Tag Archives: debt

How much money can banks create – Banking 101…Positive Money

How much money can banks create – Banking 101 (Part 4)

Published on Jan 18, 2013

http://www.positivemoney.org/
What does actually limit the ability of banks to increase the money supply?
In this video you’ll see that the type of reserve ratio that’s discussed in the textbooks has never even existed in the UK. We’ll see that the liquidity ratios that did exist have been reduced and eventually abolished, and that even when they did exist, they only limited the speed that the money supply could increase, but put no limit on the total size that it could grow to.

You’ll learn that the Capital Adequacy Ratios and Basel accords are about preventing banks from going bust when loans go bad, rather than limiting their dangerous lending or limiting how much money they create through lending. And although the capital adequacy requirements can restrain lending after a banking crisis, it doesn’t do anything to restrain lending in a boom.

You’ll also see that there is no natural limit on how quickly the banks can create money. They know that even if they don’t have the actual central bank reserves to make payments, they’ll be able to borrow those reserves from other banks, or even the central bank.

All this comes together to imply that the only thing that truly limits the creation of money, is the willingness of banks to lend. And their willingness to lend depends on their confidence.

In other words, the money supply of the nation depends on the mood swings of banks and the senior bankers that run them. This is surely an insane way to run an economy.

————————–
If you’d like to translate this video into other languages, please let us know. We’ll send you the transcript with timecodes.
Email: mira[at]positivemoney.org

————————–
SUBSCRIBE to Positive Money UK’s videos:
http://www.youtube.com/subscription_c…

Like us on Facebook http://www.facebook.com/PositiveMoney
Follow us on Twitter http://www.twitter.com/PositiveMoneyUK
Follow us on Google+ http://www.positivemoney.org.uk/googl…

Positive Money is a not-for-profit research and campaign group. They work to raise awareness of the connections between our current monetary and banking system and the serious social, economic and ecological problems that face the UK and the world today. In particular they focus on the role of banks in creating the nation’s money supply through the accounting process they use when they make loans – an aspect of banking which is poorly understood. Positive Money believe these fundamental flaws are at the root of – or a major contributor to – problems of poverty, excessive debt, growing inequality and environmental degradation. For more information, please visit: http://www.positivemoney.org/

Animation by Henry Edmonds

  • Category

  • License

    Standard YouTube License

The Gold Series: Gold as an Investment (Part 4)

http://www.visualcapitalist.com/portfolio/the-gold-series-gold-as-an-investment-part-4

Gold as investment...Infographic

” DOW 14,000, A Grand Deception…pump and dump….” Gregory Mannarino

Must Watch. DOW 14,000, A Grand Deception. By Gregory Mannarino

Published on Feb 1, 2013

The Debt Limit Explained…CGPGrey

The Debt Limit Explained

Published on Jan 21, 2013

  • Category

  • License

    Standard YouTube License

Jim Rogers ” others people money will run out too…”

Jim Rogers: Global economic shocks coming in 2013-2014

Published on May 31, 2012

The G8 meeting in Camp David was focused on saving Europe from its economic nightmares. World leaders discussed Greece and its severe debt crisis, trying to figure out how to save the eurozone. The Great Recession struck the world nearly four years ago, but the aftershock is still being felt. And it’s unclear when the economy will finally start to recover, and where its new center will emerge. So are there any signs of light at the end of the tunnel? RT talks to one of the insiders of the world financial elite, co-founder of the Quantum Fund, Jim Rogers.

More RT’s Spotlight interviews: http://rt.com/programs/spotlight/

Subscribe to RT! http://www.youtube.com/subscription_center?add_user=RussiaToday

Watch RT LIVE on our website http://rt.com/on-air

Like us on Facebook http://www.facebook.com/RTnews
Follow us on Twitter http://twitter.com/RT_com
Follow us on Google+http://plus.google.com/b/102728491539958529040

RT (Russia Today) is a global news network broadcasting from Moscow and Washington studios. RT is the first news channel to break the 500 million YouTube views benchmark.

Reuters Today: Bernanke pleads for higher debt ceiling

Reuters Today: Bernanke pleads for higher debt ceiling

Published on Jan 15, 2013

Jan. 15 – Federal Reserve Chairman Ben Bernanke urges lawmakers, in no uncertain terms, to lift the U.S. borrowing limit and avoid a potentially disastrous debt default.