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The Cost & Politics of Economic Inequality

The Flow of Money FACT The rate of inflaton n the Unted States since the lederal leserve nas ceated in 1913 has been about 375% per yea jaccurding to the US Bureau d later Staistics, Duer the curse el 100 years at tat ate, the tual uflaton ul have teen apprucinately 2,45K, neanny that S1 at the bepnng tad the same puchanng pner a SS at the end. In other words, in the past century, the U.S. Dollar has lost 96% of its value. D tes e h alaa ta de How Fractional Reserve Banking Contributes to The National Debt, Economic Instability & Income Inequality Who has benefited? Who has been harmed? 1 Congress Authorizes the Creation of NEW MONEY as DEBT. The Federal Reserve Bank CREATES NEW MONEY L.by adding the authorized amount to its accounts, III lowering interest rates or reducing reserve requirements. Authorization for OW Debt Creation U.S. Government (The Federal Reserve then LOANS this new money mostly to big banks & to government via "open market" operations 7 Having run out of their ability to tax the . people in order to fund transfer payments to their favorite constituents or the operations of government agencies such as the military, the politicians running Federal Reserve 9 Major Banks buy US Government backed Treasury Bonds&make loans with NEW MONEY to big businesses Banks Buy Treasuriesovide Loans to FUNDernment and smaller commercial banks. X% of Deposits Taxes Kept as RESERVES (NOTE: Even small percentages of this new money, either directly or via revenue from investments, can be measured in "BILLIONS of dollars. Thus, payments & salaries to bankers and others directly involved at this level are often expenentially higher than those made to individuals who do not have access to the money at the major points of creation. Consider how this feature of the Fractional Reserve system itself effects "income inequality". Those controlling the money supply benefit the most from the expansion of credit in an economy.) However. Inflation & higher costs of 60. iving make most people reluctant to NEW MONEY government will instead. Authorize the creation of give more of their limited financial resources to government via Vansfer Payments 6a. NEW MONEY as DEBT. TAXES. Major Comercial & Investment Banks Promises from politicians, and continuing I. economic hardship created by high inflation Smaller Commercial Banks take in deposits from 4. individuals, loans from the big banks, and other investment often leads to people demanding more from their government in the form of transfer payments such as welfare, subsidies, etc.. IN EW "MONEY" is created as debt again"HERE", through the process of the "Money Multiplier". As LOANS are made, individuals deposit their new tound credit in other banks, which in turn put away revenue. They loan out as MUCH as possible at interest, and hold as little as they can in RESERVES. the required percent in reserves and loan out the rest apain in an on-poing cycle. Money given cut by one loan shows up as a new "deposi elsewhere, and thus loans are made with previously loaned money until diminished by the reserve ratio. Example: At a 10% RESERVE RATE, Banks can LOAN out $90 for eadch $10 they retain in "checkable" DEPOSITS. So with a $100 deposit, $90 will be loaned out and deposited into new accounts, of which $81 can be loaned out and deposited into new accounts of which $72.90 can be loaned out etc. until only a negligible amount is left to loan out. However. Since the original deposit was only $100, after just 3 tiers of new credit/debt already $243.90 has been banet This inmense expansion of the noney DEBT (Money held in reserves is important to avoid bank runs, since depositors need to know they l be able to get their money out when they need it. But reserves don't generate revenue for the bank, so the bank's main desire is to loan out as nuch money as possible without upsetting depositors. However. Since the Federal Reserve Bank, and not individual commercial banks, set the reserve requirements and base interest rates, ordinary banks DO NOT COMPETE for customer loyalty on the basis of DEPOSIT SECURITY. So, the risk of losing deposits with reserve rates is no longer at stake. However, if the Federal Reserve Ordinary people can benefit from new credit with J. which to purchase houses, cars & assets like capital for their businesses.. ut they also bear the bulk of Supply through the money nultiplier effect is the costs of both INFLATION and INTEREST PAYMENTS. Small Commercial Banks & Credit Unions (Unfortunately.Itis in eeryone's general interest to have an economy with either NO or incredibly SLOW increases in the cost ef living, commonly called "INFLATION". Expansicons of the noney supply cause the decline in purchasing power of the currency itselt, and that in turn raises the real cost of living and weighs down the production of goods & services, which in tum slows job-creation and lowers overall employment However. t is in the specific, or "special interest". of bankers and politicians controling the creation of money to have relatively HIGH inflation in a Fractional Reserve Banking system. Politicians benefit when the new money goes towards funding favored government programs and into hiding the true cost of foreign debt payments. Likewise, high-level bankers benefit from inflations because they profit the most, both SAVINGS sets the WRO NG interest or reserve rates, ALL banks in the system are at risk of systemic failure by being seriously over-leveraged. Thus, the FOIC and other "incurance" programs were created (in principle) to protect ordinary depositors. But these proprams also introduce MORAL HAZARD to banks which have less concern for risk & potential losses as a result. Since banks know they will keep most of the profits from extremely high leveraging, but be bailed out in the event of significant loss by the FOIC and others (in theory, so as to insulate their account-holders from big risks), the otherwise "risky" behavior mostly counteracted by the REPAYMENT of loans. As loans are paid back, the money created on the books in the form of new credit disappears but new meney from interest stays with the bank] People of bankers suddenly becomes relatively "safe" instead. directly in the form of salaries and indirectly from investment returng, by being the first people to control how that NEW MONEY is used) Created by Sean WMalope Citizen www.citienamedia.com The Flow of Money FACT The rate of inflaton n the Unted States since the lederal leserve nas ceated in 1913 has been about 375% per yea jaccurding to the US Bureau d later Staistics, Duer the curse el 100 years at tat ate, the tual uflaton ul have teen apprucinately 2,45K, neanny that S1 at the bepnng tad the same puchanng pner a SS at the end. In other words, in the past century, the U.S. Dollar has lost 96% of its value. D tes e h alaa ta de How Fractional Reserve Banking Contributes to The National Debt, Economic Instability & Income Inequality Who has benefited? Who has been harmed? 1 Congress Authorizes the Creation of NEW MONEY as DEBT. The Federal Reserve Bank CREATES NEW MONEY L.by adding the authorized amount to its accounts, III lowering interest rates or reducing reserve requirements. Authorization for OW Debt Creation U.S. Government (The Federal Reserve then LOANS this new money mostly to big banks & to government via "open market" operations 7 Having run out of their ability to tax the . people in order to fund transfer payments to their favorite constituents or the operations of government agencies such as the military, the politicians running Federal Reserve 9 Major Banks buy US Government backed Treasury Bonds&make loans with NEW MONEY to big businesses Banks Buy Treasuriesovide Loans to FUNDernment and smaller commercial banks. X% of Deposits Taxes Kept as RESERVES (NOTE: Even small percentages of this new money, either directly or via revenue from investments, can be measured in "BILLIONS of dollars. Thus, payments & salaries to bankers and others directly involved at this level are often expenentially higher than those made to individuals who do not have access to the money at the major points of creation. Consider how this feature of the Fractional Reserve system itself effects "income inequality". Those controlling the money supply benefit the most from the expansion of credit in an economy.) However. Inflation & higher costs of 60. iving make most people reluctant to NEW MONEY government will instead. Authorize the creation of give more of their limited financial resources to government via Vansfer Payments 6a. NEW MONEY as DEBT. TAXES. Major Comercial & Investment Banks Promises from politicians, and continuing I. economic hardship created by high inflation Smaller Commercial Banks take in deposits from 4. individuals, loans from the big banks, and other investment often leads to people demanding more from their government in the form of transfer payments such as welfare, subsidies, etc.. IN EW "MONEY" is created as debt again"HERE", through the process of the "Money Multiplier". As LOANS are made, individuals deposit their new tound credit in other banks, which in turn put away revenue. They loan out as MUCH as possible at interest, and hold as little as they can in RESERVES. the required percent in reserves and loan out the rest apain in an on-poing cycle. Money given cut by one loan shows up as a new "deposi elsewhere, and thus loans are made with previously loaned money until diminished by the reserve ratio. Example: At a 10% RESERVE RATE, Banks can LOAN out $90 for eadch $10 they retain in "checkable" DEPOSITS. So with a $100 deposit, $90 will be loaned out and deposited into new accounts, of which $81 can be loaned out and deposited into new accounts of which $72.90 can be loaned out etc. until only a negligible amount is left to loan out. However. Since the original deposit was only $100, after just 3 tiers of new credit/debt already $243.90 has been banet This inmense expansion of the noney DEBT (Money held in reserves is important to avoid bank runs, since depositors need to know they l be able to get their money out when they need it. But reserves don't generate revenue for the bank, so the bank's main desire is to loan out as nuch money as possible without upsetting depositors. However. Since the Federal Reserve Bank, and not individual commercial banks, set the reserve requirements and base interest rates, ordinary banks DO NOT COMPETE for customer loyalty on the basis of DEPOSIT SECURITY. So, the risk of losing deposits with reserve rates is no longer at stake. However, if the Federal Reserve Ordinary people can benefit from new credit with J. which to purchase houses, cars & assets like capital for their businesses.. ut they also bear the bulk of Supply through the money nultiplier effect is the costs of both INFLATION and INTEREST PAYMENTS. Small Commercial Banks & Credit Unions (Unfortunately.Itis in eeryone's general interest to have an economy with either NO or incredibly SLOW increases in the cost ef living, commonly called "INFLATION". Expansicons of the noney supply cause the decline in purchasing power of the currency itselt, and that in turn raises the real cost of living and weighs down the production of goods & services, which in tum slows job-creation and lowers overall employment However. t is in the specific, or "special interest". of bankers and politicians controling the creation of money to have relatively HIGH inflation in a Fractional Reserve Banking system. Politicians benefit when the new money goes towards funding favored government programs and into hiding the true cost of foreign debt payments. Likewise, high-level bankers benefit from inflations because they profit the most, both SAVINGS sets the WRO NG interest or reserve rates, ALL banks in the system are at risk of systemic failure by being seriously over-leveraged. Thus, the FOIC and other "incurance" programs were created (in principle) to protect ordinary depositors. But these proprams also introduce MORAL HAZARD to banks which have less concern for risk & potential losses as a result. Since banks know they will keep most of the profits from extremely high leveraging, but be bailed out in the event of significant loss by the FOIC and others (in theory, so as to insulate their account-holders from big risks), the otherwise "risky" behavior mostly counteracted by the REPAYMENT of loans. As loans are paid back, the money created on the books in the form of new credit disappears but new meney from interest stays with the bank] People of bankers suddenly becomes relatively "safe" instead. directly in the form of salaries and indirectly from investment returng, by being the first people to control how that NEW MONEY is used) Created by Sean WMalope Citizen www.citienamedia.com The Flow of Money FACT The rate of inflaton n the Unted States since the lederal leserve nas ceated in 1913 has been about 375% per yea jaccurding to the US Bureau d later Staistics, Duer the curse el 100 years at tat ate, the tual uflaton ul have teen apprucinately 2,45K, neanny that S1 at the bepnng tad the same puchanng pner a SS at the end. In other words, in the past century, the U.S. Dollar has lost 96% of its value. D tes e h alaa ta de How Fractional Reserve Banking Contributes to The National Debt, Economic Instability & Income Inequality Who has benefited? Who has been harmed? 1 Congress Authorizes the Creation of NEW MONEY as DEBT. The Federal Reserve Bank CREATES NEW MONEY L.by adding the authorized amount to its accounts, III lowering interest rates or reducing reserve requirements. Authorization for OW Debt Creation U.S. Government (The Federal Reserve then LOANS this new money mostly to big banks & to government via "open market" operations 7 Having run out of their ability to tax the . people in order to fund transfer payments to their favorite constituents or the operations of government agencies such as the military, the politicians running Federal Reserve 9 Major Banks buy US Government backed Treasury Bonds&make loans with NEW MONEY to big businesses Banks Buy Treasuriesovide Loans to FUNDernment and smaller commercial banks. X% of Deposits Taxes Kept as RESERVES (NOTE: Even small percentages of this new money, either directly or via revenue from investments, can be measured in "BILLIONS of dollars. Thus, payments & salaries to bankers and others directly involved at this level are often expenentially higher than those made to individuals who do not have access to the money at the major points of creation. Consider how this feature of the Fractional Reserve system itself effects "income inequality". Those controlling the money supply benefit the most from the expansion of credit in an economy.) However. Inflation & higher costs of 60. iving make most people reluctant to NEW MONEY government will instead. Authorize the creation of give more of their limited financial resources to government via Vansfer Payments 6a. NEW MONEY as DEBT. TAXES. Major Comercial & Investment Banks Promises from politicians, and continuing I. economic hardship created by high inflation Smaller Commercial Banks take in deposits from 4. individuals, loans from the big banks, and other investment often leads to people demanding more from their government in the form of transfer payments such as welfare, subsidies, etc.. IN EW "MONEY" is created as debt again"HERE", through the process of the "Money Multiplier". As LOANS are made, individuals deposit their new tound credit in other banks, which in turn put away revenue. They loan out as MUCH as possible at interest, and hold as little as they can in RESERVES. the required percent in reserves and loan out the rest apain in an on-poing cycle. Money given cut by one loan shows up as a new "deposi elsewhere, and thus loans are made with previously loaned money until diminished by the reserve ratio. Example: At a 10% RESERVE RATE, Banks can LOAN out $90 for eadch $10 they retain in "checkable" DEPOSITS. So with a $100 deposit, $90 will be loaned out and deposited into new accounts, of which $81 can be loaned out and deposited into new accounts of which $72.90 can be loaned out etc. until only a negligible amount is left to loan out. However. Since the original deposit was only $100, after just 3 tiers of new credit/debt already $243.90 has been banet This inmense expansion of the noney DEBT (Money held in reserves is important to avoid bank runs, since depositors need to know they l be able to get their money out when they need it. But reserves don't generate revenue for the bank, so the bank's main desire is to loan out as nuch money as possible without upsetting depositors. However. Since the Federal Reserve Bank, and not individual commercial banks, set the reserve requirements and base interest rates, ordinary banks DO NOT COMPETE for customer loyalty on the basis of DEPOSIT SECURITY. So, the risk of losing deposits with reserve rates is no longer at stake. However, if the Federal Reserve Ordinary people can benefit from new credit with J. which to purchase houses, cars & assets like capital for their businesses.. ut they also bear the bulk of Supply through the money nultiplier effect is the costs of both INFLATION and INTEREST PAYMENTS. Small Commercial Banks & Credit Unions (Unfortunately.Itis in eeryone's general interest to have an economy with either NO or incredibly SLOW increases in the cost ef living, commonly called "INFLATION". Expansicons of the noney supply cause the decline in purchasing power of the currency itselt, and that in turn raises the real cost of living and weighs down the production of goods & services, which in tum slows job-creation and lowers overall employment However. t is in the specific, or "special interest". of bankers and politicians controling the creation of money to have relatively HIGH inflation in a Fractional Reserve Banking system. Politicians benefit when the new money goes towards funding favored government programs and into hiding the true cost of foreign debt payments. Likewise, high-level bankers benefit from inflations because they profit the most, both SAVINGS sets the WRO NG interest or reserve rates, ALL banks in the system are at risk of systemic failure by being seriously over-leveraged. Thus, the FOIC and other "incurance" programs were created (in principle) to protect ordinary depositors. But these proprams also introduce MORAL HAZARD to banks which have less concern for risk & potential losses as a result. Since banks know they will keep most of the profits from extremely high leveraging, but be bailed out in the event of significant loss by the FOIC and others (in theory, so as to insulate their account-holders from big risks), the otherwise "risky" behavior mostly counteracted by the REPAYMENT of loans. As loans are paid back, the money created on the books in the form of new credit disappears but new meney from interest stays with the bank] People of bankers suddenly becomes relatively "safe" instead. directly in the form of salaries and indirectly from investment returng, by being the first people to control how that NEW MONEY is used) Created by Sean WMalope Citizen www.citienamedia.com The Flow of Money FACT The rate of inflaton n the Unted States since the lederal leserve nas ceated in 1913 has been about 375% per yea jaccurding to the US Bureau d later Staistics, Duer the curse el 100 years at tat ate, the tual uflaton ul have teen apprucinately 2,45K, neanny that S1 at the bepnng tad the same puchanng pner a SS at the end. In other words, in the past century, the U.S. Dollar has lost 96% of its value. D tes e h alaa ta de How Fractional Reserve Banking Contributes to The National Debt, Economic Instability & Income Inequality Who has benefited? Who has been harmed? 1 Congress Authorizes the Creation of NEW MONEY as DEBT. The Federal Reserve Bank CREATES NEW MONEY L.by adding the authorized amount to its accounts, III lowering interest rates or reducing reserve requirements. Authorization for OW Debt Creation U.S. Government (The Federal Reserve then LOANS this new money mostly to big banks & to government via "open market" operations 7 Having run out of their ability to tax the . people in order to fund transfer payments to their favorite constituents or the operations of government agencies such as the military, the politicians running Federal Reserve 9 Major Banks buy US Government backed Treasury Bonds&make loans with NEW MONEY to big businesses Banks Buy Treasuriesovide Loans to FUNDernment and smaller commercial banks. X% of Deposits Taxes Kept as RESERVES (NOTE: Even small percentages of this new money, either directly or via revenue from investments, can be measured in "BILLIONS of dollars. Thus, payments & salaries to bankers and others directly involved at this level are often expenentially higher than those made to individuals who do not have access to the money at the major points of creation. Consider how this feature of the Fractional Reserve system itself effects "income inequality". Those controlling the money supply benefit the most from the expansion of credit in an economy.) However. Inflation & higher costs of 60. iving make most people reluctant to NEW MONEY government will instead. Authorize the creation of give more of their limited financial resources to government via Vansfer Payments 6a. NEW MONEY as DEBT. TAXES. Major Comercial & Investment Banks Promises from politicians, and continuing I. economic hardship created by high inflation Smaller Commercial Banks take in deposits from 4. individuals, loans from the big banks, and other investment often leads to people demanding more from their government in the form of transfer payments such as welfare, subsidies, etc.. IN EW "MONEY" is created as debt again"HERE", through the process of the "Money Multiplier". As LOANS are made, individuals deposit their new tound credit in other banks, which in turn put away revenue. They loan out as MUCH as possible at interest, and hold as little as they can in RESERVES. the required percent in reserves and loan out the rest apain in an on-poing cycle. Money given cut by one loan shows up as a new "deposi elsewhere, and thus loans are made with previously loaned money until diminished by the reserve ratio. Example: At a 10% RESERVE RATE, Banks can LOAN out $90 for eadch $10 they retain in "checkable" DEPOSITS. So with a $100 deposit, $90 will be loaned out and deposited into new accounts, of which $81 can be loaned out and deposited into new accounts of which $72.90 can be loaned out etc. until only a negligible amount is left to loan out. However. Since the original deposit was only $100, after just 3 tiers of new credit/debt already $243.90 has been banet This inmense expansion of the noney DEBT (Money held in reserves is important to avoid bank runs, since depositors need to know they l be able to get their money out when they need it. But reserves don't generate revenue for the bank, so the bank's main desire is to loan out as nuch money as possible without upsetting depositors. However. Since the Federal Reserve Bank, and not individual commercial banks, set the reserve requirements and base interest rates, ordinary banks DO NOT COMPETE for customer loyalty on the basis of DEPOSIT SECURITY. So, the risk of losing deposits with reserve rates is no longer at stake. However, if the Federal Reserve Ordinary people can benefit from new credit with J. which to purchase houses, cars & assets like capital for their businesses.. ut they also bear the bulk of Supply through the money nultiplier effect is the costs of both INFLATION and INTEREST PAYMENTS. Small Commercial Banks & Credit Unions (Unfortunately.Itis in eeryone's general interest to have an economy with either NO or incredibly SLOW increases in the cost ef living, commonly called "INFLATION". Expansicons of the noney supply cause the decline in purchasing power of the currency itselt, and that in turn raises the real cost of living and weighs down the production of goods & services, which in tum slows job-creation and lowers overall employment However. t is in the specific, or "special interest". of bankers and politicians controling the creation of money to have relatively HIGH inflation in a Fractional Reserve Banking system. Politicians benefit when the new money goes towards funding favored government programs and into hiding the true cost of foreign debt payments. Likewise, high-level bankers benefit from inflations because they profit the most, both SAVINGS sets the WRO NG interest or reserve rates, ALL banks in the system are at risk of systemic failure by being seriously over-leveraged. Thus, the FOIC and other "incurance" programs were created (in principle) to protect ordinary depositors. But these proprams also introduce MORAL HAZARD to banks which have less concern for risk & potential losses as a result. Since banks know they will keep most of the profits from extremely high leveraging, but be bailed out in the event of significant loss by the FOIC and others (in theory, so as to insulate their account-holders from big risks), the otherwise "risky" behavior mostly counteracted by the REPAYMENT of loans. As loans are paid back, the money created on the books in the form of new credit disappears but new meney from interest stays with the bank] People of bankers suddenly becomes relatively "safe" instead. directly in the form of salaries and indirectly from investment returng, by being the first people to control how that NEW MONEY is used) Created by Sean WMalope Citizen www.citienamedia.com The Flow of Money FACT The rate of inflaton n the Unted States since the lederal leserve nas ceated in 1913 has been about 375% per yea jaccurding to the US Bureau d later Staistics, Duer the curse el 100 years at tat ate, the tual uflaton ul have teen apprucinately 2,45K, neanny that S1 at the bepnng tad the same puchanng pner a SS at the end. In other words, in the past century, the U.S. Dollar has lost 96% of its value. D tes e h alaa ta de How Fractional Reserve Banking Contributes to The National Debt, Economic Instability & Income Inequality Who has benefited? Who has been harmed? 1 Congress Authorizes the Creation of NEW MONEY as DEBT. The Federal Reserve Bank CREATES NEW MONEY L.by adding the authorized amount to its accounts, III lowering interest rates or reducing reserve requirements. Authorization for OW Debt Creation U.S. Government (The Federal Reserve then LOANS this new money mostly to big banks & to government via "open market" operations 7 Having run out of their ability to tax the . people in order to fund transfer payments to their favorite constituents or the operations of government agencies such as the military, the politicians running Federal Reserve 9 Major Banks buy US Government backed Treasury Bonds&make loans with NEW MONEY to big businesses Banks Buy Treasuriesovide Loans to FUNDernment and smaller commercial banks. X% of Deposits Taxes Kept as RESERVES (NOTE: Even small percentages of this new money, either directly or via revenue from investments, can be measured in "BILLIONS of dollars. Thus, payments & salaries to bankers and others directly involved at this level are often expenentially higher than those made to individuals who do not have access to the money at the major points of creation. Consider how this feature of the Fractional Reserve system itself effects "income inequality". Those controlling the money supply benefit the most from the expansion of credit in an economy.) However. Inflation & higher costs of 60. iving make most people reluctant to NEW MONEY government will instead. Authorize the creation of give more of their limited financial resources to government via Vansfer Payments 6a. NEW MONEY as DEBT. TAXES. Major Comercial & Investment Banks Promises from politicians, and continuing I. economic hardship created by high inflation Smaller Commercial Banks take in deposits from 4. individuals, loans from the big banks, and other investment often leads to people demanding more from their government in the form of transfer payments such as welfare, subsidies, etc.. IN EW "MONEY" is created as debt again"HERE", through the process of the "Money Multiplier". As LOANS are made, individuals deposit their new tound credit in other banks, which in turn put away revenue. They loan out as MUCH as possible at interest, and hold as little as they can in RESERVES. the required percent in reserves and loan out the rest apain in an on-poing cycle. Money given cut by one loan shows up as a new "deposi elsewhere, and thus loans are made with previously loaned money until diminished by the reserve ratio. Example: At a 10% RESERVE RATE, Banks can LOAN out $90 for eadch $10 they retain in "checkable" DEPOSITS. So with a $100 deposit, $90 will be loaned out and deposited into new accounts, of which $81 can be loaned out and deposited into new accounts of which $72.90 can be loaned out etc. until only a negligible amount is left to loan out. However. Since the original deposit was only $100, after just 3 tiers of new credit/debt already $243.90 has been banet This inmense expansion of the noney DEBT (Money held in reserves is important to avoid bank runs, since depositors need to know they l be able to get their money out when they need it. But reserves don't generate revenue for the bank, so the bank's main desire is to loan out as nuch money as possible without upsetting depositors. However. Since the Federal Reserve Bank, and not individual commercial banks, set the reserve requirements and base interest rates, ordinary banks DO NOT COMPETE for customer loyalty on the basis of DEPOSIT SECURITY. So, the risk of losing deposits with reserve rates is no longer at stake. However, if the Federal Reserve Ordinary people can benefit from new credit with J. which to purchase houses, cars & assets like capital for their businesses.. ut they also bear the bulk of Supply through the money nultiplier effect is the costs of both INFLATION and INTEREST PAYMENTS. Small Commercial Banks & Credit Unions (Unfortunately.Itis in eeryone's general interest to have an economy with either NO or incredibly SLOW increases in the cost ef living, commonly called "INFLATION". Expansicons of the noney supply cause the decline in purchasing power of the currency itselt, and that in turn raises the real cost of living and weighs down the production of goods & services, which in tum slows job-creation and lowers overall employment However. t is in the specific, or "special interest". of bankers and politicians controling the creation of money to have relatively HIGH inflation in a Fractional Reserve Banking system. Politicians benefit when the new money goes towards funding favored government programs and into hiding the true cost of foreign debt payments. Likewise, high-level bankers benefit from inflations because they profit the most, both SAVINGS sets the WRO NG interest or reserve rates, ALL banks in the system are at risk of systemic failure by being seriously over-leveraged. Thus, the FOIC and other "incurance" programs were created (in principle) to protect ordinary depositors. But these proprams also introduce MORAL HAZARD to banks which have less concern for risk & potential losses as a result. Since banks know they will keep most of the profits from extremely high leveraging, but be bailed out in the event of significant loss by the FOIC and others (in theory, so as to insulate their account-holders from big risks), the otherwise "risky" behavior mostly counteracted by the REPAYMENT of loans. As loans are paid back, the money created on the books in the form of new credit disappears but new meney from interest stays with the bank] People of bankers suddenly becomes relatively "safe" instead. directly in the form of salaries and indirectly from investment returng, by being the first people to control how that NEW MONEY is used) Created by Sean WMalope Citizen www.citienamedia.com

The Cost & Politics of Economic Inequality

shared by rmmojado on Dec 28
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The biggest problem with runaway inequality, however, is that it undermines the unity of purpose necessary for any firm, or any nation, to thrive. People don't work hard, take risks and make sacrifice...

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