The entire process of creating Bank money to borrowers so simple that the mind just does not want to believe it. We know that money is created by the state. But we don’t know what their banks are also create. Most of us think that the loan the Bank gives the money to the Bank depositors have trusted, the person thinks it is, but it’s not true. The Bank creates new money specifically for a loan. They are not even from the income of the Bank, not the depositor’s money, and the debtor signed the document promised to return them. Signature, naturally obliges the debtor to return what he took plus interest. Otherwise he will lose all his property. That may be the key. It is the duty of the debtor to the Bank. And this signature is that it requires the Bank and the Bank makes a simple focus, he writes the amount to the account of the debtor.
Here is the story how was born on the banks. Once upon a time, as money was everything. Clothing, food, beautiful stones. But gold and silver are very beautiful and easily handled. Jewelers began to promote trade, collecting coins as standard. But in order to have somewhere to store their gold with the goldsmiths got the idea to keep it protected. And soon all the townspeople began to bring him their gold under protection. Before the loans the goldsmith passed his store interest and receive a small income from this business. Time passed and the jeweler noticed that the depositors never came to get their savings all at once, because the ious, brave, deposited gold people used in everyday life, for a place of gold. It is much more convenient than carrying and counting gold. And at that time the jeweler has a new business. He gave a loan, but not the gold and the ious. And his business flourished. Then he came up with even better idea. He knew that none of his investors do not require the gold back. He was therefore able to give people ious for Deposit of foreign gold, and not just his. After all, even if the investor will demand their gold, then what difference is it whose his gold? Hence already implies more income. Among the residents are rumors about that the jeweler (and now banker) uses the gold of his depositors. They gathered and told the banker that I wanted to see their gold. The banker showed them that all the gold on the spot. But instead of take their gold, they demanded that the banker would take them in the proportion paying part of the interest. And then there was banks. It seems that this is a way to meet the demand for loans.
Bankers are paid a small percentage of their depositors, and the loans were given at a higher percentage, the difference in the interest covers expenses, and amounted to income of the Bank. But modern banks are very different.The banker was not very happy with what he has to pay interest to depositors. But at the same time, the demand for credit grew significantly. But there was one problem. The ability to lend was limited gold reserves that were stored in the Bank. And then the Banker came up with a brilliant idea. Since in addition the banker no one looks in the box, you can give ious for non-existent gold!