Skill 5 examines the economic instability created by the fractional reserve banking system. This system is based on the premise that if you hold a certain amount of assets, you can lend money on interest to make even more money.
Fractional reserve banking
In the fractional reserve banking process, you don’t have to produce anything by way of goods or services. Instead, you can simply lend money to someone who does and make more money off the interest. This global model of finance, however, is an unsustainable closed-circuit system. It ensures that the rich get wealthier, while ‘real people’ have to work harder to earn more.