The role of parents in financial education

[gwigs]

http://www.learningmarkets.com/under...anking-system/


Fractional reserve banking...money out of thin air...
No wonder the system is fucked and doomed to failure..

[Oscar]

It was worse than that.
The loans had been passed on with such frequency, being bundled and unbundled, that no one actually knew who owned what.
Yet teaching kids financial literacy will stop that? Pulease.

So you would just allow your kids to accept what the nice banker said?
You wouldn't give them the tools to assess their ability to repay?
The knowledge to minimise the cost of debt (like shortening the standard terms offered on a mortgage, thereby saving great swags of interest)?

You kids will be as uneducated as you obviously are, and prey for the wolves in suits.

[Oscar]

http://www.learningmarkets.com/under...anking-system/


Fractional reserve banking...money out of thin air...
No wonder the system is fucked and doomed to failure..

That assumes that people are borrowing money to deposit it in another bank rather than purchasing something with it.

[Banditbandit]

That assumes that people are borrowing money to deposit it in another bank rather than purchasing something with it.

No .. it's just the reverse ..

Say I put $100,000 into the bank .. I have $1000,000 in the bank ..

Say the bank loans $90,000 to someone who wants to buy ahouse .. they buy the house and have a $90,000 house ...

Fractional banking says that I have an asset worth $100,000 and the otrher person has an asset worth $90,000 - so $190,000 assets out of $100,000. The bank, hloding both, hold both - they have my $100,000 and the house (as they can reposses it at will) .. so the bank has $190,000 on its assets base ... it's the bank with the massive increase - not us, the poor twits who give our banks money ...


Got that clear ?

Now the reality is that the person who owns the house also has a $90,000 liablity which cancels out the $90,000 asset.

And the second reality is that the bank can only give me back my $100,000 if the other person pays back the money .. othereaise the banks is fucked .. and actually the bank has the liability as well - they owe me $90,000 ... (the other 10 grand is still in the bank .. )

[gwigs]

That assumes that people are borrowing money to deposit it in another bank rather than purchasing something with it.

Banks do it all the time...

[Oscar]

Got that clear ?

Now the reality is that the person who owns the house also has a $90,000 liablity which cancels out the $90,000 asset.

And the second reality is that the bank can only give me back my $100,000 if the other person pays back the money .. othereaise the banks is fucked .. and actually the bank has the liability as well - they owe me $90,000 ... (the other 10 grand is still in the bank .. )

Ah, memories of Accounting 101 - I almost went to sleep again...

[gwigs]

You cleared it up?
You repeated some half arsed catch phrase you saw on the web and now you can't explain it.
The only issue here is your apparent messiah complex.

Hes just a naughty boy..

[mashman]

my apologies, my post wasn't showing what I had down, went back to cut and paste and the same thing happened, i had to dash - so delete it was.

S'alright, there's was nothing of any real note in it anyway was there

There is no vs, if you go back and read what I wrote you'll see the word, portion
While one is saving for a rainy day or big ticket item, another is spending their savings on a rainy day or big ticket item.
In the world's population it's all relative. Why would you assume you have to spend or save when you can do both??????
Again, saving reduces personal debt, which in turn has a positive effect.

Good for you, now do something in real life about it. We're waiting

You are talking about a minority of unethical people, investment is needed, how else do the other 99.9% of businesses exist, and people do well out of Investments if they plan exit scenarios...which will vary.

It takes time. I'll get there.

They may be a minority, but they do the majority of damage to society. All good that people are looking after themselves, but the money they are earning is doing damage somewhere else.

Well no I'm not, what I'm saying is, is that we all have choices some leave us kicking ourselves and handing over your money to someone else to grow for you is silly, it's a steep learning curve. Been there myself, live and learn aye.
If I had listened to you 20 years ago, I would be broken arsed today, no doubt about it. And again I don't agree with your moneyless idea because I don't think you understand economics to begin with and you can't plan around facets of human nature, end of.

And you're saying that economics takes into account human behaviour? I understand economics fine thanks and I use it just about every day of my life, as do many other people. Turning it into some mythical science is disengenius to say the least. If you could grasp the concept of how the moneyless society worked, you wouldn't see human nature (human nature doesn't exist, it's learned behaviour) as there being a problem.

The fixed bit

So everyone that was invoved was unethical? And no matter what financial system rules and regs are in place those same temptations will be there... after all, there was nothing illegal about their activity's where there?

You're arguing with a real life scenario, not just one mind, that proves your argument wrooooong.

Don't buy it? Lol too late, bro!
Already living the dream. Good luck

A real life scenario. Care to explain why millions/billions of people go hungry? That's a real scenario, one that you don't want sorted it would seem.

You still didn't answer the original question though. Given that your scenario has been a successful one, apply that to every "kid" and tell me what the likely economic outcome is going to be... after all, you say I don't understand economics, so you must.

[mashman]

You are obviously an idiot, so I'll type this slowly.
What you said was: People saving = people losing jobs = people saving less = people being financially overexposed = more people in serious debt etc...
This is simply not true, and certainly doesn't constitute "the money supply drying up". Notwithstanding that, the money supply doesn't dry up, it just goes somewhere else.

Now you're reversing your postion and saying that people aren't saving and that's why the economy is suffering.
People (obviously) don't save when times are hard because they have no money. When times are good, they save and/or pay off debt, which frees up money for investment.

Teach your kids that saving is better than borrowing, and that paying off debt is generally better than saving.
That's so obvious that I'd hoped a fool like you could appreciate it.
I was wrong...

I'll type this slowly for you too.
What you are quoting is absolutely true, the GFC was proof. I never said that that was the money supply drying up, you did.

Now you're splicing A and Spandex together to make an argument, which whilst massively amusing, has me concerned that you shouldn't really be allowed out on the road.

I saved. You're wrong! When times are good they spend. You're wrong again!

And yet another one who has been unable to extrapolate what that would mean in economic terms should they all do the same thing. It's simple. Saving/Not spending = no customers for many businesses = job losses catch 22.

And you call me a fool .

[mashman]

So you would just allow your kids to accept what the nice banker said?
You wouldn't give them the tools to assess their ability to repay?
The knowledge to minimise the cost of debt (like shortening the standard terms offered on a mortgage, thereby saving great swags of interest)?

You kids will be as uneducated as you obviously are, and prey for the wolves in suits.

Have you got a frame of reference for that question?
EASY. You earn X, the repayment is Y, do you have that left at the end of the week. Done! Their choice from then on in.

In comparison to your offerings so far, I'm a fuckin bonafide genius. I will teach my kids to be a person of value, not a person of financial success.

[mashman]

That assumes that people are borrowing money to deposit it in another bank rather than purchasing something with it.

... you need to hit the books that were printed post 1920 mate.

[mashman]

Hes just a naughty boy..

When's my punishment

[gwigs]

Have you got a frame of reference for that question?
EASY. You earn X, the repayment is Y, do you have that left at the end of the week. Done! Their choice from then on in.
I will teach my kids to be a person of value, not a person of financial success.

+ 1 on that my friend..

[jonbuoy]

One is moderately amused. The single question that most adults ask is, what is my payment going to be. Believe it or not, that is more than enough. In regards to cover, a simple question is, what does this not cover. A lot of kids can ask those questions and then figure out if they can afford the repayments. Job done!

Then you don't understand my line of thinking and refuse to see that even the experts fuck up. Ya see, it's not the knowledge, or lack of, that's the real danger. Can you grasp that concept? Once you have, factor in the number of people that have to struggle for a living, not because they have debts, but because they are not paid enough to cover the basics, let alone considering a mortgage that they'll never be able to afford because of the persistent rise in the cost of living and the persistent misnomer that growth is required for human beings to survive. I know you won't get that far, not sure if that's because you are incapable of doing so or not, or whether it's sheer bloody mindedness that has you defending an ultimately flawed system.

I ain't the one that needs the badge. Muddling through life should not be a punishable offence as it has been very successful for many people.

Your opinion right or wrong that the current financial system is flawed has nothing to do with educating kids to survive in an environment where they have to live in that very system. Educating people to make the most from their incomes small or large can only help in the long run. If you chose a mortgage purely on the lowest monthly payments even though you could afford to pay back a little more - you made the wrong choice.

[Banditbandit]

Fuck - I've spent my whole life being a rebel and an outsider ...

People keep giving me well paid jobs and throwing money at me ..

What the fuck am I doing wrong ???