Understanding Money & Banking Pt. 2: Anatomy of a Bank Loan
Posted by admin | Posted in Finance | Posted on 21-09-2009
Tags: Anatomy, Bank Loan, Mckeever
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Part 2 of a multi-part series by lawyer Paul McKeever that explains the nature of money and banking as it has never been explained to you before.
Content by Joomla Developer
Content by Fun Joomla
I’m just starting out in understanding banking and money, and so far I’ve learned that through fractional reserve banking, a bank when issuing a loan (IOU), creates this out of thin air, since it just has to have 10% of it’s deposits in reserve.
So this contradicts the bank’s debt that it issues to the borrower, because who has issued that debt to the bank? No one, since the bank created it.
Content by Book Store
so in other words; the more loans we take from a bank, the more of “what we have”, we give To the banks???? in other words… the more we play into their “scheme”, the richer They get???? ….. i.. don’t know what to say..
Content by Drink Hot
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Content by Drink Hot
by citizens, corporations, the government, and a sufficient time lag between the new debt being created and the existing debt repayments falling due, or else the “system” will collapse (as has happened all over the world from time to time).
The system is unsustainable, and is the reason people feel trapped in a rat race, forced to consume more and more crap they don’t need.
Meanwhile, ALL property eventually comes back to the bankers, because there is inadequate “money” to pay the debt…
Content by Alvisa Rizky
It’s interesting, but please comment on the sense and sustainability of the system. The banks “create” the principal of the “loan” (out of thin air, they add no value, other than credibility). Credit (debt) accounts for 95% of an economy’s money supply. Banks do NOT create “money” to cover the interest on the credit. That has to come from the overall nation’s money supply, which we now know is 95% existing debt money.
The system requires ever increasing amounts of debt to be entered into
Content by Book Store
Hey Paul,
Really good and informative while understandable video’s. I plan to watch them all. I wanted to know for a while how money works.
Content by Home Decor Zine
awesome video! please make more.
Content by Angel Ponsel
I just wish the youtube video conversion process didn’t (sometimes) stretch the video. I feel like I’m watching a movie at the drive-in.
Content by Home Decor Zine
Great stuff, Paul! Certainly an original way of looking at this topic.