Friday, April 4, 2014

Fractional reserve banking

During the past few days, we've watched and learned about money and the monetary system. Money is the main part of the monetary system, in order to make, borrow, and some other things. Talking about monetary systems, specifically talking about the US monetary system, we've learned how this one is composed and how it works.


Photo credit: cynic.me/2012/05/28/frackin-reserve-how-fractional-reserve-banking-creates-money-and-why-it-is-fraudulent-3-6/

The US monetary system, it's organized in the government, the FRB (fractional reserve banking), banks, and the people or users.  
The government has a debt, a country debt, they need to borrow money from the FRB in order to "pay" these debts. The FRB creates money, paper money and the government deposit this money into a bank account. The money becames "real", or legal when it's already part of a bank. 
When a person makes a loan because they need money for something, the bank borrows them the money, but actually the user has to pay it back, pay even more money back. The US monetary system function in order to gain money, not caring about people, or even the country itself.

MLA citations:
"Fractional Reserve Banking." - Wikipedia, the Free Encyclopedia. N.p., n.d. Web. 04 Apr. 2014.

No comments:

Post a Comment