Why the banks dont give free money? Why they loan it? - page 9.

V for Varoufakis

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Quote from: Razick on April 10, 2016, 09:45:22 PM

Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

If the banks gave out free money no one would want to work and money would be worthless because 1) it would no longer be scarce and 2) no one would produce anything to sell since money is free.

Tell that to Byron Dale: http://www.wealthmoney.org/

Nahl

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banks even they are supported by government they will never gave us free money because they also take advantage from the loans also on my country banks only give loans with collateral because if someone don't have it banks will never give us free loan basically banks give loans because they also want money

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Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

If the banks gave out free money no one would want to work and money would be worthless because 1) it would no longer be scarce and 2) no one would produce anything to sell since money is free.

jaysabi

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Quote from: botany on April 10, 2016, 08:18:14 PM

Quote from: jaysabi on April 10, 2016, 04:31:55 PM

Quote from: blackmachinegun on April 10, 2016, 04:29:42 AM

Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

I don't think so because with the borrowing. someone who needs the money will be helped by it. although they should pay the interest but it is very helpful for people who need money
but of course the cost of interest must be in accordance with your abilities not too big <10%

Interest rate is largely related to risk. If you're a risky borrower, you pay higher interest because you're more likely not to pay back the loan, which requires someone to have a larger potential reward in order to make it worth it to take on the risk of making the loan. Of course, risky borrowers always have the choice to save for what they want to buy and pay for it in full instead of borrowing.

Risk is one aspect. There are a lot of other costs which banks have to factor in
- Interest they pay on deposits
- Employee and other overhead costs
- Cost of deposit insurance

While all of that is true, I think risk of the borrower is the most crucial component in determining the rate. All of those other factors don't change the rate nearly as much as the risk of the borrower. This is true for individuals, and businesses that issue corporate bonds. The riskier the borrower, the more they pay in interest.

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Quote from: jaysabi on April 10, 2016, 04:31:55 PM

Quote from: blackmachinegun on April 10, 2016, 04:29:42 AM

Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

I don't think so because with the borrowing. someone who needs the money will be helped by it. although they should pay the interest but it is very helpful for people who need money
but of course the cost of interest must be in accordance with your abilities not too big <10%

Interest rate is largely related to risk. If you're a risky borrower, you pay higher interest because you're more likely not to pay back the loan, which requires someone to have a larger potential reward in order to make it worth it to take on the risk of making the loan. Of course, risky borrowers always have the choice to save for what they want to buy and pay for it in full instead of borrowing.

Risk is one aspect. There are a lot of other costs which banks have to factor in
- Interest they pay on deposits
- Employee and other overhead costs
- Cost of deposit insurance

jaysabi

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Quote from: blackmachinegun on April 10, 2016, 04:29:42 AM

Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

I don't think so because with the borrowing. someone who needs the money will be helped by it. although they should pay the interest but it is very helpful for people who need money
but of course the cost of interest must be in accordance with your abilities not too big <10%

Interest rate is largely related to risk. If you're a risky borrower, you pay higher interest because you're more likely not to pay back the loan, which requires someone to have a larger potential reward in order to make it worth it to take on the risk of making the loan. Of course, risky borrowers always have the choice to save for what they want to buy and pay for it in full instead of borrowing.

V for Varoufakis

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Quote from: Indrawan77 on April 10, 2016, 04:32:02 AM

Imagine what will happen if bank give free money, all of human will become lazy and the economic of the country will stop

I disagree because the 90% of the works do by machines.

Indrawan77

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Imagine what will happen if bank give free money, all of human will become lazy and the economic of the country will stop

blackmachinegun

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Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

I don't think so because with the borrowing. someone who needs the money will be helped by it. although they should pay the interest but it is very helpful for people who need money
but of course the cost of interest must be in accordance with your abilities not too big <10%

V for Varoufakis

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Quote from: avikz on April 10, 2016, 02:25:01 AM

Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

My question to you is, why would the bank give you free money?? Why are you expecting to receive free money??

Loan is an asset for the bank from where they earn interest and pays back the interest to the savings account holders. Banks make profit with the difference in interest rates. That's business for them and the whole banking system is using this model.

It's better to work for money instead of hoping to receive free money from banks.

No, the bankers must go to work because they earn money without work.

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Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

My question to you is, why would the bank give you free money?? Why are you expecting to receive free money??

Loan is an asset for the bank from where they earn interest and pays back the interest to the savings account holders. Banks make profit with the difference in interest rates. That's business for them and the whole banking system is using this model.

It's better to work for money instead of hoping to receive free money from banks.

jaysabi

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Quote from: BellaBitBit on April 04, 2016, 12:58:37 PM

There really is no money in the first place. It stopped being money (USD for example) when it was no longer backed by gold. It is madness that interest is charged on something that does not exist in the first place. They don't have to "give free money" they GET free money.

There certainly is money. Money is currency. It's tangible, you can hold it in your hand; it exists. Furthermore, society has agreed that it has value, which is what makes trade possible. People won't trade with something that "doesn't exist." You can hate the current monetary system or hate that it isn't backed by gold. But you can't deny it exists and be taken seriously.

plost24

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Quote from: quentincole32 on April 04, 2016, 02:03:33 PM

Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

Quote

Why the banks dont give free money? Why they loan it?

uncontrolled people will ask for more money if bank give free money,almost all people are greedy,its the matter.
bank loan money for interest,they have big interest to get profit,its should not asked in future.

it is normal they loan the money of other to make profit so bank don't use their own money to make income.
and like you said if it will give free money how it can make profit or give back the money saved from others.

V for Varoufakis

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Quote from: quentincole32 on April 04, 2016, 02:03:33 PM

Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

Quote

Why the banks dont give free money? Why they loan it?

uncontrolled people will ask for more money if bank give free money,almost all people are greedy,its the matter.
bank loan money for interest,they have big interest to get profit,its should not asked in future.

More money = high velocity of money and according to QTM high velocity = high tax. So there is balance.

Laosai

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Quote from: BellaBitBit on April 04, 2016, 12:58:37 PM

There really is no money in the first place. It stopped being money (USD for example) when it was no longer backed by gold. It is madness that interest is charged on something that does not exist in the first place. They don't have to "give free money" they GET free money.

Thanks you for understanding that it's exactly where is the problem...

quentincole32

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Quote from: V for Varoufakis on March 31, 2016, 11:46:20 AM

I think loan is a scam. An economy needs, only, free funding and a tax system and nothing else. Do you agree?

Quote

Why the banks dont give free money? Why they loan it?

uncontrolled people will ask for more money if bank give free money,almost all people are greedy,its the matter.
bank loan money for interest,they have big interest to get profit,its should not asked in future.

BellaBitBit

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There really is no money in the first place. It stopped being money (USD for example) when it was no longer backed by gold. It is madness that interest is charged on something that does not exist in the first place. They don't have to "give free money" they GET free money.

Laosai

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Activity: 462

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Quote from: sallymeeh27 on April 04, 2016, 10:44:54 AM

If the banks will give free money then they cannot operate anymore they only depend on people's money to invest on them, file some loans then they will earn interest where they can depend on their operation and a day to day transactions.

Absolutely not. Banks owns everything. Every penny has been owned by a bank then lent to someone with interests...

sallymeeh27

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If the banks will give free money then they cannot operate anymore they only depend on people's money to invest on them, file some loans then they will earn interest where they can depend on their operation and a day to day transactions.

Laosai

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Quote from: n0ne on April 04, 2016, 08:01:49 AM

Quote from: Pab on April 03, 2016, 04:06:18 PM

Becouse banks want your money.In exchange thay are giving you that what thay call loans debt
money what dont exist for that virtual money you have to pay hardly earned money

I believe banks don't have the money. Only the government holds the money. Bank doesn't have the right to issue their own money. For these reasons they use several tactics to gain more from the public with various schemes.

That's the most wrong thing I ever read in this forum.

Banks don't issue their own money in paper, but they got total control over it and they can litteraly create money.
A bank needs only 3$ to lend 100$! That means they can create 97$ with only3$!!!

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