A video of this introduction can be viewed here:
In the main segment, he opened the show with the definition of the system. Reading from an IMF working paper, "The shadow banking system is a non-banking institution that includes hedge funds, money market funds, pension funds, insurance companies, large custodians like the Bank of NY, State Street (brokerage firms) etc. The funding is typically associated with non-banks (which means security lending transactions)
This is topic that caused quite a stir recently as many banks have become insolvent but on the surface seemed health and solvent. Deep down the bank may be much further in dept than they appear at a face value.
He went on to say, "This is a non-bank bank, it's difficult to track and the funds and the money of the shadow banking going on and off the accounting books so what they're reporting on the commercial bank level isn't really accurate because all the major institutions and commercial banks deal in shadow banking underneath, they set up finance companies."
Charles Vance pointed this involves fractional banking, where banks are lending money "on paper" up to many multiples in IOU's. He used the example in stating that if the bank shows a balance sheet of $1,000 it can lend up to 27 times that, lending out a total of $27,000. As loans began to collapse the system shows it's inherent flaws.
A video of this in-depth explanation can be viewed here:
Mr. Sacka also gave many examples of important U.S. Statistics that the average American should be aware of and frequently posts this information on his website and blog. His website features many interesting videos providing historical insight into the power of gold and silver, information on how to protect the IRA and 401K with precious metals and the Wealth Transfer Archive where all his appearances on the show can be viewed.
About Terry Sacka
Terry is a financial analyst and accredited asset management specialist (AAMS) at Cornerstone Asset Metals, a private bullion dealer located in Jupiter Florida. The company enables investors, both large and small, to use metals such as gold, silver, platinum and palladium as an effective hedge for their retirement accounts against inflation. The company mission is to put people back in charge of their wealth through tangible assets that have been used as a medium for exchange since the dawn of civilization.
For more information visit the company website at http://www.cornerstoneassetmetals.com
Cornerstone Asset Metals 601 Heritage Drive, Suite 104 Jupiter, FL 33458 (888) 747-3309