… well, Chris Ferrrara knew, because that’s where I discovered this little oddity on my way to finding something else.
Did you know that according to British Common Law, money deposited in a bank is not your money? A bank deposit is not a “bailment” (an entrustment of your property to the bank for safekeeping) but rather an “investment” in the bank.
This bit of common law is why “fractional reserve” banking is legal. Banks can legally lend out many multiples of money they have on deposit. If a bank has $100,000 on deposit, it can loan out nine times that, or nearly a million dollars. This fractional reserve system allows banks to create money out of thin air.
The fractional reserve system is the government-sponsored ponzi scheme that is the basis for the various housing and property bubbles in our history. But I had no idea that it was rooted in British common law saying that bank deposits were investments in the bank!!!