Hi Kerry,

Thanks, as always, for sharing your thoughts!

The reason I say that banks create money out of thin air is because the money they're introducing into the economy isn't backed by anything of "real" or intrinsic value. Yes, the initial recipients of money/debt are creating things of "real" value (whether in the form of goods or services), but banks aren't backing that money/debt with anything that can inherently limit the creation of more money/debt.

In theory, this allows banks to produce a near- infinite amount of money -- which is, in fact, what they've done. It's estimated that more than a quadrillion dollars worth of money currently exists in the global banking system and all asset classes (exacerbated of course, by the existence of derivatives). Now, is there really a quadrillion dollars worth goods, assets, and services on the planet? I truly doubt it.

For example, the amount of precious metals sold on COMEX is 20x greater than the amount of precious metals that physically exists. In the case of $25 silver, this has created a severe disconnect between the price of the metal and its physical availability.

Creating money without actual tangible items to back it up leads to a situation in which resources are outstripped at an accelerating pace because there is more money in circulation than there are goods and services to support the amount of money in circulation. Money should always reflect the amount and value of goods, services, and resources available. It should be created at an organic pace that matches the actual growth of resources, and not dumped into the economy in trillion dollar batches in a short period of time.

When there's a disconnect between the amount of money being created and the amount of resources available -- whether silver, real estate, or homes -- we find ourselves in the situation we're in now: extreme inflation and rapidly depleting resources that are funneled to those with the most money.

Hope this makes sense?