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Posted: Tue Aug 25, 2009 1:18 pm
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Maddness91 Fresnel Maddness91 Fresnel The actual social security, that is, saving money for later generations, isn't that bad, though I find it retarded that I pay for some old geezer's hooch, even if his great-grandkids will do the same for me one day. Sorry, but I'd rather live off my OWN money. it does this to protect you and your eventual lifestyle from inflation rates tho right? right now, your paying current valued money to the old man that worked for his money back when it was worth past (lower) value so that he can still live in the style he is accustomed to, and worked for... and in the future, ur money will be the past (lower) value and some young p***k will be paying you in higher future value so that you can still live in the style that you will have become accustomed to and worked for... Banks have inflation protection too. They call it 'interest'. Of course interest isn't worth s**t now (I make .5%), but seventy years ago it wasn't bad. interest has never kept up with inflation rates... if it did, the banks wouldn't make money really... if the banks gave back the 7% (or w/e the world growth rate is) back directly into interest rates, yes, they may still gain monetary value through there regular means, but while the dollar lost value, they would basically hover in actual real world worth... and that;s not what businesses want to do... Banks make money by spending yours. They're one gigantic credit firm. Ten people drop off a hundred bucks each, okay? An eleventh person comes in asking for a $500 loan. He gets it, and pays interest on it. This interest is how banks make money (because interest on a twenty thousand dollar student loan is quite a bit, really). If any one of those first ten people asks for part of or the entirety of his $100 back, he can get it. If all ten ask for it back, it's not there any more, and the bank can't pay it. This is exactly why the banks crashed in the 20's, and this is exactly what the FDIC insures against.
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Posted: Wed Aug 26, 2009 6:55 pm
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Fresnel Maddness91 Fresnel Maddness91 Fresnel The actual social security, that is, saving money for later generations, isn't that bad, though I find it retarded that I pay for some old geezer's hooch, even if his great-grandkids will do the same for me one day. Sorry, but I'd rather live off my OWN money. it does this to protect you and your eventual lifestyle from inflation rates tho right? right now, your paying current valued money to the old man that worked for his money back when it was worth past (lower) value so that he can still live in the style he is accustomed to, and worked for... and in the future, ur money will be the past (lower) value and some young p***k will be paying you in higher future value so that you can still live in the style that you will have become accustomed to and worked for... Banks have inflation protection too. They call it 'interest'. Of course interest isn't worth s**t now (I make .5%), but seventy years ago it wasn't bad. interest has never kept up with inflation rates... if it did, the banks wouldn't make money really... if the banks gave back the 7% (or w/e the world growth rate is) back directly into interest rates, yes, they may still gain monetary value through there regular means, but while the dollar lost value, they would basically hover in actual real world worth... and that;s not what businesses want to do... Banks make money by spending yours. They're one gigantic credit firm. Ten people drop off a hundred bucks each, okay? An eleventh person comes in asking for a $500 loan. He gets it, and pays interest on it. This interest is how banks make money (because interest on a twenty thousand dollar student loan is quite a bit, really). If any one of those first ten people asks for part of or the entirety of his $100 back, he can get it. If all ten ask for it back, it's not there any more, and the bank can't pay it. This is exactly why the banks crashed in the 20's, and this is exactly what the FDIC insures against. i wasn't arguing about how banks make money...
i'm saying that if the banks payed back at par with global (or country by country) inflation rates, they would not gain true value... because as they payed there investors more, they couldn;t keep up with inflation them selves... sure, they may make there millions or dollars per quarter, but they could still only buy the same amount of "item X" they could the year before...
this is why they don't pay @ par with inflation... because the "job" of the bank is to profit as much as they can, and gain true value and grow as fast as they can for as long as they can... (this is why the system is flawed BTW, but don;t start that argument of capitalism vrs. alternatives., because this is not the guild for that xp
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