Fractional Reserve Banking - The First Pillar of Fascism
Channel: Christian Labor
Date: 2015-08-29

In my video, The Three Pillars of Fascism, I quickly enumerate three legal concepts that tend towards monopoly and government control. In this video I do a quick gloss of why Fractional Reserve Banking is the primary pillar.

This came to me while perusing Breitbart's Facebook page, and I posted something quite similar there. 

Waaaa QE QE! Why don't you explain why bond dumping has anything to do with the money supply to begin with? Bonds replaced gold because gold backed FRB kept cratering. Now instead of cratering, we just get constant QE. 

Put simply - no, taking deposits and lending said deposits while promising you will allow them to be withdrawn on demand does NOT work. FRB - the west's favorite Ponzi scheme. 

Depositor deposits $10
Bank promises return on demand.

Bank lends $9

Depositor withdraws $10

Where does extra $9 come from? It comes from other depositors. If the bank is not making enough money, eventually, even the reserve is insufficient.

Eventually, the money comes from YOU if your government underwrites the bank. Or the Fed can shovel bonds into reserve to expand the reserve artificially. 

Generational idiocy. No. IOU's are not "money", though they spend like money until the IOU market collapses. But the glut of IOU's just causes constant inflation and does the economy no good. 

It does bankers and investors a lot of good though. Specially if you're STUPID ENOUGH TO KEEP BAILING THEM OUT AND NOT PROSECUTE.

P.S. Enron was prosecuted under Bush. Show me the prosecutions of Obama's crony's. Show me some Libertarians who give a flying fig. Libertarians don't care how far down the economy goes as long as their filthy taxes stay low.

The music in the intro and close: 
"Gallows Hill" by Josh Woodward - licensed under a Attribution 3.0 United States License.
http://creativecommons.org/licenses/by/3.0/us/