merry go round

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merry go round

Postby holy vehm » Sun Oct 11, 2009 7:08 pm

Still trying to get my head around this money thing. I hope this makes sense.

Is this how it works?

In this order,
Loan application > Bank > Treasury > Bank > You > bank > shareholders.
How it probably started. Everything going through the treasury.

Then it became,

Shareholders > bank (shareholders fund the banks keeping treasury out of the loop))

The bank dont forward your application to the treasury but keep it and lend you the money from themselves. Money made in the past from interest, loan repayments and investments from shareholders.
So now its,
Loan application > Bank >You > bank > shareholders > Bank and so on.

If credit crunch then,

The banks forward loan applications they have kept on to the treasury and draw cash on the signatures on the loan application. Keeping this for themselves.
Is this a bank bail out?

Loan application > bank > treasury > bank. This one stops here.
Treasury > taxpayer. Treasury accepts the applications and passes on the payment to the taxpayer.

Banks lost there money because they lent it all to others who lent it all to others. they all did it in the chase for interest payments.
I lend you £1000 and charge 10%
You lend it to someone else and charge 20%
We both make 10% on the same £1000
But eventually its lent to people who cant afford the repayments and if the one at the end of the line cant pay, then no-one gets paid and the original £1000 has gone.
Put this on a global scale and it runs into hundreds of billions.
Those that have loan applications are ok because they forward them to the treasury.
They can cover there losses.

The taxpayer on the other hand is conned more than once.
Having paid back the bank what it lent you plus interest you now have to pay again in taxes to cover their losses.
Yet the bank only lost its own money gained through fraud and deciept. Your money.
The treasury lost none of its own money because it doesnt have any only the ability to sanction the printing of money from the royal mint. So it passes the loan application back to you.

Bank > loan application > Treasury > taxpayer > bank > Shareholders.

I dont think loan applications are forwarded to the treasury straight away anymore but kept in reserve, like collateral. The bank suffer no risk, either way they get there money, they cannot lose money.

A little simplistic i know but its how it seems to me.

"A ruler who violates the law is illegitimate. He has no right to be obeyed. His commands are mere force and coercion. Rulers who act lawlessly, whose laws are unlawful, are mere criminals".
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holy vehm
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