The dangerous lives of bankers working in Joburg

Emjay

Executive Member
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Jun 18, 2005
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7,085
Maybe you should talk to all the people under debt counselling and consolidation due to the practice ?
Anyhow i said my piece and usury is bad for everyone ,if getting rid of usury stopped even 1 person from becoming a criminal wouldnt it be worth it ?
I have been reading your posts, and you are not making a case for yourself at all. A loan is a transaction between two private individuals. No one is forcing the lendee to take money from the lender. It is a voluntary exchange. The Government has put down fair regulations to deal with unsavory practices. It's not a massive ask to expect people to be able to manage their own finances. The Government is not there to ensure this. Nor is it the government's responsibility to bring everyone out of poverty.

I am willing to bet that the majority of the people who are under debt counselling are there due to their own actions and decisions. Like spending too much on credit cards, buying an expensive car or home, getting divorced, etc.

Jeez guys! Thank you for derailing the thread. :mad: So far less than 10% of the posts actually relate to the article!
So care to comment on the original article, then?

But he's got a point. What will you replace it with.

I get a salary of R4000. I have to support a family of 8 where I am the only one with work, they live in poverty, I stay with my boss but still have to pay 800 for transport to see them, food also for myself. The roof leaks at my family house, there is no water because of draught, food is very expensive, kids need school stationary, my daughter is sick, gas stove is broken. No electricity. I go to Africa bank and they give me a loan of R25000 rand to fix and pay everything. That money finish. Now I have 3000 a month, and 1000 for Africa Bank. Now I borrow more money every month to survive. And so on.


It is a vicious cycle. A bank should NEVER have given someone with a salary of R4000 a R25 000 loan, never mind the stupid high interest rate. But they make a hell lot of money at the poor becoming even poorer.


What is the solution?
Can you not see the issues in the above scenario? I'll give you a hint. It has something to do with personal responsibility.
 

RedViking

Nord of the South
Joined
Feb 23, 2012
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19,055
I have been reading your posts, and you are not making a case for yourself at all. A loan is a transaction between two private individuals. No one is forcing the lendee to take money from the lender. It is a voluntary exchange. The Government has put down fair regulations to deal with unsavory practices. It's not a massive ask to expect people to be able to manage their own finances. The Government is not there to ensure this. Nor is it the government's responsibility to bring everyone out of poverty.

I am willing to bet that the majority of the people who are under debt counselling are there due to their own actions and decisions. Like spending too much on credit cards, buying an expensive car or home, getting divorced, etc.



So care to comment on the original article, then?



Can you not see the issues in the above scenario? I'll give you a hint. It has something to do with personal responsibility.
I completely agree. But some people didn't grow up the way we did and have no knowledge in finances. The Banks exploit this opportunity,
 

ToxicBunny

Honorary Master
Joined
Apr 8, 2006
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80,536
No wonder the banks get away with it.
Actually doing a bit of digging, it looks like Debt Rescue practioners are required to investigate reckless lending practices when a person applies for debt rescue, and then it goes to the National Credit Tribunal (apparently).

So yes, banks do get away with it to some degree, but if it happens regularly enough the NCR can revoke a banks license to provide credit (though this has of course never happened to any of the big banks)
 

NarrowBandFtw

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Feb 1, 2008
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15,753
Now the formula is really simple. You want more valuable money, than have less of it. You want less valuable money then have more of it.
which is exactly how it works, except central planners (i.e. governments, banks, stooges) get to decide the "having more or less" bits and they have proven time and again in history that they cannot be trusted with that level of influence
 

Techne

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Sep 28, 2008
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I have thought in the past we need to back money with something, go back to the gold standard. I have moved away from that view and now fully support worthless electronic or paper money.

That is exactly how money should work it shouldn't carry any value in and off itself, but what you can actually exchange it for, and that is purely link to supply and demand of the money itself and of the goods you want.

Now the formula is really simple. You want more valuable money, than have less of it. You want less valuable money then have more of it.
That is pretty much the free market system for money. A decent idea IMO. The problem here is how the money is created. Most of it is essentially made via debt from private banks. More debt equals a bigger money supply and visa versa. But that debt can never be repaid due to usury/compound interest. I.e. remove the debt and you essentially remove the money supply but without any money supply you can't repay the outstanding interest. So what happens when the debt cannot be serviced? Quantitative easing. The government steps in and essentially prints money and the private banks use it to increase the money supply even further. But this eventually increases inflation so then the banks have to step in by increasing the interest rates. This in turn slows down the increase in money supply but eventually more will be needed to service the debt. And around we go with the boom and bust cycle. It is a feature of the current system. This can't go on forever due to the fact that the interest on the debt (that can never be paid off) just gets too big. So what happens then? Well, the government can decide to print so much money extremely quickly and then pay off the debt before it becomes worthless or just default. Either way, the money will become worthless. The US debt is currently being propped up by military might and the fact that the vast majority of refined oil is traded using the US Dollar. The former helps keep the latter going. But this can't go on forever. So... Interesting times ahead.
 

rietrot

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Aug 26, 2016
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That is pretty much the free market system for money. A decent idea IMO. The problem here is how the money is created. Most of it is essentially made via debt from private banks. More debt equals a bigger money supply and visa versa. But that debt can never be repaid due to usury/compound interest. I.e.
This is where you are wrong and where it gets complicated. There's many ways of getting rid of the debt with the most obvious just being default and the second being inflating out of it. Assets' value inflate. We never have to pay back all the debt. We just have to balance the books and have more assets than debt. I don't even agree with calling it debt on the reserve bank balance sheet in the first place. A better inscription would probably just be "the money supply" but with how accounting works it basically is debt.
Then you have the whole Keynesians vs Australian debate and as hard as it is for me to say this the Keynesians guys aren't 100% wrong. They are mostly wrong but not 100%.
Compounding isn't a problem as it works both ways and you can't have interest without compounding and you can't have any lending(both ways) without interest, you can substitute it with a fix cost but that is basically the same thing and still a cost.
To get away from usury you need to throw away this specific tool (lending) in the monatery system, that's like having a dislike for hammers because some people use it incorrectly and hit themselves.

As for private banks, I prefer that over state banks. Having private banks run something as big as money makes a pretty strong libertarian argument that we don't need the state. Now the state should just back out of it completely.
And around we go with the boom and bust cycle. It is a feature of the current system. This can't go on forever
Yes it can. The boom, bust cycle is a natural law not invented by people and it can go on forever. We can have inflation for as long as we have population and economic growth and we should have deflation if we stop having that. All the "problems" you hi-light and incorrectly attribute to usury and compounding is actually because government interference trying to smooth out the boom, bust cycle. Kicking the can down the road will probably safe us short term, but longterm we might be in for a worse crash.

Seems like you have issues with the bust part of the cycle. There's no avoiding it, avoiding it is exactly what the system you criticise is trying to do and why we will probably have a bigger bust coming up.
 
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eehellfire

Executive Member
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Sep 25, 2007
Messages
9,401
No wonder the banks get away with it.
They don't get away with much.
Where a reckless lending allegation seems possible, they often write off the loan.
Often the allegations are false - customer lied about and/or falsified details concerning income/expenses, employment, or applying for multiple loans from multiple institutions simultaneously.
 

Cius

Executive Member
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Jan 20, 2009
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5,202
Strong banks are a key part of any economy, dissing them for one aspect of banking seems silly. Also, if the banks do over lend to those that can't afford it the bank generally takes the loss along with the person who got into too much debt so not sure I see where the issue is as they take the risk on, and pay the price if they do something stupid (client and bank).

On the other hand banks make it possible to:
Get a home loan and work towards full home ownership
Banking services to make it easy to manage your money, and paying people
Business loans and financial services (card systems etc)
The whole world of corporate and investment banking by which the economy gets necessary funds to big projects etc.

People who hate on banks are generally oblivious to what an economy without a decent bank looks like.
 
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