(Before It’s News)
Could This be the Simple Formula That has Wrecked Two Civilizations, Going on Three?
And they’d use their one point seven billion hollow points to back it up…
Today’s banks are insolvent by definition and if customers lose confidence in their holdings and decide to cash out, it’s called a ‘run on the bank‘ and the doors close.
If banks were legitimate businesses with ‘normal’ constraints, they would be legally liable to meet their contractual obligations, one of which is to ‘pay you, on demand’ your money.
A loss of confidence is always fatal because, by the very nature of fractional-reserve banking, no bank can honor all of its contracts.
HOW IT WORKS
A bank has two “customers”: people who make the initial deposit of cash and those who borrow the bank’s issue of warehouse receipts against its deposits or ‘reserves’.
The fractional-reserve process works because the law treats a deposit of cash in a bank as credit rather than a ‘bailment’ or a loan to the bank.
A deposit is a loan, and you expect a return of interest on it – it’s a transfer of custody, not ownership……..
via DHS Has Reportedly Told Banks That It Has Authority To Seize The Contents Of Safety Deposit Boxes Without A Warrant When It’s A Matter Of “National Security”, Which A Major Bank Crisis No Doubt Will Be. | Economy.