You're going to need a bigger mattress.
Posted on 03/18/2013 6:46:57 AM PDT by Kartographer
Take your money OUT of banks. OK, then what do you do with it?
At least you can keep it,a mason jar is safer than a bank.
Putting my savings into land and real estate sound like a risky investment. If the SHTF will land and real estate have any value?
Yeah, good luck holding on to any land or real estate you don’t personally occupy if things go south. You will need a small army or it will simply slip through your hands like dry sand. Good luck with that.
problem being - land has taxes assessed on it - Im not convinced its a good idea -suddenly your woodland camp is costing you several thousand dollars a year and your net investment impacts existing family budgets. Raw land is another issue altogether IMO.
That said, where does one stick the family fortune short of burying it in the ground
Wow - they elected a bunch of Socialists and they’re mad that the Socialists are Socializing?
Get an account at a credit union.
No, that's not how it works at all. The bank can't create money out of thin air. They loan based on the amount of deposits they have. They can only loan 90% of that money, and must hold 10% as reserves. Banks are highly leveraged, but they absolutely cannot make their own money.
You're going to need a bigger mattress.
They even have a handle on the bartering angle with RFID chips. They will know what items you have in your possession and which ones you have traded.
They will even know when you walk down the street if you have personally paid for anything you have on.
They are not printing money but they certainly are creating it based on the money multiplier which they can change at any time by raising or lowering the reserve requirement. It is one of the ways the Fed expands or contracts the money supply along with T-bills and the Discount Window.
The Fed was supposed to keep the government from printing as much money as they wanted. They were supposed to rein the government in but they are all the same now.
I pay my bills with cash.
As for land and real estate having value, it depends where you are located. But with land you can grow a garden, have a few chickens and low frame cattle. Everyone likes to eat!
No. A bank can only lend based on the amount of deposits it has on hand. It can lend 90% of deposits and must keep 10% as reserves. These banks cannot create money in any way. The Fed operates in a completely different manner. The original poster I was replying to claimed that any bank making a loan can create 90% of that loan out of thin air. That’s a bunch of nonsense.
This will happen here, post-crash,
the left will blame responsible* people on the right.
*Responsible, not for the crash, but for their own finances.
Good primer for those firmly in the Matrix.
prove what you are saying.
This article shows Banks Really Do Create Money Out of Thin Air
Thus, fractional reserve banking is at one and the same time fraudulent and inflationary; it generates an increase in the money supply by issuing fake warehouse receipts for money. Money in circulation has increased by the amount of warehouse receipts issued beyond the supply of gold in the bank….
Where did the money come from? It came—and this is the most important single thing to know about modern banking—it came out of thin air. Commercial banks—that is, fractional reserve banks—create money out of thin air. Essentially they do it in the same way as counterfeiters. Counterfeiters, too, create money out of thin air by printing something masquerading as money or as a warehouse receipt for money. In this way, they fraudulently extract resources from the public, from the people who have genuinely earned their money. In the same way, fractional reserve banks counterfeit warehouse receipts for money, which then circulate as equivalent to money among the public. There is one exception to the equivalence: The law fails to treat the receipts as counterfeit.
http://www.investopedia.com/terms/m/multipliereffect.asp?ModPagespeed=noscript
Definition of ‘Multiplier Effect’
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
Investopedia explains ‘Multiplier Effect’
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.
They are creating money out of thin air. The Fed cannot print money, so they have other methods for creating money. When the banks open in Cyprus, it should be pretty interesting to see what happens.
You said: ...so If I make a $100,000 loan then the bank only needs to have $10 k actually, they create the 90,000 $ out of thin air to give me the 100k loan.
This is as wrong now as it was when you first posted it. If you want to borrow $100,000 from the bank, they'd better have $100,000 (+ 10% of $100,000) in deposits, or they won't be loaning you $100,000. The bank can't create any money out of thin air. The money they lend has to be deposited.
No bank can loan out 500% of the deposits they hold.
Who is creating money out of thin air? If I deposit $100 with a bank, the bank can only loan $80 of that money -- provided the reserve requirement is 20%.
The Fed cannot print money, so they have other methods for creating money.
The Fed cannot print money, but they can create money. That's one of their functions. So what?
When the banks open in Cyprus, it should be pretty interesting to see what happens.
Yes, people who don't want their savings going to bailing out bad behavior will be pissed. What does that have to do with the fact that a bank cannot create money from thin air?
Land can be rented. You can live on a property and rent the crop land or rent hunting rights in season. If you buy land already in the CRP, you also buy the CRP contract, which can pay some or all of the taxes, depending. If the land is in the Managed Forest Program, it reduces your taxes and the contract transfers to the new owner. You can also rent any home on the property, separate from the land rental.
A woodland camp is assessed at recreational land levels, but really, the majority of taxes are on the improvements. If the land is tillable and has been a working farm, you can continue to rent the cropland and those parcels will be taxed at the lower ag rate.
Ideally, you would spend time somewhere and get to know folks. There are always people around who make it a business to manage property for absentee owners. You have to invest the time and get to know whom to trust and rely upon.
That said, the ideal would be to sell out of the city/suburb and live on your rural property. It really is safer out here. There are not feral gangs squatting anywhere. You have 3 years of non-payment of taxes (should something awful happen) before it goes to a sheriff’s sale.
Look for places with reasonable taxes, reasonable zoning. Most rules are from the township. Townships are small, population-wise, and you have a say. Not many services, but, for example, we pay $20/per time for someone to plow our drive now that we are getting older. Expensive this year, with a lot of storms, but usually not that bad.
People are moving here and starting businesses. Some telecommute to their present job. Some are retired. Pay your bills, mind your own business and make friends and you will find yourself welcome. We have credit unions and investment services out here, too.
We came here in 1974. It took awhile, but we have good friends, some transplants, some locals. We lost a great deal in the Crash and we are selling out and downsizing by this time next year. The land appreciated. We will net out at about 8x our purchase price, 6x if you count the improvements we made and we have lived and worked here on the property for nearly 40 years. So, it was the best investment. We will ideally end up with a small place and have replaced our cash nut.
There are no longer any sure bets, IMO. I recommend Talib’s book “Anti-Fragile”. You need to assess any situation and yourself in terms of resilience. Not have all your economic eggs in one basket, be prepared to shift your economic and social weight with the changing circumstances, and have at least 3 plans for any contingency.
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