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Response to Bunnahabhain (Reply #87)

Wed Aug 14, 2013, 08:05 PM

88. Are you looking for a conversation or a fight?

 

Banks must be boring, slow, and stable. Article I, Section 8, the part reserving the right to coin money and determine the value thereof, was written specifically to keep the European banking cartels out of our country by making it unattractive for them as profits would have been meager. Obviously it was circumvented, but the idea was brilliant and should be revived.

Deposits do fluctuate but not wildly, unless the bank is being run in the interest of investors rather than the customers/community. Loan terms are set at the time of origination. A 10% reserve requirement (which is high) allows the bank a $1000 loan capacity per $100 on deposit, you seem to be thinking like a retail bank, this model is much closer to the Federal Reserve or pre-'70s USPS model. The whole idea is not to make banksters rich, but to fulfill the banks only legitimate functions, those being regulation of the currency supply and security of deposits.

Did you miss the very first thing I wrote, "the entire banking system should be returned to the commons"? There is a small and consistent profit allowed on top of operating costs, period.If a bank were to choose to pay its President $8M per/year its costs are going to be much higher and as a result will have a hard time attracting borrowers, which will in turn reduce it's actual loan factor, which will discourage deposits, which will create a downward spiral into insolvency. OTOH, a bank which works to constantly contain its costs will create better terms for borrowers which will get the bank closer to the optimal 1.0 carrying capacity.

How can you have no idea of how to calculate operating costs? Fixed costs plus variable expenses.

The intent of this system is to make banks a part of, and subservient to, the community, not a free ride for those hoping to clip coupons for their livelihood.

Now, since I feel like shit, I'm going to do something far more interesting. If you want to converse and work through an idea, feel free to ask some questions or contribute some creativity, if not, buh-bye.

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