Message:

<p>[QUOTE=&quot;fatima, post: 1469775, member: 22143&quot;]You miss the important element that Fractional Reserve Banking has an artificial limit placed on it by the Federal Reserve else it will lose control over its banks.&nbsp;&nbsp; That limit is that a bank can&#039;t create more money than a multiple of it&#039;s reserves (usually 9X) on deposit at the Federal Reserve.&nbsp;&nbsp; So where does a bank get new reserves?</p><p><br /></p><p>Here you go:</p><p><br /></p><p>So the government borrows the money and then uses it to issue checks to make payments.&nbsp; So Mr. Federal Recipient takes this check down to his local bank and deposits it.&nbsp; (or maybe he cashes it a his local liquor store and the store deposits it) Now the bank all of a sudden has a new amount that it can add to its reserves.&nbsp; Hence it can now, should it choose, to increase it&#039;s FRB activities.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in