A Quote by Michael Hudson
Most banks - with Deutsche Bank at the top of the spectrum here - have decided that they can't make money lending to barrowers anymore, so they're going to the second business plan: They lend money to casino capitalists. That is, to people who want to gamble on derivatives.
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What's the best gamble in the world, right now? Its betting that Deutsche Bank stock is going to go down. Short sellers borrowed money from their banks to place bets that Deutsche Bank stock is going to go down. Now, it's wringing its hands and saying, "Oh the speculators are killing us." But it's Deutsche Bank and the other banks that are providing the money to the speculators to bet on credit.
If two parties, instead of being a bank and an individual, were an individual and an individual, they could not inflate the circulating medium by a loan transaction, for the simple reason that the lender could not lend what he didn't have, as banks can do. Only commercial banks and trust companies can lend money that they manufacture by lending it.
The business of a bank is to lend money; which amounts, nowadays, to lending credit.
The problems of 2008 were never cured. The Federal Reserve's solution to the crisis was to lend the economy enough money to borrow its way out of debt. It thought that if it could subsidize banks lending homeowners enough money to buy houses from people who are defaulting, then the bank balance sheets would end up okay.
A lot of people want to start a business, and they're like, 'I wanna start a business, give me some money to invest.' Where is your business plan? Are you investing money yourself into your own business? How is this going to work? People think that they can just come to you with an idea and have money.
Save money; never rely on other people to lend you money. We call it having 'walking the streets' money - money in your back pocket or bank account that belongs to you.
I think a lot of people like to gamble, and they don't want to go to the casino to gamble. Sometimes they want to do it in the privacy of their home. They can't concentrate the way they want to in a gambling casino.
You entrust your money to banks, God entrusts His money to you. How would you feel if the bank took your money and used it to play the lottery or gamble with it? So, how does God feel?
Contrary to what most people think, bank money is much more important than state money. In Greece, for example, bank money makes up 84.26% of the total money supply.
Deutsche Bank has a very simple problem. It doesn't make money.
If we want the banks to lend - and we all do - if we want the economy to expand - and we all do - do you really want to start confining the banks in their ability to make profits in order to generate more capital to lend out to the people?
I don't like losing money. I don't go gamble. Because I don't want to lose any money. I didn't grow up with any money and I'm not going to go gamble and lose money.
Life can be lived at a remove. You trade in futures, and then you trade in derivatives of futures. Banks make more money trading derivatives than they do trading actual commodities.
When banks place credits into your account, they are merely pretending to lend you money. In reality, they have nothing to lend. Even the money that non-indebted depositors have placed with them was originally created out of nothing in response to someone else's loan. So what entitles the banks to collect rent on nothing? It is immaterial that men everywhere are forced by law to accept these nothing certificates in exchange for real goods and services. We are talking here not about what is legal, but what is moral.
The expansionary operations of the Second Bank of the United States, coupled with its laxity toward insisting on specie payment by the state banks, impelled a further inflationary expansion of state banks on top of the spectacular enlargement of the central bank. Thus, the number of incorporated state banks rose from 232 in 1816 to 338 in 1818.
What do the 5%, or the 1% actually use their money for? They lend it back to the economy at large, they load it down with debt. They make their money by lending to the bottom 95%, or the bottom 99%. When you give them more after-tax income, it enables them to buy even more control of government, even more control of election campaigns. They're not going to spend this money back into the goods-and-services economy.
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