Credit Creation Quotes

Some people think the Federal Reserve Banks are the United States government's institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers.

The process by which banks create money is so simple that the mind is repelled.

I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people

A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.

The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented.

Modern money is almost altogether credit money.

There is another method of obtaining money... It does not presuppose the existence of accumulated results of previous development, and hence may be considered as the only one which is available in strict logic. This method of obtaining money is the creation of purchasing power by banks. The form it takes is immaterial.

When banks place credits into your account, they are merely pretending to lend you money. In reality, they have nothing to lend. Even the money that non-indebted depositors have placed with them was originally created out of nothing in response to someone else's loan. So what entitles the banks to collect rent on nothing? It is immaterial that men everywhere are forced by law to accept these nothing certificates in exchange for real goods and services. We are talking here not about what is legal, but what is moral.

The modern banking system manufactures money out of nothing.

In truth, money is not created until the instant it is borrowed. It is the act of borrowing which causes it to spring into existence. And, incidentally, it is the act of paying off the debt that causes it to vanish.

And what did the banks do to earn this perpetually flowing river of wealth? Did they lend out their own capital obtained through investment of stockholders? Did they lend out the hard-earned savings of their depositors? No, neither of these were their major source of income. They simply waved the magic wand called fiat money.

Then came the second Amsterdam discovery, although the principle was known elsewhere. Bank deposits...did not need to be left idly in the bank. They could be lent. The bank then got interest. The borrower then had a deposit that he could spend. But the original deposit still stood to the credit of the original depositor. That too could be spent. Money, spendable money, had been created. Let no one rub his or her eyes. It's still being done-every day. The creation of money by a bank is as simple as this, so simple, I've often said, that the mind is slightly repelled.

Maturity transformation is a central part of the economic function of banks and many other types of financial intermediaries.

The whole profit of the issuance of money has provided the capital of the great banking business as it exists today.

Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess

If you've taken Econ 101, you know that the quantity of money rises only when the banking system makes a net loan.

If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve.

Banks lend by creating credit. They create the means of payment out of nothing

The threshold question: Will banks continue to exist? The answer is yes, because society will still need the two essential functions they provide: mobilization of capital from providers to users, and facilitation of payments for goods and services.

Every dollar of a bank that is issued beyond the quantity of silver and gold in the vaults represents nothing and is therefore a cheat upon somebody.

Credit markets were originally created to serve human needs; to provide businesses and individuals with capital to start or expand businesses or fulfill other financial needs.

In fact, without any exaggeration, the current mechanism of money creation through credit is certainly the "cancer" that's irretrievably eroding market economies of private property.

Whether a bank lent one million, ten million, or a hundred millions, they would not permanently alter the market rate of interest; they would alter only the value of the money they issued.