Well, tomorrow is December 7 and since I'm tired of answering the same email, I first to write on the blog, hoping to do some 'clarity.
As you know it for months, 8 October 2010 to be precise, the video circulating on the web former footballer Eric Cantona, about his proposal to withdraw money from banks to bring down the system.
The usual questions are:
1) why should we withdraw our money, what would change?
2) but if the system does not collapse worsens our situation?
3) means I have to keep money at home under the tile?
etc. etc. Then
behind the proposed Cantona lies a magic word that many do not know, called "fractional reserve .
What is this?
I quote Wikipedia: "The fractional reserve is the percentage of bank deposits that the bank is required by law to hold in the form of cash or assets readily convertible into cash. "
In Europe, the fractional reserve is 2%, determined not by member governments, but by an internal regulation to private European Central Bank (ECB), according to Article 4 of Regulation 1745/2003 of the ECB .
Translated means that if tomorrow I recassi to the door of my bank to deposit 100 € in cash, the bank would have to retain a reserve of 2% figure, which is 2 € and pay (and hence release The cashier of the bank) the remaining sum of € 98.
This trick allows banks to create money ex nihilo, ie out of nothing. By some calculations, by a deposit of 100 €, by alternating deposits-loans-deposits and so on, through the artifice and the fractional reserve, the bank gets to make € 5000, € 4900 or created from scratch, ie 50 times the amount deposited.
This is an example with € 100 deposit, try to imagine what the bank creates out of nothing by filing 1,000, 5,000, 10,000 € and so on.
This is the reason that if all depositors of the Bank XXX went to withdraw their savings at the same time the Bank may not XXX provided to all, for the simple fact that the money there are no reserve, or physically are not there.
On December 7, will not be any collapse of the banking system because people will not join in a massive event, but the purpose of this proposal are two in particular: the first is to arouse curiosity in people and urge them to ask "why should I withdraw my money in the bank to change the system? And it is that its banks are the source of this unhealthy economic system? ", the second purpose is to understand the banking system that" now we know , which we implement practical solutions and in opposition to their diktat, and then can no longer ignore.
Always remember the quote by Henry Ford (which I have deliberately placed as the first page of my book) that says: " Thank goodness that people do not understand our banking and monetary system, because if I understand that a revolution broke out before tomorrow. "
I'll be optimistic, but I trust in the good understanding of the people.
As you know it for months, 8 October 2010 to be precise, the video circulating on the web former footballer Eric Cantona, about his proposal to withdraw money from banks to bring down the system.
The usual questions are:
1) why should we withdraw our money, what would change?
2) but if the system does not collapse worsens our situation?
3) means I have to keep money at home under the tile?
etc. etc. Then
behind the proposed Cantona lies a magic word that many do not know, called "fractional reserve .
What is this?
I quote Wikipedia: "The fractional reserve is the percentage of bank deposits that the bank is required by law to hold in the form of cash or assets readily convertible into cash. "
In Europe, the fractional reserve is 2%, determined not by member governments, but by an internal regulation to private European Central Bank (ECB), according to Article 4 of Regulation 1745/2003 of the ECB .
Translated means that if tomorrow I recassi to the door of my bank to deposit 100 € in cash, the bank would have to retain a reserve of 2% figure, which is 2 € and pay (and hence release The cashier of the bank) the remaining sum of € 98.
This trick allows banks to create money ex nihilo, ie out of nothing. By some calculations, by a deposit of 100 €, by alternating deposits-loans-deposits and so on, through the artifice and the fractional reserve, the bank gets to make € 5000, € 4900 or created from scratch, ie 50 times the amount deposited.
This is an example with € 100 deposit, try to imagine what the bank creates out of nothing by filing 1,000, 5,000, 10,000 € and so on.
This is the reason that if all depositors of the Bank XXX went to withdraw their savings at the same time the Bank may not XXX provided to all, for the simple fact that the money there are no reserve, or physically are not there.
On December 7, will not be any collapse of the banking system because people will not join in a massive event, but the purpose of this proposal are two in particular: the first is to arouse curiosity in people and urge them to ask "why should I withdraw my money in the bank to change the system? And it is that its banks are the source of this unhealthy economic system? ", the second purpose is to understand the banking system that" now we know , which we implement practical solutions and in opposition to their diktat, and then can no longer ignore.
Always remember the quote by Henry Ford (which I have deliberately placed as the first page of my book) that says: " Thank goodness that people do not understand our banking and monetary system, because if I understand that a revolution broke out before tomorrow. "
I'll be optimistic, but I trust in the good understanding of the people.
Salvatore Tamburro
0 comments:
Post a Comment