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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (61795)	12/7/2000 8:05:50 AM
From: Rarebird	Read Replies (3) \| Respond to of 116761

<Didn't the bankers lend to a great many that weren't such a good risk?> Yes, because they want to post higher profits. When banks lend money, they do not usually lend any cash, they simply create out of nothing the money they lend, at absolutely no cost for them. They need not print any paper money, they only write figures in bank accounts, which circulate in the form of checks, and these bookkeeping figures are just as good as cash. There are two kinds of money(OK 3, I'll be a nice guy and say Gold but no one has ever paid me by this means yet): cash or legal tender (paper money and coins), and bookkeeping money (figures written on checks or bank accounts). This bookkeeping money, created out of thin air by the banks, constitutes, I think, over 95% of all the money of our country; cash constitutes less than 5%. Didn't the Goldsmiths from the Middle Ages act as Bankers when gold was the highest form of money back then? For each person who comes to the bank and wants to be paid in cash (paper money), about ten people only transfer figures from one account to another one, without using any cash. This is what allows the banks to lend much more money than they actually have. The only restraint to this creation of credit is the fear that too many people show up to the bank and ask to be paid in cash, since the bank could only repay in cash about one consumer in ten.