Banking Explained

Yeah its simplified.

Reccomended Viewing : The Secret of Oz http://www.youtube.com/watch?v=U71-KsDArFM

Reccomended Reading: The Creature from Jekyll Island

http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986395/re...

Category:

Film & Animation

Tags:

• banking
• financial
• crisis
• fractional
• reserve
• lending
• subrime
• housing
• bubble
• money
• supply
• loans
• fraud
• fraudulent

[Siderussianlegsweep]

@mje173

if you'd like a book on money creation Ed Griffin (who I personally dislike) has good chapters on the topic in the description. i completely disagree with his gold based solutions however though you might like them.

you don't need to conform to an official institution of thought, (most tend to have some good qualities and plenty of negative) these only serve to stop people understanding the mechanics for themselves and coming to their own rational conclusions.

[mje173]

@Siderussianlegsweep granted. which is why books are better mediums to transmit knowledge, instead of 6 minute cartoon videos.

ps. if you take out keynesians and austrians, what the hell do you have left? austrians is basically supply side economics with liberal montary policy. i mean, don't tell me you want to go back to the Lincoln greenback, because I sure do trust the current Congress with THAT kind of power! :P

[Siderussianlegsweep]

@mje173

who said keynesian economics was any better ;) i guess machiavelli was a "conspiracy theorist" when he observed the most effective ways for conquerors to control an unsettled populace being to create factions from within and let them fight it out amongst themselves.

again i point anyone interested in the actual mechanics of money creation to the videos in my previous post, i dont completely agree with the authors, but theyre far more informative than ideological cheerleaders!

[mje173]

@Siderussianlegsweep Wow. Austrian economics IS Keynesian economics, but without intervention by the central bank and/or the government to manipulate the cost of money (interest rate for those of you w/o financial background).

To start conspiracy theories just because some people don't want monetary intervention, and believe that a proper system rewards and negates rewards justly is morally corrupt.

Good day, Master of Economics homeslice.

[mje173]

@Siderussianlegsweep Bankers are in themselves money managers and risk managers regarding investments. As long as there is money, there will be bankers.

So, no, I don't have a vested interest in "the 1%" in completely screwing over society, because it includes me.

I'm happy you have a masters in economics. But that's pretty much what Bernake says "I have a PhD, so STFU". Sorry buddy, but making a video, and jumping to conclusions while you're at it is ethically ambigous.

[Siderussianlegsweep]

@mje173

I'd also caution people to be wary of the Mises Institute and Austrian theory in general, whose free-market rhetoric is an effective veneer to disguise its pro-imperial/feudalistic nature and origins. I'd recommend researching the Hapsburgs, Carl Menger and others instrumental to its creation for those interested in the topic.

[Siderussianlegsweep]

@mje173

so you certainly don't have a vested interest in the topic :) oh and FYI i have a masters degree in economics and when it comes to the crunch the statement that banks are responsible for creating 90% + of money (in the form of bank credit) in a society is completely correct,

since i dont beleive in writing essay posts on youtube I will point those who want a more detailed analysis online in the direction of Paul Grignon's "Money as Debt 2" and Byron Dale's videos on the topic.

[mje173]

@fburton8 MONEY is really just WORK. Or used to be.

Now, money is created by the government. The government's budget is loaned to them by banks (not at the best rate for taxpayers btw), let's say in JANUARY 1; THIS is the SOURCE of NEW MONEY into our MONETARY SYSTEM. TAXES are used to PAY these OUTSTANDING LOANS + INTEREST on DECEMBER 31.

This video makes ridiculous statements. It takes 2 truths, and mixes them with 3 half-baked lies.

[mje173]

@fburton8

6. $81 dollars are used to buy pampers. Vendors put their $81 in a THIRD bank (again, simplicity)

7. 90% of $81 are lent out ($72.90).

So on and so forth. The amount of money that a fractional reserve banking system si dependent on the margin requirement set by the Fed.

So say 900% (out of you a-hole) is ridiculous, to say the least.

Yes, debt based money sucks balls, we're in this system since '71 because we're broke.

[mje173]

@fburton8 Reserve baking works like this:

1. Federal Reserve sets margin requirements at 10% (for simplicity's sake).

2. You deposit $100 into the bank.

3. The bank loans out 90% of the $100, keeps the req. 10% in deposits. So lets say they loan it to somebody looking to buy tools ($90).

4. $90 dollars are spent. Vendors who sold tools have $90 that they put into their banks.

5. The vendor's banks can loan out 90% of the $90 ($81).