Landlords = Secondary Lenders?

[astronaut]

hi folks

Are not landlords technically secondary lenders?

peace
Trey

[Jordan]

If I understand your question as referring to people who have mortgages and rent out their properties to pay their mortgages, then in a non-legal way, they kind of are - I say 'kind of' as the renter doesn't end up owning anything in the end.

I myself am renting at the moment. I've deliberately chosen to rent from people that own and to not have a mortgage. However and ultimately, most all money that exists today in many many countries - I don't know the numbers, but from my research I only know of a few examples where it's not created as debt, as such once the banks slow there lending, as they have world wide since Basel II regulations came into effect at the end of 2008 (yes, that does correspond to the start of the global economic slide), then the amount of currency in circulation declines as the mortgage payers drain the economy of money.

I bring that point up, because in a way, as long as you are using Federal Reserve notes as money (or many of a myriad of other national currencies), then you are taking part in a system of nefarious lending and ultimately (and ultimately is a day coming very soon) there will be very little money in the 'common' economy and heaps and heaps in the casino-style economy of high finance. This will cause rampant inflation in the value of imported goods - of which the US citizenry has become very dependent. What has functionally taken place since the institution of the Federal Reserve Bank of the US in 1913 is the complete looting of the wealth of the real US 'common' economy with the rubber stamp of the congress and the direct knowledge and understanding of all of the recent presidential administrations - if not all of them since the inception of the Fed.

The recent US government bailouts of the main banks are really one of the last big thefts as such money will not go back into the real common economy via the making of new loans, thanks to Basel II. Instead the money is being spent to buy up and consolidate various assets (real wealth) that remains outside of the control of the top banks. While some of this money will make it's way back into the common economy very very little via the fractional reserve mechanisms that create vast amounts new credit.

If I've completely missed the point of your question, I do apologize. . .I do have a tendency to go on a bit   

[astronaut]

Hi Jordan. Thanks for your answer, I'll have to do some research into Basel II and III, have heard about it recently.

If I understand your question as referring to people who have mortgages and rent out their properties to pay their mortgages, then in a non-legal way, they kind of are - I say 'kind of' as the renter doesn't end up owning anything in the end.

Well a renter ends up with nothing in any case, does not matter from who he rents.

Another example would be: Someone registers a corporation, takes out a loan from a bank, buys a property (e.g. an apartment building) and then rents the apartments. After a while he/she (corporation) will have the loan paid back. So technically the landlord borrowed the money and then loaned it to the people renting the apartments, so the people have actually paid for the principal, for the bank interest and plus for the interest (profit) of the landlord.

another question:

BOOK PROFIT

Does the rent (that the landlord expects to receive during the year) appear as book profit in the landlords ledger?

book profit - In the financial world, book profit is a profit which is demonstrated on paper, but not yet actually real.

[Jordan]

So technically the landlord borrowed the money and then loaned it to the people renting the apartments, so the people have actually paid for the principal, for the bank interest and plus for the interest (profit) of the landlord.

Technically, a bank extends credit to those who 1) promise to pay it back at interest and 2) either have substantial collateral or will use the credit to purchase substantial collateral. The important point here is that the bank doesn't loan money, but credit based on the borrowers promise to pay. This may seem a small point, but it is really quite huge and the reason the world looks as it does today.

I believe you are correct though, the renter, in the instance you describe is being used indirectly to repay the bank credit.

Does the rent (that the landlord expects to receive during the year) appear as book profit in the landlords ledger?

I believe that is correct. Book profit is used to speculate on the future of a businesses success and there seems no reason to me why such wouldn't be allowed in the present system. - I am no expert on business accounting or business law however and I may be wrong.

[astronaut]

... I was thinking... does the book profit raise the national(public) debt even if it does not get realized?

[Jordan]

Book Profit:

Profit which has been made but not yet realized through a transaction, such as a stock which has risen in value but is still being held. also called unrealized gain or unrealized profit or paper gain or paper profit.

I think that if anything, it would be used to lower estimates of national debt. There are many way of calculating national debt. You would need to analyze the equations of each to see what is being put in or left out of the estimate.