How the Banking System Really Works

This is an animated series put together that in very concise words explains how our (and the world’s) “fractional reserver” banking system actually works. In addition to explaining the fundamentals of the banking system (not likely what you think it is) the video also clarifies catastrophic events in our history back from the 1800s to current day that have all been initiated by the worlds largest banking empires in an effort to consolidate their power and “shake out” smaller regional banks when power begins to dilute.

We would strongly encourage anyone interested in the global financial system to watch the videos. You will either be hooked in the first 5 minutes, making the rest of the series a VERY easy watch, or you won’t care at all in which case you can stop watching.

For those on the fence or confused by what “fractional reserve system” means, it is a mechanism by which banks are allowed to lend money against outstanding debt based on future potential earnings and not the bank’s actual holdings. What this means is that if a bank lends $100 @ 10% ($110 total) to YOU, they are allowed to immediately turn around and lend $110 to ME, because they will potentially have $110 by the time YOU pay them back.

Keep in mind that in no point does any of this money actual exist; it is created at the moment the loan to YOU is made… out of thin air.

For the astute readers out there, you might have noticed the long-term issue with this system: If the bank is constantly lending some amount of money, let’s call it DEBT, and each lender must produce DEBT+INTEREST to pay it back, and the bank is constantly creating loans based on DEBT+INTEREST (and DEBT+INTEREST+1, +2, +3 and so on) to lend to the next guy and the next guy, the growth of the DEBT the bank carries grows infinitely; it is impossible for the DEBT to ever be paid off.

The series is much more eloquent with it’s description than I was. It also explains the benefits of such a system and why it was created in the first place as well as why the crushing debt growth has the potential to suffocate our financial future:

This series has been posted and re-posted to YouTube 3x already. Given the importance of it we are constantly looking for mirrors and continue to mirror it here ourselves for safe-keeping. Please share this with anyone you think would be interested in learning about our banking system.

Update #1: If you finished the series above and are horrified/riveted to your computer, continue the learning by watching the original Zeitgeist: The Movie. You will be amazed with the content density of that piece and the fluid presentation of it all. It is gripping and also horrifying as well.

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About Riyad Kalla

Software development, video games, writing, reading and anything shiny. I ultimately just want to provide a resource that helps people and if I can't do that, then at least make them laugh.

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7 Responses to “How the Banking System Really Works”

  1. WhereIs May 24, 2009 at 3:32 am #

    Can anyone tell me where the movie: how banking works, can be found?
    It seems to haven been removed from both google as youtube.

  2. Riyad Kalla May 26, 2009 at 3:16 pm #

    I’ve updated the links, they should work now.

Trackbacks/Pingbacks

  1. Zeitgeist: Christianity, 911 and The Federal Reserve | The "Break it Down" Blog - March 29, 2008

    [...] … a few days before that we blogged about how the banking system really works. [...]

  2. Dow Down 700 Pts Again, After Bailout… Herald in the Amero and the North American Union | The "Break it Down" Blog - October 6, 2008

    [...] any further, I really recommend setting aside 10mins, or even 5mins, to begin watching the “How the Banking System Really Works” series on YouTube, if you aren’t fascinated within the first 5mins, you can stop [...]

  3. Economic Crisis, The Amero, North American Union and the New World Order | The "Break it Down" Blog - October 10, 2008

    [...] We first took a look at the shape of things to come last year with the review of the “How the Banking System Works” series of movies on YouTube (it’s an excellent series, must-watch if you haven’t [...]

  4. $700 Billion Bailout Is Not For Loans, It’s to Encourage Bank Mergers | The "Break it Down" Blog - October 25, 2008

    [...] I’d encourage you to watch “How the Banking System Really Works” and Zeitgeist The Movie if you can still see straight [...]

  5. $700 Billion Bailout Is Not For Loans, It’s to Encourage Bank Mergers : Anything And Whatnot - October 25, 2008

    [...] I’d encourage you to watch “How the Banking System Really Works” and Zeitgeist The Movie if you can still see straight [...]

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