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How the banks steal your money in the form of a loan Watch

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    (Original post by Bornblue)
    Actually, state run companies like the BBC generate a huge amount of money for the taxpayer through producing shows and selling the rights for them to be broadcast. Not to mention the merchandise.

    State run companies in China perform rather well too.
    It's not so hard to make money when you are a state monopoly and have the force of law to guarantee payment by people whether they want your product or not.
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    (Original post by Trinculo)
    It's not so hard to make money when you are a state monopoly and have the force of law to guarantee payment by people whether they want your product or not.
    Yet something like 97% of the population use at least one BBC service each week.

    It makes the taxpayer a huge amount of money. What's the issue?

    As to 'being forced to pay for it'. That's how taxation works yes. It's why we have roads and hospitals and all sorts of things...

    Though I do accept that those on the right absolutely love their bogeymen and the BBC is certainly one of them.
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    (Original post by D3LLI5)
    I work in the finance industry
    :rofl: now that is embarrassing.
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    (Original post by yudothis)
    :rofl: now that is embarrassing.
    I’m not the one who thinks that banks summon money out of thin air lol
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    (Original post by D3LLI5)
    I’m not the one who thinks that banks summon money out of thin air lol
    And yet they do. It's called debt.
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    (Original post by D3LLI5)
    If they want to lend money they don’t have them they can BORROW money from the central bank, ie not just create money out of thin air, as is being argued

    They have to pay interest on it
    Sorry, but you're wrong. Here's what our own central bank has to say on the matter:

    "In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money."

    "Commercial banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created. For this reason, some economists have referred to bank deposits as ‘fountain pen money’, created at the stroke of bankers’ pens when they approve loans."
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    (Original post by Bornblue)
    Yet something like 97% of the population use at least one BBC service each week.

    It makes the taxpayer a huge amount of money. What's the issue?

    As to 'being forced to pay for it'. That's how taxation works yes. It's why we have roads and hospitals and all sorts of things...

    Though I do accept that those on the right absolutely love their bogeymen and the BBC is certainly one of them.
    How does the BBC make a huge amount for the taxpayer? It's a huge net loss. It just loses less because of international sales.
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    (Original post by yudothis)
    And yet they do. It's called debt.
    They cannot lend money they do not have. Once they issue the loan they lose the money they previously owned in exchange for a contract where the debtor agrees to pay back a certain amount every so often.
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    (Original post by Trinculo)
    How does the BBC make a huge amount for the taxpayer? It's a huge net loss. It just loses less because of international sales.
    Shows like Strictly, Dr Who, Bake off etc were/are a huge money spinner. They sell the rights, especially to foreign stations to broadcast.
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    (Original post by Captain Haddock)
    Sorry, but you're wrong. Here's what our own central bank has to say on the matter:

    "In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money."

    "Commercial banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created. For this reason, some economists have referred to bank deposits as ‘fountain pen money’, created at the stroke of bankers’ pens when they approve loans."
    When they deposit money into the debtors bank account, they have to subtract that amount from their reserve. You can’t just ignore half the bloody process
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    (Original post by Bornblue)
    Shows like Strictly, Dr Who, Bake off etc were/are a huge money spinner. They sell the rights, especially to foreign stations to broadcast.
    BBC income is a little over £5bn. About £4bn of that is licence fee money. The rest - just over £1bn is from international sales of the programmes (above). But that just goes into the BBC incomes. It doesn't get refunded to the taxpayer -it doesn't "make" a single penny for the taxpayer as you suggest. The vast majority of BBC income is the UK taxpayer.
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    (Original post by Trinculo)
    BBC income is a little over £5bn. About £4bn of that is licence fee money. The rest - just over £1bn is from international sales of the programmes (above). But that just goes into the BBC incomes. It doesn't get refunded to the taxpayer -it doesn't "make" a single penny for the taxpayer as you suggest. The vast majority of BBC income is the UK taxpayer.
    It lowers the license fees.
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    (Original post by D3LLI5)
    They cannot lend money they do not have. Once they issue the loan they lose the money they previously owned in exchange for a contract where the debtor agrees to pay back a certain amount every so often.
    This assumes banks only lend money they first received.

    In reality they lend first and then look for reserves.
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    (Original post by D3LLI5)
    When they deposit money into the debtors bank account, they have to subtract that amount from their reserve. You can’t just ignore half the bloody process
    No, they don't. Just read the bloody pdf I posted.
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    (Original post by yudothis)
    This assumes banks only lend money they first received.

    In reality they lend first and then look for reserves.
    And if they don’t have the reserves they have to borrow from the central bank or another bank. The point is, they have to balance the loan. Any short term disparity is extremely short term and irrelevant.
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    (Original post by Bornblue)
    It lowers the license fees.
    There's no evidence for that. The licence fee is set by negotiations between government and the Trust. If the BBC couldn't sell Doctor Who to Mozambique, there's no evidence whatsoever that the licence fee would go up.
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    (Original post by D3LLI5)
    And if they don’t have the reserves they have to borrow from the central bank or another bank. The point is, they have to balance the loan. Any short term disparity is extremely short term and irrelevant.
    They are not however limited in their ability to cover these reserves. Fact of the matter is, they just need a fraction in reserves of what they credited someone. They get this after creating the credit. There's nothing more to it.
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    (Original post by Captain Haddock)
    No, they don't. Just read the bloody pdf I posted.
    They do.

    The pdf is extremely poorly worded and misleading, I can see why you are confused by it.
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    (Original post by akka444)
    Mr A takes out a bank loan to buy a car. The bank simply types the sum out of thin air into his bank account, despite the fact that they don't actually have the money in their reserves. Mr A then gives the cash from the loan to the person selling the car. The person selling the car then banks the cash. At this point the cash becomes real money. Mr A then pays back the loan. The original loan money disappears back into thin air again, but the interest is banked by the bank as real money that they now own. So the bank now owns both the interest and the cash that the person selling the car banked, neither of which they owned before giving the loan.
    How depressing that four people actually agree with your level of ignorance.
    Mr A takes out a bank loan to buy a car. The bank simply types the sum out of thin air into his bank account [ what the bank does is underwrite the liability], despite the fact that they don't actually have the money in their reserves [they dont need physical money because the liability is good enough, you are being too simplistic and thinking money is only in notes and coins, when it in fact consists of obligations to pay] . Mr A then gives the cash from the loan to the person selling the car. The person selling the car then banks the cash. At this point the cash becomes real money [Nope its still just a liability]. Mr A then pays back the loan [ for which he received a car and the advantage of being able to purchase the car sooner than he would have been able to had he had to save up the money himself] . The original loan money disappears back into thin air again [ No it does not because it remains a liability for person A to pay and for which he gained a car] , but the interest is banked by the bank as real money that they now own [ The interest is the cost of providing the service without which the person couldnt have obtained the money to buy the car]. So the bank now owns both the interest and the cash that the person selling the car banked [They own the potential interest from the agreement and a repayment of capital because that's how lending agreements work. Why would you have a problem with that? Both sides have gained] , neither of which they owned before giving the loan [You are confused. They do not own the money of the person who sold the car, that remains theirs and theres no reason to say where they banked it. In the event they bank at the same place as the buyer, then that money is held by the bank in their name and in most cases will attract interest for them. It is not the banks money and is free to be withdrawn when they like. Mystifying how you dont understand that?].
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    (Original post by D3LLI5)
    They do.

    The pdf is extremely poorly worded and misleading, I can see why you are confused by it.
    What specific parts of the article do you find to be poorly worded and misleading? Which of its claims do you have issues with?
 
 
 
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