Australian Politics Forum - Hit The Bank With The Big Stick

crocodile Gold Member Offline Australian Politics Posts: 6682 Gender:	Re: Hit The Bank With The Big Stick Reply #45 - Oct 17^th, 2019 at 7:21pm Auggie wrote on Oct 17^th, 2019 at 5:11pm: Nationalise the big four banks! Full reserve banking and back to the gold standard too I suppose.
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Auggie Gold Member Offline The Bull Moose Posts: 8571	Re: Hit The Bank With The Big Stick Reply #46 - Oct 17^th, 2019 at 8:23pm crocodile wrote on Oct 17^th, 2019 at 7:21pm: Auggie wrote on Oct 17^th, 2019 at 5:11pm: Nationalise the big four banks! Full reserve banking and back to the gold standard too I suppose. Why not?
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rhino

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Re: Hit The Bank With The Big Stick
Reply #47 - Oct 17^th, 2019 at 9:13pm

crocodile wrote on Oct 16^th, 2019 at 11:40am:

juliar wrote on Oct 16^th, 2019 at 10:00am:

Now to do things the easy way with an on screen calculator that saves having to think. Of course the Croc is correct as always he is so smart. I have done it for 1 year with interest compounded daily which is what the Croc said the banks do.

You can try yourself by clicking on the URL eg:- https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

Now for the Banks's profit at 5%.

https://i.postimg.cc/rpXRqG4t/Capturecompound1.png

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

Now for the Banks's cost at 2%

https://i.postimg.cc/PrJSDHRQ/Capturecompound-333.png

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

PROFIT = 1,051,267.50 - 1,010,050.03 = 41,217.47

Now for the Banks's profit at 4%.

https://i.postimg.cc/VNkvf76v/Capturecompound2.png

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

Now for the Banks's cost at 1%

https://i.postimg.cc/cCg8sFFw/Capturecompound444.png

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

PROFIT = 1,040,808.49 - 1,020,200.78 = 20,607.71

So for the banks at the lower interest rates there is a loss of 41,217.47 - 20,607.71 = 20,609.76

Which is I think what the Croc was getting at.

That's pretty well the nuts and bolts. It can't seriously be that hard to see why the full rate doesn't get passed on.

Poor ol' Bobby waffles on about borrowing costs as if banks have to buy money like bananas and hold them in stock waiting for customers. It doesn't quite work that way with RBA as another cog in the engine. All banks have exchange settlement accounts with the RBA. They only need to settle the spread between rates in a single transaction.

It has to work this way else the RBA would not have the means to implement monetary policy. The cash rate doesn't come about because the RBA waves a magic wand and says what the rate will be. They have to buy and sell securities on the open market to maintain the size of the money supply. The cash rate is the target. The RBA has to manage the supply of money vs demand for money until the target rate is achieved. It can only be done via the exchange settlement accounts with the banks.

So Bobby doesn't want to deal with halfwits. In reality he is just an ignorant fool who doesn't understand how the monetary system works.

To be fair Bobby is just echoing the majority of mortgage holders, the media and politicians are feeding this nonsense and the proles swallow it. Theres votes in bagging the big bad banks.

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crocodile

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Re: Hit The Bank With The Big Stick
Reply #48 - Oct 17^th, 2019 at 10:11pm

Auggie wrote on Oct 17^th, 2019 at 8:23pm:

crocodile wrote on Oct 17^th, 2019 at 7:21pm:

Auggie wrote on Oct 17^th, 2019 at 5:11pm:

Nationalise the big four banks!

Full reserve banking and back to the gold standard too I suppose.

Why not?

If you have a fixed exchange rate you will have a floating interest rate instead of a stable interest rate and a floating currency. Take your pick.

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Very funny Scotty, now beam down my clothes.

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crocodile

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Gender: male

Re: Hit The Bank With The Big Stick
Reply #49 - Oct 17^th, 2019 at 10:13pm

rhino wrote on Oct 17^th, 2019 at 9:13pm:

crocodile wrote on Oct 16^th, 2019 at 11:40am:

juliar wrote on Oct 16^th, 2019 at 10:00am:

Now to do things the easy way with an on screen calculator that saves having to think. Of course the Croc is correct as always he is so smart. I have done it for 1 year with interest compounded daily which is what the Croc said the banks do.

You can try yourself by clicking on the URL eg:- https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

Now for the Banks's profit at 5%.

https://i.postimg.cc/rpXRqG4t/Capturecompound1.png

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

Now for the Banks's cost at 2%

https://i.postimg.cc/PrJSDHRQ/Capturecompound-333.png

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

PROFIT = 1,051,267.50 - 1,010,050.03 = 41,217.47

Now for the Banks's profit at 4%.

https://i.postimg.cc/VNkvf76v/Capturecompound2.png

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

Now for the Banks's cost at 1%

https://i.postimg.cc/cCg8sFFw/Capturecompound444.png

https://www.calculatorsoup.com/calculators/financial/compound-interest-calculato...

PROFIT = 1,040,808.49 - 1,020,200.78 = 20,607.71

So for the banks at the lower interest rates there is a loss of 41,217.47 - 20,607.71 = 20,609.76

Which is I think what the Croc was getting at.

That's pretty well the nuts and bolts. It can't seriously be that hard to see why the full rate doesn't get passed on.

Poor ol' Bobby waffles on about borrowing costs as if banks have to buy money like bananas and hold them in stock waiting for customers. It doesn't quite work that way with RBA as another cog in the engine. All banks have exchange settlement accounts with the RBA. They only need to settle the spread between rates in a single transaction.

It has to work this way else the RBA would not have the means to implement monetary policy. The cash rate doesn't come about because the RBA waves a magic wand and says what the rate will be. They have to buy and sell securities on the open market to maintain the size of the money supply. The cash rate is the target. The RBA has to manage the supply of money vs demand for money until the target rate is achieved. It can only be done via the exchange settlement accounts with the banks.

So Bobby doesn't want to deal with halfwits. In reality he is just an ignorant fool who doesn't understand how the monetary system works.

To be fair Bobby is just echoing the majority of mortgage holders, the media and politicians are feeding this nonsense and the proles swallow it. Theres votes in bagging the big bad banks.

Maybe but the facts were explained a number of times prior.

Back to top

Very funny Scotty, now beam down my clothes.

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