A new one hour documentary called 97% Owned - explaining clearly how banks create money out of nothing, make you pay interest on it and why we are all drowning in debt. A must watch to understand the current economic crisis. www.positivemoney.org.uk/97perce ... cumentary/ Quote Where does money come from? Who creates it? Who decides how it gets used? 97% Owned is a new documentary that reveals how money is at the root of our current social and economic crisis. Featuring frank interviews and commentary from economists, campaigners and former bankers, it exposes the privatised, debt-based monetary system that gives banks the power to create money, shape the economy, cause crises and push house prices out of reach. Fact-based and clearly explained, in just 60 minutes it shows how the power to create money is the piece of the puzzle that economists were missing when they failed to predict the crisis.'" For anybody interested there is also an extended two hour version of the same documentary. I'd be grateful if people could watch it and tell me your opinions.

A new one hour documentary called 97% Owned - explaining clearly how banks create money out of nothing, make you pay interest on it and why we are all drowning in debt. A must watch to understand the current economic crisis. www.positivemoney.org.uk/97perce ... cumentary/ Quote Where does money come from? Who creates it? Who decides how it gets used? 97% Owned is a new documentary that reveals how money is at the root of our current social and economic crisis. Featuring frank interviews and commentary from economists, campaigners and former bankers, it exposes the privatised, debt-based monetary system that gives banks the power to create money, shape the economy, cause crises and push house prices out of reach. Fact-based and clearly explained, in just 60 minutes it shows how the power to create money is the piece of the puzzle that economists were missing when they failed to predict the crisis.'" For anybody interested there is also an extended two hour version of the same documentary. I'd be grateful if people could watch it and tell me your opinions.

Do you have a mortgage?

Yes I do.

Funny thing is when I took out my mortgage I was under the impression that the money I was borrowing was actually coming from another persons savings, not instantly created from nothing by the bank once I'd signed the paperwork.

It must have taken bank staff say 8 hours of work to sort out the details of my mortgage and then I spend the next 20 years giving the bank 25% of my income - 5 years worth of wages! Great scam don't you think?

Actually I think it is an excellent system, when it works right.

When banks get greedy and lend to those who the shouldn't be lending to and encourage those to take on more debt that they can handle because rises in property prices mean they wouldn't be out of profit then they get stung.

Perhaps the major failing is the brainwashing we have that the only way is property ownership for everyone and renting is sociably unacceptable.

Errrm, WHO gets stung?

Which banks [umake[/u people pay interest? Don't people chose, sometimes, irrationally to pay interest?

No, as far as I am aware there is no bank that allows you to opt out of paying interest on a mortgage or loan.

0% finance isn't unusual.
Although the point was more about nobody being forced to take out a loan.

For a mortgage it is. And even 0% is paid for in other ways when taking out finance deals.



True, went round the houses to say it though.

But no such thing exists in reality




The final decision is still with the lender, they are the ones who should be bearing the risk

Yes it does. The intricacies of the deal might mean a bank is still actually charging interest to help facilitate (for example) a sale, but as a consumer or business, 0% finance is often available.



It's a two way deal, with responsibility on both parties. No lender is forced to lend, no borrower forced to borrow.

True.



Not quite so true.

The lender always has had and always will have the last say, it is after all their money they are lending.

How so?



Both parties. Neither can lend/borrow without the agreement and co-operation of the other.

Which bank makes you take out a loan, be it secure or unsecured?

Any "zero %" or unrealistically low-interest finance deal still has to be financed. I don't know of one single retailer of anything that finances credit arrangements themselves, all are conducted through the usual, bank-backed finance houses. The credit fees are simply financed by utilising a portion of any available manufacturer discount or retailer margin to provide up-front interest to cover the life of the agreement. So, in reality, there is no such thing as 0% finance.




Of course both parties have a responsibility to each other but the final arbiter is always the lender not the borrower.

None of them of course but that isn't what I said.

In reality, the mechanism behind the finance is irrelevant to the borrower, therefore there is 0% finance




Considering that both parties have to agree to the deal, is there any relevance to "final arbiter"?

Not so. Unless I borrow £100 and only pay back £100, no charges, no overheads, no fees, then there is no such thing as 0% finance.
The percentage doesn't have to be on the monthly payments, even if it's an admin cost, it's still a percentage that can be measured.

A good move here in Aus is forcing banks to show the full effective interest rate on loans including any fees applied. Normally pretty irrelevant on the scale of a mortgage, but often a huge add-on on smaller loans.

A bit pointless on small, short term loans though.

Indeed, as the saying goes "no such thing as a free lunch" you'll pay for it, just somwehere a little less obvious than having an APR written on an agreement.

Until interest only mortgages and companies like Ocean Finance are closed down by the regulators I'll not believe any meaningful change is really happening in the financial services sector.

0% does exist - i looked at a bike it cost XXXX, decided to buy it using the 0% finance it still cost XXXX, paid of the 0% finance early with no early payment penalties.

That = 0% finance

nope, but you're not getting various people's meaning, so best left.

That's how car manufacturers sell it too.

It still ain't interest free though