Limits of State Power
POSTED BY: SergeantX
UPDATED: Sunday, December 14, 2025 21:53
VIEWED: 37205
PAGE 32 of 36
Quote:
Originally posted by rue:
Not the same as capitalization ratio, is it ?
Now, what were we talking about ? Oh yes - capitalization ratio. Cash on hand compared to assets, which, oddly, are outstanding loans, reserve notes and other IOUs.
You saying so, not the same thing as proof is it.
Ok, actually, I haven't got a clue what you're going on about. Sounds like you've taken "Capital Ratio" and "Reserve Requirements" and mashed them together.
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Quote:
Originally posted by SignyM:
Capitalization requirements limit the amount of loans a bank can make and is based on the stocks and retained earnings, but has nothing to do with actual bank deposits.
Not really, I was responding to what Rue seemed to be babbling on about. Rue's calling it Capitalisation, but it sure doesn't sound like it. The only percentage of anything that a bank must keep in capital is the Reserve requirement. In essence I think it's Rue getting the two confused.
I'm still curious where this imaginary money is coming from, even what you're saying doesn't support that. Seems the only thin air it's coming from is Rue's imagination.
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Citizen, dont' let snark get in the way of discussion. Rue is correct, banks have two entirely different requirements placed on them. One is the reserve requirement
Quote:The reserve requirement has to do with the Federal Reserve.
Amount of money and liquid assets that Federal Reserve System member banks must hold in cash or on deposit with the Federal Reserve System, usually a specified percentage of their demand deposits and time deposits. also called Federal Reserve requirement and reserve ratio.
www.investorwords.com/4207/reserve_requirement.html
The other, which is an entirely DIFFERENT requirement, is the capitalization ratio.
Quote:www.investopedia.com/university/ratios/debt/ratio4.asp
The capitalization ratio measures the debt component of a company's capital structure, or capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to support a company's operations and growth. Long-term debt is divided by the sum of long-term debt and shareholders' equity. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into a company's use of leverage.
In THIS sense, the bank operates just like any other business which issues stocks. The capitalization ratio was set for the EU in Basel, and by the Fed in the USA.
http://en.wikipedia.org/wiki/Capital_requirement
They are two entirely different things.
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We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy
Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy
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Quote:
Originally posted by SignyM:Quote:How??? You need SOMETHING other than economic forces. But you don't like government. So, what are your options?
In that case we can vigorously disrupt monopolies when they occur.
Did you read my post? Go ahead, use the government to bust up monopolies. Go hog wild - send in g-men to gun down any CEO whose company gets more than 90% market share. As long as interference in the economy is constrained to busting up monopolies, I don't see a lot of harm in that.
Quote:Quote:You don't hear me supporting corporations, nor corporate control of government, do you?
Can't we at least agree such policies need to end?
Not directly. But you don't seem to recognize they way corporations use government to interfere with the economy on their behalf. And much of the regulation and "oversight" you argue for does exactly that.
Quote:
I'm actually suggesting a complete revamp of the system to prevent ANY sort of power centralization, whether that power is the law, money, or the power of the pulpit.
So, its sounds like it's not really monopolies you're opposed to, but any differential in the success of competing companies. What exactly constitutes centralization of power? Are all companies guaranteed an equal market share regardless of performance? Who decides which companies succeed and which ones fail?
Honestly, this is where you need to get specific. You want to replace market forces with government control, yet you never really answer the "who decides?" questions. Care to give it a shot?
SergeantX
"It's cold and it's a broken hallelujah"
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Quote:
Originally posted by SignyM:
Citizen, dont' let snark get in the way of discussion. Rue is correct, banks have two entirely different requirements placed on them. One is the reserve requirement
Except what Rue is describing isn't a capitalisation ratio. The Capitalisation ratio doesn't say anything about keeping money in reserve, it's about how much of the Banks loans can be made up from borrowing, and how much has to be backed by the companies own shareholder equity.
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Citizen
Nowhere is a bank required to back its loans 100% either with deposits, investors, or with loans from other banks, as you claim.
They do, indeed, create money out of nowhere.
So, let's do this your way. Find me the quote, regulation, definition, calculation ... that shows banks MUST have 100% of their loans backed by deposits, investors, or loans from other banks.
I'll wait, but probably not more than a week.
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Silence is consent.
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Quote:I have more than once suggested that the corporate form be abolished, business and personal taxes be treated exactly the same, the right to privacy of people from business be the same as businesses from people, that theft laws be equalized (stealing from a corporation is an automatic felony no matter how small the amount), copyrights and patents be done away with etc. I know how binding arbitration often works against the little guy. I want the bailouts to stop. I have pointed out the role of police and troops in strikebreaking, and that many of our foreign wars had more to do with making the world safe for capitalism, not democracy. I suspect I have at least as thorough knowledge about business abuse of law as you. If you haven't heard me say these things, you haven't been listening.
But you don't seem to recognize they way corporations use government to interfere with the economy on their behalf. And much of the regulation and "oversight" you argue for does exactly that.
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We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy
Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy
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Quote:
Originally posted by rue:
Citizen
Nowhere is a bank required to back its loans 100% either by deposits or with loans from other banks, as you claim.
They do, indeed, create money out of nowhere.
Yes they are. The best you've got is the multiplier effect, and that's nothing like what you claim. Banks don't and can't magic money into existence at a whim as you claim (and have singularly failed to back up in any way shape or form).
EDIT:
Quote:
So, let's do this your way. Find me the quote, regulation, definition, calculation ... that shows banks MUST have 100% of their loans backed by deposits, investors, or loans from other banks.
I'll wait, but probably not more than a week.
Ahh, typical Rue. Rue makes a claim its a fact, and the fact Rue said it is all the evidence required. I dismiss the claim I have to come up with reams of evidence to dismiss the (probably made up on the spot) RueFact.
Since my statement is "Banks can't lend money they don't have", and yours is "banks can create money with magic fairy dust", it would seem it's your job to back up your claim. Since you rarely do so, I won't hold my breath.
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Quote:It wasn't Rue.
Rue makes a claim its a fact, and the fact Rue said it is all the evidence required
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We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy
Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy
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