Great Britain is in debt over £1 Trillion. Or are we?

The Independent is running its lead article on the alleged debt of Great British consumers. This debt is allegedly £1.13 trillion.

See http://news.independent.co.uk/uk/this_britain/article336255.ece

It sounds alot. But the actual physical value is only a tiny fraction of this.

For what is the legal definition of £?

The banks run a system called Fractional Reserve Banking. This allows them to create money out of thin air.

Here is a brief example of how FRACTIONAL RESERVE BANKING works;

The RipOff Bank has £100 pounds in its vault, and does not have any other debt to call on. Mr X goes to the RipOff Bank and asks for a loan of £1500. You would think the RipOff Bank can't satisfy this request, right?WRONG!Here, with the magic of FRACTIONAL RESERVE BANKING, is how the RipOff Bank can satisfy this request of Mr X.FRACTIONAL RESERVE BANKING allows the RipOff bank to create money upto a specified legal multiple of its deposits. It's that simple. Say the legal multiple is 10. Then the RipOff bank can create another £900 to loan £1000 to Mr X. The RipOff Bank does not have to ask anybody to repay any debt to do this, or to get the money from anyone or anywhere else. IT SIMPLY CREATES THE MONEY with a bookkeeping entry and/or entry onto a computer.

But Mr X requested £1500. So the RipOff Bank asks another bank, the Bankster Bank, for a loan of £500. But the Bankster Bank too only has £100 in its vault. But through FRACTIONAL RESERVE BANKING the Bankster Bank can create £500 and lend it to the RipOff Bank for Mr X, and still keep the £100 in its vault to use for its customer Mrs Y, who wants a loan of £300.


Through this example we see that the amount of "money" in circulation has increased by £900 + £400 = £1300, and on a base of just £100 + £100 = £200. No gold or silver was dug from the ground. The "money" was simply typed into a computer. This is transferred via cheque or electronically into the bank account of Mr X, which may or may not be with either RipOff Bank or Bankster Bank.

You must then work your arse off to pay it back...and with interest!

This is also how the banks make their money. We are led to believe that the banks carefully invest the deposits of their customers in successful businesses, and the interest earned by the banks customers is taken from the profit the bank made from investing in the businesses. You can now see that banking as a profession is not that difficult. You don't have to be a superb economist to be a successful banker and invest wisely in businesses anticipated to do well. The banks can easily afford to lose some of the money they create from your deposits.

So when we are told we owe £1.13 Trillion, we basically owe £0, for most of that "debt" is thin air. Some of the debt will be physical gold, the base for first credit pyramid that created the thin air money. The rest is thin air, typed into a computer.

But look what The Independent says about the effect this "debt" has: Half of all heavy debtors suffer from depression.

Of only they knew...

ps If you don't believe me just ask your bank if it uses fractional reserve banking and if it was used to create the "money" from thin air for your loan/mortgage/credit card etc