cobran20

Printing Money

53 posts in this topic

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“The Federal Reserve is printing money”.

No statement could be less truthful. The Federal

Reserve (Fed) is not, and has not been, “printing

money” as defined as an acceleration in M2 or

money supply. Just check the facts. For the first

quarter of 2013 the Fed purchased $277.5 billion in

securities (net) as their security portfolio expanded

from $2.660 trillion to $2.937 trillion. A review

of post-war economic history would lead to a

logical assumption that the money supply (M2)

would respond upward to this massive infusion

of reserves into the banking system. The reality

is just the opposite. The last week of December,

2012 showed M2 at $10.505 trillion, but at the

end of March, 2013 it totaled only $10.450 trillion

which was an unexpected decline of $55 billion.

Printing money? No.

This broad misconception of the Fed’s

ability to print money has been widely embraced

since the Fed began its massive balance sheet

expansion near the end of 2008. It was then that

the Fed expanded the monetary base from $840

billion to $1.7 trillion in a matter of months.

Further, from the initiation of this misguided

program to the end of March 2013, the Fed has

expanded the monetary base from $840 billion to

$2.93 trillion. The money supply indeed went up

(35%) but not in proportion to the increase in the

monetary base (249%). Presently, the year- overyear expansion of M2 is only 6.8%, which is nearly

identical to its year-over-year growth rate in March

of 2008 before the Fed decided to “help out the

economy” (Chart 1). In other words, there is no

evidence that the massive security purchases by

the Fed have resulted in a sustained acceleration

in monetary growth; nor is there evidence that

economic conditions have improved.

The Fed's Flaw

Not only does the Fed not control

money, but it cannot determine velocity (V), the

speed that money turns over, either.

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[quote name='cobran20' timestamp='1368085877' post='67327']
He gets my vote!
[url="https://www.youtube.com/watch?v=4RF3Lr4XI4w"]Money-printing scam at taxpayer expense - Godfrey Bloom MEP[/url]
[/quote]
Anyone that opens with "fractional banking was a hanging offence in the US in the 1850's" by definition supports the Cypriot taking of depositors money don't they?

After all if you can't lend out the money at all then the only way to make money is to charge people for looking after their money (like the goldsmiths of 1600's England).

He doesn't seem to mention that.

In my opinion if you make everyone pay to keep their money in a bank lots will keep it at home and as a result crime will increase. If you came and robbed my house now you would get squat, some tv's and stereo equipment. No one has anything in their house worth stealing unless the robbers are way way low on the criminal ladder. Because everyone keeps their net worth in the bank (or "not able to be picked up" assets like a house).

From a personal perspective I would rather have houses not being worth robbing.

as for "we really have to use the law of the land, not so much regulation"

What the f*ck does that even mean? We can't pass new laws just use old ones? That is the only interpretation I can think of. Which means there is no need for change to anything just enforce the stuff we have. So why doesn't he say that? Oh because what they did was mostly legal I am guessing. And "law of the land" appeals to nationalistic idiots.

f*cking bozo in my opinion based on that clip. Throw the buzzwords, be vague, don't offer a solution just say "someone f*cked up" and go on a witch hunt.

Tedious, tedious sh*t from an ill informed wanker in a suit trying to push buttons.

All things being equal I would probably punch him in the face if we went drinking for more than a couple of hours. Just because he thinks he is tough and he hasn't a f*cking clue what tough actually means. Tough policies mean people get hurt. Generally speaking the people pushing those policies think it will be someone else that gets hurt.

I am guessing he is from one of those <whatever> extremist type parties / factions because they always front wankers like that. "Oh he wears a suit, he must be believable". f*ck I hate those people.

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Anyone that opens with "fractional banking was a hanging offence in the US in the 1850's" by definition supports the Cypriot taking of depositors money don't they?

After all if you can't lend out the money at all then the only way to make money is to charge people for looking after their money (like the goldsmiths of 1600's England).

He doesn't seem to mention that.

I didn't watch the clip but I don't think that being against FRB means that you are against all lending, period.

One idea I have seen floating around is that:

--Banks can lend out the total amount of their deposits plus capital (i.e. there is no "fractional" lending, it is 1:1).

--They make their money from the "spread" e.g. they pay depositors 4% and they lend out at 7%.

--If you take deposits then that is your sole business, no speculating, no investing, period.

It makes it a boring old safe and fairly unrewarding (on a % return basis) business but that's the way it should be IMHO.

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I didn't watch the clip but I don't think that being against FRB means that you are against all lending, period.

One idea I have seen floating around is that:

--Banks can lend out the total amount of their deposits plus capital (i.e. there is no "fractional" lending, it is 1:1).

--They make their money from the "spread" e.g. they pay depositors 4% and they lend out at 7%.

--If you take deposits then that is your sole business, no speculating, no investing, period.

It makes it a boring old safe and fairly unrewarding (on a % return basis) business but that's the way it should be IMHO.

Exactly. It is a way of securing depositors' money, unlike what they've done in Cyprus. I still think that central banks could charge banks an insurance premium to safeguard depositors' money based on the risk of their loans portfolio. I have no problems with a bank going bust for its incompetent investment decisions, as long as depositors' money is secured. Either that or go back to the separation of retail and investment banking.

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I didn't watch the clip but I don't think that being against FRB means that you are against all lending, period.

One idea I have seen floating around is that:

--Banks can lend out the total amount of their deposits plus capital (i.e. there is no "fractional" lending, it is 1:1).

--They make their money from the "spread" e.g. they pay depositors 4% and they lend out at 7%.

--If you take deposits then that is your sole business, no speculating, no investing, period.

It makes it a boring old safe and fairly unrewarding (on a % return basis) business but that's the way it should be IMHO.

Oh for f*cks sake. You give a bank $100 and they lend it all out? That is 0% fractional banking. When you run to the bank and ask for your money they have none of it in that scenario. Currently they would have a few percent of it at least.

If that is the absolute monkey sh*t you are reading and they claim to be against fractional banking they are f*cking morons and you ought to be feeling dirty now for believing their stuff because you didn't think about it for a second.

Either you have synopsised the thing incredibly badly or you are reading the most retarded bullsh*t in the world.

Is there any chance you could either claim to have been drunk when you read it? That would be better than saying you read it and believed it sober.

I _am_ drunk and have read your post a few times to see if there was something I missed is how f*cking retarded that is.

I only wish this was the most retarded thing I had heard this week.

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Exactly. It is a way of securing depositors' money, unlike what they've done in Cyprus. I still think that central banks could charge banks an insurance premium to safeguard depositors' money based on the risk of their loans portfolio. I have no problems with a bank going bust for its incompetent investment decisions, as long as depositors' money is secured. Either that or go back to the separation of retail and investment banking.

What the hell are you talking about? Securing depositors money by lending it all out?

I don't know if you are making a sarcastic joke or not.

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What the hell are you talking about? Securing depositors money by lending it all out?

I don't know if you are making a sarcastic joke or not.

The premium for the deposit security is based on the collateral and the LVR.

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The premium for the deposit security is based on the collateral and the LVR.

Which is fractional banking right? And way more so than what we have now right?

I lend you (you are a bank) $100 on the collateral of my $100 house and you lent that $100 out to someone else in its entirety because my $100 house covers the deposit security.

That is what I am reading as the proposed solution to fractional banking right?

That is 0% fractional banking right?

0% fractional banking is not the opposite of fractional banking, it is the absolute furthest that fractional banking can go.

I have no issue with fractional banking, I think it is a good idea, but to argue that the absolute hardest core pro fractional banking scenario is the opposite of fractional banking is just incoherent.

And incoherent people are generally hilarious at barbecues but f*cking awful for running countries.

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UKIP are swivel eyed nut jobs. Britain's answer to one nation.

<satire>'I will show mercy when we seize power', UKIP members tell workmates</satire>

UKIP members have told their workmates that their lives will probably be spared come the day of ultimate victory.

As UKIP grabbed more than 48 council seats across England, the party’s activists informed their colleagues that although their names are on a list it did not necessarily mean that they were in danger.

Martin Bishop, member 12758 from Hatfield, said: “I do feel a little bit sorry for them, but I can’t protect them all.

“For instance Janet, who works in personnel, is sometimes a bit short with me. This morning I made a point of standing in front of her and making sure that she could see that I was writing her name in my little book.

“Hopefully that will be enough to change her attitude towards me. If not then there will come a day when she will simply not arrive for work.

“And then everyone will know how important I am.”

Helen Archer, from Peterborough, said: “I know Nigel Farage’s doctor’s cousin so I could probably pull a few strings. I really like my hairdresser so I wouldn’t want her to disappear.

“But as I say to everyone, ‘just go along with it and everything will be fine’.”

Professor Henry Brubaker, of the Institute for Studies, said: “It does look as if the UKIP surge has forced Lincolnshire into no overall control.

“Now that could mean absolutely f*ck all. At this stage we just don’t know.”

These parties always do well in tough economic times when people are looking for someone to blame.

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Oh for f*cks sake. You give a bank $100 and they lend it all out? That is 0% fractional banking. When you run to the bank and ask for your money they have none of it in that scenario. Currently they would have a few percent of it at least.

If that is the absolute monkey sh*t you are reading and they claim to be against fractional banking they are f*cking morons and you ought to be feeling dirty now for believing their stuff because you didn't think about it for a second.

Either you have synopsised the thing incredibly badly or you are reading the most retarded bullsh*t in the world.

Is there any chance you could either claim to have been drunk when you read it? That would be better than saying you read it and believed it sober.

I _am_ drunk and have read your post a few times to see if there was something I missed is how f*cking retarded that is.

I only wish this was the most retarded thing I had heard this week.

Tee-hee, hilarious.

Let's use the classic money multiplier model where the amount loaned out for each deposit = 1 / RR so e.g. you would have 10 times the money lent out if the reserve requirement is 10%.

How do you think fractional reserve banking is less risky if an extra $900 is lent out against an initial $100 deposit than a system where $100 is lent if there is an initial $100 deposit? Can you see what you are missing...

Imagine that there is only one huge bank in the economy (or world if that floats your boat). When that initial $100 is loaned out, where does it go? Think ... it goes into the bank account of the person who is getting the loan. But this is at the same bank, so there is no problem. The cash is still there.

Of course in the real world there are lots of banks and millions of accounts. The effect is the same, many deposits into bank B will be from loans made as a result of deposits into bank A and vice versa and so forth (bring bank C, D ... ZZZ into the equation with a huge web of inter-mingled deposits and loans).

What it does mean is that to be on the same risk footing as a larger bank, smaller banks will have to lend out a smaller fraction of their deposits (a larger proportion of their loans will not end up back as deposits later on).

Now you might raise the issue that some money that is loaned out does not return to the banking system, it becomes cash sitting in pockets. This is true, but it is a minimal amount, look at the cash:total money supply ratios. Cash deposit ratios (the ratio of actual cash required to satisfy customers withdrawals) is a well known fraction, varies according to day of week and day of month, bank to bank and is part of their risk management.

Banks currently go bust mostly in two basic ways:

1. Bad investments - so the proposal is that deposit taking institutions can not be investment banks.

2. A bank run where people question the solvency of the bank and want their money all at once (even if the bank is technically solvent, their loans have terms but deposits are being demanded up front so they cannot deliver the cash). I am far more confident in the solvency of a 1:1 geared bank than a 10:1 or greater geared bank.

Edit: and to clarify, you can only lend the 1:1 amount versus the actual cash deposits that you took in. That's how you prevent the multiplier.

Edited by Turkey

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UKIP are swivel eyed nut jobs. Britain's answer to one nation.

<satire>'I will show mercy when we seize power', UKIP members tell workmates</satire>

These parties always do well in tough economic times when people are looking for someone to blame.

Disagree. Farage, unlike Hanson, shows brains and is not playing a race card (that I've read at least) to get into power. He's calling the whole Euro club experiment for what it is and people in power at The Hague don't like it. We'll have to wait and see how well it survives.

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Disagree. Farage, unlike Hanson, shows brains and is not playing a race card (that I've read at least) to get into power. He's calling the whole Euro club experiment for what it is and people in power at The Hague don't like it. We'll have to wait and see how well it survives.

Europe is white, the race card is countries not colours. Check out his love for the polish for example.

Although I am pretty sure that some of his affiliates are not so into the coloured or gay people either.

Don't be too sure that the enemy of your enemy is your friend.

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Tee-hee, hilarious.

Let's use the classic money multiplier model where the amount loaned out for each deposit = 1 / RR so e.g. you would have 10 times the money lent out if the reserve requirement is 10%.

How do you think fractional reserve banking is less risky if an extra $900 is lent out against an initial $100 deposit than a system where $100 is lent if there is an initial $100 deposit? Can you see what you are missing...

Imagine that there is only one huge bank in the economy (or world if that floats your boat). When that initial $100 is loaned out, where does it go? Think ... it goes into the bank account of the person who is getting the loan. But this is at the same bank, so there is no problem. The cash is still there.

Of course in the real world there are lots of banks and millions of accounts. The effect is the same, many deposits into bank B will be from loans made as a result of deposits into bank A and vice versa and so forth (bring bank C, D ... ZZZ into the equation with a huge web of inter-mingled deposits and loans).

What it does mean is that to be on the same risk footing as a larger bank, smaller banks will have to lend out a smaller fraction of their deposits (a larger proportion of their loans will not end up back as deposits later on).

Now you might raise the issue that some money that is loaned out does not return to the banking system, it becomes cash sitting in pockets. This is true, but it is a minimal amount, look at the cash:total money supply ratios. Cash deposit ratios (the ratio of actual cash required to satisfy customers withdrawals) is a well known fraction, varies according to day of week and day of month, bank to bank and is part of their risk management.

Banks currently go bust mostly in two basic ways:

1. Bad investments - so the proposal is that deposit taking institutions can not be investment banks.

2. A bank run where people question the solvency of the bank and want their money all at once (even if the bank is technically solvent, their loans have terms but deposits are being demanded up front so they cannot deliver the cash). I am far more confident in the solvency of a 1:1 geared bank than a 10:1 or greater geared bank.

Edit: and to clarify, you can only lend the 1:1 amount versus the actual cash deposits that you took in. That's how you prevent the multiplier.

blah blah blah To return to your actual point:

but I don't think that being against FRB means that you are against all lending, period.

Yes it does. Either you have fractional banking or you don't.

Fractional banking means you can lend _some_ of the money out. The percentage is pretty much irrelevant (as you rightly point out - loaning any amount to a doomed enterprise is a loss).

But if you can lend 1% or 100% it is fractional banking. If the articles say fractional banking is the cause of the problem and to solve the problem you need a different amount of fractional banking then they are retarded because they are saying the root cause is not the root cause if it was tweaked. If fractional banking s the problem then why is fractional banking the solution?

This is just stupid english and (hopefully) designed to attract readers.

Their headline should have been "10% fractional reserves are wrong, we should have Zero" based on your synopsis.

In other words "we didn't let that bitch run free enough"

I reiterate that I think we need fractional banking. I am just pissed off at tautological arguments. And think anyone writing them is not worth listening to.

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blah blah blah To return to your actual point:

Yes it does. Either you have fractional banking or you don't.

Fractional banking means you can lend _some_ of the money out. The percentage is pretty much irrelevant (as you rightly point out - loaning any amount to a doomed enterprise is a loss).

But if you can lend 1% or 100% it is fractional banking. If the articles say fractional banking is the cause of the problem and to solve the problem you need a different amount of fractional banking then they are retarded because they are saying the root cause is not the root cause if it was tweaked. If fractional banking s the problem then why is fractional banking the solution?

This is just stupid english and (hopefully) designed to attract readers.

Their headline should have been "10% fractional reserves are wrong, we should have Zero" based on your synopsis.

In other words "we didn't let that bitch run free enough"

I reiterate that I think we need fractional banking. I am just pissed off at tautological arguments. And think anyone writing them is not worth listening to.

I suggest you re-read when sober.

Fractional banking does not mean "you can lend _some_ of the money out".

It means you can "lend _some_ of the money out", again and again and again (a geometric progression), thereby loaning out and creating far more money than was originally deposited. Why do you think it is called a MULTIPLIER?

If you can only lend out an amount equivalent to the actual cash initially deposited:

1. You are lending

2. You are not multiplying.

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Disagree. Farage, unlike Hanson, shows brains and is not playing a race card (that I've read at least) to get into power. He's calling the whole Euro club experiment for what it is and people in power at The Hague don't like it. We'll have to wait and see how well it survives.

They need to tell their own members that they're not racist cobran.

Ugly face of UKIP: Sunday Mirror exposes racist and homophobic views of party members

On the forum, senior UKIP member Dr Julia Gasper branded gay rights a “lunatic’s charter” and claimed some homosexuals prefer sex with animals. She added: “As for the links between homosexuality and paedophilia, there is so much evidence that even a full-length book could hardly do justice to the ­subject.”

Another member, Douglas Denny from the Bognor Regis branch in West Sussex, used the forum to attack gay sex as “disgusting”. He wrote: “What irritates me is they (sic) way they and their leftie, neo-Commie followers seem to want to force the rest of us to consider them as normal.

“I just wish they would keep their ­homosexual nature and practices to ­themselves and stop trying to ram it down my throat telling me they are ‘normal’ when they are not.”

Yesterday Denny said: “Private forums and private posts should stay private. I have no further comment to make and don’t wish to discuss it with a newspaper.”

Now fair enough they can't be held responsible for the attitudes of their members but surely they could actively discourage the public expression of these views on their own forum site.

The proportion of voters that are attracted to UKIP that have negative views of immigration and muslims is second only to the British National Party.

Our survey featured just one item on Islam, but additional evidence is available from a survey of Ukip supporters conducted by Matthew Goodwin and Jocelyn Evans earlier this year. Our survey asked whether voters felt that Islam posed a threat to Western civilization - 64% of Ukip supporters agreed that it was. This is lower than the 79% of BNP supporters who felt this way, but much higher than agreement among mainstream party supporters, which ranged from 31% (Lib Dems) to 49% (Conservatives). Goodwin and Evans additionally asked their survey respondents whether they would feel uncomfortable if a mosque was built in their neighbourhood - 84% said they would be. Again, lower than the 94% figure for BNP supporters but much higher than the 54% figure for the general population. On Islam, as on immigration, Ukip supporters are more negative than supporters of any other party - except the BNP.

Their own founder left the party because of concerns they were being hijacked by racist elements.

25 things you didn’t know when you voted for UKIP

Dr Alan Sked, UKIP’s founder leader, 1993-97 has said: “They [uKIP] are racist and have been infected by the far right”

Robert Kilroy-Silk (UKIP MEP since 2004) wrote in the Daily Express: “They [Muslims] are backward and evil and if it is racist to say so... then racist I must be – and happy and proud, to be so”.3

In December 2003, he discussed what he called “bleating blacks and Asians” in Britain, asking “Why don’t they stop whining and get a life?”4

In the unrest following the Iraq war, Kilroy-Silk also went on record saying that “the orgy of thieving in Iraq has more to do with the character of the people than the absence of restraining troops. And to think that good, decent, law-abiding young British and American men and women laid down their lives to liberate this thieving mob”.5

He believes that “Moslems everywhere behave with equal savagery”.6 And he also referred to Ireland as “a country peopled by peasants, priests and pixies”.7 Robert Kilroy-Silk later apologised for this remark.

Discussing Britain’s rise in HIV infections, he wrote “The indigenous population is not responsible... It is the foreigners that we have to focus on”.8

Nigel Farage (UKIP MEP since 1999, leader of the UKIP group of MEPs in the European Parliament since 2004; former UKIP Chairman, 1998-2000 and co- founder, UKIP) told former UKIP leader Dr Alan Sked “We will never win the nigger vote. The nig-nogs will never vote for us”, according to Dr Sked.9

Dr Richard North (UKIP’s former Research Director in the European Parliament, Brussels from 1999-2003) described our Spanish neighbours as “rag-arsed dagos” in a BBC TV documentary video, The Enemy Within , which UKIP has described as “a perfect tool for converting the sceptical... and showing at branch meetings”.10

Peter Watson (Chairman, UKIP North Dorset branch) distributed anti-Semitic messages via e-mail, including one remark that read “Jewish merchant bankers

Dr Alan Sked (founder leader of UKIP, 1993-97) has told us that when it comes to immigration policy, “UKIP is even less liberal than the BNP. Certainly, there is a symbiosis between elements of the parties”.16

Robert Kilroy-Silk MEP has suggested that paratroopers should “herd the immigrants together” and dump them on a “slow boat to – wherever”.17

Dianne Carr (UKIP parliamentary candidate at the 2001 general election and a BNP candidate at the 2004 European elections) believes that “the EU is turning England into individual regions and bringing in asylum seekers and alien people and putting them in certain areas right across the middle of Britain and trying to turn it into an Islamic state”.18

Andrew Moffatt (UKIP parliamentary candidate in Beaconsfield at the 2001 general election and member of the Young National Front, 1977-79) declared at a UKIP meeting in Beaconsfield: “Speaking personally, we should put a complete halt to all asylum seekers.”19

A UKIP national leaflet published during the 2004 European elections depicted hordes of foreigners invading Britain via the Channel Tunnel, with the slogan “Great Britain – standing room only”.20

Graham Booth (UKIP MEP since 2002 and former UKIP Deputy Leader, 2000-02) has written “[EU enlargement] will allow 73 million eastern Europeans open access

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I suggest you re-read when sober.

Fractional banking does not mean "you can lend _some_ of the money out".

It means you can "lend _some_ of the money out", again and again and again (a geometric progression), thereby loaning out and creating far more money than was originally deposited. Why do you think it is called a MULTIPLIER?

If you can only lend out an amount equivalent to the actual cash initially deposited:

1. You are lending

2. You are not multiplying.

Even drunk I have to say sorry you're wrong.

Fractional banking creates the multiplier at any level.

I give the bank $100

They lend out $X (1 cent or $100, doesn't matter, this is the fraction in fractional)

it gets spent on blah with joey

joey deposits $X

the bank lends out $Y

but only $100 started the whole thing

Fractional banking baybeeee.

A non fractional banking system is

I give the bank $100

They put it in the safe

End of story.

Hence the word fractional. It is the fraction of the deposit which must remain in the safe.

Of course I know where you are headed with your argument, you are thinking that if I give the bank $100 they can lend it multiple times. They can't, never have, never will, doesn't happen, the articles you are reading are completely misinformed if they state this and if they are that far wrong on really quite elementary areas of banking law maybe you shouldn't read them because probably their other idea will be way wrong too.

Or you could ignore reality and believe stuff posted by people that live in a different universe from the one where it is really quite quite illegal to do those things and banks do tend to have a smidgen of lawyers ensuring they don't breach the laws of a country quite in the manner of walking down the main street shooting babies and throwing coke in the air yelling free for all baby.

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Europe is white, the race card is countries not colours. Check out his love for the polish for example.

Although I am pretty sure that some of his affiliates are not so into the coloured or gay people either.

Don't be too sure that the enemy of your enemy is your friend.

Farage dislikes the open borders policy that has resulted in high crime rates emanating from people from some Eastern european countries like Romania and Bulgaria that he mentioned. He also had the police stats to back himself on that one.

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They need to tell their own members that they're not racist cobran.

Ugly face of UKIP: Sunday Mirror exposes racist and homophobic views of party members

Now fair enough they can't be held responsible for the attitudes of their members but surely they could actively discourage the public expression of these views on their own forum site.

The proportion of voters that are attracted to UKIP that have negative views of immigration and muslims is second only to the British National Party.

Their own founder left the party because of concerns they were being hijacked by racist elements.

25 things you didn’t know when you voted for UKIP

That, unfortunately, throws a different light on the party! sad.gif

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A non fractional banking system is

I give the bank $100

They put it in the safe

End of story.

Thanks for your decreed definition, I will respectfully disagree.

Of course I know where you are headed with your argument, you are thinking that if I give the bank $100 they can lend it multiple times. They can't, never have, never will, doesn't happen, the articles you are reading are completely misinformed if they state this and if they are that far wrong on really quite elementary areas of banking law maybe you shouldn't read them because probably their other idea will be way wrong too.

Good grief, classical economics (the stuff I have a degree in and you say I don't believe) teaches this stuff with very basic balance sheet examples. The same bank doesn't lend out the same $100 but the END RESULT is that the initial amount is multiplied.

They lend $100 minus the RR (say 10%) = $90. Then that person spends it, $81 is deposited into whatever bank a/c, then $81 less 10% is deposited. Each time the deposit is a credit in the bank's books and the loan and reserves held are debits. All the debits and credits added up from the initial deposit equal the initial deposit times the multiplier. Go argue with the professors of the system that you are supporting if you disagree.

Or you could ignore reality and believe stuff posted by people that live in a different universe from the one where it is really quite quite illegal to do those things and banks do tend to have a smidgen of lawyers ensuring they don't breach the laws of a country quite in the manner of walking down the main street shooting babies and throwing coke in the air yelling free for all baby.

Yes, they comply with their reserve requirements, where the reserves are a FRACTION of deposits.

Let's use the RBA's March 2013 figures if you don't want to believe me. All figures in $ billions.

Currency: 53.7

Money base: 61,8

M1: 267.6

M3: 1530.9

Looks like the money multiplier from the original base is alive and well. In your world I would expect M1 and M3 to be smaller than the base.

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That, unfortunately, throws a different light on the party! sad.gif

Start watching the linguistic techniques, it is apparently all the rage in the advisor circles now (well has been for a while but now the incompetent people are selling themselves as linguistic advisors like every other buzzword that came down the pike).

If you watch ABC24 you can actually start picking who is working for who and who defected pretty quickly. The pre mike checks are a hilarious give away. For some reason certain advisors have certain routines that must be followed. I think of it as the warm up but I am guessing the journos would prefer a proper warm up comedian.

I think Bush's 911 "we can't hear you" "that's okay they'll hear us" was when that particular industry got started myself (totally f*cking awesome speech in one line!) but that is a pub argument.

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Thanks for your decreed definition, I will respectfully disagree.

In that case I wonder why you have the word "fractional" in your terminology. What fraction does it refer to?

Aside from that yes you talk about fractional banking, 10% 80% 0% doesn't seem to matter to me if the article you are reading says "fractional banking is wrong".

If I said "fractional banking is wrong" the only logical thing is "not fractional banking". Given that the word fractional refers specifically to the fraction of deposits held in reserve then it is only logical[1] that a person saying fractional banking is wrong is saying that 100% of deposits must be held in the safe.

I don't have degree in economics and would be interested to see what definition of "Fractional Banking" is the current definition of where exactly this word Fractional comes from?

It can't be the velocity of money because fractions in velocity aren't really that useful.

[1] I could be pedantic and say that 100% is still a fraction and therefore all banking is fractional but that would just be me being silly.

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In that case I wonder why you have the word "fractional" in your terminology. What fraction does it refer to?

Aside from that yes you talk about fractional banking, 10% 80% 0% doesn't seem to matter to me if the article you are reading says "fractional banking is wrong".

If I said "fractional banking is wrong" the only logical thing is "not fractional banking". Given that the word fractional refers specifically to the fraction of deposits held in reserve then it is only logical[1] that a person saying fractional banking is wrong is saying that 100% of deposits must be held in the safe.

I don't have degree in economics and would be interested to see what definition of "Fractional Banking" is the current definition of where exactly this word Fractional comes from?

It can't be the velocity of money because fractions in velocity aren't really that useful.

[1] I could be pedantic and say that 100% is still a fraction and therefore all banking is fractional but that would just be me being silly.

It's not "fractional banking", it's "fractional reserve banking". ("Fractional banking" would imply a divisional effect on loans:deposits whereas "fractional reserve" suggests a multiplicative effect.

From what I can see you are:

1. Taking the term that you have made up "fractional banking" and

2. Interpreting "fractional banking" (your made up term) as meaning that banks can lend out less than the deposits that they take in.

The correct definition is simple, to quote the mighty wiki:

Fractional-reserve banking is the practice whereby a bank retains funds equal to only a portion of the amount of its customers' deposits as readily available reserves (currency on hand at the bank plus deposit accounts for that bank at the central bank) from which to satisfy demands for payment. The remainder of customer-deposited funds is used to fund investments or loans that the bank makes to other customers.[1] Most of these loaned funds are later redeposited into banks, allowing further lending. Because bank deposits are usually considered money in their own right, fractional-reserve banking permits the money supply to grow to a multiple of the underlying reserves of base money originally created by the central bank.

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It's not "fractional banking", it's "fractional reserve banking". ("Fractional banking" would imply a divisional effect on loans:deposits whereas "fractional reserve" suggests a multiplicative effect.

You said FRB I said fractional banking, both are short terms for the same thing. We don't have a different system so it should be pretty obvious from the world around you and the context of the discussion what I meant in the same way I knew what you meant.

You however said:

I didn't watch the clip but I don't think that being against FRB means that you are against all lending, period.

and then said:

Fractional-reserve banking is the practice whereby a bank retains funds equal to only a portion of the amount of its customers' deposits as readily available reserves

Now if a portion (fraction) is kept in FRB / fractional banking then being against FRB / fractional means what exactly?

Keeping none

-or-

Keeping all

-or-

Keeping some

If you keep some of the deposits as cash in the safe then you doing exactly what we do now.

If you keep all of the deposits of the deposits as cash in the safe then you are doing what I think most people would call the opposite of FRB / fractional banking. You could call it full reserve banking if you wanted.

If you keep none of the deposits as cash in the safe then you are doing the absolute hardest core of fractional reserve banking, would you mind if we called it no reserve banking because there is no reserve.

Reserve is a word which in this context means "the bit you hold back". You keep it in the safe.

So. Someone claiming that FRB is the cause of the problem then suggesting the solution is to have "no reserve" banking is a flat out contradictory person that does not understand the words they are using.

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UKIP are swivel eyed nut jobs.

Who cares? They serve the purpose of introducing counterviews and counterpoints.

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