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I've been bitching about the fractional reserve banking system for years... and even a few times on posts here... It's fucked up... I didn't bother actually looking at the links but I hope it talks about the concept of a "central" bank as well which you didn't mention in the original post. A central bank will loan the funds at the same ratio to its other banks... those in turn loan the funds to yet MORE banks and the money multiplies before, yet again, the cash is loaned out to individuals and companies.
That's why when a large amount of people try to withdraw funds, the bank collapses... it simply can't produce the money it owes.
And the really REALLY fucking FUCKED UP part is fucking FDIC insurance. When fractional reserve banking first came about you would have had to be fucking high to keep your money in some place like that. That's where FDIC comes in... our government will fucking guarantee that you'll get your monies back (up to a certain point, obviously).
Our government facilitates this bullshit...
THIS is the shit they should be teaching in school... not fucking calculus and advanced trig... Fuck I'm a god damned programmer and I don't use that math... well very, very rarely but... it's a very limited subset of people who need to understand advanced mathematics. EVERYONE should understand the fractional reserve banking system...
/endrant
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