Watching this video of "This is how you buy a Rolls Royce for free!" made me remember why i hate our debt based, fractional reserve lent, monetary system.
In this video, the guy tells of how people buying a Rolls with cash makes him sick. Just put the money in the bank, earning interest. And then, take out a line of credit against the parked cash. (of course he changes the amount of money from $500k to $5million) and so, the parked money is earning more than your loan payments, and you still have all the capital.
This only works because banks can just print money.
In this system, the rich get richer, and the poor get poorer. Mathematically provable.
Fractional Reserve Lending - da ebil
If you give your "friend" a loan, you usually give it at 0% interest. Basically, you are giving your friend money (that you can afford to lose), and you hope that he will pay you back in the future.
Now, imagine giving a loan to a not-friend. How much interest makes it worth it? Makes it worth your time to keep track of loans and payments? Somewhere around 10% is where people start moving from, too much work, not bothering, to maybe.
And real people, who lend real money (not a bank) charge 10-30% interest for construction loans.
The only way banks can charge so little is that they do not lend their money. They make it up out of thin air.
(how much would you lend if money magically appeared? Probably all you could)
The banks have limits. They have to keep a certain fraction (fractional reserve) on hand. But really, as long as there is collateral (house, car) then they can lend as much as people want loans. They just have to make sure that the income stream is larger than the losses. And godz help you if everyone decided to pay off their mortgages.
The Rich Game
After a certain point of wealth, you can live off the interest of your investments.
In times of old, you would invest in companies that were making money. And so, you would be making an income through the company you owned.
Today, that "interest" comes from inflation.
When you make owning a company almost risk free, and as easy as calling your broker, then there should be no value gotten from it. No risk = no reward. If you were really a part owner of a company, you would have to provide more money during bad years, and get extra money in good years. But we see that no where in the stock market.
Wallymart literally makes money off the difference in product value, due to inflation, between time of manufacturing and the time of selling. They can only do this because inflation is baked into the cake. So, they can float loans through this that actually pay them. (insidious. Who heard of a loan paying you?)
When a bank creates a loan, they don't really make the money out of thin air, the actually steal a penny from every person holding a dollar anywhere near them. (yes, all of your money has been stolen from you.)
So, in this fractional reserve = inflation money printing game, all you have to do is get above a certain amount of money, and you are forever in the money. It used to be a million dollars. I am not sure what it is now.
You get over a certain amount, and you stop paying banks, and banks start paying you. Often with your very own bank secretary. Yes, your own person, that takes your calls personally, at the bank. Its a whole different world.
Money makes more money.
A world without Fractional Reserve lending
If every dollar you lend is a dollar you first had to earn and save, lending would be a very different thing.
If a stock certificate meant you actually were a company owner, where you paid in down years, then business would be a very different thing.
When we go back to sound money, everything changes.
The plan the guy in the video above communicated will no longer work.
Borrowing money will not be just easily doable because you have money. You will have to explain how you are going to make all the money back, and then some. You will have to show business plans, and make known who you are going to be working with. It will be a painful process of talking a lot of other rich people into investing in you.
(this is actually what capitalism means. How you get capital together to do an enterprise)
There would be almost no way you would get interest from a savings account.
Instead, it would be more of a thing like a CD, where you had to lock up the money for a period of time. And then you would get part of the money made by a big investment in starting a new endeavor.
And since there is not a lot of new endeavors, you may never get interest.
You will not be able to go to a bank. You will have to start going to oil drilling companies and speculate on plays. (or similar)
The debt based, fractional reserve lent, fiat monetary system is evil. It was designed by evil banksters, for evil rich people.
It was designed to steal from the poor and give to the rich.
The tax system, that came into being at the same time as the Fed, is in the same vein.
The system is designed against the little people.
It is 1000% evil.
And worse, in order to get rid of it, all the little people have to lose everything they might have saved.
But, it is either that, or continue to have our life's blood sucked from us.
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