No, that's not how I think it works. You enter into an agreement to purchase the house from the seller, who agrees to sell you the house for a certain price denominated in whatever currency. Not having the requisite amount of currency on hand to pay the price outright, you turn to the bank. The bank then agrees to settle your debt with the seller in exchange for a lien on the house and repayment of the agreed price to the bank. The transfer of title and money is handled through escrow, so the buyer doesn't directly pay the seller, and the seller doesn't deliver the title to the bank.
With fiat, you're correct that the money is created. It's created at the Fed and disbursed to banks. With fractional reserve lending they can lend even more money that they don't have. However, this is by statute and is authorized by the largest lender in the land: the Fed. While some banks go beyond the statutory limit for fractional reserves, the banks within the statutory limit are guaranteed by the Fed. That's why it is the lender of last resort. Not saying I agree with it, but it is what it is.
My point is that, even with 100% reserve requirements, bank loans for houses would still follow the same formula, and the buyer would still be responsible for repaying the amount owed to the bank. If the bank provides the requisite amount to the seller, they've met their obligation.
We can argue about the legitimacy of cashless transactions in bank databases and the nature of currency, but ultimately if the seller receives their agreed-upon consideration from the bank through an agreed-upon debt obligation between the buyer and the bank, the buyer is responsible for repayment.
I'm curious to see this video you mentioned.
Like i said, i used to believe that way.
However, the banking system does not work the way you think.
A part i left out is that you pay the bank twice for that mortgage.
THIS IS ON TOP OF the fact that they never gave you anything real.
If you do not have a burning desire to see the FED burn to the ground, you don't have a clue about what it is doing.
If you don't see the price of something rise in the store and then curse the FED, you don't know what is going on.
(and neither did i)
The place to start is G. Edward Griffin's book The Creature From Jekyll Island
Video by him about the book
Then follow up with Mike Maloney's Hidden Secrets of Money Series
https://www.youtube.com/user/whygoldandsilver
I do, so you're preaching to the choir. Again, I'm not arguing about what ought to be the case. Only what is the case and what is enforceable at law. Contract law wasn't written by banksters; its codification was certainly influenced by them, but contract law derives from the English common law, which predates any organized system of banks by centuries.
It's not a matter of believing one thing or another. You can read the law and, if you understand it with sufficient clarity, you can see how it will be applied. That's the advantage of positive law (I'd argue its only advantage).
Once again, so long as the bank comports with the standards issued by the Fed and the statutes regarding fractional reserve lending promulgated by the federal government, it's a good contract and enforceable at law. Banks don't give you anything when you purchase property. They give the seller the money. What you get is a release from your debt obligation to one entity in exchange for another (private person to institutional lender). That doesn't defeat the contract, as you are still given valuable consideration under the law.
If you take everything in court terminology you find that it really applies to the river. The current. The currency.
The banks (of the river) control the currency flow.
You can go more in depth and find that EVERYTHING in the court is tied to the nautical language. And, here in The US, all courts are Navel (wish i could remember the correct word) courts. Courts of the sea.
There is even language that describes that a judge is the banks representative.
But, this all seems normal to us, who accepted the line that "the banks give us money to buy a house".
We think it is normal to pay them back in currency.
However, this attitude puts all the burden on the people, and very little, if anything on the bank.
In the future, i do not feel the laws will change, however the banks will be done away with. And then, the law will act like we think it did in the first place.
The admiralty law argument is a bunk argument. That's a tired argument paraded around by sovereign citizens who think they've found a run-around for the judicial system, but it's utter nonsense. Admiralty (or maritime) law is just that: admiralty law. It concerns torts, contracts, injuries, and offenses on the seas or navigable waters, and it only applies in disputes arising from activities on the sea. Federal courts can, and do, exercise jurisdiction over admiralty cases that occur within a certain proximity to their judicial district on the water. States have concurrent jurisdiction over admiralty cases.
Judges are not bank representatives. They never have been. If you want to know what a judge is, look at Black's Law Dictionary. A judge is a government officer appointed to hear and decide legal matters in a court. You're going to have to provide some kind of evidence for what you're putting out here, because none of it has basis in the law. Treating legal language as some sort of metaphor isn't dispositive of anything.
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.
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.