Banks don't lend out the money their account holders deposit - they 'create' money for loans

Most people , including the tellers at the banks themselves , think that when a bank makes a loan ,it is lending out money that it got from its account holders making deposits .

But this is not the case .

What happens , is that the banks literally create electronic currency to lend out , and then, upon repayment of the loan , destroy the money they created , taking interest payments as profit from the process .
Thereby , the profit that banks make from loaning out invented money is virtually risk free .
The same applies in central banking - if the UK govt requires money , they ask the Bank of England to create it for them . Who did we think the National Debt was owed to again ?

It's not a subject matter that's well understood by this poster , but it is true. positivemoney.org...

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a reply to: ZIPMATT

And when the Ponzi scheme threatens to come crashing down the public are forced to bail them out.

It's laughable really and a system that can only ever create increasing debt.

a reply to: andy06shake

Thanks for that , and yes it is ridiculous . People complain about their tax money being handed out to beggars , when they should be worrying about it being handed out to banksters as interest only payments

This practice is called "Fractional Reserve Lending", for anyone who feels like reading up on it.

It is, essentially, the tool that has been used to steal everything from everyone in the last century- and has given control of most of the world to a private group of bankers.
They employ about 18,000 people- and 1000 of them are 'presidents' of this or that.

271 "presidents" in new york alone.

Didn't those crooks have a bunch of office space in WTC #7?
Hmmmm.

a reply to: ZIPMATT

Always a good topic for debate. Eventually the world will wake up to this scheme. At least I believe we will.

originally posted by: ZIPMATT
a reply to: andy06shake

Thanks for that , and yes it is ridiculous . People complain about their tax money being handed out to beggars , when they should be worrying about it being handed out to banksters as interest only payments

Yes indeed fractional reserve banking is screwing us all over, well that and piss poor management if funds from our elected leaders.
Those who complain about their tax money going to welfare are truly clueless and simply not bright enough to understand the bigger picture.

a reply to: lordcomac

This practice is called "Fractional Reserve Lending", for anyone who feels like reading up on it. It is, essentially, the tool that has been used to steal everything from everyone in the last century- and has given control of most of the world to a private group of bankers.

Phew , what a statement !
Thanks for bringing it !

originally posted by: lordcomac
This practice is called "Fractional Reserve Lending", for anyone who feels like reading up on it.

It is, essentially, the tool that has been used to steal everything from everyone in the last century- and has given control of most of the world to a private group of bankers.
They employ about 18,000 people- and 1000 of them are 'presidents' of this or that.

271 "presidents" in new york alone.

Didn't those crooks have a bunch of office space in WTC #7?
Hmmmm.

And they all got bonuses during the mortgage bubble.

Yup it's a very corrupt world.

Ponzi schemes from the banks are the very pinacle of it, without the general public believing in the financial system, it unquestionably would collapse like a pack of cards.

Theres nothing tangible to back up what the computers say there is in terms of money. The modern financial system is based on an almost religious belief.

a reply to: wdkirk

So did everyone who took a loan out on their house during the refinance boom. Just saying.

Essentially that was ruse and pretty much everyone bit hook, line and sinker.

To add insult to injury, not only is the money created with your signature, the banks are allowed to put up to 10 times the amount of the intial loan on their books as an asset.

Nice right?

What are these loans but loans created from debt?

Think of it this way...since the FED is loaning debt coupons, i.e. dollars to the US treasury, and those coupons are a loan, when you use these coupons to purchase things, do you really OWN said purchases??

What happens when the US defaults?

Well, good bye 'things', hence a bail in would be perfectly legal since the dollars are FED money, NOT your money or the United State's money, so they are legally within their right to do as they will with THEIR money.

And our government allows this to happen. It is allowed so that the value of our dollar does not fall because of money the Feds print. All scam and it gets into the highest levels of government. Just think, where does the money come from when a stock increases value by two dollars a share on the trading of five thousand shares out of an outstanding hundred million shares of a corporation? The money comes out of thin air.

Not much is real in our economy anymore, most people cannot comprehend this.

originally posted by: Isurrender73
a reply to: ZIPMATT

Always a good topic for debate. Eventually the world will wake up to this scheme. At least I believe we will.

This either leads to anarchy by devaluation or we move to electronic 'credits' like in Star Trek. Bitcoin will have to be dealt with if that happens.

I suspect it will be electronic. Hell, this is all a number in a bank account now. We could just forgo all this pretense and just key in a number that is good for each of us . That would let us buy our land yachts and Power boats with a truck to pull it and that would make the economy tick but people would have to be motivated to work for more when the Gov just gives you all you need, ah the dilemma's we face.

a reply to: Justoneman

Might sound like Star Trek but i imagine any completely electronic currency, will and already does, resemble more like Orwell's 1984.

Take away cash monies giving complete control to only electronic transactions and there will be no free market economies left around.

Absolute power corrupts absolutely.

It's the way banks have always worked.

There is nothing inherently scary or nefarious about it and is not part of some conspiracy.

If most people don't know/understand it it just shows that schools would be better covering basic economics.

a reply to: ScepticScot

Banks have always been a plague upon humanity. There's everything predatory and wrong with it. Always has been.

originally posted by: Puppylove
a reply to: ScepticScot

Banks have always been a plague upon humanity. There's everything predatory and wrong with it. Always has been.

In what way are they a plague?

They provide key financial services that people want and modern economies couldn't operate without them.

a reply to: ZIPMATT
I believe there was a thread here several years ago about banking, and it's history. Went into great detail about loans and how banks get the capital for them.

Did a search but didn't find it.

a reply to: ScepticScot

They provide key financial services that people want and modern economies couldn't operate without them.

So why cant Western banks take on an Islamic form of banking?

Why must debt keep being created from interest that can never be paid off with all the money circulating?

There is nothing inherently scary or nefarious about it and is not part of some conspiracy.

Conspiracy has defined meaning.


How the system of banking was set up that most of the western world uses fits perfectly with conspiracy to control wealth and the circulation of it and make it a never ending battle with debt once nothing is backing the money created.

originally posted by: InhaleExhale
a reply to: ScepticScot

They provide key financial services that people want and modern economies couldn't operate without them.

So why cant Western banks take on an Islamic form of banking?

Why must debt keep being created from interest that can never be paid off with all the money circulating?

There is nothing inherently scary or nefarious about it and is not part of some conspiracy.

Conspiracy has defined meaning.


How the system of banking was set up that most of the western world uses fits perfectly with conspiracy to control wealth and the circulation of it and make it a never ending battle with debt once nothing is backing the money created.

Islamic banking just uses charges/fees rather than interest. The fundamental operations aren't really that different.

The Idea that debt can't be paid off due to interest is a Myth.

Fractional reserve banking and having a backed currency are in no way mutually exclusive. you can have both, neither or either one. Neither are part of some conspiracy.

a reply to: ScepticScot

Islamic banking just uses charges/fees rather than interest.

every other bank charge fee's and many more charges + interest on money borrowed on top of that , use the ATM more than a certain times a month, there's a charge,


Deal with a bank teller instead of telephone or internet banking, charged.


Direct debit taken without enough funds, penalized with a fee for not having enough money.

The Idea that debt can't be paid off due to interest is a Myth.

all debt, yes it cannot be paid off because of how it was created.

The debt I have, yeah its easy pay off.