Sign Nebraska Banking Medical History Fast

Industry sign banking nebraska medical history fast

we go to grade school to get a good knowledge base to go to high school when in high school the generally accepted goal is to get into a good college we go to college to learn marketable skills that once in the workforce will allow us to earn money we work our entire life for money and invest in hopes that our money will grow I'm amazed that during all that schooling and for most of our lives most of us never learn the history of our money and what it is I think it's about time we all find out the story of our money starts as a simple fraud it's a fraud that has infiltrated every facet of our lives when someone benefits from this fraud the draw to perpetuate it in most cases is overwhelming imagine an old English Goldsmith he makes a handsome living minting coins for the local Lord and at times the king himself along with other services associated with the working of precious metals his used some of the profits from this enterprise to invest in a grand safe in which to store not only his gold but the gold of his clients as his business grows he adds additional 24-hour trusted cards to add to the security of his vault this security was visible and imposing and introduced a new business opportunity for the metals worker clients began to request that their wealth in the form of gold and silver be stored in his facility on a longer-term basis for a small fee he agreed in return for the gold he gave the owner a simple receipt among his other services he became a storage facility a legitimate service for fair compensation after some time the Goldsmith was making nearly as much income from his storage fees as he was from his metalworking it was a lucrative business a few new things occurred the first of which was people began to use the receipts directly to purchase goods and services the receipts are lighter and more convenient than carrying around gold and silver coins but the bearer of such receipts could be confident that they could be returned to the Goldsmith to claim their wealth originally it was no different than a coat check receipt you might receive at a restaurant but now they were being used as money they took on a very unique characteristic before only allotted to precious metals coins they were the medium of exchange on the surface there's nothing fraudulent about this development either one thing that the use of this paper currency did facilitate was the gold was rarely taken from the custody of the Goldsmith's fault once the Goldsmith realized this he felt it a shame that all that money sat there idle temptation started working on him urging him to put this money to work he had some options he could simply use it to purchase whatever he wished but to the brave businessman this was a sure path to disaster he had no way of regaining the gold and eventually his clients may want it back imagine that instead a smart goal of Smith could loan a portion to farmers other businessmen even Lords the king and other members of the government at interest of course now he could convince himself that he was not stealing since he was only keeping the interest this scheme was sustainable but very clearly fraud to loan other people's money and profit without their knowledge most would agree is an immoral act but even if the Goldsmith started small the returns in many cases must have been a resistible the people watching the goldsmith attained impressive wealth through jealousy self-interest or curiosity may have started paying close attention and determined that he was not gaining as well through just means these curious onlookers may have thought he was just spending the gold and silver that he was storing or completely picked up on the whole lending scheme either way the result would be clear to the observer there will be more claims on the precious metals in the vault then there was actual gold and silver stored there if that observer was a client of the goldsmith this realization would cause a loss of competence those who realized it would rush to trade in the receipts for their gold people often move as a herd and whether the first to pick up on the fraud actually vocalize their concerns were those watching the long lines of the vault felt it better just to be part of the crowd the result would be the same well we now know of as a bank run the remaining gold and or silver quickly disappeared from the vault many that entrusted the storage of their wealth to the Goldsmith would have been devastated at the loss of their savings the grieving would hit the well-known anger phase and the Goldsmith may have paid with his life there is though no question that the practice could create immense wealth for the perpetrator and people had risked far more for less the most cunning of these Goldsmith's attempted to make this fraud more legitimate to at least not shut this cash cow down alt undoubtedly the interest on the loans in some cases may have been more profitable than either the storage or the Goldsmith's fees loans allow people to have now what they would otherwise have to wait for so loans feed on a human condition for pleasure in the moment and demand for loans at the right terms would always be high so how could the goldsmith continue to feed that demand and profit from it the answer was to become what we now know of as a banker they essentially bribed their customers to allow them to continue to make loans they would use the deposits of gold and silver to make a loan and split the interest with the depositor making loans on deposits in this manner actually isn't fraud at all on one condition and that is if the depositor is willing to wait for the duration of the loan to get their money and interest back unfortunately for the banker this is not working nearly as well considering the gold had been earned by the depositor through hard work they're less likely to loan that hard-earned money at an interest rate nearly as low as the banker would be willing to the banker did not have to work very hard for the loanable funds in the previous model it was given to him now on top of the already high interest the depositor demands the banker has to tack on his cut with high interest rates the demand for loans would be lower less loans would mean that compared to the fraudulent model not only would the banker has to pay the depositor their cut there wouldn't be nearly the volume both these conditions equal less money for the banker and after it was so liquid if it was only a matter of time before another fraudulent version was born the receipts would also lose their usefulness as a medium of exchange since they could no longer be exchanged for gold and silver on demand all the banker needed to do was convince the depositors that it was safe to give the bank their gold and silver while at the same time continuing to allow them to use the receipts to collect their precious metals on demand this is known as a demand deposit if depositors could get their savings on demand they would not insist on such a high rate of interest the banker would continue to make loans with the deposits but would compensate or bribed the depositors with the interest the receipts could also continue to be used as a medium of exchange due to the interest payments to the depositor this arrangement was not quite as good as the secret of theft this new slightly more transparent deal didn't protect the system from bank runs and thus was unstable and then it could not ensure that the depositors could always get their hard-earned money bankers certainly would make every attempt to convince them that the deposits were safe though it was similar to a much later scheme started by a mr. Ponzi the depositors who in the event of a bank run got out first did just fine they got their gold as well as all the interest for however long the scheme held together but the last ones out got none of their original deposit let alone the interest this was still clearly an immoral system but the depositors certainly shared some of the blame for knowingly participating although it has become a tradition in banking to make the system confusing but also in a way explainable to make it seem viable the bankers give the depositors and bars a list of exactly what they want excuses as to why they can participate collect interest or as a borrower get cheap loans and in general continue the good times I'm sure in some cases the bankers even convinced themselves that these excuses were real now enters the final piece of the puzzle if the government is fair and just even if the depositors want such a system it will see it for what it is and shut it down through its laws just like any other system of fraud so to get a government to allow such a system the bankers will in addition to the depositors need to give the government a cut of the wealth and benefits they can do this through paying taxes providing cheap loans to the government or providing other benefits to those who control the implementation of the laws and let's be honest the governments of the past were just as crooked as today the bankers could also attempt to convince the governmental powers that this system was actually good and healthy for the economy and thus those in power direct payments government officials cheap loans along with a healthy dose of opacity and confusion will allow the government to endorse such a system now this fraud has legitimacy its lawful yet still immoral government only sanctioned fractional reserve banking has now been born the key point is fractional reserve banking was born of fraud not some benevolent innovation this system also increases the amount of money in the economy initially there's only the number of gold and silver coins circulating when those coins are deposited and the receipt is given out the receipt will flow in the economy just as if it was gold itself but the gold coin is also load-out entering the economy the gold could then be redeposited adding another gold receipt and then loaned out again repeating this cycle over and over this increase in the money supply was originally termed inflation because it was an inflation of the money supply if there was a perfectly commensurate increase in goods and services known as the boom the increase in the money supply would likely not affect prices if the increase in goods and services did not keep pace with the increase in money prices would likely rise and finally in the event that the amount of goods and services increased faster during the boom than the money supply prices could actually fall the main takeaway is the term inflation initially only referred to the increase in money supply and could be a cause of changes in prices but there were other variables namely money velocity and the actual economic growth one of the other issues arising from these booms is that due to the volatile growth that is born from monetary inflation there can be great miss allocations of resources as a result of bubbles bubbles can be defined as over investment in one sector of the economy due to incorrect market signals usually this incorrect market signal is increasing price action in an investment giving the false impression of assured gains but other factors can also cause these incorrect market signals such as manipulation fractional reserve systems grew and infiltrated the economies of Europe as long as they held together using them could be quite prosperous but the collapse was actually inevitable when these banking systems collapsed the economic turmoil left in their wake could be so devastating that the initial boom created by the monetary expansion as a result of bankers loans would be erased or worse could cause the economy to regress here's how the Austrian economist Ludwig von Mises put it there's no means to avoid the final collapse of a boom brought on by credit expansion the second part of the quote is more profound but we'll revisit that later in a sense the credit created boom they bring true economic growth it may cause farmers to produce more crops builders to build more homes and fishermen to catch more fish in addition during the boom the depositors benefit the government benefits and even the general may benefit from the wealth created but the bankers benefit most of all with very little effort during the boom none of these groups will resist after all they're making money and living better the splinter in the side of the system is the crash and one of the aspects that makes fractional reserve banking and even hard pill to swallow is that one generation they enjoy the benefit of the boom and leave the crash for their children or grandchildren it feels against human nature to benefit at the detriment of your offspring but again there's caught up in the boom want to believe and will justify it by any means possible or they might not be paying attention a key point with a boom is that the longer it is able to continue the larger the crash can be the mechanism through which the crash happens is simple after a bank run the unredeemed seeds no longer have value since they can no longer be exchanged for gold and silver coins they are no different than the coat AG that you can no longer use to get your coat the receipts are no longer money just like the worthless coat AG the receipts can be discarded at this point the only money left in the economy are the gold and silver coins there's far less money than there appeared to be when the receipts were still generally accepted this reduction in the money supply is the flip side of inflation and is a factor in the opposite effects there are other effects the result from the boom and subsequent crash some of the gold and silver may have travelled far from the immediate economy causing even less money to circulate locally another issue is that after any shock it is human nature to store what is needed and this extends beyond just food after a famine in an economic light this storm can cause humans to store or save money in an unproductive manner for example keeping money under a mattress instead of investing it in productive assets storing money hits from one of the variables that was mentioned when discussing price levels money velocity and now is a perfect time to explain it here's one example a pig farmer and an apple orchard owner would like to trade their apples and pork chops the owner of the orchard has one gold piece that they will use as their medium of exchange a simple place holder in our first example the apple orchard grower goes down the road to the pig farmer and asks if he can buy a pig for one gold piece the pig farmer agrees and the Apple man goes down the road with Figg later that year in the fall the pig farmer decides he wants to go down the street and buy some cider with his gold piece the pig farmer and orchard owner decide that 26 casks of cider is a fair price for one gold piece and the pig farmer loves the cider in his cart and drives home for the year so what was the income of each man if these were the only transactions that took place that year easy right one gold piece let's try another example the same two men have the same farm and orchard and one gold piece between them this time the apple man gives to the pig farmer on the first weekend of January and asked to buy some pork chops for the coin the following week the pig farmer goes and gets a cask of cider for the same coin similar exchanges take part every weekend bacon for pie ribs for apple butter pork loin for hard cider and sokka's for the rest of the year 52 weeks each man gets the gold 26 times and thus their annual income is 26 pieces of gold essentially they exchange the same amount of goods nothing was wrong with either way of doing the transaction but their income varied by twenty-six hundred percent money velocity can have tremendous effects on economic perception as much as or more so than the money supply after a bank run some may have thought they had a large store of wealth only that wealth was not in the form of gold but paper Gold receipts which after the run were worthless maybe he wants more for his gold piece or maybe he won't spend his last precious piece of metal at all and we'll wait for the economic storm to pass the natural reaction to store the only real money left after a bank run the gold and silver coins causes the money velocity to plummet making the reduction in apparent money supply fall by even more than just the elimination of paper money in the system I'm sure it's easy to see that with the real reduction in the medium of exchange as well as the perceived reduction due to the reduction in money velocity incomes would suffer and could make it difficult to pay back loans for farmers or businessmen say to a neighboring towns bank these failing also known as non-performing loans along with the rumor of the first bank run could cause depositors in those neighboring towns to panic and cause bank runs there as well thus the crash does not remain isolated and spreads like a plague throughout a fractional reserve banking system causing just as much devastation as one since the creation of this fractional-reserve economic system there have been those that support and perpetuate its use but this is mostly rooted in their greed and normalcy bias not because they think fractional reserve banking is the best for their country or its citizens then there are those that see it for what it is fraud and try to rid it from their country like liberty and tyranny it is a constant battle that must be waged at times hot and at times cold but this battle has been going on for centuries I've left the origins abstract and the origination 'he's actually took place over millennia and not just in england but through your own research you can find examples of all that has been laid out there are two very real services that the banker supplied to their clients that deserve just compensation the first has been covered in the form of safe storage of wealth the second was the facilitating of loans and guiding their depositors money into productive assets also known as investing these storage and investment services should be paid for but under the fractional reserve system the compensation for the bankers is much higher than would otherwise be justified in a free market system the profit share taken by the banks is not fair to their clients whether the depositors or the recipients of the loans this reminds me of another injustice in which real services were supplied but it did not change the deplorable nature of the arrangement this is the instance of southern slavery during the first part of our nation's history the Masters of the slaves certainly exploited the slaves labor but they were supplying a service management of the plantation and as businessmen of today know a good manager is a valuable part of the team that said these managing masters took an unfair cut of the profits and the basis of the arrangement was still rooted in an amoral system now it's time to make this notion of fractional reserve banking a little more real in the history of the United States