The united states, the US dollar is the nation’s fiat currency. It all starts off with the US Treasury whom creates bonds which are government IOU’s that are paid back over a specific time period with interest.
Once again nothing backs these dollars except IOU’s. Furthermore, for the hard work each US citizen does to make sure you earn his or her salary, a part of it eventually ends up for the Treasury in the form of income taxes. This is exactly what pays the principle and interest on the bond that your Fed bought with a check from nothing. US citizens will be forced into paying fees for the use of our recent money supply system.
Within the industrial banking sector we now have what precisely I refer to as “magic money creation” which is literally called “Fractional Reserve Lending”. Here is an example of how fractional reserve lending works. As an example someone deposits $100. 00 into a bank account, the bank who received that deposit is right now legally allowed to remove $90. 00 or ninety percent of your deposit and re-lend it to someone else.
At last over time, there becomes an excessive amount of bonds at the Fed and cash in the Treasury. The Treasury now takes that excess cash and stores it into the various twigs of government.
The person who received your cash from the bank as a loan will use it to buy an issue such as a car. Then that individual will pay the car dealer while using the money he borrowed. Nowadays the car dealer will bank this money into his own account at the lender. Now there is $190. 00 on deposit and the lender can legally steal Eighty percent again or $81. 00 and lend that out.
Therefor actually leaving your bank account with only $10. 00 or ten percent of your total deposit. However your lender statement will still show the entire $100. 00 greenbacks or one hundred percent of your deposit, on deposit in your bank account.
The Treasury holds monthly auctions to sell off its bonds to primary dealers, who are the major banks. Then the US Federal Reserve enters the game by getting all the bonds from the bankers through something called “open market operations”.
Nevertheless, it’s important to note, that when all the Fed writes and problems a check, there is no revenue what so ever inside the account to cover the amount of the fact that check. The account a lot of these checks are written out of will always carry a good zero balance. Therefore each individual dollar that exists, is normally borrowed and must be refunded.
The entire system of producing money from nothing is a complete scam. It all starts along with the Federal Reserve and the USA Treasury exchanging IOU’s. Some check is an IOU meant for cash and a connection is an IOU to be reimbursed with interest at several later date. Cash has existence once the Fed difficulties someone a check.
The next person consequently comes along, and borrows funds. Once the new borrower will pay the seller for what that they bought the money again is usually re-deposited into the bank and there is $271 dollars at deposit. This creation in money through deposits and loans (fractional reserve lending) keeps re-occurring to where by at some point your original $100. 00 deposit has grown to help you $1000. 00 (ten times the amount of your original deposit) in fiat currency produced from the bank.
Which is in that case spend on wars, military, federal salaries, social programs, general public work projects and other shortfall spending that keeps concerning re-occurring. Next all those government employees and military workers take their salaries and deposit them into several bank accounts throughout the location. This is how the fiat capital now enters the financial banking sector.
Once again the banks go back to the US Treasury auctions the next month choosing more bonds and merchandising them to the Federal Park. And every month this action of buying and selling makes on getting repeated.
This can be a Ultimate Government backed and sponsored pyramid scheme, when only the banking high level who own the Given and other central banks all over, massively profit by stealing from generations of innocent residents.