Name: Banks Don't Lend Money – Deposits are Loans to the Banks & Banks Borrow from the Public
Uploaded: 2024-05-12T02:00:00+00:00
Duration: 10 min 31 s
Description: Banks are thought of as Deposit Taking Institutions that Lend Money. The Legal reality is, that banks do NOT take deposits and banks do NOT make loans. The states that if you give your money to the ba

13 days ago

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Banks don’t lend money How Money is Created by Banks Promissory Notes Security Notes How Banks Operate Banks are the Borrowers People Lend to Banks A Deposit is a Record of Debt What are Deposits

Banks are thought of as Deposit Taking Institutions that Lend Money. The Legal reality is, that banks do NOT take deposits and banks do NOT make loans.

The states that if you give your money to the bank it is not a deposit, you are LOANING your money to the bank.

So what we think are Deposits are actually LOANS to the Bank. We should be charging them and not them charging us for interest.

They are the Borrowers and WE are the Lenders.

Banks borrow from the public.

Do Banks Lend Money?

NO.

Banks are in the business of purchasing Securities.

When we go to the bank and we ask for a LOAN. We receive a CONTRACT and we receive an OFFER letter and we sign it.

When we sign this, by law, we have just issued the Bank a Security Note – aka “Promissory Note” and the bank is going to purchase this security note.

What a bank really is doing is very, very different than what it is presenting it is doing.

So the bank purchases your Promissory Note also called Security Note, so how do I get my money?

The bank will say “you will find it in your account with us.”

The money is NOT transferred to your account.

Why?

Because what we call a Deposit is the Banks Record of DEBT to the Public.

The bank owes you money, so it’s record of what it owes you is what you think you are getting as a loan.

That is how the Banks Create the Money Supply. The money supply consists of 97% money deposits.

Money is created out of nothing when they lend, because they invent Fictitious Customer Deposits.

They simply Restate, in accounting terms, what is an accounts payable liability arising from the Loan Contract having Purchased your Promissory Note as a Customer Deposit. BUT – Nobody has deposited any money.

Banks create the money supply by INVENTING these claims on themselves as fictitious deposits. This can be positive for economy as long as money creation is in line with the creation of new goods and services, implementation of new technology and therefore adding value to the economy is FUNDED by this money creation.

If that happens, we are talking about business investment, productive loans, productive bank credit, you will have NO inflation and these loans can also be serviced and repaid in a stable economy without promise.

Countries that achieve this are successful.

So if banks create money for PRODUCTIVITY – meaning focusing on “lending” for productive purposes, it can be a win win situation.

If Banks create credit “loans” for CONSUMPTION, you have more money for goods, more demand for goods, but you have LESS goods and services, thus you are creating INFLATION.

Unfortunately, over 70% of all lending is bank credit creation or money creation for Financial Transactions, for purchasing Ownership Rights.

This is a problem.

Why?

Because you are creating new money but you are not creating new goods and services.

You are giving someone purchasing power over EXISTING ASSETS and what happens to these asset prices?

They are pushed UP. Does this sound familiar in the market right now?

This is called Unproductive Lending, which causes INFLATION.

What does INFLATION cause? INEQUALITY!!

We must ALWAYS look at what the loans are for as this will tell us WHERE the money is going and what is being used for.

Bottom Line: Is it being used for good (Producing new goods and services – Productivity) or is it being used for bad – for non-goods, non physical items and non-services – for financial transactions.

If the money is for productive purposes you will have a good economy with no inflation and will have financial stability and there will not be inequality issues.

The Capital Approach is based on that Banks are just Financial Intermediaries – facilitating transactions between lenders and borrowers but they are not.

What we need to understand is that they are MONEY CREATORS.

We have a problem with the banks being “regulated” because the regulators don’t know how the real game is being played. If you don’t know the rules of the game, how can the game be officiated?

Without proper monitoring – aka “regulation” we can get these Asset Bubbles that seem to come out of nowhere, like the 2007 - 2008 housing crisis, when you have all this money being created for the wrong reasons, simply to PROFIT from the creating it – called Transaction Fees.

Greed creates Bubbles. This is why we do need regulation.

When Banks create CREDIT – aka “Loans” – Money – simply for the profiting from the “TRANSACTION FEES” you have a problem and that’s exactly what occurred in 2003, 04, 05, 06, 07 which led to the housing collapse.

Now that all this is said we have to remember that banks are actually borrowing money from us and creating money this way, but when “deposits” from the public which really are loans are 10x to 100x LESS that the money that is being created by the banks, we have a MAJOR Bubble in the making.

Bubbles are ALWAYS created by GREEDY Bankers. How do Bankers really make their money? By charging for Transactions -- Usage.

What is the way to prevent Bubbles in the financial markets?

BAN the Creation of Money for Transaction Fee Purposes.

You have companies like Goldman Sachs that are nothing but a Las Vegas for speculating on financial instruments. They create money out of thin air to create a “market” of speculative gambling and they look for two parties who desire to bet on something, they create a “security” and they charge a transaction fee for doing all of this.

This is for greed and not for productivity.

Anything in the name of greed is not good and causes inflation and bubbles.

Banks that attempt to make money on Speculation are eventually going to fail. Speculation is gambling. Banks can win big and other banks want to know how they are growing so fast, so it becomes a monkey see, monkey do strategy and before you know it there are banks creating money for the wrong reasons and when one falls, they all fall and so goes the entire economy.

Then the people who have loaned the banks money in the form of “deposits” are the last ones to know and when they go to collect their loan – aka deposit, the bank may not be able to pay you back.

That leaves bail ins – which the bank can legally confiscate the loans – “deposits” from the people.

This hasn’t happened yet, but I think it will, because we are looking at a bubble that will take everything down. It is the EVERYTHING Bubble.

You also have the One World Government at play who is in control of the Central Bank of the World and they can secretly help the Big Banks.

The goal is to eventually have ONE Giant Bank of the World, which we kind of do right now as all the big banks are acting as one and they are going to act like big fish and consume the little fish.

The Elites of the world do not like small banks.

Why?

Because they are the honest ones, the ones who focus on PRODUCTIVITY.

Since the introduction of the Federal Reserve in 1913, the value of the dollar has decreased by 90%.

To bring about their new world order they will need to collapse the entire market to bring in their one world version of Digital Banks which they plan on offering just Digital Currency and I have seen that they may even bribe people with up to 1.5x their money to join these banks.

I don’t think the entire market will collapse to zero, but I can see it going down 40% to 50%. Anything less than this would be catastrophic, but maybe that’s what they want.

They also want to offer some type of Universal Base Income to entice compliance. Of course, everything sounds great at first until they begin gradually removing rights, replacing with “Privileges.”