Originally posted by EarthCitizen07
Originally posted by NewThor7
You want me to simplify it for you?
In a fractional reserve system...
For every $1 dollar of National Debt the banks can print $9 dollars in credit.
There ya go!
That simply is NOT TRUE! They are required to keep 10% of the money they borrow from the federal reserve and loan out the rest. I keep seeing this
misnomer being passed away as fact by everyone just because they hate banks.
Actually, he is
underestimating the split, and it is you who have confused what the bankers and economist put out as propaganda for truth.
The ratio is adjusted depending on "how important" the bank is to the overall central banking system which
they refer to (in our country) as
the "federal" Reserve system.
Here's a table which I find confusing; but shows us a "hint" - a sort of "peek" behind the curtain. This table is the publication of the Bank of
International Settlements (BIS) which - in my opinion - is the "mothership" of the global banking cartel. ALL banks in our country are subordinate
to the BIS's regulatory control. It is a stipulation of the "Federal Reserve Act" now that all banks in the country are.
Note that "capital" exists in a oft-mentioned "tier" structure to them.... this entry in the BIS table refers to "tier 1."
Common Equity Tier 1 (CET1) capital requirement ranging from 1% to 2.5%, depending on a bank’s systemic importance. For banks facing the highest
SIB surcharge, an additional loss absorbency of 1% could be applied as a disincentive to increase materially their global systemic importance in the
future. A consultative document was published in cooperation with the Financial Stability Board, which is coordinating the overall set of measures to
reduce the moral hazard posed by global SIFIs.
This statement states that
the ratio can be as low as 1% (that's 1 to 100) or 2.5% depending on the bank's judgement.
And that's the key... look at the law, the regulations, and you will find that most everything is
their discretion... with the "they" being
the board of the bank.... needless to say they are also exposed to no liability for their 'economic approach's' failure and they benefit the most
from success... more than nations (the "assumed" wealth-holders) themselves.
Next time you meet a banker.. ask him or her what their fractional reserve rate is at "at this moment" - and watch them squirm.