Once upon a time in an ancient civilization which prevailed in the gold barter trade as a means of family: the Goldsmiths (creators of gold). The family discovered that gold is very heavy and therefore create a system of coins: large coins, some smaller ... so that villagers could trade more easily with gold. The Goldsmith got rich thanks to a job as secilla as the loan with interest. They pay gold for them back a bit more than they have provided. The
Goldsmith, as a major gold dealer family, they see the need for a large safe to keep your money (gold) at the risk of they could steal. But Goldsmith is not only the ones that are not safe for your money, well, people start to come home to rent them a place of safe and well keep your money in a safe place. Before long all the villagers left their money in the vaults of the Goldsmith family in exchange for a small price in return for the service. What happens is that the market is just no gold coins in circulation: No one wants to risk losing them. Thus was born the check ticket as a means of trade. Bill creates a check which represents a portion of the gold that Goldsmith kept in his safe. All the villagers take for these tickets really good represent the gold they have saved. How good Goldsmith distrust?
But a phenomenon arises in the village: people rarely go to collect their gold but all trading with checks Goldsmith creates ticket for trade. People rely on the value of these checks because there is a gold behind supporting its value. And Goldsmith, who was no fool, realizes this. So Goldsmith decided that from now can check tickets (loans) are not only considering its own gold, as usual, but also that of others, they seldom take their gold and nobody will notice this trick . By doing this Goldsmith multiply their profits they are no longer paying their gold but to others an interest in getting money that is not theirs.
But Goldsmith's village was small with explanations and thus, its inhabitants constantly gossiped about the great wealth in such short Goldsmith. Villagers discovered the trap of Goldsmit but come to a mutual agreement, if Goldsmith is richer for giving loans of money which actually belongs to them, they must also have its benefits. The deal is simple: Goldsmith pays some interest because people put their money - so far, remember, were the villagers who paid to have the gold for safekeeping -; certainly seems a good deal for the villagers. But not for Goldsmith he sees as their earnings have substantially reduced causing increased interest from lenders, that is, borrow money from Goldsmith from now will be more expensive.
The villagers continue to rely on the good of Goldsmith: still not get their gold from the vaults. Goldsmith, a new atauqe of expertise, you realize that you can make loans even without a real gold backing behind and thus makes even more losses for the interests to be given to the depositories. While people do not go for the gold - which it does not, he knows that there is a safe place - there shall not be a problem. So, where Goldsmith creates wealth really there is nothing.
And as always throughout the day, history repeats itself. Goldsmith returns to get rich and people to distrust him. Thus, flock to get their money. Formed long queues at Goldsmith's house. What happens? There is much gold in the vaults of Goldsmith as checks tickets in circulation! The game is over for Goldsmith.
This is what today is called 'the panic of depositors' and is what every banker fears that happen. This is what happened in 2001 in Argentina in what was called "The Playpen."
As will be thinking it is logical that this practice was abolished debt-money, right? No, not only was not abolished but is the same monetary system that now exists in the Western world. Is the macro-economic model that rules our lives, and it is, because it is LEGAL. The banks make loans on money that does not exist and we charge some interest on it. If you think this is impossible, keep reading.
The colonialist Europe concluded that Goldsmith was the only model to generate valid wealth to continue the colonial expansionism, and thus, instead of banning the model is legalized and regularized. This regulation is to split the debt which is actually invented money where there is none: the fraction will be 9 / 1, is Thus, for every gold coin that exists in a bank it can create bank notes with a value of nine supiestas gold.
was also agreed that in case of financial meltdown - remember, 'the panic of depositors' - central banks to support local dose of gold to avoid panic among savers. Only if there were such a crack at many banks and the central bank had no gold to all the demand the system is broken.
fractional system of debt and the organization of the Central Bank and local banks has been imposed in the world, but the gold backing to check ticket is gone. Now you do not create a debt on the existing gold but establishing a debt on other existing debt.
Central Bank system (as a public body) and local banks is circular and closed, that is, as if a mill in question. In the middle is the Central Bank and it is connected to other local banks. The Central Bank is to regulate interest rates, the loan amount that may give the banks, and even have the mopolio to issue money, how is it possible for banks to build monopoly money if the currency issue is what the Central Bank? With the adoption of the 'credit or loan' private law becomes legal currency flow, ie, euros or dollars that are commonly we believe it is money.
So, if both banks and the government can create money ... How much money there?
In the next chapter if you, dear and beloved readers wish.
