I'm also curious as to how the banks will be done away with. So long as people want things now rather than waiting to save the requisite funds, or want to make an initial expenditure on the basis of a greater return in the future, there will be institutional lenders. That's all a bank is. The Fed is something of a different animal, but you're talking about banks generally.
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It will come out to public knowledge what a bank is.
And then people will be revolted.
Along with this, cryptos will come into fashion.
And bang, banks will be gone.
Yes, lending may still go on, however it will be smart contracts on a blockchain. Or something like a GoFund.me website where people ask other to give/lend them money.
Like i said, banks do not have any money to lend. Fractional reserve lending works because they are able to make money on the spot.
Just try to do that with bitcoin. You can't make extra bitcoins, so instead, the "bank" would have to go out and get actual deposits, and then lend out the money. Currently our deposits to lending is something like 3%.
The big one will be this.
When you put money in the bank, you are actually giving them your money. The bank is under no obligation to give it back.
When people learn this, and also learn that cryptos can hold your money even more securely, than a bank, as a holding vehicle, just goes out the window.
Basically, everything that a bank can do, the block-chain and smart-contracts can do better, faster, cheaper, with more control, less hassle and with almost instant verifiable verification.
And, the idea of paying a high price to get a piece of land will go out the window. It will be established that when a person comes of age, they are entitled to a piece of land. How this works out, i don't know... but it will be like a tribe. They just set up another Teepee. They don't withhold it from him while he goes to college than saves up lots of money.
You do realize that you can trade on margin at exchanges like Poloniex, right? That you can purchase an amount of crypto greater than the amount you can actually pay for on credit with the exchange? You're acting like banks are some monolithic entity that only exist to harm people. They don't.
As far as crypto goes, it certainly works as a store of value, but until it becomes decoupled from fiat valuation, it's mostly irrelevant in the context of this conversation.
Not so fast there, Turbo-Lenin.
It will be something like, you don't have a kid, unless there is room for that kid.
It will be considered a heinous crime to deny a child who has come of age a place in the society.
Like i said, i don't know how we get there, but that is the future.
It will be an extension of, you don't bring a child into the world unless you have food to feed it. That is cruel to the child, and cruel to the world.
A child, when it becomes an adult needs a place in the community. Denying that person a place in the community is denying them life.
All of these exchanges are about to die a horrible death.
Like Mike Maloney is fond of saying, if you don't hold it, you don't own it.
Trading on margin is going to bite people going both ways.
Right now, the world is awash with cheap currency.
But, it is all derivative money. It is all about to vaporize.
In the future we will have sound money.
And when that happens, there will be very little lending or speculation.
Lending at interest is considered a sin in the bible. We will once again realize why that was the case.
Usury was prohibited among the Israelites, but it was condoned between Israelites and Gentiles, so that assertion is bunk.
Lending at interest isn't going to go away or even substantially diminish. Even if we're talking about person to person lending, interest is an added incentive to a lender to loan out the money to the borrower. That's its purpose. It can be abused, of course (loan sharks), but as a concept it's no more unethical than allowing someone to borrow money from you in the first place.
I'm stepping out of the conversation before it gets more ridiculous.