"It is time to 'clear the decks' and talk about exactly what a sound banking system is - and is not.This is a really good article that describes how fractional reserve banking goes bad. Basically, it says that banks can loan out money they "create" as long as they have a hard asset to back it up. In modern times, of course, banks are making loans against things that don't exist: a building that isn't built yet, your ability to pay (or not pay) your credit card, and incorrect assessment of home values.
It is time to identify that which is an exercise in capitalism, and that which is an exercise in fraud."
So there's lots of fraud and most banks, by this definition, are insolvent.
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