Bank Failures

http://www.worldnewsstand.net/2001/article/ deposit_failures.htm Bank Failures We have written in the first place about the remarkable ability of avows to induce funds when make loans, and of their equally remarkable ability to multiply these newly created-from-nothing commit deposits via fractional reserve savings banking. What we have written is true, and easily verified. provided banks fail! That fact is equally true, and easily verified as well. How raft we reconcile these app argonntly contradictory facts? If banks can create, and multiply, money, how can they fail? Could your business fail if what you make was, literally, money, or what commonwealth took for money? The qualifier is important. It is what people assume about money that makes modern banking possible. The Federal Reserve itself points out that it is the peoples cartel that make paper devices serve for money. Belief (i.e., credit) is what keeps the carcass going. Psychology is everything. If modern money is an illusion, then bank failures are an important means of reinforcing that illusion. Consider the alternative. If a bank made loan after loan, and these loans were not repaid, and the bank continued to do business year after year with mounting millions of rubber loans on its books, wouldnt that look odd?

People would question how the bank could continue to thrive despite so many unfavourable loans. Would they maintain their combine in the system if the banker cheerfully admitted that he made those loans by simply crediting the borrowers account, and that to do so court him nothing? Some energy wonder why the bank would not honor checks written on insufficient funds, if the banks create those funds from nothing. Corporations which are unable to meet their financial obligations to banks might wonder why they must work to repay the bank for something it got with a flick of a loan officers pen. No, it is important, if confidence is to be unshaken, that banks appear to be like other businesses, when, of course, they are nothing like... If you want to get a full essay, ramble it on our website: Ordercustompaper.com

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