Fractional Reserve Lending

Dear Sir or Madam,

I have been doing research on the banking system and I have several
questions.

I have been doing research on the banking system and I have several
questions.

1.The UK banking system operates under the Fractional Reserve
model, is this correct? If not what system/model is used?

2.What is the fractional reserve that is being used at this time?

3.As I understand the system the banks only need to keep in reserve
the fraction that is required of the. For example if the fraction
required is 1/10 or 10% for each £1 that the bank holds in reserve
it can lend out £9. Is this correct? If not what are the rules for
lending money? (Please note that for the following questions I will
be using the 1/10 or 10% as an example as it is the easiest when
speaking on this matter)

4.The reserves are kept by the bank in the form of a deposit to the
bank of England. Is this correct? If not please specify where the
banks keep its reserves?

5.This means that if a deposit of £100 is made, the bank can keep
£10 in reserve and lend out £90. Is this correct? If not what is
the amount that the banks can lend out?

6.If my understanding of the previous question is correct it also
means that the bank can hold the full £100 in reserve and lend out
£900. Is this correct?

7.Because the banks uses this system(Fractional Reserve Lending)
the £900 lent out is simply created by the bank as an entry in the
records or books. Is this correct? If not where does the £900 come
from?

8. If people, companies and the government use this system to fund
mortgages, business and services then it can be said the a
substantial (if not all) of the money in circulation was created
out of nothing more than an entry into the system. Is this correct?

9.If my understanding of the previous question is correct then a
substantial (if not all) of the money in circulation was created as
debt that must be paid back to the banks, and the bank charges
interest on the money that it loans out. But if the bank only
creates the principle where does the money to pay back the interest
comes from?

10.As the loans are paid back the money that was created is
destroyed or cancelled out. This means that the banks must keep
lending otherwise the supply of money disappears. Is this correct?

11.The more the banks lend the greater the amount of money in
circulation and the greater the inflation. Is this correct?

12.If the banks do not make loans the amount of money in
circulation decreases and therefore there is a deflation. Is this
correct?

13.The government does not create money it borrows it and as such,
needs to pay interest on the amount borrowed. Is this correct?

14.Taxes on the people is one of the ways that government generates
revenue, what is the percentage of taxes that go towards paying
debt services or the interest on money that the government has
borrowed?

15.The government borrows more money (which it also must pay back
with interest) to pay the already existing interest that it owes.
Is this correct? If not how does the interest get paid?

16.If my understanding if the two previous questions is correct
then it is impossible to pay back both the principle and the
interest that the government owes. Also if taxes goes towards the
repayment of the debt then it is nothing more than a form of
slavery for the people of the UK. Is this not correct?

Yours faithfully and without prejudice,

J Hoontrakul.

Dear Enquiries, CEU,

Darren Creamer,

As I understand it you have until the 5th of October 2009 to reply
to my questions. After that you are in violation of the Freedom Of
Information act.

I demand answers to my questions and it is your duty to answer
them. If you do not supply the answers by Monday the 5th of October
2009 and the days that follow, I will be reminding you at regular
intervals of you failure to do your duty until you answer these
questions.

I will also be circulating this question and your failure to answer
widely on the internet. I only ask that you do your duty.

Yours sincerely and without prejudice,

J Hoontrakul

Dear Enquiries, CEU,

Mr. Darren Creamer,

You are now officially in violation of the Freedom Of Information
act. Do you need more time? Are you unable to answer my question?
Please respond with the reason for your lack of response.

Yours sincerely and without prejudice,

J Hoontrakul

Dear Mr. Creamer and whom this may concern,

Day four of your violation, I now request and require a legal
reason for your failure to promptly respond with either the answers
to my questions or a reason for your complete disregard of your
duties as a public servant.

Do you suggest that I make an internal review request? Do you need
more time? Regardless a response would be appreciated.

Yours sincerely and without prejudice,

J Hoontrakul

Dear responses, FOI,

In your response you state that "Most of the questions you have
asked do not constitute requests for recorded information."

Just to be sure that I have not misunderstood this statement. I
would like to confirm the following from you as an official source
for future publication:

1. HM Treasury has no record of the current banking model/system
that is the basis of the UK's economy.

2. HM Treasury does not have on record how the banking system
works.

3. HM Treasury does not have on record how money is created, where
it comes from and where it goes when a debt is paid.

4. HM Treasury does not have on record the percentage of taxes that
go towards paying debt services or the interest on money that the
government has borrowed.

As for your answers, I am afraid that they are not good enough.
They do not answer my questions.

I did not ask whether the government has managed to reduce the
percentage of the GDP that is national debt. I asked "what is the
percentage of taxes that go towards paying debt services or the
interest on money that the government has borrowed". May I also say
that 36% of the GDP is debt is nothing to be proud of.

As for the the government achieving its "Golden Fiscal Rule" which
you kindly point out means "the government did not borrow to fund
current(i.e. day-to-day) expenditure, including debt interest
costs". This still means that the "day-to-day" and "interest costs"
can be funded by tax and everything else by borrowing, is this not
correct? Because if it is, it just means that the amount of
interest now owed on the "non-day-to-day" borrowing will accumulate
and the percentage of debt in relation to the GDP will just rise
again in the future.

I have asked relatively simple questions, pointing me to the 2009
budget report does not constitute an answer, nor does referring me
to the index page for a website.

So this time I do expect answers or a confirmation that HM Treasury
does not have the information on record for each of my questions in
itemised form. Considering that many of the questions can be
answered with a simple yes
or an explanation, a short concise one if possible. Otherwise I
have no choice but to make an internal review.

Yours sincerely,

J Hoontrakul

Dear Sir or Madam,

I have been pointed to
http://www.publications.parliament.uk/pa...
by a member of the public. It concerns many of the questions I have
asked, do you still maintain that the questions I have asked are
not valid questions?

Yours faithfully,

J Hoontrakul

Dear responses, FOI, Paul Morran

Thank you for your response. It has been very helpful.

Yours sincerely,

J Hoontrakul