This video is a follow on from the other four videos I’ve done on the Central Bank currency creation operation. If you haven’t seen those videos, I would recommend you doing so before watching this one.
Let’s turn our attentions now to the High Street Banks currency creation operation.
High Street Banks
High Street banks also have a part to play in creating currency in a country.
How do they do this? Well, by means of something in the banking business known as “fractional reserve banking”. Very few people seem to know about this, yet it’s a hugely important topic because it’s something that has a big effect in our economy.
I’m going to start off by telling a joke.
What’s the difference between a counterfeiter and a bank manager?
Nothing much as it happens, because both create “funny money”.
A counterfeiter makes fake paper currency, whereas a bank manager creates fake digital currency on a computer system.
Unfortunately, this isn’t just a joke. It’s actually a very serious matter.
To my way of thinking, both are crooks – but only one is a small time crook.
Can you guess which one I’m referring to? I’ll give you a moment or two … if you guessed the counterfeiter as being the small time crook, then you were correct.
Bank managers are, to my mind, by far the greater crooks. They are much more of a scourge to society because they swindle the general public on a scale that beggar’s belief. The “Fractional Reserve System” is a scam. It’s a “confidence trick” becuase it relies on people’s confidence, or trust and lack of knowledge in banking in order to work. In short, it’s a con.
The key difference between a counterfeiter and a bank manager is that a counterfeiter is considered a criminal by society and by the courts, whereas a bank manager is considered a law-abiding member of society who provides a valuable financial service for the community.
By rights, both the counterfeiter and the bank manager belong in jail because both commit fraud.
