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Fractional Reserve Banking

I happened upon this...

http://www.youtube.com/watch?v=cvpjM0rkAu4

I bring this up (a small number of families holding all the wealth) with my family and all but one economist is dismissive... Actually after a while my parents just started to patronize me.

And the one economist says "don't tell anyone I agree" and went went deep into the subject with me. Then "This conversation never happened."

Weird. Why do those who understand banking and/or economics have to hide in the shadows for the most part. Some people definitely don't. But the subject seems to be taboo for no good reason. It seems people who talk about the subject are marginalized or thought of as kooks.

This video is old but it's really good.

I've gotten into heated debates about fiat money and how even our original US central banks were pretty much just as bad as the FED.

But it's a very simple subject. A small number of bloodlines were the first to gather wealth grew their bloodlines to maintain that wealth. They can then institute whatever they want.

They start banks which start central banks (someone correct me, not quite right) and they lend money to the banks and the public puts their money into banks who loan it out again via fractional reserve banking. It's a very simple idea. If I'd have been born back then and had a thirst for money I would have done it.

Like I tell people "follow the money."

I had a neighbor bent on learning about money so I gave him some info on FRB and some info on Austrian Economics. Then one night I told him to follow the money and he said he didn't want to because he knew where it led.

Most people don't want to accept that FIAT notes and money is a sham for the most part. Only when promissory notes are exchanged I think economics works but I could be wrong. I'm not very knowledgeable in economics but I don't think one needs to be incredibly knowledgeable to understand FIAT money and Fractional Reserve Banking is a ticking time bomb.

If anyone can educate me more or debate I'm open. I've only scratched the surface. I'm all ears.

I'd like some input.



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Cyril's picture

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You might be interested in this comment of mine :

http://www.dailypaul.com/254423/expectations-ramp-up-for-qe3...

'HTH,

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

This video

is only a clip from a documentary called the Money Masters. This documentary is 3 and a half hours long. It is heavily criticized amongst us dpers, and austrian economists, mainly due to the solutions that are presented at the end of the film. It basically posits that it is not the federal reserve itself that is the problem, but the private nature of the fed, and as you point out, the secrecy involved which keeps those at the helm in shadows. He offers the solution that the Congress should be the one printing the money. Most Austrians and Ron Paul believe that competing currencies are the answer (usually gold and perhaps silver will win out as the historical money when given the chance, of course), and giving congress control of the fiat printing press will cause the same volatility/ perpetual boom & bust cycles and inevitable inflation that the Fed/ powers that be are giving us anyway (if not worse)

You don't seem like you need a primer on Fractional Reserve Banking, But keep in mind that this is made possible through the tool of the fed known as the RRR, required reserve ratio. The fed has usually kept the RRR at around 9-10%, meaning that the biggest banks are only legally obligated to keep 9-10% of all deposits, and what is left is up for loan, which the banks can make money upon the interest of those loans. but thats not all:
- If a bank's total deposits are less than $11.5M they have a 0% required reserve ratio
- If it holds a total of $11.5-71M, the rrr is 3%
- If total deposits are more than $71M, the rrr is 10%

Fractional reserves are the most inevitable inflationary feature of the system. Of course all this is out in the open and easy to criticize; it is the secret actions that are the most dangerous to us.
We saw last year when we received a partial audit of the fed that they had secretly created and lent out nearly $16 Trillion during the 2007-2009 bust. That's outrageous, and yet the result of only a partial audit... Ron Paul wasn't even satisfied with this, yet the amount discovered was more than the entire national debt, and at least 7 trillion being lent to foreign banks. Now imagine how many digital zeros they are adding to certain accounts that we do not even know about!

To keep it humorous, check out these short sketches by the Australian satirists Clarke and Dawe:
How does the Financial System Work?(banks encourage risk and debt in order to make money themselves)

The US Bailout and Debt Crisis(under Bush). (It works the same way on a global scale)

How to Run a Country (The interests rates which Clarke is referring to is the rates that banks charge borrowers, (not to be confused with the Federal Funds Rate, the rates that banks charge each other, which is manipulated by the Fed's Open Market Operations), this reiterates that debt is the goal of the banks))

European Debt Crisis (how can broke economies lend money to other broke economies and where does the money come from... the question that cannot be answered.)

Quantitative Easing. (This is the most straightforward explanation of QE you'll find. pull up a chair.)

I'm pretty sure I just vomited a bunch of videos that aren't necessarily relevant but I get a kick out of them. Besides, once you realize the mess that is going on, you have to maintain a sense of humor to keep it all from getting on top of you. :)

All ears too... desperate for guidence

Totally understand what you're talking about where nobody wants to talk about it. (except there is a LOT more about it that I don't know or understand than what I do).

What I do know is that something feels very wrong. And if something bad does happen, I'm in an area (predominately clueless, starry eyed 0bomba worshipers) that I will definitely have to bug out when SHTF.
I checked into my bank account and noticed a message from the credit union posted from a month prior, about not being able to access my account on a specific date. Something to do with "upgrades to the system in order to comply with something to do with the gov".
Within an hour I was closing my IRA -- which took 45 minutes I might add and having to answer a bunch of 'none-of-their-business' questions. So now I'm trying to figure out where to go from here. I don't feel like I have a lot of time to fully research what seems everyone but me knows, and also have a really bad feeling.
Where do you go to get physical silver? How can you trust they'll send it or it won't be intercepted by the gustopo?
And then there are so many things to choose from! I'm getting overwhelmed, confused, and nervous to the point that I'm not sure how to make an educated (or rational) decision atm. Not to mention my husband won't wake up, doesn't read anything, gets his 'newz' from Robin Meade (so it must be true!) and is totally UN-interested in computers -- yeah, it's a scarey place to be.
I'm hoping you or someone can point me in the right direction so I can quickly learn to help myself out of this black hole/funk.
Thanks in advance for any insight.
(sorry if I sound pathetic... it feels that way too)

Hang in there

you'll be fine! a positive outlook and a cool head are the first things you'll need - and if you're religious, I utilize prayer as meditation and source for guidance.
Local Coin Shops are the way to go for precious metals, often you can pay cash if you are worried about a paper trail. I bought some silver a few years ago online through apmex and payed not much over spot, but over fifty dollars for shipping, and a paper trail. I'm not too concerned about a paper trail, others may be.
Honestly, I do not plan to buy more precious metals, instead I am stocking up on things that store well, and are in high demand during a crisis/ depression. Things like alcohol, heirloom seeds, a few gas jugs of non-ethanol gas (ethanol gas goes bad and won't store very long), black berkey water filters (are gravity based and don't need electricity).
I can relate, my wife also is uninterested in whats going on. She is concerned, but has asked me not to talk to her about any developments in the economy. She says that it is too depressing to think that all of this is as inevitable as we Ron Paul people keep saying. I respect that because, like I said, a level head is very necessary; however I keep telling her that its not depressing, but empowering.
have a good day!