| Forum Home | ||||
| PC World Chat | ||||
| Thread ID: 136978 | 2014-05-08 23:14:00 | Hear Hear! | ruup (1827) | PC World Chat |
| Post ID | Timestamp | Content | User | ||
| 1374478 | 2014-05-08 23:14:00 | Blood suckers! First against the wall... www.voxy.co.nz |
ruup (1827) | ||
| 1374479 | 2014-05-09 11:24:00 | If banks can create money out of thin air - why do they go broke? In the United States in 2012 over 1000 banks went bankrupt . In the UK - London Scottish Bank, Dunfermline Building Society, Northern Rock, Bank of Scotland etc . Why would a bank give up if it can create money? |
Winston001 (3612) | ||
| 1374480 | 2014-05-09 20:43:00 | Other banks showed why they always start "bankrupt" with a bank. ;) (That, and mistakenly using fat air.) |
R2x1 (4628) | ||
| 1374481 | 2014-05-09 20:59:00 | If banks can create money out of thin air - why do they go broke? In the United States in 2012 over 1000 banks went bankrupt. In the UK - London Scottish Bank, Dunfermline Building Society, Northern Rock, Bank of Scotland etc. Why would a bank give up if it can create money? Of course they do, where have you been all these years Win ?? :) It's called Fractional Reserve Banking...creating money out of thin air................. en.wikipedia.org |
Terry Porritt (14) | ||
| 1374482 | 2014-05-09 22:13:00 | I thought it was common knowledge that if all the people with deposit money in any Bank were to wish to withdraw all their funds the Bank would be unable to pay. If you or I were to try the same trick we’d be charged with “Trading when knowingly insolvent”. I’m afraid there are rules for some, and rules for others. :rolleyes: |
B.M. (505) | ||
| 1374483 | 2014-05-09 22:48:00 | Alternatively, money can be printed, but because those are dirty words associated with the Weimar Republic and galloping inflation, these days the process is more sophisticated, they call it Quantitative Easing.................."The way the central bank does this is by buying assets - usually government bonds - using money it has simply created out of thin air." www.bbc.com en.wikipedia.org |
Terry Porritt (14) | ||
| 1374484 | 2014-05-09 23:23:00 | I think this cartoon sums it up well. www.stuff.co.nz |
ruup (1827) | ||
| 1374485 | 2014-05-10 08:39:00 | Of course they do, where have you been all these years Win ?? :) It's called Fractional Reserve Banking . . . creating money out of thin air . . . . . . . . . . . . . . . . . . wikipedia . org/wiki/Fractional_reserve_banking" target="_blank">en . wikipedia . org Correct, no argument . I thought it was common knowledge that if all the people with deposit money in any Bank were to wish to withdraw all their funds the Bank would be unable to pay . If you or I were to try the same trick we’d be charged with “Trading when knowingly insolvent” . Sort of . This happened to the Southland Building and Investment Society (SBS today) in 1991 which I well remember because I drew out my life's savings in case everything was frozen . What happened is Westpac stepped in and provided armored truck-loads of cash until everything calmed down . SBS was good for the money but most was lent out on mortgages - no bank holds a vault of money equal to all deposits . The Basel III rules require banks to hold approx 9% assets/reserves (Tier I) over and above the total deposits received . So they aren't insolvent . |
Winston001 (3612) | ||
| 1374486 | 2014-05-10 08:44:00 | I think this cartoon sums it up well. www.stuff.co.nz Nevertheless you haven't answered my original question. If banks can create money out of thin air then they have many times the amount received from deposits. How can a bank go broke? |
Winston001 (3612) | ||
| 1374487 | 2014-05-10 09:26:00 | It's the legal fees that drag them down ;) | R2x1 (4628) | ||
| 1 2 | |||||