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Where does water come from, and where does it go? For that matter, where does money come from, and where does it go?
I often ponder these questions, resulting in a host of thoughts, because water and money are expansive and varied topics. For today’s musings, I consider the education process in America, and I wonder how much attention is afforded money– its meaning and impact on society. The same can be said about water, in that scant focus is given to this basic life necessity, since, for the most part, it is amply provided. I recognize that certain areas of the USA live in water stress or wealth lack (or both), yet has that translated into devoting educational efforts towards water awareness and source conservaton, or money knowledge?
So, how many high school graduates, or adults for that matter, understand fractional reserve banking—the standard by which our banking system functions? And when I witness a cigarette-smoking pedestran discard their butt in a storm drain, is that consciously not littering, or unconsciously dirtying municipal water systems? When it rains, where does THAT water pour?
Wikipedia.org provides a simple definition of our system of money.
“Fractional-reserve banking is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all these deposits upon demand.”
A bank’s mandate is to collect deposits and lend money, and they obviously don’t perform these tasks for free. Rather, interest is charged on loans, while a smaller rate of interest is offered on savings deposits. Ah, if today’s banks were only that simple.
In terms of the fractional reserve, a bank is able to lend 9x the amount of deposits, so your $1,000 deposit “stored in the vault” can create a $9,000 loan. Expand that to the volumes of people and businesses that deposit money in banks, and then consider when a bank lends money, often times those funds are steered in the direction of another bank, whereby that bank lends 9x the received amount. The exponential effect drives our economy, and the economies of the world.
As for our precious H2O: Just do 10 minutes of research on water infrastructure, or water treatment processes and you will discover many things. In developed societies, how is this vital, life-sustaining nectar distributed? I wonder if policies would shift if more people understood the process and policy of water distribution.
Any person with a television knows the power of money. If current practice continues, in terms of how we treat our planet and its constituents, dominance will be in the hands of the water bearers. Simply because it’s a distant possibility does not allow for ignorance today. This potential paradigm is completely avoidable, and we have the compassion and brains to shift our life approaches. The missing ingredients are knowledge and awareness.
Our education system can provide a great starting point for future decision-makers.
Cross-post from Daily Kos