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Originally Posted by Skybird
You clever guy should meditate a moment about what this idea of a "fractional reserve system" really means, and what it means related to the constant increase of the amount of money in circulation, and the constant devaluation of said money.
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FRB allows the creation of credit beyond what is immediately available in direct funds. It works off the principle that not everyone wants all their money out of the door at the same time. Which has been verified and re-verified over a couple of hundred years. I know exactly what it means.
Ah here, you wouldn't post creationism links in a geology thread.
For everyone else -
https://en.wikipedia.org/wiki/Fracti...eserve_banking
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Money created from credit only, that has no real-value representation, is worthless money. People today are under a spell and so think they are rich when owning paper money. That illusion only last until the first player at the table looses his trust and wants to see the cards.
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Any currency other than direct barter works on a basis of trust and shared value. That includes gold, silver, stones, old batteries, $/€. After all currency is nothing but delayed barter. It's all worthless unless there's common agreement that it demarcates value.
Money is only a transfer mechanism. It's not like the world would be a better place if everything was constantly backed by a random arbitrary metal as opposed to measured, verifiable economic action.
People
are rich when they have paper money. Because it's easily converted into goods and services. They're not living in a dreamworld.
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All banks are bankrupt right now. All states are as well. The king is naked. That simple it is.
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Yes, the global economy and financial system is
just that simple.
A old guy is driving home. His wife calls him and she says "Be careful, there is a lunatic driving on the wrong side of the road, it's on the news."
He replies, "One, there's hundreds!"
http://www.theonion.com/articles/us-...es-money,2912/