Where Does Your Money Come From (cont'd)

no its fractionalization.

10:1, then 10:1 again at the fed.

they can work off of promissory notes.

 

your deposit creates a "trust", that is insured

 

we can plainly see that the value of the dollar remained constant prior to the federal reserve and fractionalization.

Think about this. When there is gold there is incentive to sell when money gets scarce, with the system we have now people can hold money therefore taking money out of a system in which the federal reserve must replace to maintain liquidity increasing the money supply as you can see from the charts and the resultant value goes DOWN NOT UP and there is no incentive to get rid of dollars as there was with specie backed by gold and silver when the system was "self correcting".

Now you depend on the federal reserve..... and we know who they work for!

Its backwards thinking to think this system can possibly work over the long haul. Basically we have been screwed by very intelligent wheeler dealer con men.

When a closed loop monetary system lends at "interest" into the economy that interest can never be paid except by more loans meaning more money added to the economy that results in ballooning at about the same rate as shown below on the compound interest chart leading to eventual self destruction by hyperinflation and worthless paper as we have now and getting worse.

You can expect in the next cycle to pay 8 bucks for gas, 8 bucks for a gallon of milk and 4 bucks for a loaf of bread. The charts clearly show that the cycles become closer as we go along to an eventual straight line straight up to infinity.

Right now the money you saved and invested in your 401k is being reduced in value by 100% every 10 years!

and that is a fact!

Something to think about in federal reserve talks.

that is where we are at right now, see the compound interest curve as I posted earlier.








[/quote]

 

More textbook garbages

How about we're laughing at your cluelessness.

LMAO!!!!

 

It is. The moment your money is in deposit, it becomes your loan to banks. That's why they pay interest on your money.

 

North Dakota has a central bank and unemployment in the three percent range.

What you are describing is merely mediocre public policy decisions by our elected representatives who would be better off being one hit wonders and letting professional bureaucrats do their jobs.

 

Would it be more efficient for banks to obtain cash without the services of a central bank?

 

You can't use North Dakota as a stick to measure the entire US economy.

And fundamentally, ND has a small population, and of course with petroleum business is booming over there right now, labor shortage is inevitable.

 

derivatives are a form of fiat money created by private sector.

 

Of course. That's why some major banks are trying to lure consumers over by offering some cash to open checking accounts with them.

 

no

I deposit under title 12 s411

 

the judicial then must also be considered the private sector as all the bonds et el are sold as derivatives.

 

Who would create the cash?

 

The same could be said of other States with similar conditions, but without a central bank. I only claim it is anecdotal evidence in my favor and that supports my line of reasoning.

 

what happens when a bank runs out of cash?

 

why have a problem with the Fed doing something that market friendly, at the behest of our federal Congress, which is delegated the power to fix the Standard of money?

 

the banks could form a union of banks for central lending purposes; but we already have a central bank.

 

Exactly...

 

If you think of the Fed, Treasury, and the banking system as a whole as one unit to create and monitor our monetary system based on how much the country (aka Congress) decides it needs to spend... it makes much more sense.

 

I assume you're taking hypothetical stance, if banks run out of cash, then they're screwed, but it rarely happens, even when Lehmans Brothers collapsed, all banks across the countries handled their withdrawal demands just fine. Your checking/saving deposit is insured up to $250K/$500K respectively by FDIC, your money is safe even when banks fail.

 

And it's proven multiple times that you're the only one on this board fail to understand how US Banking System works.

 

Where Dr. Righteous and Iriemon and others get lost is understanding the difference between reserves and capital. Take for example, if every single person with a deposit account today went and spent their money. Absolutely nothing would change in the banking system. Not a single bank would lose a dollar of capital. The only thing that would change is what banks are borrowing reserves and what banks are lending reserves.

Banks don't "run" out of reserves. They run out of capital, they lose REAL money. Your deposits are insured to instill faith in the banking system and to protect your "money" in the case of a bank losing it's capital. Your deposits aren't insured because the bank runs out of reserves.

 

Fundamentally, you fail to understand why checking/saving deposits have to be insured in the first place. Banks use checking/saving deposits as a lending facility, they make loans by multiplying deposit. How come you do not understand this basic concept of fractional reserve banking is hard to explain.

Also, banks have to comply with reserve ratio and cap requirement ratio. If banks do not have enough capital to offset bad loans, they either have to raise more cash through issuing stocks or bonds sales to meet their obligation, othewise, banks will fail. When banks fail, most if not all of your money is gone with them. That's when FDIC has to step in because your checking/saving is backed by FDIC.

 

the only reason they don't fail now, is because our federal Congress is willing to bail out that sector; even if it requires the services of our central bank.

 

Small banks are failing across the country every month. Banks that do not have sufficient capitals are under supervision of FDIC. If banks cashflow drops below what FIDC deems critical point, FDIC will take over those banks immediately.