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starwars101 t1_j5w8ahx wrote

... Explain how it is a Ponzi scheme.

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Odd-Pick7512 t1_j5wd36h wrote

Sure. Fractional reserve banking is how all our banks work. Say you put $1 into a bank, FRB allows that bank to "invest" $10 into whatever they want since they have a 10% cash reserve requirement. So what do you think is happening every time the bank 10X your money? You pay for it through inflation. Who do you think benefits from that? The people who own the banks and get kickbacks from the banks for instituting and perpetuating such an asinine system. So you, the low person on the pyramid gets shafted with inflation while the banks get to keep multiplying their money as more people pile in. And what happens if their "investments" fail? Well nothing... Cause the government bails them out because they're right, if our banks fail society as we know it will fail, and guess who pays for that... You, through taxes and the ponzi scheme keeps going syphoning money from the bottom up to the top.

You can read more about about, or not, I don't really care cause it's not going to change.

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Rich4718 t1_j5xzgcp wrote

Don’t forget this is all built in by design so when too many Americans get too comfortable the goalposts are moved so you can never retire so you can continue to drive new record profits for corporations

Not enough workers you say? Print enough money 10 dollars becomes 7 dollars. Send some strugglers back to the grinder.

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womens_motocross t1_j5yhfdp wrote

dont forget that recently we even upgraded from fractional reserve banking to no reserve banking!

​

source:https://www.federalreserve.gov/monetarypolicy/reservereq.htm

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kangaroospyder t1_j5z3le8 wrote

That's not how that works... If you give the bank $1, and they have a 10% cash reserve requirement, they can keep $0.10 on hand, and only use the other $0.90 of your $1.

https://www.investopedia.com/terms/f/fractionalreservebanking.asp

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Odd-Pick7512 t1_j5z4twg wrote

You're arguing semantics or you have way too much faith in the systems ability to regulate itself. To a regulator that number would come out the same. They'd see the bank has one real dollar in cash and $9 in "investments" and that'd be the end of it because they're following the law. It doesn't matter that they literally just created money out of thin air. As long as the train keeps on chugging along it'll never come crashing down. Just like the 2008 crisis all over again.

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asdfgtttt t1_j64b6xj wrote

its not semantics, its how money gets created, the fed doesnt print money, banks generate loans, and do so through FRB. The fractions are fractions, not exponents as stated above, its different; especially in the framework that the markets are a ponzi, it should be more accurate - someone may read this in a year.

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starwars101 t1_j5wo954 wrote

So what kind of system would you replace it with? And who would you go to to get financing for a new business?

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radgore t1_j5x4u0n wrote

Regulate the banks, dummy.

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starwars101 t1_j5x5bk0 wrote

Regulate them to reduce what, loaning out money? Paying interest? The system described above only mentions those two bank functions. What would you be regulating them to make them do, essentially?

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radgore t1_j5xamxz wrote

Pay out more interest to their more common customers instead of to multinational investment firms?

Don't nickel and dime your customers into the negative?

Don't get govt bail outs and subsidies for every bad business decision? Maybe make them pay for their mistakes?

Re-codify anti-trust laws?

Outlaw predatory practices?

Actually enforce ANY of the laws we currently have in place with punishments that actually mean something?

Anything, dude. Anything at all.

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