That the accounts are correct does not mean that no money is created.
What banks do is lend money that they do not have. For example, if they need 10% coverage, they can legally borrow the same money 10x (and thus earn 10x in interest).
This is possible because there is no longer a need for physical money transfer. Most transactions only involve accounting, where one person’s credit counter goes up and another’s counter goes down. There is no physical movement of money, just an imaginary one.
Because this imaginary (cash) money is also used for real-world transactions, the amount of financial money increases. Money is actually created in the economic sense. Therefore, these “fractional reserve” banks are also called “money-making banks”. Actually. Due to the practice of private banks, there is now 4 times more debt in the world than there is money. The banks’ money creation is therefore debt creation.
What people want to understand is that financial money rests on physical money, secured and SPECIAL UNCOVERED receivables.
In fact, it’s a little worse. Because many citizens and businesses are in debt, they no longer have many assets in banks. The coverage for the money lent therefore comes largely from loans from central banks such as the Fed and the ECB, which also create that money out of NOTHING.
Money has now become hot air, constantly being added by financial institutions as partial security for the ever-growing mountain of debt. Money creation has been detached from the growth of the real economy
And we must earn more, because more and more money must be lent out. When debt proves to be irrecoverable, these receivables lose money (the implosion following the financial crisis). But this can be postponed by lending the debtor new money to pay off his old debt. Because there is always interest on these loans, the debt burden increases. In fact, one is then digging an ever larger debt hole to fill the old hole and thus postpone the bankruptcy and loss of the receivables / debts.
Meanwhile, the economic money supply continues to grow, threatening inflation. Because for this, extra financial money is not automatically a counterpart in the real economy. Therefore, there is a need for constant real economic growth, the population must continue to increase, women and children must work, labor productivity increases, etc. And then the environment is an afterthought, unless it can create further economic growth. Economic growth that no longer serves the citizens, but primarily serves to prevent the Ponzi scheme from collapsing.
For decades, the money back has no real value anymore. The gold subsidy has long since been abolished, and the dollars that replaced it have also long since lost their gold subsidy. Also, the coverage of the money that banks create out of nothing comes again largely from money creation out of nothing.
The value of money is determined by trust and the financial need for money for transactions (for the money wind trading or commodity and service transactions). If the money supply grows faster than it needs, it has a negative effect on the money value and the prices. Where the money supply grows plays a role in this. If this is limited to financial institutions and states, the average citizen will hardly notice it.
Until now, it has been seen that the rich primarily invested their rising wealth in stocks because investments have been declining for years. As a result, stock prices have exploded to the absurd point. The consumer was not bothered by this. Because the rich are also beginning to fear that the financial system is facing another crisis, they are now investing in land and real estate on a large scale. Ordinary citizens notice this on their own. Housing has now become unaffordable for many people. Rents and mortgages are going through the roof, and the banks are taking advantage of this.
Because the banks’ shares again often lie with the rich, this is again a win-win. Before the business collapses, they quickly sell these shares (such as Rothschilds ‘sale of ABN to Fortis) and buy them back for a tip when governments get the banks back to health at the taxpayers’ expense. That is not a problem in a false democracy. Politicians are fooling the public and the media is in the hands of the rich.
But what happens if you completely abolish physical money and replace it with only digital claims on the central banks that issue the money? Not much, then you can even more easily convert debt into receivables from the central bank. For example, politicians who constantly channel tax revenues and state assets to the rich (neoliberal robbery), and if their states get into debt as a result, can exempt them from their debt payments for a while so they can continue with their robbery.
The central banks are now doing this with so-called “Quantitative easing (QE)”. It is an invention of the Japanese, who have also messed around with money on a large scale and have built up a huge debt to get out of stagflation. The central bank buys existing debt securities from governments that have ended up with the private banks, from the newly created countries’ assets in the central bank (ECB, FED), which gives these private banks space to hold new government debt certificates. and the states continue to lend and distribute money to the wealthy.
So can you not continue to make money from the ECB and the Fed indefinitely? No, because it is accompanied by an ever-increasing impoverishment of the population due to an increasingly unequal distribution of wealth. Purchasing power suffers as a result, as a result of the real economy no longer growing, while the money supply continues to grow happily. Pure money does not seem to be wrong, but in reality people and states are getting poorer.
This is seen all over the western world. I just watched a documentary about Korea, a very prosperous country one would think. But even there, a social catastrophe is emerging due to the growing differences in wealth between rich and poor. The number of suicides over 50 has increased dramatically. Continuous economic growth and impoverishment go hand in hand.
Anyone with a bit of common sense understands that money creation should be an exclusive state monopoly and not put in the hands of private loan sharks, who are also put above the law in our system. The Scientific Council has also issued a fascinating piece of advice on returning money creation to a state bank. Rutte has thanked him and promised to study it. Never heard of it again.
The banks’ money creation is the reason for the ongoing recession. First, they cast the net to let as many fish as possible swim in it. They inflate the economy by handing out cheap money, leading to rapid growth, which in turn encourages even more investment, consumption and borrowing. If everyone is up to the neck in debt, they will bring it back by raising interest rates. Debtors are forced to pay off, high interest rates stop investment and consumption, and the economy collapses. Once enough debt has been paid after several years of pulling the belt, the next round begins. These usury methods cause great misery, but our rulers have only a selective conscience.
[Reactie gewijzigd door Elefant op 5 februari 2022 03:22]