Quick look into how the banking system works

[hanimmal]

This is a good discussion that may get lost in a different thread so I thought I would repost here as it's own thread.

This is a pretty basic rundown of how the banking and fed operate. There are a lot of misconceptions that banks just invent money, or that they are a Ponzi scheme. And that the Fed is somehow king of the ponzi scheme.

Feel free to disagree, because in reality this helps me study up on this, having to figure out where the criticism is and how it is wrong, or right. And force me to reevaluate what I think that I know.

When you deposit money into your bank, they in turn deposit your cash as a RESERVE upon which they can and do create money out of thin air to loan to someone else. The Entire world's banking system works on FRACTIONAL reserves. They don't actually lend YOUR money to anyone, your deposit lets them make a loan about 10 times larger than your deposit. Your deposit is sent to a holding area and it becomes part of the reserve required by law to be at least 10% in assets to loans. IE the bank has 1 million in reserve and 10 million in loans. this is the basis of our banking system, we let banks borrow money to us that doesn't even exist and we gladly pay them interest to do it. The banks are basically making money off of nothing. It has been this way since 1913. It has been this way for your entire life and you have no idea thats how it was done, because you and millions like you have been fooled into thinking that a piece of paper is as good as gold.

This is the misconception. That somehow banks can make money out of thin air. But it is not reality.

Fractional-reserve banking is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all these deposits upon demand.

First sentence on the wiki page. Some people continue to not understand that banks are only allowed to lend out most of the full amount they keep in deposits! Not that they are able to lend out more than they have in deposits.


Here is how it works in reality:

See with what gets said by people that believe banks make up money is that gold is the only thing of value. I say we are the only things that can give value to an object, and in essence we are the only thing of value.

If I take out a loan, I am telling the bank that I will be able to work and pay for it by paying you back a small amount of the total each month until I do. Like it or not, most people do not have the funds to simply buy homes outright and need a loan to get them.

And just spending the money has a multiplier effect too, just nowhere as efficient because a lot gets siphoned away:

This is how these folks think that it works:

Meaning that money was invented out of thin air. But it is not. The original deposit is what everything is tied to. If there was not a fixed amount lending would never have lasted thousands of years and helped our society grow and advance.

If I am a bank and someone deposits funds to my bank, I have those funds, pure and simple (It doesn't matter to me if they came from another bank or from a birthday check).

To me those were someones money that they lent to me to grow and keep safe.


I do that by paying my FDIC insurance and keeping it in safe investments (the shadow banking system did not have to follow this and that is where this collapse started).

This is why the Fed is so darn important. It has very nice tools to somewhat offset what banks can do, up or down. If they want more people opening up businesses they can lower the RR (reserve requirements) and banks will be freed up to lend more, or they can heighten them and this forces banks to lend out less:

This is a nice graph showing this on the wiki page:

This is all very logical and easy to understand, so I am unsure why people continue to believe the lie?

The gold thing is whatever at this point. This is the pivotal point to people saying gold is the most important thing. But when they can actually see how the system is, hopefully they will realize it is not as scary or evil as you thought.

Stop taking your professors teachings as gospel, they can and are very wrong very frequently.

Although I agree to not just take everything that gets said at face value, you should still listen to your professors and learn what they are saying. Because you may be wrong, and sitting there saying nuh-uh just leads to a lifelong misunderstanding of the facts.


Thank you to the people that contributed to this thread. I changed it a little to keep it general.

 

[Illegal Smile]

A pretty good overview. People tend to think of wealth as money and to think of money as currency. In fact, currency, M1, is a small fraction of the liquid wealth that flows globally. It "is" very complex and for that reason is a magnet for conspiracy theories.

 

[Rob Roy]

Wait...I know....it's like cloning right? You need a mother plant right?

 

[hanimmal]

A pretty good overview. People tend to think of wealth as money and to think of money as currency. In fact, currency, M1, is a small fraction of the liquid wealth that flows globally. It "is" very complex and for that reason is a magnet for conspiracy theories.

Thank you Illegal!

Here is a look at what he means by M1. To figure out what the actual money in society is, they have come up with a system called "Measures of Monetary Aggregates" which is M1, M2, and M3.

M1 = All currency +Traveler's checks + Checking accounts
M2 = All M1 + Small denomination time Deposits + Savings and money market accounts +Money market mutual funds.
M3 = All M1 +all M2 + large denomination time deposits. This is hardly ever used.

Table from Nov. 2008;

M1 ----------------------In billions (so 100 is 100 billion, and 1000 is 1 trillion.
Currency----------------804.9
Travelers Checks------5.6
Checking Deposits----405.9
Other Checking d------306.1

Total M1-----------------1,522.5

M2
M1------------------------1,522.5
Small Time Deposits--1351.0
Savings and MM-------4,007.1
MMMF--------------------1053.9
Total M2-----------------6,412.0


This is how the Fed determines how much money is in the system. Depending on things like GDP growth or decay(or unemployment rates, or inflation), they will base their decisions on how to try to set interest rates, and reserve requirements to grow or shrink the monetary supply.

And based on this they try to get the desired effect. It hardly ever works 100% like it should, but that is because people are not up on what is being done and continue to go on with life as normal, and that is hard to test for (they are trying to study this better with behavioral economics), and others try to get a jump and figure out a way to beat the system. But generally it works well, and that is why we only see (usually small) recessions every 5-7 years or so, and they rebound pretty quick now.


This is why government works well. People cannot be told (and shouldn't) what to buy. So when they start to save, and not spend there is more money taken out of the system, but at the same time that banks are able to lend more, businesses start to curb their growth because nobody is buying anything (recession).

So this is when the government should cut taxes (so people can get their savings up faster, which is why Obama dropped the lower income brackets since most consumer demand is from them) and increase it's national spending (i.e stimulus package). This increases the demand and allows businesses to produce and not lay off the people they would have when their customer base dried up (which would lead to even less demand, and more layoffs, on and on down the downward spiral).

The trick is, that when the economy is back on track, the government should then do the opposite. They should increase taxes while cutting their spending accordingly. This would shrink their role and build up a surplus for when the system goes into the next hiccup.

This is pretty amazingly easy stuff, why do they get it wrong?

Because economics as a whole is a pretty new science. And some people refuse to put any faith into sciences. Before the great depression, economics was not looked at as a whole, it was only looked at on a very small level (businesses). And only after Keynes did they really take a look at math models that worked in both demand of consumers and supply of businesses as a whole. And even then it was in it's infancy and they got a lot wrong. So after WW2 through the 80's it was highly experimental, and we did not understand the full nature of it.

Finally they get it (mostly) and are starting to put more weight on it even if a lot are dragging their feet with it. There will continue to be things that are learned and force it to adjust the old models, but it will just continue to get more and more accurate as time passes.

This is why Bush although he wanted to allow the banks to fail (like Lehman Bros.) he saw that the economists were right and it errupted into a bank panic after a couple did. And he stopped it by injecting all that money into them in November 08. Without the banks doing what I had pointed out above, we would have been screwed, a 9fold monetary decrease ontop of the recession would have been devastating. Especially because it was mostly due to irrational fear of the banking industry.

 

[hanimmal]

Wait...I know....it's like cloning right? You need a mother plant right?

Lol kinda!

Except that kinda leads to unlimited growth. If clones could only grow to 90% of the mother, then yeah!

 

[Tyrannabudz]

Exactly. Fractional reserve banking. I went to the bank to get a loan. I had at the time $6,000 or so in my savings account. They would not give me a loan, I asked for $15,000. They offered to loan me my own money that I had in savings. They would give me a loan for $6,000 with a 20% interest rate, they would hold the money I had in my savings account hostage until I payed them back. "What kind of shit is that" I asked the loan officer. I told the lady that since I had my $6,000 in the bank I knew that they could write in their books that they had $60,000. I told her I felt like I was entitled to some of that imaginary money since it was my $6,000 they were holding. I have never seen a more confused look on a persons face. I insisted that she was aware of this fractional reserve game. She had no clue.
So I told her that maybe before she starts to approve loans she ought to at least know where the money or funny money is coming from.

 

[Keenly]

in 1913 we gave bankers control over our currency

its no longer backed up by gold... so yeah in essence, its created out of thin air

the fed needs to be audited and then shut down

 

[NoDrama]

Hanimal, add up all the money from your very first illustration, the money multiplier effect. After its all said and done, almost $100,000 in loans was made from the original $10,000. This right there says to me that you DO NOT understand our monetary system. Where did the money come from? The commercial banks create money out of thin air. Please note there is a difference between a commercial bank, and your local town bank or credit union.

When the fed buys 200 billion dollars of US treasuries, where does the money come from? Do you think the Federal Reserve is part of the Government?

 

[NoDrama]

If the M2 money supply is 8 trillion, how is it possible to have 57 trillion in debt if all loans are 100% cash backed there han? Wouldn't the M3 money supply be equal to the total indebtedness of everyone in the USA including all corporations and government? Its not, total indebtedness is many times more than all the money that exists in the world, by a huge margin. JUST in credit derivatives we have a total worldwide value of over 4 quadrillion dollars. There is no way possible that much money exists in banks. Take every bank in every countries deposits and add it all up and it wont even be a fraction of that number.

 

[Rob Roy]

The creation of fractional reserve banking is a way to make more money, literally. Who benefits from this and why they didn't want this to become common knowledge to the public is the real question.

Federal Reserve...cute name. So simple, it worked for years. The slumbering beast IS awakening. Will they awaken before it's too late is another interesting question. We'll see.

 

[hanimmal]

Hanimal, add up all the money from your very first illustration, the money multiplier effect. After its all said and done, almost $100,000 in loans was made from the original $10,000. This right there says to me that you DO NOT understand our monetary system.

You do not see that is almost exactly what that was showing, and somehow you say that I did not know it was happening? Did you not see this chart?

It stands that if $100 deposit would multiply to about $1000 that it is a multiplier of about 10times the original amount?

Where did the money come from?

I am not sure why this so hard for you to get.

If I go to a bank, and have $1,000 to deposit and put it in their bank, what happens? They treat it like anything else and will now be able to loan out $909, (not $10,000 like you believe).

But, what you're not getting is that money could have been a loan from another bank, so someone had to have went and deposited $1100 for me to get $1000, and that goes all the way back each time gaining an additional 10% before you get back to the original deposit. The money multiplier in reverse.

If you are a bank, you do not distinguish where the money came from, you do not ask if this money you are depositing is a loan from another bank, and if so decide not to tie any loans to it, would you? No because it is someones money, not yours. Those people put it in your bank to keep it safe and grow it a little for them.

This is what distinguishes banks from buying something, because that money can almost all be used to help someone else, it allows money to expand and help more people out.

The commercial banks create money out of thin air. Please note there is a difference between a commercial bank, and your local town bank or credit union.

They do not, I have shown you where the wiki page you linked told you this, explained it, drew up some charts to explain how what you believe is completely wrong, and completely illogical.

You are an economist right? How can it possibly be that a bank could be able to take a deposit and give a loan with that as 10%, and not have unlimited growth? Imagine, bank1 and bank2, they bounce customers with loans, someone deposits $100 in one, so they go to the next and deposit it, bank2 can give a $1000 loan, and they deposit it into bank1 who then makes a $10,000 loan, who goes back to bank2 and someone gets a $100,000 loan based off of it, back and forth it would never stop under your model.

This is not reality.

When the fed buys 200 billion dollars of US treasuries, where does the money come from?

The problem with explaining this, is that you lose sight of why it is buying or selling treasuries. This is an entirely different topic than banking and how it affects the money multiplier. But important none the less.


It is because something is not working right and something needs to be done to correct the economy.


If the goal is to get some more money out into the system due to recession, the Fed buys the treasuries or if they are trying to shrink it, they will sell them.

If they are trying to shrink it, it points to the system is expanding rapidly and they are trying to slow growth (and inflation). So what they will do is sell treasuries to banks. This means that the banks now have the treasury which is a liability on the Fed's balance sheet (meaning that they will need to buy it back at some point). The bank is happy because they are making interest off of it, and as soon as they wish, it is the easiest thing to sell on the open market for them next to cash. The money collected is now part of the Fed's assets though for future open market operations.

Likewise if they are injecting money into the system by buying the treasuries, it is likely because they are trying to stimulate the economy, and slow deflationary trends. They use money from their assets or if the need is important enough (like this last year) they will get the treasury department to issue them money in the form of an IOU and use that to buy the treasuries.

And they do have to pay back any difference in the borrowing, you can look at their asset/liabilities here: http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1

This is as close to 'out of thin air' that this system gets. And it is in times that are needed that they have to do this to stop a collapse, and usually with the permission of the senate.

But it is important to understand that they are not willy nilly doing this, it is to keep the economic system operating smoothly and keeping us from living in dirt huts.

Do you think the Federal Reserve is part of the Government?

You seriously keep attacking me, and I do not get it. You were dead wrong with how you thought the money multiplier effect works. You think that banks are able to take your deposit and loan out 10x the amount because your money is the reserve, which is 100% wrong. And now you ask this question?

No the Fed is a blend of the government and private banks.

What happened is that because nobody trusts the government, and nobody trusts the banks, they smartly set up the fed (after the 1907 crash) to not be tied to politicians because politicians are subject to trying to look like they are doing something (even if it is wrong (ie: end the fed)), and will try to get the Fed to do what they want.

Likewise they did not want monetary policy in the hands of bankers because it is not a good idea to have them with the only ability to stabilize the economy, because they will have lots of tools to manipulate markets and the past bad behavior pops up with banks and the system melts (like it did in 1907 that prompted the Feds creation). And they were the reason something needed to be done in the first place.

So now they have the Fed which is set up to stop the collapse of banks, while at the same time helping the government to direct the economy to steady growth with as few bumps as possible.

And like now, when politicians start barking about gaining more control over the fed (which is stupid to have a bunch of non economists/finance/accounting/mathematicians that are constantly more worried about getting votes than doing what is the best thing and don't really understand it) they get push back by the fed and the banks.

Likewise when the banks seem to get more pull on the Fed (because they do work so close together) the government steps in and tries to pull back.

So it is very interesting that they are being pulled one way or the other when bad behavior starts up, because of conflicting interest. Which is a big reason why our country has worked so well, that balance that gets struck.

If the M2 money supply is 8 trillion, how is it possible to have 57 trillion in debt if all loans are 100% cash backed there han? Wouldn't the M3 money supply be equal to the total indebtedness of everyone in the USA including all corporations and government?

See you really don't get it.

Lets say you have a home that is worth $100k. Do you have to have $100k in cash? No, what happens is that the bank uses its money to buy your home and you owe them that $100k (about $220k if you only make the regular payments) over the next 30 years. Again once you actually are able to think about how the money multiplier works you should get this.

Again a bank cannot make loans more than the amount that it has in deposits. But that does not stop people from depositing the money they got from that loan into another bank which can then make another loan based on the deposits.

So that is why you get about 10x money can circulate before it cannot grow in banks anymore. And if we look at your M2 of 8 trillion, 8 x 9 = 72 trillion dollars that it could be loaned out if everything was kept as a deposit. So that is how you can have 56trillion debt.

JUST in credit derivatives we have a total worldwide value of over 4 quadrillion dollars. There is no way possible that much money exists in banks. Take every bank in every countries deposits and add it all up and it wont even be a fraction of that number.

This is where you should see what I mean about 'shadow banking system'.

This is not the banking industry, and the Fed has almost zero control over them. This is the system that has cropped up over the last couple decades in response to loosening of the laws. But even so they have almost no regulation and can pretty much do anything they wish to.

This is why it is very important to understand that the bad behavior while the banks did become part of it, it did not start there (they jumped on the money train well after it left the station, just like people did with flipping houses). The collapse we just experienced did not start with the Mac banks, it started with this shadow industry that is to this day is not regulated.

And worse yet because people refuse to understand the difference, the banks are going to get more regulation to appease the public, and these systems are going to continue to go unregulated.

And due to that they can sit there and leverage themselves a hundred times over on a bet (hedge) that someone is going to fail, and nobody is there to stop them. If they are right (which usually leveraging against a weak business is usually enough to drop confidence and have its investors pull out their money causing the collapse) they make a ton of money. If they are wrong, they file bankruptcy and go work for another company.

 

[hanimmal]

Exactly. Fractional reserve banking. I went to the bank to get a loan. I had at the time $6,000 or so in my savings account. They would not give me a loan, I asked for $15,000. They offered to loan me my own money that I had in savings. They would give me a loan for $6,000 with a 20% interest rate, they would hold the money I had in my savings account hostage until I payed them back. "What kind of shit is that" I asked the loan officer. I told the lady that since I had my $6,000 in the bank I knew that they could write in their books that they had $60,000. I told her I felt like I was entitled to some of that imaginary money since it was my $6,000 they were holding. I have never seen a more confused look on a persons face. I insisted that she was aware of this fractional reserve game. She had no clue.
So I told her that maybe before she starts to approve loans she ought to at least know where the money or funny money is coming from.

No offense, but I really feel bad for that lady that had to help you.

Your deposit would allow them to only lend out about $5,454, not $60k. They can only lend out about 90% of the money they have in deposits.

in 1913 we gave bankers control over our currency

its no longer backed up by gold... so yeah in essence, its created out of thin air

the fed needs to be audited and then shut down

So your time at work is not worth anything? That must suck. I know when I work and get paid and get cash for my checks that I can then use to buy what I need/want it is not created out of thin air.

Gold has no value other than what we place on it. Same with bills. Same with our time.

The creation of fractional reserve banking is a way to make more money, literally. Who benefits from this and why they didn't want this to become common knowledge to the public is the real question.

Federal Reserve...cute name. So simple, it worked for years. The slumbering beast IS awakening. Will they awaken before it's too late is another interesting question. We'll see.

This is common knowledge, if you go to the fed Here I will make it easy, here is the Feds 101 on its website:
http://www.federalreserveeducation.org/fed101/index.htm?CFID=3812205&CFTOKEN=74581677

Who benefits is us!

Look at how we are able to have homes (how many people had over a 1000 sqr foot home during the old gold days?). Cars, education, electricity, ect. Everything we have is because of our economy. And our economy works so well because of the banking industry. The Fed is just there to make sure the banking industry does not collapse, and to help the government to keep the economy from the boom bust cycle that we had before (amazingly enough the gold standard did nothing to stop this).

 

[NoDrama]

Hannimal, I am going to assume with near 100% certainty that you have never worked at a commercial bank.

Do you really think that the Fed buys Treasuries with Money that they either had, or borrowed from the treasury? If the treasury had the money in the first place why the hell would they sell it to the fed. When the US sells treasuries to the fed this process has a couple different names according to who you ask. Its called "Monetizing debt" by most , other more politically correct persons will call it "Quantitative Easing".I hate to burst your ego, but the fed buys treasuries in any amount it wants and it creates the money to buy it out of thin air. They have an account they just add numbers to in the form of electronic "Credits". The treasury cannot print money it does not have, only the Fed reserve system is allowed to create money.

When a bank makes a loan that loan becomes an ASSET, and goes on the books as an asset. Now if you have any accounting background you and I both know that an asset is as good as money in the bank. So when the bank takes your hundred dollar deposit, it sets aside 10% and loans out the other $90, now that $90 goes into the books as an asset, which they are now able to make yet another loan upon in the amount of $81 and on and on it goes until the money from the original deposit has multiplied by almost 10 times. This IS the way it works, banks cannot and do not hold 100% of total loan amount in the bank, that never ever ever happens and to say otherwise only indicates that you do not understand how banking works at all. In FACT banks ARE money factories.

FWIW I am not attacking you, but when you constantly prove yourself wrong, misunderstand the info you yourself post, and fail to actually try to understand what is being told you, well it comes off that way I guess to you, though no animosity is intended.

You need to do far far far more study on this subject, because as it is right now you really do not understand it at all. And thats not an attack, thats the 100% truth.

"The Greatest limit to Money is the belief that money is Limited". Dr. K.R. Stevenson

If the Derivatives market is 4 quadrillion worth, every one of them MUST have been purchased by someone else, or they would not exist. Explain that if you think you can. Explain how Something 200 times larger than all currency, deposits, pensions, investments, TOTAL world GDP and all other things combined could have been purchased if the money does not exist. Fact is the money does exist, central banks can make as much money as they want with the push of some keyboard buttons, its really just that easy and it happens every day.


PS congress cannot control the Fed, the fed cannot be overruled, dont believe me? watch as Alan Greenspan tells you it is so.


[youtube]pVmxQsvj6lo[/youtube]

And there you have it, as long as congress doesn't ask the fed reserve to do things the fed does not want, then there is no realationship with congress or government at all since the Fed is a Private and independent Cabal of privately owned international banks.

 

[NoDrama]

http://www.federalreserveeducation.org/fed101/index.htm?CFID=3812205&CFTOKEN=74581677

I checked out this link, it shows exactly what I have been saying, let me quote it for you:

The New York fed pays for the Securities by "creating" funds- creating the accounts that the dealer's banks have at the New York Fed.


pretty cut and dried there, they "Create" the money.


Just for fun. Did you know that the majority stake of the Bank of England was purchased with a stick? Totally true, I would not shit you.

 

[rips run]

dont mean to butt in here ,these 2 documentarys sumed it up well "zeitgeist" movie(2007)
and zeitgeist addenum,has alot of good points , on alot of differnt stuff ,keep a open mind and dont forget the fattie before you watch them,,,

 

[Keenly]

im pretty sure you have it backwards...

money, paper, the dollar, has value because we say it has value

gold has value because there is a limited supply of it, and it has always, and always will, continue to hold value


your argument against the dollar being worthless because you can buy stuff with it does not even make sense


yes you can buy stuff with it, but if they continue to keep printing money (out of thin air, with no REAL money to back it up, as paper is a PROMISE to give you real money) if they keep printing money thats backed by nothing producing practically nothing our nation and our currency will collapse leading into the greatest depression


you should read what gerald celente has to say on the subject, his statements directly contradict yours, but i trust him so much more

 

[hanimmal]

You need to do far far far more study on this subject, because as it is right now you really do not understand it at all. And thats not an attack, thats the 100% truth.

"The Greatest limit to Money is the belief that money is Limited". Dr. K.R. Stevenson

Is this who your getting your economic information from?

Welcome to KalindaRoseStevenson.com​

Kalinda Rose Stevenson, Ph.D.
President, ABKA Diversified, Inc.​

What's ABKA Diversified Inc. you may be asking yourself, I know I did:

"ABKA Diversified, Inc." owns about 45 other domains View these domains >; is a contact on the whois ... ABKA Diversified, Inc. 6440 Sky Pointe Dr #140-106 ...
whois.domaintools.com/forexsystemmastery.com -

Love google. Yeah so her company is 45 domains that cost about $500 to open up.

So her "Main page" goes on;

Consider this page a brief introduction to who I am and what I do, and an invitation to join me.
The first thing you will notice is that my interests cannot be contained under one topic or one identity. On the top of the page, I call myself:

Writer
Story ReTeller
Persuasive Writing Coach
Teacher
Scholar
Photographer
Climber of Small Mountains
​

This list is both too long and too short.

Yup not a economist, nor a banker. Infact she is a persuasive writing coach, so at least that could be some solace.

Here is the page link if you want to check it out yourself:
http://kalindarosestevenson.com/

So then I am trying to find out what she is a doctor of in her "About me" section:

About


Welcome back!

About Kalinda Rose Stevenson​

​

Coming Soon​

So yeah, take what you "Know" with a grain of salt.

At least when I recommend a economics book about the banking system it is written by an economist with his PHD in economics from MIT. And the first book I recommended was his 1986 edition which was a full 22 years before he became a gov. at the Fed. And his latest book came out in 08 after he had left the fed so you can judge any difference in what he says.

And these are the textbooks of the people that are going to be the bankers. So what exactly would be the reasoning for teaching everyone that is going to do the job over the last 22 years lies?

I would go into more about how you are wrong in your last post, but the problem is you have a completely backwards understanding of what the Fed and banking does.

You have some nice fun facts, but the problem is how they interact with reality is completely backwards. I have shown you the law, gov websites, ect at how banks do not create money out of thin air, and you refuse to believe it.

So you jump to the fed, which I explained before you did that they do inject money into the system, because that is their job! Not out of some back door scheme to steal another 2% from you somehow.

And ontop of it all you get your information from people like above, instead of people that are actually in the profession and have a far better understanding of it.

'Course, I could get a hell of a good look at a T-Bone steak by sticking my head up a bull's ass, but I'd rather take the butcher's word for it."

Great quote.

 

[NoDrama]

'Course, I could get a hell of a good look at a T-Bone steak by sticking my head up a bull's ass, but I'd rather take the butcher's word for it."

Great quote.

I got ZERO information from her, not even a one word bit of info, but she did have a great quote, so I used it.

Now go back and read it all over again knowing that I did not use her as my source. My source comes from the devil himself.

Here I will leave you with some other quotes, perhaps you can educate us all on how these people are also so unworthy to speak on the subject.

“I sincerely believe that banking establishments are more dangerous than standing armies, and that the principles of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”

Thomas Jefferson

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Henry Ford

“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight-of-hand that was ever invented. Banking was conceived in inequity and born in sin... But if you want to continue to be slaves of the bankers and pay the cost of your own slavery, then let the bankers continue to create money and control credit .” ~Josiah Stamp, president of the Bank of England

“The trouble with being educated is that it takes a long time; it uses up the better part of your life and when you are finished what you know is that you would have benefited more by going into banking.”

Philip K. Dick

"Banks lend by creating credithttp://www.articlesbase.com/international-business-articles/famous-quotes-on-banking-701216.html#. They create the means of payment out of nothing." -- Ralph M. Hawtrey, former Secretary of Treasury, England

"Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of a pen they will create enough to buy it back." -- Sir Josiah Stamp, former President, Bank of England

"The Founding Fathers of this great land had no difficulty whatsoever understanding the agenda of bankers, and they frequently referred to them and their kind as, quote, "friends of paper money. They hated the Bank of England, in particular, and felt that even were we successful in winning our independence from England and King George, we could never truly be a nation of freemen, unless we had an honest money system. Through ignorance, but moreover, because of apathy, a small, but wealthy, clique of power brokers have robbed us of our Rights and Liberties, and we are being raped of our wealth. We are paying the price for the near-comatose levels of complacency by our parents, and only God knows what might become of our children, should we not work diligently to shake this country from its slumber! Many a nation has lost its freedom at the end of a gun barrel, but here in America, we just decided to hand it over voluntarily. Worse yet, we paid for the tyranny and usurpation out of our own pockets with "voluntary" contributions and the use of a debt-laden fiat currency!." -- Peter Kershaw


"The real truth of the matter is, and you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson. History depicts Andrew Jackson as the last truly honorable and incorruptible American president." -- President Franklin Delano Roosevelt, November 23, 1933 in a letter to Colonel Edward Mandell House

"The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy." -- Pringle, Robert; and Deane, Marjorie

"When you or I write a check there must be sufficient funds in our account to cover that check, but when the Federal Reservehttp://www.articlesbase.com/international-business-articles/famous-quotes-on-banking-701216.html# writes a check, it is creating money." -- Boston Federal Reserve Bank in a publication titled "Putting It Simply

"Some people think the Federal Reservehttp://www.articlesbase.com/international-business-articles/famous-quotes-on-banking-701216.html# are U.S. government institutions. They are not ... they are private credit monopolies which prey upon the people of the U.S. for the benefit of themselves and their foreign and domestic swindlers, and rich and predatory money . The sack of the United States by the Fed is the greatest crime in history. Every effort has been made by the Fed to conceal its powers, but the truth is the Fed has usurped the government. It controls everything here and it controls all our foreign relations. It makes and breaks governments at will." -- Congressman Charles McFadden, Chairman, House Banking and Currency Committee

"Give me control over a nation's currency and I care not who makes its laws." -- Baron M.A. Rothschild (1744 - 1812)


So lets see you discredit these people, please, I await the schooling from you and your extensive knowledge of bupkis.

 

[hanimmal]

“I sincerely believe that banking establishments are more dangerous than standing armies, and that the principles of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”

Thomas Jefferson

Born before economics was even invented, much less understood.

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Henry Ford

1923 autobiography "Henry Ford - My life and work"

A few years before the great depression, hmm Yeah I think he may be right!

“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight-of-hand that was ever invented. Banking was conceived in inequity and born in sin... But if you want to continue to be slaves of the bankers and pay the cost of your own slavery, then let the bankers continue to create money and control credit .” ~Josiah Stamp, president of the Bank of England

Born in the 1880's a full 50 years before the invention of macroeconomics, which before was just about a single business or micro economics.

“The trouble with being educated is that it takes a long time; it uses up the better part of your life and when you are finished what you know is that you would have benefited more by going into banking.”

Philip K. Dick

Although Dick spent most of his career as a writer in near-poverty,[8] nine of his stories have been adapted into popular films since his death, including Blade Runner, Total Recall, A Scanner Darkly and Minority Report.

Which movie did that quote come from?

I am actually tired of google and need to finish my laundry.

So maybe I can just ask, is there any of those quotes that are from after WW2 besides science fiction writers?

 

[NoDrama]

But, what you're not getting is that money could have been a loan from another bank, so someone had to have went and deposited $1100 for me to get $1000, and that goes all the way back each time gaining an additional 10% before you get back to the original deposit. The money multiplier in reverse.

So lets use your own logic against you shall we? If each loan given out was preceded by an even larger initial deposit. the initial deposit into the very first bank account ever created would have to be in excess of 1 trillion quadrillion dollars, for if every bank loan is 100% backed by cash/assets /liquid capital then that original loan must be 10% larger than all the wealth in the whole entire world and all future wealth created. An impossibility if there ever was one. Kind of like saying some super rich dude made the first deposit which all loans made by all banks since the beginning of banking were originated upon. Thats just , well, its stupid Han, take your idea to your professor of econ and submit it as your term paper. I'm sure you will get to wear the pointy hat in the corner of the room for the rest of the semester.

Do you see how your understanding of the system is flawed? You don't do you? Your lost, but think you have a compass that shows you the way, but your compass only shows the way deeper into the cave of ignorance.