--- In FairfieldLife@yahoogroups.com <mailto:FairfieldLife@yahoogroups.com> , new.morning <[EMAIL PROTECTED]> wrote: > > --- In FairfieldLife@yahoogroups.com <mailto:FairfieldLife@yahoogroups.com> , off_world_beings <no_reply@> > wrote: > > > > > > --- In FairfieldLife@yahoogroups.com <mailto:FairfieldLife@yahoogroups.com> > > <mailto:FairfieldLife@yahoogroups.com <mailto:FairfieldLife@yahoogroups.com> > , Robert <babajii_99@> wrote: > > > > > > In the old days, the old Jewish Law... > > > Was that you were not to charge interest on money lent. > > > So, perhaps the grand days of interest on interest is gone, forever... > > > People have wised up, on this Interest thing. > > > Interest on interest started with during the 'Reagan Years', and MBA > > mentality.... > > > Learning skilled ways of charging interest on interest... > > > Interest...but whose interest, my house, your house, their houses. > > > Why can't we lend money for no interest...how would that work. > > > This is what we have done with the Banks, we loan them money at no > > interest. > > > This is what we do with the Saudi's, we give them money with no > > interest. > > > This is what we do with the military, we give them money with no > > interest. > > > ~It's All About Interest, Stupid! > > > R.G.>> > > > > You also were not supposed to lend out 120 times what you own. Most of > > the banks would take $1 that they owned, lend it out 120 times to 120 > > people. If the interest charged in one year was only 5%, then the profit > > would be $6 on the dollar, per year, if everyone paid. So you could make > > $5 a year for every dollar you owned. > > So if you have $1 million you could make at $5 million a year on 5% > > interest only. And all you have to is sit on your ass and pay fairly low > > wages to maybe 1 or 2 people for every $1 million loaned. For you to > > lose, you would have to have 75% of the people default on the loan > > before you are not making money. > > Jeezus !....that can't be right...must have screwed up the math !...or > > maybe we should start a bank ! > > > > OffWorld > > > > It doesn't really work like that Off. Though its common misunderstanding. > > Following is a blurb that describes it -- or expanded versions can be > found in any introductory macro economics text.>>
It was a PHD in economics who told me what I told you, and I think you need to re-read what you posted below. It is saying there is a 5 to 1 lending of the dollar in their example. Then they go on to say: "The lower the reserve requirement, the larger the money supply, which means more money is being created for every dollar deposited." And experts in economics say that is creating a 120 to 1 ratio. For every dollar owned by the bank, 120 times has been loaned. Take this recent bailout for example. $700 billion dollars that doesn't exist. There is nothing to back it up exepct military might and hope in the future. That is what it is based on. OffWorld > > > "The expansion of a country's money supply that results from banks > being able to lend. The size of the multiplier effect depends on the > percentage of deposits that banks are required to hold as reserves. In > other words, it is money used to create more money and is calculated > by dividing total bank deposits by the reserve requirement. > Investopedia Says... The multiplier effect depends on the set reserve > requirement. So, to calculate the impact of the multiplier effect on > the money supply, we start with the amount banks initially take in > through deposits and divide this by the reserve ratio. If, for > example, the reserve requirement is 20%, for every $100 a customer > deposits into a bank, $20 must be kept in reserve. However, the > remaining $80 can be loaned out to other bank customers. This $80 is > then deposited by these customers into another bank, which in turn > must also keep 20%, or $16, in reserve but can lend out the remaining > $64. This cycle continues - as more people deposit money and more > banks continue lending it - until finally the $100 initially deposited > creates a total of $500 ($100 / 0.2) in deposits. This creation of > deposits is the multiplier effect. > > The higher the reserve requirement, the tighter the money supply, > which results in a lower multiplier effect for every dollar deposited. > The lower the reserve requirement, the larger the money supply, which > means more money is being created for every dollar deposited. " >
