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Category Archives: Multiplied reserve banking

“Multiplied Reserve Banking” & a “Promise-Based Monetary System”


Conventional View of Fractional Reserve Banking [courtesy Google Images]

Conventional View of Fractional Reserve Banking
[courtesy Google Images]

This article advances an hypothesis that’s both new and unclear–at least, to me.  The article is overly long (3,700 words) because I’m not only trying to explain my hypothesis to you, I’m also trying to explain it to myself. 

In the process, I use numbers in this article, but those numbers aren’t intended to accurately reflect reality—they’re only intended to illustrate principles relevant to my hypothesis.

I’m not claiming that this hypothesis is true. In fact, it might be seriously flawed or even absurd.  I’m only claiming that it might be interesting and even roughly correct.

 

Most people don’t understand that we live in a financial world characterized by:

1)  “fractional reserve banking”; and,

2)  a “debt-based monetary system”.

Neither of those two concepts are well-understood by most people.  The term “fractional reserve banking” might be vaguely recognized by most people, but seldom understood.  The term “debt-based monetary system” hasn’t even been heard of by most people and isn’t understood by even one in a thousand.

Insofar as we recognize either term, we tend to regard them as two distinctly different, and unrelated concepts.

But I begin to see that those two concepts are no more unrelated than the two sides of a coin.  In fact, I begin to suspect that neither characteristic could exist without the other and that, together, they comprise the backbone for the current financial system of the US, the world, and perhaps even the New World Order.

Read the rest of this entry »

 

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