You won’t see it in the headliners, but major banks in the US are operating in bankruptcy. Banks such as Wells Fargo and Bank of America are no longer able to cover their liabilities. Instead, they are operating on a fraudulent basis, hoping that their debts are never called in.
The reality is: for a majority of Americans, the bank just doesn’t have your money anymore. “Nonsense!” you say, “I can go online and see that my full bank balance is there!” Not true. Sure, the bank tells you your money is there and available, but in reality, they have already taken your money and given it to somebody else. This is because banks work on a fractional reserve system and at most, are only required to maintain enough liquidity to payout 10% of their total deposits. If too many people ever tried to claim their money at one time, a majority would find their savings missing.
Tell me, how comfortable would you feel using USA Store-It-All if you knew they had a reputation of lending out 90% of it’s current stock of couches, televisions, and beds to Rent-A-Center and other individuals? Why, there’s no way you would do business with such a company! In fact, when individuals such as Bernie Madoff try similar ponzi schemes they are locked away and forever disgraced by society. So why has the United States, much less the world, blindly accepted such conditions?
There was a time when the dollar actually had meaning and backing you could count on. I say an overhaul of the banking and monetary system is long overdue.
The Rogue Economist 