What's a middle class?

There is a few things wrong with what you wrote, but I do agree with the sentiment, to some degree. That being said, if there was not usury, a private bank could not exist. Now, we make that bank a State entity, there would still be usury and robbery via taxation, to keep the bank in business. Now, if you want to be able to borrow money, you would need some sort of usury. If you don't want to borrow (like me - I know the pains of debt), then I say fuck all. Basically, you cannot have your cake and eat it too... So.. Decide...

It's simple economics...

Yea but the messed up part is that when these banks make bad loans, ones that they know are going to default, they either sell them in one of their sub-prime bundles masked as a safe investment, or if they do actually take some losses, they just get bailed out under the guise of "too big to fail". -- That's the messed up part. Not necessarily that they charge interest on loans.

I think the student loan scam is going to be the most devastating on Americans because they cannot go bankrupt. When interest rates go up, so will the rates on student loans.

^ This will be one of the catalysts in the perfect storm that is coming to collapse the economy, imo.. Far more than real estate...

Subprime car loans might win the race!

How do I profit from this? Can I make a wall street bet of some sort that would see large returns if this should happen? Can I "short" student loans similarly to how airlines were "short sold" before 9/11?

Only if you have a ton of money to "bet" in the mean time. That's why it's so hard to do. You'd have to be paying periodically huge sums for that insurance policy to be worth it if the particular industry collapses. If you saw the "The Big Short", that's why the investors backing Michael Burry want to kill him.. It's because he placed a bet that the housing market would collapse way too early, therefore costing him millions in insurance payments until it eventually does collapse and he makes a killing. It's all about timing, and having enough money to make the final return worth it.

Yes, to some extent, but the damage will at least be more contained.

I explained above how the bank leveraged a single mortgage into many separate products, so that a single mortgage's default was capable of creating a cascading tsunami effect (which is what happened). No such derivative market was created off of student loans.

That said, student loans are more dangerous because the student loan holders are younger, more angry, and desperate than home owners.

And the worst part is you tell people about it and they look at you like you've got three heads.

This only applies to private variable interest rate loans. Also the total amount of money in mortgages is far larger than the amount in student loans. Unless the student loan numbers recorded were filtered based on a bunch of criteria like the unemployment numbers then we will probably be okay for some time. The collapse of brick and mortar retail or even small business loans is a more likely factor than student loans imo. Retail makes up a large percentage of the US economy and if ecommerce makes brick and mortar obsolete, then we could be looking at a slow default on commercial retail spaces. It's tough to decide what will happen because there are so many risks in play all at once that could be driven by rate hikes.

Yeah look up usury and gold lenders

And Jews I suppose

In America, prior to the creation of the Federal Reserve System, banks gave what was known as "open book loans". There was no deadline on the loans. There was rarely a foreclosing if someone was "late" on paying their loan off. If a farmer couldn't make any payments during the winter months, the bank would let him wait until harvest to continue payments.

With the creation of the Federal Reserve System, if you miss your monthly payment, you lose your home. It's a scam.

Yeah so history bad

Modern history really bad ...

Banks who hold their own paper (don't sell off the mortgage to the fed) can totally still do this.

It's just not profitable to do so.

From what I recall of my readings, the Judeo-Christian-Islamic religions all have prohibitions on usury. It's just that Jewish religious law made a distinction between lending to Jews vs non-Jews. Thus Jews could lend money (and generally be immoral) to anyone who wasn't a Jew, thus the Jewish profession of money lending within Christian communities.

Anyone feel free to correct me though.

Don't forget car loans!!!

u·su·ry ˈyo͞oZH(ə)rē/ noun the illegal action or practice of lending money at unreasonably high rates of interest. archaic interest at unreasonably high rates.

Basically we work meaningless jobs until we die. And weather it's living comfortably, paying health costs, or whatever else life throws at us (houses), all of our money is taken and given to the rich.

That just our lives. Not much has changed since midevil days.

Accurate.

We still pay taxes which go to warring with other countries too like good little serfs...

Someone needs to dress up like Jesus and go into these banks with a whip.

300% is assuming you somehow didn't make any payments until the end of the 3 years. If you made monthly payments you end up paying around 170% of what you borrowed, it's hardly outrageous for the bank to be making 70% profits over 30 years.

For comparison the Dow Jones Industrial Average is pretty well accepted to provide 7% returns, so if the bank were to just put that money into the index they would earn that 70% in just less than 8 years.

Also if you follow your own number 6, the house is somehow automatically worth more in the future, so if you were only to pay 1 million dollars on a 1 million dollar loan then you could simply borrow and purchase as many properties as you can and get free money from each of them as long as you can pay off your loan.

Whoever told you a 4% home loan is ursury has literally no idea what they're talking about. Also this has nothing in common with a ponzi scheme.

Dow Jones goes up and down and can crash. There is a risk.

Home loans are insured so there is zero risk. They earn that 70% on zero risk.

You think insurance companies have a magic fountain of money?

Yes, they do. Because if they need more money they just raise the premiums. Simple really.

Sooo then the bank pays higher premiums, therefore reducing their profits?

Umm no. The mortgage-taker pays the premium. I.e. the home-owner pays the insurrance-premium (whatever % it is) to the insurrance company and also pays theinterest on the loan to the bank.

The bank has zero risk, because if the home-owner defaults they get paid by the insurance company.

The insurance company also wins because they just put the premiums to match whatever % of loans default so they cover their payouts + their expenses + a tidy profit.

If markets can crash then insurance companies can go bankrupt, therefore creating risk. Hell if you thik 4% mortgage rate is ursury then you can just go buy 3% US treasury bonds and make 140% profits over 30 years. Hell you can go buy the bonds of these banks for 4-5% yield over 30 years.

Large insurance companies are always bailed out by governments. Still zero risk.

And anyway this would only be a problem for a bank if a large amount of loans defaulted at the same time (thus causing a major problem for the insurer). Anyway it would just get bailed out by the government.

If they get in trouble the tax payers are there to prop them up.

May be true, but I need a house bro. And my mortgage is actually less than what rent would be on an equivalent apartment/rent house.

Not to mention that you can pay extra on your mortgage to pay it off faster. And they disclose the costs of everything when you sign the paperwork. Anyone who calls this shit slavery is willfully blind.

Yes, and the worst was how they bundled mortgages into a single product (mortgage backed security), and then sold each package many times over. And then another separate financial instrument was created to bet off of the success/failure of said mortgage product (credit default swaps).

But hey, banks are always good at profiting without creating anything of actual value to the economy.

Even though I have a good job, I live like a street person, I eat basic foods that i can get in bulk, I gave up my car. All because I'm buying a house cash. Who the fuck wants a 15 to 30 year bill?

It is worth considering that the S&P 500 has seen about 7% growth over every 20 year period over the last century and a half. This is better than the growth in home values. Putting a 20% down ( the threshold to avoid mortgage insurance) and then taking a 30 year mortgage at 4.5% would allow you to invest the rest of your cash as you please - which could net you more money overall.

My plan is to live in that home for 5 years, make improvements along the way, and then rent it after that time. The area I live in is very transient, but it's upper middle class. I now have a very valuable asset which i can leverage for a mortgage on better terms. My ex is on her 3rd home doing this, and rent from the first two cover her current mortgage and taxes on all 3, with leftover income at the end. When she got the mortgage for that 3rd house, she didn't even have a job.. that's unheard of, but obviously property is quite valuable.

I was turned on to this book, The Creature From Jekyll Island, by someone in this sub. It's really long. I'm listening to the audio book and it 20 + hours. Anyway, it's all about the Federal Reserve and the NWO. Mind blowing stuff,check it out.

So what can you do if you're a middle class person stuck in this? with a massive loan and a monthly payment that only 1/3 of actually goes towards principle? What do you do?

Start your own bank?

I tried that already.

How did you come to the loan costing the buyer 3 million dollars?

A million dollar loan at 4% over 30 years costs $700,000 in interest. There are no "fees" unless you fail to make payments on time (I've had mortgages for decades and never paid a dime more than the agreed-upon payments.)

You are also ignoring inflation in your consideration of the "vast" profits banks earn. Inflation averages 2-3% a year, so at 4% the bank is earning only 1-2% in real terms. Mortgages are actually terrible investments in terms of return, but are generally safe and it provides a place to park large amounts of capital.

I don't know where you're getting 1.2 million but it's wrong. Use a mortgage calculator - there are tons of them and they all produce the same results, since it's just math.

Interest is not a "fee", it's interest. It's what you pay for the use of the money over 30 years. The bank doesn't get to use the money and you do, so the bank gets interest. And you cannot ignore inflation which eats up most of that 4%.

Virtually everything you have said and apparently believe is flat-out wrong.

The compounding interest would only add up to that much if they never made a payment. The real figure would be about 1.5 million.

Because that property's value is protected by the local government, who keep criminals off the street your house is on, firemen who prevent your neighbourhood from burning down, people who keep your street clean and plants from becoming overgrown.

What do you mean? This is all public knowledge. Do you not believe in firemen, police and cleaners? Or do you not believe they get paid? Or do you not believe they get paid out of taxes? What transparency are you actually hoping to see?

You think insurance companies have a magic fountain of money?