Show me the loser in the following arrangement

In Uncategorized on January 3, 2011 at 7:55 am

Banker has available credit that he has permission to turn into loans.

Banker likes builder so he transfers some of his credit to him and calls it a loan.

Builder uses this credit to build a home with no out of pocket expense.

Buyer likes home, banker likes buyer so some more credits are transferred and called a loan.

Buyer asks banker to turn some of that credit into money.

Out of thin air, credit becomes money.

Buyer uses new money to trade builder for his house.

Buyer attempts to use his earnings in real money to replenish the credit account while paying banker interest.

Banker turns mortgage into a security and through the magic of fractional reserve generates enormous wealth for himself.

Securities are bundles and banker sells derivatives on the interest to be collected and makes another fortune.

At this time:

Builder is paid

Banker is rich

Buyer has a safe home to raise his family

So tell me again who loses when the buyer tells the banker, you’ve made enough money from my signature., and stops making payments to banker?

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