“Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something.
They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.”
-Woodrow Wilson
former persident of the United States
http://video.google.com/videoplay?docid=-9050474362583451279
I was enjoying a smoke and a cup of coffee with a friend at a starbucks and the conversation let to money somehow, and it reminded me of this documentry I saw on the internet once of a guy explaining how the US Dollar represents nothing but debt. I’ll try to break this down… Lets say you deposit $100 cash dollars into a bank, that bank can use $90 (assuming that the reserve requirement is 10%) to loan to someone else, that then gets put back into the economy and is used to buy iPods, food, whatever and eventually gets deposited at another bank. That bank then can use $81 of that $90 dollars to lend out to someone else, and keep the loop going you will eventually get a lot of money created out of thin air…
Heres a picture for people how have trouble reading long paragraphs(I know who you are!):
You see in the picture that with $100 deposit the bank created $171.. but as long as they meet the reserve requirement to back these loans (3-10%) they are allowed to do this… in fact this is what drives our economy.
Then why does banking work if we are always creating this money?
Because, banking is about trust. You trust that they will have your money when you need it and they trust (and hope) that everyone doesn’t withdrawal at the same time… Even though that is very odd it works… but it has its long term effects such as the united states will always be in a state of debt and the Dollar is backed by nothing but debt.
Something to ponder next time you take a loan, or deposit… Who are you really borrowing from? Where is your money really going? Watch the video… let me know what you think.
