Re: i just gotta inject some reality here

That's not how banks create credit. They don't lend depositor's money. They used to but under current bank pratices, they are forbidden. They create the credit as new currency. They actually increase the currency supply this way.

When you get a mortgage, the money is created in the account. This is why you may notice that you never get bank loans in cash, meaning actual bank notes. They will be in the form a created check or draft or as an account entry (most common).

There was no money before the entry or check creation took place. The currency supply goes from x to (x plus the nominal value of the loan). When the loan is repaid, the currency supply is reduced because the loan is "de-created" and goes back to nothing, from whence it came.

Deposits are supposed to be available and on deposit so that savers are protected.

This is part'n parcel of the Federal Reserve Act.

You may want to read some books on money. I've read over 30, as being born on the 4th of July, it was just a natural vocation for me. I would recommend "The Creature from Jekyll Island", as it is quite entertaining, not just academically sound. It reads like a "who done it". One of the very best books is "Gold Wars", but not for beginners.

The story of Jefferson's fight and Jackson's fight of the first two central banks is very interesting and quite admirable. The FED is the U.S,'s third central bank. The other two failed as the FED will also fail. It's mathematically impossible to maintain a fiat debt currency over a long period of time. The existing currency, being commpletely unbacked by gold, is 36 years old, since the closing of the gold wndow in 1971. The USD has only been a pure fiat currency since that time. Before that, it was redeemable on demand.

The reason that the gold window was closed was because France was demanding payment of gold for their USD's. The U.S. was secretly inflating the supply of dollars for the sale of supporting the war. Modern war cannot be waged without the creation of credit from thin air. This is why banks have a financial interest in war. When the Nixon admin closed the gold convertability window, in effect, the US was defaulting on its debt, just as it is now, in some sense. Consider all the "IOU's being held by China and Japane, alone. What can they redeem them for ? The petro-dollar strength/strategy, which was negotiated by the Nixon crew, in the face of the demand vacuum, is fading.

Here's the lesson and it's nothing new. Centralization (hierarchy) will always exploit those with less power. It's a structural problem. You cannot pour new wine into old wineskiins. Tweet