Cyprus-Forum.com

[Maximus]

Why would that be an overdraft and not a loan?

I want to by cloths from Marks and Spensers for $100 with %10 interest.

The bank lends me $100.

how much new money was created by the bank?

Because it is such a small sum of money and they would laugh at you if you tried to create a credit account for £100.

In the more practical example I gave, £10k of New Money ...... as explained ....... was created in the other guys bank account when he cashed your cheque/payment. Your bank plunged you £10k into the red on your credit account and gave you £10k of debt, But the bank has zero liability to repay that £10k to any other entity because THEY created it from thin air ..... and it will return to thin air when you pay it off. The 10% interest YOU provide as it was probably added to your credit limit + arrangement fees and costs.

Its just for illustration purposes and for example and the answer is $0, even with your example.

So the private banks dont really create any new money because it all negates itself. So i dont really know what you are talking about.

The other $10 for the interest in my example ($1000 in yours) is money the borrower has to find that is already in existence or circulating in the economy.

I think you need to think about it some more.

[Londonrake]

I'm sure to get a bollocking for this but.................... a moment of light relief from a heady subject:


https://www.youtube.com/watch?v=pENxsLVR_Xs

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[Lordo]

Of course you do not have to worry about 6 million people who have to get universal credit or go to food banks to survive even when they have up 3 jobs. Of course these interest hike will also push up rents because landlords will increase them to pay interest.

I would have thought this would be more to your liking no?

crocodile tears hey? Shiit man.

[Londonrake]

Yeah but, it seems you couldn't give a flying fuck about 9000 murdered "blond" Ukranians. They apparently deserved it.

Who are you trying to kid?

Idiot.

[Lordo]

Yeah but, it seems you couldn't give a flying fuck about 9000 murdered "blond" Ukranians. They apparently deserved it.

Who are you trying to kid?

Idiot.

I still don't give a fuck because they started it. They also killed 14,000 back in 2014.

You can't help being a cunt can you.

[Robin Hood]

Maximus quoted RH ......The BoE does not create ''money' that goes into circulation, only private banks do that and do so from your local Branch right through to Head Office. Every bank has a hypothetical money tree growing in the back yard!

and commented ..........You brought your knowledge into question

On the contrary YOU have exposed your own ignorance on the subject. I suggest you read the BoE Article. What I explained IS correct.

Can banks create as much money as they like? No, they can’t.

Of course they can’t and I did not suggest they could ..... you are trying to expand the envelope of stupid comments.

Regulation limits how much money banks can create. For example, they have to hold a certain amount of financial resources, called capital, in case people default on their loans. These limits have become stricter since the financial crisis.

I suggest, once again you check up and find out what LIBOR is as that explains how each day the bank’s balance the books. They lend to each other within the deposits they hold in the BoE! Hence “London Interbank Offer Rate”.

Banks also risk going bust if they lend out money left, right and centre. For instance, people borrowing money will probably spend it. If they make payments to people who have accounts at other banks, their bank will need to transfer the money to that other bank by sending it some of its electronic central bank money. So if one bank lends out too much money, at some point it will not have enough electronic money in its account with us to pay the other banks.

That is why there are limitations. Look up LIBOR!

https://www.bankofengland.co.uk/explain%20...%20ey-created

You need money to make money!

Wrong! Private bank’s create New Money by giving credit to one customer to pay into another customers bank account as a deposit of New Money. The source account then goes negative by that amount ..... the New Money deposited in one bank is created as debt in another. That is just what it says above!

Money creation and banking video ........... this may be beyond your attention span ..... but they all seem to agree with me on the concept of money creation.
https://www.youtube.com/watch?v=kw0QVwt7LVI 1h 40m ...... should fill in the bits lacking in your perspectives of the monetary and banking system.

https://www.google.com/search?q=bank+of+england+money+creation+video&rlz=1C1GCEA_enCY916CY916&oq=BoE+money+creation&gs_lcrp=EgZjaHJvbWUqCwgBEAAYFhgeGIsDMgYIABBFGDkyCwgBEAAYFhgeGIsDMgsIAhAAGBYYHhiLAzI

[cyprusgrump]

Wrong! Private bank’s create New Money by giving credit to one customer to pay into another customers bank account as a deposit of New Money. The source account then goes negative by that amount ..... the New Money deposited in one bank is created as debt in another.

Yes, but you seem to believe that this is an endless process – the banks can just create money endlessly and lend it out with no consequence…

The reality of course is that banks have to balance the books every day – matching loans with deposits as I pointed out earlier.

If they can’t balance the books, they go bust – see Black Rock et al.

So Banks can’t magic money out of thin air as you insist, it is a temporary process that has to be matched by deposits or borrowing – if it wasn’t no bank would ever go bust.

And the idea that Central Government could somehow handle this process more efficiently than the private sector is demonstrably absurd.

[Lordo]

Wrong! Private bank’s create New Money by giving credit to one customer to pay into another customers bank account as a deposit of New Money. The source account then goes negative by that amount ..... the New Money deposited in one bank is created as debt in another.

Yes, but you seem to believe that this is an endless process – the banks can just create money endlessly and lend it out with no consequence…

The reality of course is that banks have to balance the books every day – matching loans with deposits as I pointed out earlier.

If they can’t balance the books, they go bust – see Black Rock et al.

So Banks can’t magic money out of thin air as you insist, it is a temporary process that has to be matched by deposits or borrowing – if it wasn’t no bank would ever go bust.

And the idea that Central Government could somehow handle this process more efficiently than the private sector is demonstrably absurd.

Who do you suppose check whether the bank is behaving on a daily basis? Is this not why banks collapse.

[Robin Hood]

Yes, but you seem to believe that this is an endless process – the banks can just create money endlessly and lend it out with no consequence…

The reality of course is that banks have to balance the books every day – matching loans with deposits as I pointed out earlier.

If they can’t balance the books, they go bust – see Black Rock et al.

So Banks can’t magic money out of thin air as you insist, it is a temporary process that has to be matched by deposits or borrowing – if it wasn’t no bank would ever go bust.

I am too old in the tooth to remember all this off-the-cuff ..... but I know the basics and where to find the detail. Watch this and you will find YOUR concept is wrong! Banks can in practice create money without limit.

In this video we’ll see that the type of reserve ratio that’s discussed in the textbooks has never even existed in the UK. We’ll see that the liquidity ratios that did exist have been reduced and eventually abolished, and that even when they did exist, they only limited the speed that the money supply could increase, but put no limit on the total size that it could grow to.

We’ll learn that the Capital Adequacy Ratios and Basel accords are about preventing banks from going bust when loans go bad, rather than limiting their dangerous lending or limiting how much money they create through lending. And although the capital adequacy requirements can restrain lending after a banking crisis, it doesn’t do anything to restrain lending in a boom.
We’ll also see that there is no natural limit on how quickly the banks can create money.

https://positivemoney.org/how-money-works/banking-101-video-course/how-much-money-can-banks-create-banking-101-part-4/#:~:text=And%20although%20the%20capital%20adequacy,the%20banks%20can%20create%20money.

So your perception is wrong! Banks can create money out of thin air by creating debt .... 'ad infinitum' !

And the idea that Central Government could somehow handle this process more efficiently than the private sector is demonstrably absurd.

Do you really believe that those that run the Banks are any different to those that run the economy or the Central Bank? One day, maybe, you will realise that banking is a numbers game the basis of which is designed to make a very small percentage of the population very, very, very rich!

[Robin Hood]

I'm sure to get a bollocking for this but.................... a moment of light relief from a heady subject:


https://www.youtube.com/watch?v=pENxsLVR_Xs

.

For once you are not far off the mark!