Understanding Money & Banking Pt. 2: Anatomy of a Bank Loan

Part 2 of a multi-part series by lawyer Paul McKeever that explains the nature of money and banking as it has never been explained to you before.

Category:

News & Politics

Tags:

• money

[glennyh]

Great stuff, Paul! Certainly an original way of looking at this topic.

[PaulMcKeever]

I just wish the youtube video conversion process didn't (sometimes) stretch the video. I feel like I'm watching a movie at the drive-in.

[marklethanarkle]

awesome video! please make more.

[nooriginalthoughts]

It's interesting, but please comment on the sense and sustainability of the system. The banks "create" the principal of the "loan" (out of thin air, they add no value, other than credibility). Credit (debt) accounts for 95% of an economy's money supply. Banks do NOT create "money" to cover the interest on the credit. That has to come from the overall nation's money supply, which we now know is 95% existing debt money.

The system requires ever increasing amounts of debt to be entered into

[TheUtube4ever]

great vid! taught me a lot. thanks

[ott0Kitam]

banks neither loan nor create money, people do(an obligor does) with a promissory obligation, which banks steal on conception obfuscating into a debt owed to itself... just for publishing evidence of our promissory obligations into existence

theyre artificial debts to banks, the purported banking system gives up no lawful consideration in any "loan"... banks have no claim to the principle(it should be retired from circulation) or any justification in charging people interest(their 2nd crime)

[ryanburbridge]

@nooriginalthoughts great comment have you found an answer?

[thinkfree41]

@bergweg No, it's only a fractional backing. If a run occurs, the bank will lose capital. I agree that fractional reserve commercial banking is a scam.

[bergweg]

@thinkfree41 so if there is a run on the bank the banks capital will cover all the demands for cash?

[thinkfree41]

@bergweg the bank's debt is backed by its capital.

[thinkfree41]

The bank's credibility is bestowed upon it by law - credit issued by a bank is regarded as valid national currency and acceptable for all forms of payment. In effect, this means that the law entitles banks to create the national currency, which is expressly forbidden to all other businesses and individuals. A wealthy individual - say Warren Buffet - may issue IOUs that most are willing to accept as payment, but they would not be interchangeable with the national currency at the central bank. 

[FortNikitaBullion]

If interest is the cost of using the bank's credibility, why does the bank pay you interest on deposits?

[matthew376]

What debt does the bank give to you - does he mean a cheque?

[FortNikitaBullion]

Can you make another video to elaborate on how credit scoring factors into the loan process?