DISQUS

Dave Delaney : Dave Made That: Banks Loan Money They Do Not Have

  • Julien · 11 months ago
    Oh yeah, I've actually seen this before-- a few months ago, afaik. Good stuff, worth thinking about.
  • driver49 · 11 months ago
    The confusing foundations of the fractional reserve monetary system have been well known for a long time. You consider your assets to be what you HAVE. The banks consider their assets to be what OTHERS HAVE and OWE the bank. Weird, but that's the way it has worked, more or less, for decades if not centuries.

    What's causing the current disruption has been the dergulation of the banks allowing them to take the concept to absurd extremes, most notably in the for of "over the counter derivative" securities like Credit Default Swaps. With CDSs, I can sell insurance to investors who are not even parties to the original transaction -- and do it many times over.

    In the wake of the Great Depression, various regulations were put in place to prevent a recurrence. Most notably Glass-Steagal, which separated deposit-based banks from invesment banks. In the last 15-20 years, all those regulations have been discarded, and now we're right back where we started.

    So, yeah, money is debt and fractional banking is the foundation of the house of cards. But on that foundation the house has been built into a looming tower. And like that famous economist (and head of the British Mint for some time) Isaac Newton said, "what goes up...."
  • Dave Delaney · 11 months ago
    Wow, I had no idea you're so knowledgeable in this area. We'll have to talk more over breakfast soon. Kinda depressing, but certainly what we all need to understand in order to change this downward direction.

    Cheers,
    Dave
  • Laura Creekmore · 11 months ago
    Well, and the primary issue with CDS is as you identify -- they are functionally insurance. But they are new, and no one ever said [until now], umm, hey, CDS are insurance and therefore must be regulated like other insurance.

    Insurance requires a higher asset ratio [ie., more money on hand] for an insurer than a loan does for a bank. Because the presumption is that a certain number of insurance policies will be collected -- larger than the number of bank loans that will typically default.

    I don't think all of the discarded regulations are bad. In fact, there are a couple still on the books fr the Depression I wish they'd get rid of. But our regulatory system simply has not kept up with financial innovation. And [don't tell anyone I said this] perhaps that's as it should be. It's not pretty to watch the sausage being made -- nor to watch innovation at work.
  • Dave Delaney · 11 months ago
    I'm still getting my head around this all. Strangely, I am now craving
    sauages :-)

    So do changes need to be made before the world economy (further) goes
    down the toilet? Do you they will be made?

    D
  • loan stocks · 11 months ago
    the video was open my eyes
  • Bob Woolnough · 10 months ago
    This is totally mind blowing. I had no idea that our s and other governments simply handed the countries to the bankers on a plate with a licence to rule the populace regardless of what the populace wants. To thinks that whomever we vote for in elections are really just puppets of the bankers is abhorrent and disgusting and there is no wonder nothing real is ever done for the creation of a good society and civilisation as it's all about the greed of a few. If there is a movement out there to change this then sign me up.
  • Dave Delaney · 10 months ago
    Thank you. I feel the same way too, it's frightening. D
  • Commercial Financing · 6 months ago
    Banks want to know that they will at least get part of their money back if you fail. If you do not have collateral to secure a commercial loan with
  • Dave Delaney · 6 months ago
    Approve.
  • Chris · 2 months ago
    The only thing left to do is a. learn who we really are. b. call the bluff and exercise our rights. You may be interested in www.de-facto.org. It is a site that I have put up for info purpose. I'm not selling anything.

    Two methods: Claim of right (for those under the crown jurisdiction) to establish lawful excuse and an affidavit asking to see where the banks took a loss in their books.
  • Dave Delaney · 2 months ago
    Great thanks! I'll check your site out.
    D