Many sites critical of today's money system start by explaining how little cash we use. Then they jump straight to electronic bank-created money. However: banks are also the gatekeepers of cash!
Granted: only the state can print and mint. That's why, to banks, cash is a thorn in their side, and why they leapt at the chance presented by computers, catching us asleep at the wheel.
But cash is also very useful for criminals!
See why it's so important to understand the present system before we move forward?
Before you fire up the old laserjet to print some fake euros in your cellar, read on!
There's an easier – and more legal way – to improve YOUR personal situation!
First, understand how banks have a stranglehold on our money supply, even cash.
FROM THE BANK'S POINT OF VIEW
Banks today are in the business of creating money. Mostly electronic money, but if someone wants cash, they'll supply that, too. They keep a stockpile for when people withdraw cash via their human tellers and ATMs. When we give banks cash, it immediately becomes the bank's property as "reserves", while the sum is recorded electronically. If the bank's clients withdraw more cash than is generally deposited, the bank has to replenish its cash-vault.
This process of cash flowing in and out of banks is totally separate from the processes of money creation and destruction described elsewhere on these pages!
FROM THE CLIENT'S POINT OF VIEW
Joe Normal walks into his bank and withdraws 100 bucks from his account.
He doesn't know that before he folds up the bills and puts them in his pocket...
...someone, somewhere (maybe even Joe himself!) had to go into debt with a bank, anywhere, via an overdraft, a loan, or a mortgage.
...at some point in time, the central bank had it printed – with its name on it for Joe to read. Note how useless this act of printing/minting is by itself!
...the bank had to maintain a sufficient stock of cash, just in case. Please note: this isn't money from savers. It belongs to the bank. See next article How banks (don't) work.
The other thing Joe doesn't know is that even while he walks around with those bills, the debtor at the end of the food chain is constantly paying interest, as is the bank that obtained them from the central banks.
The initial debtor in fact even keeps paying if Joe lights the bill on fire (don't try this at home).
In the case of coins it's different ... they are created on the planet Melmac and fall through a gap in space-time, accumulating in laundromats across the country. (Everything else is true.)
For a more poetic angle on these same facts, see our blog-posting embodi-mint.
by Michael K for Banks need Boundaries!
- Or a bank created money to purchase assets.