actually thats pretty bad ass if their system allows the sale of shares that dont exist...
money machine!
hmmm, lets see.... today I want to sell the entire earth.
Sell Order: 500 quintillion shares.
muahahahaha I now own it all!!!!!!!
When you or I do it, it is called "fraud".
When a bank does it, it is called smart business.
Simplest way to understand is that when we where on gold standard. Gold was at $20 to 1 ounce. So origionally if you had 1 ounce of gold in your bank, you would print a voucher for $20. But then banks found out that most of the time people would not turn in voucher for gold. So for 1 ounce they could get away with printing $200 worth of vouchers. So it was legally set that banks could lend out 10x what their deposits are. So in an essence "money machine"
Thanks to bank lobby groups this percentage of deposits to lending ratio keeps on getting lower and lower.
I think the limit is now 1%. So bank has $1 they can lend out $100. If they charge 1% interest they are making $1 a year on your $1 deposit. If i did that i would go to jail.
Ofcourse this increased amount of $$$ causes inflation. But this again plays into gov't's hands. Higher tax brackets are taxed higher. So if your real wages (wages when inflation is factored in) are the same. But because of inflation your wages go from $100K a year to $200K you are effectively paying more taxes. So it is a hidden way to increase taxes.
Joe
Idiot American is the one caught holding the bill. And to make things even more better. When banks fuk up, well poor Joe American gets stuck holding the bill, I think they call it TARP. TARP is basically tails banks win, heads Joe American loses.
