97% of All Money is Created out of THIN AIR as Loans by the Private Banks‏

[TonyZ]

Here are some facts that you will not find in the media:
1. In the private bankers debt-based money system that we are made to use, 97% of money circulating was originally created as computer ledger entries by private commercial banks when we take out loans and mortgages. It has no tangible existence outside the banks interacting computer systems because we withdraw hardly any of it in the form of Government created cash. This system is replicated in virtually every developed country, the world over.
2. No borrowing in the system would mean no money. When the commercial banks lend “money” its NEW Number Money (existing as data only) created the moment the amount appears in the “borrower’s” account. No depositor is ever sent a letter saying their money is temporarily unavailable because its been lent to someone else. Meanwhile not one person in a hundred grasps the fact that our governments have all permitted private banks to create over 95 percent of our money supply bringing huge profits to them and endless debt to us. Obviously there will not be enough money to pay the interest as the interest has to come from the same source, (more money creation by private financial institutions with yet more interest). So national and personal debt rises and the overall interest due also rises with time. This is the real reason why we are told the economy always has to grow. Present UK government debt mostly to the private banks is £0.5 Trillion, up from £90 Bn in 1980 and £26 Bn in 1960.
3. For government, taxing the people helps pay the interest bill and that is why overall taxation is always rising. Much of our taxes go straight into the pockets of the super-rich international bankers to pay the interest on the "money" (data) they have lent and created out of thin air.
4. Banks are allowed to create money OUT OF NOTHING at virtually Nil cost to them and charge all borrowing individuals, businesses and governments interest on it. This is because it only circulates as data between banks' computers and not as cash which they would have to pay the government for. This freely created intangible data "money" circulates when you get paid by bank computer transfer or when you use your cards, direct debits, cheques, CHAPS payments etc. Look into "fractional reserve banking." Google "electronic money creation", "webofdebt", "prosperityUK".
I know its hard to get your mind round when none of our corporate media talks about it, hardly any MPs know about it and it goes against everything you've assumed or been taught. 99.99% of people assume that banks & building societies lend out money that their other customers have deposited, or that they've borrowed it from the Central Bank, (BoE in UK). We demand of our government a fairer money system. Money creation must be taken out of the hands of the money masters and into the hands of the people, "where it properly belongs." (Abraham Lincoln)
If you don't believe me & you don't want to bother researching the sources I have quoted then for a succinct explanation google "basic income a privatised money supply" OR
Google "money as debt you tube" to watch a 50 minute animated film, (needs headphones).
Then act.

[Accountable]

Hi, Tony, and welcome.

On the off chance that you're not a drive-by poster, and because this is a fairly interesting topic, Here's my take.

Money hasn't been an exclusively tangible thing for many years. This money sysem you seem to think is evil seems like a good thing to me. Banks give you a safe place to keep your cash, and you don't have to pay for it. In fact, the bank pays you! How is this possible? Simple business transaction. They take your cash, lend it to someone who needs some, and charge that customer for the service (interest). They then share a portion of the profits with you (also called interest). Sounds like win-win to me.

We rarely see actual currency anymore. People write checks or cheques, use credit cards, or electronically transfer funds from account to account. Granted, a barter system could never be run this way, but it works so long as we trust the system. Without that trust, all the paper cash in the world is only so much kindling.

Now if you get paranoid that the system is about to collapse, you can use your nebulous money to purchase gold for a more concrete way to barter. If you think it's going to be really bad and chaos is in your outlook, you may want to opt for chickens or maybe cattle instead. You recall in the movie Waterworld, the most precious commodity was dirt.

[Nomad]

You recall in the movie Waterworld, the most precious commodity was dirt.
__________________



In that case I am one wealthy SOB !

[Bridget]

The reason the money in the United States is of no material value is because some president of several years ago took off our gold standard. We had large underground vaults holding gold bars that was of a certain value so any money exchange in the US was to be equal to the value of that gold. After they took out the gold bars the national debt went sky high and any money we have is of no value really when you get to the bare facts. I do not remember what they did with the gold bars as I was a young girl at the time. Would really like to know, does anyone from the US remember?

[Bridget]

Accountable, I was just rereading some threads and you mentioned that the most valuable comodity was dirt. That is no joke. It will someday be like over in foriegn countries. Right now farm land in Illinois is selling for 8,000 an acre.
That was last week, a couple farms sell this week and we are waiting to see what happens.

[Bryn Mawr]

I wouldn't know where to start with the OP - it's wrong in so many ways.

Private banks are not allowed to create electronic money out of nothing - only the government can do that.

For every dollar / pound / yen / denarious they credit to a customer's loan account there is an equal debit to their reserve account. If their reserve account is getting low then they have to borrow money from other banks to keep it to the legally required minimum level (see Northern Rock as a perfect example).

There's an entire industry auditing the reconciliation of these accounts and a large percentage of my time is taken up with designing the systems to prove to the auditors that no money has been invented - the government takes a dim view of anyone trying it on as they would lose income.

There are enough aspects of the money market to worry people with that you don't need to invent scare stories that don't stand up to the slightest investigation.

[Accountable]

Originally Posted by Bridget

The reason the money in the United States is of no material value is because some president of several years ago took off our gold standard. We had large underground vaults holding gold bars that was of a certain value so any money exchange in the US was to be equal to the value of that gold. After they took out the gold bars the national debt went sky high and any money we have is of no value really when you get to the bare facts. I do not remember what they did with the gold bars as I was a young girl at the time. Would really like to know, does anyone from the US remember?

I believe it was Nixon that took us off the gold standard, but don't bet the house on it. I'm pretty sure the gold is still there. We're just not basing our cash on it.

[Bridget]

Thanks accountable for your answer. Am glad the gold is still there. Does Texas vote today? We in Illinois do. It is pouring down rain here. I mentioned to my husband that we always have really rotten weather on election day. Is the 'gods'
trying to tell us something?

[Bryn Mawr]

Originally Posted by rjwould

What are we basing it on then?

How many notes the government decided to print this year.

Like everything else, too many on the market and they loose their value.

[Galbally]

If you tried to make all the nominal money in the world economy into paper cash, or even god help us all, coins, you would need to cut down a hell of a lot of forests, or mine a lot of nickel. I know economics can seem baffling a lot of the time, thats because it is baffling a lot of the time. But at the same time, by and large, it works. But it is important to state that banks are not allowed to create money, and nominal money is just as valuable as paper currency which after all is also nominal money in that its not actually worth anything. Even coin is not worth anything, unless its made from precious metals, and the amount of precious metals is nowhere near enough even to provide all the cash required by everyone, let alone the entire amount of nominal currency in the world.

Also the amount of Gold that a country owns does not really reflect how much its economy is worth in terms of its ability to create goods and services, for instance the US economy is worth about 10 Trillion dollars, but America doesn't have 10 trillion dollars worth of gold or diamonds (for instance), no one does, thats why the Gold standard became an unworkable system a long time ago. The worth of a country's currency is now set based on that country's economic performance, level of debt, credit rating etc etc. The reason the dollar is weak right now, is because the US economy is under performing, the general economy is over indebted, and the government is running very large budget deficits.

Its actually a fascinating subject, I don't understand it very well, or a lot of my instincts are the typical ones about what money is and how it should work, but I know that they are all wrong and whenever people try to use "common sense" approaches to monetary policy, it usually results in disaster and exactly the opposite result of what they wanted to achieve. Which is why you need economists sometimes and can't shoot all of them. A great little book you should check out is one by JK Galbraith called "A Short History of Money", its a cracking read by a very intelligent and influential man.