This is how The Banks Create Money Out of Thin Air

This is how The Banks Create Money Out of Thin Air








Because the bankers effectively run our world, they’ve created a society in which they cannot lose. American banks only have to back up investments (or loans) with a cash reserve ratio of 10%. This means with an American savings account for 10,000 dollar, the banks get a present of 90,000 dollar. In the European Union the reserve requirement is even lowered to 1%, so European financial institutions could even invest 990,000 for 10,000 dollar. And this is probably why Great Britain never took part in the Euro , The Great Britain has a 0% cash reserve ratio. In this way the European colonial forces still rule the USA - the European banks are 10 times more powerful than their American counterparts. On the other hand: Brazil has a reserve requirement of 45%, so with 10,000 dollar Brazilian banks can invest only 12,222 dollar. In 1978 Turkey had a reserve requirement of 62.7%, so with 10,000 dollar Turkey could only invest 5,949 dollar. I’ll illustrate this with some examples. You deposit 10,000 dollar on a savings account at an interest rate of 2% a year. I will use a conservative interest rate for the investments of the bank of 4% a year. At the time of the deposit the bank can place the 10,000 in the central bank and invest 90,000 dollar. In 1 year time your credit has grown to 10,200 dollar, while the bank has made a profit of 3,600 dollar,so including your 200 interest, the bank can invest an additional 3,800 multiplied by 9. In 2 years time your credit has grown to 10,404 dollar, while the bank made 7,552 dollar. In 3 years time your credit has grown to 10,612 dollar, while the bank has made 11,874 dollar. So in 3 years time the bank makes more money from the money you put in your savings account than your total savings. Probably the bank even gets an interest rate for the 10,000 dollar it holds in reserve with the central bank. Insurance companies can use the same cash reserve ratio of say 10%. According to the following information insurance companies settle the bill you pay for only a small fraction. In this example you pay a medical bill to the insurance company for 100 dollar, which the insurance company settles for 20 dollar 20%. The insurance company makes a profit of 80 dollar for which it can invest 720 dollar not even counting your monthly insurance fee. The previous is unfair but not money creation. When you borrow money from the bank, now that’s money creation. Don’t you think it’s strange that when you buy a house, the down payment goes to the bank instead of to the house seller? In this example you make a down payment of 50,000 for a mortgage loan to buy a 250,000 dollar house. The bank doesn’t run any risk with the 50,000 it can already invest 450,000 dollar and of course: they will get the 250,000 dollar plus interest. If you cannot pay, they confiscate your house while you’ve paid 50,000 the bank simply created 200,000 dollar out of thin air. Of course the created 200,000 dollar ends up on another bank account for which that bank can invest 1.8 million. And you have to work really hard to “earn” the created 200,000 dollar which makes you a motivated slave. There used to be a gold standard, where central banks could only create money backed up by gold or we only had to believe it was backed, but this was abolished in 1971. So central banks can print money without limitations . Central banks can also create money by simply lowering the reserve requirement or lending “money” to commercial banks. Because banks can almost freely invest money they can always plunder a company and then file for bankruptcy keeping the money. One major goal of TTIP is to liberate the “stricter” standards in the USA to the more “liberal” standards of the Europe for banking.






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