Are Banks Taking Over?

I can remember my father telling stories of finding money after my great-grandmother passed away.  She was so terrified of using banks and the threat of a depression that she hoarded the family's money in secret stashes throughout the house.  I used to chalk this up to the old-Italian superstitious ways of my elders.  Now, as an adult, I am starting to get the drift...

In a general sense, we all keep our money in banks to keep it safe?  Right?!  We don't want someone to be able to break into our homes and steal our stashes of cash! So, to ease our minds, we give it to the bank to hold on to it for us. 

Hmmmmmm......   (I'm thinking)  How safe can your money really be when you put it into a bank?

Don't be fooled.  Banks are not giant piggy-banks or lock-boxes.  Banks are businesses.  And just like any other business in the world, banks are out to make a profit. More importantly, like every other business in the world, banks also risk failing.

Know this...  When your account balance says $5,000, there isn't some drawer inside of that bank with your name on it that has your five grand inside.  When you make a deposit, that money is now considered an asset of the bank, and your bank balance only reflects the amount the bank owes you as the depositor. 

Now that the banks own your money, they don't just leave it sitting in a drawer somewhere for your later retrieval.  Banks are only required to keep a portion of your cash on hand to be able to fill your demand for withdraws.  They lend out the rest of your money to other clients - Which is no big deal.  Right?!  We don't seem to mind that banks are lending out our money to make a profit. 

But what if I told you that banks are legally allowed to lend out more money than they have on deposit?
 
Yes, you heard that right.  Banks are loaning out more money than they have. Its called fractional reserve lending.

Julian Websdale, author of Understanding the Illusion of Money and the Economic System Construct, used following diagram to explain this practice.

Websdale, J. (July 18th, 2014).  Banks artificially create money. Retrieved from: http://themindunleashed.org/2014/07/understanding-illusion-money-economic-system-construct.html

Now, ask yourself again....  How safe is your money when you put it in a bank?  What happens to your money if the borrowers your bank choose to loan to, fail to repay? 

As crazy as it may sound, this practice, called fractional reserve banking, is currently used in all countries of the world.

Websdale believes such banking practices has allowed banking families to attain high power and great fortunes, while the rest of the world is left enslaved to foot the bill.

Think about it.

We all know how it works.  In order to get a bank loan, you must put up some kind of asset for collateral, like your car, house, or business.  If you are unable to fully repay the loan plus interest, the bank gains ownership of that asset.

And who borrows money from the banks?  Damn near everyone.

From individuals, to businesses, to entire governments, everyone is borrowing from the banks.  And when loans go unpaid, banks are taking over land, homes, and businesses.  According to Websdale, some of these banks are already controlling some of the poorest countries of the world.

It is easy to recognize how banks could potentially take over the world, considering that borrowing has become a universal norm. 

Reference: Websdale, J. (July 18, 2014). Understanding the Illusion of Money and the Economic Construct. The Mind Unleashed. Retrieved from: http://themindunleashed.org/2014/07/understanding-illusion-money-economic-system-construct.html