Fractional Reserve Lending IS NOT bad - its unavoidable - page 14.

NotLambchop

sr. member

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Merit: 254

Quote from: Ozziecoin on May 11, 2014, 07:41:31 PM

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Relax mate or you're going to get an aneurysm. Bitcoin has the blockchain mate. If on the Blockchain = money. Not on the Blockchain = not money.

I'm about as relaxed as I get without the aid of heavy recreational chemistry.
Now explain to me how the blockchain bit helped NeoBee "investors"? Or how it helped Ukyo's depositors/investors? Or how it helped Pirateat40's depositors/investors? Or Patrick Harnett's depositors/investors?

Quote from: Ozziecoin on May 10, 2014, 10:24:26 AM

The FRB makes everyone without assets poorer, increasing the wealth divide: http://ozziecoin.com/index.php/fractional-reserve-banking-explained/ It's sad but totally true.

I assume it's your blog and you're quoting yourself? No shortage of humility here Cheesy

Anyhow, no. You're wrong. Repeating yourself and linking to your blog (I assume it's your blog) only adds extra lulz.

Quote

Charlatans will always exist, but the biggest thieves by far wear suits: http://www.ritholtz.com/blog/2014/05/6-years-after-financial-crisis-big-banks-are-still-committing-big-crimes/

Sure bro, there are plenty of scams in fiat world. When 95% of banks simply walk away with *all of your money*, fiat banking would descend to where Bitcoin finance is now.
And you would have the beginnings of a point.

Ozziecoin

sr. member

Activity: 448

Merit: 250

Quote from: NotLambchop on May 11, 2014, 07:28:58 PM

Quote from: Ozziecoin on May 11, 2014, 07:06:41 PM

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FRB increases the wealth divide because it creates money out of thin air.

And bitcoin is created out of???
And no, FRB does not create money out of thin air.
And no, FRB does not increase the wealth divide. Money increases the wealth divide. Non-inflationary money like Bitcoin [will eventually become] maintains the wealth divide. Hoarders increase the wealth divide. Greed increases the wealth divide. Money revolutionaries like Danny Brewster, who praise your pseudo-liber notions to rob you, as well as people who get robbed by the likes of him, increase the wealth divide.

FRB doesn't even rank, let's stop repeating nonsense.

Relax mate or you're going to get an aneurysm. Bitcoin has the blockchain mate. If on the Blockchain = money. Not on the Blockchain = not money.

FRB creates money out of thin air. Totally. Even the central bankers admit that: https://bitcointalksearch.org/topic/m.6653996

The FRB makes everyone without assets poorer, increasing the wealth divide: http://ozziecoin.com/index.php/fractional-reserve-banking-explained/ It's sad but totally true.

Charlatans will always exist, but the biggest thieves by far wear suits: http://www.ritholtz.com/blog/2014/05/6-years-after-financial-crisis-big-banks-are-still-committing-big-crimes/

CoinCube

legendary

Activity: 1946

Merit: 1055

Quote from: NotLambchop on May 11, 2014, 07:28:58 PM

Quote from: Ozziecoin on May 11, 2014, 07:06:41 PM

...
FRB increases the wealth divide because it creates money out of thin air.

And bitcoin is created out of???
And no, FRB does not create money out of thin air.
And no, FRB does not increase the wealth divide. Money increases the wealth divide. Non-inflationary money like Bitcoin [will eventually become] maintains the wealth divide. Hoarders increase the wealth divide. Greed increases the wealth divide. Money revolutionaries like Danny Brewster, who praise your pseudo-liber notions to rob you, as well as people who get robbed by the likes of him, increase the wealth divide.

FRB doesn't even rank, let's stop repeating nonsense.

Bitcoin is created out of Work

Bitcoin's non-inflationary property is not a problem because the very fact that it is non-inflationary will result in bitcoin eventually losing market share to some future superior cryptocurrency that has some built in inflation. Bitcoin thus won't increase or maintain the wealth divide because it is only the beginning of something better.

FRB does effectively create money out of thin air. The posters up-thread describing it as fraud are correct. See the links to my posts on Finance linked above for a detailed analysis of this point.

NotLambchop

sr. member

Activity: 378

Merit: 254

Quote from: Ozziecoin on May 11, 2014, 07:06:41 PM

...
FRB increases the wealth divide because it creates money out of thin air.

And bitcoin is created out of???
And no, FRB does not create money out of thin air.
And no, FRB does not increase the wealth divide. Money increases the wealth divide. Non-inflationary money like Bitcoin [will eventually become] maintains the wealth divide. Hoarders increase the wealth divide. Greed increases the wealth divide. Money revolutionaries like Danny Brewster, who praise your pseudo-liber notions to rob you, as well as people who get robbed by the likes of him, increase the wealth divide.

FRB doesn't even rank, let's stop repeating nonsense.

CoinCube

legendary

Activity: 1946

Merit: 1055

theonewhowaskazu

The three links below are my rebuttal to your argument. I believe they convincingly demonstrate that you are completely and utterly mistaken.

Finance Part I: Understanding the Parasite
Finance Part II: The Parasitic Cycle
Finance Part III: Divide, Conquer, Enslave

hccwin

newbie

Activity: 56

Merit: 0

It's fraud because you're lending out money that you're also making available for withdrawl simultaineously. If too many people exercise their rights to deposits the whole system falls apart, That's exactly like a Ponzi.

Ozziecoin

sr. member

Activity: 448

Merit: 250

Quote from: NotLambchop on May 11, 2014, 06:59:31 PM

Quote from: Ozziecoin on May 11, 2014, 06:43:26 PM

Quote from: ?? on ??

Quote from: NotLambchop on May 11, 2014, 02:15:03 PM

FRB without regulation -- recipe for disaster. Works just fine with regulation, though. 100% of the world's economy runs on fiat and FRB.

Well, you seemed to have forgotten the S&L crisis in the 1980s, and 2008 of course. Regulation is not a solution. In fact, it is part of the problem because it gives an illusion of security and it promotes risky behavior.

I'm not convinced that FRB is a good thing, but I don't think it is as evil as the conspiracy nuts claim. The advantage is increased availability of money for investment, leading to higher productivity and growth. The disadvantage is increased risk of failure. So far it has been a net positive, but the story is not over yet.

FRB also increases the wealth divide. It promotes aristocracy and not meritocracy.

Nah. Money increases the wealth divide. FRB is the way money works today. No exceptions. ...well, occasional fuqups like Pirate S&L, BitFunder and NeoBee. <==meritocracies immune to failure

Build an economy that works without FRB, then preach to me about economics.

P.S: No, I do not work for a bank.

The blockchain buddy. That's the solution right there.

FRB increases the wealth divide because it creates money out of thin air.

NotLambchop

sr. member

Activity: 378

Merit: 254

Quote from: Ozziecoin on May 11, 2014, 06:43:26 PM

Quote from: ?? on ??

Quote from: NotLambchop on May 11, 2014, 02:15:03 PM

FRB without regulation -- recipe for disaster. Works just fine with regulation, though. 100% of the world's economy runs on fiat and FRB.

Well, you seemed to have forgotten the S&L crisis in the 1980s, and 2008 of course. Regulation is not a solution. In fact, it is part of the problem because it gives an illusion of security and it promotes risky behavior.

I'm not convinced that FRB is a good thing, but I don't think it is as evil as the conspiracy nuts claim. The advantage is increased availability of money for investment, leading to higher productivity and growth. The disadvantage is increased risk of failure. So far it has been a net positive, but the story is not over yet.

FRB also increases the wealth divide. It promotes aristocracy and not meritocracy.

Nah. Money increases the wealth divide. FRB is the way money works today. No exceptions. ...well, occasional fuqups like Pirate S&L, BitFunder and NeoBee. <==meritocracies immune to failure

Build an economy that works without FRB, then preach to me about economics.

P.S: No, I do not work for a bank.

Ozziecoin

sr. member

Activity: 448

Merit: 250

Quote from: NotLambchop on May 11, 2014, 04:53:21 PM

Quote from: Robert Paulson on May 11, 2014, 04:31:51 PM

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no one tells you how banking works when you open a bank account, 99% of the public is unaware of what is really happening when they deposit their money in the bank.

The butcher doesn't explain to you where meat comes from, the baker doesn't tell you how bread is made. Why should a bank explain to you what it does with your money? Take some responsibility for yourself. I'm sure a teller will explain the basics to you if you ask her nicely.

Quote

the bank should obviously be paid for its services, and it should tell me exactly the price so that i can decide if i want to use their service or go to another bank, needless to say this does not happen.

That is the most unjustifiably entitled thing I've read today. See above.

Quote

finance is a hobby of mine and i've been studying monetary systems for years, FRB is a fraud.

A finance hobbyist is as useful and worthy as an amateur brain surgeon, which is to say "be careful, bro."

Quote

if taking your depositors money and investing it without telling them for your own personal profit is not fraud then i don't know what is.

There's still time to learn. Adult education is a thing.

Looks like someone works for a bank.

Ozziecoin

sr. member

Activity: 448

Merit: 250

Quote from: ?? on ??

Quote from: NotLambchop on May 11, 2014, 02:15:03 PM

FRB without regulation -- recipe for disaster. Works just fine with regulation, though. 100% of the world's economy runs on fiat and FRB.

Well, you seemed to have forgotten the S&L crisis in the 1980s, and 2008 of course. Regulation is not a solution. In fact, it is part of the problem because it gives an illusion of security and it promotes risky behavior.

I'm not convinced that FRB is a good thing, but I don't think it is as evil as the conspiracy nuts claim. The advantage is increased availability of money for investment, leading to higher productivity and growth. The disadvantage is increased risk of failure. So far it has been a net positive, but the story is not over yet.

FRB also increases the wealth divide. It promotes aristocracy and not meritocracy.

NotLambchop

sr. member

Activity: 378

Merit: 254

Quote from: Robert Paulson on May 11, 2014, 04:31:51 PM

...
no one tells you how banking works when you open a bank account, 99% of the public is unaware of what is really happening when they deposit their money in the bank.

The butcher doesn't explain to you where meat comes from, the baker doesn't tell you how bread is made. Why should a bank explain to you what it does with your money? Take some responsibility for yourself. I'm sure a teller will explain the basics to you if you ask her nicely.

Quote

the bank should obviously be paid for its services, and it should tell me exactly the price so that i can decide if i want to use their service or go to another bank, needless to say this does not happen.

That is the most unjustifiably entitled thing I've read today. See above.

Quote

finance is a hobby of mine and i've been studying monetary systems for years, FRB is a fraud.

A finance hobbyist is as useful and worthy as an amateur brain surgeon, which is to say "be careful, bro."

Quote

if taking your depositors money and investing it without telling them for your own personal profit is not fraud then i don't know what is.

There's still time to learn. Adult education is a thing.

Robert Paulson

sr. member

Activity: 448

Merit: 250

Quote from: NotLambchop on May 11, 2014, 04:11:41 PM

Quote from: Robert Paulson on May 11, 2014, 04:03:01 PM

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who said i agree for the bank to take my money and invest it.

You did, when you deposited your money.

Quote

not only did the bank invest my money i don't get anything in return for the risk.

Sure you did, do you think the bank and its employees should work for free? Not only do you get the services, you usually get a bit of interest to sweeten the deal

Quote

if ill want to invest my money ill invest it myself, the bank has no right investing my money while still claiming its in my account.

See above. And read up on money.

no one tells you how banking works when you open a bank account, 99% of the public is unaware of what is really happening when they deposit their money in the bank.
the bank should obviously be paid for its services, and it should tell me exactly the price so that i can decide if i want to use their service or go to another bank, needless to say this does not happen.
finance is a hobby of mine and i've been studying monetary systems for years, FRB is a fraud.
if taking your depositors money and investing it without telling them for your own personal profit is not fraud then i don't know what is.

NotLambchop

sr. member

Activity: 378

Merit: 254

Quote from: Robert Paulson on May 11, 2014, 04:03:01 PM

...
who said i agree for the bank to take my money and invest it.

You did, when you deposited your money.

Quote

not only did the bank invest my money i don't get anything in return for the risk.

Sure you did, do you think the bank and its employees should work for free? Not only do you get the services, you usually get a bit of interest to sweeten the deal

Quote

if ill want to invest my money ill invest it myself, the bank has no right investing my money while still claiming its in my account.

See above. And read up on money.

Robert Paulson

sr. member

Activity: 448

Merit: 250

Quote from: ?? on ??

The advantage is increased availability of money for investment, leading to higher productivity and growth. The disadvantage is increased risk of failure. So far it has been a net positive, but the story is not over yet.

who said i agree for the bank to take my money and invest it.
not only did the bank invest my money i don't get anything in return for the risk.
if ill want to invest my money ill invest it myself, the bank has no right investing my money while still claiming its in my account.

NotLambchop

sr. member

Activity: 378

Merit: 254

FRB without regulation -- recipe for disaster. Works just fine with regulation, though. 100% of the world's economy runs on fiat and FRB.
Well, 100% minus Bitcoin banks like NeoBee Undecided

theonewhowaskazu

sr. member

Activity: 448

Merit: 250

Quote from: twiifm on May 11, 2014, 01:03:15 PM

Quote from: zimmah on May 11, 2014, 12:44:43 PM

it's fraud and it's bad.

Consider this:

You store $100 at the bank

the bank uses that $100 as a security to grand a $1000 loan to someone else. So the bank magically makes $900 and gambles with your money.

The bank now also expects the $1000 'back' (while it was never their possession in the first place) and on top of that they also charge interest on it.

So they actually make money on money that never existed in the first place. That's pretty much counterfeiting.

Umm. Thats not how modern banks work though.

Besides if they don't do this then how do people get loans?

Actually that is how it works (although he got the numbers wrong, since the bank would now have $1100 liabilities and $100 liquid assets, that wouldn't have a high enough reserve ratio, you would only be able to lend out $900 when you got a $100 deposit).

greenlion

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Quote from: twiifm on May 11, 2014, 10:56:48 AM

Say what? If a bank takes in your deposit and loans out 900% of that as FRB. The loan is an asset-no? BTW this is not how it works. But I'm trying to use YOUR logic.

How is it you think banks are designed not to meet liabilities if their assets exceed liabilities due to being able to create new money

Replace the word "liability" with "obligation" or whatever general English word you want to use, and the argument still holds up. Your rhetorical spasms here sound good dramatically but the entire point you're trying to make is a sloppy equivocation on the definition of money, then you're acting like it's outrageous that somebody else produces an argument that doesn't accept your at best controversial baked-in assumptions.

DeathAndTaxes

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Gerald Davis

Quote

Besides if they don't do this then how do people get loans?

Loans are possible without fractional reserve banking. It just isn't done with depositor funds. It involves a lender and a lendee. If your friend needs $5K to buy a car so he can commute to work and you have $5K cash, you could lend it to him, and he repays you over time. That is an example of lending without fractional reserve banking.

Borrowing, lending and interest far predates fractional reserve banking. AFAIK the earliest recorded example of FRB by design was in the late 1600s. Prior to that banking was a bailor-bailee arrangement, it was a place for merchants to store coinage that was more secure than what they had available themselves and they usually paid fee for the security. If the bank couldn't pay out everything it took in, then it probably was going to end with someone being hanged.

twiifm

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Quote from: zimmah on May 11, 2014, 12:44:43 PM

it's fraud and it's bad.

Consider this:

You store $100 at the bank

the bank uses that $100 as a security to grand a $1000 loan to someone else. So the bank magically makes $900 and gambles with your money.

The bank now also expects the $1000 'back' (while it was never their possession in the first place) and on top of that they also charge interest on it.

So they actually make money on money that never existed in the first place. That's pretty much counterfeiting.

Umm. Thats not how modern banks work though.

Besides if they don't do this then how do people get loans?

zimmah

legendary

Activity: 1106

Merit: 1005

it's fraud and it's bad.

Consider this:

You store $100 at the bank

the bank uses that $100 as a security to grand a $1000 loan to someone else. So the bank magically makes $900 and gambles with your money.

The bank now also expects the $1000 'back' (while it was never their possession in the first place) and on top of that they also charge interest on it.

So they actually make money on money that never existed in the first place. That's pretty much counterfeiting.

Topic: Fractional Reserve Lending IS NOT bad - its unavoidable - page 14. (Read 12782 times)