How did we get where we are today?

The Gold Survival Guide eCourse:

Why Gold is your must have insurance and 9 ways to profit from it”

Today, you’ll learn about the structure of the global banking system and how it leads to inflation…

Module 1: How did we get where we are today?

You may have heard various reasons as to the cause of the “financial crisis”. The housing bubble, greed, banks poor lending practices, sub-prime mortgages, credit default swaps, derivatives, extended low interest rates, legislative changes like the repeal of the Glass-Steagal Act, lax regulation. Now while these may all be symptoms, they’re not the disease. As you read on you will discover that the root cause of the world’s financial problems are in the structure of the world’s monetary system.

Fractional Reserve Banking

Given the problems in the worlds financial system that you will have heard about are in the banks, let’s start with an explanation of the way the world’s banks operate.

The modern banking system functions on a “Fractional Reserve” basis. This is just what it sounds. A bank is only required by law to keep a “fraction” of its reserves on hand at any time. Say for example 1 in 10 (although it can in fact be much less than this in many countries). So for every $10 they lend they are only required to have $1 of deposits on hand as backing.

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