The Creature From Jekyll Island
(the creation of the Federal Reserve System)
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Tuesday, January 1, 2008
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- Discussions and Debates (1)
- Documentaries (4)
- Historic interviews (6)
- Jim Rogers (71)
- John Stossel (3)
- Marc Faber (33)
- Peter Schiff (132)
- Ron Paul (138)
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Posts
Thank you for uploading this. Scary what they say about the fed. Guess the only way to protect wealth is buy gold, silver or other commodity's.
ReplyDeleteGold and Silver will see you through. The price is being artificially held down right now by world governments. Buy it now, it's going to go through the roof when the Bush/Obama inflation caused my massive money printing hits the money supply. There are going to be a lot of people hurt bad who are not watching and listening to the peter Schiff's of the world!
ReplyDeleteI think the price of gold can come down a little bit more, because the IMF is still planning to sell alot of its gold holdings, and that will bring down the price for some time. But for a long term investment, gold is great!
ReplyDeleteJust to clarify on the part where he talks about how money is created when it hits the commercial banks (3rd video). According to my understanding, the way he interprets the creation of money through the fractional reserve system is wrong.
ReplyDeleteA bank with a deposit of only $1,000 cannot simply loan out $9,000. If the required reserve is 10% then it can loan out $900 of the $1,000. That $900 will likely be deposited in some bank in which the process repeats until which the banks have in effect created $10,000 (1000/0.1) from a $1,000 deposit.
Does anyone agree?
@ they guy above
ReplyDeleteYou are wrong, fractional reserve banking doesn't work like that. It means that 1000 dollar is the 10% reserve of 9000. Read about it at wikipedia: http://en.wikipedia.org/wiki/Fractional-reserve_banking
Well if read it correctly from wikipedia. A bank needs to keep (for example in the US) 10% of its high powered money (money at the central bank) and its deposits as a reserve. So with 500.000 at the central on deposit and the deposits from your clients (also 500.000) you can loan out 900.000 dollar.
ReplyDeleteBut that sounds kinda reasonable. Not like banks can loan a 100 million from 1 million and then collect interest on the 100 million with 1 million down.
@ the guy who provided the wikipedia link.
ReplyDeleteI do not believe you even read your link, it pretty much confirms my understanding of the fractional reserve system.
A bank cannot simply create $9,000 dollars directly from a $1,000 deposit. It is indirectly created through the loan process, as i explained in my earlier post.
So the documentary is wrong? Why can't I find anything about this on google? If the documentary was wrong someone must have noticed?
ReplyDelete@ guy above
ReplyDeleteFrom what i understand the documentary explains the money creation process in the most simplistic way pretty much just jumping to the end result, banks effectively creating $9,000 out of thin air.
Yes. But they make it sound like the bank creates that 9000 itself. They also make it sound like the bank collects 9000 interest from a deposit of a 1000. So, banking in real life is not that sinister.
ReplyDeleteEither way we're screwed
ReplyDeleteI wish you guys would chose a nickname so I could refer more easily to particular posts.
ReplyDeletethanks,
J E Dorner
What I *wish* the govt would do would be to put the dollar back on the gold standard & keep the fed in line with that. No need for social security (your savings maintain value), maybe international exchange rates smooth out, maybe we avoid big future financial bubbles - who knows. Good video though...
ReplyDeleteBanks can also "borrow" from the Fed (printed money) at discount rate and turn around and lend it at prime rate or more, like 30% on most credit cards today charged by none other than BofA.
ReplyDeletediscount rate? Is that like the federal funds rate? So that means that they can now borrow for next to nothing 0%-0,25% and then charge 30%? Holy **** I need to start a bank!!!
ReplyDelete