10 posts on what you need to know before the shift #2
Who Holds the Reigns of World Banking?
Who Holds the Reigns of World Banking
* The 'poor' Knights templar -
Within a decade of their return from the Crusades the Templars
(forerunners of the Freemasons and the core of the New World Order) were
probably the most influential body the world has ever known. Being so
well funded, the Templars established the first international banking
network, becoming financiers for the Levant and for practically every
throne in Europe. Perhaps their most famous financial service was the
issuance of paper for money. The documents were honored at any Templar
commandery and as such might be considered the forerunner of today's
checks or sight drafts. Their aims were both political and religious, an
idea we have heard before of getting to people from both sides, the
everyday control wielded by politics, and the moral control wielded by
the church or religion. Two arms of control were needed, and each needed
to have multiple heads so that if one were `cut-off' another one
or two would grow in its pace.
from v4 of Where Were You before The Tree of Life?
IMF's (International Monetary Fund) Four Steps to Damnation:
By Gregory Palas, Observer, Sunday April 29, 2001
"It was like a scene out of Le Carré: the brilliant agent comes
in from the cold and, in hours of debriefing, empties his memory of
horrors committed in the name of an ideology gone rotten.
"But this was a far bigger catch than some used-up Cold War spy. The
former apparatchik was Joseph Stiglitz, ex-chief economist of the World
Bank. The new world economic order was his theory come to life.
"He was in Washington for the big confab of the World Bank and
International Monetary Fund. But instead of chairing meetings of
ministers and central bankers, he was outside the police cordons. The
World Bank fired Stiglitz two years ago. He was not allowed a quiet
retirement: he was excommunicated purely for expressing mild dissent
from globalisation World Bank-style.
"Here in Washington we conducted exclusive interviews with Stiglitz
for The Observer and Newsnight about the inside workings of the IMF, the
World Bank, and the bank's 51% owner, the US Treasury.
"And here, from sources unnamable (not Stiglitz), we obtained a
cache of documents marked, 'confidential' and 'restricted'. Stiglitz
helped translate one, a 'country assistance strategy'. There's an
assistance strategy for every poorer nation, designed, says the World
Bank, after careful in-country investigation.
"But according to insider Stiglitz, the Bank's 'investigation'
involves little more than close inspection of five-star hotels. It
concludes with a meeting with a begging finance minister, who is handed
a 'restructuring agreement' pre-drafted for 'voluntary' signature.
"Each nation's economy is analysed, says Stiglitz, then the Bank
hands every minister the same four-step programme.
"Step One is privatisation. Stiglitz said that rather than objecting
to the sell-offs of state industries, some politicians - using the World
Bank's demands to silence local critics - happily flogged their
electricity and water companies. 'You could see their eyes widen' at the
possibility of commissions for shaving a few billion off the sale price.
"And the US government knew it, charges Stiglitz, at least in the
case of the biggest privatisation of all, the 1995 Russian sell-off.
'The US Treasury view was: "This was great, as we wanted Yeltsin
re-elected. We DON'T CARE if it's a corrupt election." '
"Stiglitz cannot simply be dismissed as a conspiracy nutter. The man
was inside the game - a member of Bill Clinton's cabinet, chairman of
the President's council of economic advisers. . .
". . . Stiglitz calls this the 'hot money' cycle. Cash comes in for
speculation in real estate and currency, then flees at the first whiff
of trouble. A nation's reserves can drain in days. And when that
happens, to seduce speculators into returning a nation's own capital
funds, the IMF demands these nations raise interest rates to 30%, 50%
"'The result was predictable,' said Stiglitz. Higher interest rates
demolish property values, savage industrial production and drain
"At this point, according to Stiglitz, the IMF drags the gasping
nation to Step Three: market-based pricing - a fancy term for raising
prices on food, water and cooking gas. This leads, predictably, to
Step-Three-and-a-Half: what Stiglitz calls 'the IMF riot'.
"The IMF riot is painfully predictable. When a nation is, 'down and
out, [the IMF] squeezes the last drop of blood out of them. They turn up
the heat until, finally, the whole cauldron blows up,' - as when the IMF
eliminated food and fuel subsidies for the poor in Indonesia in 1998.
Indonesia exploded into riots.
"There are other examples - the Bolivian riots over water prices
last year and, this February, the riots in Ecuador over the rise in
cooking gas prices imposed by the World Bank. You'd almost believe the
riot was expected.
"And it is. What Stiglitz did not know is that Newsnight obtained
several documents from inside the World Bank. In one, last year's
Interim Country Assistance Strategy for Ecuador, the Bank several times
suggests - with cold accuracy - that the plans could be expected to
spark 'social unrest'.
"That's not surprising. The secret report notes that the plan to
make the US dollar Ecuador's currency has pushed 51% of the population
below the poverty line. The IMF riots (and by riots I mean peaceful
demonstrations dispersed by bullets, tanks and tear gas) cause new
flights of capital and government bankruptcies This economic arson has
its bright side - for foreigners, who can then pick off remaining assets
at fire sale prices.
"A pattern emerges. There are lots of losers but the clear winners
seem to be the western banks and US Treasury.
"Now we arrive at Step Four: free trade. This is free trade by the
rules of the World Trade Organisation and the World Bank, which Stiglitz
likens to the Opium Wars. 'That too was about "opening markets",' he
said. As in the nineteenth century, Europeans and Americans today are
kicking down barriers to sales in Asia, Latin American and Africa while
barricading our own markets against the Third World's agriculture.
". . . because the plans are devised in secrecy and driven by an
absolutist ideology, never open for discourse or dissent, they
'undermine democracy'. Second, they don't work. Under the guiding hand
of IMF structural 'assistance' Africa's income dropped by 23%.
"Did any nation avoid this fate? Yes, said Stiglitz, Botswana.
Their trick? 'They told the IMF to go packing. . .
"'It's a little like the Middle Ages,' says the economist, 'When
the patient died they would say well, we stopped the bloodletting too
soon, he still had a little blood in him.' Maybe it's time to remove
Undermining democracy and the rights of the individual lay at the very
core of the New World Order`s agenda.
Banking and You
"I believe that banking institution are more dangerous than standing armies… If the American people ever allow private banks to control the issue of currency… the banks and corporations that will grow up around them will deprive the people of their property until their children wake up homeless on the continent their fathers conquered"
-Thomas Jefferson (1743-1826)
From Zeitgeist and Zeitgeist Adendum:
Part Three: Don't Mind the Men Behind the Curtain
There is something behind the throne greater than the king himself"
-Sir William Pitt, House of Lords, 1770-
"The World is governed by very different personages from what is imagined by those who are not behind the scenes"
-Benjamin Disraeli, English Statesman, 1844-
"The real truth of the matter is that a financial element in the large centers has owned the government since the days of Andrew Jackson"
-Franklin D. Roosevelt, US President, 1933-
1775. The American revolutionary war began as the American colonies sought to the detach from England and its oppressive monarchy. Though many reasons are sided for the revolution, one in particular sticks out as the prime cause that King George III of England outlawed the interest-free independent currency the colonies were producing and using for themselves. In turn forcing them to borrow money from the Central Bank of England, at interest, he immediately put the colonies in the debt. And as Benjamin Franklin later wrote:
"The refusal of King George to allow the colonies to operate an honest money system, which freed the ordinary man from clutches of the money manipulators was probably the prime cause of the revolution"
-Benjamin Franklin, Founding Father
In 1783 America won its independence from England. However, its battle against the Central Bank concept and the corrupt, greed filled men associated with it had just begun.
So what is a central bank? A central bank is an institution that produces the currency of an entire nation. Based on historical precedent, two specific powers are inherent in central banking practice: the control of interest rates and the control of the money supply, or inflation. The central bank does not simply supply a government's economy with money, it loans it to them at interest. Then through the use of increasing and decreasing of supply of money the central bank regulates the value of the currency being issued. It is critical to understand that the entire structure of this system can only produce one thing in the long run: DEBT.
It doesn't take a lot of ingenuity to figure their scam now. For, every single dollar produced by the central bank is loaned at interest. That means every single dollar produced is actually the dollar plus a certain percent of debt based on that dollar. And since the central bank has the monopoly of the production of the currency for the entire country and they loan each dollar out with an immediate debt attached to it, where does the money that pay for the debt come from? It can only come from the central bank again. Which means the central bank has to perpetually increase its money supply to temporarily cover the outstanding debt created which in turn, since that new money is loaned out at interest as well creates even more debt? The end result of this system without fail is slavery for it is impossible for the government, and thus the public, to ever come out of the self-generating debt. The founding fathers of this country were well aware of this.
"I believe that banking institution are more dangerous than standing armies… If the American people ever allow private banks to control the issue of currency… the banks and corporations that will grow up around them will deprive the people of their property until their children wake up homeless on the continent their fathers conquered"
-Thomas Jefferson (1743-1826)
"If you want to remain slaves of the bankers and pay for the costs of your own slavery, let them continue to create money and control the nation's credit"
-Sir Josiah Stamp (1880-1941)
By the early 20th century the US have already implemented and removed a few central banking systems, which were swindled into place by the ruthless banking interests. At this time, the dominate families in the banking and business world were: J.D. Rockefeller, J.P. Morgan, Paul Warburg, Baron Rothschild. And in they early 1900's they sought to push once again legislation to create another central bank. However, they knew the Government and public were very wary of such an institution. So they needed to create an incident to affect the public opinion. So J.P.Morgan, publicly considered a financial luminary at the time, exploited his mass influence by publishing rumours about a prominent bank in New York wasn't solvent or bankrupt. Morgan new this would cause mass hysteria which would affect other banks as well. And it did. The public in fear of losing their deposits immediately began mass withdrawals. Consequently, the banks were forced to call in their loans causing their recipients to sell their property and thus the spiral of bankruptcies, repossessions and turmoil emerged. Putting the pieces together a few years later, Fredrik Allen of Life Magazine wrote:
"The Morgan interests took advantage… to participate the panic [of 1907] guiding it shrewdly as it progressed" –Frederik Allen, Life Magazine
Unaware of the fraud, the panic of 1907 led to the Congressional investigation headed by Senator Nelson Aldrich, who had intimate ties to the banking cartels and later became part of the Rockefeller family through marriage. The commission led by Aldrich recommended a central bank should be implemented so a panic like 1907 could never happen again. This was the spark that international bankers needed to initiate their plan.
In 1910 a secret meeting was held at the J.P.Morgan's estate on Jekyll Island off the coast of Georgia. It was there that the central banking bill called the Federal Reserve Act was written. This legislation was written by bankers, not law makers. This meeting was so secretive, so concealed from Government and public knowledge that a 10 or so figures who intended disguised their names when on route to the island. After this bill was constructed, it was then handed over to their political front man, Senator Nelson Aldrich, to push through Congress. And in 1913, with heavy political sponsorship by the bankers, Woodrow Wilson became president, having already agreed to sign the Federal Reserve Act in exchange for campaign support. And two days before Christmas, when most of Congress was at home with their families, the Federal Reserve Act was voted in and Wilson in turn made it law. Woodrow Wilson wrote:
"[Our] Great Industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men.. who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom."
"We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world –no government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men."
Congressman Louis McFadden also expressed the truth after the passage of the bill:
"A world banking system was being set up here… a superstate controlled by international bankers.. acting together to enslave the world for their own pleasure. The FED has usurped the government."
Now, the public was told that the Federal Reserve System was economic stabilizer and inflation and economic crises were thing of the past. Well, as history has shown, nothing was further from the truth. The fact is, the international bankers now had a streamline machine to expand their personal ambitions.
For example, from 1914 to 1919 the Fed increased the money supply by nearly 100% resulting in extensive loans to small banks and the public. Then, in 1920 the Fed called in mass percentages of the outstanding money supply. Thus resulting in the supporting banks having to call in huge numbers of loans and just like 1907, bank runs, bankruptcy and collapse occurred. Over 5.400 competitive banks outside of the Federal Reserve System collapsed further consolidating the monopoly of the small group of international bankers. Privy to this crime, Congressman Lindbergh stepped up and said in 1921:
"Under the Federal Reserve Act, panics are scientifically created. The present panic is the first scientifically created one, worked out as we figure a mathematical equation." –Charles Lindbergh
However, the panic of 1920 was just a warm-up. From 1921 to 1929 the Fed again increased the money supply resulting once again in extensive loans to the public and banks. There was also a fairly new type of loan called the margin loan in the stock market. Very simply, the margin loan allowed an investor to put down only 10% of the stock's price with the other 90% being loaned from the broker. In other words, a person could own a $1000 worth of stock, with only a $100 down. This method was very popular in the roaring 1920's as everyone seemed to be making money in the market. However, there was a catch to this loan. It could be called in at any time and had to be paid within 24 hours. This is termed "a margin call", and a typical result of a margin call was the selling of the stock purchased with the loan.
So, a few months before October in 1929, J.D.Rockefeller, Bernard Baruch and other insiders quietly exited the market. And on October 24th, 1929 the New York financiers who furnished the margin loans started calling them in, in mass. This sparked an instantaneous massive sell off in the market for everyone who had to cover the margin loans. It then triggered a mass bank runs for the same reason, in turn collapsing over 16.000 banks enabling the conspiring international bankers to not only buy up rival banks at the discount but to also buy up whole corporations at pennies on the dollar. It was the greatest robbery in American history.
But that didn't stop there. Rather then expanding the money supply which were recovered from this economic collapse the Fed actually contracted it, fuelling one of the largest depressions in history. Once again outraged, Congressman Louis McFadden, a long time opponent of the banking cartels began bringing impeachment proceedings against the Federal Reserve Board. Saying of the crash and depression:
"It was a carefully contrived occurrence, international bankers sought to bring about a condition of despair, so that they might emerge the rulers of us all." -Louis McFadden
Not surprisingly, and after two previous assassination attempts, McFadden was poisoned at a banquet before he could push for the impeachment.
Now, having reduced the society of the squaller the Federal Reserve bankers decided that the gold standard should be removed. In order to do this, they needed to acquire the remaining gold in the system. So, under the pretense of "helping to end the depression", came the 1933 gold seizure. Under the threat of imprisonment for 10 years everyone in America was required to turn in all gold bullion to the Treasury, essentially robbing the public of what little wealth they had left. And at the end of 1933 the gold standard was abolished. If you look at a dollar bill from before 1933 it says it is redeemable in gold. You look at the dollar bill today, it says it is legal tender which means it is backed by absolutely nothing. It is worthless paper. The only thing that gives our money value is how much of it is in circulation. Therefore, the power to regulate the money supply is also the power to regulate its value which is also the power to bring entire economies and societies to its knees.
"Give me control of a nation's money supply, and I care not who makes its laws"
-Mayer Amschel Rothschild, Founder of Rothschild Banking Dynasty
It's important to clearly understand, the Federal Reserve is a private corporation. It is about as "federal" as Federal Express. It makes its own policies and is under virtually no regulation by the US Government. It is a private bank that loans all the currency at interest to the Government, completely consistent with the fraudulent central banking model that the country sought to escape from when it declared independence in the American revolutionary war. Now, going back to 1913 the Federal Reserve Act was not the only unconstitutional bill pushed through Congress. They also pushed the Federal Income Tax. It's worthwhile to point out that the American public's ignorance towards the Federal Income Tax is a testament to how dumbed down and oblivious the American population really is.
First of all the Federal Income Tax is completely unconstitutional as it is a direct unapportioned tax. All direct taxes have to be apportioned to be legal, based on the Constitution. Secondly, the required number of states in order to ratify the amendment to allow the Income Tax was never met. And this has even been sided in modern court cases.
"If you… examined [the 16th amendment] carefully, you would find that a sufficient number of states never ratified that amendment."
-U.S. District Court Judge, James C. Fox, 2003"
Third, at the present day roughly 25% of the average worker's income is taken from them via this tax. That means you work 4 months out of the year to refill this tax obligation. And guess where that money goes? It goes to pay the interest on the currency being produced by the fraudulent Federal Reserve Bank, a system that does not have to exist at all. The money you make working 4 months out of the year goes almost literally into the pockets of the international bankers who own the private Federal Reserve Bank. And forth, even with the fraudulent Government claim as to the legality of the Income Tax there is literally no statute, no law in existence that requires you to pay this tax. Period.
"I really expected that, of course there is a law that you can point to in the law book, a code that requires you to file a tax return. Of course there is! I was at that point where I couldn't find a statute that clearly made me personally liable, at least not me and the most people I know and I had no choice in my mind except to resign." –Joe Turner, Former IRS Agent
"Based on the resource that I did throughout the year 2000 and that I'm still doing I have not found that law. I've asked the Congress, we've asked a lot of people, in the IRS, IRS Commissioner's helpers, they can't answer because if they answer the American people are gonna know that this whole thing is a fraud." –Sherry Jackson, Former IRS Agent . . .
"I haven't filed a thorough income tax return since I left."
"I have not filed a tax return since 1999."
The income tax is nothing less than the enslavement of the entire country. Now, the control of the economy and the perpetual robbery of wealth is only one side of the Rubik's cube that bankers hold in their hands . . .
Society today, is composed of a series of institutions. From political institutions, legal institutions, religious institutions. To institutions of social class, familiar values, and occupational specialization.
It is obvious, the profound influence these traditionalized structures have in shaping our understandings and perspectives. Yet, of all the social institutions, we are born into, directed by, and conditioned upon.. There seems to be no system as taken for granted, and misunderstood, as the monetary system.
Taking on nearly religious proportions, the established monetary institution exists as one of the most unquestioned forms of faith there is. How money is created, the policies by which it is governed, and how it truly affects society, are unregistered interests of the great majority of the population.
In a world where 1% of the population owns 40% of the planets wealth. In a world where 34.000 children die every single day from poverty and preventable diseases, and, where 50% of the world's population lives on less than 2 dollars a day… One thing is clear. Something is very wrong. And, whether we are aware of it or not, the lifeblood of all of our established institutions, and thus society itself, is money.
Therefore, understanding this institution of monetary policy is critical to understanding why our lives are the way they are. Unfortunately, economics is often viewed with confusion and boredom. Endless streams of financial jargon, coupled with intimidating mathematics, quickly deters people from attempts at understanding it. However, the fact is: The complexity associated with the financial system is a mere mask. Designed to conceal one of the most socially paralyzing structures, humanity has ever endured.
"None are more hopelessly enslaved than those who falsely believe they are free." -Johann Wolfgang von Goethe- 1749-1832
A number of years ago, the central bank of the United States, the Federal Reserve, produced a document entitled "Modern Money Mechanics". This publication detailed the institutionalized practice of money creation as utilized by the federal reserve and the web of global commercial banks it supports.
On the opening page the document states its objective. The purpose of this booklet is to describe the basic process of money creation in a fractional reserve banking system. It then precedes to describe this fractional reserve process through various banking terminology.
A translation of which goes something like this:
The United States government decides it needs some money.
So it calls up the federal reserve and requests say 10 billion dollars.
The FED replies saying: "sure, we'll buy ten billion in government bonds from you".
So the government takes some pieces of paper, paints some official looking designs on them, and calls them treasury bonds.
Then it puts a value on these bonds to the sum of 10 billion dollars and sends them over to the FED.
In turn the people of the FED draw up a bunch of impressive pieces of paper themselves, only this time calling them federal reserve notes, also designating a value of ten billion dollars to the set.
The FED than takes these notes and trades them for the bonds.
Once this exchange is complete, the government than takes the ten billion in federal reserve notes, and deposits it into an bank account.
And, upon this deposit the paper notes officially become legal tender money.
Adding ten billion to the US money supply.
And there it is! Ten billion in new money has been created. Of course, this example is a generalization. For, in reality, this transaction would occur electronically, with no paper used at all. In fact, only three percent of US money supply exists in physical currency. The other 97 percent essentially exists in computers alone.
Now, government bonds are by design instruments of debt. And when the FED purchases these bonds with money it essentially created out of thin air, the government is actually promising to pay back that money to the FED. In other words, the money was created out of debt.
This mind numbing paradox, of how money or value can be created out of debt, or a liability, will become more clear as we further this exercise.
So, the exchange has been made. And now, ten billion dollars sits in a commercial bank account. Here is where it gets really interesting. For, as based on the fractional reserve practice, that ten billion dollar deposit instantly becomes part of the banks reserves. Just as all deposits do. And, regarding reserve requirements as stated in "Modern Money Mechanics": "A bank must maintain legally required reserves equal to a prescribed percentage of its deposits". It then quantifies this by stating: "Under current regulations, the reserve requirement against most transaction accounts is ten percent". This means that with a ten billion dollar deposit, ten percent, or one billion, is held as the required reserve. While the other nine billion is considered an excessive reserve, and can be used as the basis for new loans.
Now, it is logical to assume, that this nine billion is literally coming out of the existing ten billion dollar deposit. However, this is actually not the case. What really happens, is that the nine billion is simply created out of thin air on top of the existing 10 billion dollar deposit. This is how the money supply is expanded.
As stated in "Modern Money Mechanics": "Of course they" (the banks) "do not really pay out loans for the money, they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes" (loan contracts) "in exchange for credits" (money) "to the borrowers transaction accounts." In other words, the nine billion can be created out of nothing. Simply because there is a demand for such a loan, and that there is a 10 billion dollar deposit to satisfy the reserve requirements.
Now let's assume that somebody walks into this bank and borrows the newly available nine billion dollars. They will then most likely take that money and deposit it into their own bank account. The process then repeats. For that deposit becomes part of the banks reserves. Ten percent is isolated and in turn 90 percent of the nine billion, or 8.1 billion is now available as newly created money for more loans. And, of course, that 8.1 can be loaned out and redeposited creating an additional 7.2 billion to 6.5 billion… to 5.9 billion… etc…
This deposit money creation loan cycle can technically go on to infinity.
The average mathematical result is that about 90 billion dollars can be created on top of the original 10 billion. In other words: For every deposit that ever occurs in the banking system, about nine times that amount can be created out of thin air.
"Money-Jitters? Ask the obliging Bank of America for a jar of soothing instant money. M-O-N-E-Y in the form of a convenient personal loan." – TV Ad
So, now that we understand how money is created by this fractional reserve banking system. A logical yet illusive question might come to mind: What is actually giving this newly created money value? The answer: the money that already exists. The new money essentially steals value from the existing money supply. For the total pool of money is being increased irrespective to demand for goods and services. And, as supply and demand defines equilibrium, prices rise, diminishing the purchasing power of each individual dollar. This is generally referred to as inflation. And inflation is essentially a hidden tax on the public.
"What is the advice that you generally get? And that is, inflate the currency. They don't say: debase the currency. They don't say: devalue the currency. They don't say: cheat the people who are safe. They say: lower the interest rates. The real deception is when we distort the value of money. When we create money out of thin air, we have no savings. Yet there is so called "capital". So, my question boils down to this: How in the world can we expect to solve the problems of inflation… That is: increase in the supply of money, with more inflation?" – Rep. of Texas, Ron Paul
Of course it can't.
The fractional reserve system of monetary expansion is inherently inflationary. For the act of expanding the money supply, without there being a proportional expansion of goods and services in the economy, will always debase a currency. In fact, the quick glance of the historical values of the US dollar, versus the money supply, reflects this point of definitively. For inverse relationship is obvious.
One dollar in 1913 required $21.60 in 2007 to match value. That is a 96 percent devaluation since the Federal Reserve came into existence.
Now, if this reality of inherent and perpetual inflation seems absurd and economically self defeating… Hold that thought… For absurdity is an understatement in regard to how our financial system really operates. For in our financial system money is debt, and debt is money.
Here is a chart of the US money supply from 1950 to 2006. Here is a chart to the US national debt for the same period. How interesting it is, that the trends, are virtually the same. For the more money there is the more debt there is. The more debt there is the more money there is. To put it a different way. Every single dollar in your wallet is owed to somebody by somebody. For remember: the only way the money can come in to existence is from loans. Therefore, if everyone in the country were able to pay off all debts including the government, there would not be one dollar in circulation.
"If there were no debts in our money system, there wouldn't be any money." – Marriner Eccies
In fact, the last time in American history the national debt was completely paid off was in 1835 after president Andrew Jackson shut down the central bank that preceded the Federal Reserve. In fact, Jackson's entire political platform essentially revolved around his commitment to shut down the central bank. Stating that one point: "The bold efforts the present bank has made to control the government… are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution or, the establishment of another like it."
Unfortunately this message was short lived. And the international bankers succeeded to install another central bank in 1913, the Federal Reserve. And as long as this institution exists perpetual debt is guaranteed.
Now, so far we have discussed the reality that money is created out of debt through loans. These loans are based on a banks reserves, and reserves are derived from deposits and through this fractional reserve system. Any one deposit can create 9 times its original value. In turn, debasing the existing money supply raising prices in society. And, since all this money is created out of debt and circulated randomly through commerce, people become detached from their original debt, and a disequilibrium exists where people are forced to compete for labor in order to pull enough money out of the money-supply to cover their costs of living.
As dysfunctional and backwards as all of this might seem there is still one thing we have omitted from this equation. And it is this element of the structure which reveals the truly fraudulent nature of the system itself. The application of interest.
When the government borrows money from the FED or when a person borrows money from a bank it almost always has to be payed back with accrued interest. In other words: Almost every single Dollar that exists must be eventually returned to a bank with interest payed as well. But, if all money is borrowed from the Central Bank and is expanded by commercial banks through loans only what would be referred to as the "principal" is been created in the money supply. So then, where is the money to cover all of the interest that is charged? Nowhere. It doesn't exist.
The ramifications of this are staggering for the amount of money owed back to the banks will always exceed the amount of money that is available in circulation. This is why inflation is a constant in the economy. For new money is always needed to help cover the perpetual deficit build in to the system. Caused by the need to pay the interest. What this also means, is that mathematically the faults and bankruptcy are literally build into the system and there will always be poor pockets of society that get the short end of the stick.
An analogy would be a game of musical chairs: For the once music stops, somebody is left out to dry. And that is the point. It invariably transfers true wealth for the individual to the banks. For, if you are unable to pay for your mortgage, they will take your property. This is particularly enraging when you realize, that not only is such a default inevitable due to the fractional reserve practice, but also because of the fact that the money, that the bank loaned to you didn't even legally exist in the first place.
In 1969 there was a Minnesota court case involving a man named Jerome Daly, who was challenging the foreclosure of his home by the bank, which provided the loan to purchase it. His argument was that the mortgage contract required both parties, being he and the bank, each put up a legitimate form of property for the exchange. In legal language this is called consideration (a contracts basis. a contract is founded on an exchange of one form of consideration for another.)
Mr Daly explained that the money was in fact not the property of the bank, for it was created out of nothing as soon as the loan agreement was signed. Remember what Modern Money Mechanics stated about loans? What they do, when they make loans is to accept promissory notes in exchange for credits. Reserves are unchanged by the loan transactions, but deposit credits constitute new additions to the total deposits of the banking system. In other words: The money doesn't come out of their existing assets, the bank is simply inventing it, putting up nothing of it's own, except for a theoretical liability on paper.
As the court case progressed, the bank's president Mr. Morgan took the stand. And in the judge's personal memorandum he recalled that "the Plaintiff (banks president) admitted that in combination with the Federal Reserve Bank did create the money and credits upon its books by bookkeeping entry. The money and credit first came into existence when they created it. Mr Morgan admitted that no US Law or Statute existed which gave him the right to do this. A lawful consideration must exist and be tendered to support the Note. The Jury found that there was no lawful consideration and I agree." He also poetically added: "Only God can create something of value out of nothing."
And upon this revelation the court rejected the bank's claim for foreclosure and Daly kept his home.
The implications of this court decision are immense, for every time you borrow money from a bank, whether it is a mortgage-loan or a credit-card charge, the money given to you is not only counterfeit, it is a illegitimate form of consideration and hence voids the contract to repay, for the bank never had the money as property to begin with.
Unfortunately such legal realizations are suppressed and ignored. And the game of perpetual wealth transfer and perpetual debt continues and this brings us to the ultimate question: Why?
During the American Civil War President Lincoln bypassed the high-interest loans offered by the European banks and decided to do what the founding fathers advocated which was to create an independent and inherently dept-free currency. It was called "The Greenback". Shortly after this measure was taken an internal document circulated between private British and American banking interests, stated: "…slavery is but the owning of labor and carries with it the care of the laborers, while the European plan… Is that capital shall control labor by controlling wages. This can be done by controlling the money it will not do to allow the Greenback… as we cannot control that."
The fractional reserve policy perpetrated by the Federal Reserve, which has spread in practice to the great majority of banks in the world, is in fact a system of modern slavery. Think about it, money is created out of debt, and what the people do when they are in debt? They submit to employment to pay it off. But if money only can be created out of loans, how can society ever be debt free? It cant, and that´s the point.
And it is the fear of losing assets coupled with the struggle to keep up with the perpetual debt and inflation inherit in the system, compounded by the inescapable scarcity within the money supply itself, created by the interest that can never be repaid that keeps the wage slave in line. Running on a hamster wheel, with millions of others. In effect, powering an empire, that truly benefits only the elite at the top of the pyramid.
For, at the end of the day who are you really working for? The Banks! Money is created in a bank, and it variable ends up in a bank. They are the true masters, along with the corporations and governments they support.
Physical slavery requires people to be housed and fed. Economic slavery requires people to feed an house themselves. It is one of the most ingenious scams for social manipulations ever created, and at it's core it is an invisible war against the population. Debt is the weapon use to conquer and enslave societies, and interest is it's prime ammunition.
And as the majority walks around oblivious to this reality the banks in collusion with governments and corporations continue to perfect and expand their tactics of economic warfare, spawning new bases such as the World Bank and International Monetary Fund. While also inventing a new type of soldier, the birth of the economic hit man.
"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt" – John Adams, 1735-1826
"We economic hit men really have been the one's responsible for creating this first truly global empire and we work many different ways. But perhaps the most common is that we will identify a country that has resources our corporations covet, like oil, and then arrange a huge loan to that country from the World Bank or one of it's sister organizations. But the money never actually goes to the country, instead it goes to our big corporations to build infrastructure projects in that country. Power plants, industrial parks, ports… things that benefit a few rich people in that country in addition to our corporations. But really don't help a majority of the people at all. However, those people, the whole country is left holding a huge debt.
It's such a big debt they can't repay it, and that's part of the plan, that they can't repay it. And so at some point we economic hit men go back to them and say `Listen, you owe us a lot of money. You can't pay your debts, so sell your oil real cheap to our oil companies, allow us to build a military base in your country, or send troops in support of ours to someplace in the world like Iraq, or vote with us on the next U.N. vote, to have their electric utility company privatized and their water and sewage system privatized and sold to US corporations or other multinational corporations.'
So there was a whole mushrooming thing, and it's so typical of the way the IMF and the World Bank work. They put a country in debt, and it's such a big debt it can't pay it, and then you offer to refinance the debt and pay even more interest. And you demand this quid pro quo which you call `conditionality' or `good governance' which means basically that they've gotta sell off their resources, including many of their social services, their utility companies, their school systems sometimes, their penal systems, their insurance systems, to foreign corporations.
So it's a double, triple, quadruple whammie! "
[/John Perkins] . . .