Our monetary system

[JG4_Helofly]

Originally Posted by pupo162

Well usually similar threads get closed down... unfornatly i must say. Not talking about it wont make it any better, and in the Old ubi forum i learned a lot about (there were some news posted and commented there before they hitted my local news source)

OT

Of what i understood banks are obliged to only backup 10% (!!!!!) of what they lease.

meaning, that if a bank HAS 10 dolars worth of gold in its deposits, (wich might not even belong to him, lets say it belongs to helofly.) the bank can lease me 9 bucks, yet Helofly still owns that initial 10 bucks.

And so voila, out of tin air, the 10 bucks worth of gold Helofly placed on the bank, are now worth 19 dolars on the street. This can spiral even more given that the banks can bacckup with debit from the gouvernment and even other banks.

SO, if the bank where Helofly placed the money leases me 9 bucks, i can eventually myself ( i am now a bank lol), lease some of it too (lets say 5 dolars)

so now we have 24 dolares out of 10 real dolars.

and on and on on.


The most redicolous thing, Atleast in portugal, but seems global, is this is not public knowledge. Never in my mandatory studies ( not even my 5 current extra studies years), was this and other monetary rules and works explained.

It's even worse. 10% reserve means that if there is a real value like gold or central bank money in the bank (lets say 10 dollars), the bank can make 10 times as much. So with 10.- they make 100.-. Because only 10% must be backed.
But this would be ok If there wasn't the interest you have to pay. That's the real problem.

I just found this excellent video:

http://www.youtube.com/watch?v=PlxKtDOkEj4

Very well explaned!