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Q. But there is no question about it that banks create the medium of exchange?
Mr. Towers: That is right. That is what they are for... That is the Banking business, just in the same way that a steel plant makes steel. (p. 287) The manufacturing process consists of making a pen-and-ink or typewriter entry on a card in a book. That is all. (pp. 76 and 238) Each and every time a bank makes a loan (or purchases securities), new bank credit is created — new deposits — brand new money. (pp. 113 and 238) Broadly speaking, all new money comes out of a Bank in the form of loans. As loans are debts, then under the present system all money is debt. (p. 459)
When the Federal Reserve purchases a $1 million Government bond and gives some bank credit for $1 million in its reserve account, that bank also credits the bond dealer's checking account with $1 million. I n other words, to acquire $1 million of reserves, the bank also assumes a liability to pay its customers $1 million. If the transactions stopped here, the bank would, of course, come out even, neither gaining anything nor losing anything.
But the fact that there is now $1.million more of bank reserves than existed before means that the private banks as a group can create $6 million more money than existed before. In other words, by acquiring this $1 million more in bank reserves, the private banks have the privilege of creating another $6 million of bank deposits, in the process of which they acquire $6 million in interest-bearing securities or loan paper,[mortgages] less an allowance for leakage into the cash (currency) balances of the public. [pg 43]
What amount of Government securities have the private banks acquired with bank-created money? On January 31, 1964, all commercial banks in this country owned $62.7 billion in U.S. Government securities. The banks have acquired these securities with bank-created money. In other words, the (banks have used the Federal Government's power to create money without charge to lend $62.7 billion to the Government at interest. On January 29, 1964, commercial banks had total assets amounting to $304.7 billion, and all of these had been paid for with bank-created money, except $25.4 billion which had been paid for with their stockholders' capital. In other words, less than 10 percent of the banks' assets have been acquired with money invested by stockholders in the banks. [pg 46]
Banks typically have 3% of their assets in cash in order to meet customer needs. Since 1960, banks have been allowed to use this “vault cash” to satisfy their reserve requirements. Today, bank reserve requirements have fallen to the point where they are now exceeded by vault cash, which means lowering reserve requirements to zero would have virtually no impact on the banking system. Source
Originally posted by 27jd
reply to post by truthtothemasses
I'm SO extremely sick of people like that, personally. The "you got what you deserved" crowd is the reason our country is in as bad a shape as it is. They're all for whatever as long as it doesn't affect them personally, but it will soon enough.
"Give me the right to issue and control a nation’s money and I care not who governs the country.” Meyer Amschal Rothschild, International banker
I don't have a bank account. I would suggest everyone else avoid having one, too.
Incredible as it sounds, civil asset forfeiture laws allow the government to seize property without charging anyone with a crime....
Under civil asset forfeiture laws, the simple possession of cash, with no drugs or other contraband, can be considered evidence of criminal activity.
Asset forfeiture was virtually unheard until recently. In 1984, Congress overhauled the federal forfeiture laws to give the government incredible advantages over property owners, and began expanding the list of offenses which could trigger forfeiture. Now there are over three hundred federal offenses which trigger forfeiture. But the most terrifying aspect of the legislative scheme in the 1984 crime bill was that it allowed the seizing police agency to keep what they seize and forfeit. This inherent conflict of interest has lead to greater and greater abuses, as forfeiture income -- and dependence on forfeiture income -- has risen. Asset forfeiture brings in close to a billion dollars a year for the federal government alone. Source
Originally posted by Blaine91555
This was all over the news on Monday. I suppose it got little attention because it only affects people who illegally write rubber checks.
This charge is not only easy to avoid by setting up a personal credit line on the account, the act of writing a rubber check is a crime.
Don't fool yourselves into thinking writing rubber checks is not a crime. The bank saves your butt's every time they cover the bad check for you.
Look up check kiting for more info. You can not write a check until after the funds are deposited otherwise it is kiting.