The Legal Lie Banks Tell You
The money you deposit in a bank, isn’t in their vault. It’s not in a vault across town. It’s not in a vault at your bank’s headquarters either. It’s not in a vault at all. In fact, outside of a computer, your money doesn’t even exist. It sounds weird, but that’s how most banking systems in the world are set up today. It’s called Fractional Reserve Banking and it works like this... When a person deposits say, P10,000, into a bank, that person believes their money is still there. After all, their account balance still says P10,000. But the truth is, the banks are lying to you. They are legally allowed to loan out 90% more or less of your deposits to other customers and STILL tell you that your P10,000 is in the bank. And This is the Real Dangerous & Scary Part ... Of that P10,000 deposited, we know the bank can lend 90% of that to other customers. That’s P9,000. So say a person borrows that P9,000 from your bank to buy a Cell phone. The borrower leaves the bank with P9,000 ca