governments and corporations to the simplicity of a home checkbook. It sounds nice and simple and believe me I wish it was but to do so would be to forfeit your chances of being competitive. It doesn't really make sense to keep things stationary because it causes things to stall out.
Think about it this way. If I gave you $100,000 and you put it under your mattress that 100,000 would loose value because of inflation. Remember managed inflation is a good thing because it stimulates economic activity. So to protect that 100,000 you would need to invest it in something that would payout more then the rate of inflation.
At the end of the day Governments (all governments) get credit from investors who buy bonds from them. Banks get credit from stock, bonds and deposit investors. and you get credit from your local bank. Things only get sticky when people get carried away. We forget that just because it's credit doesn't mean we don't have to pay it back. Capitalism is a boom and bust system and it always has been. 2008, 1998, 80's 70's and so on. We tend to get financial corrections every 10 years for one reason or another. Some one starts getting rich because of some new thing and all the rest jump on the band wagon thinking lightning can't strike. It does and every one backstabs each other on the way down trying to protect them selves. The closest thing i can relate it to is the
Red Queen hypothesis
Difference in 2008 was that that correction was tied to home assets of regular hard working people. it was a costly mistake because a home tends to be the largest single investment most americans make.
Anyway I'm totally rambling. I guess my point is that there is no conspiracy here. There are allot of smart MoFos in places like NYC who know how these markets work, how the game is played and how to play it. I'm not saying it's perfect because it's not but the game is the game. Kind of like the dating game. It sucks but what are your choices
.
Just take care of your self. Keep a close eye on your money and don't over leverage your self to make a buck because you'll always get burned in the end.
Cheers man, I think i like this stuff too much. Let me know if you'd like to keep chatting and will find a better place. No sense clogging this thread up with our ever more unrelated topic
