posted on Mar, 25 2008 @ 12:20 AM
Fractional reserve banking lets a bank say to a depositor that all his money is safe and sound, at the same time they get to loan out most of it to
someone else so the bank can collect interest on it. From the perspective of the depositor, all his money is still in the bank. From the perspective
of the borrower, NEW money exists. But the legitimacy of their claims are based on the same original pile of money, which hasn't changed. Where did
the new money come from? The astonishing answer is that the bank CREATED IT so they could loan it to the borrower. From thin air. This new money is
then deposited into another bank, which “loans” out most of it too, and the process is repeated over and over. If you do the math, there is far
more money CREATED by banks in loans than existed in the first place.
Considering all the interest being made on all these loans you see it is a very profitable scam. The risk comes when too many people come asking for
their deposits all at once. Then the only thing the banks can do is call in as many loans as possible and see how much they're able to cough up,
which is invariably far less than what people thought they had tucked away safely.
One final note: in the example with the vacation home, the banking scam works the same way except... THERE IS NO HOME! There is no gold backing the
receipts anymore, so essentially we have all been trading titles without property!
What's the result?
1) Almost every dollar that exists is owed to a bank somewhere, because at some time in history, it was created when it was loaned out.
2) Far more dollars are owed to banks (because of compound interest) than even exists! So as a country, we cannot possibly get out of debt under
this system. It is important to recognize, however, that the bulk of our debt is in the form interest, which is an arbitrary amount of money banks
demand in return, but never gave you. This raises questions of its legitimacy.
3) There is no money, in the real sense. Just checks, data stored on computers, and promises. It is all created by typing on a keyboard, and
signing signatures. The only tangible assets in regard to money is the collateral we pledge when we ask for a loan. The money they loan you comes
from nowhere, but the assets you lose in foreclosure are real!
4) Because the US government borrows from the Federal Reserve, bankers have the power to influence our society and government by controlling finance.
They decide to create (or not create) money depending on who's asking, and for what. They choose what projects get funded, and let other needs
wither on the vine by starving them of working capital. This subtle yet immense power is more than enough to undermine democracy, and guide the
course of a nation's history.
What is the solution?
Simple. Money must not be created in the form of loans. It must be something that once created, circulates permanently. Otherwise many forms of
abuse and deceit can work their way into the system, and a class of parasites will rise to power in society by cleverly disguising the fact that they
can create money from thin air.