In the life of every person there are things that greatly affect his fate. The main ones are two: money and love. Everyone ever thought: “Love – what is it?” Then he seeks the answer to this question, reading literature, watching movies and finds it. But in this way you can not find the answer to the question: “Money – what is it?”
It is impossible to find the answer where I found it to the question of love. There is nothing to be surprised at, because there is not a single movie series about creating money. And in educational institutions in which everyone once studied, this is also not told. Therefore, most people are convinced that a printing machine for banknotes and coins exists, and that real money is created only by the government.
On the one hand, they are right. Yes, paper bills and coins of various metals, which everyone is used to count as money, are printed in the mint. And this court is accountable to the dominant elite that governs the state. It is, but it is only a small fraction of all cash. Most of them are created differently. In fact, a huge amount of money is created by private corporations called banks.
There is a misconception that banks issue loans with money from depositors. In fact, money is created by banks and they are given to their borrowers, although they are not the money of depositors. They are also not taken from bank income. This money arises as a result of a written receipt of people taking a loan from a bank, signed by them on the terms of a loan repayment.
What does this signature give the bank?
Yes, everything is very simple: the bank credits the amount indicated in the debt receipt to the accounts of the borrowers. Their signature in such a document indicates that they become debtors of the bank. On the basis of this paper, the debtor undertakes to repay the amount of money borrowed from the bank for a certain time and to repay the interest indicated on the receipt in a timely manner. In case of non-repayment or untimely repayment of the loan, he loses his own property left as a pledge. That is how the so-called obligation of the borrower to the bank arises.
Think this is not the case? You are wrong. Of course, this is hard to believe and you have every right to do so.
To fully explain what tricks the modern banking system does, read a short story. It can be called a fairy tale about a jeweler.
Despite the conventional wisdom about the printing press, the money printed by the government is no more than five percent of all money in circulation. More than 95 percent of money today is created by those who sign debt instruments to the bank. Moreover, this loan money is created and destroyed in huge quantities daily as old debts are paid and new ones are created.
“I’m afraid that ordinary people will not be happy to learn that banks can and actually create money. They often control the state’s policy, determine the tasks of governments and hold the fate of peoples in their hands”
Reginald Mc Kenna, chairman of the board of English Midlands Bank.
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