Quote from: franky1 on Today at 10:12:54 AM

Quote from: Antithesis on Today at 06:38:26 AM

We are discussing that when you hold fiat money the whole banking system protects you by ensuring that the borrowers provide you the things you can live off of.

no no and no
thats not the banks charter, thats not the banks contract. thats not the banks job

if you go to a bank they dont give you bread. they just ask for your crumpled bank notes. and give you back crisp bank notes for the same number(if you meet their conditions).

'savings accounts' is where you give them crumpled bank notes. and they store the number in another form(electronic). they dont need to keep X% of paper bank notes on hand at any time, but some do.
meaning to stop bank runs of everyone asking for a withdrawal at once. they limit, question or delay requests.
its why ATM's have limits of $500. its why if you do more then 6 bank note withdrawals a month from a savings account the banks charge you for it.
they question the reasons if the amount is above a certain level. they say you have to make a pre-arranged request taking days to finalise if its above a certain level. to pressure and give you headaches to not withdraw it all in one go.

banks in america are not obligated to instantly pay you on your demand. the charter actually does the opposite. it allows the banks to delay, limit or deny instant demands

savings account is NOT where they "USE" your deposit amount as a loan to someone else. instead they have a separate charter where a charter allows a bank to 'create new money' for the person getting a loan as a separate charter (nothing to do with your savings account terms and conditions.) based on how much volume a bank holds.

EG say a bank has $100billion savings account deposit balance on its books.
a bank has to hold $10bill as bank notes.
but can create upto $90bill of new money
this mean while all savings account balance still appears as $100bill digitally. loan accounts of other customers can go upto $90b digitally. and the bank has $10b in bank notes physically ($200b savings'balance'+loan 'balance'+paper bank notes)

they are not actually giving away your savings balance to a loan recipient. a loan recipient is not liable to you.
your deposit balance still appears as $100b even when 90bill loans are created
if a loan defaults. it does not affect the savings account holder. it just means the bank loses out on its potential future profit from the terms of the $90m loan allotment

anyway
the bank can do many things with the $90m separate loan allotment amount
1. split up and offer parts of this $90b loan allotment to other customers in the forms of bank branded overdraft, bank branded credit, or bank branded mortgages

2. sell part of the allotment to other companies. for a small percentage so that (non savings deposit) credit companies can offer credit/mortgages to their customers

..
there are a few other charter details. like its not exactly $90bill a year they can offer out in one go. its more complex. EG like if they want to allocate $90bill over a 30 year mortgage period. they can only offer out $3billion per year. so that it all sums up that if all mortgages are paid in full over time it equates back to the $90b allotment
..
anyway. this $90b is not the savings account security/property/liability.... its the banks liability/property

a savings account owner cannot walk upto a person that got a loan and say "give me my money back, its mine"
its not theirs.. the loanee has a contract with the bank. not the savings account customer.

its not a Loanee <-> savings account depositor contract

its not a Loanee <->bank<-> savings account depositor contract

the closest visualisation is
┌>treasury
loanee <->credit bank subsidiary<->private insurance
└>bank
the loanee has a contract with the credit bank subsidiary
separately. different contract
the credit bank subsidiary has a contract to pay insurance on the loan allotment.(private company)
the credit bank subsidiary has a contract to pay tax on the loan allotment.(treasury)
the bank gets to keep the rest
..
separately. ┌<bank
saver <->deposit bank<->FDIC
separately. different contract
the BANK has to pay insurance on the deposit allotment.(FDIC)

a saver has a contract with deposit bank
a loanee has a contract with credit bank subsidiary
but a saver does not have a contract with a credit bank subsidiary

because a bank is offering its product to subsidiary which offer to loanee's... the loanee needs to pay THE BANK(indirectly) in the future.
so imagine all collected up(paid in full) $100bill loans returned in a year
the bank subsidiary gets $5b
out of that the bank subsidiary has to pay
800m-1.2b to the treasury
2b to the private company
the bank keeps 2.8b-3.2b (its less because the subsidiary also keeps profit)

then separately to entice/ incentivise savings depositors to not "bank run"/withdraw.. the bank may offer its $100b depositors
60m-810m (0.06%-0.81%)
then separately to entice/ incentivise savings depositors to not "bank run"/withdraw.. the bank insures depositors by paying the FDIC
830m(0.83%) (for a $250k cap per customer)

where by the bank keeps 1.16b-2.13b out of the 5bill loan interest returned via the subsiduary

..
your savings account is not secured against a loan. it has nothing to do with a loan.
your savings account is insured for 'upto' $250k
meaning if you have $1m
a. spread over 4 accounts($250k each)
the $1m will be insured
b. in one account($1m in 1 account)
the FDIC will only honour $250k.. and the rest of your $750k is lost if bank failed

it has nothing to do with any contract with loans
a savings account is not contracted to a loanee, not secured by a loanee. not liable to a loanee

obviously the bank only makes profits from loans. and thus can only afford to pay depositor insurance by doing loans.
but that does not mean a deposit/bank note is securitised/contracted/linked to a loan. there is no contracted obligation between a bank note/deposit account balance to a loanee

a loanee does not owe the depositor anything. because the savings account balance does not disappear when loans are made.
the loanee does not 'get' funds of a savings account. they are separate balances

where by as said at the start. a bank with 100b in deposits .. will have a combined loan, deposit balance and bank note of $200bill

with all that said..
BANK BALANCE in a deposit account is insured by upto $250k per account
but guess what.
in the 2008 financial crisis. the FDIC did not want to let banks fail to then have to pay out the insurance.
no one was able to file claims to activate the insurance clause.
even if it was activated. the funds go to the bank. not the citizen
(thus the insurance is meaningless as its never used)

what actually happened in 2008 was the treasury 'printed' its own money and gave it to the banks.
so now the banks have the value.
the treasury is now in debt by trillions. and its now the people that owe the treasury, in tax, to attempt to draw down the national debt.
yep the bank is getting tax from people. (meaning their $100b deposits are now worth $80b(20% tax)) the treasury then pays banks that bought the bonds a small % of the $1trill 'quantitative easing'/bail out. so again the banks are making profit while peoples money is becoming worth-less and worth .. less

your bank note is not insured.
your bank deposit balance probably will never activate its insurance clause
instead, government will just create debt which its citizens have to pay back, even if they personally didnt ask for a loan.

if you want an explanation of this process i can give it. but i think i have wrote enough for now.

I asked you a simple question yesterday: a borrower is obligated to pay his dollar loan, and I have dollars, either deposit or notes. How will he get the dollars, that is worthless numbers? "Protection" that I am talking about means the banking system forces the borrowers to trade me goods, services and labour for worthless numbers. It has nothing to do with the things you are describing.