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alstry (< 20)

The Single Most Important Finance Lesson EVER



October 14, 2011 – Comments (1)

When banks loan money, they only lend principal.

Yet, they demand principal PLUS interest in return.

The interest is a NEW obligation created each day, and cumulative on the previous obligations.

The only mathematical way to pay back the principal PLUS accumulated interest is if the banks keep lending additional money to the system so their is sufficient currency to cover the growing obligations.

If the banks don't lend sufficient money to cover the total accumulated interest, it becomes MATHEMATICALLY impossible for someone somewhere to pay back their loan.  If the banks have a lot of loans outstanding, and the banks pull back on lending, it becomes mathematically impossible for many people to pay back loans.

In the past 30 years...the banks loaned America approximately $50 TRILLION dollars....about 10X than the accumulated borrowing of the prior 200 years.

The NEW interest obligations on that $50 trillion dollars is in excess of $2 Trillion per year.....

Without the banks loansing MASSIVE amounts to the private sector.....we can be certain that millions of loans will continue to default each and every year.  If we only bail out the banks(which should otherwise go bankrupt for such behavior)....we can be certain that millions of our fellow citizens will go bankrupt and lose everything they have saved over their entire lifetimes.....

while the bailed out bankers laugh all the way to increasing riches with your fellow citizens property.

These banks we are contemplating are what make up Wall Street......and Wall Street is destroying America......yet these are the people you and our politicians are supporting.

1 Comments – Post Your Own

#1) On October 18, 2011 at 12:54 AM, oshiri (< 20) wrote:

     F O L L O W      T H E      M O N E Y ! ! ! 


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