Modern Money Mechanics Federal Reserve Part 3

[patriotsundergod]

It would be awesome if you would include a link to this document in each of your video descriptions. If link is not available please upload torrent and seed.

[InquiringMind63]

Also interest or "userary" was illegal throughout Europe for centuries. Banks that have the power to create money out of thin air should not be charging interest. It's fraud.

[InquiringMind63]

MisterPerfikt: I think you fail to see his point here. It's that why is an exclusive club, "The owners of the Federal Reserve", lending our government the fiat money AND are making a huge profit from it. Our government is in a perpetual debt that increases every year since we can pay back the loan with interest attached to it without borrowing more money from the Fed. That's the fraud his pissed about. It doesn't have to exist. We don't have be under this indentured servitude that we're in

[MisterPerfikt]

lol @ some unedumacated comments. Banks are NOT evil, nor are they conspiracies. Banking was around LONG before the practice of fractional banking started. Money is created when you sign your name. When you go to the bank for a loan, the money is created when you sign on the dotted line. They are lending you money you created, they create new reserves out of that and loan it to others, starting the cycle again, AND they get you to pay back your own money at interest. It's a beautiful thing.

[sheeeeeeeeeeeeeeeit]

@MisterPerfikt How can banks be conspiracies mr i call people unedumicated? celticbandit doesn't know what he's talking about but you're a hypocrite.

[MisterPerfikt]

@sheeeeeeeeeeeeeeeit Comments like this only serve to prove my point. Thank you, sheeeeeit.

[sheeeeeeeeeeeeeeeit]

@MisterPerfikt "Banks are not conspiracies" grammar fail!

[lixiao2882]

I don't know about the I can't post ordeal. I mean to correct a mistake. r in the equation shold be the rate of decay of the deposit, which is 90% since the reserve requirement is around 10%

[lixiao2882]

Reserves come from Federal Reserve purchasing US government bonds. green papers in exchange for treasury papers.

[MelodicNightmare]

Yes, this is where some of our "money" originates. However, it's expanded once it enters the banking system 10x-30x and maybe more. Reserves can be physical cash at each bank or a balance of "money" held at the FED. This is electronic.

[lixiao2882]

That's correct. deposits expand approximately 10 times and assets expand about 9 times, without considering discounting and rediscounting, under the current US federal reserve system. The book did not state the equation used to approximate the expansion, which is Sn=a1/(1-r). Sn is the sum of deposits after n times of expansion, a1 is the first treasury deposit, and r is the fractional reserve ration. They used high school math to conquer the world!!

[celticbandit]

Fractional reserve banking gave birth to banking, and without it banking wouldn't exist.

Banking = ancient conspiracy

[DeeperBlueX16]

"...checkable liabilities of banks ARE money. These liabilities ARE customers' accounts. They INCREASE when customers deposit currency and checks and when the proceeds of loans made by the banks are credited to borrowers' accounts.

In the absence of legal reserve requirements, banks can build up deposits by increasing loans and investments so long as they keep enough currency on hand to redeem whatever amounts the holders of deposits want to convert into currency." (3)

Liability is money.

[TodMcInerney]

It seems to be a misconception that under a bimetalic system (Gold and Silver) that their is never enough money (specie).

[exxxxxxxx]

"If deposit money can be created so easily, what is to

prevent banks from making too much - more than sufticient

to keep the nation's productive resources fully employed

without price inflation? Like its predecessor, the

modem bank must keep available, to make payment on

demand, a considerable amount of currency and funds on

deposit with the central bank. The bank must be prepared

to convert deposit money into currency for those depositors

...

[exxxxxxxx]

....

who request currency. It must make remittance on

checks written by depositors and present"

[exxxxxxxx]

Youre wrong. 10m on reserve can create 50m of demand deposits sure. But if anyone tries to wire that 50m from one bank to another the bank has to get hold on extra 40m reserves - this reserve money is the settlement asset. Its all there in MMM. It would have to borrow the 40m from elsewhere. Its quite as simple as you think.

[MelodicNightmare]

Yes you are correct about this. I got my terminology mixed up. The 10 million would allow banks to create 50 million in demand deposits. The point is though, this money never leaves the banking system, it's just temporarly in flux when being transferred. The private banking system benefits from this system as a whole.

[ronskilbeck]

Mark, I'm really enjoying you working through all this. Keep it going. The Fed might as well be the 4th branch of our Government, but one without checks and balances. The Fed touches our live more than any other institution. They do this by setting the overnight rate (increases contracts supply), setting the reserve requirement (increases contracts), and issuing commercial paper (Short term loans). Contracting the money supply slows growth and creates recessions and depressions

[ronskilbeck]

While you're studying, look up a relatively new phenominon - Credit Default Swaps (CDS) (Thank JP Morgan for this one in 1994) Bundles, and Tranches. Best Banking scam ever invented and it's what got us in this current mess. Look up how many Trillions in CDS there are - basically the banks have been able to take their liabilities and claim them as Assets and with the fractional reserve system lend even more money. The credit crisis is contracting the money supply and causing our currency problem

[MelodicNightmare]

Hey thanks for the encouragement ron. Yes, I'll look into that CDS. It's amazing, the more you study what is actually going on, the more questions you have and the more unbelievable the information is!

[MelodicNightmare]

I'm still researching MBSs, CDSs, and how derivatives work overall. At first glance though, it would seem as if lending banks are able to package their mortgages into an MBS and sell for cash, then use this cash as reserves. Banks can loan/create as much as people can borrow. I've heard that said before and it definitely seems to be true the more you investigate this.

[ronzinger84]

Actually the 4th branch of the government is the media...

[MelodicNightmare]

I'd have to agree, because what does it matter if the government changes our laws and ruins this country when the media can sway popular opinion to believe whatever they want people to believe. The general public doesn't want to admit it, but 99.9% of their ideas about how life works and what's happening in this world comes from the television.