Fractional haven promissory note as well as a multiplier effect. Introduction to a income supply.
Tags: Banking, effect, fractional, fractional reserve banking, money, money supply, multiplier, multiplier effect, reserve, supply
Fractional haven promissory note as well as a multiplier effect. Introduction to a income supply.
Tags: Banking, effect, fractional, fractional reserve banking, money, money supply, multiplier, multiplier effect, reserve, supply
*2nd comment*
In this fiat world money continues to lose value as more and more is created from nothing. This has enabled several entities to buy up foreign assets for basically nothing while the dollar keeps falling. Currently, several nations are seeing this and getting angry as their dollar reserves and US investments continue to lose value. In turn they are holding private conferences about dumping the dollar and going with a new world reserve currency.
njneopatriot:
Not sure if I am following you completely on your statement but I will do my best to answer. Fiat currency is only as good as a commitment to a promise as fiat currency has debt attached from the very beginning. There is only one controlling source (Central Bank) which operates as “the” primary lender for a nation. This controlling source issues credit that it knows can never be paid back causing permanent debt. *Continued on second comment*
Don’t you think it is also a matter of whether one will keep their promise? Money is really only as good as the commitment to a promise. The society that supports its money determines the value it possesses on a global scale.
What a big fucking sham. The money changers should be hung. They have ruined America!
Not bad, but the trouble with this is that modern banks use “chequebook money” based on a fiat currency.
When you ask for a loan, they literally just type it in. In the case of mortgages with 10% (100,000) money down, they bank does not even need any money at hand to create $1000,000. Since the “deposit” includes the cash they need to maintain the reserve. Not to mention some banks were inflating 40 to 1. See “Money as Debt” also on youtube.
10% reserve requirements
excellent work
As a real estate appraiser I know a bit about this. If we are talking real estate with inflated values then thats where the problem occurs. The bank has the over valued properties on their books that wont even sell for 50% of what they loaned for it due to corrupt brokers, RE agents and appraisers. This is why RE prices are going down so slow… The lending institutions do not want to suffer such a loss so they keep the prices fixed but its not working.
In the end fractional reserve lending is a major risk as it depends on the customer to pay the loan back. But this is why there is collateral. If a customer defaults, they can eventually be sued and have property seized. As long as the property which is seized has been valued correctly then the bank can get their money back by selling the seized property. The major problem we have had lately is the over-valuing of property.
Gold cannot be printed meaning that if a gold holding bank went under, the chances of being covered for a large amount (Lets say a trillion dollars worth) would be slim to none meaning that only the people that dealt with that bank are effected. Meanwhile other stable gold holding bank and their customers will do just fine as their gold wont face devaluation due to the inability to inflate the gold supply.
Theres a big difference… Gold has to be mined. Keep in mind that gold does not only yield a monetary value but an industrial value as well which makes it difficult to devalue. This is just a fact… Paper yields only monetary value which constantly changes based on global economic events. Inflation is a another key factor being that if one bank goes under then money can be printed to cover the loss (FDIC) meaning that the money losses value. This effects everyone that holds paper money.
This is not the fractional reseve method used by the modern banking network with the Federal Reserve as central bank. Reserves are now government securities and treasury checks. Modern fractional reserve method increases the actual money supply while this entire supply is loaned by the bank with unmonetized interest.
Excellent video – explains it very clearly.
Are these people watching the same video I am? Gold is not magic, in that it doesn’t defeat fractional reserve lending. That is the banking system explained here. If you only count money as gold, then no new gold is created. If you count money as deposits in a FR system, new money can be created as demonstrated. Pay attention.
To everyone saying it doesn’t work with gold, look at it this way. Gold is not created out of thin air, money is. The non-gold money doesn’t exist in physical form. If 1 man made a deposit of 1000G and then a 2nd man asked for a loan of 900G at a 10% reserve rate, the 2nd man has 900G and the 1st man knows he has 1000G in his bank but only 100G is left there. If he were to withdraw any more than 100G without the 2nd man repaying his loan, there would be a bank run.
it looks like madden is explaining a football play
He said that the people who deposited the gold think this, but would discover that this was not the case if they all came to the bank to claim the gold, they thought they had
This can totally happen with gold. Go back and follow the video again. This time, assume that everything happens in the same day. Then look at the money supply – as defined by M1 – at the end of the day. Farmers deposit -> loan to irrigation -> money to workers -> workers deposit -> loan to factory builder, who deposit loan back into bank for time being. It makes sense!
This video is completely flawed, because your treating gold in the same way paper money is created now adays. It is created out of nothing. Your creating gold out of nothing, so of course it will have a multiplier effect.
Lies it cannot happen with gold.
Gold cannot be created by banks out of nothing and cannot be printed up limitlessly by the fed.
That is why gold is fair and constitutional and Federal reserve notes are a fraud which has devalued our money by 96%.
This video is a croc of shit.
Paper and gold are not the same thing. While the gold has a ‘real’ value – money itself is an illusion and is valuless. It is perceived to have value and that perception is based on the reserve of 10%. The more money in the system = more debt needing more money to service that debt. The more money there is in the system, the less its worth. There is still the same amount of gold in the system.
Yes but everyone has the money at the same time. If the bank keeps track of the loans and liabilities then they can balance them on the budget sheets at the end of the month/year, but there is still more money in the system than there was at the beginning. That’s why he says “people think they have 2710 gold pieces.” It’s counter-intuitive that’s why it seems so misleading at first, and why D4Shawn just can’t get it.
he does say that all the gold is on reserve in the vault
You go to a bank, and ask for a loan for a house. The bank takes the loan as security for your loan, and gives you let’s say 2000 dollars for the house.
Where do you think these 2000 come from? It’s not transferred from another account, it is created. Try looking at wikipedia about FRB and you will understand much more.
IT IS creation of money, it happens digitaly and it all would collapse if everybody did it at the same time, a so called “bank run”. Google is your friend.
“9 times”
where do you get this number from