Banking 7: Giving out loans without giving out gold

November 5th, 2009 | by admin |

How banks can give out loans without ever giving out gold.

Duration : 0:8:29


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  1. 13 Responses to “Banking 7: Giving out loans without giving out gold”

  2. By Evulmeh on Nov 5, 2009 | Reply

    No no, banks are …
    No no, banks are charging interest because of the risk, and as manager.

    If you fail to repay the loan, the bank will be in trouble.

  3. By draggeddownthehole on Nov 5, 2009 | Reply

    All I’m saying it …
    All I’m saying it that it’s utter nonsense to allow private banks in such a monetary system. They bring nothing to the table and collect all the interests. Even worse, they imply ownership of 96% of the money supply (debt presumably owed to them). Credit should be public and debt-free.

  4. By caveltor on Nov 5, 2009 | Reply

    the bank is acting …
    the bank is acting as a conduit here. As every loan has a depositor and creditor, the “work” the bank does is to manage the risk and pay the depositor.

  5. By draggeddownthehole on Nov 5, 2009 | Reply

    But taking a loan …
    But taking a loan is just giving a promisory note (with our signature) in exchange of promisory notes from the bank, aka bank notes. The bank doesn’t have to work to gain those notes. Why should you have to work to repay them? You’re just buying back your promise to pay (the asset security) with other promises to pay (new bank notes) so the bank can discharge the liability on its book. Wether you repay or discharge the liability the bank contracted for your signature, it’s the same.

  6. By jackuy12345 on Nov 5, 2009 | Reply

    wow u guys r just …
    wow u guys r just nerds that read from the book and never studied in real life

  7. By ananiasacts on Nov 5, 2009 | Reply

    Yes, but his …
    Yes, but his solution that we should literally be using physical gold is simply impractical. People would barter with everything if that was the case. It’s the same thing as saying there should be no such thing as currency because to do otherwise is immoral.

  8. By FranceParisian on Nov 5, 2009 | Reply

    In fairness to …
    In fairness to nemnaisa; his got a point and he is trying to critique the bad side of the system. Remember a system is only effective if the rest of its parts are working properly.

  9. By HappyCowinCA on Nov 5, 2009 | Reply

    You obviously have …
    You obviously have no idea what you are talking about and probably never went to college. Or if you did, you did not pay attention.

  10. By nemnaisa on Nov 5, 2009 | Reply

    I understand what …
    I understand what Sal is trying to do: to justify the current fractional reserve banking system. The point why gold should be money is that it takes effort and human energy to extract gold from the ground hence it is precious and cannot be manipulated. While digital dollar can be manufactured by the bank anytime. The point is that banks are enjoying the spread by essentially doing nothing in the money creation process. Now, they try to keep all the profit while socializing the lost.

  11. By Cabanas751Dunhill on Nov 5, 2009 | Reply

    Thanks to the …
    Thanks to the FAILOUT, they are not required to have anything in reserve

  12. By luke2468013579 on Nov 5, 2009 | Reply

    Whats the maximum …
    Whats the maximum the bank can loan out in this vid, assuming money is not redeposited and there is no sort of multipier? cheers

  13. By pongman on Nov 5, 2009 | Reply

    Lol, I can see that …
    Lol, I can see that this is going to get juicier and juicier and how the banks basically neglected their requirements of keeping enough assets to cover the loans that were outstanding. I often wonder what the bank examiners were doing? Visions of “It’s a Wonderful Life” keep popping in my brain, and the massive run on the bank. Y’know I think Hollywood should make a movie about this. It’s a Wonderful Life 2008.

  14. By gamemaster014 on Nov 5, 2009 | Reply

    your voice sounds …
    your voice sounds cool

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