How Money is Created by Banks as Debt - Part 1 of 3

[tallicalad]

4:36 = Pac man

[sovereignmoney]

“[Banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts."

- 1960s Chicago Federal Reserve Bank booklet entitled “Modern Money Mechanics”

[sovereignmoney]

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin . . . . Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again.

- Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920s.

[sovereignmoney]

Yes it is very complicated and by design, in my opinion, to mislead the public away from them creating money out of thin air and then through their monopoly, holding us hostage to our own monetary system.

winterspeak dot com /2009/09/loans-create-deposits­-how-banks.html

[PositiveMoneyUK]

@sovereignmoney - actually, the system in the US and the UK is very similar. You have to look at the two 'money flows' separately - the central bank money is paid into a bank's reserve account and then lent out, but simultaneously the new bank deposits are created when the bank makes a loan and creates a liability to the customer. The two things happen simultaneously - the central bank money deposits are lent on, but in the process, new bank deposits (the money that the public use) are created.

[sovereignmoney]

Very good video series! I like it. I didn't know that you system was so different from here in the US. In America, we don't loan out deposits, loans create deposits. We create NEW money (balanced by the debtor's liability) when a loan is made. I think it was in our Federal Reserve's booklet on how they work where they said: We don't loan out deposits, otherwise we wouldn't be creating any new money.

And I think the confusion they create is part of their con game (to hide their unfair power).

[PositiveMoneyUK]

@sovereignmoney - it's pretty complicated and many explanations confuse things by simply talking about money and not distinguishing between central bank money and commercial bank 'money'. We'll have a written version of this shortly to clarify everything!

[Bluecloudandrew]

@sovereignmoney Our system is almost exactly the same my fellow American.