Cyprus-Forum.com

[erolz66]

No, it's a roller coaster and humanity has made a lot of money from the roller coaster.

Just go for it whenever you can, and then back pedal when you need to.

Sounds like Reganomics / Tatcherite economics (what I would call voodoo economics) to me. The very policies and 'way forward' that sowed the seeds that eventually bloomed into the global fincical ciris of 2008 and the miserly that has inflicted on billions of people world wide - not least of all those in Greece.

The power belongs to the consumer who decides the products they need and what they are going to do with the money. Often, opportunities are being provided to people to invest in what they want and over time these individuals will become more wealthy. That is the whole point of it all.

See my 'story' above.

The power belongs to the Central Bank. Banks are only Businesses that have to abide by the Financial Regulations they operate under. Their performance is monitored by the Central Bank.

I do not think this is true today. Just look at the desperate and unprecedented measure central banks are trying today to influence such things, and still getting at best mediocre results and at worse no results. Billions in QE - sustained low and even negative base rates. To me these things are indications that actually Central Banks no longer have the 'levers' they need to be able to influence things as much as is needed. Maybe the solution is just to return to them having better more effective 'levers' or maybe it is tiome and an opportunity to re evaluate the whole mechanism and seek better more stable solutions that meet the same needs ?

Banks can only create money when you offer them Collateral. As I stated earlier, I am not talking about consumer credit products like Credit Cards. All other debts a supported by a Security. That's how it has always been.

I am still not sure I agree with this though it does depend on what you actually mean by collateral. If you mean, for example, a' threat to break my knee caps if I do not repay' is a form of collateral then maybe I agree with you. If you mean by collateral a specified specific asset then no I do not think this is true. Much lending is based on collateral but not all and not just 'consumer credit' either. From venture capital banks to 'mezzanine' lending - there are forms of lending that do not require the borrower to have a specific real world asset with a value at the time the loan is taken out in excess of the value of the loan.

[Robin Hood]

As Erol has pointed out to you ........ he has extended credit of up to £12.5K! To get that, no collateral is asked for ...... they don’t even want to know what your salary is, or the value of your property or the level of the outstanding debt.
.

What?
Have you looked at their application form? Furthermore the credit is not that big in fact it looks like Erolz got the maximum possible. These are just facilities for the middle class working people with rather guaranteed income.
Notice that similar schemes exist in Cyprus. Usually approved for the Public Servants and Bank employees.

I stand corrected. It is many years since I got my first credit card, a 'Barclay Card' and that was around 1960. I didn't ask for it, they didn't have Credit Rating Agencies, only very few shops accepted them ....... and it had a credit limit of £300.......... and at the time I was earning the princely sum of £80 a month. I don't think I ever really used it because I soon realised that money didn't grow on trees .......... but there again I didn't realise at that time, that it wasn't money, it was CREDIT and it came with a cost!

So I am a bit out of touch with the requirements in todays society. I apologise

[Robin Hood]

Paphitis:

You have every right to be concerned.Now imagine some nutjob getting into power - Pootin, Assad, Trump.

Open your eyes! Nothing would change. The BoE would still be in control of the monetary system, the Government would still want money! The difference would be that the people via their elected Government, would own the Central Bank and not a bunch of proven crooks and the Government would get its money without debt and without interest. i.e. Instead of taxes being collected to pay off the banks, leaving the Government with a short fall ..... which they then have to fill with more loans, form the same banks .... at interest, ALL the tax revenue goes back into the Tresury to fund the country.

All this sh*t about Zimbabwe and Weimar ..... is just that. The system would effectively be self regulated and controlled by the Central Bank as it is in say Norway. What the Government does in step with the CB is to control the balance between imports and exports through applying import duties and maintaining currency controls.

They have the power to wipe you out. Banks don't do that.

You recon? Have a look at Greece, Cyprus, Spain, Portugal, Malta etc. It is the IMF/ECB that have screwed them up and plunged them into debts they can never repay! In the end, as they have done in Greece, the Banks will seize the countries real wealth ..... their assets! The Bankers get richer and the people pay for it through austerity. The last payment to Greece from the IMF, 60 something billion(?) ..... went straight back to the same banks!

Neither austerity or the Euro has worked, both have been an unmitigated disaster for ordinary people and a resounding success for the Bankers!

It would not have happened had they all still had their own independent sovereign currencies.

[Robin Hood]

Pyrpolizer:

What is the alternative? RH’s proposal in which the Banks would have no reason to exist, while the Government itself would turn itself to a huge Banker???

You are reading into the suggestion, things that are not there! The banks would still be there, providing personal loans to those that qualify but they would lose the right to create the money! They would be treated like any other commercial organisation ..... they would have to borrow it. The banks would still be required but would revert to the status of ‘a service to industry’ they would no longer be self declared as an ‘industry’!

The Government would merely be doing what it is supposed to do ......... protect the interests of the country and its citizens by applying statutory controls and regulations.

[Robin Hood]

Paphitis:

The Bank will only offer you Credit against this security. That is the only way. Therefore, no money is being created at all.
The money is backed up by this security, like it was originally backed up my Gold in the 19th Century.

Paphitis .... as a pilot you need a licence, you need to be rated for type, both need to be current, you need a medical. You also need a lot of information before you can even sit down at the controls; NOTAMS , weather reports, a flight plan, a slot ..... and so on.

These are not required to produce an aeroplane! That requires a different set of conditions. In this case the ‘pilot’ is the borrower and the banks are responsible for providing the ‘aeroplane’ They are not one and the same!

When the Americans changed things with the advent of the Federal Reserve, and allowed money to be backed up by virtually anything of value, they were actually making Banking and borrowing available to the average person on the street, farmers and workers.

The United States stopped selling gold to foreign official holders of dollars at the rate of $35 an ounce in 1971, it brought the gold exchange standard to an end. In 1973, the United States officially ended its adherence to the gold standard.

It was at that point(1971) things started going haywire, there was no longer a ‘standard’ ONLy the US dollar! The brakes were off and the horse bolted. Even then the US assured the World that gold would remain valued at $35 an ounce ..... they lied about that too! (1973)

The alternative is Banks for the elites only. But we would not have the economic development on the same scale we have had in the last 100 to 200 years.

That is what you have now! The Elite ..... the 0.01% or even less, control the banks to ensure the system works in their favour. Are you seriously suggesting that all the economic benefits we enjoy today are all down to an efficient, honest and dependable banking system???? They are a bunch of proven crooks!. Every recession, depression, bubble, economic collapse in history (Oh .... and War!) lays at the feet of the Bankers ....... they don’t work for you, YOU work for them ...... it’s called debt slavery!

[Robin Hood]

Paphitis:

Please go to a Bank and ask for a loan.

You wouldn't be able to get one if you don't have Collateral to begin with or are able to apply a minimum 20% deposit to buy an asset which they will take as security.

Previously addressed.

Unfortunately, there is no way to avoid boom and bust cycles. You got to remember that Banks are only facilitators. They make it all possible.

Exactly, with the banks operating as the ‘industry’ rather than as its servant there will always be booms and busts ..... they are deliberately engineered by the bankers!

The only way to avoid boom and bust is to reprogram human beings or to clone them so that they cannot be as greedy as they are.

The answer is a frontal lobotomy performed on all Bankers ...... a bit like removing a tumor. Human beings don’t create booms and busts ..... banks do!

We will see the cycle over and over. In good times, people borrow, often too much. But we have the boom cycle. Eventually, over some period, the level of borrowing becomes excessive, and people need to tighten their belts. Hence the bust cycle. During this time, debt is reduced. It is just a natural cycle which can't be broken.

..... and who is in the LH seat? ..... The Banks! But it CAN be broken ..... by restructuring the banks to perform as they should do .... as a service to wealth creating industry. Removing their ability to create ‘money’ would be a good start ...... revise The Bank Charter Act (1844) to bring it up to date with modern technology ...... and re-impose ‘Glass Steegal’, to separate High St. Banks from the ‘investment’ bank casino cowboys!

[Robin Hood]

Paphitis:

Then you would limit economic development, employment and basically restrict people from doing what is natural to them.

Rubbish ..... it would be business as normal ..... but with banks having to borrow what they want, just like any other business!

No, it's a roller coaster and humanity has made a lot of money from the roller coaster.

SOME people have made a lot of money, bankers being at the top of the pyramid of greed ...... many more have been plunged into poverty ask the Greeks .... ask some Cypriots who have lost every thing because of the banks!

Just go for it whenever you can, and then back pedal when you need to.

Sure ..... live for today .... and why bother about tomorrow!

The power belongs to the consumer who decides the products they need and what they are going to do with the money. Often, opportunities are being provided to people to invest in what they want and over time these individuals will become more wealthy. That is the whole point of it all.

Power belongs to banks ........... more accurately, to The Bankers! Taking away the power from a single self interested section of society will enable others to enjoy the fruits of their ideas and labours.

The power belongs to the Central Bank. Banks are only Businesses that have to abide by the Financial Regulations they operate under. Their performance is monitored by the Central Bank.

As you say ..... MONITORED ...... the banking system is NOT controlled by the Central Banks. The regulators are independent organisations.

Banks can only create money when you offer them Collateral. As I stated earlier, I am not talking about consumer credit products like Credit Cards. All other debts a supported by a Security. That's how it has always been.

Once again ..... you fail to see the whole picture! Collateral/security is an ‘insurance’ for the banks, it is NOT a requirement to create new money out of thin air. How much more proof do you need to convince you that you are thinking wrongly?

[Paphitis]

So I am a bit out of touch with the requirements in todays society. I apologise

You don't say!

Hardly surprising since you only think you know how money is created. Basically, you're only half right, because money is not exactly created out of thin air. It is usually backed up by a security.

[Paphitis]

Then you would limit economic development, employment and basically restrict people from doing what is natural to them.

Rubbish ..... it would be business as normal ..... but with banks having to borrow what they want, just like any other business!

Sorry RH, but I don't believe you. We've had Banks go Bankrupt because they were under-capitalised and under your plan, they will be under-capitalised because they wouldn't be able to support all the IOU's

We've had many decades of development, so I'm sticking with what we got now.

No, it's a roller coaster and humanity has made a lot of money from the roller coaster.

SOME people have made a lot of money, bankers being at the top of the pyramid of greed ...... many more have been plunged into poverty ask the Greeks .... ask some Cypriots who have lost every thing because of the banks!

Correction, MOST people have made some money.

I don't need to be a top of the pyramid. And secondly, Banks are publicly listed. Millions upon millions of middle class families own shares in banks because of the safety these stocks provide.

Just go for it whenever you can, and then back pedal when you need to.

Sure ..... live for today .... and why bother about tomorrow!

No, invest for your family and children for a better tomorrow. That is what Banks help people and families do. Not to mention all the businesses they help to set up and even buy stock.

The power belongs to the consumer who decides the products they need and what they are going to do with the money. Often, opportunities are being provided to people to invest in what they want and over time these individuals will become more wealthy. That is the whole point of it all.

Power belongs to banks ........... more accurately, to The Bankers! Taking away the power from a single self interested section of society will enable others to enjoy the fruits of their ideas and labours.

Ultimate power is with the consumer. Without the consumer offering up security, there is no lending. It is a business partnership and no one has any power over the other. A mere mutual agreement offering what is mutual benefit. Each party has rights clearly defined in the contract or agreement.

The power belongs to the Central Bank. Banks are only Businesses that have to abide by the Financial Regulations they operate under. Their performance is monitored by the Central Bank.

As you say ..... MONITORED ...... the banking system is NOT controlled by the Central Banks. The regulators are independent organisations.

Oh yeh, but it is the Central Bank that can fine them 500,000 for a basic breach of the Financial Services Act.

Banks can only create money when you offer them Collateral. As I stated earlier, I am not talking about consumer credit products like Credit Cards. All other debts a supported by a Security. That's how it has always been.

Once again ..... you fail to see the whole picture! Collateral/security is an ‘insurance’ for the banks, it is NOT a requirement to create new money out of thin air. How much more proof do you need to convince you that you are thinking wrongly?

No it is wealth, not just security.

You can offer Gold or anything else but at the end of the day, you get a loan because you don't want to sell and rely on a Bank to credit you an IOU based on EQUITY in a security that you already have. That is what the Bank is providing you. A damn friggin IOU which is in fact a liability yes, but it is still an IOU from money that does not really exist. Don't you see that it is actually a balancing act. These IOU's have a limit or breaking point for any Bank. What is so hard to understand.

It's not just insurance at all. This wealth exists. It is tangible and it has value on the market.

[Paphitis]

Robin Hood,

You need to understand why we need Banks and why they are quite essential to all of us.

People borrow money, hopefully for good reasons, and not to squander. That is, it is usually considered a bad idea to borrow money to go on a holiday, buy electronics, gadgets, cars and other items that depreciate.

The whole purpose of borrowing sensibly, is to invest, and create residual incomes etc.

So why would people borrow:
1) to buy a home,
2) to buy a rental property,
3) to buy commercial property,
4) to set up a business or buy a stake in a business start up,
5) to buy shares,
6) to buy land,
7) to invest in currencies and trade,
8. to invest in shares and trade, etc etc
9) you can invest (speculate) in many other things, like metals, gold, commodities and securities.

The above is what I term good debt.

Remember, the whole purpose is to increase your wealth as well as leverage your borrowings against residual income which would leave you a PROFIT. And then, the goal is to pay off the debt so that you can keep all that residual income for yourself, or keep borrowing to expand your residuals.

People can't do most of these things all by themselves or without selling another asset, so they borrow from a Bank. A Bank will only lend to you if you have security to offer. The borrowings are not possible without a security. So it's not correct to say that a bank can simply just create a "data entry". This so called "data entry" has very tangible implications on the borrower, but not only. It also has tangible implications on the Banking Sector because they have now created money into the economy which in turn becomes a liability to the banking Sector. Follow the money through to see how it is also a liability for the Banks, or to a Bank. If Banks just "created" Trillions without any security or restriction, then in turn, there will be a Bank Meltdown, as they go to the wall one by one.

Debt is all about Residual Income, Investing in Capital Growth Assets and is also a good way to get some business tax deductions and reduce the amounts of tax to be paid.

If there were no benefits to borrowing, then loans would not be needed.