erato99 (November 30, 1999 at 12:00 am)

Great video. Keep them coming. Everyone should see this, but instead we will all become further victims when the next bailout plan shows up in 2009.

ekjohnson9 (November 30, 1999 at 12:00 am)

no one has said that they lend more money than they have, but the supply of money in their reserves increases due to deposits of loans into banking accounts. basically more money is created out of nothing and then is deposited into a bank account which increases a bank's reserves. these transactions occur across several banks at once, each bank increasing the amount of reserves in the bank and therefore increasing the amount of money it can lend out.

AzowRagbak (November 30, 1999 at 12:00 am)

Taken over by the Feds yes, a commercial bank which is taking over everything. The Fed is not really related to the government. Well congress has a bit to say about them, but also not too much. The main chief of the Fed does get appointed by the US president, but that's it. Why is the issue of currency not in hands of the US treasury? Makes more sense to me.

AzowRagbak (November 30, 1999 at 12:00 am)

hehehe yeah things in banking can be so so difficult. But where is the balance in the system now? There are trillions of dollars (in loans) going towards the banks, while the value of their goods (houses) is going down so much. What will this lead to? I also wonder what happens to the financial balance of any company, once the value of their buildings plummets. How do they correct this on their balance, through the cost of what?

adien209 (November 30, 1999 at 12:00 am)

If low reserve ratios caused inflation, then Switzerland, with a required reserve ratio of 2.5% should have greater inflation than the U.S. According to Modern Money Mechanics, a low 10% reserve ratio leads to inflation. But for that theory to work, everyone in the banking ladder must "lend their money". So if everyone is "lending" their money, then everyone is saving and nobody would need a loan. There would always be a balance between money saved and money loaned.

adien209 (November 30, 1999 at 12:00 am)

Yes, inflation is greater money with a lesser proportionate amount of goods and services. There are serveral factors that lead to inflation, but the bank cannot lend more than what it has. JUST ASK ANY BANKER. Cheap, low interest loans do contribute to inflation because money becomes more accessible. Please, just take a minute and ask anyone in the banking industry if a bank lends more than what it has.

ekjohnson9 (November 30, 1999 at 12:00 am)

its obvious that you do not understand fractional reserve banking... im not calling you stupid i just think you are idealistic and misinformed.... look up modern money mechanics and the fractional reserve system... this isn't made up, it is the cause of inflation... if the money the bank loaned literally came out of its deposits then there would be no inflation, which is a fancy word for a greater amount of money without a proportionate increase in goods/services.

naomibee (November 30, 1999 at 12:00 am)

wow unbelievable

adien209 (November 30, 1999 at 12:00 am)

I give up, you guys are right. I'm going to open up a bank so the I can CREATE MONEY. Why have I been working my whole life to make money when I can just create it through opening up a bank along with friends and investors. I must be stupid! In fact why isn't every large company in the banking business. You create your own money through lending it to yourself, and you don't have to worry about your bottom line!

ekjohnson9 (November 30, 1999 at 12:00 am)

the lender is the bank... they create the money and credit it to your account upon signing hte loan contract... that is how fractional reserve banking works...