www.iva.co.uk

We think Banks are loaded but they aren't as they have been operating in an environment of MAKING UP MONEY throughout the last 40 years!

I have a friend who works in senior coporate Banking who approves lending,I called up for drink...before I got drunk,I said where is all this money coming from to lend?? Deposits??

The revelation:
She said we have 10% of ££ of what we lend out. We just make an IOU from you to us and presto we are ££ richer and with the interest as well...worked well for a long time.That's is why there is a ton of debt and little real money of value out there.Most money is debt owned by one to another.

If we wait to get deposits before we lend do you think we be lending out the dough we have....she said on her fifth glass of wine.

Your money deposits are only IOUs from us to you she saids. We don't physically lend out the deposits. You think we hand that out in real lending, no it looks that way...banks lend an IOU to you she said. Its only now the FK government saids we can't lend more than a % of what we have in the vault as cash that there is no money to lend out.We use to lend 200% of what we don't have!

So Banks only creates IOUS payable by you....as they don't have the money to lend and to you its debt.


Her final comments was,we can't get rich unless we create more debt..more debt means more IOU and more interest and we'll take the house if people can't play.

This is all from the mouth of a banking expert....the rest of us have been made slaves to debt...the system demands it...thats why there can be no getting out of the Recession for riches to pour in again...as people are not spending...little debt ..little wealth...

I felt enlightened and that the whole lending sytem is a con, perverted from the days 1800s when interest charging was wholly fobidden as money was only a means to represent existing persnalised wealth, now its an IOU carried literally for life??

If people really realised how fractional reserve banking and how private ownership of the countries money supply etc worked there would be riots in the street.

Thomas Jefferson knew it too...

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. - Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)

I am glad you grasp the nettle of this, its so simple the concept that the mind finds it a struggle to grasp it! If banks lend what they don't have and we spent what don't have = as we know it! We can't do anything about it.

Britain owns 800 billion quid to foriegn Banks and governments, the US about half of that in sterling terms. The amounts cannot be paid off unless they steal from the tax payers and giving us nothing in return - low salaries,cut in pensions, work longer,poor public service and care etc.

You can only own 800 million quid if you can print and create 800 million quid as as IOU!That is how everyone gets into debt...someone creates more money for us from no where.

If you ever study economics you will see that this has been going on since banks were created. you put £100 into the bank and they lend £90 of the £100 to someone to buy a tv, the retailer puts the £90 into his bank and that bank lends £81 pound out to someone else from the £90 you have already lent out £171 from the intial £100 deposit and it is only the start of the cycle. I am sure you can see that there is a lot more money lent out than there is deposited.

Paul,

You have to take in to account that £90 is returned back to the bank in your example. This means they have lent £171 against deposits of £190.

It doesn't matter how many time the cycle is repeated as the lending is still based on deposits. However where this gets off the rails is when the bank assets are used as collateral for loans.

Previously banks may have funding in similar rations to 30% deposit, 40% assets and 30% securitised funding. The latter two can (and have) had huge impacts to banking.

Assets have depreciated in most cases and securitisation (a form of lending against loans) is near impossible these days. However, even with these factors, the FSA imposes collateral ratios based on risk, governance and the type of exposure to the general public.

Can't say I agree with the previous statement by timeforchange.

Cheers

Andy

yes you are right Andy, I was just trying to explain how far £100 can go but you are right in that the deposits are greater than what has been lent out. haven't seen you around for a while, hope you are keeping ok.

Hi Paul,

Sorry I can see the point you were making.

Unfortunately been very busy with work and getting less time to spend on here. Hopfully there will be light at the end of the tunnel soon [:)]

Hope everything is well with you?

Cheers

Andy

not too bad at all, had a very bad week last week but we got some tremendous support from the forum and our IP company (ClearDebt)

Nice response guys, but what you both fail to grasp is from day one, money supply was tied to gold!! In the 1800s and even after the war...Bretton wood agreement..till 1971. You can't have more money than your gold reserve, that means money is backed by a valued commodity...Gold! Money represented something.

When the UK told the world in 1931 that the £ was no longer following Gold standard, many lost faith in UK paper money. The French got so worried that it told the US treasury that it wanted Gold in return for the dollar it kept as a reserve currency...as the believe was more dollars will be printed and becoming inflationary.I collect coins and rare notes as a hobby and have a replica of a pre-digital dollar bill that can be redeemed in gold or silver in those days.

In 1971,with the gold standard gone Nixon created 26 billion to pay for the Vietnam war....money it didn't have...its that moment we are in now, more money is created to pay for expenditure.The French was right to redeem the dollar for bullion of gold.

As for the money lent out in fractional terms,the point here is that its lend out over and over too many times.....the FSA is now voicing concerns.Rightly so! 4 to 1 and not 9 to 1!

is this your personal opinion Timeforchange or have you got a reference?

Its all true mate, as I said I collect foreign notes and stamps....and know the history of the dollar very well! My hobby is money.....all paper money is becoming worthless slowly as its backed by faith in an economic downturn??

The US dolar have deflated in value since it came off the gold standard....the Chineses who own 760 billion are very worried!