Is this girl right about our government conspiring to make banks rich?

[onthebottom]

Here you go.....

https://www.federalreserve.gov/faqs/about_14986.htm

Who owns the Federal Reserve?

The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution.

As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve's activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as "independent within the government" rather than "independent of government."

The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks.

However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, paid to member banks at a maximum rate of 6 percent, determined in part by each member bank's total assets.

 

[Titalian]

Interesting alternative, what do you guy's think? Right now, the banking system is shitting all over us. Cause we have no alternative. Bitcoin, Pyramid skeam ? Maybe.

 

[onthebottom]

Okay maybe a quote from one of Americas founding fathers not taken out of context.

“The [private] Central Bank is an institution of the most deadly hostility existing against the principles and form of our constitution . . . . If the American people allow private banks to control the issuance of their currency . . ., the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered” (Thomas Jefferson, 3rd U.S. President).



I'm sure you are not on Terb reading the financial advice column lol, but anyway I can help cure you haha

Jefferson was against a strong federal government, Hamilton supported federalize The national debt and creating the Fed....

The play Hamilton on Broadway is a spectacular rap rendition of this period of history (the rap battle between Jefferson and Hamilton with Washington moderating is epic)

 

[Polaris]

I got a better idea

Correct her and help me understand as well

Why does our government borrow made up monies from private banks and not made up monies from itself so it will not have to pay interest?

What you are asking is extremely complicated.

It seems like a simple enough question. However, what really is at stake here is the financial system itself.

To get right to the point - how should credit work.

That I don't understand or know at all since I am just someone drunk on the internet.

To give you an example, how it works in western capitalistic countries is the system now. Credit is created via the banks. And people make money off creating this credits for the economy. Like NINJNA loans.

How it can work in a socialist system, say for China for example, is that the government the central gives money to the state banks (also owned by the government), and that credit is loaned out to the people in the economy, but in China's case often it is state owned firms, such as military or petroleum or heavy industry.

We have to understand that the extension of credit into the economy makes it grow.

Both here the western system and Chinese system are the same.

What they are radically different is that the west financial firms have to make a profit. Since the financial system is state owned by the Chinese government, they are not concerned about making money. The Chinese government main concern is that credit goes to where it is needed.

Imagine Lehman Brothers not needing to make a profit but to only try to allocated capital efficiently.

So what is the best way to create credit for the economy? The jury is out on that.

 

[Titalian]

Jefferson was against a strong federal government, Hamilton supported federalize The national debt and creating the Fed....

The play Hamilton on Broadway is a spectacular rap rendition of this period of history (the rap battle between Jefferson and Hamilton with Washington moderating is epic)

Jefferson, to this day was an incredible leader, of freedom and common well being.

https://www.youtube.com/watch?v=UrxKOO0nKwc

 

[SkyRider]

and people going into 1,000 people lineups trying to all cash out killing their cash on hand. That's how a bank collapses.

That is why you want profitable banks, to avoid a "run on the bank". I'm not too worry about the "Big 5" or "Big 6" but not so sure about the smaller institutions above the the $100,000 CDIC guarantee, however, historically the "Big 5" would take over a failing smaller institution to protect the depositors (like your mother and grandma).

 

[Occasionally]

That is why you want profitable banks, to avoid a "run on the bank". I'm not too worry about the "Big 5" or "Big 6" but not so sure about the smaller institutions above the the $100,000 CDIC guarantee, however, historically the "Big 5" would take over a failing smaller institution to protect the depositors (like your mother and grandma).

Yeah.

As much as the big Canadian banks monopolize the economy and are basically tit-for-tat copying each other, Canadian banks are rated among the strongest in the world. During that 2008-2009 crisis with the global economy blowing up and US banks going belly up, the Canadian banks had some bad quarters, but soon after it's back to normal like nothing happened. I doubt many Canadians got affected at all with their bank accounts, mortgages and homes. It's like status quo.

They might be greedy, but it sure helps to know that there's tons of branches of each company, are financially sound, they have similar services, and transferring assets form one to another is easy. In the US, many people I know have their money in all kinds of weird no-name banks. I'd never trust that.

 

[Titalian]

That is why you want profitable banks, to avoid a "run on the bank". I'm not too worry about the "Big 5" or "Big 6" but not so sure about the smaller institutions above the the $100,000 CDIC guarantee, however, historically the "Big 5" would take over a failing smaller institution to protect the depositors (like your mother and grandma).

Really? where did you come up with this BS ! Please don't compare BANKS to family situations. Banks have no empathy !!!

 

[Karate]

"Money Creation in the Modern Economy" (2014), co-authored by three economists from the "The Bank of England's Monetary Analysis Directorate, states that most common assumptions of how banking works are simply wrong: "Money Creation in the Modern Economy"
"Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits" … "In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money 'multiplied up' into more loans and deposits."

David Graeber: "In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money.
This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing. In fact, with "quantitative easing" they've been effectively pumping as much money as they can into the banks, without producing any inflationary effects.
What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this (and the paper does admit, if you read it carefully, that the central bank does fund the government after all). So there's no question of public spending "crowding out" private investment. It's exactly the opposite."
The truth is out: money is just an IOU, and the banks are rolling in it

 

[SkyRider]

This is what happens when you don't have profitable banks.

http://www.ft.com/intl/cms/s/2/014ea43e-2657-11e5-9c4e-a775d2b173ca.html

 

[Titalian]

"Money Creation in the Modern Economy" (2014), co-authored by three economists from the "The Bank of England's Monetary Analysis Directorate, states that most common assumptions of how banking works are simply wrong: "Money Creation in the Modern Economy"
"Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits" … "In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money 'multiplied up' into more loans and deposits."

David Graeber: "In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money.
This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing. In fact, with "quantitative easing" they've been effectively pumping as much money as they can into the banks, without producing any inflationary effects.
What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this (and the paper does admit, if you read it carefully, that the central bank does fund the government after all). So there's no question of public spending "crowding out" private investment. It's exactly the opposite."
The truth is out: money is just an IOU, and the banks are rolling in it

Very good !!!!
Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans
didn't know how banking really works, because if they did, "there'd be a revolution before tomorrow morning".

 

[Yoga Face]

Back to the OP

Does our government borrow from Canadian banks???

If so, why do they not borrow from themselves (the Bank Of Canada) and thus avoid paying interest

The whole OP is based on our government needlessly borrowing from banks and has yet to be answered

 

[SkyRider]

If so, why do they not borrow from themselves (the Bank Of Canada) and thus avoid paying interest

http://www.globalresearch.ca/the-case-to-reinstate-the-bank-of-canada/5430132

Sounds good. If our governments borrow enough "free" money from the B of C they can eliminate income taxes, HST and property taxes. Not sure if this works in the real world.

Wouldn't it debase our currency? Wouldn't it cause inflation?

 

[Yoga Face]

http://www.globalresearch.ca/the-case-to-reinstate-the-bank-of-canada/5430132

Sounds good. If our governments borrow enough "free" money from the B of C they can eliminate income taxes, HST and property taxes. Not sure if this works in the real world.

Wouldn't it debase our currency? Wouldn't it cause inflation?

But the banks also make up their loans so what is the difference if the government does the same thing as long as they pay it back to the Bank of Canada thus getting the made up money out of the system thus avoiding inflation but this time without having to pay interest is the point of the OP

According to your article this is exactly the case and this girl is correct!


The Committee for Monetary and Economic Reform: http://www.comer.org/ filed a lawsuit to force a restoration of the Bank of Canada to its mandated purposes. In essence, they want the Bank of Canada to provide interest-free loans to the federal, provincial, and municipal governments, as provided for in the Bank of Canada Act.

"At present, governments borrow all of the necessary money (apart from any bonds they may sell to the public) from private banks at the going rate of interest."


It seems to me, the B of C should give the billions (trillions?) needed to our federal, provincial, and municipal governments to pay off bank loans immediately and they can pay back the B of C at the same rate but this time without interest.

 

[Yoga Face]

This is what happens when you don't have profitable banks.

http://www.ft.com/intl/cms/s/2/014ea43e-2657-11e5-9c4e-a775d2b173ca.html

Bank debt is the engine of our economy but do they need our government to give them interest monies needlessly when the government has the power to borrow from itself?

If you had the power to borrow from yourself at zero interest and have your self loan recognized as legal tender would you borrow from a bank?

 

[FAST]

I think one important point is being missed here.

If a government could borrow/print money at no cost/interest, how long do you think it would take before you would be taking a wheel barrow full of money to buy a banana ???

Civil servants take on this, doesn't count, as have been proven over and over again.

FAST

 

[Yoga Face]

I think one important point is being missed here.

If a government could borrow/print money at no cost/interest, how long do you think it would take before you would be taking a wheel barrow full of money to buy a banana ???

Civil servants take on this, doesn't count, as have been proven over and over again.

FAST

you are missing the key issue

banks make up the money governments borrow when governments can make up their own money so why borrow from banks and pay interest on money they can create themselves?

as long as the government pays itself back (the bank of Canada), like they pay banks back, inflation is not a major issue

 

[onthebottom]

Jefferson, to this day was an incredible leader, of freedom and common well being.

https://www.youtube.com/watch?v=UrxKOO0nKwc

Unless he owned you, then you were sold upon his death to pay his debts.

 

[onthebottom]

What you are asking is extremely complicated.

It seems like a simple enough question. However, what really is at stake here is the financial system itself.

To get right to the point - how should credit work.

That I don't understand or know at all since I am just someone drunk on the internet.

To give you an example, how it works in western capitalistic countries is the system now. Credit is created via the banks. And people make money off creating this credits for the economy. Like NINJNA loans.

How it can work in a socialist system, say for China for example, is that the government the central gives money to the state banks (also owned by the government), and that credit is loaned out to the people in the economy, but in China's case often it is state owned firms, such as military or petroleum or heavy industry.

We have to understand that the extension of credit into the economy makes it grow.

Both here the western system and Chinese system are the same.

What they are radically different is that the west financial firms have to make a profit. Since the financial system is state owned by the Chinese government, they are not concerned about making money. The Chinese government main concern is that credit goes to where it is needed.

Imagine Lehman Brothers not needing to make a profit but to only try to allocated capital efficiently.

So what is the best way to create credit for the economy? The jury is out on that.

Chinese banks are probably most insolvent, local corruption has banks loaning government projects to get infrastructure projects approved and local officials promoted. That's why 35% of China's GDP is infrastructure and they have empty cities.

 

[lucky_blue]