Where
Does Money Come From?
You have just gotten paid $100 for some work you did. You went to the bank and put that $100 in a savings account.
To illustrate my story, we must now agree that the ONLY money in the Bank is the $100 you just put there.
The Bank now opens its Loan Window and announces that it has money to loan.
That makes me happy because that is what Banks are for, to loan money. So I go over to the Loan Window and ask to borrow some money to buy a house. I ask the Bank, “How much money can you loan me?” The Bank answers nine hundred dollars.
If the only money in the Bank was the $100 you put there, where did the nine hundred come from?
Federal Banking Regulations require banks to hold ten percent of its assets. Since 100 is ten percent of 1,000, the Bank loans me nine hundred. Where did the 900 come from? Out of thin air!
OK. I borrow the $900 the Bank just created out of thin air and sign a contract stating that I will pay the Bank the nine hundred back and I will pay an interest on that money the Bank just created out of nothing. But better than that, I also sign a performance contract that I will pay the Bank once per month for the next fifteen years or they can come and take my house!
That’s why Banks like the Debit Monetary System.
WHY GOVERNMENT LIKES THE DEBT MONETARY SYSTEM
President Bush asked Congress for 84 billion to spend on Iraq. Congress approved it. The Controller of the US Treasury does not have 84 billion. Where does he get it?
He writes up paper Bonds, puts them in his briefcase and takes them to the Federal Reserve Building and puts the Bonds on the desk. Now a gentleman opens a desk drawer and pulls out a checkbook. He writes a check to the US Treasury for 84 billion and hands it to the Controller who now takes it back to the Treasury and deposits the check. Now the US bank account has 84 billion to spend on Iraq.
Who put the money in the checking account of the Federal Reserve?
There is no checking account. It is just a “Check Book”.
Money springs into existence when the Federal Reserve man signed the check. Mr. Allen Greenspan comes to congress and tells us how much it is going to cost to borrow that 84 billion that was just created out of thin air. He calls it the “prime rate”.
The “prime rate” is the interest the Federal Reserve charges for creating money from no-where. By my way of thinking, ANY interest on something that is created out of nothing is a rather good return.
Now “How can they do that?” is usually the next question. Who gave the Federal Reserve the power to create money out of nothing? (That’s better than turning led into gold!). The answer is “Congress” in 1913.
Why would Congress do that? The answer is very simple, but not one you will want to hear.
Instead of Congress coming to you and me and
telling us that our taxes are going up by three thousand dollars each this year,
they go to the Federal Reserve and “borrow” the money, which you and I must
pay back with interest. They like
to call that “Inflation”.
“Money” created from out of space is pumped into the economy, (world and ours), and that brings down the “value” of the dollar which means we must pay more “dollars” to purchase the same item than it did before the extra money was put into the system; hence, “Inflation”.
That’s why the Government likes the Debit Monetary System.
Maybe just one more fact you might find enlightening is that the Federal Reserve is a “Cartel” made up of banks! It is a “private” Cartel; it is NOT part of our “Federal” system. And as you now know, there is no “reserve” as the money is created on demand and there is no “system”. By the way, if you thought “Cartels” were ILLEGAL in the United States, you are very correct.