There's a problem right from the start - if 'giving you back what is yours' is described as a 'liability' there's a fundamental flaw in the concept. Ditto when an unpaid loan can be listed as an asset.
Funny how people state that banks are straightforward regarding lending practices with deposits. I consider myself fairly intelligent, well read, and I have seen "Its a Wonderful Life" hundreds of times. But, I didnt know that the amount of reserves kept on hand was 10% of what was deposited. My simple 100 dollar deposit yields about $1000 of interest bearing assets to the bank. Banks cry when they become insolvent but are strangely silent when profiting from our ignorance.
All religions were against usury (predatory lending at interest), now only Islam is. Bankers/usurers of the Khazarian empire pretended to be Jewish, thus the Spanish Inquisition. Then they pretended to be Christians, creating the Templar's IOU counterfeiting scheme, thus Friday the 13th, 1307. Then they hid among Freemasons & created the Federal Reserve in America. Now they pose as the Muslim Brotherhood, using NATO mercenaries against countries resisting their bankster cartels.
Excellent video-another video to watch is Money as Debt I and II which is about 45 mins and The American Dream Cartoon which is 30 mins. Both videos help you understand the money and the banking system. "Billions For the Bankers, Debts For the People" by Sheldon Emry is also an excellent cartoon. You can find it online and read it for free. Both videos are also right here on youtube. EMPOWER YOURSELF!!
Mistake in the first 30 seconds. When you give your money to a bank, it is not just for "safe-keeping". You have voluntarily exchanged your money for a financial asset called "credit". If you just want safe-keeping, then use a safety deposit box or a vault.
Second mistake just after 1 minute. There is no discrepancy between what the bank tells you and what they do. They tell you that they will lend out the money, and they do lend out the money. Read the bank contract you voluntarily signed.
@johnhumphreys99 you claim are verifiable false. When I deposit into a checking account, there is no credit involved - I am promised the "safe keeping" for my money.
And no, they do not tell you they can lend out your money, and they certainly do not tell you they can lend out more than you put it. Hiding it in the fine print is a cheap trick - go check with bank customers , and how many of them agreed (or even aware) of Their money being lent out
@rtcell Read your banking contract, then come back and apologise. And if you don't know that banks lend out the money they receive from depositors, then you are in a very small minority. That is common knowledge.
Your ignorance of banking does not justify your desire to ban the entirely *voluntary* actions of consenting adults. If you want to keep your money in a safety deposit box, that is your choice. But don't impose your choices on me.
@johnhumphreys99 you may want to beef up your knowledge (Rothbard's "The Mystery of Banking" is a good read - amazon has it, or free pdf ) before talking about ignorance. FYI, my demand deposit DOES NOT create credit for me. The bank is promising safe keep, with repayment in full on demand. Fractional reserve system allows them to conjure money into existence and lend x10. Read up on the history of fractional reserve to understand how it is a legalized fraud -the bank has no money to repay all
@rtcell Rothbard is a great thinker and a great writer, but he's wrong on this issue. Read Seglin & White, or just think it through yourself. I strongly urge you to read the *voluntary* contract you signed with your bank. You'll see that they have *not* offered you safe-keeping and guaranteed repayment on demand. They have kept to their word. Voluntary contracts should be allowed. And once again -- they don't "conjure money". They create credit. The difference is important.
"they don't "conjure money". They create credit. The difference is important."
They create credit for DOLLARS. DOLLARS ARE MONEY. They ISSUE DOLLARS (either cash or digitally) for the original deposit as well as the credit they created based on it. This can be done AT THE SAME TIME, which means - to people with functioning brains - that they have increased the money supply since where once there was $1 there now is $2 in circulation. Deny that, creep.
@johnhumphreys99 yes, they create credit, but not for me. From my relationship with bank, it's a classic demand deposit. I did read my BoA contract (thanks for the nudging btw). there is a bunch of unpleasant surprises there, but they do promise to pay all my funds, on demand. they only reserve the right to decline "an unreasonably large" amount payout *at a banking center*, but they promise to arrange any size payout on demand from "one of our cash vaults".
@rtcell I'm surprised the contract didn't include an "availability clause", which normally states that you only get the money if it's available. But I don't know the details of BoA so I can't be sure. (Side note: breach of contract is not necessarily fraud.)
On your other comment, I totally agree that government bail-outs, guarantees and distortions of base money supply are bad policy. This is where Austrian economists and libertarians should be complaining the loudest, not FRB.
@johnhumphreys99 thats a gross over reach of the banks power.They know full well that 99.99999% of people have never in detail read or understood what fractional reserve banking is. Its an evil system. Can a car company charge me interest for a car theyve never given me? Fractional reserve banking is pure insanity.
@ChristiansMustLearn The banks, like everybody, should have the "power" to engage in voluntary trade with consenting adults. FR-banking is nothing more than the voluntary creation and the voluntary trading in credit. Trade is a good thing, and you should not be trying to ban my voluntary and peaceful actions just because you don't like them.
@johnhumphreys99 The FRB system is a fascist system of state granted privilege. The credit you say they "voluntarily" create is only marketable because the state says it is lawful money. Otherwise it would just be worthless paper.
@MillionthUsername Just not true. FRB is nothing more than the voluntary creation and voluntary trading of credit. Despite what the statists tell you, trade is a *good* thing. If you don't want to put your money in a bank, then don't put your money in a bank. But please don't force your choices on to me.
@johnhumphreys99 How in hell can you say that the Federal Reserve System is voluntary? It is established by LAW, backed by GOONS WITH GUNS. They will PUT YOU IN JAIL if you mess with their monopoly on "dollars" as currency and credit. You don't seem to know what the hell you're talking about. Look up "voluntary" for crying out loud. Learn basic English. You're so far off the mark it's ridiculous.
@MillionthUsername Calm down. The FRB system is voluntary because all it requires is the existence of voluntary contracts. In an entirely free-market system, I would set up a voluntary FRB and people would be allowed to voluntarily interact with me. The only way to stop me would be with your "goons with guns" to stop trade between consenting adults. Please leave me alone to make my own free choices without your violence. Thanks.
@johnhumphreys99 "Please leave me alone to make my own free choices without your violence."
OMG. So now you're talking about FRB as it would be in a free market? Fine. If you want to trade in worthless paper, go ahead. But you were not talking about a free market before. You were talking about banking today. THIS system is fraudulent. It is the OPPOSITE of a free market. Why would you think anyone wants to take away your right to speculate in somebody's paper issue in a free market?
@johnhumphreys99 Why should we ban violent action? Doesn't that just incentivize the weak and penalize the strong who are able to defend what is theirs? And, because naturally, when you incentivize something, you get more of it, you get more weakness and inability to protect yourself by incentivizing weakness. Property; socialism at its finest! Don't listen to the statist socialist lies, my friend!
@Watermark0n I assume you're taking the piss, but just in case anybody else takes this seriously... the reason why a voluntary society works best is that it rewards productivity, while a plunder society rewards ability to plunder. As you say, incentives matter. And "property" is neither capitalist or socialist -- it just exists. The difference is that capitalists believe property should be transferred without violence or coercion.
@johnhumphreys99 You forget that banks are doing this with other people's money. If banks and investors want to do this, they should be put in their own little sand box, isolated away from everyone else. There you can consent all you want. Just leave me and my assets out of it. I do not consent.
@ElsewhereIsHere I'm not forgetting anything -- when you *voluntarily* agree to deal with a bank, then you *voluntarily* agree that they can lend out your deposits. If you don't want to keep your money in a bank, then you can put your money elsewhere. Safety deposit boxes and vaults are legal. Use them. But please don't force your choices on to me. I like the *voluntary* agreement I currently have with my FR-bank.
@johnhumphreys99 It's a fraud. They aren't loaning out your money. They are creating money out of nothing and "loaning" it out, thus inflating the money supply and stealing from all holders of "dollars." It's a phony state-created fascist cartel system. They control the interest rate, credit creation, currency. They use it to steal and to kill.
It's the farthest thing from a free market voluntary exchange. What planet do you live on?
@MillionthUsername They are not creating "money", they are creating "credit". You can also create credit by lending $10 to your brother and receiving an IOU. Do you really want to make it illegal to give loans? At a recent Mises Seminar a friend and I engaged in FR-banking by giving each other a $10 IOU... do you want to violently prevent us from engaging in such voluntary actions? Now *that* would be fascist.
@johnhumphreys99 "They are not creating "money", they are creating "credit"."
Are we in the world as it is now or in a free market? Under the current system of fraud, they are definitely creating money. The "dollars" are money by law. It's legalized counterfeiting. If you issue "John Humphreys" to people in a free market, those aren't money unless they are accepted by the market as such. A credit for 10 JHs would be utterly useless to people unless it met the conditions of money for them.
@johnhumphreys99 "You can also create credit by lending $10 to your brother and receiving an IOU."
Banks don't do just that though. Banks have the PRIVILEGE IN LAW of calling their IOUs "dollars." They monetize the IOU. I can't do that. I can't call my IOU for $10 "ten dollars," and then loan out that as if it were "dollars" again. That's counterfeiting.
"do you want to violently prevent us"
Of course not. But you didn't "engage in FRB." You just made a loan. The IOU is not $10.
@MillionthUsername You don't need a "privilege in law" to be able to create and trade credit. You can do it. And you certainly are allowed to on-sell your IOU if you like. It is up to the recipient to decide whether they will accept it. Many people accept bank credit. You don't have to if you don't want... but you shouldn't try to control my choices.
You seem to be against the concept of trading in financial assets. That's a dangerous type of socialism.
@MillionthUsername FR-banking is nothing more than the creation and trading of credit. If you don't know this very simple point about banking, perhaps you aren't the best person to be commenting on the financial system. Ignorance is not a virtue, and being proud of your ignorance is not a good look.
@MillionthUsername The credit is an IOU for the underlying asset. If person A borrows $100 from person B, then person B has an IOU $100 financial asset. Surely you don't think IOUs should be illegal?!
Simple question for you now... should it be legal to create financial assets (ie give loans)? Should it be legal to voluntarily trade in financial assets? Because that is *exactly* FR-banking. I don't blame you for not knowing, but you should get informed before getting angry.
@MillionthUsername If you think that IOUs should be legal, and you think that people should be allowed to trade in IOUs, then you have just accepted FR-banking. Congratulations. You are now marginally less stupid.
@johnhumphreys99 "If you think that IOUs should be legal, and you think that people should be allowed to trade in IOUs, then you have just accepted FR-banking."
I'm done with you. I'll respond to your crazed utterances only for the sake of readers.
The present banking system does not merely trade in IOUs. They MONETIZE them. Only banks can do this. If everyone turned an IOU for 100 dollars into 100 actual dollars, the currency would die overnight. That's why there are counterfeiting laws.
@MillionthUsername What you write just isn't true. I strongly urge you to read the *voluntary* contract you signed with your bank.
But I should also apologise. Many of my comments were based on an assumption that you understood the basics of economics, but perhaps that was a wrong assumption. I can't explain 200 years of learning in YT, so I won't try. But if you want to learn more, google "The unforgivable stupidity of the anti-banking libertarians John Humphreys".
@johnhumphreys99 he misses a few points. Of course FR banking is not a fraud if it's fully disclosed on voluntary agreement (just like anything else). However "runs on the bank" is a mechanism to regulate it, and central bank with co-ercisive fiat (legal tender laws) destroy this mechanism. Plus - I checked - it is NOT disclosed on agreements, at least BoA. So we are back to square 1 - FR is a fraud, and coercive fraud at that. You can call it "create credit" or "conjure money" - same result
@rtcell Do you understand that this person you are talking to is here to purposely rile you? He is a complete waste of time. He denies that banks have the privilege of turning IOUs into cash. He flat out denies it. He says that you and I can also create US dollars. Everyone knows that you cannot create a dollar. Since it is a fiat currency, it is a special privilege in law to create it. This jackass is trying to say anyone can counterfeit. He's a disturbed individual.
@johnhumphreys99 You are nothing but a troll. You deny that the banking system creates money. You deny that the credit issued is for USD. You also deny that banks are allowed legally - and we are not - to turn their IOUs for USD into USD. If anyone else does that, they will be arrested and tried for counterfeiting.
Anyone who knows anything about banking and law knows this. The fact that you sit here and repeatedly deny basic facts shows just how far you will go in your quest to troll.
@MillionthUsername You're clearly upset, but when you calm down I strongly urge you to read the articles I have suggested for you. They will clear up how banking works.
You seem to think that banks can print cash. That just isn't true. I encourage you to ask somebody in a bank whether they can print cash. They cannot. What they can do is create credit, which can be fungible for cash in certain situations. Good luck in your learning.
@MillionthUsername I agree that you have repeated yourself a dozen times. But that does not make you correct. Banks cannot print cash. They create credit, which can be fungible for cash. Being fungible for cash does not make credit the same as cash.
Whether something is fungible for cash is entirely up to the voluntary choices of free people. This is all explained in more detail at the links, and I strongly encourage you to read and learn. Good luck.
Never said they did, twit. That's another lying tactic of yours, that you can't even repeat back to me what I say without distorting it. You are an anti-intellectual, reason-hating, logic-obliterating trolling scumbag.
"Whether something is fungible for cash is entirely up to the voluntary choices of free people"
Your IOUs are not voluntarily "fungible for cash" the way bank IOUs are! You lying scumbag! You cannot ISSUE NEW DOLLARS, you cretin!
@MillionthUsername Really, you would save a lot of time, learn some valuable things about banking, and save yourself the need for constant insults, if you just read the article I suggested. Google "the unforgivable stupidity of anti-banking libertarians John Humphreys".
You deny saying banks issue dollars, and then say banks issue dollars. No. They issue credit, measured in dollars. Anybody can do that. Whether the credit is accepted by shops is up to each shop.
@johnhumphreys99 "You deny saying banks issue dollars, and then say banks issue dollars."
I have denied that banks issue dollars? Quote me, liar.
"They issue credit, measured in dollars. Anybody can do that"
For the hundredth time, that is not the issue. Anyone can scroll back to the beginning and read where I repeatedly said that issuing credit is not the issue. Do you remember that? Or did you start on new meds today? Didn't I say the issue was MONETIZATION?
@MillionthUsername Anything can be money -- including cigarettes, shells, rum, gold, and bank credit. You don't get to decide what other people voluntarily use. You seem to be confusing the concepts of "broad money" and "base money", which is an understandable mistake for somebody new to economics. I suggest you calm down, read the article I have suggested, and if you have further questions you can comment on that article and I'll try to help. Good luck.
@johnhumphreys99 "You don't get to decide what other people voluntarily use."
Not the issue - again! Can't deal with anything I say, can you? Can't defend your little fantasy world where "dollars" come out of the woodwork for banksters but are scarce for us.
You are so pathetic with this pose of yours. You're a freaking joke. I was going to walk away when I realized you were trolling, but now I'm staying. I will continue to defeat you with facts. You deserve to be set down repeatedly.
@MillionthUsername In the current system, base money is created by the government. Nobody else can create base money. But anybody can create credit (measured in dollars). If the credit is accepted by many people as fungible to base money, then it increases what is known as "broad money". That is an outcome of voluntary choice by free people. Counterfeiting is copying base money, which is different.
This is all explained in the article. Don't be afraid to learn.
@johnhumphreys99 "In the current system, base money is created by the government."
According to you, anyone and everyone can create money since this is your claim. Now you are acknowledging that this is a fascist scam based on the initiation of force - the monopoly of the creation of money by gun toting goons? Or do you still not have a clue?
Do you now acknowledge the system is based on decrees and is not "voluntary"? So were you lying, or just stupid?
Why not? I thought FRB was voluntary and anyone could create money and do whatever they pleased with voluntary arrangements. If I can't create money but the fascist banking system can, doesn't that mean there is a difference between me and the fascist banking system? You have denied there is any difference. Again, have you changed your mind, or are you just stupid beyond words and don't even keep track of your own claims?
@MillionthUsername Touche. I should have written that nobody else can copy somebody else's base money. Of course you are free to create alternative currencies. I suggest bitcoin.
But you now seem to be confusing the ideas of "central banking" with "FRB". The former is obviously socialist, while the later is obviously voluntary & capitalist. This is all explained in the article. Don't be afraid to learn.
@johnhumphreys99 "But you now seem to be confusing the ideas of "central banking" with "FRB".
No, I'm not. You are talking about what banks do now. When you talk about "credit" and "money," you're talking about current system "dollars" and how they are "fungible." You are the one who can't separate the concepts. You are using current fascist examples calling them "voluntary" and equating banks calling IOUs "dollars" with you and I "issuing credit" for pens. It's obscenely stupid.
@johnhumphreys99 This isn't about alternative currency either. You are defending FRB and you are using the current banking system to do so! You have never answered my points. All you can do is distort them and pretend I said something else. That reveals your character. I tried to deal with you in the beginning, but you NEVER addressed the issue of banks MONETIZING IOUs, turning "I owe you $1" into an actual DOLLAR. Then you say, "ask me questions" like a psycho.
@MillionthUsername Banks do not magically turn "I owe you $1" into an actual dollar. You are just wrong about that, but I can understand your confusion. If you actually want to understand (instead of just shouting insults) then I urge you to start at the beginning and learn how the banking and monetary systems work. My article "the unforigvable stupidity of anti-banking libertarians" provides an easy introduction for non-economists. Whether you learn or not is up to you.
@johnhumphreys99 "Banks do not magically turn "I owe you $1" into an actual dollar."
Unbelievable. Ok, define "dollar." You think you're talking about economics, but you're talking about the most sophisticated system of looting that has ever existed. And you go along with it while claiming to be libertarian. You mindlessly accept terms as given without understanding what they mean in reality, what underlies them. You're a victim of brainwashing who can't make the most basic distinctions.
@MillionthUsername If you actually cared about this issue and wanted to understand, you would have read the article I suggested. The fact that you ask questions, but then refuse to read the answers, says more about you than any of the mindless insults you throw around.
@johnhumphreys99 Why should I read your article when you have displayed here the grossest ignorance? I might as well read some other establishment shill. You don't even understand what money is. You think money is "dollars" that can be created out of the blue left and right. You think you can have two of these things where once there was one and that it's all "voluntary." Not only are you ignorant, you are claiming to be an expert! You're a freaking joke.
Your "answers" are nothing but sophistry. I quoted you directly where you claimed banks don't create money, but credit. Then I asked you what the credit was. I tried to converse with you to no avail. The credit is dollars. Dollars are money. Money by law, not by acceptance. Today you admitted credit is money. You can't even keep your story straight. You're caught up in the whole delusion of the scam because you have never seen through it.
@MillionthUsername Do you think repeating a lie will help it come true? If you weren't scared of learning, you would read the article I mentioned, which answers all your questions. But you don't.
Broad money is made up of base money * credit multiplier * velocity. Base money is not the same as credit, but they can be fungible if other people will voluntarily accept them as such. This is all clearly explained in the article that you refuse to read.
@johnhumphreys99 "This is all clearly explained in the article that you refuse to read."
I understand the way the fascist monopoly scam works, so I don't need to you "clearly explain" it. You refuse to define terms such as "money" and "dollar." You refuse to even acknowledge the privilege in law that the banksters enjoy. You just deny any influence of law, which makes you look insane since this is what protects the cartel and allows it to practice what you think is normal business activity!
@johnhumphreys99 I said this EIGHT PAGES AGO: "Are we in the world as it is now or in a free market? Under the current system of fraud, they are definitely creating money. The "dollars" are money by law. It's legalized counterfeiting. If you issue "John Humphreys" to people in a free market, those aren't money unless they are accepted by the market as such. A credit for 10 JHs would be utterly useless to people unless it met the conditions of money for them."
@johnhumphreys99 You have fallen into the trap of equivocation. People routinely yet erroneously refer to "the law" (legislation) to make arguments. You do this unconsciously when you refer to "dollars" and "money" here. You are mixing concepts in economic theory with their wicked distortions created by "the law," which is an attempt to override economics! This is why you are so off base. You take statist crap as a given, so you're hopelessly entangled.
@johnhumphreys99 "If the credit is accepted by many people as fungible to base money, then it increases what is known as "broad money". "
OMG. You're talking about gov't fiat money. You do realize that, don't you?
People are FORCED to use the worthless paper issue of the Fed in at least some circumstances since it is decreed (and backed by force) "legal tender for all debts public and private." It is required for the payment of taxes (also backed up with force).
@MillionthUsername Again, you're confusing a few issues. If you would just read the article, you would stop making these mistakes.
In your country (and mine) the dominant currencies is indeed a fiat currency. While not quite forced in my country, the government does warp the system in a number of ways which prevents currency competition. Like most libertarians, I would prefer no government currency, and free banking.
But that's a different issue to FRB. Please read & learn.
@johnhumphreys99 Scumbag, I'm not going to read your article. You have shown yourself to be completely ignorant and a trolling jackass. You have not dealt with anything I have said. You have twisted what I have said, thrown out red herrings, repeated irrelevant points, refused to answer, answered in ways where you changed the meaning of the words in mid-sentence. You employ sophistry, not logic or reason. You constantly avoid dealing with what I say because you cannot. Put up or shut up.
@MillionthUsername As I said, it is not possible for me to tutor you in monetary economics within YT comments. But if you ever want to learn about monetary economics, free banking, and libertarian philosophy -- I will try to help. All of your questions have already been answered in the article I mentioned. If you have any follow-up questions, I'll try to help further. If you don't want to learn now, that's fine. If you do want to learn, then good luck.
Running away? Good. Get lost, creep. I totally destroyed your pathetic attempt to use sophistry to deny that the banking system creates money. You stupidly tried word games with "credit" and "money," but it didn't work. You know damn well the "money" is created out of thin air via monopoly, just as you know that the "credit" is for that very same fiat "money." And you know banks can call an IOU for dollars "dollars". We can't.
@MillionthUsername Sure, if it makes you feel better you can consider this me "running away". I can see you're angry now... but perhaps in the future you will become curious about the monetary system and try to become educated. When you do want to learn, my offer to help explain monetary economics and free banking still holds. Peace.
"To deal with men by force is as impractical as to deal with nature by persuasion" -- Ayn Rand
@johnhumphreys99 Hey, jackass. Go back to the beginning and READ. You made me waste my time and energy trying to talk to you from the start. I don't need sophists like you lecturing me about libertarianism, money, or banking. You stupid twit, I've read all Rand's books over 20 years ago. You kept telling me I wanted to ban FRB, like you're some kind of nut smoking Silly Putty. You repeated idiotic charges like that OVER AND OVER AND OVER like a true nutbag. Get over yourself, punk.
@johnhumphreys99 It's stupid idiots like you that make it impossible to have a conversation on YT. In the very beginning, I asked you what the hell you were talking about - if you were defending the system or talking about a free market. You did not pay attention to ANYTHING that I said right from the first post. You are a self-absorbed prick that can't even mirror to me my simple basic point about the privilege in law that bankers enjoy. You refuse to acknowledge reality.
@johnhumphreys99 You were unable to make the basic distinction between FRB as practiced and free banking because you were using the current system as an example of "how things work." You stupid fool, they don't work like that in reality, under a free market. I tried to tell you that if EVERYONE can make DOLLARS appear, then a "dollar" is not money. It's only "money" under a forced system, by force. But you equated all these things, that's why you fail completely.
@johnhumphreys99 I exposed you for a liar and a fool with quotes from your own posts where you directly contradicted yourself. I showed that you were just playing games with words. People like you don't give a damn about reason or logic. You rely on word play. You clearly have described the Ponzi scheme of FRB. You KNOW damn well it is a scam which relies on being bailed out - either through a money-creating central bank or using Madoff's method of Peter/Paul money shuffling.
@johnhumphreys99 You know for a fact that you cannot deal cleanly with me if I send you $10 to deposit and you practice FRB with just my account. You know damn well that you cannot issue me $10 back since you won't have it. You are barred from turning that IOU into cash by law. You know damn well that banks don't have it either, but they are allowed to call it cash. They rely on central banks and taxpayers to bail them out of the scam when it implodes. You would too. There is no magic.
@johnhumphreys99 "Whether something is fungible for cash is entirely up to the voluntary choices of free people."
Prove it, scumbag. I'll send you $10. You will give me a $10 IOU. Then you will give the $10 (original cash deposit) to someone else as a loan so that it is not in your possession. Then you will ISSUE (not get from some other source) $10 cash to me when I ask to withdraw my deposit. Then I'll call the FBI and ask them to confirm the legality of the new cash issue.
@MillionthUsername There is no "new cash" being issued. When I give you the $10 cash, it comes from my cash reserves. Where do you think it comes from?
It is hard to explain these issues to you in YT, so once again I strongly urge you to go and read up about banking first. Look for the article I suggested earlier, and that should explain all of the issues you are currently confused about. When you get stuck, ask politely and I'll explain. Good luck.
@johnhumphreys99 "There is no "new cash" being issued. When I give you the $10 cash, it comes from my cash reserves."
You can only give me a fraction, as in "FRACTIONAL RESERVE BANKING," moron. You can only give me $1 of my original deposit (if that) since you gave the rest to others. When I demand the full $10, you take it from cash on hand that others might also demand at the same time. Ever hear of a bank run, you low life slug?
@johnhumphreys99 You rob Peter to pay Paul. Or, just like Madoff, you pay old suckers with money from new suckers.
Why do you think the system relies on a central bank, you cretinous bottom-dweller? They provide magic money for banks who are caught short due to the scam. Money MUST be created to cover the demands, PROVING it was created on day one. The scam only becomes visible when a certain number demand their cash. It's entirely phony and fraudulent, which is why only banks can do this.
I dare you to take my challenge and let me establish an account with you. You know damn well that you can't issue me $10 after having given me and IOU and loaning the cash out to someone else! You know that! The only way you can do that is to get the cash from another source. This is no different than Madoff or any Ponzi scheme. Liquidity is not the issue. It's the creation of two equal demands for the same original dollar.
I can see that this is confusing you, and that understandable because these issues can get complex. The article you refuse to read explains all of these issues in simple terms. Some non-economist friends have said that they struggled to understand banking, but the article really helped. Try it. You should never be afraid to keep learning.
@johnhumphreys99 How are you going to issue me new money when you have given my money to someone else? With FRB, you will only have $1 in reserve after loaning the $9. How will you give me $10? You can't cheat and get it from somebody else. This is to prove your claim that you can do the same thing banks can do, that is, you can make the IOU for $9 or $10 dollars actual money.
@MillionthUsername I'm glad you're asking questions. That issue is explained in the article. You shouldn't be afraid to read it. Trying to tutor you in monetary economics is difficult through YT, so I strongly urge you to read the article, think carefully, and you can ask any further questions in the comments section.
@johnhumphreys99 The way you use the concept of fungibility here is just another ploy since you know damn well you cannot give MY money away to someone else and then return THAT MONEY to me at the same time. You created a placeholder for that original money, but it isn't a simple IOU. It is "dollars." They are digital dollars, spendable dollars. They are not IOUs for dollars. THAT is how banks can do that, and we can't.
You kept saying: "FR-banks don't create "money", they create "credit"."
When I exposed this childishly idiotic ploy of yours, you never dealt with it. But I guess you forgot your own bullshit - as liars often do - a day or two later, because today you said...
"What they can do is create credit, which can be fungible for cash"
This exposes you for a liar since cash - if you haven't heard - is money.
@johnhumphreys99 The whole trick of FRB is getting something for nothing in creating money out of thin air. This trick is lost on a true free market since no one willingly wants to be taken advantage of. They don't want to take the risk of having their money lose most or all of its value because it isn't backed by anything. When anyone can issue their own currency, competition will encourage real discipline and will tend to drive out fraudulent "easy money" schemes like FRB.
@MillionthUsername As I already explained once, FR-banks don't create "money", they create "credit". And banks don't do "nothing" -- they match loans of different maturity, which is a huge benefit to their customers. And bank liabilities are not backed by "nothing" but by other financial assets.
In a free world, I will defend your right to not deal with an FR-bank. You should also respect my right to deal with an FR-bank. Google "non-aggression axiom".
As I already explained, that's hogwash. The "credit" they create out of nothing is a fiat currency which the gov't allows them to call "US Dollars" and trade in as if they were the original dollars. If I call a horse a car, does it become a car? If I say I have two horses when I only have one, how many horses do I have?
@MillionthUsername Of course credit is created "out of nothing". If I give you a loan, the piece of paper with IOU written on it came "out of nothing". Do you really want to ban the giving of loans? Weird.
The only thing that gives banks the "right" to trade with credit is that people voluntarily accept the credit. Google the word "voluntary".
Of course base money is unbacked in our current system. But bank credit is backed with bank assets. You don't know that?
@johnhumphreys99 The practice of keeping only a fraction of deposits in reserve is irrelevant. It is the privilege in law of monetizing the IOU which creates money. The proof that money is created is simple: Both the depositor and the borrower can withdraw cash from their accounts at the same time. There are two claims for the same "dollar." This then becomes TWO dollars.
You should acquaint yourself with these basic facts before you go shooting your mouth off like an ignoramus.
@MillionthUsername No need for a privilege in law. You only need voluntary contracts (which you seem to hate). The borrowers and depositors can't withdraw more cash than the bank has. Whoever withdraws the money has the money. Whoever has a bank account balance has credit. They are different things. They don't even rhyme or start with the same letter, so I'm not sure why you're so confused. You're quick to insult, but slow to learn.
To create credit in dollars? You mean I can monetize an IOU for $100 by printing out a $100 bill and spending it into the economy just like the banks can?
"They are different things."
Cash and credit are different things, but the banking privilege is what makes credit spendable money, i.e, the same as cash.
I cannot spend your IOU for $10 at the store. I can't print out a $10 USD (or issue a credit/debit card). Banks can.
@MillionthUsername You can create credit in anything at any time without any special privilege. If you lend me a pen and I give you an "IOU pen" then we have created pen credit. No special privilege. If you lend me $100 and I give you an "IOU $100" then we have created financial credit. No special privilege.
You can try and trade using the "IOU $100". Others are free to accept or not, voluntarily. Many people accept bank credit, voluntarily. Free choice.
@johnhumphreys99 "You can create credit in anything at any time without any special privilege."
Wow. Every single thing you say is completely unrelated to my points. It is actually impossible to reason with you because nothing I say is ever mirrored back to me the way I said it. If I said, "the sky is blue," you would say, "not everything is blue! Why are you saying everything is blue? Should blue be made illegal"?
IOW, you're a freaking nut case. You are the epitome of irrationality.
@MillionthUsername I just explained to you that there is no special privilege in creating credit. Anybody can create credit. Even you. There is no special privilege required. None. Nada.
And there is no special privilege in trading credit. You can trade it if people accept your credit. You can't trade it if people don't accept your credit. It all comes down to a voluntary choice (which you seem to hate). Do you understand yet? Do you want me to use smaller words?
@johnhumphreys99 "I just explained to you that there is no special privilege in creating credit."
No one said anything about needing a special privilege to issue credit. Does that matter to you, or do you just ignore everything that people say to you and create your own version of an imagined conversation in your head? Do you realize that the world exists outside of you? Do you understand that I am not in your head? Why are you not able to recognize and respond to what I have said?
@johnhumphreys99 "If you lend me $100 and I give you an "IOU $100" then we have created financial credit. No special privilege."
The special privilege is the ability to monetize that debt, to turn an IOU for dollars into actual dollars, thus increasing the money supply. If you try to do that, you will be arrested and charged with counterfeiting. Banks can do that legally because they are given that privilege in law.
@johnhumphreys99 In any rational economic system, you can't be owed something and have that very thing at the same time. That's called a contradiction. In our crazy world, reason is overridden by law (decrees backed up by force). This law allows banks to claim to have dollars they lent (make them dollars). The law also keeps you and I from doing what banks do - creating (actually multiplying) money because it would instantaneously DESTROY the currency altogether. Do you understand why?
@MillionthUsername FRB does not involve having something and being owed the same thing. If you have $10 credit at the bank and then withdraw $10 in cash, you no longer have the $10 credit.
Banks don't claim to have the cash. They claim to own financial assets. And they do own financial assets. No contradiction & no conspiracy.
You can create credit any time you like by borrowing money. You can trade credit whenever you like by finding somebody to trade with, voluntarily.
@johnhumphreys99 "If you have $10 credit at the bank and then withdraw $10 in cash, you no longer have the $10 credit."
Wow. You are colossally stupid! You are completely unable to mirror something back to me as I said it and then engage in a rational exchange. You can't even get the subject matter straight! If you are not doing this on purpose, you are definitely the stupidest person I've seen on YT, and YT is just overflowing with stupid people!
@MillionthUsername I'm not trying to mirror you. You said "you can't be owed something and have that very thing at the same time". That doesn't exist in FRB, so it's irrelevant.
You anti-banking fascists seem to enjoy blocking voluntary and peaceful behaviour... and when your illogical violence is revealed, you get abusive. Typical. Just like every other type of socialist, you want to force your preferences on to other people. I'm glad you have admitted defeat and given up.
I know. You are unable to have a conversation. Do you even know what that phrase means? It means that when you are talking to someone, you need to listen to what they say and then mirror it back to them (correctly summarize what they said) as you respond. If you don't mirror what the other person says, you come off as crazy or stupid - as you do right now. You are not conversing or arguing with me since you can't even acknowledge what I say.
@johnhumphreys99 "You anti-banking fascists seem to enjoy blocking voluntary and peaceful behaviour."
What did you do, look up libertarian lingo so that you could troll better? You are pathetic. Why don't you just accuse me of being a terrorist while you're at it? Loser.
@johnhumphreys99 "FRB does not involve having something and being owed the same thing"
The whole point of the current FRB system is to do just that. If Jack deposits $100 in Bank A, BOTH Jack AND Bank A are able to USE this money IMMEDIATELY. Both have $100. Now if both have $100, that's $200 which arose from Jack's $100. How did this happen? The bank created money by claiming it could - at the same time - loan Jack's $100 to Pete as well as give Jack back his $100 at any time. They cloned it.
Colonel Gaddafi was the greatest and, by far, the most effective humanitarian who ever lived. The Great Man Made River alone will save millions of lives (and that's why the Nato Nazis bombed it.) Gaddafi's plan for an African central bank, free of Rothschild \ Bilderberg ownership, would have freed Africa from the horror of the IMF and World Bank, and the Gold Dinar would have freed Africa from the Fractional Reserve system, thus saving millions of lives.
This is ridiculous! Bottom line here is that if all the people that had their "money" in these banks came to get their "money" out, then there would not be enough "money" to give to all these people. With that being said, this shows that this "money" is created out of nothing. It is created by the goldsmith/banker and loaned out for interest. The vast majority of the "money" isn't "lent out" it is fictitious and created out of nothing! You are being disingenuous here or you are misinformed
Even if banks don't explicitly tell people that they can't cover all of their demand deposits, wouldn't competition drive up the interest rates banks pay on these accounts anyway? Or is there collusion among the banks? I suspect that the miserable rates that most banks pay on checking accounts is close to the limit of what they can afford, but I'm willing to believe they are colluding with each other or, better yet, the government's setting the rate.
I believe, yes, competition in a free market would push up interest rates since banks compete for the most reserves by offering the highest rates. But with the Fed manipulating short term rates through open market operations they artificially lower lending rates between banks which has a trickle down effect of suppressing interest rates throughout the banking sector
A biggest public campaign has started to end fractional reserve banking, look at the POSITIVE MONEY website and support the campaign ...and spread the word.
one aspect of the instability of the fractional reserve system that you didnt mention sal, & occurred in history as an act of far reaching corruption and misery is .. a rogue and voracious banker & big investor can use his investment reputation and clout to put out a false rumour that some banks are insolvent when they arent. The resulting panic, & an 'insider' refusal by the central bank to liquify them even though the rumour is false, results in a cleanup by the liar and inside connection.
The principal problem is that the economy needs to grow so that all this debt can be repaid. But, even if Peak Oil were centuries away, perpetual economic growth in a finite world is impossible. However, we are at Peak Oil now; therefore, the economy cannot grow. Hence the catastrophes we expect are upon us. Isn't this the best and simplest explanation for all of the current crises?
Abolish the private jewish federal reserve.Since 1913 they have destroy the country.They have create wars,depressions and brought poverty to America,their final goal in total destruction.
Read this book for free on internet to understand all the problem America is facing.
@Holisticism1 Well again, the fact of the matter is that mathematically, the banks must steadily increase credit to allow interest to be paid off with new debt. The debt required to pay off interest has itself an interest rate also, hence it is a slowly compounding situation. Thus there is little surprise that one never hears about a 'good bank', and that they are all 'bad banks' needing 'bailouts', 'regulation' etc. In reality, some bankers just need throwing in jail for practicing this fraud.
@Holisticism1 (Continued). Now the reason the bank can do this is that the credit is just numbers on its sheets, that its customers view as "amount of money I have" rather than "credit to money that doesn't exist". Now when the $100M must be repaid, this is done by cancelling out credit at the bank. But since there is not enough credit to do that (only %90M credit created), the extra amount must be paid (cancelled) with a new loan of $10M, and so on. Hence credit expands until a run occurs.
@Holisticism1 No I think you misunderstand around the 'paid back' bit. The question is, paid back with what? Suppose the simplified situation: All money is in the bank, and by money we mean paper notes (say a total of $10M). The bank then issues $90M of loans for 1 year at ~11%, and this means the bank issues $90M credit, and requires $90M + interest in 1 year. The bank now has issued a total of $100M credit (original deposits + loaned credit). In one year, $100M is due back from the loan.
@Holisticism1 Well not really; suppose at the start of year, the banks have issued total credit of $100M, at an average interest rate of 10%. This means that in 1 year, $110M is due in total. Suppose then that interest rates (hypothetically) are lowered to 0%. The following year, $110M is still due.
@Holisticism1 I'm not sure what you mean by 'principle money'. When a bank run occurs, the actual money (monetary base) held in the bank of course does not get destroyed. However, all of the false credit extended against this money does. The effect of interest is in the opposite direction - more credit must be extended so people can pay the required interest.
@Holisticism1 By defaults, bankruptcy and bank runs & failures. Indeed, just before 1933 (when the US gold standard ceased), 9200 banks failed over the course of four years. In the absence of this (i.e nowadays), yes, the money supply increases roughly exponentially. If you view an money supply chart, since 1971 (when gold exchange ceased), the money supply has done just this.
Great video. Nice description of a certain economics concept, the technical term is RDB: Rewarding Douchebag Behavior. RDB is an important concept to understand and leads to programs like TARP.
Had it happen to me... Went to clean out my savings account but the bank did not have enough cash on hand. What bank doesn't have $18,000? It wasn't like I was trying to withdrawl $500,000. They offered me $4,000 and cashier checks that I would have to try to cash at other bank branches... had to go to two other branches to get my money. It's just wrong.
@deadman12078 Last summer I made my own little bank run over several weeks and turned 90% of my dollars into precious metals, but I only took out 500 at a time. I hope you turned your toilet paper into real assets like PMs or canned goods.
Exactly Khan, it constitutes fraud. When the bank claims that it is a demand deposit, it is 10% truth and 90% fraud, and should be illegal. Only money that has actually been lent to a bank (i.e. time deposits) should be allowed to be lent out/against, and once only. Everything else is false credit.
The YouTube video WHY WE ARE IN SO MUCH DEBT provides the much-needed, simple and clear explanation of why our money is destroying our prosperity. It starts slow to build its foundation, but stick with it as the revelations keep coming. Highly recommended.
Sal.. THanks for showing the reality to people.. If all were aware how the system works.. I think it would be a revolution.. they are some advocates over there that believes the real ecnomic problem is goverment. The system works for big banks not for normal people.
What is this instead of charging you a fee to store your money, my bank charges me money to keep my money and withdraw it, and makes money loaning it out. I don't get paid anything for the money they loan.
My guess is that most of it ended up making the AIG credit default swaps good and keeping Citibank propped up (via debt that they keep turning into equity at inflated prices).
Fractional Reserve Banking is simple fraud in a bailor-bailee relationship, but designated legal under the current system. For example, if the company Public Storage secretly rents out your furniture hoping 10% of the time you use it is just fraud, but completely legal for banks.
oh god, an Austrian school troll. Those who know everything can learn nothing.
etzel33 2 weeks ago
There's a problem right from the start - if 'giving you back what is yours' is described as a 'liability' there's a fundamental flaw in the concept. Ditto when an unpaid loan can be listed as an asset.
EvilEddtheRed 2 weeks ago
RON PAUL 2012
Check vids on Diebold vote hack
Welfarism: Give Jack a fish and he wont go hungry today
Freedom: Teach Jack to fish, he will never go hungry!
*RON PAUL vs WRONG POLL* AMERICA vs MEDIA
FIGHT MEDIA BLACKOUT SPREAD RON'S 'WHAT IF' AND 'IMAGINE' SPEECH ON IPAD,IPOD
Write on bills : IN RON WE TRUST ! END THE FED OR FEED THE END
Please vote on vids and comments, Your opinion matters!
/watch?v=EqG-apYD_lA&feature=channel_video_title
Click like for ♥ RON PAUL ♥
ashwadhwani 1 month ago in playlist True Political Scope 2
Comment removed
getattrs 2 months ago
Funny how people state that banks are straightforward regarding lending practices with deposits. I consider myself fairly intelligent, well read, and I have seen "Its a Wonderful Life" hundreds of times. But, I didnt know that the amount of reserves kept on hand was 10% of what was deposited. My simple 100 dollar deposit yields about $1000 of interest bearing assets to the bank. Banks cry when they become insolvent but are strangely silent when profiting from our ignorance.
PhilW66 2 months ago
Ron Paul 2012, end the fed!!
Bawang0716 2 months ago
All religions were against usury (predatory lending at interest), now only Islam is. Bankers/usurers of the Khazarian empire pretended to be Jewish, thus the Spanish Inquisition. Then they pretended to be Christians, creating the Templar's IOU counterfeiting scheme, thus Friday the 13th, 1307. Then they hid among Freemasons & created the Federal Reserve in America. Now they pose as the Muslim Brotherhood, using NATO mercenaries against countries resisting their bankster cartels.
MrTruthAndLife 2 months ago in playlist Favorite videos
Excellent video-another video to watch is Money as Debt I and II which is about 45 mins and The American Dream Cartoon which is 30 mins. Both videos help you understand the money and the banking system. "Billions For the Bankers, Debts For the People" by Sheldon Emry is also an excellent cartoon. You can find it online and read it for free. Both videos are also right here on youtube. EMPOWER YOURSELF!!
delyparker777 2 months ago
Excellent video - more should see it.
dskillz1 2 months ago
Mistake in the first 30 seconds. When you give your money to a bank, it is not just for "safe-keeping". You have voluntarily exchanged your money for a financial asset called "credit". If you just want safe-keeping, then use a safety deposit box or a vault.
Second mistake just after 1 minute. There is no discrepancy between what the bank tells you and what they do. They tell you that they will lend out the money, and they do lend out the money. Read the bank contract you voluntarily signed.
johnhumphreys99 2 months ago
@johnhumphreys99 you claim are verifiable false. When I deposit into a checking account, there is no credit involved - I am promised the "safe keeping" for my money.
And no, they do not tell you they can lend out your money, and they certainly do not tell you they can lend out more than you put it. Hiding it in the fine print is a cheap trick - go check with bank customers , and how many of them agreed (or even aware) of Their money being lent out
rtcell 2 months ago
@rtcell Read your banking contract, then come back and apologise. And if you don't know that banks lend out the money they receive from depositors, then you are in a very small minority. That is common knowledge.
Your ignorance of banking does not justify your desire to ban the entirely *voluntary* actions of consenting adults. If you want to keep your money in a safety deposit box, that is your choice. But don't impose your choices on me.
johnhumphreys99 2 months ago
@johnhumphreys99 you may want to beef up your knowledge (Rothbard's "The Mystery of Banking" is a good read - amazon has it, or free pdf ) before talking about ignorance. FYI, my demand deposit DOES NOT create credit for me. The bank is promising safe keep, with repayment in full on demand. Fractional reserve system allows them to conjure money into existence and lend x10. Read up on the history of fractional reserve to understand how it is a legalized fraud -the bank has no money to repay all
rtcell 2 months ago
@rtcell Rothbard is a great thinker and a great writer, but he's wrong on this issue. Read Seglin & White, or just think it through yourself. I strongly urge you to read the *voluntary* contract you signed with your bank. You'll see that they have *not* offered you safe-keeping and guaranteed repayment on demand. They have kept to their word. Voluntary contracts should be allowed. And once again -- they don't "conjure money". They create credit. The difference is important.
johnhumphreys99 2 months ago
@johnhumphreys99
"they don't "conjure money". They create credit. The difference is important."
They create credit for DOLLARS. DOLLARS ARE MONEY. They ISSUE DOLLARS (either cash or digitally) for the original deposit as well as the credit they created based on it. This can be done AT THE SAME TIME, which means - to people with functioning brains - that they have increased the money supply since where once there was $1 there now is $2 in circulation. Deny that, creep.
MillionthUsername 2 months ago
@johnhumphreys99 yes, they create credit, but not for me. From my relationship with bank, it's a classic demand deposit. I did read my BoA contract (thanks for the nudging btw). there is a bunch of unpleasant surprises there, but they do promise to pay all my funds, on demand. they only reserve the right to decline "an unreasonably large" amount payout *at a banking center*, but they promise to arrange any size payout on demand from "one of our cash vaults".
rtcell 2 months ago
@rtcell I'm surprised the contract didn't include an "availability clause", which normally states that you only get the money if it's available. But I don't know the details of BoA so I can't be sure. (Side note: breach of contract is not necessarily fraud.)
On your other comment, I totally agree that government bail-outs, guarantees and distortions of base money supply are bad policy. This is where Austrian economists and libertarians should be complaining the loudest, not FRB.
johnhumphreys99 2 months ago
@johnhumphreys99 thats a gross over reach of the banks power.They know full well that 99.99999% of people have never in detail read or understood what fractional reserve banking is. Its an evil system. Can a car company charge me interest for a car theyve never given me? Fractional reserve banking is pure insanity.
ChristiansMustLearn 2 months ago
@ChristiansMustLearn The banks, like everybody, should have the "power" to engage in voluntary trade with consenting adults. FR-banking is nothing more than the voluntary creation and the voluntary trading in credit. Trade is a good thing, and you should not be trying to ban my voluntary and peaceful actions just because you don't like them.
johnhumphreys99 2 months ago
@johnhumphreys99 The FRB system is a fascist system of state granted privilege. The credit you say they "voluntarily" create is only marketable because the state says it is lawful money. Otherwise it would just be worthless paper.
MillionthUsername 2 months ago
@MillionthUsername Just not true. FRB is nothing more than the voluntary creation and voluntary trading of credit. Despite what the statists tell you, trade is a *good* thing. If you don't want to put your money in a bank, then don't put your money in a bank. But please don't force your choices on to me.
johnhumphreys99 2 months ago
This has been flagged as spam show
@johnhumphreys99 How in hell can you say that the Federal Reserve System is voluntary? It is established by LAW, backed by GOONS WITH GUNS. They will PUT YOU IN JAIL if you mess with their monopoly on "dollars" as currency and credit. You don't seem to know what the hell you're talking about. Look up "voluntary" for crying out loud. Learn basic English. You're so far off the mark it's ridiculous.
"But please don't force your choices on to me."
What???
MillionthUsername 2 months ago
@MillionthUsername Calm down. The FRB system is voluntary because all it requires is the existence of voluntary contracts. In an entirely free-market system, I would set up a voluntary FRB and people would be allowed to voluntarily interact with me. The only way to stop me would be with your "goons with guns" to stop trade between consenting adults. Please leave me alone to make my own free choices without your violence. Thanks.
johnhumphreys99 2 months ago
This has been flagged as spam show
@johnhumphreys99 "Please leave me alone to make my own free choices without your violence."
OMG. So now you're talking about FRB as it would be in a free market? Fine. If you want to trade in worthless paper, go ahead. But you were not talking about a free market before. You were talking about banking today. THIS system is fraudulent. It is the OPPOSITE of a free market. Why would you think anyone wants to take away your right to speculate in somebody's paper issue in a free market?
MillionthUsername 2 months ago
@johnhumphreys99 Why should we ban violent action? Doesn't that just incentivize the weak and penalize the strong who are able to defend what is theirs? And, because naturally, when you incentivize something, you get more of it, you get more weakness and inability to protect yourself by incentivizing weakness. Property; socialism at its finest! Don't listen to the statist socialist lies, my friend!
Watermark0n 2 months ago
@Watermark0n I assume you're taking the piss, but just in case anybody else takes this seriously... the reason why a voluntary society works best is that it rewards productivity, while a plunder society rewards ability to plunder. As you say, incentives matter. And "property" is neither capitalist or socialist -- it just exists. The difference is that capitalists believe property should be transferred without violence or coercion.
johnhumphreys99 2 months ago
@johnhumphreys99 You forget that banks are doing this with other people's money. If banks and investors want to do this, they should be put in their own little sand box, isolated away from everyone else. There you can consent all you want. Just leave me and my assets out of it. I do not consent.
ElsewhereIsHere 2 months ago
@ElsewhereIsHere I'm not forgetting anything -- when you *voluntarily* agree to deal with a bank, then you *voluntarily* agree that they can lend out your deposits. If you don't want to keep your money in a bank, then you can put your money elsewhere. Safety deposit boxes and vaults are legal. Use them. But please don't force your choices on to me. I like the *voluntary* agreement I currently have with my FR-bank.
johnhumphreys99 2 months ago
@johnhumphreys99 It's a fraud. They aren't loaning out your money. They are creating money out of nothing and "loaning" it out, thus inflating the money supply and stealing from all holders of "dollars." It's a phony state-created fascist cartel system. They control the interest rate, credit creation, currency. They use it to steal and to kill.
It's the farthest thing from a free market voluntary exchange. What planet do you live on?
MillionthUsername 2 months ago
@MillionthUsername They are not creating "money", they are creating "credit". You can also create credit by lending $10 to your brother and receiving an IOU. Do you really want to make it illegal to give loans? At a recent Mises Seminar a friend and I engaged in FR-banking by giving each other a $10 IOU... do you want to violently prevent us from engaging in such voluntary actions? Now *that* would be fascist.
johnhumphreys99 2 months ago
This has been flagged as spam show
@johnhumphreys99 "They are not creating "money", they are creating "credit"."
Are we in the world as it is now or in a free market? Under the current system of fraud, they are definitely creating money. The "dollars" are money by law. It's legalized counterfeiting. If you issue "John Humphreys" to people in a free market, those aren't money unless they are accepted by the market as such. A credit for 10 JHs would be utterly useless to people unless it met the conditions of money for them.
MillionthUsername 2 months ago
@johnhumphreys99 "You can also create credit by lending $10 to your brother and receiving an IOU."
Banks don't do just that though. Banks have the PRIVILEGE IN LAW of calling their IOUs "dollars." They monetize the IOU. I can't do that. I can't call my IOU for $10 "ten dollars," and then loan out that as if it were "dollars" again. That's counterfeiting.
"do you want to violently prevent us"
Of course not. But you didn't "engage in FRB." You just made a loan. The IOU is not $10.
MillionthUsername 2 months ago
@MillionthUsername You don't need a "privilege in law" to be able to create and trade credit. You can do it. And you certainly are allowed to on-sell your IOU if you like. It is up to the recipient to decide whether they will accept it. Many people accept bank credit. You don't have to if you don't want... but you shouldn't try to control my choices.
You seem to be against the concept of trading in financial assets. That's a dangerous type of socialism.
johnhumphreys99 2 months ago
@johnhumphreys99 "You don't need a "privilege in law" to be able to create and trade credit."
No kidding. The privilege in law I mentioned did not refer to credit.
"You seem to be against the concept of trading in financial assets."
You seem unable to read.
MillionthUsername 2 months ago
@MillionthUsername FR-banking is nothing more than the creation and trading of credit. If you don't know this very simple point about banking, perhaps you aren't the best person to be commenting on the financial system. Ignorance is not a virtue, and being proud of your ignorance is not a good look.
johnhumphreys99 2 months ago
@johnhumphreys99 "FR-banking is nothing more than the creation and trading of credit"
Credit for what? Apples? Rides on horsies? Babysitting time?
Answer the question.
MillionthUsername 2 months ago
@MillionthUsername The credit is an IOU for the underlying asset. If person A borrows $100 from person B, then person B has an IOU $100 financial asset. Surely you don't think IOUs should be illegal?!
Simple question for you now... should it be legal to create financial assets (ie give loans)? Should it be legal to voluntarily trade in financial assets? Because that is *exactly* FR-banking. I don't blame you for not knowing, but you should get informed before getting angry.
johnhumphreys99 2 months ago
@johnhumphreys99 "Surely you don't think IOUs should be illegal?!"
When did you stop hitting your wife? Why do you hate black people?
MillionthUsername 2 months ago
@MillionthUsername If you think that IOUs should be legal, and you think that people should be allowed to trade in IOUs, then you have just accepted FR-banking. Congratulations. You are now marginally less stupid.
johnhumphreys99 2 months ago
This has been flagged as spam show
@johnhumphreys99 "If you think that IOUs should be legal, and you think that people should be allowed to trade in IOUs, then you have just accepted FR-banking."
I'm done with you. I'll respond to your crazed utterances only for the sake of readers.
The present banking system does not merely trade in IOUs. They MONETIZE them. Only banks can do this. If everyone turned an IOU for 100 dollars into 100 actual dollars, the currency would die overnight. That's why there are counterfeiting laws.
MillionthUsername 2 months ago
@MillionthUsername What you write just isn't true. I strongly urge you to read the *voluntary* contract you signed with your bank.
But I should also apologise. Many of my comments were based on an assumption that you understood the basics of economics, but perhaps that was a wrong assumption. I can't explain 200 years of learning in YT, so I won't try. But if you want to learn more, google "The unforgivable stupidity of the anti-banking libertarians John Humphreys".
johnhumphreys99 2 months ago
@johnhumphreys99 he misses a few points. Of course FR banking is not a fraud if it's fully disclosed on voluntary agreement (just like anything else). However "runs on the bank" is a mechanism to regulate it, and central bank with co-ercisive fiat (legal tender laws) destroy this mechanism. Plus - I checked - it is NOT disclosed on agreements, at least BoA. So we are back to square 1 - FR is a fraud, and coercive fraud at that. You can call it "create credit" or "conjure money" - same result
rtcell 2 months ago
@rtcell Do you understand that this person you are talking to is here to purposely rile you? He is a complete waste of time. He denies that banks have the privilege of turning IOUs into cash. He flat out denies it. He says that you and I can also create US dollars. Everyone knows that you cannot create a dollar. Since it is a fiat currency, it is a special privilege in law to create it. This jackass is trying to say anyone can counterfeit. He's a disturbed individual.
And I'm outta here.
MillionthUsername 2 months ago
@johnhumphreys99 You are nothing but a troll. You deny that the banking system creates money. You deny that the credit issued is for USD. You also deny that banks are allowed legally - and we are not - to turn their IOUs for USD into USD. If anyone else does that, they will be arrested and tried for counterfeiting.
Anyone who knows anything about banking and law knows this. The fact that you sit here and repeatedly deny basic facts shows just how far you will go in your quest to troll.
MillionthUsername 2 months ago
@MillionthUsername You're clearly upset, but when you calm down I strongly urge you to read the articles I have suggested for you. They will clear up how banking works.
You seem to think that banks can print cash. That just isn't true. I encourage you to ask somebody in a bank whether they can print cash. They cannot. What they can do is create credit, which can be fungible for cash in certain situations. Good luck in your learning.
johnhumphreys99 2 months ago
@johnhumphreys99 ":You seem to think that banks can print cash. That just isn't true."
They turn the credit they created into cash, you sick troll. I've said that a dozen times.
You have previously denied that they do this with your idiotic word games.
"What they can do is create credit, which can be fungible for cash"
Oh, it's true when you say it but not when I say it? Schizo twit.
Is your IOU for your friend's pen "fungible for cash" the way bank credit is, nutbag?
MillionthUsername 2 months ago
@MillionthUsername I agree that you have repeated yourself a dozen times. But that does not make you correct. Banks cannot print cash. They create credit, which can be fungible for cash. Being fungible for cash does not make credit the same as cash.
Whether something is fungible for cash is entirely up to the voluntary choices of free people. This is all explained in more detail at the links, and I strongly encourage you to read and learn. Good luck.
johnhumphreys99 2 months ago
@johnhumphreys99 "Banks cannot print cash"
Never said they did, twit. That's another lying tactic of yours, that you can't even repeat back to me what I say without distorting it. You are an anti-intellectual, reason-hating, logic-obliterating trolling scumbag.
"Whether something is fungible for cash is entirely up to the voluntary choices of free people"
Your IOUs are not voluntarily "fungible for cash" the way bank IOUs are! You lying scumbag! You cannot ISSUE NEW DOLLARS, you cretin!
MillionthUsername 2 months ago
@MillionthUsername Really, you would save a lot of time, learn some valuable things about banking, and save yourself the need for constant insults, if you just read the article I suggested. Google "the unforgivable stupidity of anti-banking libertarians John Humphreys".
You deny saying banks issue dollars, and then say banks issue dollars. No. They issue credit, measured in dollars. Anybody can do that. Whether the credit is accepted by shops is up to each shop.
johnhumphreys99 2 months ago
@johnhumphreys99 "You deny saying banks issue dollars, and then say banks issue dollars."
I have denied that banks issue dollars? Quote me, liar.
"They issue credit, measured in dollars. Anybody can do that"
For the hundredth time, that is not the issue. Anyone can scroll back to the beginning and read where I repeatedly said that issuing credit is not the issue. Do you remember that? Or did you start on new meds today? Didn't I say the issue was MONETIZATION?
I swear you are evil.
MillionthUsername 2 months ago
@MillionthUsername Anything can be money -- including cigarettes, shells, rum, gold, and bank credit. You don't get to decide what other people voluntarily use. You seem to be confusing the concepts of "broad money" and "base money", which is an understandable mistake for somebody new to economics. I suggest you calm down, read the article I have suggested, and if you have further questions you can comment on that article and I'll try to help. Good luck.
johnhumphreys99 2 months ago
@johnhumphreys99 "You don't get to decide what other people voluntarily use."
Not the issue - again! Can't deal with anything I say, can you? Can't defend your little fantasy world where "dollars" come out of the woodwork for banksters but are scarce for us.
You are so pathetic with this pose of yours. You're a freaking joke. I was going to walk away when I realized you were trolling, but now I'm staying. I will continue to defeat you with facts. You deserve to be set down repeatedly.
MillionthUsername 2 months ago
@MillionthUsername In the current system, base money is created by the government. Nobody else can create base money. But anybody can create credit (measured in dollars). If the credit is accepted by many people as fungible to base money, then it increases what is known as "broad money". That is an outcome of voluntary choice by free people. Counterfeiting is copying base money, which is different.
This is all explained in the article. Don't be afraid to learn.
johnhumphreys99 2 months ago
@johnhumphreys99 "In the current system, base money is created by the government."
According to you, anyone and everyone can create money since this is your claim. Now you are acknowledging that this is a fascist scam based on the initiation of force - the monopoly of the creation of money by gun toting goons? Or do you still not have a clue?
Do you now acknowledge the system is based on decrees and is not "voluntary"? So were you lying, or just stupid?
MillionthUsername 2 months ago
@johnhumphreys99 "Nobody else can create base money."
Why not? I thought FRB was voluntary and anyone could create money and do whatever they pleased with voluntary arrangements. If I can't create money but the fascist banking system can, doesn't that mean there is a difference between me and the fascist banking system? You have denied there is any difference. Again, have you changed your mind, or are you just stupid beyond words and don't even keep track of your own claims?
MillionthUsername 2 months ago
@MillionthUsername Touche. I should have written that nobody else can copy somebody else's base money. Of course you are free to create alternative currencies. I suggest bitcoin.
But you now seem to be confusing the ideas of "central banking" with "FRB". The former is obviously socialist, while the later is obviously voluntary & capitalist. This is all explained in the article. Don't be afraid to learn.
johnhumphreys99 2 months ago
@johnhumphreys99 "But you now seem to be confusing the ideas of "central banking" with "FRB".
No, I'm not. You are talking about what banks do now. When you talk about "credit" and "money," you're talking about current system "dollars" and how they are "fungible." You are the one who can't separate the concepts. You are using current fascist examples calling them "voluntary" and equating banks calling IOUs "dollars" with you and I "issuing credit" for pens. It's obscenely stupid.
MillionthUsername 2 months ago
@johnhumphreys99 This isn't about alternative currency either. You are defending FRB and you are using the current banking system to do so! You have never answered my points. All you can do is distort them and pretend I said something else. That reveals your character. I tried to deal with you in the beginning, but you NEVER addressed the issue of banks MONETIZING IOUs, turning "I owe you $1" into an actual DOLLAR. Then you say, "ask me questions" like a psycho.
MillionthUsername 2 months ago
@MillionthUsername Banks do not magically turn "I owe you $1" into an actual dollar. You are just wrong about that, but I can understand your confusion. If you actually want to understand (instead of just shouting insults) then I urge you to start at the beginning and learn how the banking and monetary systems work. My article "the unforigvable stupidity of anti-banking libertarians" provides an easy introduction for non-economists. Whether you learn or not is up to you.
johnhumphreys99 2 months ago
@johnhumphreys99 "Banks do not magically turn "I owe you $1" into an actual dollar."
Unbelievable. Ok, define "dollar." You think you're talking about economics, but you're talking about the most sophisticated system of looting that has ever existed. And you go along with it while claiming to be libertarian. You mindlessly accept terms as given without understanding what they mean in reality, what underlies them. You're a victim of brainwashing who can't make the most basic distinctions.
MillionthUsername 2 months ago
@MillionthUsername If you actually cared about this issue and wanted to understand, you would have read the article I suggested. The fact that you ask questions, but then refuse to read the answers, says more about you than any of the mindless insults you throw around.
johnhumphreys99 2 months ago
@johnhumphreys99 Why should I read your article when you have displayed here the grossest ignorance? I might as well read some other establishment shill. You don't even understand what money is. You think money is "dollars" that can be created out of the blue left and right. You think you can have two of these things where once there was one and that it's all "voluntary." Not only are you ignorant, you are claiming to be an expert! You're a freaking joke.
MillionthUsername 2 months ago
@johnhumphreys99 "but then refuse to read the answers"
Your "answers" are nothing but sophistry. I quoted you directly where you claimed banks don't create money, but credit. Then I asked you what the credit was. I tried to converse with you to no avail. The credit is dollars. Dollars are money. Money by law, not by acceptance. Today you admitted credit is money. You can't even keep your story straight. You're caught up in the whole delusion of the scam because you have never seen through it.
MillionthUsername 2 months ago
@MillionthUsername Do you think repeating a lie will help it come true? If you weren't scared of learning, you would read the article I mentioned, which answers all your questions. But you don't.
Broad money is made up of base money * credit multiplier * velocity. Base money is not the same as credit, but they can be fungible if other people will voluntarily accept them as such. This is all clearly explained in the article that you refuse to read.
johnhumphreys99 2 months ago
@johnhumphreys99 "This is all clearly explained in the article that you refuse to read."
I understand the way the fascist monopoly scam works, so I don't need to you "clearly explain" it. You refuse to define terms such as "money" and "dollar." You refuse to even acknowledge the privilege in law that the banksters enjoy. You just deny any influence of law, which makes you look insane since this is what protects the cartel and allows it to practice what you think is normal business activity!
MillionthUsername 2 months ago
This has been flagged as spam show
@johnhumphreys99 I said this EIGHT PAGES AGO: "Are we in the world as it is now or in a free market? Under the current system of fraud, they are definitely creating money. The "dollars" are money by law. It's legalized counterfeiting. If you issue "John Humphreys" to people in a free market, those aren't money unless they are accepted by the market as such. A credit for 10 JHs would be utterly useless to people unless it met the conditions of money for them."
You never even responded.
MillionthUsername 2 months ago
@johnhumphreys99 You have fallen into the trap of equivocation. People routinely yet erroneously refer to "the law" (legislation) to make arguments. You do this unconsciously when you refer to "dollars" and "money" here. You are mixing concepts in economic theory with their wicked distortions created by "the law," which is an attempt to override economics! This is why you are so off base. You take statist crap as a given, so you're hopelessly entangled.
MillionthUsername 2 months ago
@johnhumphreys99 "If the credit is accepted by many people as fungible to base money, then it increases what is known as "broad money". "
OMG. You're talking about gov't fiat money. You do realize that, don't you?
People are FORCED to use the worthless paper issue of the Fed in at least some circumstances since it is decreed (and backed by force) "legal tender for all debts public and private." It is required for the payment of taxes (also backed up with force).
Guns, not economics.
MillionthUsername 2 months ago
@MillionthUsername Again, you're confusing a few issues. If you would just read the article, you would stop making these mistakes.
In your country (and mine) the dominant currencies is indeed a fiat currency. While not quite forced in my country, the government does warp the system in a number of ways which prevents currency competition. Like most libertarians, I would prefer no government currency, and free banking.
But that's a different issue to FRB. Please read & learn.
johnhumphreys99 2 months ago
@johnhumphreys99 Scumbag, I'm not going to read your article. You have shown yourself to be completely ignorant and a trolling jackass. You have not dealt with anything I have said. You have twisted what I have said, thrown out red herrings, repeated irrelevant points, refused to answer, answered in ways where you changed the meaning of the words in mid-sentence. You employ sophistry, not logic or reason. You constantly avoid dealing with what I say because you cannot. Put up or shut up.
MillionthUsername 2 months ago
@MillionthUsername As I said, it is not possible for me to tutor you in monetary economics within YT comments. But if you ever want to learn about monetary economics, free banking, and libertarian philosophy -- I will try to help. All of your questions have already been answered in the article I mentioned. If you have any follow-up questions, I'll try to help further. If you don't want to learn now, that's fine. If you do want to learn, then good luck.
johnhumphreys99 2 months ago
@johnhumphreys99 "If you do want to learn, then good luck."
Running away? Good. Get lost, creep. I totally destroyed your pathetic attempt to use sophistry to deny that the banking system creates money. You stupidly tried word games with "credit" and "money," but it didn't work. You know damn well the "money" is created out of thin air via monopoly, just as you know that the "credit" is for that very same fiat "money." And you know banks can call an IOU for dollars "dollars". We can't.
MillionthUsername 2 months ago
@MillionthUsername Sure, if it makes you feel better you can consider this me "running away". I can see you're angry now... but perhaps in the future you will become curious about the monetary system and try to become educated. When you do want to learn, my offer to help explain monetary economics and free banking still holds. Peace.
"To deal with men by force is as impractical as to deal with nature by persuasion" -- Ayn Rand
johnhumphreys99 2 months ago
@johnhumphreys99 Hey, jackass. Go back to the beginning and READ. You made me waste my time and energy trying to talk to you from the start. I don't need sophists like you lecturing me about libertarianism, money, or banking. You stupid twit, I've read all Rand's books over 20 years ago. You kept telling me I wanted to ban FRB, like you're some kind of nut smoking Silly Putty. You repeated idiotic charges like that OVER AND OVER AND OVER like a true nutbag. Get over yourself, punk.
MillionthUsername 2 months ago
@johnhumphreys99 It's stupid idiots like you that make it impossible to have a conversation on YT. In the very beginning, I asked you what the hell you were talking about - if you were defending the system or talking about a free market. You did not pay attention to ANYTHING that I said right from the first post. You are a self-absorbed prick that can't even mirror to me my simple basic point about the privilege in law that bankers enjoy. You refuse to acknowledge reality.
MillionthUsername 2 months ago
@johnhumphreys99 You were unable to make the basic distinction between FRB as practiced and free banking because you were using the current system as an example of "how things work." You stupid fool, they don't work like that in reality, under a free market. I tried to tell you that if EVERYONE can make DOLLARS appear, then a "dollar" is not money. It's only "money" under a forced system, by force. But you equated all these things, that's why you fail completely.
MillionthUsername 2 months ago
@johnhumphreys99 I exposed you for a liar and a fool with quotes from your own posts where you directly contradicted yourself. I showed that you were just playing games with words. People like you don't give a damn about reason or logic. You rely on word play. You clearly have described the Ponzi scheme of FRB. You KNOW damn well it is a scam which relies on being bailed out - either through a money-creating central bank or using Madoff's method of Peter/Paul money shuffling.
MillionthUsername 2 months ago
@johnhumphreys99 You know for a fact that you cannot deal cleanly with me if I send you $10 to deposit and you practice FRB with just my account. You know damn well that you cannot issue me $10 back since you won't have it. You are barred from turning that IOU into cash by law. You know damn well that banks don't have it either, but they are allowed to call it cash. They rely on central banks and taxpayers to bail them out of the scam when it implodes. You would too. There is no magic.
MillionthUsername 2 months ago
@johnhumphreys99 "Whether something is fungible for cash is entirely up to the voluntary choices of free people."
Prove it, scumbag. I'll send you $10. You will give me a $10 IOU. Then you will give the $10 (original cash deposit) to someone else as a loan so that it is not in your possession. Then you will ISSUE (not get from some other source) $10 cash to me when I ask to withdraw my deposit. Then I'll call the FBI and ask them to confirm the legality of the new cash issue.
MillionthUsername 2 months ago
@MillionthUsername There is no "new cash" being issued. When I give you the $10 cash, it comes from my cash reserves. Where do you think it comes from?
It is hard to explain these issues to you in YT, so once again I strongly urge you to go and read up about banking first. Look for the article I suggested earlier, and that should explain all of the issues you are currently confused about. When you get stuck, ask politely and I'll explain. Good luck.
johnhumphreys99 2 months ago
@johnhumphreys99 "There is no "new cash" being issued. When I give you the $10 cash, it comes from my cash reserves."
You can only give me a fraction, as in "FRACTIONAL RESERVE BANKING," moron. You can only give me $1 of my original deposit (if that) since you gave the rest to others. When I demand the full $10, you take it from cash on hand that others might also demand at the same time. Ever hear of a bank run, you low life slug?
It's a scam whereby you "rob Peter to pay Paul."
MillionthUsername 2 months ago
@johnhumphreys99 You rob Peter to pay Paul. Or, just like Madoff, you pay old suckers with money from new suckers.
Why do you think the system relies on a central bank, you cretinous bottom-dweller? They provide magic money for banks who are caught short due to the scam. Money MUST be created to cover the demands, PROVING it was created on day one. The scam only becomes visible when a certain number demand their cash. It's entirely phony and fraudulent, which is why only banks can do this.
MillionthUsername 2 months ago
@johnhumphreys99 "Where do you think it comes from?"
I dare you to take my challenge and let me establish an account with you. You know damn well that you can't issue me $10 after having given me and IOU and loaning the cash out to someone else! You know that! The only way you can do that is to get the cash from another source. This is no different than Madoff or any Ponzi scheme. Liquidity is not the issue. It's the creation of two equal demands for the same original dollar.
MillionthUsername 2 months ago
@MillionthUsername If you want to send $10, then that is fine with me.
I can see that this is confusing you, and that understandable because these issues can get complex. The article you refuse to read explains all of these issues in simple terms. Some non-economist friends have said that they struggled to understand banking, but the article really helped. Try it. You should never be afraid to keep learning.
johnhumphreys99 2 months ago
@johnhumphreys99 "If you want to send $10, then that is fine with me."
And you are going to follow those instructions and issue me new money?
MillionthUsername 2 months ago
@johnhumphreys99 How are you going to issue me new money when you have given my money to someone else? With FRB, you will only have $1 in reserve after loaning the $9. How will you give me $10? You can't cheat and get it from somebody else. This is to prove your claim that you can do the same thing banks can do, that is, you can make the IOU for $9 or $10 dollars actual money.
MillionthUsername 2 months ago
@MillionthUsername I'm glad you're asking questions. That issue is explained in the article. You shouldn't be afraid to read it. Trying to tutor you in monetary economics is difficult through YT, so I strongly urge you to read the article, think carefully, and you can ask any further questions in the comments section.
johnhumphreys99 2 months ago
@johnhumphreys99 "I'm glad you're asking questions."
Try reading one and answering it without red herrings, lies, distortions, word games, and this idiotic posing.
MillionthUsername 2 months ago
@johnhumphreys99 The way you use the concept of fungibility here is just another ploy since you know damn well you cannot give MY money away to someone else and then return THAT MONEY to me at the same time. You created a placeholder for that original money, but it isn't a simple IOU. It is "dollars." They are digital dollars, spendable dollars. They are not IOUs for dollars. THAT is how banks can do that, and we can't.
MillionthUsername 2 months ago
This has been flagged as spam show
@MillionthUsername I've got your number, dingbat.
You kept saying: "FR-banks don't create "money", they create "credit"."
When I exposed this childishly idiotic ploy of yours, you never dealt with it. But I guess you forgot your own bullshit - as liars often do - a day or two later, because today you said...
"What they can do is create credit, which can be fungible for cash"
This exposes you for a liar since cash - if you haven't heard - is money.
You are an obnoxious sophist nut.
MillionthUsername 2 months ago
@johnhumphreys99 "Should it be legal to voluntarily trade in financial assets?"
Surely you don't think it should be illegal to trade financial assets??!!????!??
MillionthUsername 2 months ago
@johnhumphreys99 The whole trick of FRB is getting something for nothing in creating money out of thin air. This trick is lost on a true free market since no one willingly wants to be taken advantage of. They don't want to take the risk of having their money lose most or all of its value because it isn't backed by anything. When anyone can issue their own currency, competition will encourage real discipline and will tend to drive out fraudulent "easy money" schemes like FRB.
MillionthUsername 2 months ago
@MillionthUsername As I already explained once, FR-banks don't create "money", they create "credit". And banks don't do "nothing" -- they match loans of different maturity, which is a huge benefit to their customers. And bank liabilities are not backed by "nothing" but by other financial assets.
In a free world, I will defend your right to not deal with an FR-bank. You should also respect my right to deal with an FR-bank. Google "non-aggression axiom".
johnhumphreys99 2 months ago
This has been flagged as spam show
@johnhumphreys99 "FR-banks don't create "money", they create "credit"."
As I already explained, that's hogwash. The "credit" they create out of nothing is a fiat currency which the gov't allows them to call "US Dollars" and trade in as if they were the original dollars. If I call a horse a car, does it become a car? If I say I have two horses when I only have one, how many horses do I have?
"And bank liabilities are not backed by "nothing"
Dollars are un-backed. You don't know that?
MillionthUsername 2 months ago
Comment removed
johnhumphreys99 2 months ago
This has been flagged as spam show
@MillionthUsername Of course credit is created "out of nothing". If I give you a loan, the piece of paper with IOU written on it came "out of nothing". Do you really want to ban the giving of loans? Weird.
The only thing that gives banks the "right" to trade with credit is that people voluntarily accept the credit. Google the word "voluntary".
Of course base money is unbacked in our current system. But bank credit is backed with bank assets. You don't know that?
johnhumphreys99 2 months ago
@johnhumphreys99 The practice of keeping only a fraction of deposits in reserve is irrelevant. It is the privilege in law of monetizing the IOU which creates money. The proof that money is created is simple: Both the depositor and the borrower can withdraw cash from their accounts at the same time. There are two claims for the same "dollar." This then becomes TWO dollars.
You should acquaint yourself with these basic facts before you go shooting your mouth off like an ignoramus.
MillionthUsername 2 months ago
@MillionthUsername No need for a privilege in law. You only need voluntary contracts (which you seem to hate). The borrowers and depositors can't withdraw more cash than the bank has. Whoever withdraws the money has the money. Whoever has a bank account balance has credit. They are different things. They don't even rhyme or start with the same letter, so I'm not sure why you're so confused. You're quick to insult, but slow to learn.
johnhumphreys99 2 months ago
@johnhumphreys99 "No need for a privilege in law."
To create credit in dollars? You mean I can monetize an IOU for $100 by printing out a $100 bill and spending it into the economy just like the banks can?
"They are different things."
Cash and credit are different things, but the banking privilege is what makes credit spendable money, i.e, the same as cash.
I cannot spend your IOU for $10 at the store. I can't print out a $10 USD (or issue a credit/debit card). Banks can.
MillionthUsername 2 months ago
@MillionthUsername You can create credit in anything at any time without any special privilege. If you lend me a pen and I give you an "IOU pen" then we have created pen credit. No special privilege. If you lend me $100 and I give you an "IOU $100" then we have created financial credit. No special privilege.
You can try and trade using the "IOU $100". Others are free to accept or not, voluntarily. Many people accept bank credit, voluntarily. Free choice.
johnhumphreys99 2 months ago
@johnhumphreys99 "You can create credit in anything at any time without any special privilege."
Wow. Every single thing you say is completely unrelated to my points. It is actually impossible to reason with you because nothing I say is ever mirrored back to me the way I said it. If I said, "the sky is blue," you would say, "not everything is blue! Why are you saying everything is blue? Should blue be made illegal"?
IOW, you're a freaking nut case. You are the epitome of irrationality.
MillionthUsername 2 months ago
@MillionthUsername I just explained to you that there is no special privilege in creating credit. Anybody can create credit. Even you. There is no special privilege required. None. Nada.
And there is no special privilege in trading credit. You can trade it if people accept your credit. You can't trade it if people don't accept your credit. It all comes down to a voluntary choice (which you seem to hate). Do you understand yet? Do you want me to use smaller words?
johnhumphreys99 2 months ago
@johnhumphreys99 "I just explained to you that there is no special privilege in creating credit."
No one said anything about needing a special privilege to issue credit. Does that matter to you, or do you just ignore everything that people say to you and create your own version of an imagined conversation in your head? Do you realize that the world exists outside of you? Do you understand that I am not in your head? Why are you not able to recognize and respond to what I have said?
MillionthUsername 2 months ago
This has been flagged as spam show
@johnhumphreys99 "If you lend me $100 and I give you an "IOU $100" then we have created financial credit. No special privilege."
The special privilege is the ability to monetize that debt, to turn an IOU for dollars into actual dollars, thus increasing the money supply. If you try to do that, you will be arrested and charged with counterfeiting. Banks can do that legally because they are given that privilege in law.
MillionthUsername 2 months ago
@johnhumphreys99 In any rational economic system, you can't be owed something and have that very thing at the same time. That's called a contradiction. In our crazy world, reason is overridden by law (decrees backed up by force). This law allows banks to claim to have dollars they lent (make them dollars). The law also keeps you and I from doing what banks do - creating (actually multiplying) money because it would instantaneously DESTROY the currency altogether. Do you understand why?
MillionthUsername 2 months ago
@MillionthUsername FRB does not involve having something and being owed the same thing. If you have $10 credit at the bank and then withdraw $10 in cash, you no longer have the $10 credit.
Banks don't claim to have the cash. They claim to own financial assets. And they do own financial assets. No contradiction & no conspiracy.
You can create credit any time you like by borrowing money. You can trade credit whenever you like by finding somebody to trade with, voluntarily.
johnhumphreys99 2 months ago
@johnhumphreys99 "If you have $10 credit at the bank and then withdraw $10 in cash, you no longer have the $10 credit."
Wow. You are colossally stupid! You are completely unable to mirror something back to me as I said it and then engage in a rational exchange. You can't even get the subject matter straight! If you are not doing this on purpose, you are definitely the stupidest person I've seen on YT, and YT is just overflowing with stupid people!
Congratulations. You win the prize.
MillionthUsername 2 months ago
@MillionthUsername I'm not trying to mirror you. You said "you can't be owed something and have that very thing at the same time". That doesn't exist in FRB, so it's irrelevant.
You anti-banking fascists seem to enjoy blocking voluntary and peaceful behaviour... and when your illogical violence is revealed, you get abusive. Typical. Just like every other type of socialist, you want to force your preferences on to other people. I'm glad you have admitted defeat and given up.
johnhumphreys99 2 months ago
@johnhumphreys99 "I'm not trying to mirror you"
I know. You are unable to have a conversation. Do you even know what that phrase means? It means that when you are talking to someone, you need to listen to what they say and then mirror it back to them (correctly summarize what they said) as you respond. If you don't mirror what the other person says, you come off as crazy or stupid - as you do right now. You are not conversing or arguing with me since you can't even acknowledge what I say.
MillionthUsername 2 months ago
@johnhumphreys99 "You anti-banking fascists seem to enjoy blocking voluntary and peaceful behaviour."
What did you do, look up libertarian lingo so that you could troll better? You are pathetic. Why don't you just accuse me of being a terrorist while you're at it? Loser.
MillionthUsername 2 months ago
Comment removed
johnhumphreys99 2 months ago
@johnhumphreys99 "FRB does not involve having something and being owed the same thing"
The whole point of the current FRB system is to do just that. If Jack deposits $100 in Bank A, BOTH Jack AND Bank A are able to USE this money IMMEDIATELY. Both have $100. Now if both have $100, that's $200 which arose from Jack's $100. How did this happen? The bank created money by claiming it could - at the same time - loan Jack's $100 to Pete as well as give Jack back his $100 at any time. They cloned it.
MillionthUsername 2 months ago
END THE FED!
Ron Paul 2012!
Hackiesacker007 2 months ago
as of the time of this post, 2 central bankers have watched this video.
Jwill1914 2 months ago
I was about to skip the rest of the vids from the playlist, glad i didn't, this one is the best one so far, thank you
dalvarezmartinez1 3 months ago in playlist Banking and Money
This has been flagged as spam show
Colonel Gaddafi was the greatest and, by far, the most effective humanitarian who ever lived. The Great Man Made River alone will save millions of lives (and that's why the Nato Nazis bombed it.) Gaddafi's plan for an African central bank, free of Rothschild \ Bilderberg ownership, would have freed Africa from the horror of the IMF and World Bank, and the Gold Dinar would have freed Africa from the Fractional Reserve system, thus saving millions of lives.
davisoneill 3 months ago
This is ridiculous! Bottom line here is that if all the people that had their "money" in these banks came to get their "money" out, then there would not be enough "money" to give to all these people. With that being said, this shows that this "money" is created out of nothing. It is created by the goldsmith/banker and loaned out for interest. The vast majority of the "money" isn't "lent out" it is fictitious and created out of nothing! You are being disingenuous here or you are misinformed
tatethedon 4 months ago
Even if banks don't explicitly tell people that they can't cover all of their demand deposits, wouldn't competition drive up the interest rates banks pay on these accounts anyway? Or is there collusion among the banks? I suspect that the miserable rates that most banks pay on checking accounts is close to the limit of what they can afford, but I'm willing to believe they are colluding with each other or, better yet, the government's setting the rate.
cepson 6 months ago in playlist Banking and Money
@cepson
I believe, yes, competition in a free market would push up interest rates since banks compete for the most reserves by offering the highest rates. But with the Fed manipulating short term rates through open market operations they artificially lower lending rates between banks which has a trickle down effect of suppressing interest rates throughout the banking sector
SomeUsefulIdiot 2 months ago
Who speeks?
RiechoMedia 8 months ago
This has been flagged as spam show
A biggest public campaign has started to end fractional reserve banking, look at the POSITIVE MONEY website and support the campaign ...and spread the word.
PositiveMoneyUK 8 months ago
one aspect of the instability of the fractional reserve system that you didnt mention sal, & occurred in history as an act of far reaching corruption and misery is .. a rogue and voracious banker & big investor can use his investment reputation and clout to put out a false rumour that some banks are insolvent when they arent. The resulting panic, & an 'insider' refusal by the central bank to liquify them even though the rumour is false, results in a cleanup by the liar and inside connection.
feelthewyrd 10 months ago
i have to get some better running shoes
Adrenoah 10 months ago
This has been flagged as spam show
Great job!!! I'll spread the word...
one note: you need to make the writing (and drawing) better :o)
thanks!
neway20045 11 months ago
Great job!!! I'll spread the word...
one note: you need to make the writting (and drawing) better :o)
thanks!
Jim
neway20045 11 months ago
A video on Libertarianism by Khan Academy would be cool
Ron Paul 2012
RunLiberty 11 months ago 16
The principal problem is that the economy needs to grow so that all this debt can be repaid. But, even if Peak Oil were centuries away, perpetual economic growth in a finite world is impossible. However, we are at Peak Oil now; therefore, the economy cannot grow. Hence the catastrophes we expect are upon us. Isn't this the best and simplest explanation for all of the current crises?
twayburn 1 year ago
8:45 isn't that just like a CD? Is this what happens when you put money into a CD account at the bank?
FortNikitaBullion 1 year ago
This has been flagged as spam show
Abolish the private jewish federal reserve.Since 1913 they have destroy the country.They have create wars,depressions and brought poverty to America,their final goal in total destruction.
Read this book for free on internet to understand all the problem America is facing.
Who Is Esau-Edom...Who Is Esau-Edom..
MsMihailescu 1 year ago
@Holisticism1 Well again, the fact of the matter is that mathematically, the banks must steadily increase credit to allow interest to be paid off with new debt. The debt required to pay off interest has itself an interest rate also, hence it is a slowly compounding situation. Thus there is little surprise that one never hears about a 'good bank', and that they are all 'bad banks' needing 'bailouts', 'regulation' etc. In reality, some bankers just need throwing in jail for practicing this fraud.
tothemax01 1 year ago
@Holisticism1 (Continued). Now the reason the bank can do this is that the credit is just numbers on its sheets, that its customers view as "amount of money I have" rather than "credit to money that doesn't exist". Now when the $100M must be repaid, this is done by cancelling out credit at the bank. But since there is not enough credit to do that (only %90M credit created), the extra amount must be paid (cancelled) with a new loan of $10M, and so on. Hence credit expands until a run occurs.
tothemax01 1 year ago
@Holisticism1 No I think you misunderstand around the 'paid back' bit. The question is, paid back with what? Suppose the simplified situation: All money is in the bank, and by money we mean paper notes (say a total of $10M). The bank then issues $90M of loans for 1 year at ~11%, and this means the bank issues $90M credit, and requires $90M + interest in 1 year. The bank now has issued a total of $100M credit (original deposits + loaned credit). In one year, $100M is due back from the loan.
tothemax01 1 year ago
@Holisticism1 Well not really; suppose at the start of year, the banks have issued total credit of $100M, at an average interest rate of 10%. This means that in 1 year, $110M is due in total. Suppose then that interest rates (hypothetically) are lowered to 0%. The following year, $110M is still due.
tothemax01 1 year ago
@Holisticism1 I'm not sure what you mean by 'principle money'. When a bank run occurs, the actual money (monetary base) held in the bank of course does not get destroyed. However, all of the false credit extended against this money does. The effect of interest is in the opposite direction - more credit must be extended so people can pay the required interest.
tothemax01 1 year ago
@Holisticism1 By defaults, bankruptcy and bank runs & failures. Indeed, just before 1933 (when the US gold standard ceased), 9200 banks failed over the course of four years. In the absence of this (i.e nowadays), yes, the money supply increases roughly exponentially. If you view an money supply chart, since 1971 (when gold exchange ceased), the money supply has done just this.
tothemax01 1 year ago
@Holisticism1 Of course
tothemax01 1 year ago
Great video. Nice description of a certain economics concept, the technical term is RDB: Rewarding Douchebag Behavior. RDB is an important concept to understand and leads to programs like TARP.
TreachMarkets 1 year ago
Had it happen to me... Went to clean out my savings account but the bank did not have enough cash on hand. What bank doesn't have $18,000? It wasn't like I was trying to withdrawl $500,000. They offered me $4,000 and cashier checks that I would have to try to cash at other bank branches... had to go to two other branches to get my money. It's just wrong.
deadman12078 1 year ago
@deadman12078 Last summer I made my own little bank run over several weeks and turned 90% of my dollars into precious metals, but I only took out 500 at a time. I hope you turned your toilet paper into real assets like PMs or canned goods.
Torgo1969 1 year ago
Exactly Khan, it constitutes fraud. When the bank claims that it is a demand deposit, it is 10% truth and 90% fraud, and should be illegal. Only money that has actually been lent to a bank (i.e. time deposits) should be allowed to be lent out/against, and once only. Everything else is false credit.
tothemax01 1 year ago
The YouTube video WHY WE ARE IN SO MUCH DEBT provides the much-needed, simple and clear explanation of why our money is destroying our prosperity. It starts slow to build its foundation, but stick with it as the revelations keep coming. Highly recommended.
SilentNoMorePubs 1 year ago
Sal.. THanks for showing the reality to people.. If all were aware how the system works.. I think it would be a revolution.. they are some advocates over there that believes the real ecnomic problem is goverment. The system works for big banks not for normal people.
nalcow 1 year ago
1:26-2:00
That is a crime.
2:11-2:19
This 'assumption' is what causes the boom and bust cycle!
randyguitarman13 1 year ago
@randyguitarman13 Damn straight. Glad more people are starting to know this.
tothemax01 1 year ago
What is this instead of charging you a fee to store your money, my bank charges me money to keep my money and withdraw it, and makes money loaning it out. I don't get paid anything for the money they loan.
puddingpimp 1 year ago
I understand the video is based on modern money mechanics? rayservers . com / images/ModernMoneyMechanics.pdf
RemiG2006 2 years ago
Sal, what do you think about Ron Paul?
Pr0x1mo 2 years ago
For some reason, I find that question hilarious.
Budisawsome 2 years ago
I think a funnier question would've been, "what do you think about Glenn Bekkk?"
Pr0x1mo 2 years ago
@Pr0x1mo haha.. I have a funnier question.. what do you think about Sarah Palin?
nalcow 1 year ago
Thanks Sal. So Sal, do you know where the 700 Billion dollars went? I think Professor Elizabeth Warren wants to know. It seems to have disappeared.
pongman 2 years ago 4
No. Wish I did.
My guess is that most of it ended up making the AIG credit default swaps good and keeping Citibank propped up (via debt that they keep turning into equity at inflated prices).
khanacademy 2 years ago 2
@khanacademy 1.4 trillion there were two bailouts. Also where is the 2 trillion the pentagon was missing in 2001?
aaronjowns 1 year ago
@pongman its actually 29 trillion.
revolutionary17 2 months ago
Fractional Reserve Banking is simple fraud in a bailor-bailee relationship, but designated legal under the current system. For example, if the company Public Storage secretly rents out your furniture hoping 10% of the time you use it is just fraud, but completely legal for banks.
siggyboss 2 years ago
thanks for bringing more banking videos Sal!
vinniepaz730 2 years ago