and yet at the end of the day there is a situation where money is created out of thin air and inflated through an artificial mathematical formula and charging interest on it that has the net effect of taking away the purchasing power of that dollar when the bankers lend money to the world and expect to be repaid plus interest - it creates a scenario that simply cannot be achieved on a nett scale its not about the dollar - its about the "value" of that dollar that is being tinkered with
Fractional-reserve banking is a type of banking whereby the bank does not retain all of a customer's deposits within the bank. Funds received by the bank are generally lent to other customers. This means that available funds (called bank reserves) are only a fraction (called the reserve ratio) of the quantity of deposits at the bank. As most bank deposits are treated as money in their own right, fractional reserve banking increases the money supply, and banks are said to create money. Bank runs (or when problems are widespread, a systemic crisis) can occur in fractional-reserve banking systems. To mitigate this risk, the governments of most countries (usually acting through the central bank) regulate and oversee commercial banks, provide deposit insurance and act as lender of last resort to commercial banks. History Savers looking to keep their valuables in safekeeping depositories deposited gold coins and silver coins at goldsmiths, receiving in turn a note for their deposit (see Bank of Amsterdam). Once these notes became a trusted medium of exchange an early form of paper money was born, in the form of the goldsmiths' notes.[1] As the notes were used directly in trade, the goldsmiths observed that people would not usually redeem all their notes at the same time, and they saw the opportunity to invest their coin reserves in interest-bearing loans and bills. This generated income for the goldsmiths but left them with more notes on issue than reserves with which to pay them. A process was started that altered the role of the goldsmiths from passive guardians of bullion, charging fees for safe storage, to interest-paying and interest-earning banks. Thus fractional-reserve banking was born. However, if creditors (note holders of gold originally deposited) lost faith in the ability of a bank to redeem (pay) their notes, many would try to redeem their notes at the same time. If in response a bank could not raise enough funds by calling in loans or selling bills, it either went into insolvency or defaulted on its notes. Such a situation is called a bank run and caused the demise of many early banks.[1] Repeated bank failures and financial crises led to the creation of central banks public institutions that have the authority to regulate commercial banks, impose reserve requirements, and act as lender-of-last-resort if a bank runs low on liquidity. The emergence of central banks mitigated the dangers associated with fractional reserve banking.[2][3] From about 1991 a consensus had emerged within developed economies about the optimum design of monetary policy methods. In essence central bankers gave up attempts to directly control the amount of money in the economy and instead moved to indirect methods by targeting interest rates. This consensus is criticized by some economists.[4] http://en.wikipedia.org/wiki/Fractional-reserve_banking
thats right - if enough people approached the banks and demanded their deposit money - the banks would collapse - because the depositors money is not there and it is not safe
people often don't listen and understand things to be able to absorb information that innately simply doesn't make sense like the principle of gravity :|
And yet people knowingly deposit their money in the bank, and understand inflation exists. They get back exactly what they expect - where is the stealing?
just because people do not realise they are being robbed doesn't mean it is not happening if the general public was as educated as this forum the financial system would collapse TOMORROW.
Money is stolen from all other people holding that currency though dilution. Never Gonna Give You Up???
Well, technically that may be correct, but I think what Yippe is getting at is the whole fraudulent way that banks make their profits. Profits that do indeed come out of money created from nothing.
Heh gives you that cold metallic feeling in your chest , rather than that bowel loosening one further down the body lots of traders must be feeling lately.
My understanding of fractional reserve banking is different to this, so perhaps someone can correct me if im wrong. I was of the understanding that if $100 is deposited with the bank (under a 10% fractional reserve system), rather than the bank lending out $90 of the original $100, it actually 'creates' $900 out-of-thin-air which to loans out. It retains the original $100 which it stores as its 10% reserve against the newly created $900 ($100 being 10% of $1,000). The 'crime' (in my opinion) is that the bank provides no consideration toward the loan contract that it enters into with the loan applicant. The bank creates the new money out of thin air (costing it nothing) however the loan applicant is now required to provide their time, effort and labour in order to create wealth that can be used to pay back the bank with interest. Should the loan applicant default on the loan then the bank claims the items of REAL wealth (i.e. the home if it was a home loan)
That is not what Maloney stated. He was talking to those with the deposits. I have already stated that generalized theft occurs through inflation. The fed reserve controls that. "Banks fraudulently lend out money all the time that they have pulled out their arses and then have the cheek to charge people interest on that phantom money..." They are limited by the deposits and capital base. So how exactly are they pulling it out of their arses? I am not defending the banks here. I was just opining that Maloney is very loose with the truth. Remember his claim that ASEs went to 4 x silver price when silver tanked. That is a fraudulent statement and I lost any respect I had for him after that.
