The Magic of the Banking System
There is one key word to keep in mind when grappling with the complexities of the current day, worldwide banking system. That word is ‘scam’. With this word in mind every one of the complex rationalisations, economic equations, quantitive easing calculations and money supply terminology will fall by the wayside as the scales fall from your eyes.
I have lived on this planet for over 6 decades blissfully ignorant of this simple key to understanding the near magical complexities of the banking system, the gold standard, the concept of scarcity etc., all of which had been explained to me, frequently, by many, in great and mind numbingly tedious detail, and all to no avail.
What it boils down to is a scam perpetrated by Dutch monyelenders whose sole aim was to gain complete, absolute and unfettered control of the money creation process. And they have achieved worldwide success in this endeavour. The family bank of one notable but shy member of this clique has grown to include control of the reserve banks of almost every nation on earth.
The old lady of Threadneedle Street, the BoE, the Bank of England was chartered in 1694 to one William Patterson, a Scotsman resident in Holland. The charter was one of the many terms and conditions applied to a loan of £1.2 million made to the, then, newly crowned King William III of England to finance his war against the French. Another critical feature of the ‘ts and cs’ was that the principal would never be returned and that the interest would be compounded at a rate of 8%, which marked the start of the National debt.
The most onerous of the terms was the moneylender’s right to secure payment on the national debt by direct taxation of the people. Thus the interest payable on this National Debt, and all subsequent ‘loans’ was and continues to be collected from the population in the form of taxes; taxes of every stripe and type from VAT to income, from capital gains to corporate, from car tax to brass tacks etc, it all goes to the BoE and into the private coffers of the banking system. Just for a laugh, I calculated the value of the interest only to date on the original capital of £1.2 million based on the formula
Future Value =P*(1+r)^n where,
P is the initial amount invested = £1,200,000 r is the annual interest rate (as a decimal or a percentage); = 0.08 n is the number of periods over which the investment is made. = 323 years (2017 – 1694)
and arrived at a value of £74.9 quadrillion (that’s 5 commas or 74,998,xxx,xxx,xxx,xxx.00). And this is before the debt became £16 million within the next 2 years.
The original capital was but a sprat to catch, not a mackerel, but 7.5 billion slaves; slaves that clothe, house and feed themselves, but slaves nonetheless. A long, long game played for lives, everyone’s lives, spanning all the yesterdays since 1694, now and into the future.
This Faustian bargain struck by a new English king, and Dutch to boot, who had simply married into the role, and who, in the service of his overweening ambition placed a burden in perpetuity upon the inhabitants of the United Kingdom, and then the rest of the world as this ‘English’ model was exported and eventually applied to every nation save three, Cuba, North Korea and Iran (not entirely sure about China).
But, by far and away, the most disturbing term of this charter was, and I quote from the flyer circulated to attract investors
“The bank hath benefit of interest on all moneys which it, the Bank, creates out of nothing”.
When you apply to this alchemical formula for turning base air into gold, the additional magic of the fractional reserve lending multiplier, you then discover the true length, breadth and depth of this scam.
The concept of the fractional reserve lending mechanism arose from the practice in the Middle Ages of depositing one’s gold and silver coins (in exchange for a receipt, and a fee, of course) with a goldsmith for safe-keeping instead of humping it around on one’s person. These wily, lovable, fun-loving rascals discovered that they could loan out 90%, of your gold with interest, quite safely as, in general, only one out of ten depositors ever came back for their gold, thus only requiring that 10% be held in reserve. Current banking contracts include a well-buried clause that assumes your implicit permission for the bank to use your money as if it were theirs.
The above illustrates why the fractional reserve is pegged at 10%, but the magic doesn’t stop there. Assume that £90k of your £100k savings account is loaned (with interest) by your bank at the rate of £10k each to 9 individuals who in turn put it into their banks. These deposits are treated as new money of which £81k is loaned (with interest) and returns to the banking system and is again added to the ‘new deposit’ category. This cycle continues until your original £100k is the basis for loans totalling £1million, all earning interest for the banking system.
But there is an even more magical aspect to uncover. At least, the above fractional reserve bullshit is tied, albeit very tenuously, to something that bears an intrinsic value greater than the ink/pixels-on-a-screen required to make a mere accounting entry. The moneylender’s banking system equates money with debt, which is why the capital must never be repaid as it is ‘monetised’ to create money for the economy. Should a government ever repay its entire ‘national debt’ and achieve that fiscal nirvana of National Debt=0, there would be no money supply for the economy! But the moneylenders’ system of compounding on the capital which must never be returned guarantees a constantly rising debt and therefore money supply. A money supply they can squeeze like a farmer does a cow’s teat.
If, at the point you apply for a mortgage of £100 k, the bank’s money supply is X, after the loan is approved (by making an accounting entry in your bank account – [Harry Potter eat your heart out]) the bank’s money supply has grown to X+£100k. The money is created at the point at which it becomes a debt, which is ‘made real’ by the accounting entry in your ledger, for which onerous task by the bank you will be charged interest, i.e. real money, the kind you worked hard and long for, not the ‘pulled out of hat’ variety that they scammed you with in your account. And now that your mortgage has swelled the money supply by £100k, the bank can lend £1 million, with interest, this notwithstanding that they have just ‘given’ you the money in the first place and in the second, you have yet to make your first mortgage payment, never mind repay the debt.
The moneylenders have bestowed upon our planet the gift of the accounting entry system, finely tuned by the fractional lending reserve limit and all backed by the thin-air standard to ensure a non-inflationary economy because of the inbuilt scarcity of said thin air standard. Now, how could any sovereign state favourably compare an economy based on their own printed currency at 0% interest, thus 0 National Debt, and backed by the self regulating product/services, supply/demand of the original tally sticks?
The legality of any contract depends on the consideration (that which each party does or brings to the contract) offered by each party and it has be something meaningful and tangible. For example; You pay me money (your consideration), I spend time and effort (my consideration) to teach you English. Your consideration in the mortgage contract with your bank is the house (or part of) that you put up as collateral for the loan, while the bank’s consideration is an accounting entry in your account ledger. I struggle to find a way of equating the two considerations especially since one of them invokes magic that is the envy of Dumbeldore; magic otherwise called a scam.
The moneylender’s original argument for being the sole agency for the creation of money is that they would provide a safe, secure ‘gold standard’ to back the currency and for this ‘risk’ the nation’s consideration will be perpetual taxes to repay the infinitely increasing interest. That they do not have, indeed the solar system does not have, the amount of gold needed to ‘back’ the trillions and gazillions of apparently value bearing bits of paper already printed is an insignificant detail. Instead, they have introduced 3 types of money, M1, M2 and M3, of which only the first two are vaguely real (coins, notes, savings, loans) and horrifyingly represent less than 3% of the money supply. And the truly astonishing feature of this monetary system is that no matter how large the money supply, or how much it fluctuates, the intrinsic ‘value’ of each individual unit remains the same.
So, I hear you ask, if the government can issue a bond, it can issue a bank note, no? As legal tender, and this for 0% so, no taxes, no national debt and a currency backed by an average work or service unit! Why don’t sovereign states do just this?
The moneylenders consider their ‘gold standard’ backed by the ‘out of a hat’ money creation capability and the ‘debt equals money’ formula to be so compelling that they have fomented wars, rebellions, insurrections, economic crashes and much, much, much more to ensure that governments never wander from this straight and narrow path. Basically, it is the world’s biggest protection and extortion racket, one that holds entire nations and peoples to ransom. We don’t work to pay the national debt, we work to pay the ‘vig’ on the ‘loan’ forced on us. It certainly casts the ‘crime’ of tax avoidance or evasion in an entirely new light; and indeed on what is our true moral duty here.
Still, we could always escape en masse to Cuba, North Korea or Iran. I’m setting up an Underground Railroad in case anyone is interested.
The sole purpose of the present day banking system is to concentrate the wealth of the world in the hands of the very, very few, a policy and strategy that has systematically deprived billions of people around the world of their fundamental human rights, all for want of money that is used by moneylenders to leverage even more money.
To repeat, that lovely family bank mentioned earlier of one of the key moneylenders behind the BoE extortion in 1694, has grown to include control of the reserve banks of almost every nation on earth. The reserve bank of a country prints the countries’ legal tender in return for government bonds (promises) of equal value. However, the reserve bank does not print the money for the interest due on the money it printed in exchange for the bonds. This is what ensures ‘scarcity of money supply’ and is the tool used by the IMF in their austerity strategy approach to break national economies at the behest of the moneylenders who then ‘re-inflate the money supply’ of the economy they crashed by ‘borrowing’ from their ‘reserve’ banks to buy the now bankrupt businesses. Rinse and repeat several times and call it Darwinian Economics.
The Fed or the Federal Reserve Bank of America is owned by the largest private banks in the world. It is not a United States ‘democratically elected’ Government Federal institution, it is a commercial bank that receives bonds from the US govt for an equivalent value in banknotes which it asks the United States Bureau of Engraving and Printing to print on its behalf. It then charges the US government interest on the printed notes. The Fed does not, however, print the notes required to pay the interest on the banknotes it printed. The value of the US government bonds it receives are included in its reserves and, subject to the ‘rules’ of fractional reserve lending, is the basis for making new loans. This despite the fact that the Fed has already issued banknotes against the bond.
The transcendental magic of the moneylenders. It just keeps giving……. the world the shaft.