Why Do Banks Make So Much Money?

http://www.positivemoney.org.uk

The Proof that Banks Create Money:
http://www.positivemoney.org.uk/how-b...

Banks make so much money because they can create money, effectively out of nothing, by lending. Every single pound in your bank account was created by a bank, not by your government.

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ABOUT POSITIVE MONEY:
Positive Money is a not-for-profit research and campaign group. They work to raise awareness of the connections between our current monetary and banking system and the serious social, economic and ecological problems that face the UK and the world today. In particular they focus on the role of banks in creating the nation's money supply through the accounting process they use when they make loans - an aspect of banking which is poorly understood. Positive Money believe these fundamental flaws are at the root of - or a major contributor to - problems of poverty, excessive debt, growing inequality and environmental degradation. For more information, please visit: http://www.positivemoney.org.uk/

TRANSCRIPT:

Banks are the most heavily subsidised businesses
in the world, specially protected by governments.
While the money runs out for the rest of us,
the largest private banks still thrive. This
is because they get the biggest subsidy of
them all - the licence to print money.

Hard to believe? Martin Wolf, the Chief Economics
Editor at the Financial Times, said it recently:

"The essence of the contemporary monetary
system is the creation of money, out of nothing,
by private banks' often foolish lending..."

You heard that right. Private banks create
money out of nothing! Then they loan it to
us and ask for interest on top!

If you've ever wondered why the bank buildings
around the world soar higher than any palace
or spire ever did, you now have the answer.

But the banks don't simply print money using
secret printing presses in their basements.
They don't have to. Like so many other things
these days, printing money has now gone digital.
With the popular use of debit cards, electronic
fund transfers, and internet banking, only
3% of the money in the UK is now made of paper
and metal coins. The other 97% is entirely
in computers. Electronic money is convenient
for everyone, but it's especially convenient
for the private banks, since they own, run,
and control the entire digital money system.

And what do they do with this special privilege?
Do they channel new money, the blood supply
of the nation, towards the things we need
like hospitals, schools, universities and
public transport?

Not if it doesn't make a profit for them.
Instead they use their licence to print money
to gamble on the financial markets and pushing
house prices out of reach of ordinary people
by pumping hundreds of billions of pounds
into risky mortgages. This is exactly how
the banks caused the financial crisis, and
now the rest of us are being asked to pay for it.

If we can't afford to run hospitals and build
schools, can we really afford to subsidise
the financial industry? Should we have to
live with less so the bankers can have more?

This is ludicrous, and it's time to put a
stop to it. The private banks can't be trusted
to hold the reins to our entire economy.

We need to take away the bank's power to create
money out of nothing.  This will stop them
from causing yet another financial meltdown
and allow us to afford the crucial services
that we as a society need.

Help us caption & translate this video!

http://amara.org/v/3Zr/

• Category

  News & Politics

[mntiki]

I'm not from the UK and I'm no fan of banks, but this video has a HUGE plot hole.

This says that private banks "create money of nothing". This is absolutely not true, and obviously this video says nothing to back up that claim.

Other parts of this video may be true, but it's hard getting by this blatant lie.

[Positive Money]

Hi, please visit Positive Money website to find out more including proofs that banks are indeed allowed to create money out of nothing. Or check the video "How money is made/created"

[G58]

Where do you think money comes from? The banks create it on a computer, lend it to you a loan agreement, and simultaneously create a second document they can then sell to investors who gamble that yo u will pay your loan back and that the bank will make a profit. So all money is created as debt. It's the biggest fucking scam in the world, and it's the same in every country. So, no "HUGE plot hole" or "blatant lie", just the truth.

[GutsnoKen]

Maybe, if you see what is happening wit all the banks like BNP, (all around the world really) they crash due to poor investments and the money they should have disappears, so people get are left pennyless but how can the money they had there "disappear"? It is as they say, either it never existed or the people have been Robbed and the banks cannot be punished.

But i guess you are already thinking that, Nao e mesmo?

[sharky8899]

the most stupid thing that was ever done was to replace gold and silver with paper.....

how the fuck is paper of anyworth?? look at usa, the paper is worth less and less looool.

In the end it will have no theory.

[sam robinson]

expensive beer, the publican deposits the $900 at their bank and then their bank loans 90 per cent out, $810 and keeps $ 90 in reserves and the process continues from there. Banks create multiple amounts of money from a single deposit through multiplier and fractional lending processes. ya fucking moron @mntiki

[sam robinson]

00 and a reserve rate of 10%. a t account is debited 1000 in the reserves and the liabilities, in the form of a deposit. The bank only needs to hold reserves of $100 and can loan out the other $900, as they don't earn interest on the quantity of reserves. This credits $900 to the assets of the t account as loans and $900 to the liabilities as deposits of the borrowers account. This increased the total money supply by $1900. say the borrower of the $900 buys a very

[sam robinson]

actually banks do create money, take the example of a demand deposit consisting of $1000.

[ZP ZAP]

Scum bags

[Marcuskilinen1]

You kind of a good example of why we can't fight injustice.

Please make an effort to understand the whole picture and connect the dots. The access to your knowledge is here on the web.

[bergweg]

Banks don't create money out of nothing, they create it out of fraud.

[Tiago Lopes]

hi my friend, im wondering, i live in portugal, so im part of the euro zone with the same coin on lots of countries. This happens here also? with the european central bank ? i mean, the private banks on the eurozone do this also? is there any files or proves that i can get? i will go to a tv show and i would like to explain this but related to the eurozone. Is there any files that you know, that i migth investigate? By the way, i am graduated in economy but i never learned as you explain here