Fractional reserve banking system

                  Photo Credit: Metro Forum

Money is created in the United States thanks to the national reserve banking system. When this process happens, the government obtains a debt with the reserve, because this money was created out of empty air; of nothing. The government acquires the amount of money they have asked by giving the reserve papers called bonds; so it is like and exchange between this entities. After all this process is done, the government gives the money to different banks to store the money or use it with people and organizations. The only rule for the banks is to keep that 10 percent of money that they have received from the government.

This system is based on loans that the citizens or companies must pay to the banks who gave them money. This means that interests are added because the bank needs to make some money. In order that this system works efficiently is that someone needs to get to bankruptcy, because if this no happens more money must be created to pay all this loans. This will cause more inflation in the world and the money will lose the value that have in that determined moment. In conclusion, this system is created to make people lose money so the government can pay the initial debt that they acquire.