Of course our glorious rulers in the UK are getting ready to let the existing system collapse (you will own nothing) and replace it with a central bank digital currency linked to a CCP style social credit system (you will be happy, and if you don't act happy they will lower your credit score until you learn to at least look happy, and don't forget this week's booster).
The average person, when first learning of how fractional reserve banking increases the money supply, becomes paralyzed by cognitive dissonance.
The most common manner of resolving that internal conflict is to expostulate "it's all too complicated, I don't understand finance and I never will," followed the second-most common reaction; disbelief.
And no wonder; everyday folks pick up a factual detail here and awareness of a basic mechanism there, but those are random and isolated proto-conceptualizations. When the underlying structure is revealed in all of its fundamental simplicity, those random bits and pieces begin to reveal their relationship to each other, and it's really rather overwhelming.
I am no longer surprised at the look of stunned disbelief on peoples' faces as they struggle to accept the realities of fractional reserve banking, its effect on monetary velocity at identifiable points of the distribution curve and the way that it determines incentive structure across most areas of human endeavor.
The longer one ponders these things and the more one adds to their corpus of knowledge, the more visible this "butterfly effect" of fractional reserve banking becomes.
The "low road" is taken when our stunned disbelief becomes inchoate condemnation of the system, without considering the limitations and difficulties of other means of creating money. Once we acknowledge what a wicked problem it is, we have placed our feet before the gate to the "high road."
It helps to remember that anywhere wealth and influence concentrates, predators and parasites gather. This is fundamental to understanding the effect of perverse incentives. getting incentive structures wrong, is one of the most common ways that we make the problems worse.
Thanks for the link to an interesting and informative video.
Feb 1, 2023Liked by NE - nakedemperor.substack.com
NE - That commercial banks are financial intermediaries, is one of the principal misconceptions in the false doctrine which has been proselytized in economic schools for decades.
So true. The de facto privatization of the power of money creation, also known as "fractional reserve banking", is the REAL root of all evil, rather than money per se. Ellen Brown has been saying this for over a decade and a half now.
Restore the power of money creation to the Treasury, as permitted by the legislature, and raise the reserve requirements for private banks to 100%.
And phase out the practice of usury, while we are at it.
Oh, and by the way, ALL major central banks are effectively privately owned (by the big banks), or quangos at best. Including the FERAL Reserve.
Close but no cigar. This misses where the money comes from before the banks multiply it through fractional reserve banking: government. Specifically government debt. All the regulatory structure is necessary to force banks to buy government debt, as it will never be repaid and is effectively junk, so out of hand government spending is across the world. With quantitative easing government is now creating money to buy its own debt, handing that money to the banks, big finance and favourite political groups. Basel III regulations force banks to buy some of this debt, so it sort of looks legitimate. Regulation by government as Prof Werner recommends is fantasy, as no government, democratic or otherwise, will ever turn off the money spigot, or it will have to stop spending money on its clients and itself.
100 % gold backed money. No central bank. The Interest rate is the “ price” of money. Having A central bank set an interest rate it’s just another example of price fixing. The interest rate is the most important price in the economy. It’s the price of capital. In a free market the last thing we need is a Soviet style central committee setting the price of capital
Of course our glorious rulers in the UK are getting ready to let the existing system collapse (you will own nothing) and replace it with a central bank digital currency linked to a CCP style social credit system (you will be happy, and if you don't act happy they will lower your credit score until you learn to at least look happy, and don't forget this week's booster).
The average person, when first learning of how fractional reserve banking increases the money supply, becomes paralyzed by cognitive dissonance.
The most common manner of resolving that internal conflict is to expostulate "it's all too complicated, I don't understand finance and I never will," followed the second-most common reaction; disbelief.
And no wonder; everyday folks pick up a factual detail here and awareness of a basic mechanism there, but those are random and isolated proto-conceptualizations. When the underlying structure is revealed in all of its fundamental simplicity, those random bits and pieces begin to reveal their relationship to each other, and it's really rather overwhelming.
I am no longer surprised at the look of stunned disbelief on peoples' faces as they struggle to accept the realities of fractional reserve banking, its effect on monetary velocity at identifiable points of the distribution curve and the way that it determines incentive structure across most areas of human endeavor.
The longer one ponders these things and the more one adds to their corpus of knowledge, the more visible this "butterfly effect" of fractional reserve banking becomes.
The "low road" is taken when our stunned disbelief becomes inchoate condemnation of the system, without considering the limitations and difficulties of other means of creating money. Once we acknowledge what a wicked problem it is, we have placed our feet before the gate to the "high road."
It helps to remember that anywhere wealth and influence concentrates, predators and parasites gather. This is fundamental to understanding the effect of perverse incentives. getting incentive structures wrong, is one of the most common ways that we make the problems worse.
Thanks for the link to an interesting and informative video.
How dare you criticise banking you anti semite.
I'm going to report you for trying to do a double holocaust.
More dangerous than standing armies.
NE - That commercial banks are financial intermediaries, is one of the principal misconceptions in the false doctrine which has been proselytized in economic schools for decades.
One pedantic comment. Only Gold is money.
When "money" is used in this article, you are actually referring to fiat currency.
So true. The de facto privatization of the power of money creation, also known as "fractional reserve banking", is the REAL root of all evil, rather than money per se. Ellen Brown has been saying this for over a decade and a half now.
Restore the power of money creation to the Treasury, as permitted by the legislature, and raise the reserve requirements for private banks to 100%.
And phase out the practice of usury, while we are at it.
Oh, and by the way, ALL major central banks are effectively privately owned (by the big banks), or quangos at best. Including the FERAL Reserve.
Glad to see Richard Werner's outstanding work mentioned here. John Titus (who quotes Werner abundantly) also deserves to be mentioned.
Close but no cigar. This misses where the money comes from before the banks multiply it through fractional reserve banking: government. Specifically government debt. All the regulatory structure is necessary to force banks to buy government debt, as it will never be repaid and is effectively junk, so out of hand government spending is across the world. With quantitative easing government is now creating money to buy its own debt, handing that money to the banks, big finance and favourite political groups. Basel III regulations force banks to buy some of this debt, so it sort of looks legitimate. Regulation by government as Prof Werner recommends is fantasy, as no government, democratic or otherwise, will ever turn off the money spigot, or it will have to stop spending money on its clients and itself.
Good explanation on how banks really work, will be linking it today @https://nothingnewunderthesun2016.com/
Watched Mike Malone’s “Hidden Secrets of Money” ages ago. Very informative. It’s not “money”, but “currency”.
Superb article, thank you.
The old guy didn't know ? Mind Blown !
Money grows on trees after all... The tree is called a bank.
Missing the days of cash even more... You can't spend what you don't have.
100 % gold backed money. No central bank. The Interest rate is the “ price” of money. Having A central bank set an interest rate it’s just another example of price fixing. The interest rate is the most important price in the economy. It’s the price of capital. In a free market the last thing we need is a Soviet style central committee setting the price of capital
https://mises.org/library/what-has-government-done-our-money