Saturday, 7 December 2013

the economic hampster wheel

Ok, so as I understand it, banks approve loans on (say) property by 'creating' the money and then injecting that into the 'community'. So they sort of make up money to give to you to give to the person who you're buying from who will probably give that to the bank ...

So then if the property values fall while you're paying it back or the interest rates rise so that you can't pay it back the bank spits you off the wheel, takes the property and puts it on the market again


Clearly I don't know shit about Economics.

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