WealthMoney.org

I have learned a ton from listening to Byron. I have a few questions.

Under our current monetary system when a typical bank creates a loan out of thin air as an entry or whatever into a checking account what is the process in which they get the actual money into circulation after the loan is made? Is the money sent to the bank from the fed or mint if the individual wants to take out the cash?


Also is money just spent into circulation based on any kind of meaningful production? Is that sufficient enough. On a federal level?

If we had a debt free money system such as the one Byron proposes on a state and federal level would banks still make loans and offer credit with interest attached. I assume they still would do some of this? If so what would the interest rates be like? How high. What would that process (credit and usury) be like under a debt free money system?

gscash,

Byron is out of town for a couple weeks. I just checked your message and we'll put together a video response for you.

ok cool. it's crazy learning about this stuff. it's good though that alot of people are catching on to it. even if it seems like a slow process, alot of people are realizing how rigged the game is at this point. but there's still too many people that just don't understand this.

One more question I had also. Say I take out a 30 year loan I pay back the interest and the principal, after that the banks only keep the interest and extinguish the computer entry and the cash (principal that was paid back over that time) ? That's how it works? Just trying to understand that better.

Bank A creates a loan of 100,000. if the loan is spent and deposited in an account at Bank A (by cheque etc), then no reserves are moved. The borrowers account is decreased by 100,000 and the person who recieved the cheque's account is increased by 100,000.

if the money is transfered to bank B, bank A's reserves (their account at the Central bank) are reduced by 100,000 and bank B's reserves (their account at the CB) are increased by 100,000.

if the loan is demanded by the borrower in cash, then bank A has to give it to him. Bank A's reserves are reduced by 100,000.

Reserves are cash and bank's accounts at the Central bank. They move around the system as money is moved from one bank to another and as people take out and deposit cash.

Hee are some good links that should answer your questions.

http://bilbo.economicoutlook.net/blog/?p=1623

http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/




At present banks simply write you an IOU when you get a loan. The numbers in your account represent what the bank owes you. There is nothing 'in' your account. Deposits are merely claims on the bank for 'Government' money.

Banks do have to give you the Government money when you write a cheque and it is deposited at another bank or when you withdraw cash, but it either stays within the banking system (moved from one bank's account at the CB to another) or quickly returns to the banks (cash is usually redeposited quickly).

Full reserve banking would mean no more IOUs. Banks would have to have the money and transfer it from one account into your account.



Banks will spend most of their interest income back into the economy.

http://wfhummel.net/timebomb.html

Commercial banks are not authorised to create or destroy cash.