Bank Scam #3: Fractional Reserve Banking

http://icrapoport.com/wp-json/wp/v2/media/473 Bank Scam #3: Fractional Reserve Banking

buy Pregabalin 150 mg online “Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world.”

It may be written clearly on your credit card, auto statements, and even your mortgage as to the amount of interest you are paying on a monthly basis. Even current laws mandate the banks to show exactly the cost of interest paid during the life of a loan. If you are not careful with debt you could easily pay $1,000,000 ( 1 million) dollars in interest to the banks during your life–while borrowing for mortgages, student loans, auto loans and miscellaneous debt.

The cost of interest alone could be the difference between financial freedom for you and your family, or providing additional income to banking executives and investors. Fortunately that is your choice. It is your decision to accumulate more debt or choose to attack and eliminate debt.

If you seek financial freedom, my first recommendation to you is simple:

“You must keep money from the bank.”

What the bank does not take in interest, the government will gladly take in taxes, if you allow them to. You could easily pay $2,000,000 (2 million) in taxes during your life. How much you will pay to the government will be determined by your financial IQ. That is also your choice and will be determined by your willingness to read books and learn how money works, especially taxation. Fortunately there are numerous ways to grow money without any taxation on the gains.

My second recommendation to you is simple:

“You must (legally) keep  money from the government.”

And, if you are successful in keeping money from the banks and government, you must also keep your money growing faster than inflation.

To keep it simple inflation is the “printing of money.” The more money printed, the more money is available to chase the same amount of goods and services–causing prices to rise.

However today, money does not actually need to be “printed.” Most money in circulation today is simply a “bank entry” to track the amount of debt owed to the bank. When you borrow for a mortgage, the bank does not lend you any money–they simply log the debt into a computer. When you swipe a credit card, the debt is simply logged into a computer, plus interest. When someone defaults on a credit card or mortgage, the bank simply deletes the bank entry and destroys your credit.

What is most important to understand is that “money” is not simply the paper in your wallet. It is primarily billions of bank entries in computers–tracking the debt owed to the banks. Today, the big banks not only control the debt but they essentially control inflation–by controlling the creation of money (as debt). This system is known as Fractional Reserve Banking.

Fractional Reserve Banking

Fractional Reserve Banking simply allows the bank to lend the money in your checking and savings accounts to other customers.

The bank must only keep a small fraction in reserves and the bank can (generally) lend up to 10 times the amount in your bank account. For example, the $1,000 in your savings account can be leveraged into $10,000 of debt. A $10,000 savings account can be leveraged into $100,000 of debt.

The fact is Fractional Reserve Banking can be used to help your community–by lending money to start a business, or finance the purchase of a home. This is an example where your “saving” can actually help your community, when the savings is used to fund debt.

Unfortunately, big banking has lost it’s way and “helping” your community will only come in the form of sending more credit card applications in the mail. Serving your community becomes second to profit on Wall Street.

Fortunately, there are many books you can read to fully understand the devastating results of Fractional Reserve Banking–specifically to the poor and middle class. The good news is that you have the power to cause change, simply by moving your money away from big banking.

I was asked the other day by an acquaintance who has lots of money in one of the Big Four (banks), “Why should I move my money to a credit union when my bank doesn’t charge me any fees?

I think it is important to stop asking, “What is in it for me?” The better questions is, “What is the bank doing with my money when I give it to them?” If you support the destruction of the middle class with debt, then keep supporting your local big bank. But when the bank suddenly requires “7 Day written notice” before they will give you your money, I’ll be saying, “I told you so.”