You are welcome.

Some times I think I make it sound worse than it is. At other times I believe it is even worse than I think.

Take local banking for instance. I try to be careful and not offend local banks/bankers because it is not my intent to do so. The banks most of us are familiar with (most of us do not have Jamie Dimon or Dick Fuld on speed dial) operate in a very competitive business. Although their cost of goods (money creation via fractional reserve lending ie creating new money out of nothing) is zero their operating cost are certainly not. And since they compete for business against other banks with the very same cost of goods (zero cost for creating new loan money - stroke of a pen) that drives interest rates down to the point that their operating costs (pay for tellers, loan officers, electricity, software and electronics, etc) do what costs do for any competitive business. Competition tends to drive profits towards zero. Not to zero but towards zero.

So in that respect I do not want to lead anyone to believe I am against banks, lending or any of that. I repeat, it is the SYSTEM of fractional reserve lending and having no permanent money system that I am against. A system that depends on loans being issued in order to have any transnational money to use in daily transactions. That and the international/central banks that have control over and regulate the system. Fractional reserve lending most certainly causes interest rates to be lower than they would be in an environment of sound money. No doubt. So those of us (such as myself) that use leverage do gain some benefits from the system. But we gain those benefits at the detriment of the overall good of the nation in my opinion.

That is the not so bad part. The part I feel I may cause undue strain on the feelings of people that work in the banking system.

But the part that is beyond worse to me is the fact that every dollar that sits in our checking accounts, someone somewhere is paying interest on that dollar. All checking account dollars originated as a loan and will go away as that loan is paid off only to be replaced by another loan to create another new dollar. I wonder how many people realize this? That the banking system is collecting interest on 90+ percent of what we call the money supply 365 days of the year? That if a significant portion of people or companies tried to "get out of debt" it is virtually impossible without others going into debt (borrowing money) or the money supply contracts causing a recession?

Imagine if 10% of the population tomorrow got financial religion and decided to take Dave Ramsey's ideas to heart and get out of debt. In this hypothetical situation lets also say that their goal is to accomplish this in  a years time. Let's also say they get it done. The money supply has just contracted 10% and we are in a recession. Unless another 10% of people decided to borrow an equal amount of money the Ramsey 10% were paying off, the transaction money supply would contract.

That is how our money supply works. It is nearly all dependent on bank loans being created. Hard to believe. We are totally beholding to the banking system to keep pushing credit (debt) or we literally run out of money to do business. Oh there is 4 or 5% physical cash that could be used, but essentially all of what we call money is really bank credit and exists only if banks loan out money. It goes away when the loans are paid off. It is literally impossible for our nation to reduce its debt load without creating a recession or depression because of lowering the supply of transaction money.

Hardly anyone other than banking elites know this, for good reason. I suspect many that even work in the banking industry have never really given it much thought or realize it. If we wonder why there is a .01% with most of the money, a good place to start looking would be fractional reserve banking. It is by design that way.

Am I just very badly mistaken? Am I wrong? I would love to be wrong. Because if I am right it is just almost unbelievable we as a nation put up with such a system. We have no permanent money. It is all credit. IOU's. Created exclusively and to the benefit of the banking industry.

John