₦airaland Forum

How do you know?

JoshuaBestPremi:
It is really good that the people of the country do not understand our banking and monetary system, because if they did, I believe they will be at war by the next morning. - Henry Ford, Founder Ford Motors

I believe that banking institutions are more dangerous to our freedom than armies. - Thomas Jefferson, 3rd President of the United States

If the people only understood the injustice of our money and banking system, there would be a revolution by tomorrow morning. - Andrew Jackson

I'm afraid ordinary citizens do not like to be told that commercial banks can and do create money. A lot of economists will always argue with me on this, but banks are exactly the opposite of what our Economics textbook told us they are. Most Economics Professors, if not all, think banks are deposit-taking institutions that lend deposited money, but no, banks don't do that. They don't lend you someone else's money, they keep it to themselves.

Banks have the power to create money by typing numbers into their computer systems. When a bank issues a loan to a borrower, they are essentially creating new money. This money does not come from the deposits of other customers; rather, it is newly created by the bank itself. Our current banking system allows banks to create money out of nothing by just typing numbers into their computer and then loan this money out to people and charge interest on it. This is how money is created in our current economy.

My problem is:

1. Banks have the power to create money, but this money is not evenly distributed. Banks have the freedom to decide to whom they lend money. This can lead to situations where deserving individuals, like poor farmers, come to the bank for a loan and the bank will say we are sorry we can't give you this loan, it too risky because we don't know if you can pay it back and refuse to lend them the money that was created out of nothing.

2. The ability of bank owners to create money out of nothing bring concerns about potential abuse. If a bank owner can create money out of nothing, they can just type in N100,000,000,000 for themselves in their bank and start spending it in the economy, potentially disrupting our economic stability. Imagine if you could create money whenever you wanted by typing numbers into your computer. You could give yourself large amounts of money and start spending it freely, leading to potential chaos and inflation in the price of goods and services. Isn't this crazy?