111.11% The MAGIC number behind interest & the financial crisis EXPLAINED - Please read.

Ladies and Gentlemen,

Do you want to know when the breaking point will be? Are you looking for answer as to when the bubble will burst? if so you are lucky. TODAY, I can tell you that I can give you the answer with 111.11% certainty

I will give you the answer, and then explain how I came to this conclusion.

The answer is, It is determined by YOU when it bursts. And that my friends is 111.11% truth.

So why do I keep using 111.11%? Simple. I have found and can PROVE to you that this figure is the WATERSHED. This is the breaking point of the whole system. and YOU can prove it to yourself also, and i will show you how.

Disclaimer: I am not an accountant, or financial adviser, however banking and economics are based on simple mathematics but spoken about in a different language. but the point is even a lay person like me, with excel and a Sunday afternoon to waste can figure this scam out.

Further I will show to you how this IS 111.11% a pyramid scheme, a "Ponzi" scheme, of the highest order. However, it is not man made. It is a natural law applying itself to a man made mechanism. One of the wonders of Mathematical semantics. Which the banks have just figured out how to utilize.

This will make no assumptions about prior knowledge on the subject. So if you knew this, sorry. This is for those that don't.

OK Ready?

here we go

Fractional reserve banking as employed by ALL banks, is based on the following. All banks have to keep 10% of deposits in reserve. Fact. The other 90% can be loaned.(with interest) fact.

When the 90% is deposited in a bank, the cycle continues over and over and over. until there is nothing left. which is technically impossible as this is an infinite cycle. it just depends how far YOU want to go.

With this in mind, I decided to see if I could make money, by using the same scheme on a local level using $1 as my opening capital. So i built my table in excel as below.

Bank
Deposits $1.00 $0.90 $0.81 $0.73 $0.66
Reserve $0.10 $0.09 $0.08 $0.07 $0.07
Loans $0.90 $0.81 $0.73 $0.66 $0.59
Holdings $2.00 $1.80 $1.62 $1.46 $1.31
P/L $- $- $- $- $-


This shows how banks are able to show a healthy working capital, and a balanced book.
They get $1, have $0.10 in reserve, have a debt owned to them of c0.90. Total ASSETS $2.00 Liabilities $0.00 This is the position of the Federal Reserve / Bank of England / Bank of Bagladesh etc. etc. etc.

It was at this point I remembered about interest. so had to build another table. As i went on I forgot about making money, and decided to see where the system would break. It wouldn't everyone made a profit. THEN I remembered that the interest due has to be repaid to the creditor as well, which affects the P/L

What I found was astounding. If everyone charges the same interest to each other. They ALL go bankrupt. ALL of them. Expect the man printing the money. This is the pyramid scheme.

And this is why:

When the loan is loaned it is always loaned with INTEREST. and here is where the magic happens.

I loan you $1.00 at 5% interest meaning you have to pay me back $1.05

Meaning that your balance book is now
Deposits $1.00
Reserve $0.10
Loan $0.90
P/L $0.00 All good right?....... WRONG

Liability $0.05 This is the interest that MUST be paid to your CREDITOR.

You balance sheet that should be $2.00 in real term is now is $1.95 with a $0.05 on the liability column, which still gives you a $0.00 Profit / Loss statement. SO Happy days!

This of course is assuming that all banks are benevolent non-profit institutions, and not greedy life suckers.

SO, how are you going to make the money to pay back your $0.05 liability? You can't use you deposit because that has to be repaid as the principal. So you make a loan to someone else and charge interest again. (easier than working for it)

At what rate of interest do you have to charge you debtor in order to BREAK EVEN i.e. get you %0.05 and show a balanced book?

In this case it is: 5.56%. This is a 111.11% increase on 5% which YOU have to pay.

This cycle continues and continues, of loan, reserve and deposit over and over again. Each time this happens the next institution has to charge a higher rate in order just to break even, let alone make a profit.

The increase is exponential, and goes like this:
5.00% 5.56% 6.18% 6.87% 7.64% 8.49% 9.44% 10.49% 11.66% 12.96% 14.40% 16.00% 17.78% 19.76% 21.96% 24.40% 27.12% 30.14% 33.49% 37.22% 41.36% 45.96% 51. 07% 56.75% 63.06% 70.07% 77.86% 86.52% 96.14% 106.83% 118.70%

EACH TIME the break even point is 111.11% higher than the last. and the ONLY person making a profit. is the guy at the top. if even step one in this chain (the Government) cannot get a buyer for their loans (debt) at a sufficiently high rate based on the rate of interest that they have to pay back. the result is BANKRUPTCY.

This is not pie in the sky theory people. This is simple mathematical mechanics. + / * and -

No crazy equations, or derivatives. going long of short, hedge or funding. SIMPLE maths!!

SO where is the breaking point you ask.

OK I will give it to you. You apply for a credit card. the card company says we will loan you $10,000 at 29.9% APR. Bear in mind how the curve is exponential. How many steps away from the principal is this company??? to need to charge 29.9% on a card. Lets be true this is not about risk, that YOU may default. you may and they will be in trouble, as will not have made enough, theoretically, to repay the principal and interest on what they owe for what they loaned you!!.

Do you see how weak and shabby this is??

OK what if the card company asked for 34.9% or 40%?? 43.5%?? 100% how about 2310% (this is an actual figure from a pay day loan company in the UK)

How BADLY do you need that credit, how MUCH do you want that new TV.

How badly do THEY need to raise capital to pay the interest on the principal that they loaned. Fearful that this, in these days, could be recalled at any moment.

I hope you see what I am saying. If not please ask. If you know more, please correct. but this is how I see it. And from where I am standing, the BREAKPOINT is YOU. Saying.

NO. No I will not take you credit. no I will not pay that rate.

Very Simply, if they cannot raise their rates of interest above 111.11% they are history.

So this is the breaking point 111.11% and you.

So as this goes down the line, at what point do other banks stop agreeing to the rate of interest. And if they are all charging the same rate for loans, they they cannot be breaking even. However this also depends on you. Because every time you make a new deposit, the system renews, and starts all over again. with them as the man at the top of the pyramid.

So if you don't agree with this practice, Stop depositing. Stop agreeing to credit at any price!!

Most are already stuck in it, and I have no answers for that. That needs to be dealt with by a debt counseling company. but to all those that are not stuck in it. Pay heed.

Because when the music stops, the person / company who has not made 111.11% MINIMUM will do a Bear Sterns

Potentially this has the capability o wiping out 90% of the financial market, based on a 10 institution system.
They only one left standing?

The guy who prints the money!









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reply to post by JakiusFogg


Don't forget that deposits are both an asset and a liability. What you described is leverage. Now a days, leverage has dropped significantly. This has led to much less money circulating in the economy, to the point that there is no enough money in the economy.

Just one point to add. This is taking into account a banking leverage (magnification of money) of 10:1

I hear that banking leverage is now around 35:1

What sort are hell is that going to put us in????

reply to post by sligtlyskeptical


Indeed, except for the guy at the top.

This is why it needs to be loaned at a 111.11% higher rate than they need to pay in order to break even.

This is why Banks pay you interest on your money.

Just at a really bad rate.because you don't have any say about what rate of interest you will charge them for borrowing your money (debt). because you give it to them!!

They have it well sewn up. But this, I believe is the chink in the Armour.

I was just taking a shower (sorry for the info) and thinking.

Surely if the reserve amount required to be held, thusly affecting the available loan amount. Surely this would affect the percentage ratio.

I checked it and yes it does.

If the bank is required to keep more in reserve. it has to charge even larger amounts of interest to cover itself for what it owes vs what it loans.

This accordingly affects the ratio.

For example it shows that a required 20% reserve required a 125% increase in interest rates at each stage. But AGAIN this is constant. and shows the built in inflationary concept of reserve banking with applied interest.

This proves this is unsustainable,

No wonder the banks hate deflation. It means THEY have to pay money down the chain!!!

Wow, I guess everyone has been shocked into silence at this revelation!!!

Given that banks can loan out up to 90% based on 10% reserves and then most of that money gets redeposited and recycled. But not all of that money comes back as time deposits....some of it is paid out to employees and it gets consumed and deposited in demand deposits that cycle in and between banks as a part of normal commerce and pay little interest. The saving grace for the banks is that they can charge more for the money that they loan out than they have to pay depositors and their gross profit is the difference minus the defaults. Given that the big banks can borrow from the Federal Reserve Window at cheap rates have you factored in how this affects your numbers (111.11 = 10/9) especially since they have been hoarding the money to improve their balance sheets and avoid risky loans even if they do pay interest?

reply to post by CosmicCitizen


The ratio figure in the interest accrual does change as posted above

I.e. with a 20% reserve the interest rate increment required is 125% in that instance.

However, the increment increase is CONSTANT in what is required to break even at each transaction.

not only that but as show each increase is exponential.

Therefore it is only a matter of time before it breaks, and someone, whoeever, is left carrying the can.

The only winner is the guy at the top of the pyramid.

Even though the variables may change, the premise is sound.

reply to post by JakiusFogg


Here is the way it was put to me long ago.

The dollar was meant to last 100 years.
It was meant to devalue 1 cent every year for those 100 years.
The federal reserve was created in 1913
It is now 2011
It has devalued 98 cents since its inception.

Example: 1913 candy bar was 1 cent to 2 cents
2011 candy bar $1.00 to $2.00
1913 house $2500.00
2011 house $250,000.00

Interest you earn is 1 to two points under what the dollar devalues
When we used to get 6 percent on a cd the doallar was devaluing at 8 percent.
You get money in digits but lose buying power.

A one ounce of gold was $20.00..............100 years later its almost $2000.00

you will be issued a card soon with your life on it soon and a digital currency. You will tip your barber $5 and they will automaticly take $2 in taxes.

If you want to avoid this, the mass all people should do all personal exchanges in cash. Gas stations, resturaunts etc.

reply to post by Analyze76

When they change the system (debt default and new currency) and roll out the chip cards wont they do something to discourage cash transactions? Even to the point of making any cash transaction over $100 or $1000 illegal or even going so far as to eliminate the FED (careful there Ron Paul) which would make Federal Reserve Notes null and void! This would make the currency worthless except as exchanged for either bank credits (useable with your card) or a new currency (issued by a new central bank, possibly a world CB or even the treasury)....but a new currency would still make cash transactions possible so at some point they may eliminate cash completely as a means of legal tender.

reply to post by Analyze76

The dollar was around before the Federal Reserve but it is interesting how it has lost ~98% of its value in 98 yrs (consistent with what you were told). What are the credentials of the source who shared that with you?

reply to post by Analyze76


I understand the devaluation part well enough.

The main thrust of this is that the application of interest to a fractional reserve system, is a deliberate recipe for disaster.

It pure nature makes it so. and what's worse. is that there is just no way out of it.

All though this concept is now widely accepted. This is a way that even the most hard of skeptics can prove it to themselves in the simplest of terms!

The conclusion is undeniable.

We just have to break through the normalcy bias!

reply to post by CosmicCitizen


My friend worked for an investment firm. Thats how corporations come up with a ten year plan. If they know or a pension plan knows that the dollar (federal rserve note) will devalue 10% over 10 years they can invest in land (Real Estate or any other tangible item ....) sell some to pay back your interest and keep some to increase capital.

The last economic theory we were on was by John Forbes Nash (see movie "A Beautiful Mind). This was an in your face convince everyone else that they do not want a house and food, convince them they want DVD's, cars, vacations, etc. while we consolodate everything in our hands.

The (fed note) has only been here called the dollar since 1913. Before the federal reserve note was the united states note and numerous local currencies. ...........too much to type right now. I'll visit tonight

reply to post by JakiusFogg


Really good!

Printing money is the only gig worth having! Good to know. ...S&F&

This helps explain to me why my mailbox is stuffed daily with credit card applications, you have been pre- approved car loans to furniture, re-mortgage applications for the past month. My mailbox for the last 3 years rarely seen 1 letter or advertisement per week, and now out of the blue, I get this trash. I have not had a credit card for 3 years, nor owe anyone except mortgage.They believe we will give them the freedom to continue their evil plot, and sadly we will watch a large segment buy into the scheme again, but they will crash, and it will be the end of their system..

reply to post by soficrow


You got that right.

Give i a try and you will see, after one move it the interest rates are not exponential. GAME OVER

in 1 move!!

What a scam!

Well WE knew that anyway, but now we can prove it!!

reply to post by electricalpup


Exactly, they are fishing to see at what rate people will buy in.

Most won't check the rate until it is too late. and that is what they are counting on.

Credit is a drug

just say no!!

Right yanks are awake!
BUMP!!

I like stars!!! but I also like to share my work. Took me bloody ages this did!

Although, the Zeitgeist guys caught some grief for the religious portion of their movie, I thought the part regarding the financial crisis (and 9/11) was spot on, and it describes the fractional reserve system in exactly the same fashion as you have - watch it, if you have.

reply to post by SquirrelNutz


Yep, I have seen it some time ago.

Good info right there!