Irving Fisher Quotes

Commercial banks - that is, fractional reserve banks - create money out of thin air. Essentially, they do it in the same way as counterfeiters.

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.

The modern banking system manufactures money out of nothing.

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

Tangible currency (coins and dollar bills) together make up less than 3 percent of the U.S. money supply. The other 97 percent exists only as data entries on computer screens, and all of this money was created by banks in the form of loans.

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.

The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending.

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.

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.

There is no limit to the amount of money that can be created by the banking system, but there are limits to our productive facilities and our labor supply ...

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

The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.

If there were no debts in our money system, there wouldn't be any money.

It should be clear that modern fractional reserve banking is a shell game, a Ponzi scheme, a fraud in which fake warehouse receipts are issued and circulate as equivalent to the cash supposedly represented by those receipts.

Having examined the nature of fractional reserve and of central banking, and having seen how the questionable blessings of Central Banking were fastened upon America, it is time to see precisely how the Fed, as presently constituted, carries out its systemic inflation and its control of the American monetary system.

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.

First reason is, it's not authorized in the Constitution, it's an illegal institution. The second reason, it's an immoral institution, because we have delivered to a secretive body the privilege of creating money out of thin air; if you or I did it, we'd be called counterfeiters, so why have we legalized counterfeiting? But the economic reasons are overwhelming: the Federal Reserve is the creature that destroys value.

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.

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.

And let the Fed sell bonds to bring bank reserves back down to required reserve levels, so we have restraint on bank lending and bank issuances of liability.

Money is the kind of instrument which is very speedily produced.

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

The banks have accounts with the Fed, much the same way that you have an account in a commercial bank.