The bottom line of the fractional reserve banking system is that as long as the money supply expands at the rate of the interest being charged, everything is ok.
But the expansion is based on consumption.
When the consumption trend slows or even goes negative, there is big trouble.
The fractional reserve banking system is a form of theft.
Imagine, and this will be difficult but try to imagine that the number of dollars in circulation were limited to a finite number of dollars. What would happen then is that the money would, over time, buy more and more. The value of the money as measured in things, would go up.
That is an honest system. Its also impossible to steal from the common man with that system. So the fractional reserve system was created.
And just to put a point on it, citing the example from a wonderful life above, its not your money that was used for freds mortgage. Its conjured up money created at a multiple of ten times or more what you have on deposit that was used to pay freds mortgage.
If its really your money, you should be able to put your hands on all of it at any time you want. But that can not be done. Its why FDR declared "bank holidays". We will see this phenomenon again in the next ten years.
That's RIGHT.
The Fed is a contrivance created through the efforts of the Int'l Rothschild banking cartel.
Indeed the inflation the Fed's creation has allowed was the imperative of it's creators so that Govt could finance with inflated dollars WWI, WWII and all others since along with all the unconstituional entitlement and pork spending by Govt that DOES NOT benefit every single citizen equally.
That's what the "General" in "promote the general welfare" was all about. That if govt spent the people's money, it could do so only if ALL citizens were equally benefitted.
In a nut shell: the Fed was created by the elites for the elites and we the (ignorant) people are left holding the bag to the tune of approx $20K per man women and child in Fedl debt.
It gave our Govt a power over the people's purse that the Founder's NEVER intended and sought to prevent in the Constitution.
One of the biggest reasons for the Great Depression was the the Euros got off the gold standard to inflate for their own spending during and after WWI. When England wanted to get back on, Churchill insisted the pound be valued at it's pre-war gold standard value, which of course it no longer was due to it's inflation. But we allowed it, our bankers being more loyal to the Int'l Banking Cartel than to America, and the apple cart toppled. Do you remeber FDR confiscating the all people's bullion? Then his arbitray revaluation of the price of gold?
WE, dear friends, are a country of sad ignorant dupes.
Isn't it about time we reverted to our pre-1900's Constitution whose sole purpose was the protection of citizen's rights and property???