NuclearWinter
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- Apr 13, 2006
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- #881
Yes. NW. That is fractional reserve lending. It's also bad. Fractional Reserve lending combined with fiat currency makes it extra extra bad.
Good point Rtwng.
And 97% of all bank transactions are nothing more than simple ledger entries where no money trades hands. Think about it. When you pay your mortgage (principle + interest), do you lay down $700 cash, or do you write a check? The same applies to your monthly car payment, credit cards, or things like loans at Sears for a washer/dryer.
All that is happening is that numbers are being juggled from one column to another, yet international bankers have become the richest men on Earth by capitalizing on this practice. Only 3% of our financial transactions consist of using actual coin and paper!
And what, you may wonder, is the result of this practice? Well, as debts rise, so do our interest payments. To cover these increased expenses, taxes are raised. In the business World, higher interest payments equal higher business expenses, and thus higher prices.
If you look back at the last ninety years, have prices, our national debt, taxes, and interest payments gone up or down? The ultimate result is that the everyday person suffers because taxes and inflation continually keep eating into their REAL net worth, not allowing them to get further ahead. And that is precisely why it is so hard for people to ascend from one particular social or financial class. It's because the system is designed to keep them where they are! And it prevents movement from one class to another.