How Banks Use Your Deposits to Fund the Wealthy
How Banks Use Your Deposits to Fund the Wealthy
Every time you deposit 1,000 rupees in the bank, they somehow manage to turn it into something much bigger. The same money can be used to fund a house, a company, or even an investment, while you think that the cash is sitting safely with the bank. Here's how the whole system works.
The hidden banking system: How billionaires use peoples’ money
A lot of people remain in poverty because they do not understand the inner workings of the modern economy. The financial system works in such a way that it allows the rich to make money out of other people’s deposits.
Understanding how banks operate with your deposits
When you go to the bank and make a deposit of, say, one hundred thousand Rupees, the bank does not keep this sum in its vaults. Only ten percent of your deposits are held by the bank, while the remaining ninety percent are relent to other clients, who are usually well-off individuals.
When you go to your bank and check the balance, it will show that you still have one hundred thousand Rupees on your account, while in reality, you only have ten percent of that amount. The other ninety percent of your deposits are used to fund other people’s ventures, which are mostly made by the rich.
Who gets the ninety percent?
The critical thing to realize is that the ninety percent that the banks relent to others are always directed to the same people. Those who benefit from the banks’ loans are wealthy individuals and corporations.
Wealthy people and how they use the money
Once the loan is issued to the rich, they start using the money to make themselves even richer. There are various ways in which the wealthy can grow their capital, such as:
- Buying real estate
- Investing in the stock market
- Purchasing other companies
- Expanding their business
Conclusion
The conclusion that can be drawn from the information provided above is that the capital that funds the rich’s ventures comes from middle-class people’s deposits. The banks are the ones that immensely profit from such transactions, as they earn money on the interest rates of the loans they provide. The banking system enables the rich to continue making more money while the majority of the population remain in poverty.