Why does the government allow the banks to commit fraud through fractional reserve banking?
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If I had and lent out . Would I still be able to say I have still had .
OF COURSE NOT, because I only have .
If you and I cannot do this, why does the government allow the banks to commit this fraud on the American people which has destabilized our entire banking system and economy.
Alex – Fractional Reserve banking has only been around from the last 200 years or so. Are you saying there were NO loans made before this time period?
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Kiran C said:
No.
The 9 is an asset to a bank because you are paid interest on that 9 dollars. The economy is destabilized because that assets like that have lost value and need to be marked down, not because of fractional reserve banking.
May 27th, 2009 at 1:41 am -
Alex said:
Without banks loaning money, our economy would grind to a halt very quickly. Would you want to save up the full purchase price of your house before you could buy one? I didin't think so.
May 27th, 2009 at 1:41 am -
No More BS! said:
They cooperate with each other and can only get rich by fleecing ignorant poor people. That is reality although they call it capitalism or democracy etc. Just a scam. It comes in cycles.
May 27th, 2009 at 1:41 am -
Flying Car said:
Because no one really knows what the Federal Reserve does and they don't say anything because they don't want to be thought stupid.
May 27th, 2009 at 1:41 am -
Watchful Occupier said:
Great question. They really messed up when they allowed them to start using ridiculous ratios of 20-1 and worse. This I believe is the reason for the economy crapping out. Besides the fact that bank lobbyists get the government to do whatever it is they want now, the fractional reserve system is a destined failure.
They are scrambling to save it. If they manage to salvage it this time the fall for our grandchildren will be all the harder.
May 27th, 2009 at 1:41 am -
meg said:
You should read this http://en.wikipedia.org/wiki/History_of_banking and revise your statement about 200 years. Here is an excerpt.
"The first banks were probably the religious temples of the ancient world, and were probably established sometime during the third millennium B.C. Banks probably predated the invention of money. Deposits initially consisted of grain and later other goods including cattle, agricultural implements, and eventually precious metals such as gold, in the form of easy-to-carry compressed plates. Temples and palaces were the safest places to store gold as they were constantly attended and well built. As sacred places, temples presented an extra deterrent to would-be thieves. There are extant records of loans from the 18th century BC in Babylon that were made by temple priests/monks to merchants. By the time of Hammurabi's Code, banking was well enough developed to justify the promulgation of laws governing banking operations.[May 27th, 2009 at 1:41 am