What I didn't learn at school but wish I had
higher rate. If the bank loans your $1,000 out 32.8 times at 10% they would earn $3,280 p.a. This interest rate could vary anywhere between 5% and 10% for a mortgage and up to 16% for a credit card. The interest you would get in return would be around 3%-6%. For this example, let's be generous and say you earned $60 on your $1,000, i.e., 6%. You then pay tax to the government and you are left with about $45. In essence, the bank has risked nothing and earned $3,220. So you can see that the money is usually made by the bank, rather than the depositor. Would you not like to be a bank? Who sets the bank's liability ratio? Generally, there are rules and regulations that to some degree are set by the government. Most people would assume that the government, seeing that it is designed to represent the people, should regulate that figure in the best interest of the people. However, there is a tremendous amount of money at stake when it comes to 'fractional reserve banking' and the Centrally Controlled Banks (CCB) can wield a lot of influence over individual politicians or the entire government to have the regulation set at a level that they would prefer. If the banks have only a small fraction of reserves, what then would happen if everybody wanted to withdraw their money? The truth is if everyone demanded their money, the banks would run out before they had even paid out 3 percent of their customers. This is because the account holder's funds no longer physically exist as they have been loaned out so many times. The banks have little or no reserves. Essentially they are giving you fake money but because everyone accepts it, they can keep creating more of it, without actually earning it like we have to. Through the Fractional Reserve System, they effectively create counterfeit money and get away with it, yet you and I would go to jail if we did the same thing. Is it any wonder the banks own the tallest buildings in every city? So, how does a small minority of the world's population gain control of the money supply and why is this of concern to us? There are two major players in the money game. The first is what we call a Centrally Controlled Bank (CCB). CCBs are owned and controlled by a small number of families and individuals. The second player is the US Federal Reserve. Now with a name like the US Federal Reserve you would think it was a government organisation designed for the people. The interesting thing is if 50