Bank of England Chief Mervyn King Proposes Eliminating Fractional Reserve Banking

This is a very good posting on the Infowars.com site. Mervyn King says, “Eliminating fractional reserve banking explicitly recognises that the pretence that risk-free deposits can be supported by risky assets is alchemy. If there is a need for genuinely safe deposits the only way they can be provided, while ensuring costs and benefits are fully aligned, is to insist such deposits do not co-exist with risky assets.” Trouble is Ben Bernanke is on the side of the digital money printers.

David Cameron's government should revisit the 1844 Bank Charter Act, which stopped banks printing money as if it were confetti. The digital age demands that reckless banking, or casino banking as Vince Cable calls it, is stopped. The only people to gain are the bonus-grabbing bankers as the digitally created cash moves from one computer to another.

Fractional Banking and the Federal Reserve System Explained!

Just thought I'd post this again. Money does grow on trees - or bank branches - and is very easy to do. No wonder there was a run on the Northern Rock!



This one is a real treat too!

CNBC anchors mortified that Ron Paul was allowed air time

All In This Together - Part 2

Following on from my first posting in this theme, I came across this section on the BBC News website called "Money Worries". The top question is very pertinent indeed. Someone called Patrick Howard from Bristol asks this simple question, no doubt asked by many, many others. He asks this, "What I fail to understand is where exactly has all the money gone? Huge amounts of it must still be out there in the banks. It can't have vanished into thin air, can it? Please explain?" He gets this answer -

This is a great question and deserves a very long answer, but there isn't the space. However, in brief, money is not really 'money' at all nowadays; it is a "promise of value". When we use our credit cards at the shops, we don't actually hand over any money, we merely promise a transfer of value from our bank to the shop's bank (quite often the same bank). But what has happened over the most recent years, as banks have overstretched their lending capacity, other banks have decided that the "promise of value" (in the form of a debt i.e. mortgages) is not a good risk to take in the main because the "promise of value" could not be backed up by hard cash. Banks lend much more than the deposits held by depositors; it is a system called the fractional reserve banking system and means banks can gear up many times more than the deposits they hold. This works well when value is added to the system, but has failed miserably as institutions have found the "promise of value" in the debts has turned sour. So, the money has not actually gone anywhere - it was never there in the first place!

Never there in the first place. WOW! Perhaps George Osborne, instead of tinkling with the debt crisis, could get real and launch a root and branch clearout of the banking system. Money should be somewhere. Should be accounted for. But it is not. How many more Mr Howards are sitting wondering where the money has gone?

The BBC needs to deliver its public service remit by telling more about Fractional Reserve Banking. Its fractional all right. But there are no reserves to speak of and the word banking hardly counts.

What did Della wear to the Tea Party?

The conservative Tea Party movement has won several victories over mainstream US Republicans in primary contests ahead of November's mid-term elections. In Delaware Tea Party-backed Christine O'Donnell beat veteran Congressman Mike Castle for the Senate nomination. Ms O'Donnell seems a cheery wonder, all low taxes and little league government. Whether she will make it all the way to the Senate is something else (memories of Eddie Cochran?).

I have my doubts about the Tea Party. Probably in the same way as the British did in Boston all those years ago. They sound patriotic in a kind of airhead way. If ever they are let loose as a governing group in charge of the American way of life then prepare to run for the hills. I don't think they have much of a clue. I'm a conservative, but these people make me look like a pansy liberal. But then I'd say true conservatism was about conserving the best rather than weeding out the roses with ragwort.

Tea Party ideas with their emphasis on tax slashing and federal job cuts sounds neat and dandy until one realises that the entire American edifice is built on a federal empire. Taking a sledgehammer to the foundations won't work. The USA, like Britain and others, has exported jobs. In addition, the US has the dollar as a reserve currency. The Tea Party thinks it is on its way to demolishing the federal empire to put American back into the hands of "We, the People". If they don't step back a bit and think, all they will do is just puncture the balloon that is puffed up by the fractional reserve banking system that gives succour to their perceived enemy.

Banking on fractions!

Nice to see all the big banks gleefully turning out big buck profits. The Daily Mail had a headline on Saturday suggesting that Britain was now living with two economies. One for the banks (or financial product shops) and one for the struggling entrepreneurs, the cash-strapped public services et al. All the bank chiefs crowed about performance and how well they had turned things around. Maybe they have succeeded in changing their fortunes and have a modicum of feeling for their customers. However, I still get the impression it is a case of bank chief speak with forked tongue.

We are told that small and medium enterprises are being starved of cash. That the banks are putting undue restrictions on lending. Representatives of the SMEs come on television to tell one and all that the banks must do better. Spokespersons for the banks in turn tell a different story. They claim the SMEs don't want the loans. Who is telling the truth? The economy is too important for silly games to be played.

Royal Bank of Scotland chief, Stephen Hester, is forging ahead nicely. But his bank is 83% owned by the taxpayer. I wonder if there is a board director representing the taxpayers? Does anyone know? Hester is also keen to continue his casino banking. Are we entitled to know exactly what he and his RBS team are up to? When the sub-prime fiasco was revealed to the world, it became known that loans of totally worthless value were being repackaged, mixed with other "financial vehicles", and punted round the market for unsuspecting bonus baggers to do something with. Have any of these people been brought to book?

I think it is high time the 83% shareholding had proper representation. We don't want anything untoward happening on our watch. Perhaps the Taxpayers Alliance could put forward some ideas. At the moment, the British people are awaiting VAT going up to 20%, swingeing cuts in public spending and the possibility of erratic price increases. Things could be bad for years to come. When a bank tax was discussed, Barclays got all steamed up and threatened yet again to leave the country. I think this moral blackmailing is an outrage. If Barclays are so unpatriotic let them go. It's not as if they are bending over backwards to assist in times of trouble.

The Coalition Government needs to rebalance the scales. We do not want two economies. We want one flourishing economy. But letting the banks get away with blue murder will never give us an economy built on rock foundations. They have left us with shifting whispering sands. 45 small businesses are being swept away daily.

The whole banking system needs a complete overhaul. The Northern Rock episode shows how the world of fractional reserve banking is so precarious. Get a desire for large numbers of withdrawals and the banks can't meet their obligations. They must be the only businesses that can operate on a techniquely insolvent basis and get away with it. We've pumped billions into RBS and Lloyds. We've eased the public purse quantatively or basically printed money so that the whole sorry saga continues. Only 3% of money in the system is real cash. The rest is computerised, either real or fictional. So the Government should break up these banks. Have proper retail banks and proper merchant banks. The so-called investment banks will need to be far more transparent than they are now.

It is an absolute scandal that very few have been shown accountable for this mess. Nothing in the current thinking will stop further catastophe. However, if it does happen, we should as taxpayers, all loudly say will will NOT bail out another bank. Better a bust bank than a bust economy. It would have been far cheaper to let Northern Rock go bust, set up a National Compensation Fund, and sell off the remaining assets to those who felt they could have made a go of it.

We must stop this funny money economy and build an enterprising economy making real things, selling real things, and doing real things.

Money grows on trees - or out of thin air! OFFICIAL!!

Anyone wanting to find out the scams and schemes that bankers get up to should watch this video which gives a very good description of the fractional reserve banking system. Essentially this is a grand money printing exercise or, in the current computer world, a digital dollar production. Shocking or what?

Bankers thought the Chancellor was really rather lenient on them in the Budget. He may have been, but should we? Sooner or later this balloon is going to pop big time. I see the Rev. Stephen Green, Anglican priest and chief of the HSBC Banking Group is off to Canada for a B20 meeting. This group has been set up to shadow the shenanigans of the G20. I'm still figuring out how the reverend gentleman squares up dominical teaching with modern day money changing. It's currently too warm for my brain to cogitate properly, but I'll be giving it some further thought. However, it does appear that HSBC has been steered in a way that may reflect Christian stewardship as a component part, so a fractional part of the stewardship may have been implemented!