T or F: Banks are a den of vipers?
Keep in mind that all banks and especially the private Federal Reserve Banks use fractional-reserve banking. "Fractional-reserve banking refers to the common banking practice of issuing more money than the bank holds as reserves. Banks in modern economies typically loan their customers many times the sum of the cash reserves that they hold."
http://en.wikipedia.org/wiki/fractional-...
These banks are loaning out much more money than they actually have and are charging interest on fake money that has no asset backing. This creates inflation and reduces the purchasing power of the dollar. The purchasing power of the dollar has fallen by 96% since the Fed was created. What else will it take for people to abolish the unconstitutional Fed?
Answer:
True
This isn't a question, it's a poorly constructed history lesson. What's your ultimate question here? An argument against your whole "den of vipers" thing is that banks create growth through putting money in the economy that would have otherwise been sitting in someone's piggy bank or under their mattress. Banks are not loaning out more money than they have, it's impossible. Banks take deposits and turn them into loans and investments. It's true that if everyone tried to collect their money from the bank all at once they would not have it, but this is simply because the bank has that money either invested or loaned elsewhere. If we didn't have banks, we would be far less efficient and if you wanted to get rid of banks, something close to the exact same would end up taking its place in the future. Also, banks have very low margins for the most part, there is an overwhelming amount of competition that forces banks to drive down rates of return and leads to an incentive to increase rates given to customers. With regards to your inflation comment, whos to say that this CAUSED the inflation. Do you think the Fed invented inflation or something? Your simply talking about reserves, OF COURSE the bank is not going to have all money backed by reserves, it would be incrediably inefficient and serve NO purpose. When was the last time that you couldn't withdrawal money from the bank? Never. However, we may see some negative effects if a mass scare or systemmatic externatlity requires people to extract their money. Which is highly unlikely.
Can you put that on a DVD? I am having some minor surgery next month and will need something to put me to sleep.
True. I hear they are making a movie about them. It's called "Snakes in a Bank Vault".
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