Chapter nine from the book:the free man - Evolutionary psychology, the study of the brain and the understanding of the mind"
This chapter deals with the economic system in Israel and Western society. What does that mean and to say that his preoccupation with the soul, consciousness, free will?
beginning, the matter that will be described here seems so delusional and fictional (even though it is based on publications of senior economists, see links and sources), until most people react to it with disbelief and disregard. The reasons for this reaction are the well-known psychological phenomena calledcognitive dissonance" and "Cultivated ignorance", which were described earlier in the book.
Second, this is a wonderful example of information and subject that are not taught in the education system, even though their influence on our lives is enormous.
Third, this is a wonderful example of how the competition and the drive to rise in social status lead to the cynical exploitation and enslavement, under the protection of the law, of one large group by another small group, in a supposedly enlightened, progressive, and free society.
quarter, the desire for freedom, as presented in this book, is suppressed by mechanisms to create modern slavery, as you will see below.
And to the point, Do you know the answers to the following questions?:
1. Where does the bank get the million shekels it gives you as a mortgage loan?
2. Who produces most of the new money in the country?
3. What does the bank do with the loan fund money that you pay back every month after you worked hard to earn it?
4. What is the real reason for inflating apartment prices, car prices, and the price of life in general? (In contrast to the nonsense heard from politicians and other commentators of Nablus and the Arabs).
Here are the answers:
First, remember that most of the money in the financial system is virtual, that is, it exists as numbers in the banks' computers and is not backed by bills or coins.
1. The bank invents these million shekels from somewhere, out of thin air, as new money, and puts them into your account with the click of a button. The bank of course charges you interest on the loan of this money.
2. The commercial banks produce most of the new money in the Western world and in Israel. Why do you need new money? Because the population is growing and the economy is growing and the tangible assets are multiplying and the amount of money available is not enough to sustain the process.
3. We will find out the answers to 3 and 4 later.
Is this all legal? Yes, absolutely. The method is called fractional reserve banking and is based on the reserve ratio, capital adequacy and liquidity obligation. All these are concepts that no one has ever taught you, apparently on purpose, and they are taken from the Bank of Israel law and the instructions of the supervisor of banks (see links to sources).
How does the method of creating the new money by the banks work??
The focus of the matter is that the bank is obliged to keep in practice at any time only 10% of the funds it gave as loans. See a simple explanation in the figure attached below: "Partial reserve banking". In fact, the truth is even more amazing, the bank invents almost all the loan amounts it gives, as new money at the click of a button. Read extensions in the quoted article: "The study that will make you forget everything you know about money". What does the bank earn? Interest you pay him on the money you borrowed - tens of billions of shekels a year, for the benefit of the shareholders. But more importantly, the large amount of money they borrowed inflates the prices of apartments, cars, and more, and leads the general public to take more and more loans to finance the purchase of the apartments that have become more expensive, the cars that have become more expensive, and more and more, and eventually rolls over to a small group in the population.
The banks also lend huge sums to their associates, thus strengthening the economic power of a small group in the population.
Now please do yourself a favor and say: "Okay, let's assume for the sake of discussion that what has been said so far is true and not a conspiracy theory, how does that affect me?" Let's see:
So why does an apartment that cost a million NIS a few years ago cost two million today??
The price of apartments is determined like the price of tomatoes, like the price of cars, like the price of televisions and like the price of everything else, According to demand and supply. Why does an apartment cost two million NIS? Because there are enough people who can and are willing to buy it at that price. Who are these people? you. Where did you get the money to buy at this price? From the loan you took from the bank (it's called a mortgage). How much effort did the bank put in to earn the money it gave you as a loan? The effort required to press a few keys on a computer and invent two million shekels out of thin air, from fairy dust, as new money, legally.
You got the point?
And now for the most amazing thing: when you return a loan to the bank, there is a separate entry for the principal and the interest. The interest is recorded as the bank's profit. What happens to the funds of the fund? They are deleted from circulation, destroyed, evaporated into the air (see source: "The amazing answer to what the bank does with the loans that are returned to it"). That is, you borrowed a million shekels and returned a million shekels of the fund money (without the interest), the registration in the bank's computer was reset and this money was deleted from circulation.
And why do such a thing to the money you worked hard to earn?
The first reason is that the principal funds of a loan given by the bank cannot be considered profit of the bank after you pay them back (the interest funds are the profit). The second reason is this: if you sell cucumbers, do you want the market to have a lot of cucumbers or a few cucumbers? Obviously, a little, the higher their price.
The bank sells you money, and its interest in the market will be relatively little money. And so what will the good people be forced to do? Very true, to take loans, through which almost all the new money in the country is produced.
How long has this method been working successfully??
many many years. You are most likely second or third generation modern slaves.
And for those who had trouble being convinced, it is recommended to watch the movie: "Saving Capitalism" whose main character is Robert Reich, the former Secretary of Labor in the US government.
The conclusions according to Reich are clear:
• The majority of the population is in economic distress and actually serves an upper millenium that is getting richer.
• This situation is made possible over time through the activity of the government and the legislative bodies: laws are passed that protect and encourage the activity of the capitalists at the expense of the ordinary citizens. Legislation that goes against the interests of the capitalists is not allowed.
• Capitalists control a significant part of the politicians through the funding that is transferred to them.
Does this situation sound familiar to you??
More clear conclusions according to Reich:
• The politicians who maintain the system for years are either ignorant or corrupt or a combination of the two.
• Like the electorate that chose these politicians.
• There is probably no difference in this matter between conservative and Republican politicians, left and right, religious and secular. (Although in the third chapter of "The Silver Tray" it is explained how the great deterioration in Israel began with the rise of the right-wing to power).
And what can be done?
• First, without understanding the causes of the problems there is no chance of changing anything, as we saw from the poor results of the housing and cottage protests.
• Second, you can vote in elections for politicians who have an opinion on this matter (you probably won't find any, they lack understanding in this matter as in many other matters, and also rely on the ignorance of the public and its tendency to focus on vanity).
• Thirdly, there are other possibilities to correct the distortion, if the electorate bothers itself and learns the reality.
Sources for this chapter:
Werner, Richard A. Can banks individually create money out of nothing? The theories and the empirical evidence. International Review of Financial Analysis, 36 (2014), 1-19
The study that will make you forget everything you know about money, Beaz Hirsch 31/07/2015
This is how the method of the banking system works - the complete guide, Uri Yaron 09/06/2015
Everything you wanted to know about how money was created in the world, Eliezer-Ben-Yonathan
Imaginary money: the banks are simply thieves 02.12.11 Dr. Kraus who are Oshi
"Strip Private Banks Of Their Power To Create Money": Financial Times' Martin Wolf Endorses Positive Money's Proposals For Reform. April 24, 2014
The amazing answer to what the bank does with the loans that are returned to it, Uri Yaron 30/06/2016
Fractional Reserve Banking, Eco-Wiki
Bank of Israel - Liquidity Obligation, 2012
The reserve ratio, Wikipedia
Capital adequacy, Wikipedia
More of the topic in Hayadan: