When you walk into a bank and sign the mortgage note, the bank monetizes the debt on the spot. In other words, your pledge is as good as gold (maybe), but the bank turns it into currency that didn’t exist until you promised to create enough value in the marketplace to pay back the currency. The bank doesn’t have the money to lend, it creates money this way up to the fractional limit.

Thus, the law gives the bank standing to create the money to buy the house with. Under the law, the bank then owns it. But the question arises; if the economy is collapsing because the banks found a way around the fractional limit (they did), do they really have the moral right to keep the property? I suppose equity dictates we must all suffer equally. But it’s still profoundly wrong that banks should own all the property by virtue of entering a pen-stroke into their ledger book, while the debtor may have poured years of his life into paying the interest and a pittance against principle.

When an inflationary fractional reserve system crumbles, the banks end up with most of the currency and title to most of the property.

So I cry no tears at the plight of the banks. They’ve managed to own most of the country through this ruse, and now they’re bankrupting it too. And taking the property.