Monetary Mirage: When Your Deposits Become Collateral to Bail Out Banks Derivative Exposure NOW NORTH OF A QUADRILLION
BANKS HAVE INSTITUTIONALIZED USURY: Understanding the risks of zero reserve requirements and predatory banking practices is essential for safeguarding your financial future and security.
Get your Money out of the BANKS BEFORE THANKSGIVING
Your Money is Not Safe in BANKS: The Illusion of Security in Modern Banking
In the current financial landscape, the concept of "safety" for your money in banks is increasingly questionable. This is primarily due to the zero reserve requirement policy, which has significant implications for depositors and the broader economy.
Zero Reserve Requirement
Since March 2020, the Federal Reserve has set the reserve requirement ratio for depository institutions to zero percent.
This means that banks are not legally required to hold any portion of your deposits in reserve. When you deposit $10,000, the bank can theoretically lend out the entire amount without holding any cash in reserve. This policy is part of a broader strategy to maintain liquidity in the financial system, but it raises concerns about the security of individual deposits.
The Risks of a Collateral Pool
The statutes governing banking allow your money to be used as collateral to cover banks' massive derivative exposures. These derivatives are complex financial instruments that can lead to significant losses if not managed properly. The potential exposure is staggering, with some estimates suggesting a quadrillion dollars in derivatives globally.
In such a scenario, taxpayer money could be used to bail out banks, leaving individual depositors vulnerable.
Predatory Schemes and Financial Misconduct
Recent cases highlight the predatory nature of some banking practices. For instance, conspirators involved in multimillion-dollar international money laundering schemes have been sentenced to federal prison.
Additionally, allegations of alliances between drug cartels and bankers for laundering drug money further underscore the risks involved.
These examples illustrate a pattern where financial institutions are implicated in unethical and illegal activities, eroding public trust.
The Illusion of Security
The notion that banks are safe havens for your money is further challenged by the fact that deposits are essentially unsecured loans to these institutions. Professor Richard Werner points out that when you deposit money in a bank, you're not making a deposit but an unsecured loan to an institution that may be on the brink of bankruptcy. This perspective highlights the precarious nature of modern banking practices.
The FDIC's Limited Coverage
As of the second quarter of 2024, the Federal Deposit Insurance Corporation's (FDIC) Deposit Insurance Fund balance stands at $129.2 billion.
With total deposits in U.S. banks amounting to approximately $17.4 trillion this translates to just 7.40 cents available for every $1,000 deposited. This stark disparity underscores the limited capacity of federal insurance to cover potential losses in a banking crisis.
Conclusion: A Call for Vigilance
In light of these realities, it is crucial for depositors to remain vigilant and informed about where and how their money is held. The current financial system's reliance on complex derivatives and zero reserve requirements poses significant risks that cannot be ignored. As we navigate these uncertain times, understanding the true nature of banking practices and their implications on personal finances is more important than ever.
Explain The Cantillon Effect , Money Printing to me like I’m in 3rd grade
Monopoly Game Version anyone can recreate: A Lesson in Economic Fairness
The Cantillon Effect can be taught to third graders yet most adults don’t understand what is going on today.
I invented a modified version of this popular board game designed to teach third graders about economic inequality.
The classroom transforms into a financial microcosm and 3rd grade students can experience firsthand how money creation and distribution can create dramatic advantages for some players.
At the start of the game, most players receive standard Monopoly money, but a select few "Bankers" are secretly given extra funds.
These privileged players represent those closest to the economic money-printing machine - the Wall Street insiders, central bankers, and financial elites who benefit first from new money creation.
As the game progresses, the "Bankers" use their additional printed monopoly money to quickly purchase prime properties, build houses, and create wealth barriers that other players will never overcome. The remaining students watch as these connected players rapidly accumulate assets, experiencing a real-time simulation of economic inequality.
The game's magic lies in its visceral demonstration. Students feel the unfairness, not just hear about it. They witness how those with first access to money can reshape the entire economic landscape before others can even make their first move. The Monopoly board becomes a living economic textbook, transforming complex financial concepts into a tangible, emotional learning experience.
After gameplay, a rich discussion emerges. Students share their feelings of frustration, surprise, and insight. They begin to understand how economic systems can create structural advantages that persist long before most people recognize them.
This interactive lesson transforms dry economic theory into a powerful, memorable experience that plants seeds of critical thinking about money, power, and fairness.
To visualize the difference between 129 billion and 17.4 trillion using a used car lot, let's start with a typical scenario and then scale it up.
Visualization with Used Car Lots
A typical used car dealership has about 100 cars on a half-acre lot.
Let's use this as our base representation for 129 billion.
To represent 17.4 trillion, we would need to scale up this lot significantly:
Number of cars: 13,488 cars (134.88 times more)
Lot size: 67.44 acres (134.88 times larger)
This massive scaling illustrates the enormous difference between these two numbers. Imagine a single used car lot with 100 vehicles, then picture that same lot multiplied 134.88 times.
The resulting lot would be larger than many small towns, stretching over 67 acres and filled with over 13,000 vehicles.
To put this into perspective, the scaled-up lot would be about 51 football fields in size. It would be so large that you'd need a vehicle just to traverse the lot itself.
This vast expanse of cars demonstrates the staggering scale difference between 129 billion and 17.4 trillion, showcasing how the larger number dwarfs the smaller one in comparison
Get your Money out of the BANKS BEFORE THANKSGIVING
