This is starting to get a little scary Page 365

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  • Immaterial 22 Oct 2012 13:54:10 1,320 posts
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    From The Telegraph:
    IMF's plan to do away with debt and bankers, basically by limiting banks to only be able to lend out on secured deposits- so none of this fractional security stuff.

    I'm slightly financially retarded (get a parking space and everything), but would this actually fix anything?

    Think I'll just switch everything off.

  • Bremenacht 23 Oct 2012 00:42:43 17,600 posts
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    Immaterial wrote:
    From The Telegraph:
    IMF's plan to do away with debt and bankers, basically by limiting banks to only be able to lend out on secured deposits- so none of this fractional security stuff.

    I'm slightly financially retarded (get a parking space and everything), but would this actually fix anything?
    Ohhh nooooooooo

    the exorbitant privilege of creating money out of thin air
    moggin was right all along! :D

    Not sure that I'd trust government to manage money-supply & movement any more than I would the current market. Actually, no - I definitely wouldn't. It'd be swapping one bunch of cunts for another. "Meet the new cunts! Same as the old cunts!". I'm sure careful regulation could sort a lot of things out, partnered with significant punishment for those that breach regulations. Put cunts in jail! That'd make all the other wannabe cunts think twice.

    Wonder what the effect on China's foreign reserves would be? They can't be too happy with having their pile of foreign cash devalued at the moment.

    Oh anyway - nothing much is going to change. All well and good discussing it, but no-one really wants change. That's what happens when people somehow get too much money - they become obsessed with holding onto it.
  • Moot_Point 23 Oct 2012 01:06:33 3,911 posts
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    Bremenacht wrote:
    Immaterial wrote:
    From The Telegraph:
    IMF's plan to do away with debt and bankers, basically by limiting banks to only be able to lend out on secured deposits- so none of this fractional security stuff.

    I'm slightly financially retarded (get a parking space and everything), but would this actually fix anything?
    Ohhh nooooooooo

    the exorbitant privilege of creating money out of thin air
    moggin was right all along! :D
    Was he the EG prophet. Or just some conspiracy loon...

    ================================================================================

    mowgli wrote: I thought the 1 married the .2 and founded Islam?

  • mal 23 Oct 2012 02:11:12 22,332 posts
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    Is there any chance we could rename this thread to be any more ambigious? I know I marked it interesting at some point in the past, but every time there's a new page I've no idea what they fuck the topic is.

    Cubby didn't know how to turn off sigs!

  • mcmonkeyplc 23 Oct 2012 07:31:19 39,384 posts
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    The topic is always the end of the world.

    Come and get it cumslingers!

  • Fozzie_bear 23 Oct 2012 09:04:57 15,470 posts
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    Immaterial wrote:
    From The Telegraph:
    IMF's plan to do away with debt and bankers, basically by limiting banks to only be able to lend out on secured deposits- so none of this fractional security stuff.

    I'm slightly financially retarded (get a parking space and everything), but would this actually fix anything?
    It'd probably help if governments all agreed to spend what they raise in tax or at least limit borrowings. It'll never happen. Come election time the temptation to throw billions you don't have at winning a few votes will be too much. Gordon Brown's 'golden rule' lasted until there was an election to be won.

    Support the Mowgli Dirty Protest!

  • Chopsen 23 Oct 2012 09:25:54 15,702 posts
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    The difference between what that article describes and what the normal "lets get rid of fractional lending" stuff I've seen floating around the interwebs is that the offset of the loan is actually government issued security, and not deposit accounts held by other bank customers.

    I don't quite see this. Can some explain to me, as if I'm 5:

    1. How exactly is this any different from quantitative easing to compensate for bad loans?

    2. "While Washington would issue much more fiat money, this would not be redeemable. It would be an equity of the commonwealth, not debt. " What does that mean? Surely if it can't be used or liquidated in some meaningful way, then it is not collateral?

    3. Surely this means that inflation rises if lots of people default their debts, as happened post 2008? A run on the banks would mean inflation rises (as the govt security is cashed to cover bank debts), meaning more people would want to get their hands on their money to invest it in something that will hold it's value, meaning inflation rises further, meaning a further run on banks, etc, etc. No?

    4. This centralises wealth creation, possibly a bad thing? Election coming? Free loans for everyone! It also decentralises inflationary control, partially, because the *risk* of lending rests with banks?

    Or am I completely misreading an article written by someone who admits he doesn't understand the report?

    Edited by Chopsen at 09:26:51 23-10-2012
  • LeoliansBro 23 Oct 2012 10:52:51 43,166 posts
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    Either I don't understand banking and money or that article doesn't. Banks don't create money out of thin air.

    What they're saying is that for every pound you lend, you need another pound sitting in your central reserve to cover the possibility of that lent pound never coming back. So doubling up. Currently banks are required to lodge something like 11% of what they lend based on the risk of the loans, the type of the loans (a mortgage is more risky than a letter of credit) and their customers. THese guys want that to be 100%.

    This is like not being allowed to buy a car unless you can show you've enough money in your account to cover replacement costs of everything you might hit. Or only being allowed to get a mortgage if you have enough money to rebuild the house.

    Weird. Are they really doing this?

    LB, you really are a massive geek.

  • mcmonkeyplc 23 Oct 2012 11:03:36 39,384 posts
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    Reserve ratio from 10% to 100%?!

    Yeah right!

    Come and get it cumslingers!

  • GiarcYekrub 23 Oct 2012 11:16:00 3,658 posts
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    My view is they need to sort the housing market, its been overvalued by debt based morgages, it won't start growing properly until prices either fall in line with average wages or wages rise at the moment both are stagnant held at bay by a very low bank of England base rate.
  • mcmonkeyplc 23 Oct 2012 11:17:34 39,384 posts
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    How can you get a non-debt based mortgage?

    Come and get it cumslingers!

  • GiarcYekrub 23 Oct 2012 11:28:35 3,658 posts
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    I mean the ones that people like Northern Rock were dishing out, they over inflated the housing market, it was unstainable but that bubble IMO hasn't popped
  • Deleted user 23 October 2012 11:37:09
    Property price fluctuations seem to be very region specific (stating the obvious I know). Arguably in some areas they have already ‘corrected’.

    Many of my wifes friends who bought in the North East in the last few years are sitting in negative equity.

    Meanwhile down in Surrey we bought our flat at the supposed peak of the market in 2007 and have still sold it last month for a profit. Lucky me? Not really as the place we are buying is also more expensive.

    To be honest if I was waiting to get on the property ladder I don’t think I would be pinning my hopes on any sort of crash. Prices will stagnate maybe but in the long term they are only going one way (up!).
  • Deleted user 23 October 2012 11:42:18
    All mortgages are debt based. All mortgages have ever been debt based.

    What you talkin' 'bout?
  • mcmonkeyplc 23 Oct 2012 11:53:37 39,384 posts
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    He's talking about sub-prime mortgages.

    Which I suppose you can say were based on fairy dust instead of debt.

    Come and get it cumslingers!

  • LeoliansBro 23 Oct 2012 12:08:38 43,166 posts
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    Mortgages didn't fail because they were debt based, but because the underlying asset was overvalued for the purposes of lending.

    I'm interested to find out why GiantBackrub thinks low interest rates are stifling wages.

    LB, you really are a massive geek.

  • mcmonkeyplc 23 Oct 2012 12:17:33 39,384 posts
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    Steady on Leo, he thinks that sub-prime mortgages created a housing bubble which inflated house prices in the UK by allowing people on low income to afford housing which they couldn't before thus increasing the demand for said housing.


    Nothing about low interest rates stifling wages there. :)

    Come and get it cumslingers!

  • nickthegun 23 Oct 2012 12:21:23 58,782 posts
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    Anyone who bought in the last few years and is north of the watford gap is probably sitting in negative equity.

    We just sold our house and made money but my friends in a virtually identical house in Derby cant afford to move as they have lost nearly 10 large on it.

    ---------------------------------------------------------
    He totally called it

  • Khanivor 23 Oct 2012 12:22:07 40,356 posts
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    I too am interested in hearing more from the Diana Vickers school of economic theory.
  • mcmonkeyplc 23 Oct 2012 13:28:48 39,384 posts
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    One might equally say that this opened the way to England's agricultural revolution in the early 18th Century, the industrial revolution soon after, and the greatest economic and technological leap ever seen. But let us not quibble.
    Yes let us not quibble about such a moot point...

    That article is special.

    Come and get it cumslingers!

  • LeoliansBro 23 Oct 2012 13:47:26 43,166 posts
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    mcmonkeyplc wrote:
    Steady on Leo, he thinks that sub-prime mortgages created a housing bubble which inflated house prices in the UK by allowing people on low income to afford housing which they couldn't before thus increasing the demand for said housing.


    Nothing about low interest rates stifling wages there. :)
    it won't start growing properly until prices either fall in line with average wages or wages rise at the moment both are stagnant held at bay by a very low bank of England base rate.
    ...both?

    LB, you really are a massive geek.

  • Tom_Servo 23 Oct 2012 13:49:26 17,262 posts
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    http://www.bbc.co.uk/news/business-20041588
  • LeoliansBro 23 Oct 2012 13:52:54 43,166 posts
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    And that article is ludicrous. A flight of fancy given to some puffed grammar school prig who doesn't see why his opinion on monetary policy should be any less valid just because he doesn't understand monetary policy, either here or generally. So long as he can write about classical stuff he used to read about as a child and boast to his wife's friends at their next dinner party then he can look himself in the mirror and be pleased at how successful, how influential, how significant he is.

    Deary me.

    LB, you really are a massive geek.

  • LeoliansBro 23 Oct 2012 13:54:43 43,166 posts
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    Tom_Servo wrote:
    http://www.bbc.co.uk/news/business-20041588
    Windfall tax which works globally or not at all. Stupid short termism by governments looking for liquidity now at the expense of prosperity later, when of course it will be somebody else's problem.

    LB, you really are a massive geek.

  • mcmonkeyplc 23 Oct 2012 14:03:10 39,384 posts
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    LeoliansBro wrote:
    mcmonkeyplc wrote:
    Steady on Leo, he thinks that sub-prime mortgages created a housing bubble which inflated house prices in the UK by allowing people on low income to afford housing which they couldn't before thus increasing the demand for said housing.


    Nothing about low interest rates stifling wages there. :)
    it won't start growing properly until prices either fall in line with average wages or wages rise at the moment both are stagnant held at bay by a very low bank of England base rate.
    ...both?
    Oh serves me right for trying to back him up :)

    Come and get it cumslingers!

  • mcmonkeyplc 23 Oct 2012 14:06:45 39,384 posts
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    Also banks do not create money out of thin air. They charge an interest rate on loaning out the proportion of deposits they hold.

    The interest rate is the price of money/ price of receiving the service of a loan. It is not money for nothing.

    Just thought I'd get that off my chest.

    Edited by mcmonkeyplc at 15:06:38 23-10-2012

    Come and get it cumslingers!

  • Moot_Point 23 Oct 2012 16:37:33 3,911 posts
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    mcmonkeyplc wrote:
    One might equally say that this opened the way to England's agricultural revolution in the early 18th Century, the industrial revolution soon after, and the greatest economic and technological leap ever seen. But let us not quibble.
    Yes let us not quibble about such a moot point...

    That article is special.
    /Waves

    ================================================================================

    mowgli wrote: I thought the 1 married the .2 and founded Islam?

  • Tom_Servo 23 Oct 2012 17:54:31 17,262 posts
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    LeoliansBro wrote:
    Tom_Servo wrote:
    http://www.bbc.co.uk/news/business-20041588
    Windfall tax which works globally or not at all. Stupid short termism by governments looking for liquidity now at the expense of prosperity later, when of course it will be somebody else's problem.
    Yeah, I would've thought it's something everyone has to implement for it to be effective and for it not to have a detrimental effect on some countries.
  • Bremenacht 9 Dec 2012 15:20:47 17,600 posts
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    Triple dip?

    It's not a big deal really. If your ship is already scraping along the bottom, it's going to get bumped up and down. Still, it provides a new stick for Punch and Judy (Ed and George) to twat eachother with.
  • Errol 9 Dec 2012 15:32:21 12,454 posts
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    We haven't had the crash yet. We are looking at the death of paper money - paper money collapse.
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