[WorkingPoor]

And while we sympathize with people not getting returns on their money, the fact of the matter is that the big problem we have right now is that people have too much debt, not an abundance of cash that's just sitting there not returning anything.

The bottom line is this: Yes, it sucks that pensioners and garden-variety savers aren't getting returns, but it also sucks for everyone in the U.S. right now, because the economic outlook seems to be so mediocre. Welcome to the club!

Until growth and inflation return to anything that looks robust, savers will have to be stuck with the same garbage returns boat the rest of us are in.

Read more: http://www.businessi...2#ixzz1lKclpfyx

[qqqbear]

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[Pulp_Cutter]

Banking and WallSt depend on trust, and that trust is gone (at least for anyone who's been paying attention).

It follows, then, that the rentier lifestyle is gone as well. We are back to the way the world has always been: you can't hide your talents, have to put them to work - yourself or in a business you know personally.

[qqqbear]

With risk-free government bonds broadly seen as a relic of the past, investors are having to rethink the way they compose portfolios or learn to live with heightened levels of volatility and risk that they have historically shied away from.

Jeff Molitor, CIO Europe at Vanguard said, the 2011 debt crisis had underlined a critical need to refocus on "long-term investment truths" when building portfolios, rather than on the noise of 'experts' making economic and investment forecasts.

http://uk.reuters.co...ontent=My+Yahoo

[HYPERTlGER]

slaves to those who live off them...the so called savers...sorry we can't supply you with the yield you are demanding.

if you take money you recieve as income and put it into a shoe box and take it out of circulation...you are saving it from being spent.

but if you lend it into circulation with the expectation that you are going to get more out than you put in...you are not saving it from being spent.

so then if you are transforming excess income that is potential savings into spendings and you want more out than you put in...You have a serious mental problem.

you are suffering from some kind of social engineering scheme that causes your ability to think to be defective.

You lend money to someone and they spend it on something and you want that transaction to magically equal more out than in...like they buy something for a 1 dollar and you want 1.05 dollars back.

Yoo hoo...when you save something from being used...the best you can do is have it for later use...if you take care of it.

the only way to spend money into a system and recieve more back is if the money supply inflates by the amount you demand.

that's where the slaves come in...

All the slaves in the system slaving to produce the yield of the system dictate what the so called savers can obtain as a yield from their spending of their savings into the system to extract the yeild out that they demand.

Now that you cult members have been deprogrammed a bit...

If the FEDERAL RESERVE were to artificially raise yeild rates beyond what the slaves can sustain...the default rates would increase...they did this back in the late 1970's...to stop the hyperinflation...and change to the new economy policy of lower and lowr rates in search of volume...

Yield rates have been dropping for 30 years because...I'm sorry to say...the productive employees of the enterprise support the unproductive employees of the enterprise...and the productive employees or workers have a limited ability to supply the demands of the unproductive employees or so called savers that don't produce anything but expect more out of the system than they put in.

A person that expects more money back when they spend it than they spend is not a saver...they are I think an idiot or something.

like I give a bank my money to save it from spending...and then they give it to someone else to spend...and I expect more back?

Because the bank says they will give me more back?

Good thing banks can create money out of thin air to supply the demands for more back by the savers to keep this magic trick working.

actually how it works is like the below.

this have how banking has worked for centuries.

all teh money savers supply to the bank is fractionally reserved...

lets say that the fractional reserve is 10%.

and savers have given the bank $10,000 to save at 5% for a year

The bank can then create out of thin air $100,000 to lend out at least say 10% for a year

Lets balance the ledger...

in one year

The $10,000 in savings will grow to $10,500 because there is a demand for it to grow by 5%

The $100,000 will grow to $110,000

now the 100,000 dollars was created by the bank...the create an asset an a liability and attach interest to it.

so as the payments are made on the debt they created...what was created returns back to thin air from where it came.

So ultimately at the end in a year...the $100,000 disappears and all that is left is the interest payments of $10,000

The savers are given $500 and the bank keeps the $9,500.

of course there is supply an demand...or deposits and withdrawls...as long as the economy can supply the demand for yield...the banking operation can be sustained...but if the withdrawls become greater than deposits...the bank defaults or goes bankrupt.

Thats basically how it works.

Alexander Hamiltion founded the Bank of New York June 9, 1784 and it operated like this...and it was the oldest banking concern in teh USA until it was merged with the Mellon financial corporation on July 2, 2007

The was made the treasury secretary by George Washington on Sept 11, 1789

Alexander Hamiltion proposed the first central bank of the USA..It's first president was a city of london schooled merchant that refuse to sign teh declaration of independance Thomas Willing...Alexander then consolidated the revolutionary war debt of the colonies into one debt or federalized it and issued treasury bonds.

The NYSE was created by the Buttonwood agreement and the first shares traded were Alexander Hamilton's bank of New York and the first securities traded were the Treasuries issued by the Treasury secretary Alexander Hamilton.

He is buried at the corner of Wall street and broadway.

The entire history of the USA and world was finaced into existance this way.

Unfortunately the slaves of USA enterprise centuries later are not supplying the yield that is being demanded and the so called savers are starving to death now.

oh well.

[detachedbear]

I see your over-simplification and raise you an over-simplification. It's called "capitalism". Money that is saved from current consumption is invested in the "means of production" and production has always been enough to provide some return on investment, otherwise, why save? When a corrupt government consumes so much money that it must borrow from other nations and taxes and regulates both savings and production at such a high rate that there can be no remaining return for savers or investors, then the whole system is being destroyed and will fail.

[HYPERTlGER]

I don't care what your excuse is.

absolute capitalism is taking more than you give.

which is the exponential function...the investment of the yield of production into the means of production to sustain it....

Corrupt Government borrowing what from other countries?

Dollars? that US consumers exported to China...If China did not have all those Dollars to lend back to the USA to begin with...there would be no way for the US Government to borrow them from China.

To keep Treasuries bid up and yields down so that US consumers could request commercial banks to create more and more floods of new US Dollars to then go to wall mart and buy the product of Chinese slave labor to export US Dollars to china...so that the chinese could reinvest the yield of production...US Dollars...into the means of production...the USA...to produce more and more US Dollars...

[kinglear]

HYPERTlGER, on 03 February 2012 - 01:40 PM, said:

lets say that the fractional reserve is 10%.

and savers have given the bank $10,000 to save at 5% for a year

The bank can then create out of thin air $100,000 to lend out at least say 10% for a year

I thought the bank can only lend out $9,000 if the fractional reserve is 10%.

[HYPERTlGER]

A 10% reserve translates to an ability to create $10 of credit for every 1 Dollar they have on deposit.

Banks don't lend out anything.

When a consumer requests a loan..like for $1,000...the bank creates an asset of $1,000 and a liability of $1,000 and attaches interest to it.

when the loan is paid down...the asset an liability shrink by that amount and the bank keeps the interest...eventually once the loan is paid off...the money tah twas created out of thin air returns back to thin air.

but the flow of credit is dynamic...there's the deposits coming in and the withdrawls going out...the reserve is ultimately the difference between the flow in and the flow out.

bankruns kill banks because the flow in basically decelerates and the flow out accelerates.

The reserve shrinks to zero and there is nothing left.

The reserve of cash or banknotes...

The vast majority of demand accounts in banks are just filled up with previously created debt that exists as electromagnetic polarity differentials on hard disk platters now.

before they were just ledger entrys

10% reserve is a rule...Ultimately you want or even need your reserves to be higher...depending upon how much cash is withdrawn on a regular basis...prior to modern banking the ratio between cash and credit had to be way higher.

Canada has no reserve ratio requirement...but banks do have a supply of banknotes...

But to withdraw anything over $1000 in banknotes you must arrange it because no bank in Canada has very much cash...

Commercial banks need to use the FEDERAL RESERVE when their supply of banknotes need to be replenished...because that is what the FED was given in 1913...the banknote monopoly.

Prior to the FED the banks issued their own banknotes.

Otherwise commercial banks can create basically as much credit as consumers request...they don't need the FED at all...All the credit creation or money creation takes place in the commercial banking system.

[SuperCycleBear]

The flip side of excessive debt in our current system is a surfeit of financial claims (our system calls it cash).that brings into question the resilience of bank balance sheets.

In trying to reduce their indebtedness (totally rational in an environment where asset prices on the whole are trending down) economic entities (consumers and businesses) sell assets or divert consumption demand to repaying debt. This reduces free cash in the system and hence we need central bank monetization of debt to prevent catastrophic financial intermediary failure.

So those worried about a return on their savings should be more concerned about a return of their savings rather than the return on their savings.

People save not to get a return but to have security of future consumption in the event they are unable to earn an income (for whatever reason).

[HYPERTlGER]

Yes imagine if you saved excess food in a food bank and you could obtain loans if your crops failed.

Now imagine there was a mass crop failure and everyone went to the bank and demanded their savings...and they found out that the savings had all be turned into spendings and all that remained was poop.

In an advanced credit system like what we are in...there is no such thing as money...all the money in circulation is created out of thin air debt.

all teh gold and silver...everything in the system that has a price has it becasue it's been set by debt.

You don't need a central bank to monetize debt.

The only reason why the Federal reserve is needed is because the US Congress gave the Federal Reserve the banknote monopoly.

Consumers use their current income which is composed of previously created debt with interest atatched or an asset that has been inflated in price by previously created debt with interest attched as collateral backing their request for a commercial bank to create new debt with interest attached.

Prior to the Federal Reserve...All the commercial banks issued their own banknotes...They monetized the debt they created out of thin air.

The period was known as free banking.

The bank of England started out as a commercial bank tha teventually took over England by eventually becoming owner of the money supply through taking more in than they gave out.

People deposited their savings and then the bank turned them into spendings or debt...eventaully the circulation out an back into the bank converts the money supply into debt owed to and owned by the bank.

An then the owner of the moeny supply dictates what it is made out of and such...

To sustain the lending spending cycle...the ratio of credit to money has to shrink...the actual british pound stirling shrank in quantity in relation to the credit derivatives...

Until the British pound stirling shrank to nothing and then the previously created credit derivatives of the pound were used to back the creation of the new credit derivatives of the pound.

The Pound has been debased for 400 years so far and is still the top currency in the world and London is still the top financial center in the world.

The Pound derives it's strength or weakness based on the supply/production of and demand for the US Dollar.

The FEDERAL RESERVE didn't start out as a commercial bank like that...So there is a different story involved.

[qqqbear]

All central banks are started for the same reason.
Do you know what kind of paper you are being handed? Is there really anything in the vault? Is it counterfeit?
All sorts of blow-ups for many decades with wildcat banking and free banking.

http://www.frbatlant...ydocs/acfce.pdf

[Pulp_Cutter]

detachedbear, on 03 February 2012 - 02:02 PM, said:

I see your over-simplification and raise you an over-simplification. It's called "capitalism". Money that is saved from current consumption is invested in the "means of production" and production has always been enough to provide some return on investment, otherwise, why save? When a corrupt government consumes so much money that it must borrow from other nations and taxes and regulates both savings and production at such a high rate that there can be no remaining return for savers or investors, then the whole system is being destroyed and will fail.

Strongly agree, though I'd pin the problem on WallSt sucking too much blood out of the system. I think the govt is doing all it can, given the idiot voters it has to work with.

[Pulp_Cutter]

detachedbear, on 03 February 2012 - 02:02 PM, said:

I see your over-simplification and raise you an over-simplification. It's called "capitalism". Money that is saved from current consumption is invested in the "means of production" and production has always been enough to provide some return on investment, otherwise, why save? When a corrupt government consumes so much money that it must borrow from other nations and taxes and regulates both savings and production at such a high rate that there can be no remaining return for savers or investors, then the whole system is being destroyed and will fail.

Strongly agree, though I'd pin the problem on WallSt sucking too much blood out of the system. I think the govt is doing all it can, given the idiot voters it has to work with.

[HYPERTlGER]

All that Wall street does is what employers do.

You all are employees and Wall street is the employer.

The top employs the bottom.

The top or master, employer...employs the bottom or servants and slaves and pays them the minimum wage so that the top can obatin the maximum wage.

That is the way it's been for all recorded history.

All below are employed by the top to supply the top with all the power wholesale and then the top marks it up and sells it to all below retail.

the difference between the whoelsale cost and the retail price is the yield...or growth rate the top demand of the system...which basically inclueds the middle class lives off of.

an increase in demand anywhere within a system spreds through out the systam...so a demand fo yield by the top is a deamnd for the entire system to grow to supply it.

the top of the hierarchy is small and the bottom or base is massive...it's a pyramid scheme.

the top lives off the yield from the bottom.

Lets say the yield is 5% and the gold mines are only producing 1% more and eventual no % more

Then the pyramid scheme caves in.

In an absolute capitalist hierarchical food powereed make work enterprise, A take more than you give system, or a pyramid scheme.

The top grows richer in power by taking more than they give from the bottom while the bottom grows poorer in power by giving more than they take from the top...

Eventually the bottom is sucked dry of power...and the system collapses...

Wall street is just a tool the top created to help with the yield extraction process is all.

Once it becomes impossible for the bottom to supply the demand for yield by the top....

The only place to cut from is the middle...because the bottom is already supplied with the minimum yield so that the top can obtain the maximum yield.

The compensation of the middle class or bootlicker class then has to be cut...causing the base or lower classes to expand and the middle class to contract.

you all can save all you can.

The bottom supplies the demand for yield by the top.

If you have excess money and put it into a bank to save it from being spent...the demand for spending by the top basically sucks it out of the bank into circulation.

If you all didn't put your money in a bank to save it from being spent...and hid it under your beds...the top would then have to raise taxes or the retail prices or the demand to coax the supply out.

becasue ultimately the top owns the money supply that the bottom rents and the cost to pay the rent is hidden in the prices of everything.

The top employs the bottom to supply the top with all the gold and silver whoelsale...the top then marks it up and sells it to the bottom retail.

like you supply the top with refined silver...lets say .9 of an ounce...and you are paid 90 cents for it...the top then takes it and turns it onto a coin and stamps a face value on it of 1 Dollar.

The yield from that operation is roughly 5 to 6% since a bit of the yield is used to construct the coin.

The top lives off the yeild from the bottom...and when the bottom can no longer supply the yeild demanded by the pyramid scheme...it collapses...poof.

The banks can issue credit...

They can expand the money supply beyond what the silver mines can...They can use the current money supply to back the credit derivatives...

yield is a demand for growth...the gold and silver money supply must grow...but if the demand for yield by the top can not be supplied by the bottom.

The yield has to shrink...in the case of money...the silver and gold content of coins has to shrink.

Until it shrinks to zero.

When the productive employees of the pyramid scheme can no longer support the unproductive employees...the scheme collapses.

credit is an innovation that was used to expand the money supply beyond what the silver and glod mines of the world could sustain....to expand the suppl enough so that all teh slaves could be paid to think they are free.

Once slight problem...

Because taking more than you give is what the exponential function does...eventually you reach other barriers to exponential growth...

Like currently the USA is burning through 19 million barrles of oil a day...but only produces 9.7 million a day...

The EU produces 2.2 million barrels a day and consumes 13.7 million barrels a day....

China produces 4 million a day and consumes 9

Japan the 51st state...produces 131 thousand a day and consumes 4.4 million barrels a day.

forget gold to balance global trade...there isn't even enough oil...or basically anything anymore to balance global trade.

All that is going to happen is the imbalance of power between the top and the bottom of teh global pyramid scheme will reach maximum potential...until the bottom of the barrel is sucked dry.

and then the pyramid scheme or the global take more than you give system will implode.

Central banks and banking...are products of take more than you give thinking which is absolute self indulgent reason or absolute capitalism...they are not causes...they are effects of the cause.

Which is the choice to take more power than you give to sustain your existance.

The credit system is a product of take more than you give thinking...An effect of the choice to take more than you give...not the cause of it.

An innovation used to postpone arrival at the logical conclusion of the take more than you give equation for as long as possible.

and when all you absolute capitalists can not postpone arrival at the logical conclusion any longer.

You all begin dying in mass numbers.

The delusion you all are currently leg humping...shatters...poof...bye bye.

The Federal reserve is an effect...not a cause.

The cause of the glorious march to doom with glee you all are on is the choice to take more than you give...

commerical banking and central banking are just tools invented to help you accomplish your goal...of taking more than you give to sustain your continued existance.

Until there is nothing left to take...not enough power to sustain your delusions of grandure.

axes and saws invented to allow the chopping down of trees faster than they regrow to to supply the yield of power faster and faster in the greater and greater quantities that your ignorance demands.

So you all can enjoy the blissful dream that you are awake for as long as possible.

Until the exponential power demanded by the take more than you give equation can't be obtained and you all are forced to wake up from the dream into the nightmare.

When the glorious march to the bright wonderful future reaches it's logcial conclusion and you all find out you spent your entire lives marching to your doom.

Ignorance of or blindness to Truth takes more from you than it gives...but you don't become aware or see until you reach the logcial conclusion of the take more than you give equation.

Prior to arrival at the logical conclusion...You all are blissfully unaware...asleep enjoying the dream you are awake...weeee.

Animals are ignorant of Truth by default.

People have to choose to be ignorant of Truth.

march to doom with glee.