May 1, 2015 - Fractional Reserve Banking

There was a time when banks were required to have, on hand, the money they wanted to lend out.

In other words If someone wanted to borrow say $100,000 for a bank at whatever interest rate, the bank had to have $100,000 in the bank to loan.

To have that money they needed people to deposit money in their bank so they offered the people say 5% interest on money they deposited so that the bank could lend it out at a higher rate and make money.

All that changed when they "persuaded" politicians to allow fractional reserve banking (FRB).

FRB allows the bank to loan that $100,000 even if they have only 50% or 10% of that amount in their vault—if they have even a fraction of that amount in reserve in their bank. Hence the term Fractional Reserve Banking.

That evolved to the point that today banks create money out of nothing, i.e. they don't need our money to loan money anymore.

As a result they give us little to no interest on any money we deposit, and in fact are now pushing to charge us for the annoyance of having to look after our deposits.

So now we get no interest, and are plagued with service fees, can charges as they eat up our money.

You don't like this? Write to every politician you can think of and demand they remove FRB as an option to banks. 

Otherwise we and our children are doomed to be their debt slaves.

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