Amount of money in circulation

Dear Her Majesty's Treasury,

According to HM Treasury the fractional reserve banking stands at
8% in accordance with "Basel Committee on Banking Supervision".
Also most of the money in the UK is created by private commercial
banks using fractional reserve lending.

When money is borrowed and has to be paid back with interest. I
understand that the capital borrowed was created by fractional
reserve, however, it appears that the money required to pay back
interests was never created.

In other words, there is not enough money in the entire system to
pay back all the debts plus the interests.

Do you have any documentation on how this situation is dealt with?

How and when did the government lose control of money creation?

If there is not enough in the system to pay both capital and
interest; is it not then inevitable that people will lose their
homes and/or property? Surely the government realise that booms and
busts (what is known as the business cycle) is built into the
system.

Are there any documents that tell of how the government deals with
this built-in crash cycle?

Yours faithfully,

J Hoontrakul

Dear responses, FOI, (Paul Morran),
Ref: 10/544

I do not think that you understood my question or perhaps I was
unclear.

I am aware of the dangers of a bank run however this is not the
issue I am addressing. Fractional reserve allows banks to lend
money created by nothing more than a book entry, it also charges
interest on this money/credit. I am also well aware that the Bank
of England cannot created money from nothing, if it did the
government would not have to borrow money.

Put simply, a huge amount of the money, if not most of it, in
circulation was created by private banks via the fractional reserve
system. When a credit card is used to pay for goods, the money
enters into circulation, money that never existed before it was
spent.

This "new" money (as well as any other loan via fractional reserve)
gets value from the already existing money and devalues it, also
known as inflation. However, this money then has to be paid back,
with interest. It is common to borrow more to pay off existing
debts or interests, again fractional reserve is used to generate
this, compounding the problem.

Also there is also the issue of the money supply itself, because
much of the money in circulation was created in the form of a loan,
when it is paid back it is removed from circulation. Except for the
interest, which then feeds the fractional reserve system. So more
loans must be given out just to keep money in the system.

My question is a simple one. As the private banks create money via
fractional reserve, much of it in the form of loans, payable with
interest. Where does the money to pay the interest comes from?

Is there enough money in circulation to pay back the loans AND the
interest?

IF there is not enough money in the system for both capital and
interest repayments, is it not inevitable that in this system
people will lose their property?

Does it not also mean that it is in the bank's interest to keep
giving out loan just to collect interests to feed the fractional
reserve system?

Therefore under the fractional reserve system perpetual debt and
economic booms and crashes are built-in to the system. Is the
government aware of this fact?

Are there any documents of minutes of meetings that mentions this
fact?

Finally how and when did private banks gain control of the money
supply?

Yours sincerely,

J Hoontrakul

Dear Her Majesty's Treasury,

Could I have a response, please. You are now overdue.

Yours faithfully,

J Hoontrakul