A bank doesn't build or create anything. It has zero contribution to society. You go to a bank and ask for a loan, the bank "loans" you money that they don't actually and charges you a massive fee called interest for loaning you what they don't have. You sign a mortgage contract and then you pay, for example, $2,000/month. On top of that $2,000/month you have to pay 20% down as a security deposit for the bank in case you default on your loan. On top of your security deposit, the bank forces you to pay for insurance that covers anything going wrong with the house. On top of the that, the bank probably has it's own insurance in case you default on the loan.
So you've given the banks tens of thousands as a security deposit that you lose if you are unable to pay your loan and you have insurance to cover any problems with the house. So the bank is completely covered and has nothing to lose and didn't really give you any money since they never had any money in the first place.
At this point, there is no reason whatsoever for the bank to charge any extra fees. Processing a monthly loan payment is most likely 100% automated, it costs them no more to process a payment than your local electric company processing a payment. Regardless that the bank is protected from loss and has almost no costs involved in providing your loan, they charge you massive interest on your loan.
At the beginning of your loan almost your entire monthly payment is interest, so if you pay $2,000/month, the bank collects $1,900 in interest. Over time this interest goes down and more goes to the principal. After 15 years your $2,000 is $1,000 principal and $1,000 interest. It's not until the very end of your loan where you pay very little interest.
What exactly is the bank doing with the $1,900 a month they are collecting in interest? You've already given them a security deposit and have insurance on the house. You already paid all your closing costs. We already know that it doesn't take $1,900 to process a payment. It's pure profit. Profit from loaning you money the bank doesn't even need to have. Even if for some reason the bank ran out of fake money, the fed would just print more and give it to them.
I honestly don't know. I think the government has lost control of the economy though. They try to rein in inflation by raising interest rates, but it's still happening because the underlying cause is shortage of goods. A shortage the government also underwrote, and continues to underwrite.
I bought a house back in 16, it has almost tripled in value since i bought it. I can sell it, pay off the mortgage(obviously) and have a shit load left to buy a piece of land and build a house on (i would build it myself and some friends) and not have any debt whatsoever.
Your house didn't triple in value, inflation tripled. It took as much gold to buy your house when it was a 3rd of the price as it would to buy it today.
But you are missing the point that my mortgage would be paid three times, and it wouldnt normally matter if i were going to buy another house because that next house would be pruced higher too. But i am going to buy land and build a house that i basically already have. So, right now, i have a mortgage, i sell and have no mortgage and zero debt.... Seems like a gain in value to me. Just because inflation happens, that doesnt mean value doesnt go up on anything. Your only argument would be if my mortgage also tripled, but it doesnt work like that. You are completely mislead if you believe the housing market is unusually high. Are you somehow trying to tell me that i actually am not making out, and somehow riding out the mortgage for another 24 years is my more valuable choice? Do you math? I understand your inflation argument, but you are foolish to believe that there is no way to make out just because inflation is a thing.
The amount of gold it took to buy an egg in Roman times is probably the same amount of gold it would take today to buy an egg. Money not backed by gold or some other limited resource has no value. How can they charge you money to borrow money that was created from nothing and is backed by nothing?
Decentralized crypto is THE ONLY WAY. All the kikes and kike dick suckers here deserve the tranny, pedo kikes coming after their kids if they haven't started using crypto to buy and sell things. You can't use money your enemy creates and expect to win.
[ - ] zr855 1 point 3 yearsApr 15, 2022 05:02:22 ago (+1/-0)
Found a kike that wants you to keep using the money they create for free forever. Don't do anything different goy. Trust my money goy. https://youtu.be/JG5c8nhR3LE
A bank doesn't build or create anything. It has zero contribution to society.
Capitalist society. Banks were where you stored your wealth as the vast majority of people lived in less then secure housing and robberies/theft was much more difficult to stop.
Currently, they act as middle men trying to find places to loan money for people who want to invest their savings in a safe location. At this time they don't have enough places to actually invest that are safe.
charges you a massive fee called interest for loaning you what they don't have
Once again, they do have people that have to pay back. They also take their middle man cut as a default on the loan comes out of their profits.
On top of that $2,000/month you have to pay 20% down
Not a first time home buyer
On top of your security deposit, the bank forces you to pay for insurance that covers anything going wrong with the house.
In the event you default the security on the loan is less likely to disappear. Or say your house burns down you're less likely to just disappear to mexico leaving them holding the bag.
Processing a monthly loan payment is most likely 100% automated
Yes and no. Most banks are running on a tech called wirexchange by fiserv. Holy fuck that shit's not cheap. There are also quite a few people that actually have to manually validate a transaction along the way depending on the size of the money transfer. And, that's with the automated tech, if you're working with a crappy company then they manually have to send things to the treasury, enter checks, etc. It can get really ugly.
It's not until the very end of your loan where you pay very little interest.
Almost like they're trying to incentivize you to pay it back sooner.
What exactly is the bank doing with the $1,900 a month they are collecting in interest?
Paying back the money to the lenders
Profit from loaning you money the bank doesn't even need to have.
Yeah, they're middle men. Most of the profit leaves to the lenders. But, considering that inflation is currently higher then lending rates profits are a funny word there.
How and why do we allow such a system to exist?
Capitalism. One day you may not be broke. You'll probably want to invest some of the cash you have saved up. You're welcome to illegally lend to your friends and see just how fast you get robbed.
How do you say the bank loans money they don’t have? That’s where you lost me.
E: I’m not a huge fan of the system, but I have a made a bunch of money using their money. I have three mortgages. If I dumped those house right now, I’d rake in about 750k. I’m ok with them making a little. I’m making a bit too. Couldn’t have done it without them.
Fractional reserve lending means that they're permitted to loan out a fraction of their deposits. It's still debt based inflation since (in theory) the money that has been loaned out to borrowers could all be withdrawn by depositors, so some of those dollars double, but in practice people don't all empty their accounts all at once.
The old-school way of doing it was a savings and loan institution: Lending would only be done from long term savings accounts which couldn't be easily be withdrawn from.
TL;DR Each dollar can't be lent out 10 times, more like 0,4 times. And in practice it doesn't even come to that.
They issue a loan, it's deposited in an account, it's used to issue another loan, it's deposited in an account and used to issue another loan, over and over again. $100k can be used to generate $1M+ in loans. They're creating money from nothing.
Technically possible yes, but in practice no. People don't take out $90,000 loans just to put it in a bank account, they take that money to spend it. Retail banks don't create money from nothing, they rely on the fact that most people don't use their money, so it's potentially available for someone else to use.
Central banks absolutely do create money out of nothing but that's a different story.
So you're a kike or a kike lover? Because only kikes want to keep USD in existence as it is. They create money out of thin air and give it to BLM and migrants and trannies and pedos. You only have yourself to blame if you haven't started using crypto. You fucking deserve your kids to be harassed by tranny pedo kikes. You only use their money and you're fucking here promoting it like a degenerate kike.
If you don't believe that they create money out of thin air, watch this video you dumb shit. Only banks create kike US dollars. https://youtu.be/JG5c8nhR3LE
You are supporting usury. If there were no banks and fiat, you would have a deflationary currency that would become more valuable the longer you held it. You wouldn't need to take risks in order to make that same money grow in value.
Even with deflationary currencies (or low inflation currencies like gold or bitcoin) most of the functions banks perform are still useful. Savings and loan institutions existed for a reason.
Maybe, but you are writing that in the context of our current monetary system. In an Austrian system, people would be investing, speculating and saving much different than they do today because they would be incentivised differently.
A bank doesn't build or create anything. It has zero contribution to society.
A supermarket doesn't build or create anything, but would you like to have to source every single thing you eat and wear directly from the producers?
You go to a bank and ask for a loan, the bank "loans" you money that they don't actually and charges you a massive fee called interest for loaning you what they don't have.
Yes they do. Loans are covered by deposits. The interest is partially to cover their own costs and partially to reimburse the depositors for the use of their money.
You sign a mortgage contract and then you pay, for example, $2,000/month. On top of that $2,000/month you have to pay 20% down as a security deposit for the bank in case you default on your loan. On top of your security deposit, the bank forces you to pay for insurance that covers anything going wrong with the house. On top of the that, the bank probably has it's own insurance in case you default on the loan.
Yes? Why would an investor not want to cover as much risk as possible?
So you've given the banks tens of thousands as a security deposit that you lose if you are unable to pay your loan and you have insurance to cover any problems with the house. So the bank is completely covered and has nothing to lose and didn't really give you any money since they never had any money in the first place.
No. If you default they're still stuck with a house which may or may not cover the cost of the money they loaned out (which is still owed back to the depositor, with interest). And if market conditions are unfavourable they now have to become a landlord until the property is saleable again.
At this point, there is no reason whatsoever for the bank to charge any extra fees. Processing a monthly loan payment is most likely 100% automated, it costs them no more to process a payment than your local electric company processing a payment. Regardless that the bank is protected from loss and has almost no costs involved in providing your loan, they charge you massive interest on your loan.
Ok, so they give you the money for free. Who pays for the insurance? Who covers the cost of dealing with all the houses people defaulted on? There's a thousand costs you haven't accounted for here.
At the beginning of your loan almost your entire monthly payment is interest, so if you pay $2,000/month, the bank collects $1,900 in interest. Over time this interest goes down and more goes to the principal. After 15 years your $2,000 is $1,000 principal and $1,000 interest. It's not until the very end of your loan where you pay very little interest.
If you find yourself barely keeping up with the interest on a loan like that then you cannot afford the loan. It's either predatory lending or idiotic borrowing depending on what side you look at it from.
What exactly is the bank doing with the $1,900 a month they are collecting in interest? You've already given them a security deposit and have insurance on the house. You already paid all your closing costs. We already know that it doesn't take $1,900 to process a payment. It's pure profit. Profit from loaning you money the bank doesn't even need to have. Even if for some reason the bank ran out of fake money, the fed would just print more and give it to them.
Lmao. You think the only cost here is a server processing your payment?
Look, I agree the banking system is kiked and corrupt as fuck. But even if you kicked every jew out of the country and replaced them with whites, time would still have value and loans would not be free.
It cost the bank fuck all to "service your loan" you fucking kike lover. They literally created that money out of nothing. Only banks create US dollars. Use crypto to buy and sell things or you deserve your kids being harassed by tranny, pedo kikes. You can't win if you use your enemies money. https://youtu.be/JG5c8nhR3LE
Someone paid the builders. That would be the bank. They are taking a risk on your loan as the builders already have the banks money. If you didn’t have a bank the construction company would have to be their own bank.
The simple way it ostensibly works: the bank is making a leveraged bet that a) housing prices go up forever and/or b) you pay off the loan. However, banks still discharge loans as soon as they make them. In that respect, little has changed since '08 or whenever.
Nothing has changed since 08. They took the same fucked up institutions gambling with public money and set them right back going again. Most people haven't even heard of fannie mae and freddie mac, they think it was greedy private corporations causing all the problems because Bush gave them too much freedom, and if we just create a few more regulations we can solve the problem.
[ - ] zr855 1 point 3 yearsApr 15, 2022 04:58:27 ago (+2/-1)
The banks takes zero fucking risk. They are all run by kikes and create money out of thin fucking air. You can't win if you use your enemy's money. https://youtu.be/JG5c8nhR3LE Use crypto to buy and sell things or you deserve your kids being harassed by tranny, pedo kikes.
It's a fucking scam that your dumb kike dick sucking ass thinks is legitimate. How the hell do you think they keep CNN, BLM, New York Times, etc. afloat. They literally haven't been profitable for years.
[ + ] germ22
[ - ] germ22 4 points 3 yearsApr 14, 2022 23:24:31 ago (+4/-0)
[ + ] bonghits4jeebus
[ - ] bonghits4jeebus 1 point 3 yearsApr 15, 2022 00:54:11 ago (+1/-0)
[ + ] Deleted
[ - ] deleted 0 points 3 yearsApr 15, 2022 02:03:11 ago (+0/-0)
[ + ] JudyStroyer
[ - ] JudyStroyer 0 points 3 yearsApr 15, 2022 07:40:24 ago (+0/-0)
[ + ] Swej_Ehtsag
[ - ] Swej_Ehtsag [op] 0 points 3 yearsApr 16, 2022 22:12:48 ago (+0/-0)
[ + ] JudyStroyer
[ - ] JudyStroyer 0 points 3 yearsApr 17, 2022 05:43:25 ago (+0/-0)
[ + ] Swej_Ehtsag
[ - ] Swej_Ehtsag [op] 0 points 3 yearsApr 16, 2022 22:11:39 ago (+0/-0)
[ + ] Deleted
[ - ] deleted 4 points 3 yearsApr 14, 2022 23:15:41 ago (+4/-0)
[ + ] zr855
[ - ] zr855 2 points 3 yearsApr 15, 2022 04:55:42 ago (+2/-0)
[ + ] observation1
[ - ] observation1 -1 points 3 yearsApr 15, 2022 04:59:05 ago (+0/-1)
[ + ] zr855
[ - ] zr855 1 point 3 yearsApr 15, 2022 05:02:22 ago (+1/-0)
[ + ] Deleted
[ - ] deleted 1 point 3 yearsApr 14, 2022 23:29:27 ago (+2/-1)
[ + ] Broc_Liath
[ - ] Broc_Liath 0 points 3 yearsApr 15, 2022 08:13:48 ago (+0/-0)
[ + ] Deleted
[ - ] deleted 0 points 3 yearsApr 15, 2022 08:51:30 ago (+0/-0)
[ + ] Broc_Liath
[ - ] Broc_Liath 0 points 3 yearsApr 15, 2022 08:52:57 ago (+0/-0)
[ + ] patchCodeUnsuccessful
[ - ] patchCodeUnsuccessful 2 points 3 yearsApr 15, 2022 05:36:51 ago (+2/-0)
Capitalist society. Banks were where you stored your wealth as the vast majority of people lived in less then secure housing and robberies/theft was much more difficult to stop.
Currently, they act as middle men trying to find places to loan money for people who want to invest their savings in a safe location. At this time they don't have enough places to actually invest that are safe.
Once again, they do have people that have to pay back. They also take their middle man cut as a default on the loan comes out of their profits.
Not a first time home buyer
In the event you default the security on the loan is less likely to disappear. Or say your house burns down you're less likely to just disappear to mexico leaving them holding the bag.
Yes and no. Most banks are running on a tech called wirexchange by fiserv. Holy fuck that shit's not cheap. There are also quite a few people that actually have to manually validate a transaction along the way depending on the size of the money transfer. And, that's with the automated tech, if you're working with a crappy company then they manually have to send things to the treasury, enter checks, etc. It can get really ugly.
Almost like they're trying to incentivize you to pay it back sooner.
Paying back the money to the lenders
Yeah, they're middle men. Most of the profit leaves to the lenders. But, considering that inflation is currently higher then lending rates profits are a funny word there.
Capitalism. One day you may not be broke. You'll probably want to invest some of the cash you have saved up. You're welcome to illegally lend to your friends and see just how fast you get robbed.
[ + ] 1Icemonkey
[ - ] 1Icemonkey 2 points 3 yearsApr 14, 2022 23:15:17 ago (+2/-0)
E: I’m not a huge fan of the system, but I have a made a bunch of money using their money. I have three mortgages. If I dumped those house right now, I’d rake in about 750k. I’m ok with them making a little. I’m making a bit too. Couldn’t have done it without them.
[ + ] Spaceman84
[ - ] Spaceman84 7 points 3 yearsApr 14, 2022 23:20:04 ago (+7/-0)
[ + ] Broc_Liath
[ - ] Broc_Liath 0 points 3 yearsApr 15, 2022 08:17:28 ago (+0/-0)
The old-school way of doing it was a savings and loan institution: Lending would only be done from long term savings accounts which couldn't be easily be withdrawn from.
TL;DR Each dollar can't be lent out 10 times, more like 0,4 times. And in practice it doesn't even come to that.
[ + ] Spaceman84
[ - ] Spaceman84 0 points 3 yearsApr 15, 2022 12:12:39 ago (+0/-0)
https://www.learningmarkets.com/understanding-the-fractional-reserve-banking-system/
[ + ] Broc_Liath
[ - ] Broc_Liath 0 points 3 yearsApr 15, 2022 15:26:43 ago (+0/-0)
[ + ] Spaceman84
[ - ] Spaceman84 0 points 3 yearsApr 15, 2022 15:58:46 ago (+0/-0)
[ + ] Broc_Liath
[ - ] Broc_Liath 0 points 3 yearsApr 15, 2022 16:36:23 ago (+0/-0)
Central banks absolutely do create money out of nothing but that's a different story.
[ + ] zr855
[ - ] zr855 2 points 3 yearsApr 15, 2022 04:54:07 ago (+2/-0)
If you don't believe that they create money out of thin air, watch this video you dumb shit. Only banks create kike US dollars. https://youtu.be/JG5c8nhR3LE
[ + ] 1Icemonkey
[ - ] 1Icemonkey 0 points 3 yearsApr 15, 2022 11:03:50 ago (+0/-0)
[ + ] MaryXmas
[ - ] MaryXmas 2 points 3 yearsApr 15, 2022 05:35:14 ago (+2/-0)
[ + ] Broc_Liath
[ - ] Broc_Liath 0 points 3 yearsApr 15, 2022 16:38:25 ago (+0/-0)
[ + ] MaryXmas
[ - ] MaryXmas 0 points 3 yearsApr 15, 2022 22:03:07 ago (+0/-0)
[ + ] diggernicks
[ - ] diggernicks 0 points 3 yearsApr 14, 2022 23:19:42 ago (+0/-0)
[ + ] Broc_Liath
[ - ] Broc_Liath 1 point 3 yearsApr 15, 2022 08:13:16 ago (+1/-0)
A supermarket doesn't build or create anything, but would you like to have to source every single thing you eat and wear directly from the producers?
Yes they do. Loans are covered by deposits. The interest is partially to cover their own costs and partially to reimburse the depositors for the use of their money.
Yes? Why would an investor not want to cover as much risk as possible?
No. If you default they're still stuck with a house which may or may not cover the cost of the money they loaned out (which is still owed back to the depositor, with interest). And if market conditions are unfavourable they now have to become a landlord until the property is saleable again.
Ok, so they give you the money for free. Who pays for the insurance? Who covers the cost of dealing with all the houses people defaulted on? There's a thousand costs you haven't accounted for here.
If you find yourself barely keeping up with the interest on a loan like that then you cannot afford the loan. It's either predatory lending or idiotic borrowing depending on what side you look at it from.
Lmao. You think the only cost here is a server processing your payment?
Look, I agree the banking system is kiked and corrupt as fuck. But even if you kicked every jew out of the country and replaced them with whites, time would still have value and loans would not be free.
[ + ] Breeder
[ - ] Breeder 1 point 3 yearsApr 14, 2022 23:39:58 ago (+2/-1)
[ + ] zr855
[ - ] zr855 0 points 3 yearsApr 15, 2022 04:57:06 ago (+2/-2)
[ + ] Breeder
[ - ] Breeder 1 point 3 yearsApr 15, 2022 06:42:15 ago (+1/-0)
[ + ] AOUsYamaka
[ - ] AOUsYamaka 1 point 3 yearsApr 15, 2022 07:25:29 ago (+1/-0)
[ + ] NumbDigger
[ - ] NumbDigger 0 points 3 yearsApr 15, 2022 07:39:11 ago (+0/-0)
[ + ] Broc_Liath
[ - ] Broc_Liath 0 points 3 yearsApr 15, 2022 08:18:57 ago (+0/-0)
[ + ] NumbDigger
[ - ] NumbDigger 0 points 3 yearsApr 15, 2022 21:50:56 ago (+0/-0)
[ + ] Unreasonable
[ - ] Unreasonable -2 points 3 yearsApr 15, 2022 00:01:21 ago (+1/-3)
[ + ] bonghits4jeebus
[ - ] bonghits4jeebus 2 points 3 yearsApr 15, 2022 00:58:51 ago (+2/-0)
[ + ] Broc_Liath
[ - ] Broc_Liath 0 points 3 yearsApr 15, 2022 08:26:08 ago (+0/-0)
[ + ] zr855
[ - ] zr855 1 point 3 yearsApr 15, 2022 04:58:27 ago (+2/-1)
It's actually far worse than this now as the reserve requirement is fucking zero. They can create infinite money. https://www.federalreserve.gov/monetarypolicy/reservereq.htm#:~:text=As%20announced%20on%20March%2015,requirements%20for%20all%20depository%20institutions.
It's a fucking scam that your dumb kike dick sucking ass thinks is legitimate. How the hell do you think they keep CNN, BLM, New York Times, etc. afloat. They literally haven't been profitable for years.