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Are bankers evil

ax123man
Posts: 317
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11/30/2012 11:46:01 PM
Posted: 4 years ago
So I watch Max Keiser on rt sometimes basically cuz the guy is funny. But is he right?

On one hand, I voluntarily exchange a house for a mortgage. And at ~4 percent, the other side of the exchange isn't exactly getting rich, especially considering inflation eats up most of that.

But, here's my issue. It seems to me that I'm being lent my own money. The money they lend is either printed by the federal reserve (resulting in inflation, that we pay for, eventually), given out by FNMA (taxes we pay), or created by fractional reserve lending (based on the money WE put in the bank in the first place).

This is my (economically) uneducated reasoning anyway. Also, I have no solution to the problem. I'm just venting at this point.
Wallstreetatheist
Posts: 7,132
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12/2/2012 1:43:15 AM
Posted: 4 years ago
At 11/30/2012 11:46:01 PM, ax123man wrote:
So I watch Max Keiser on rt sometimes basically cuz the guy is funny. But is he right?

On one hand, I voluntarily exchange a house for a mortgage. And at ~4 percent, the other side of the exchange isn't exactly getting rich, especially considering inflation eats up most of that.

But, here's my issue. It seems to me that I'm being lent my own money. The money they lend is either printed by the federal reserve (resulting in inflation, that we pay for, eventually), given out by FNMA (taxes we pay), or created by fractional reserve lending (based on the money WE put in the bank in the first place).

The bottom line is that it is not fractional reserve banking per se that is the cause of inflationary increases to the money supply due to the money multiplier process but rather the ability of central banks to override market signals, thanks to their monopoly status, and add reserves to the banking system at their discretion and independently of the public's preferences. Again, there's nothing wrong with fractional reserve banking that getting rid of the central bank and other government interventions wouldn't cure.

This is my (economically) uneducated reasoning anyway. Also, I have no solution to the problem. I'm just venting at this point.
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