Your Bank - a Money Making Machine
Do you know where the bank gets the $160,000 for your mortgage? It's very simple. Someone walks over to a computer and types 160,000 beside your name. With only $27.93 of cash reserves for every $10,000 of assets (as of June 1999) the bank has just created the remaining $159,553 of that interest-earning money out of thin air. When, after 25 years of hard work, you pay off your mortgage, the $159,553 vanishes back into thin air. Not so the interest however. It vanishes into the banker's pocket.
Looking at the whole economy of a country, in this case Canada, the folly of such a practice becomes even more obvious: In 1999 bank credit amounted to $557 billion, almost 95 percent of our money supply. Real interest (i.e. nominal interest minus inflation) on this bank credit was at least 5 percent, or $28 billion. But where is this interest to come from since banks create credit, but not the interest they charge on that credit? It can't come from the approximately $32 billion in cash (GCM) that circulates in public hands. It can only come from more bank credit with more interest attached.
While this refers to the situation in Canada, there is no substantial difference between that country and any other. The money making machine of Modern Banking and the Fractional Reserve System works the same anywhere.
A Privatised Money Supply
Modern Banking and the Fractional Reserve System
Do you know where the bank gets the $160,000 for your mortgage? It's very simple. Someone walks over to a computer and types 160,000 beside your name. With only $27.93 of cash reserves for every $10,000 of assets (as of June 1999) the bank has just created the remaining $159,553 of that interest-earning money out of thin air. When, after 25 years of hard work, you pay off your mortgage, the $159,553 vanishes back into thin air. Not so the interest however. It vanishes into the banker's pocket. Chartered (i.e. privately owned) banks, such as The Bank of Montreal, The Royal Bank, The CIBC, etc. have created about 95 percent of our total money supply ($589.1 billion as of Sept 1999) in exactly this way. But the cash reserves in their vaults amount to only a paltry $3.893 billion. (About $32 billion of cash circulates in public hands.) This is called fractional reserve banking, and it's the greatest scam of all time because it creates debt for no reason other than to enrich the banking class. Its long term effect – as becomes clearer every day – is to steadily suck wealth out of the community and into the hands of a few people, a fact that bankers and most politicians stubbornly refuse to admit. Charging interest on money created out of nothing is, in the main, unjust and immoral, and Plato, Aristotle, Cicero, the Bible (Deuteronomy 23:19), the Koran (2:275-278), the Catholic Church, many codes of law and most writers on morals have condemned it for more than two thousand years. The historical name for this evil is usury. Nevertheless bankers enjoy peace of mind because they know that the public thinks they merely lend out the savings of their depositors. In fact, banks create more than 95 percent of all deposits, for when a bank creates a loan it simultaneously creates a deposit. What banks do to justify the accusation of being economic parasites is to lend out interest-bearing money of their own creation using a very thin sliver of legal tender (cash) to back it up.
To see the whole article, A Privatised Money Supply, go here.
For more info visit websites:
www.themoneymasters.com
www.moneymaker.com
See also articles in the Economy section of this site andThe Terrorism Of Debt - by Wanda Fish. The genocide happening in the third world today is even more horrifying than the death camps in Nazi Germany. This time the objective is not to "cleanse the master race", but to make the masters wealthier.
posted by Sepp Hasslberger on Tuesday October 21 2003
updated on Tuesday December 7 2010URL of this article:
http://www.newmediaexplorer.org/sepp/2003/10/21/your_bank_a_money_making_machine.htm
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