The Journey To Jekyll Island

Mr Neutron · Jun 19, 2011

This is the first installment in a series of chapter summaries from G. Edward Griffin's must-read book The Creature From Jekyll Island. This book may be the most important "red pill" available and we highly recommend that you buy and read the full book at RealityZone.

Chapter 1 Summary: The Journey to Jekyll Island

The basic plan for the Federal Reserve System was drafted at a secret meeting held in November of 1910 at the private resort of J.P. Morgan on Jekyll Island off the coast of Georgia. Those who attended represented the great financial institutions of Wall Street and, indirectly, Europe as well. The reason for the secrecy was simple. Had it been known that rival factions of the banking community had joined together, the public would have been alerted to the possibility that the bankers were plotting an agreement in restraint of trade -- which, of course, is exactly what they were doing. What emerged was a cartel agreement with five objectives: stop the growing competition from the nation's newer banks; obtain a franchise to create money out of nothing for the purpose of lending; get control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs; get the taxpayer to pick up the cartel's inevitable losses; and convince Congress that the purpose was to protect the public. It was realized that the bankers would have to become partners with the politicians and that the structure of the cartel would have to be a central bank. The record shows that the Fed has failed to achieve its stated objectives. That is because those were never its true goals. As a banking cartel, and in terms of the five objectives stated above, it has been an unqualified success.

Get the book for yourself or for others you want to wake up. Visit RealityZone for your copy today. Summary is re-printed with permission from G. Edward Griffin.

Mr Neutron · Jun 25, 2011

Part 2

G. Edward Griffin: The Name of the Game is Bailout
This is the second installment in a series of chapter summaries from G. Edward Griffin's must-read book The Creature From Jekyll Island. This book may be the most important "red pill" available and we highly recommend that you buy and read the full book at RealityZone.

Chapter 2 Summary: The Name of the Game is Bailout

Although national monetary events may appear mysterious and chaotic, they are governed by well-established rules which bankers and politicians rigidly follow. The central fact to understanding these events is that all the money in the banking system has been created out of nothing through the process of making loans. A defaulted loan, therefore, costs the bank little of tangible value, but it shows up on the ledger as a reduction in assets without a corresponding reduction in liabilities. If the bad loans exceed the size of the assets, the bank becomes technically insolvent and must close its doors. The first rule of survival, therefore, is to avoid writing off large, bad loans and, if possible, to at least continue receiving interest payments on them. To accomplish that, the endangered loans are rolled over and increased in size. This provides the borrower with money to continue paying interest plus fresh funds for new spending. The basic problem is not solved, but is postponed for a while and made worse.

The final solution on behalf of the banking cartel is to have the federal government guarantee payment of the loan should the borrower default in the future. This is accomplished by convincing Congress that not to do so would result in great damage to the economy and hardship for the people. From that point forward, the burden of the loan is removed from the banker's ledger and transferred to the taxpayer. Should this effort fail and the bank be forced into insolvency the last resort is to use the FDIC to pay off the depositors. The FDIC is not insurance, because the presence of "moral hazard" makes the thing it supposedly protects against more likely to happen. A portion of the FDIC funds is derived from assessments against the banks. Ultimately, however, they are paid by depositors themselves. When these funds run out, the balance is provided by the Federal Reserve System in the form of freshly created new money. This floods through the economy causing the appearance of rising prices but which, in reality, is the lowering of value of the dollar. The final cost of the bailout, therefore, is passed to the public in the form of a hidden tax called inflation.

So much for the rules of the game. In the next chapter we shall look at the scorecard of the actual play itself.

Bonus quote on the hidden tax of inflation:
"The American people have no idea they are paying the bill. They know that someone is stealing their hubcaps, but they think it is the greedy businessman who raises prices or the selfish laborer who demands higher wages or the unworthy farmer who demands too much for his crop or the wealthy foreigner who bids up our prices. They do not realize that these groups also are victimized by a monetary system which is constantly being eroded in value by and through the Federal Reserve System." -- G. Edward Griffin, The Creature From Jekyll Island, pg. 33.
Get the book for yourself or for others you want to wake up. It reads like a mystery novel and is filled with colorful metaphors to make the seemingly complex world of banking very easy to comprehend. Visit RealityZone for your copy today. Summary is re-printed with permission from G. Edward Griffin.

Charlie Ventura · Jun 26, 2011

Mr. Neutron, thanks for sharing. I'm over half way through my autographed edition. Ed Griffin has written a great book here that every literate American should read before the next election.

Mr Neutron · Jun 27, 2011

Charlie, you are welcome, sir.

Mr Neutron · Jul 4, 2011

Part 3

G. Edward Griffin: Protectors of the Public

This is the third installment in a series of chapter summaries from G. Edward Griffin's must-read book The Creature From Jekyll Island. This book may be the most important "red pill" available and we highly recommend that you buy and read the full book at RealityZone.

Chapter 3 Summary: Protectors of the Public

The game called bailout is not a whimsical figment of the imagination, it is real. Here are some of the big games of the past and their final scores.

In 1970, Penn Central railroad became bankrupt. The banks which lent the money had taken over its board of directors and had driven it further into the hole, all extending bigger and bigger loans to cover the losses. Directors concealed reality from stockholders and made additional loans so the company could pay dividends to keep up the false front. During this time, the directors and their banks unloaded their stock at unrealistically high prices. When the truth became public, the stockholders were left holding the empty bag. The bailout, which was engineered by the Federal Reserve, involved government subsidies to other banks to grant additional loans. Then Congress was told that the collapse of Penn Central would be devastating to public interest. Congress responded by granting $125 million in loan guarantees so that banks would not be at risk. The railroad eventually failed anyway, but the bank loans were covered. Penn Central was nationalized into AMTRAK and continues to operate at a loss.

In 1970, as Lockheed faced bankruptcy, Congress heard essentially the same story. Thousands would be unemployed, subcontractors would go out of business, and the public would suffer greatly. So Congress agreed to guarantee $250 million in new loans, which put Lockheed 60% deeper into debt than before. Now that government was guaranteeing the loans, it had to make sure Lockheed became profitable. This was accomplished by granting lucrative defense contracts at non-competitive bids. The banks were paid back.

In 1975, New York City had reached the end of its credit rope. It had borrowed heavily to maintain an extravagant bureaucracy and a miniature welfare state. Congress was told that the public would be jeopardized if city services were curtailed and that America would be disgraced in the eyes of the world. So Congress authorized additional direct loans up to $2.3 billion, which more than doubled the size of the current debt. The banks continued to receive their interest.

In 1978, Chrysler was on the verge of bankruptcy. Congress was informed that the public would suffer greatly if the company folded, and that it would be a blow to the American way if freedom-of-choice were reduced from three to two makes of automobiles. So Congress guaranteed up to $1.5 billion in new loans. The banks reduced part of their loans and exchanged another portion for preferred stock. News of the deal pushed up the market value of that stock and largely offset the loan write-off. The banks' previously uncollectable debt was converted into a government-backed, interest-bearing asset.

In 1972, the Commonwealth Bank of Detroit -- with $1.5 billion in assets, became insolvent. It had borrowed heavily from the Chase Manhattan Bank in New York to invest in high-risk and potentially high-profit ventures. Now that it was in trouble, so was Chase. The bankers went to Washington and told the FDIC the public must be protected from the great financial hardship that would follow if Commonwealth were allowed to close. So the FDIC pumped in a $60 million loan plus federal guarantees of repayment. Commonwealth was sold to an Arab consortium. Chase took a minor write down but converted most of its potential loss into government-backed assets.

In 1979, the First Pennsylvania Bank of Philadelphia became insolvent. With assets in excess of $9 billion, it was six-times the size of Commonwealth. It, too, had been an aggressive player in the70s. Now the bankers and the Federal Reserve told the FDIC that the public must be protected from the calamity of a bank failure of this size, that the national economy was at stake, perhaps even the entire world. So the FDIC gave a $325 million loan -- interest-free for the first year, and at half the market rate thereafter. The Federal Reserve offered money to other banks at a subsidized rate for the specific purpose of relending to First Penn. With that enticement, they advanced $175 million in immediate loans plus a $1 billion line of credit.

In 1982, Chicago's Continental Illinois became insolvent. It was the nation's seventh largest bank with $42 billion in assets. The previous year, its profits had soared as a result of loans to high-risk business ventures and foreign governments. Although it had been the darling of market analysts, it quickly unraveled when its cash flow turned negative, and overseas banks began to withdraw deposits. It was the world's first electronic bank run. Federal Reserve Chairman Volcker told the FDIC that it would be unthinkable to allow the world economy to be ruined by a bank failure of this magnitude. So, the FDIC assumed $4.5 billion in bad loans and, in return for the bailout, took 80% ownership of the bank in the form of stock. In effect, the bank was nationalized, but no one called it that. The United States government was now in the banking business.

All of the bail outs of previous years pale by comparison to the trillions of dollars pumped into the banks beginning in 2008 in response to the subprime meltdown. This huge amount of money will not come from the government or The Federal Reserve. It will come from the American consumers in the form of higher prices.

All of the money to accomplish these bailouts was made possible by the Federal Reserve System acting as the "lender of last resort." That was one of the purposes for which it had been created. We must not forget that the phrase "lender of last resort" means that money is created out of nothing, resulting in confiscation of our nation's wealth through the hidden tax called inflation.

Get the book for yourself or for others you want to wake up. It reads like a mystery novel and is filled with colorful metaphors that make the seemingly complex world of banking very easy to comprehend. Visit RealityZone for your copy today. Summary is re-printed with permission from G. Edward Griffin.

NoDrama · Jul 4, 2011

In 1971, The United States became bankrupt. The banks which lent the money had taken over its Congress and had driven it further into the hole, all extending bigger and bigger loans to cover the losses. Politicians concealed reality from the Public and made additional loans so the Government could pay interest on the Treasuries to keep up the false front. During this time, Wall Street and their banks unloaded their stock at unrealistically high prices. When the truth became known, the Public was left holding the empty bag. The bailout, which was engineered by the Federal Reserve, involved government subsidies to other banks to grant additional loans. Then Congress was told that the collapse of the TBTF Banks would be devastating to public interest. Congress responded by granting $Infinity in loan guarantees so that banks would not be at risk. The United States eventually will fail anyway, but the bank loans are covered. The USA continues to operate at a loss.

I fixed it so its a bit more contemporary.

Mr Neutron · Jul 18, 2011

PART 4

G. Edward Griffin:Home, Sweet Loan

This is the fourth installment in a series of chapter summaries from G. Edward Griffin's must-read book The Creature From Jekyll Island. This book may be the most important "red pill" available and we highly recommend that you buy and read the full book at RealityZone.

Our present-day problems within the savings-and-loan industry can be tracked back to the Great Depression of the 1930s. Americans were becoming impressed by the theories of socialism and soon embraced the concept that it was proper for government to provide benefits for its citizens and to protect them against economic hardship.

Under the Hoover and Roosevelt administrations, new government agencies were established which purported to protect deposits in S&Ls and to subsidize home mortgages for the middle class. These measures distorted the laws of supply and demand and, from that point forward, the housing industry was moved out of the free market and into the political arena.

Once the pattern of government intervention had been established, there began a long, unbroken series of federal rules and regulations that were the source of windfall profits for managers, appraisers, brokers, developers, and builders. They also weakened the industry by encouraging unsound business practices and high-risk investments.

When these ventures failed, and when the value of real estate began to drop, many S&Ls become insolvent. The federal insurance fund was soon depleted, and the government was confronted with its own promise to bail out these companies but not having any money to do so.

The response of the regulators was to create accounting gimmicks whereby insolvent thrifts could be made to appear solvent and, thus, continue in business. This postponed the inevitable and made matters considerably worse. The failed S&Ls continued to lose billions of dollars each month and added greatly to the ultimate cost of the bailout, all of which would eventually have to be paid by the common man out of taxes and inflation. The ultimate cost is estimated at over one trillion dollars.

Congress appears to be unable to act and is strangely silent. This is understandable. Many representatives and senators are the beneficiaries of generous donations from the S&Ls. But perhaps the main reason is that Congress, itself, is the main culprit in this crime. In either case, the politicians would like to talk about something else.

In the larger view, the S&L industry is a cartel within a cartel. The fiasco could never have happened without the cartel called the Federal Reserve System standing by to create vast amounts of bailout money pledged by Congress.

redivider · Jul 18, 2011

Mr Neutron said:
Part 2

G. Edward Griffin: The Name of the Game is Bailout
This is the second installment in a series of chapter summaries from G. Edward Griffin's must-read book The Creature From Jekyll Island. This book may be the most important "red pill" available and we highly recommend that you buy and read the full book at RealityZone.

Chapter 2 Summary: The Name of the Game is Bailout

Although national monetary events may appear mysterious and chaotic, they are governed by well-established rules which bankers and politicians rigidly follow. The central fact to understanding these events is that all the money in the banking system has been created out of nothing through the process of making loans. A defaulted loan, therefore, costs the bank little of tangible value, but it shows up on the ledger as a reduction in assets without a corresponding reduction in liabilities. If the bad loans exceed the size of the assets, the bank becomes technically insolvent and must close its doors. The first rule of survival, therefore, is to avoid writing off large, bad loans and, if possible, to at least continue receiving interest payments on them. To accomplish that, the endangered loans are rolled over and increased in size. This provides the borrower with money to continue paying interest plus fresh funds for new spending. The basic problem is not solved, but is postponed for a while and made worse.

The final solution on behalf of the banking cartel is to have the federal government guarantee payment of the loan should the borrower default in the future. This is accomplished by convincing Congress that not to do so would result in great damage to the economy and hardship for the people. From that point forward, the burden of the loan is removed from the banker's ledger and transferred to the taxpayer. Should this effort fail and the bank be forced into insolvency the last resort is to use the FDIC to pay off the depositors. The FDIC is not insurance, because the presence of "moral hazard" makes the thing it supposedly protects against more likely to happen. A portion of the FDIC funds is derived from assessments against the banks. Ultimately, however, they are paid by depositors themselves. When these funds run out, the balance is provided by the Federal Reserve System in the form of freshly created new money. This floods through the economy causing the appearance of rising prices but which, in reality, is the lowering of value of the dollar. The final cost of the bailout, therefore, is passed to the public in the form of a hidden tax called inflation.

So much for the rules of the game. In the next chapter we shall look at the scorecard of the actual play itself.

Bonus quote on the hidden tax of inflation:
"The American people have no idea they are paying the bill. They know that someone is stealing their hubcaps, but they think it is the greedy businessman who raises prices or the selfish laborer who demands higher wages or the unworthy farmer who demands too much for his crop or the wealthy foreigner who bids up our prices. They do not realize that these groups also are victimized by a monetary system which is constantly being eroded in value by and through the Federal Reserve System." -- G. Edward Griffin, The Creature From Jekyll Island, pg. 33.
Get the book for yourself or for others you want to wake up. It reads like a mystery novel and is filled with colorful metaphors to make the seemingly complex world of banking very easy to comprehend. Visit RealityZone for your copy today. Summary is re-printed with permission from G. Edward Griffin.

here is where it all goes to shit.

see, the evil EVIL people who created the federal reserve understood stupid little mundane things like the accounting equation.

assets = liabilities + owners equity.

see, when a company, like a bank, experiences a loss.... they don't report a reduction in liabilities. they report a reduction in CAPITAL. which is owner's equity, or a decrease in the value of their stock. OOPS! . the bank that holds the liability is the OTHER one, the one who OWED the money. the one who didn't pay back. the bank that loaned out the money reports a decrease in deposits, and an increase in receivables, which balances out the total value of their assets. when the loan isn't repaid the bank reports a reduction in assets (receivables, by reporting a CREDIT in their ledger), and a reduction in their capital (stockholder's equity, by an entry on the DEBIT side). WHAAA...

if you don't get the simplicity of what i just explained (literally the first or second chapter of a basic accounting book) then you best keep quiet.

go back to school man... you have lots to learn still....

redivider · Jul 18, 2011

you best study up on financial markets too.

from a macro perspective banks are BORROWERS. we are LENDERS. by putting our money in the bank we lend the bank the money.

you know what, nvmind. facts are never the point with you anyways....

redivider · Jul 18, 2011

Mr Neutron said:
Part 2

G. Edward Griffin: The Name of the Game is Bailout
This is the second installment in a series of chapter summaries from G. Edward Griffin's must-read book The Creature From Jekyll Island. This book may be the most important "red pill" available and we highly recommend that you buy and read the full book at RealityZone.

The final solution on behalf of the banking cartel is to have the federal government guarantee payment of the loan should the borrower default in the future. This is accomplished by convincing Congress that not to do so would result in great damage to the economy and hardship for the people. From that point forward, the burden of the loan is removed from the banker's ledger and transferred to the taxpayer. Should this effort fail and the bank be forced into insolvency the last resort is to use the FDIC to pay off the depositors. The FDIC is not insurance, because the presence of "moral hazard" makes the thing it supposedly protects against more likely to happen. A portion of the FDIC funds is derived from assessments against the banks. Ultimately, however, they are paid by depositors themselves. When these funds run out, the balance is provided by the Federal Reserve System in the form of freshly created new money. This floods through the economy causing the appearance of rising prices but which, in reality, is the lowering of value of the dollar. The final cost of the bailout, therefore, is passed to the public in the form of a hidden tax called inflation.

So much for the rules of the game. In the next chapter we shall look at the scorecard of the actual play itself.

Bonus quote on the hidden tax of inflation:
"The American people have no idea they are paying the bill. They know that someone is stealing their hubcaps, but they think it is the greedy businessman who raises prices or the selfish laborer who demands higher wages or the unworthy farmer who demands too much for his crop or the wealthy foreigner who bids up our prices. They do not realize that these groups also are victimized by a monetary system which is constantly being eroded in value by and through the Federal Reserve System." -- G. Edward Griffin, The Creature From Jekyll Island, pg. 33.
Get the book for yourself or for others you want to wake up. It reads like a mystery novel and is filled with colorful metaphors to make the seemingly complex world of banking very easy to comprehend. Visit RealityZone for your copy today. Summary is re-printed with permission from G. Edward Griffin.

the FDIC had little to do with covering a banks losses. at the time FDIC was invented, strict regulation was put in place to ensure that the monetary system had money flowing through different financial institutions. it placed strict regulations on how big a company could get and exactly which transactions it was allowed to partake in. since in the great depression banks incurred such losses the government put in rules to reduce the chance that the same thing would happen again. the burden of bad loans was placed back on the banks, but the government put controls in place so that large, unregulated markets wouldn't emerge that could threaten the economy. many of those regulations were eroded by conservatives and libertarians. thank you for putting the burden of bad loans back on the tax payer because the type of securities markets that have emerged ARE large enough to topple our economy, so now it's EVERYBODY's problem. not just the banks'.

the FDIC was put in place to restore confidence the people had lost in the monetary system. now they were guaranteed their deposits. no way to loose it like they had a few years before..... way to spin history man...

NoDrama · Jul 18, 2011

redivider said:
you best study up on financial markets too.

from a macro perspective banks are BORROWERS. we are LENDERS. by putting our money in the bank we lend the bank the money.

you know what, nvmind. facts are never the point with you anyways....

Do you know that no bank lends money deposited with it?
Do you know that when a bank lends money it CREATES it out of nothing?
Do you know that bank loans are merely pen and ink entries in the credit columns of a bank's ledger? They have no other existence.
Do you know that practically all the money in the community comes into circulation as a debt to the banks?
Do you know that money loaned by a Government bank is just as much a debt to the people as if it were loaned from a private bank?
Do you know that “fixed deposits” are a plausible screen to hide the creation of credit?
Did it ever occur to you that the banks enjoy this unique facility of creating credit and putting the nation progressively into debt-bondage because they create FINANCIAL credit against the REAL credit created by the people?
Do you realize that every time a Government borrows money for a public work, the people are debited with the liability (in perpetuity), but are never credited with the value of the asset?
Do you know that every repayment of a bank loan cancels the amount of the loan out of existence?
Do you know that Treasury Notes are Government I.O.U.'s — national pawn tickets for pledging the assets of the country to the banks for the loan of OUR OWN financial credit?
Do you know that banks purchase bank sites, build premises, and acquire assets at no real cost whatever to themselves — by the simple process of honoring their own checks?

redivider · Jul 18, 2011

NoDrama said:
Do you know that no bank lends money deposited with it?
Do you know that when a bank lends money it CREATES it out of nothing?
Do you know that bank loans are merely pen and ink entries in the credit columns of a bank's ledger? They have no other existence.
Do you know that practically all the money in the community comes into circulation as a debt to the banks?
Do you know that money loaned by a Government bank is just as much a debt to the people as if it were loaned from a private bank?
Do you know that “fixed deposits” are a plausible screen to hide the creation of credit?
Did it ever occur to you that the banks enjoy this unique facility of creating credit and putting the nation progressively into debt-bondage because they create FINANCIAL credit against the REAL credit created by the people?
Do you realize that every time a Government borrows money for a public work, the people are debited with the liability (in perpetuity), but are never credited with the value of the asset?
Do you know that every repayment of a bank loan cancels the amount of the loan out of existence?
Do you know that Treasury Notes are Government I.O.U.'s — national pawn tickets for pledging the assets of the country to the banks for the loan of OUR OWN financial credit?
Do you know that banks purchase bank sites, build premises, and acquire assets at no real cost whatever to themselves — by the simple process of honoring their own checks?

i'm not going to try to explain what inflation is or how it works. it's complicated but rest assured, a bank lends out some of the money deposited in it's coffers.

like every other company, a bank may capitalize such investments like buildings and stuff. it appears on the balance sheet but it does cost them something. it costs them money. the entry doesn't carry an expense account, it carries two inventory accounts, debiting buildings, crediting cash. the 'expense' is amortized over time as depreciation. the idea is that a brand new building shouldn't be considered a 'cost' it's a capitalized investment that 'expenses' over time as it ages.

there is no 'government bank'. there is only a central bank creating money. it is a quasi-governmental entity, but the loans given out by the bank are done so with interest. so the bank expects to gain money everytime it loans out money. the bank isn't a 'government bank'. in fact, most of the time it acts without asking anybody. it just says what's going down and everybody adjusts. if it were really a government bank, the government would decide how it acts. it doesn't.

banks aren't the only ones able to give out loans. i can ask for a loan from just about anybody. there is NO law prohibiting two persons/entities from engaging in a private loan transaction. this idea that the banks have a UNIQUE ability to create credit is baseless and false.

our current paper money is nothing more than a perception of value, there you are correct. it's basically created out of a belief that that piece of paper is worth something. that much is true.

treasury notes are a long term loan instrument used by the US government to raise money for one reason or another. it's not a pawn ticket. it's what the government does when too much money is being kept as profit. lol..

NoDrama · Jul 18, 2011

Banks may not be the only ones to give out loans, but they are the only ones who can create the money from nothing.

Inflation is SUPER SIMPLE, its the creation of more money. That's all there is to it, no secret formula, no accounting needed. Simple money creation, which By the way is only possible if people take out loans. If all the loans were paid off, no money would exist.

From the Federal reserve web site: http://dallasfed.org/educate/everyday/ev9.html#how

Banks actually create money when they lend it. Here's how it works: Most of a bank's loans are made to its own customers and are deposited in their checking accounts. Because the loan becomes a new deposit, just like a paycheck does, the bank once again holds a small percentage of that new amount in reserve and again lends the remainder to someone else, repeating the money-creation process many times.

they create the money to lend to you, then when you deposit those funds in your account at the bank they then use that as the basis of a new deposit upon which they can create even more money upon the money they already created.

NoDrama · Jul 18, 2011

A publication of the federal reserve called Modern Money Mechanics, in it they explain how and why the banks do what they do.

From page 6 http://ia700202.us.archive.org/3/items/ModernMoneyMechanics/MMM.pdf

Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers transaction accounts. Loans and deposits both rise. Reserves are unchanged by the loan transactions, But the deposit credits constitute new additions to the total deposits of the banking system

Keep believing they don't do that. Don't believe your own eyes, or the information from the Fed itself.

redivider · Jul 18, 2011

i know how money is created. i know paper money is nothing more than a perception of value. that doesn't make it any less valuable because it is the legal tender we use, and many people perceive money as being valuable. that's all that matters.

try teaching the OP a thing or two.

he thinks the FDIC was established to transfer the risk of loans from banks to taxpayers... lol.... it has more to do with consumer confidence than anything else. the FDIC hasn't actually had to cover a banks loans in a long time. most of the time the treasury just approves mergers.... funny how these mergers have led to 'too big to fail' banks.... there's economists that believe that too big to fail is a threat to capitalism and a descent into tyranny.

and he's not some hippy in a cave. he's the Head of the Kansas branch of the....... you guessed it... The Federal Reserve Bank...... lol.....

NoDrama · Jul 18, 2011

redivider said:
the FDIC hasn't actually had to cover a banks loans in a long time.

That is actually factually correct if your definition of "A long time" is a few minutes.

You live under a rock or something? Do you have ANY IDEA how many banks the FDIC has taken over and insured the funds of depositors? ANY IDEA AT ALL? 377 banks have failed since late 2008.

The FDIC has taken over 26 banks in 2008, 140 in 2009, 157 in 2010 and so far 41 this year. The FDIC has a list of a further 836 banks that are very close to going under. The cost so far is over $65 Billion. Also, the FDIC doesn't insure Loans, it insures deposits.

BTW the FDIC is completely tapped out and must now use government credit to insure deposits.

http://www.fdic.gov/bank/individual/failed/banklist.html

NoDrama · Jul 18, 2011

redivider said:
i know how money is created.

If you really did, then you wouldn't say factually incorrect things about how banks lend from deposits. And then back it up in a second post by reaffirming that you really do NOT know by saying it yet again.

You should call paper money currency, its actually wrong to call it money, money has intrinsic value. But don't worry about it, We were all raised on it and most of us have no idea that there are better alternatives out there.

redivider · Jul 18, 2011

NoDrama said:
That is actually factually correct if your definition of "A long time" is a few minutes.

You live under a rock or something? Do you have ANY IDEA how many banks the FDIC has taken over and insured the funds of depositors? ANY IDEA AT ALL? 377 banks have failed since late 2008.

The FDIC has taken over 26 banks in 2008, 140 in 2009, 157 in 2010 and so far 41 this year. The FDIC has a list of a further 836 banks that are very close to going under. The cost so far is over $65 Billion. Also, the FDIC doesn't insure Loans, it insures deposits.

BTW the FDIC is completely tapped out and must now use government credit to insure deposits.

http://www.fdic.gov/bank/individual/failed/banklist.html

the FDIC is charged with taking control of failing institution.... you know what, your the genius.... i'm just the wackjob who got 4.0 GPA in every finance course i ever took. EVER. you know, in that bastion of indoctrination called COLLEGE. i know how money is created and know when the FDIC has to cover loans (you call them deposits, i know a bank is a BORROWER, they don't take deposits, they BORROW our money). the FDIC is far from tapped out b/c it's funds comes from reserves of bank deposits.

that might get you a lot of political talking mumbojumbo but it isn't the truth. as long as there are banks engaging in multi-state operations, the FDIC will ALWAYS have money.

you can take THAT to the bank....

NoDrama · Jul 18, 2011

redivider said:
the FDIC is charged with taking control of failing institution.... you know what, your the genius.... i'm just the wackjob who got 4.0 GPA in every finance course i ever took. EVER. you know, in that bastion of indoctrination called COLLEGE. i know how money is created and know when the FDIC has to cover loans. the FDIC is far from tapped out b/c it's funds comes from reserves of bank deposits.

that might get you a lot of political talking mumbojumbo but it isn't the truth. as long as there are banks engaging in multi-state operations, the FDIC will ALWAYS have money.

you can take THAT to the bank....

You should really demand your tuition money back. I went to a small state college and got a much better education than you.

Banks pay premiums to have their deposits insured and that money goes into the Deposit Insurance Fund (DIF). If that account is depleted, the FDIC has a $30-billion line of credit with the Department of the Treasury. To fully seal the deal, and to make sure there will always be money to pay out customers after banks fail, the U.S. government has assured the FDIC that it will provide financial backing no matter what happens.
The FDIC can also borrow from the Treasury, in the form of short-term loans, which it did during the savings and loan crisis of 1991.

Nothing in there about the money coming from deposits, how many times are you going to tout how smart you are but be proven wrong at every turn?

Look Redi, I am not trying to make you look stupid, your doing that all on your own. I am just showing you that all those things you took for granted as being the way it works is just plain wrong.

redivider · Jul 18, 2011

no you didn't.

you seem to think that the FDIC covers the deposits of every bank that fails. it doesn't. trust me on this. banks do not pay premiums to the FDIC. it's not a normal insurance company, it's not even a company perse... lol..

you also seem to think the FDIC can just run out of money. well, it can't. it's balance is directly tied to the rate of inflation and to the amount of money flowing through banks that engage in multi-state operations, and the way the fund increases it's balance doesn't work like a normal insurance company. banks are feeding you the lie that the FDIC is doomed to failure b/c it's the only way that the rich have to take your money without you having any resource to FORCE the banks to pay you back. lol

you make good political talking points, but you are FAR from correct.

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