Uploaded on Thursday 18 June, 2020 to the illusion of money
How a fractional reserve banking system reacts to boom and bust cycles
A fractional reserve banking system is intrinsically geared towards banks lending money because of the big profits derived from interest payments on loans. Providing liquidity is advantageous to business and good for growth, but an economy that expands much too rapidly can overcook and trigger a recession; and so too can a lack of confidence in the banking system do likewise. The process of economic expansion and contraction which characteristically occurs on a repeated basis is coined the boom and bust cycle. In boom times, credit is abundant and there is no shortage of risk takers. After the bust, credit is restricted as lenders become risk-averse. One of the roles that a central bank plays in boom times is to keep inflation above a certain target, usually at 2% growth per annum, whereas in times of bust, it is to inject liquidity to steamroll the economy out of a slump. This tutorial looks into the disciplines and practices of commercial banks in this regard.
This video is courtesy of the Khan Academy whose YouTube channel is available here.
Ellen Hodgson Brown, President & Founder of the Public Banking Institute (PBI) and author of such books as "The Web of Debt", The Public Bank Solution", addresses the PBI 2012 conference in Philadelphia.
Victoria Grant, seen here aged 12 years old, addresses the first annual Public Banking Conference in Philadelphia, PA. Her father and she discovered that the debt money system was what was wrong with the Canadian economy and decided to do something about it.
The Bank of North Dakota was established by legislative action in 1919 to promote agriculture, commerce and industry. North Dakota is the only state to have escaped the credit crisis. For every year since 2008, it has run a budget surplus and it has the lowest unemployment figures in the US, the lowest default rate on its loans and the lowest foreclosure rate.
Mike Krauss, Chairman of the Pennsylvania Project, puts forward his proposal, based on the success of the Bank of North Dakota, to create a Public Bank for the state of Pennsylvania. Such a move would free the state from the clutches of the Fed, reduce the debt burden, boost investments and serve the public interest.
Most people hold the view that their bank deposits are safe with the big commercial banks, however, this assumption is not based on the facts. This video features official government documents detailing information that should sound anyone's alarm bells [edited].