Money and Banks

“Give me control of a nation’s money and I care not who makes its laws.” ~Mayer Amschel Rothschild

Most people believe that they understand how a bank works. They believe that banks take in deposits from customers and in return the bank keeps their money safe and pays them some amount of interest. The bank then takes those deposits and loans them out to borrowers at an interest rate higher than what they pay their depositors. The difference then is the banks profit, right? It’s understandable that so many people would believe this since it seems to be reasonable and makes perfect sense, which is what makes it such a good racket. The banking industry is the biggest lie after democracy ever perpetrated on society. It’s a money laundering scheme of epic proportions created by the central banks of the world. The Federal Reserve in the US, the Bank of England, the Bank of Japan, the European Central Bank, the World Bank, and the International Monetary Fund among many, many others.

In the 18th and 19th centuries banks took gold and silver deposits from customers and provided them with a receipt for their deposits. Then, rather than having to go to the bank and withdraw their gold or silver to buy things, people just used the receipts instead. Easier to carry around and more convenient. These receipts were a medium of exchange that facilitated trade and lowered the transaction’s costs of doing business for everyone. The paper the receipts were written on had little to no value in and of themselves. The value was in the gold and silver that the receipts represented, the real asset they were backed by. So although they were physically trading pieces of paper, they were practically trading gold and silver. This was paper money and it was called a gold or silver note depending on what it was backed by.

But money being backed by real assets was a problem for the government since—like a housewife put on a budget by her husband—it constrained their spending. It constrained their ability to borrow and tax. They couldn’t spend like a drunken school girl with daddy’s credit card so they needed a solution. They needed to unshackle themselves somehow from this insidious “gold and silver constraint” and free up the money supply to meet their unbridled political tastes and whims. You can’t wage perpetual war and build an empire if you don’t have access to the money to pay for it. There are weapons to make, soldiers to train, war machines to build, and foreign politicians to bribe and influence. That shit don’t come cheap and credit cards didn’t exist yet, so they decided to create their own private source of credit that would eventually plunge the US and the world into perpetual debt and economic servitude: The Federal Reserve Bank.

In 1910 six men, Nelson Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip, and Paul Warburg—legislators and some of the wealthiest bankers in the country—met in secret at Jekyll Island, Georgia to draft a bill for Congress to pass (Do you see who really controls Congress?), giving all monetary authority to a central bank run by private bankers. Although this central bank is called the Federal Reserve there’s nothing “federal” about it, it’s not a government agency, it’s all just part of the illusion. Once again the clever use of language to create the reality they want you to see. It’s a fully private bank that has been given the legal privilege of controlling the nation’s money supply and artificially manipulating and fixing interest rates. The FED enjoys a monopoly on money and interest, answers to no one—not even Congress, they cannot be audited, inspected, or regulated. They do absolutely anything they want with impunity.

The Federal Reserve was officially created by congress in 1913 without constitutional authority—so much for the Constitution constraining congress—and without the knowledge of most Americans. The bill had already passed the House and was voted on by the Senate late on December 23rd when the majority of the Senate was home on Christmas break. But since no official recess had been called, the only three members present voted unanimously to pass the bill. President Woodrow Wilson signed the bill into law creating “the creature from Jekyll Island” as coined by G. Edward Griffin in his book of the same title. Isn’t democracy grand?

Most people erroneously believe that the government makes the money—which is true only in so much as the Treasury prints the physical dollar bills and the US mint makes the coins. But those are just proxies, tokens, physical representations for money not deposited in a bank somewhere and represent a small percentage of all money in circulation. Since the creation of the FED, the FED has had a monopoly on actually “creating” money—which is actually just a ledger entry—and the paper token is called a “Federal Reserve Note” (FRN). Look at any dollar bill and you’ll see it written towards the bottom. The paper money is no longer a gold or silver note because there is no gold or silver backing the pieces of paper anymore. They are just pieces of rag paper with green ink and pictures of dead Presidents which are backed by absolutely nothing but the faith that someone else will accept it in trade. Such money is called “fiat money” because its origins are not market based money backed by real assets as was the case with gold and silver notes but rather a governing body simply declared it to be money and enacted “legal tender laws” to enforce their decree. It’s against their “laws” to refuse Federal Reserve Notes as payment, so people have faith that they will be accepted thanks to the backing of the force of government. Take those laws away and the only value of fiat money is to wipe your ass or start a camp fire.

But if FRNs don’t have to be backed by any kind of real asset, if it’s not a receipt for a real asset, if it can’t be redeemed for a real asset, then what is it? Where does it come from? It comes from thin air! It’s counterfeit money created as if by the hand of god miraculously appearing out of nowhere and entered into the bankers’ ledgers. The FED has the “authorization” to literally create money from nothing, counterfeit. Now you know why counterfeiting is against the law: the FED doesn’t want the competition. They don’t want anyone challenging their monopoly on counterfeiting and the power and control their counterfeit ring provides them.

Which means if you can produce a piece of paper that looks enough like the fiat note that someone believes is from the Treasury and fits into their belief system, then you've created just as much wealth as the FED. You don’t need to have any real assets backing it, you don’t have to worry about someone coming to redeem it for gold or silver you don’t have, so you can make as many as you want. There is no difference in value between the one you make and the ones the Treasury makes if people accept them because it’s all just a belief, a hope, an illusion; it’s not real. The real currency is faith, almost fucking religious isn't it?

The value of precious metals doesn't come from their use as money or a belief. They have widespread value even if nobody used them as money, that's why they are used as money. It's not a belief that someone will accept gold or silver in trade, it's a fact despite legal tender laws, not because of them as is the case with FRNs.

So if what the FED does is counterfeiting, how does it launder the newly created money? It can’t just add it to its current account, the books wouldn’t balance. They launder it by loaning it out to anyone it wants; banks, other central banks, corporations, state governments, the Federal government, and foreign governments. It is not constrained by anything or anyone; it can and does create new money at will. Such a debt system of money laundering is effective because the counterfeit money goes out and comes back “clean” in the accounting ledgers. Clean in the sense that the interest income is justified and accounted for in the ledgers via financial transactions.

The implications of this system are clear, namely that all money in circulation is debt. Meaning that every dollar is money borrowed by someone which needs to be paid back with interest. But if all money is debt, where does the money to pay the interest come from? More debt! It’s a counterfeit monetary system of perpetual debt. If there were no debt there’d be no money in circulation, so the bankers have to keep the debt going, they have to keep people borrowing, they have to keep the juice flowing. Ever wonder why when you were a senior in college you received all those “pre-approved” credit card applications from banks even though you hadn’t graduated yet, had no job prospects and didn’t expect to have any anytime soon with your sociology degree? Ever wonder how the banks could be so careless and risk their depositor’s money on an unemployed college kid? Well, they didn’t, they were offering to “loan” you new counterfeit money that would be created on the spot every time you swiped your card. No need for deposits when you can fabricate it out of thin air as needed.

That’s how credit cards work. There is no account of money with the card owner’s name on it that sits in the bank waiting to be spent. Every time someone uses a credit card brand new money is created by the bank that must be laundered, paid back with interest. That’s why credit cards have become so prevalent in society and so easy to get and use, they facilitate the debt process that creates money for the banking system. Normally borrowing money is something you do when you don’t have enough money to meet your needs. It’s a measure of last resort and there was a time when it was seen as shameful if you were so financially irresponsible that you had to ask the bank for a loan. It’s not something you should do to pay for a Big Mac at McDonalds.

But for decades the financial industry has engaged in their own social engineering campaign that has turned being in debt into a virtue and is even considered a status symbol. Convincing consumers that borrowing often, even when not necessary, and paying it back is the sign of financial responsibility. That their credit cards represent financial freedom and success rather than the shackles that they are. They offer a “Gold Card,” a “Platinum Card,” giving debt the illusion of wealth and stature. The “VIP Card” for the really big debtors to impress the girls and get laid because being in debt is sexy but being a VIP debtor is hot! Most stores and other point-of-sales accept credit card payments, making it easy and convenient to pay for almost anything. The easier it is to pay, even if it means taking a bank loan to pay for dinner and a movie, the more people will borrow and go further into debt. If you don’t have the money to pay for dinner and a movie for you and your girl you shouldn’t be dating.

And like any religious faith, there has to be a way to shame people who “sin” in order to control them, so they’ve created the “Credit Score.” A meaningless number for consumers to mindlessly worry about even though nobody knows how it’s calculated and any business or bank can make a report to a credit agency for anything whether it’s valid or not and the consumer has to refute it lest his “Credit Score” gets too low and embarrasses him. People actually brag about their “Credit Score” at parties and in casual conversation like it matters. The system is set up such that if you don’t borrow and spend then your credit score is just as bad as if you did borrow and spend and didn’t pay it back. Did you get that? If you are financially responsible and live within your means, your credit score will be just as bad as someone who’s financially irresponsible and lives beyond his means. Experience shows that those with the highest credit scores are those who have been in perpetual debt, borrowing increasingly larger amounts and paying it all back religiously with interest. Pretty slick huh? Works like a charm on the useful idiots.

The truth is that contrary to popular myth, your high school civics class, and what your parents told you deposits are not used to make loans, banks do not need other people’s money, loans create deposits. Sounds exactly the opposite of what you always believed right? Isn’t everything? The counterfeit nature of central banks around the world is public knowledge, nobody refutes it; they just keep it to themselves, and when challenged they keep the explanation as muddied as possible.

Alan Holmes, a former senior vice president of the New York Federal Reserve Bank, wrote in 1969, “in the real world banks extend credit, creating deposits in the process, and look for the reserves later.” Vítor Constâncio, Vice-President of the European Central Bank (ECB), in a speech given in December 2011, argued, “In reality the sequence works more in the opposite direction with banks taking first their credit decisions and then looking for the necessary funding and reserves of central bank money.”

Depositor’s money is only used to meet the reserve requirement of the loans they’ve made. “Legally” banks need to keep money on hand to meet the needs of the checks and debit card payments their customers make. So if the reserve requirement is 10% and the bank creates $100,000 in new money to make a loan, then they must have at least $10,000 in reserves so they try to attract new depositors to meet the reserve requirement. In practice these reserves serve no purpose except to meet “legal” requirements and a place for people to put their money to facilitate payments. They have nothing to do with how much a bank can loan out except in as much as they need to “legally” meet the reserve requirement, but there are ways around that as well. They can borrow from other banks, they can borrow directly from the FED, or they can just ignore it altogether because, so what? They control the politicians—not the other way around.

This is exactly the kind of open-ended monetary system the government wanted when they created the FED. The bankers get rich by keeping society in debt and controlling them with that debt and the politicians have an unlimited well of money available to “borrow” and spend to finance their empires. It also allows the government to increase taxation since people can pay taxes with their credit cards! Voila! See the whole circle now?

Economically this debt-based monetary system of counterfeit money systematically destroys the currency and the economy from the inside out. As the FED creates more and more new money the value of each existing dollar decreases; this is inflation. The inflated money supply then leads to rising prices for everyone which is an inflation tax imposed on society by the FED. This tax continues to grow with the money supply until a currency crises ensues and the money is worthless leading to economic collapse. Historically this has happened many times when governments printed paper money writ large to finance war, empire, and their own wealth. The “founding fathers” printed the Continental dollar into oblivion to finance their military coup in 1776. The Weimar Republic in Germany did the same with the Deutsch Mark to finance WW I as did the Communists to finance their worker’s paradise—and Venezuela is doing so now to prop up their socialist utopia that’s falling apart. Rinse and repeat.

The entire economy is built on an illusion of wealth; more concerning is how many other countries use the US dollar as their principle form of currency or as a reserve currency—meaning that their economies are built on that same illusion and when the US dollar collapses, so will a lot of the world’s economies, plunging mankind into an economic dark age. So in an effort to maintain the illusion the politicians have to engage in a constant media campaign extolling the wealth of the nation. That the US is one of the wealthiest countries in the world but in reality, economically, the US is one of the poorest, wealth isn’t created from a printing press. The government owes $21 trillion in debt with another $100 trillion in unfunded liabilities. Consumers are another $4 trillion in debt with another $1.5 trillion in student loan debt. The US doesn't produce anything of any quality so it has to import it so the trade deficit is $500 billion/yr. Poverty, illiteracy, obesity, drug addiction, crumbling infrastructure, violent crime, perpetual war, devaluing dollar. Over 50% of Americans now receive some form of assistance from the State. I don't think “wealthy” means what people think it means. Rinse and repeat.