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NOTE What is fractional reserve banking?

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Commercial banking, which is tied up, not just this question of borrowing money and lending them out, or lending out your profits.

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Commercial banking is also heavily involved in what's called fractional reserve banking, which I call fraudulent reserve banking,

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where the bank which originally promised to keep the gold, say, which is deposited, deposit banking, promised to keep the gold so that you can demand it at any time.

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It's like a warehouse. In other words, the original deposit banks were warehouses.

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Money warehouses, it's like you keep your chair or your watch in a warehouse and get a ticket for it and you can redeem it at any time.

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In a similar way, you have places which keep your gold or silver coins or bullion, and they give you a warehouse receipt, you can redeem it anytime you want.

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Unfortunately, over the centuries, what happened was the bankers began to realize that this was a good thing here.

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If we take some of this gold and lend it out, there will be none the wiser.

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And so this is of course what we would call embezzlement in technical legal jargon.

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And either they would lend the gold or silver out, or else in a more sophisticated variant of this, they would print fake warehouse receipts.

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In other words, warehouse receipts not backed by gold or silver and lend them out.

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This is essentially fractional reserve banking.