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Prosperity Plans failed, but we still need Banking Innovation !

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The OPPT Bubble is burst: "Resonance is not Enough"

 

But We still need Banking Innovation !

 

It is obvious now, as Two key members of the OPPT Dream team now admit

WHERE to go next? Can we have a broader discussion about New Banking ideas?

 

New Agers admit: Resonance is not enough!

 

Excerpt from : One Roundtable : 12-30-2104

Recommended Video:

Part 3 of Banker Talks : Creativity, Bitcoins, and Keeping it Local

 

===

LINK to here: http://tinyurl.com/FX-innovation

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Had they been open to the Truth, they could have accepted it almost 18 months earlier

 

(thanks to the UniversityOf Truth, for uploading this):

 

Over a year old, but this interview with a retired senior banker remains relevant. He looks at OPPT with an open mind, but tells some "home truths" about Wealth, Value, and what happens when a bank lends money "out of thin air", but still needs a deposit - the money is not completely Free even for the banker

 

A Senior Banker Talks about Wealth and Banking0FAF5D54FE9B0D710C95D01E08A110FA.cache.g

Created: Jan 16, 2015Duration: 23:52

 

 

This is over a year old, coming from the days (Sept 2013) when OPPT was still be a fresh idea. With OPPT now seen to be a bust, maybe people are ready to hear the Truth in the Senior banker's comments. "Henry O'Leary" here explains clearly and patiently why OPPT's documents would not work, and why the banks would not be able to give people "their value", which OPPT-ers had claimed was $6 Billion. The key ideas are still relevant: 1/ How much Wealth person is on our planet (maybe $300 Trillion, or $43,000 per each of the 7 billion on the planet), and: 2/ How do banks really create value (banks create money out of thin air, but they still need to fund their loans, when the loan proceeds get spent.)

 

The false Prosperity Schemes seem to be falling by the wayside: the RV, the OPPT, Swissindo... one after another. Don't we need to have an in-depth discussion about the realities of banking, how banking really works - If we are going to design a better system? I am hoping this will lead to more detailed discussions with people who have done in-depth research, and can justify their innovative ideas with actual evidence.)

 

(There's a part 2, which I may upload later, if there is enough interest. Many said the second part was "more inspirational" than the groundwork laid in part-1.)

==

The Video got picked up on GLP too

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(The Original Paper - as posted on Mr Hoza's Blog):

 

Henry O’Leary with Mark Hoza and Friends, 13 Sept 2013

by MARKHOZA on 13 SEPTEMBER 2013

 

I am very excited to share this impromptu recorded conversation with Henry O’Leary and a few of my friends. The conversation begins with Henry sharing his overall concerns about some of the current initiatives within “the One People” community around contracting with banks to access our value. I highly recommend listening to the entirety of the recordings as the discussion had various segments.

Henry has many decades, perhaps centuries (he did suggest that he is quite old) experience in the banking world at a very high level. He discusses why he doesn’t think that some of the current approaches being explored will work, but he then explored with us some very exciting alternatives to contracting with banks that we all agreed hold far more promise.

Right-click on these and save them to your hard drive or just click on these links to open and play the mp3 recordings.

http://mhandfriends.hoza.me/Henry-OLeary/2013-09-12A-Henry-OLeary-MarkHoza-and-Friends.mp3 (19.2MB)

http://mhandfriends.hoza.me/Henry-OLeary/2013-09-12B-Henry-OLeary-MarkHoza-and-Friends.mp3 (2.4MB)

Here is a brief overview of Henry’s views to supplement these recorded conversations:

(Click here if you prefer to download a word document copy — OPPT-SuggestsEVU-DRAFT2b)

To: Mark Hoza
From : Henry O’Leary
Date : 12 September 2013

Re: DRAFT – Suggestions, Towards a New Monetary System
=====================

Thanks for sharing your time this morning, and exchanging some ideas on how to move beyond our current monetary system.

As mentioned, I have much experience in the financial field, and have worked as a banker in Top global financial institutions in New York, London, and the Far East. Whilst my specific expertise was not in taking deposits, I did have formal training as a banker, and I think I understand how the banking system works, both from a legal and a practical standpoint.

 

I was happy to join the BWWEE room, and I listened to four calls so far. I have been impressed by BZ’s communication skills, and her positive attitude. And I believe she has benevolent intentions. However, from what I learned during my years in the banking world, I am (so far) convinced that she and her team will not succeed the way they are going now. (I am not saying she should not try, since there is some possibility, however slim, that my assessment is wrong.) However, I would like to point out that a misguided approach may conceivably have the negative impact of causing frustration among those pushing for change, and it could also “spoil the turf”, and generate future resistance to creative efforts that the One People (OP) may want to undertake in the future.

The problem of how to approach bankers has not been diagnosed properly IMHO. It is not “getting the documents right”, or “being assertive enough.” Nor is it “finding the right person in the banking system – the one leader who will make the change.” The problem is more Fundamental than that – and I can simplify it down to Two Key points: The scale of wealth transfer that OP are seeking is far, far too big. And secondly, the banking system does not work quite the way the OP say it does. (There’s some real irony in this second point, since some members of the OP seem so very ready to lecture senior bankers on “how banking really works.” If only they knew! )

 

I hope these thoughts will not be taken as offensive. But I think it should be clear that some important knowledge is missing. All bankers are not “evil banksters”, and the approaches that the OP have tried so far have all led to a big stone wall. If the world worked as some enthusiastic members of the OP crowd think it does, would not the bankers already be embracing this new innovation as a great way to earn some new fees? Clearly, the Visit-the-bankers-with-documents approach is not working, and it is not just because the documents need a tweak or two.

 

People should realize what the OP are asking the bankers to do, and how it looks from the bankers’ point of view. They are asking the banks to turn over vast sums of money in return for accepting some strange looking documents. And the documents being presented are ones that most bankers would have never seen before. Also, let’s be honest, the documents have never have been shown to work… ever. To make matters worse, some folks are pushing their requests for funds with some veiled threats and assertive behavior. They are informing the confused bankers that their “banks being foreclosed upon”. How strange it must seem to the bankers that while now being told “your bank is in foreclosure”, and then, the next breath, the same bank is being asked to dip into their scarce capital reserves, and hand over vast sums. No wonder the bankers are confused, and resisting these efforts. (BTW, the reality of foreclosure has never been proven. As far as I know, it is merely a claim made by Heather. Have you seen any news of it in the mainstream press?. Were it true, I would expect bank share prices to be sliding, not holding steady and rising as they are now. So, to me: mentioning banks being in foreclosure, seems to be a great way to destroy your credibility with a banker you have just met.)

 

If the threats are the stick. What carrot is being offered? The incentive suggested is a “10% fee”, but that fee money is coming from the new funds requested, in effect OP are asking the banks to pull the money out of their own pockets, and then pay their own fee from the funds they have advanced. It might be more honest to simply ask for the 90% amount, since that is how the bankers will see it. (Note: if you paid the 10% fee upfront from cash in your own pocket, and then asked the bankers to give you additional money if and when they can negotiate the DOV, you would see the banks responding differently. Bankers are always eager to earn fees PROVIDED they do not have to fund the fees themselves.)

 

Don’t Forget:

As many have said, a DOV or COV is not negotiable. “Negotiable” instruments are those so defined in law, which can be treated as money. Negotiable instruments can be used to settle debts. And a negotiable instrument is one that a bank can legally turn then over to another bank (or the Federal Reserve!) and get real cash back, or good funds remitted in return. That is not the case with COV’s – they are not negotiable, as everyone has said. If you listen carefully to what Heather has said, they are not even denominated in US Dollars, but in “Energetic Value”, and Heather simply recommends that people could use a 1:1 exchange rate. But banks have no way of monetizing a COV at any exchange rate: 1-to-1, 1-to-1,000, or 1-to-a billion. The honest transaction is that people are asking for is this: OP wants to receive dollars in exchange for what is called “Energetic Value”, a currency the bankers will never have heard of before. No amount of threats, pressure, or incentive fees are going to overcome the simple impossibility of the transaction OP are requesting.

 

Now let me move on to two key issues we discussed on the phone call:

 

TWO BIG PROBLEMS
+ Too much wealth is being requested – this will send up an immediate huge “red flag”, as soon as the bankers see it
+ OP’s understanding of money is missing a key half of the explanation on how money is created,

 

As we discussed on our phone call, I think that Heather has made a rather large error in calculating amount of wealth per person which exists on this planet. Her figure is $5 – 10 billion per person, which is far, far too big. My own figures is a less than $60,000 per person, and I can back it up. What Heather appears to have done, is taken a massive figure labelled as “total bank derivatives exposure”, and divided it by 7 billion people. That’s the wrong way to do it, since a derivatives exposure is not the same thing as a loan, a deposit, or a bar of gold. (A $100 million derivatives exposure might be settled for close to zero, and the huge Face Amounts on derivatives are a very different way of counting – so adding it to other forms of wealth, is a little like adding photos of oranges to apples. They are both “fruits”, but in reality, are very different things. I am a genuine expert in the derivatives field, and I could say much more, but it is outside the scope of this little paper.) The problem with using these they large “fantasy” amounts of millions and billions, is that they will raise an immediate red flag, since the bankers will know that the request for funds is not wholly genuine – and cannot be backed with real wealth – it is well beyond the realm of possibility.)

 

My own approach to wealth measurement is to add up the things we can count: stock market values, property values, bank accounts, and all-the-gold in the world, etc. When you add these things up, the total you come to is probably $300 Trillion to $400 Trillion. Divide $400 Trillion by 7 billion people, and you get $57,142 per person. That’s my own estimate of “your” equal share of the planet’s wealth. Even if you can find over stores of wealth which I have not counted which double it, the total is still hardly more than $100,000. Perhaps this is the sort of figure we should be talking about installing Energetic Value accounts for each person on the planet.

There’s another key point: The process that you will hear described on the OP podcasts for how money is created, is only half the truth. We discussed this a bit in our Skype chat, and I will try to summarize that discussion here.

Yes, it is true that money is CREATED at the time a bank makes a loan – but that’s not the whole story. You need to think about what happens after that. We spoke about fractional banking. By this, I mean when a bank takes a deposit, it can LEND OUT some, but not all, of that deposit to another customer. The US system basically allows a bank to lend out 90% – while the other 10% is deposited with the Federal Reserve system – that’s how the Fed gets much of its money, taking deposits from banks in the system, that are required to keep deposits with the Fed, as they grow their deposit bases.

Now let me give you an example: I am a bank, and you come along and ask for a loan for $100. When I give you the money, I “loan the money into existence”, increasing the total amount of money in existence. But I, as the banker, do not hand you the cash. Instead, I deposit it into your bank account. So, in the first instance, the money that I lend into existence stays in my bank. My $100 loan to you, is supported by the $100 deposit you hold in the account. So at moment zero, I create money out of nothing. This is the half of the explanation that everyone talks about. But they do not discuss what happens next. If you keep the money on deposit, it is wonderful for the banker. He charges full interest on the loan, and pays you less than that on your deposit – He makes a spread on no risk, and does not yet need to have any more “real money.” But what happens next, when the deposit money is moved is very important in understanding the money system.

First of all, that new $100 deposit you have with me, may require me to put a deposit with the Fed. If I am lucky, I will have “excess reserves” with the Fed, and will not need to top up my deposits. But if I do not, I will have to sell an investment I have, or raise new capital of $10 (by selling bank shares perhaps), and putting that money on deposit at the Fed. So that’s the first problem. (BZ may have had this in mind, when she suggested giving the bank a “fee” of 10%. This way, the bank can generate the reserve requirements it has, by taking a fee. But, as we have already seen there are other big problems, such as the fact that a COV is not negotiable. So this 10% fee, on its own does not solve the problem of making the scheme workable for banks.)

 

Now there is another problem for the bank, as soon as you want to take your “funds on deposit” out of the bank. When you want to take your $90 deposit out as cash, and walk across the street and buy a mobile phone, the banker has a problem – he must find that much cash. If he has excess cash on hand, he can give it to you. But if not, he must get the cash. $90 will not be a problem, but lets suppose a banker “accommodates” BZ, and gives her a loan of 90% of her supposed $500 Million of energetic value. Then, BZ wants to transfer the $450 million she has on deposit into another bank. The bank must get genuine good funds in order to do that. As I have explained, they cannot take the non-negotiable COV to another bank, or the Fed – the other bank will not recognize the value in the COV. So my bank will have to dip into its own reserves (if it has that much), to make to transfer. Let’s be honest, this is not going to happen. The COV may be denominated in a virtual Energetic Value, but it cannot be transformed into real, spendable dollars. I hope this is clear now after my explanation. Sadly, some OP podcasters have muddied the water by only telling half the story on money creation.

=== ===

 

Having pointed out these problems, I am not suggesting that we give up hope. Instead, I think we should be moving on to a different and more practical approach.

Two Key pieces to solve the Big puzzle of creating new methods of Value Exchange
+ Bitcoins
+ Local action

I will be brief. Later: We can have longer discussion about these suggestions.

Bitcoins, are a virtual currency, backed by nothing and supported by no government. The only thing that gives them value is that people have been “taught” to treat them as valuable, “store” value in them and accept them in settlement of transactions. Nothing but confidence sustains their value. The same thing could be said for Energetic Value (which I will call “Energetic Value Units”, or “EVU”, that is what I reckon might be deposited in people’s IU-V accounts.) As soon as people begin to accept them in an exchange for value, the “fantasy currency” will begin to be real, and EVU can progress towards being a real currency. It may take years, but that would be a great way to enhance the value of IU-V accounts, by making them useful for transactions in EVU’s. This would also help to bring the OP’s notion of a new currency into reality. Accept them, spend them, and eventually you can make the new currency a reality.

 

If Caleb Skinner and the developers of Project XIII want to make the software and the accounts they control very useful, then I suggest they take a close look at Bitcoins and the software they use. From BTC, they can learn how transactions are conducted, and how ownership of Bitcoins are registered. That may save many headaches later, and will also help make the exchange process more fluid, and make transaction work in the same way people are already accustomed to using for Bitcoin transactions.

 

I think it is essential to start a a Local level. As we discussed, Catherine Austin Fitts and her Solari projects may provide a great template for doing that. In brief, you may want to start out with many different varieties of Energetic Value, EV Units. Let’s say, you could have an EVU-Portland, Oregon and a different EVU for Columbus, Ohio. As people begin to embrace and use the new currency in their local area, confidence will grow. But it will not quickly reach the same level in every area. Thus, the value of a Portland-EVU may be different than a Columbus-EVU, and it may not be possible to spend a Portland-EVU in Columbus.

 

Without a local approach, and eventually some backing from local banks, I think it is likely the OP currency plan may get nowhere. As an example, I think it will be a long, long time before an impoverished farmer from the Phillipines will be able to “access his Energetic Value”, and buy a townhouse in London.

(Please give me your comments and edit suggestions, and then maybe we can take this to the next level.)

Comments here are welcome, but they will only appear after approval.

If you would like to be included in the ongoing conversations that we are having in the skype work rooms add me as a contact and ask to be added to them. My Skype username is “markhoza”.

Enjoy!

Mark

> http://hoza.me/mark-hoza-and-friends/henry-oleary-with-mark-hoza-and-friends-13-sept-2013/

> also: http://z13.invisionfree.com/HARD_Qs/index.php?showtopic=1

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Further Parts of the conversation

 

Part 2 : Strawman Arguments are Too Murky

 

Part 3: Creativity, Bitcoins, and Keeping it Local

 

It seems a shame that the OPPT wasted an opportunity to build something enduring

around the "Energetic Value" concept. It might have worked as a Crypto-coin concept.

After all the over-promises failed, people just lost interest and drifted away.

 

And it ended with some of the insiders saying they had been conned by Heather.

 

Bizarrely, some OPPT "holdouts" still say; The banks were foreclosed upon by UCC filings.

(It is an impossibility for anyone who understands UCC or how foreclosures work)

 

This taught me a lesson that I should have know:

You really CAN fool some of the people ALL of the time

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WOCU / the World Currency Unit, and other innovations

> http://www.wocu.com/wocu-advantage

 

The WOCU is a global composite currency derivative covering the world’s top 20 economies, representing the vast majority of global production. Weighted elegantly and logically based on International Monetary Fund GDP figures, the WOCU’s low volatility offers market professionals and individuals alike a natural currency stabilisation, hedging against exchange rate volatility and individual currency purchasing power.

 

> http://www.godlikeproductions.com/forum1/message2774725/pg1#48466720

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This Looks Good! Great to see this in action.
It fits in well with the Senior Bankers ideas of where we need to go:

 

Local Exchange Trading System (LETS) in WA

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COMMENT:

All human hierarchies are minority lead divide and rule ponzi schemes..always have and always will be hence there is always a one percent who have the absolute power to monopolies and subjugate and exploit other for self gains and advantage.

 

Truth is whether we are ruled by one hierarchical system or many the reality is always the same...which is why only the one percent are at DAVOS and the poor and marginalised haven't been put on the invite list..so stand out in the cold..where they are no threat....until en mass...just.as always.

 

And when people finally wake up to the huge corruption and disparities ..and protest en mass..the powers that be simply start the divide and rule divisions and herd cull wars that are slowly enacted to polarise people to fight and kill eachother for the remaining crumbs for survival....

==

/ GLP-comment:

 

Sure, elites have long controlled our Money system.

But now, the elites have built a comprehensive and ammoral system which helps them to Harvest more and more from the average person.

 

People here, talk about their money worries - it is on everyone's mind:

 

https://www.youtube.com/watch?v=aNWuqHA13uQ

 

But recently the Share of National and Global wealth held by the Top 1% and the Top 0.1% is rising and rising.

 

They risk a revolution, and maybe that is what is needed. We are in the right place now, from a Cyclical standpoint for a revolution to occur.

- from about 4 minutes:

 

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What's the Right Time and the Right Way to kill a scam ??

 

Only 2-3 years "too-late", the New Age sisterhood starts telling the Truth

 

The Truth About Swissindo and Other Free Money Cults

https://www.youtube.com/watch?v=WYzCu6RzE6A

 

SAME on CCN, Mel Ve's channel

 

"I've been involved in these cults, I followed OPPT. I bought dinars" - Hopegirl

 

All they had to to was listen to Geologic's videos like this one, when the came out

 

Max Igan on The Dragon Family etc.: "No Savior is Coming!"

 

And that was not the first !

There are several videos exposing Swissindo well before 2015 on Geologic8's channel

 

Hopegirl wrote more on her Blog:

 

Most of the people that I knew were heavily involved in these groups. I know people who invested their whole life’s savings into Iraqi dinar. I also know people who sat on conference calls for hours almost every day of the week, discussing the latest status. A tremendous amount of free labor has gone into the development of these groups and their social communications. Volunteers have built websites around them, made hundreds of videos and piles of special documentation to support the belief behind the magical day when the funds are released.

 

Here is a list of some of the groups, I’m only listing them from the best of my memory and this might be one of the only listings like this that exists. I’m sure I don’t have all the “facts” perfect about the belief system of each one. But I tried to do the best I could to just outline the gist of each to help clarify for some people who may have never heard of them.

 

Dinarians
This group believes in a re-valuation of currency, such as the Iraqi Dinar. (although there are other currencies as well such as the Vietnamese Dong) They believe that the result of this re-valuation (RV) would allegedly create overnight millionaires out of all the people that have invested. Last I checked there was reported to be over 23 million people in America alone that had bought into Dinar currency. The Dinarian group has been waiting for the RV for at least 10 years.

 

OPPT
This group followed the work of a lawyer named Heather Ann Tucci Jarraf. She claimed to have shut down all the governments of the world using a set of UCC filings. In addition to this, she claimed to have set up a new bank account for every person on the planet with 10 billion dollars in each account. This group was made popular by an internet media team consisting of several bloggers and internet radio show hosts that promoted OPPT propaganda to an online audience of hundreds of thousands. At one point in time there was reported to be millions of people that were following this group. The OPPT disbanded in 2014, however currently 5,400 people still search for “OPPT” in google every month. Most of the key players of the OPPT groups ended up in abject poverty and no one ever received any money from the alleged bank accounts.

 

The Global Collateral Accounts
The Global Collateral Accounts are said to be a series of accounts allegedly backed by all the gold in the world. These accounts are owned and operated by certain royal families. This money is allegedly supposed to be redistributed to the world and used for humanitarian purposes; however it’s been caught up in arguments and corruption of the banking elite. This is a story that has been promoted by David Wilcock and Neil Keenan amongst others.

 

St. Germaine’s Trust
St Germaine is a “legendary spiritual master of ancient wisdom”. It is said that many centuries ago he established a trust with money backed by the world’s gold and other treasures. In the time since then this trust has accumulated enough interest to now be worth one quatrodecillion dollars. The belief is that these funds will be released to the public to help wipe out the world debt and bring prosperity to all of humanity.

 

Dragon Family Money
The Dragon Family is an alliance of spiritual elders from China, Japan, Philippines, Indonesia and Viet Nam that have access to a large amount of the world’s gold. This alliance is said to want to use this gold to back a new global currency that would essentially reset all the currencies of the world and destroy the FIAT dollar. There are a number of groups that are allegedly working closely with these Dragon Families who claim they will have access to funding that will be used for humanitarian projects. One group is known as Humanus, another group refers to a figure known as “The Ambassador” and there is also “The Office of Poofness” that claims to have access to these funds.

 

Swissindo
Swissindo is a group that believes that one man who lives in Indonesia has the authority to access and sign off on all of the gold in the world. This man is known as “M1” (although he has many names) and he supposedly carries the bloodlines of every royal family member through a royal breeding program which gives him the authority to control all the worlds wealth. This group has formulated their own pseudo government that consists of hundreds of “Delegates” in countries all over the world. It is believed that M1 will sign over the funding to be distributed through what they call “Payments 1-11” to every person on the planet.

While I used to be involved in following some of these groups, I have since disassociated myself for a variety of different reasons. (some of which we’ll cover here in this post and video) I am an open minded person and was willing to give some of these ideas some time to see if anything would ever pan out. I have yet to see one project or one person get any amount of funding from any of these promises of free money. Instead I see good people end up in deplorable conditions while they wait for the funds to come in. It breaks my heart to see people in this condition...

== UNQUOTE ==

> http://www.hopegirlblog.com/free-money-cults/

 

So Hopegirl, why not do the RESEARCH, and pop these bubbles early??

 

Here's someone who tried to do that:

 

The Myth of "Accessing Value" - ie getting the Free Money

 

Senior Banker Talks about Wealth and Banking - Pt1

Published on Jan 16, 2015 - from an original recording a year or so before that

 

"Talking about $5 or 10 million per person... Well, there isnt that much wealth on the planet"

The real number is: "less than $100,000 per person."

For this "trouble" he was kicked out of the chat room, abused, and called "an agent"

 

> document / "The Paper" : xx (I am searching for the link) xx

 

Being reality-based, does not mean you have to give up on Creativity - here's more about THAT

Banker Talks Pt3 : Creativity, Bitcoins, Making it Local

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(Hopegirl has said she is willing to be interviewed by Cleve True - and so has Mel Ve / CCN ):

 

Gamblers Mentality, from 1:40 Hours: "From the beginning this (Swissindo) looked very unrealistic, or improbable... But we had a gambler's mentality: If there was a 1% chance this was going to happen, I was going to believe in it" - Mel Ve. That's a very honest statement. Makes me think that I should interview either Mel Ve, or Hopegirl, if they are willing.
+ClearVision OfTruth Thank you! Yes I think we would both be willing if we have time. I'll pass it on to Mel as well.

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The Reality of Money Creation is badly misunderstood

 

Maybe someone should show this to RVD because he always uses the excuse banking is a fraud and that's why it was okay to fraud the bank who loaned him money:

Retail banking also known as Consumer Banking is the provision of services by a bank to individual consumers, rather than to companies, corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.

I found this video of a politician exposing the CENTRAL bank scam and if someone doesn't explain the difference between retail which he committed fraud on and central banking, he will continue to see it as all banking.


https://www.youtube.com/watch?v=NeJpQQt_b8c

 

He sounds like he does not truly understand banking, and especially money creation. NO FREE MONEY is created.

A deposit and a loan are created at the same time, as part of a "web of promises" that is the reality of money creation under fractional reserve banking. This means, if the loan is not paid back, the bank will lose money, because it is responsible to the depositor.

 

Maybe an over-simplified example with help to explain how MONEY CREATION really works:

.

1/ Mr Jones borrows $100,000 from ABC bank - when he signs the Loan agreement, both the Loan and a Deposit are created similtaneously. Initiallly the Loan is funded by the deposit sitting in the account of Mr Jones. In some sense, these were both created "from thin air" - but the bank gets no richer from this act of money creation. It will only make money, if the interest it receives from Mr Jones exceeds the cost of the deposit that funds the loan

.

2/ Mr Jones instructs the bank to send $100,000 to the bank account of the seller of the house he is buying. To keep this simple, I will assume it is the same bank. So as this happens, the bank removes the $100,000 deposit from the account of Mr Jones, and credits the account of the seller, Mr Smith. At this point, Mr Smith's deposit is funding the Loan the bank made to Mr Jones.

.
3/ Smith is free to move the money out of the bank, since he fully controls it. So the bank may offer him an interest rate, let's say 1%, to keep the money on deposit for one year.

.
4/ If the bank is charging 2.5% to Mr Jones for the loan, then the "spread" it makes for the first year is 1.5%, being the difference the 2.5% Jones pays, and the 1.0% that it pays out to Mr Smith. From the spread, it must cover its various salary costs and operating expenses if it is to make a profit.

.
5/ If Mr Jones defaults, and refuses to repay the loan, the bank can foreclose. But if the value drops, and the bank gets only $50,000 in the foreclosure, the bank will suffer a very real loss of $50,000 - since it must still pay back the $100,000 represented by the deposit from Mr Smith
CONCLUSION: It isn't fractional banking that weakens the banking system, it is poor lending decisions. So the Video is loaded with misinformation!

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Remember: There's a web of promises.

The banks do not get money as free equity, they get it as something they have to repay - as a deposit or as a loan

 

sharma-obesity-yo-yo2.jpg

 

The thing that undermines the economy is that the interest rates may be so low that money flows into unproductive and speculative activities,

and assets get pushed to prices that are unsustainable. The insiders are best positioned to benefit from rises and collapses in asset vaues,

because they can watch the hand that controls the yoyo strings

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