Oct 18th 2008 Hello from CanaDUH

I recently visited a site where people were debating the banking system.

As I have studied this phenomenon for a number of years, I feel confident to post a brief statement about how Canadian Chartered banks profit with their fractional reserve system, which presumably is similar, if not identical the world over.

A simple model to explain this phenomenon is as follows.
Depositor A puts $200,000 in the bank. The bank pays 5% interest, for a gross return on investment of $10,000, taxable at 54%, leaving the depositor with apx $205,000 at the end of a year.

The bank takes the $200,000 and leverages it up to 20 times, to invent a pool of $4,000,000 out of thin air, and loans the entire package out at interest. Assuming the bank makes only an average of 10% return on the $4,000,000 invested into mortgages, credit cards, auto loans etc, will produce $400,000 gross profits for the bank.

The banks pay depositor A $10,000 for annual interst, and may also pay investors a dividend, other overheards and wages to staff, which may cost another $10,000, leaving the bank with $380,000 in net profits.

In the worst market declines of the early 1980's, the 4 largest Canadian chartered banks made between 128% - 172% NET PER QUARTER. or A STAGGERING 500% - 700% NET ANNUAL RETURN.

However, because it can with some accuracy be said that the banks and government are one and the same, the $5000 tax generated on the depositors investment, effectively adds to the banks bottom line.

An excellent film to assist anyone interested to learn a great deal more about fractional reserve banking and where currency came from in the ofrst place, is a documentary by William T. Still, called "MONEY MASTERS".
Peter Carson Vancouver CanaDUHcansteel1978@yahoo.ca