/biz/ - Business & Finance

>>25633653

when they give you a loan. Well. They don't have that money, you just have to repay it. The money didnt exist until you loaned it.

>>25633653
We topped out, sell signal

>>25633691
It's guaranteed returns for the most part, and if people get more into debt you owe them. Owing a person is much more valable

>>25633691
Because of this you dumb faggot OP. Fractional reserve banking.

Virtually 0 risk for a bank

>>25633653
the system relies on credit

>>25633691
Wtffff fuck these jews so we just inflate and ruin our money for rich Jews to get rich? And stupid poor people allow all this to happen

I think I'll go sell this not at the discount window. LOL

>>25633761
This
>>25633653

Banks literally create money from nothing

>>25633812
Bro have you ever been to /pol/ ? wait for all this capital shit to die down in a couple of days and go pop into a random JQ thread

interest and penalties.
and avrg person fails to pay on schedule or over purchases to keep up with the jones.

>>25633812
Yes.

>>25633812
Look up masters of money documentary

>>25633885
Why didn’t they just buy stocks and crypto and get rich instead of being poor

>>25633691
You should be able to do a fractional deposit by the same rules

>hello, I would like to deposit $3 million dollars in my account and earn interest on that
>I don't actually have 3 million, but that money will be backed by the $3000 in real currency that I actually hold, kosher?

>>25633812
>>25633867
How come it matters when people default then is it because banks then turn around and decide to use the money you owe them for other stuff?

>>25634171
I think the bulk of the loan pays off the banks loan for the money and they just keep the interest.

I HOPE

>>25633974
who says they are not?
Money needs to flow, that's why inflation is good. Drives competition.

Handing out loans just gives an incentive to go buy a car to drive to work OR buy a house and have a roof above your head. Incentivize people to KEEP buying.

CVC you faggot. The pump has barely started

>>25634767
woops wrong thread kek

>>25634390
The only high IQ anon in this thread

>>25634102
>You should be able to do a fractional deposit by the same rules
>hello, I would like to deposit $3 million dollars in my account and earn interest on that
>I don't actually have 3 million, but that money will be backed by the $3000 in real currency that I actually hold, kosher?
You can do what banks do already.
Consider: Why are most banks private businesses and how do they determine profitability?
If it were the case these banks just got as much money as they wanted printed whenever they wanted it with no liability to themselves then there would be no way to determine profitability. How could you say you "made a net profit of $30K by loaning to John Smith" unless you had a cost of some sort to net from? If they had no cost then why would they even bother trying to make money from customers when they could cut out the extra step and just create money for themselves instead?
In reality banks have to borrow money to loan money, and they then have to use leverage to bet on their loan bringing in enough additonal money to let them continue doing business without defaulting on the loans they took out themselves.
A simple way you can carry out this same idea is through a down payment for real estate, or through margin trading. In both cases you get to use much more money than you really have in cash on hand in order to turn a profit you wouldn't have been able to make otherwise.

>>25634102
Based

>>25633812

>>25633653
Can ye see me noo?

>>25635235
>retard never heard of the government bailing out banks and "ToO BiG toO FaIL"
They absolutely get as much money printed as they ask for, and lose money all the time. They are in on the ruse with the FED though, so they will never go under. Worst case scenario their specific branch or whatever goes bankrupt, and they open another with borrowed money.

>>25633653
Because they can turn your 1000$ into $100,000 in loans and make 10% off that. Your $1,000 deposit is 10K per year in gross profit to the bank.

Now multiply those numbers by 50 million.

>>25633653
fractional reserve banking
a bank holding assets is paradoxically a liability

>>25634171
yes, basically
>your mortgage is a currency that another bank trades to other banks for other securities
>this is part of the reason they don't want to just give you your mortgage at the same price they sell your mortgage to other banks for
>when you default on the housing market, their stock fuck-around tokens evaporate, and then they actually owe real money on their bad day trading
>this "I don't have cash to pay loans I owe" issue is what crashed the world economy
>then we basically said "the us government is now your bitch financially, stop dying already"
And here we are :)

Because they loan you money they dont have and get to own shit you pay for, if you dont pay they keep your money and the shit. Its the craziest fucking business mode ever since it cant fail and makes insane amounts of money with nothing

>>25633653
They create the money out of nothing stupid. They make 10% on zero investment or effort.

>>25633653
It's literally how they make most of their revenues
>Don’t they only get like 5-10% each on them?
Depends on what they are but generally yes. Though that is the return on stocks. And most of their lending is collateralized and safer than equities unless housing collapses :^)
Almost every bank holds equities on their balance sheets too.
>>25633812
Heh
They can only lend as much as they have*
For banks loans are an asset and deposits are a liability. They have an item on the asset side called bank capitalization. It's the difference between assets and liabilities, which are equal on the sheet, but should not really be equal. FDIC will straight up take over a bank and sell it to a stronger one if they're too poorly or negatively capitalized.
The way it works is
>you put X dollars in the bank
>they are liable to pay you X dollars
>they loan X dollars to others
>your money is still there
>but it was also lent
>money has been created.
They don't need to reserve even a single penny anymore. That requirement went out the window to little fanfare maybe a year ago.