Let’s say you have a bank account with $10,000 in savings stashed away and you want to buy a new home or car. Your savings aren’t enough to pay for it, so you take out a loan from your bank with the promise to pay back the principal, plus interest.
Where do you think your bank gets the money it lends to you, and all the others who come to it to take out loans? Do you think they just have a unlimited supply of money sitting around for them to dole out to those who want to buy new homes and cars?
If the bank only had access to the funds people have deposited into their accounts they would never be able to loan out enough so that customers could borrow more than they personally had in their own savings account; if they did the bank would either go under or be forced to deny loans due to insufficient funds.
However, the bank has this magic wand they can wave that creates money out of thin air; it is called fractional reserve lending. What fractional reserve lending is, is the idea that a bank only has to have a fraction of the money its depositors have placed into their accounts for it to do business; such as daily withdrawals…and yes…loans.
How this works is, let’s say someone deposits $1,000 into a savings account. I could be wrong, but I think the fractional reserve lending rate is 10%, so that means that the bank now has 10 X 1,000 available to loan out; or $10,000. If 1,000 people all having savings accounts with $1,000 in them, the bank now has $1 million it can loan out to its customers.
If you have both a savings account and a mortgage you may have noticed that the interest rate on your loan is higher than the interest paid to you on your savings. They do this because the interest paid to your savings account is derived from the interest paid by the people who have borrowed YOUR money to buy a home or a car. The bank has no money of its own; it is merely a depository for the money of its customers; therefore it has no money of its own by which it can pay interest upon the money you entrust it to hold for them.
Now if you are the recipient of a loan, who actually owns the home or vehicle that you have borrowed money to buy? Now before anyone brings up things like allodial titleship, I want to keep this simple, so don’t confuse the matter by mentioning them. Do you own it or does the bank own it? The answer is, the bank owns it until you have paid back the full amount you borrowed to pay for it; plus interest of course.
If you fail to pay it off, they can repossess your home or car. Think about the word repossess for a minute; it implies that they are retaking what belongs to them in the first place. Think of it this way; you want to buy something but don’t have the money for it. So your friend buys it for you and lets you use it with the promise that you will pay them back. If you don’t pay them back, the friend who bought it for you gains possession of whatever it is you bought.
That’s similar to how banks work; you contract with a bank to borrow money from other people’s accounts, or money that was created out of thin air thanks to fractional reserve lending, then until you repay all that money; money which oftentimes never actually existed to begin with, that home or car actually belongs to the bank.
But banks do not exist to hold real estate, or property; they exist to handle to flow of money, AND make a profit for their customers and shareholders. That is why the interest rate on loans fluctuates so much; because if the interest rate is too high, people won’t take out as many loans, and if it goes too low, too many people take out loans; exceeding the 10% limit on their ability to loan beyond what reserves they actually have in their vaults.
Those who manage the interest rates, (and I’ll get to them in a minute) want to see the people of this country in a constant state of debt. If people pay off their homes and cars, and don’t use their credit cards, the banks don’t make any money. People have become conditioned to buying on credit instead of saving up for the things they want. Thomas Jefferson once warned about such practices, “The maxim of buying nothing without the money in our pockets to pay for it would make of our country one of the happiest on earth.”
James Madison elaborated on that same principle when he wrote, “The class of citizens who provide at once their own food and their own raiment, may be viewed as the most truly independent and happy. They are more: they are the best basis of public liberty, and the strongest bulwark of public safety. It follows, that the greater the proportion of this class to the whole society, the more free, the more independent, and the more happy must be the society itself.”
So what has happened is that we’ve been conditioned to buy now, pay later; live beyond our means; which means most people are constantly in debt to a certain extent; some beyond their ability to ever climb out of.
People who find themselves in debt beyond their ability to pay may seek relief through the process of filing for bankruptcy; but that often destroys their credit rating; meaning they will likely never be able to borrow money again.
Yet bankruptcy laws, as we know them, did not always exist. In ancient Greece if a man was unable to pay his debts his wife and family could be taken by his creditors and placed into debt bondage; meaning they were slaves for a specified amount of time until it was determined that the debt had been recouped.
I’ve known people who have gotten so deep in debt that their only option was to declare bankruptcy, and it always stemmed from them borrowing more than they had the ability to pay back. I’m not saying these people were always just buying things they wanted, but did not have the cash to purchase; some of them had to borrow just to pay the bills and put food on the table. But whatever the reasons may have been it all boiled down to borrowing themselves into a black hole of debt that the only way out of was to declare bankruptcy.
Now you might be saying that this isn’t my typical political rant; but patience my dear readers, I’m not finished yet.
Our government has no money that it can call its own; whatever money the Treasury holds is money that is either confiscated through taxation, or money that it borrows. Just as we, as private citizens, are expected to live within a budget, our government is supposed to appropriate funds for its programs and operations based upon how much revenue it takes in through taxation.
I’m not saying that everything our government spends money upon are constitutional; in fact an overwhelming majority of the things our government spends money upon are UNCONSTITUTIONAL! What I’m saying is that government knows how much revenue it needs to operate, and should not spend more than it takes in through taxation…yet it does.
Our national debt, meaning the debt which we the people are on the hook for, currently sits at $23 trillion. At the current rate of spending by our government the debt increases at a rate of $52,000 per second. Let me repeat that, the debt increases by $52,000 PER SECOND!!! That’s more than I make in a year, and our government borrows that much PER SECOND.
There are 86,400 seconds in a day, meaning our government borrows $4,492,800,000 per day just to keep its doors open for business; or nearly $4.5 billion per day. When we hit our credit limit can we call the banks and ask that they raise it so we can borrow more? It’s highly unlikely that they would agree to that; but our government gets to decide for itself what their credit limit is.
Many of the recent threats of a government shutdown have come when discussions in Congress over raising the credit ceiling for government have stalled. It’s not so much that Congress is opposed to raising the limit on how much they can borrow, it happens when they squabble over funding for particular programs; how much this program should get, and how much spending on another one should be decreased. They are all for raising their credit limit, it is just that politics enters into the picture and they argue over how and where the new influx of funds will be spent.
In 1983 Ronald Reagan asked that a committee be established to reduce fraud and waste in government. Known as the Grace Commission, they submitted their findings to President Reagan, and in them they stated, “100% of what is collected is absorbed solely by interest on the Federal Debt … all individual income tax revenues are gone before one nickel is spent on the services taxpayers expect from government.”
Think about that, 100% of your tax dollars goes towards paying off the debt government has accumulated on your behalf; and this was back in 1983 when the debt was only $1.4 trillion. I’ve heard that the money confiscated from us through taxation is barely enough to make the minimum payment on our national debt and that soon government may come after our retirement funds; 401k’s and IRA’s…just like they spent the Social Security Trust fund into a perpetual black hole.
Yet the voters across this country continue to vote for candidates who promise to do more for them in the form of benefits, subsidies, and yes, new wars; which gobble up money at an alarming rate.
DO PEOPLE THINK THE MONEY TO FUND THESE THINGS GROWS ON TREES?!?
So where does the government get this money that they borrow at an astronomical rate; do they walk into their local credit union and say, “Hey buddy, we need another $16 billion to keep us going for the next few months.” No, that’s not what happens.
Now I’m not 100% clear on the process by which new cash is infused into government, but I believe it works something like this. Government says that it needs X amount of dollars to fund its operation. So what government does is it issues bonds to fund its operation.
I don’t know how many are familiar with the old savings bonds that people used to buy as investments, but let’s say you buy a $50 savings bond; you don’t pay $50 for it, you might pay $25. But you also can’t cash in the bond immediately; it has to accrue interest over a specified amount of time. So, in effect you are giving the government $25 with the promise that they will pay you back $50 at a later date. That is the general principle upon which bonds work, and how they are used to raise revenue for government.
However, a few savings bonds here or there do not satisfy government’s needs for cash; so they have to resort to other means to raise revenue. What they do is offer other kinds of bonds, and treasury notes, which can be purchased to raise money. These T-bonds, T-Notes, and T-bills are not for the nickel and dime common investor, they are primarily bought by those in the upper 1%, and of course, the Federal Reserve and other countries seeking to invest in our economy.
Did you know that foreign investors, often foreign governments themselves, own upwards of 39% of our national debt? China alone holds $1.1 trillion of our debt. Now if you will recall my discussion on individual debt, the person loaning the money retains possession of the collateral until the debt is paid off; meaning China owns $1.1 trillion worth of the United States.
Every person holding a piece of our national debt is entitled to the cash value of their share of the debt in property in the U.S. should our government every default on its obligation to pay that debt. This means that maybe China, Japan, Saudi Arabia, Switzerland, the United Kingdom, might lay claim your property should our government not be able to meet its obligation to pay off the debt they have accumulated.
Another thing you might not know, the Federal Reserve Bank holds a rather large chunk of the national debt; somewhere around 11% I believe. Now if you think about banks, they have no money of their own, (kind of like the government). The only money they have at their disposal is that which has been deposited into them by their customers.
Therefore, the million dollar question is; where does the Federal Reserve get its money from; as it is not a bank in the same manner as your local Wells Fargo or Credit Union where private citizens can deposit their income.
The Board of Directors for the Federal Reserve state, “The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. Other sources of income are the interest on foreign currency investments held by the System; fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations; and interest on loans to depository institutions (the rate on which is the so-called discount rate). After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.”
At first glance that all sounds above board, but if you read what that says carefully it never explains where the initial funds came from to purchase government securities or foreign currency investments. The answer to how they got their initial cash is difficult for even me to wrap my head around, but under the Federal Reserve Act the government established a national bank; America’s 4th if you know your history.
All banks that had obtained their charter through the federal government were required to become members of the various branch offices of the Federal Reserve. If you recall the Board of Directors explanation for how they get their funding, one of the services they provide is check cashing clearances and funds transfers. I am assuming that they don’t provide these services without charging some kind of a fee; so that’s one way they fund their operations; by charging smaller banks fees to provide those services. But I’ve been unable, at this time, to locate any data regarding where all the money they hold originally came from; money which they use to purchase government securities and foreign currency investments.
Did they create it out of thin air, much like how the average bank operates on the fractional reserve policy? Maybe I’ll never learn the answer to that question, but one thing is for certain; banks do not operate for the benefit of their customers, they operate to generate a profit for either their shareholders or themselves.
The first such national bank came about even before the Constitution was written, and was headed by Robert Morris; a topic which deserves another essay in and of itself. The next one came after the Constitution was adopted; one which was proposed by Alexander Hamilton, supported by George Washington, yet opposed by Thomas Jefferson.
Jefferson was vehemently opposed to the idea of allowing banks to control our currency and our country’s credit. Numerous times Jefferson wrote to others his opposition to central banks, such as the one proposed by Hamilton.
In a letter to John Taylor he wrote, “I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”
In a letter to Albert Gallatin, who became Secretary of the Treasury under President Thomas Jefferson, he wrote, “The Bank of the United States is one of the most deadly hostilities existing, against the principles and form of our Constitution. An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries.”
In 1832 President Andrew Jackson spoke the following words to the Second Bank of the United States, “You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.” Jackson was referring to, what we today might call, predatory lending and how banks can control those who they loan their money to.
There is a famous quote by Mayer Amschell Rothschild in which he says, “Permit me to issue and control the money of a nation, and I care not who makes its laws.” Josiah Stamp, who was the Director of the Bank of England, England’s version of our Federal Reserve, once painted a clearer picture of what Rothschilds meant, “Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of a pen they will create enough deposits to buy it back again.”
Those who control the money supply control those who depend upon that money for their survival. Think about your employer; they are the ones who pay you and they can impose all kinds of rules that you have to obey if you wish to remain on their payroll. Often those rules might violate or restrict your rights; but if you wish to keep getting a paycheck you MUST abide by them.
You think it is any different for those who control our monetary supply and our system of credit? You are naive if you think that banking, and big business, do not have a hand in shaping the policies enacted by our government; policies which, of course, benefit them.
Look at how Big Pharma and the Food and Drug Administration are joined at the hip; telling us that naturally occurring substances do not, and cannot be used to treat illness and disease; how we must rely upon products manufactured by the big drug companies.
Look at our wars, how we never seem to be at peace anymore. Do you honestly believe that the reason is national security, and not to ensure that the profits of the military industrial complex remain in the black?
When President Dwight D. Eisenhower left office he delivered a Farewell Address that contained a warning about the influence of the newly established military industrial complex. It would behoove you to read Eisenhower’s warning:
Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United State corporations.
This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every state house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted only an alert and knowledgeable citizenry can compel the proper meshing of huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.
Those who control the money, the monetary policy, and the system of credit of a country, effectively own and control the country; and in our case that control is held by the Federal Reserve; which works hand in hand with business and industry; which is exactly the scheme for government devised by Alexander Hamilton under President Washington, and the one which was so fervently opposed by Thomas Jefferson.
The sad thing is, most people today are either ignorant of these things, or they simply don’t care as long as government keeps providing them with more and more services. The fact that their country is going deeper into debt by the second is of little to no concern to them.
I wonder if they would care if they were to learn that this debt is not the government’s responsibility to pay off, it is theirs. That’s right you, You, and YOU are on the hook for paying off this massive debt, as are your children and your grandchildren.
You can thank your good ole Uncle Sam for this too. At the end of the Civil War the former Confederate States were forced to abide by a series of Acts of Congress before they were allowed to regain their status as part of the Union, and regain their position in Congress. Known as the Reconstruction Acts, these were laws the South must abide by if they wished to stop being treated as conquered territories and resume their status as equal members of the Union.
One of the things the south was forced to acquiesce to was the 14th Amendment. The 14th Amendment was shoved down the throats of the south buy duress; or blackmail if will. Ratified under the guise of providing rights for the newly freed slaves, the 14th Amendment also included a clause which states, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”
So, not only was the south, as well as the rest of the country, obligated to pay the public debt; meaning the debt government incurred on their behalf, it also said that those who had paid for their slaves, (slaves that had recently been emancipated), could not seek compensation for their financial loss.
I don’t want to get too deeply into this, being as how I feel slavery itself is evil, but those in the south to whom this affected had paid money for their slaves, and with the emancipation of those slaves they were lost out on their investment, and could seek no compensation for their financial loss.
The fact of the matter is, that after the Civil War each and every citizen became a slave to the debt our government creates on our behalf. We are allowed to earn an income to pay our bills and buy the food we eat; plus a little extra on the side to provide us with entertainment so that we do not focus too much upon our pathetic existences; or our bondage to those who hold the debt.
Yet that debt continues to rise, and one day it will reach a point where taxes alone aren’t enough to pay the interest upon it. What then; what will government seek to tax or confiscate to pay its obligations to its creditors?
We are serfs living on an open range plantation, serving our masters by keeping the economy flowing and paying our taxes. Nothing we own is ours, it all can be confiscated if we violate the laws government enacts, or if our country’s creditors demand payment in full for their portion of the debt.
Your home isn’t yours; you pay tribute each year for the privilege of living upon that land, in that domicile in the form of property taxes. Your right to operate a motor vehicle on public roads is a privilege which is dependent upon you obtaining a license and paying registration fees to operate your motor vehicle. Your governments require that you obtain a permit to hunt and fish; although the game does not belong to them. Hell, your kid can be arrested for setting up a lemonade stand in your front yard for crying out loud!
Now they are coming after our guns, because they know that one day the whole house of cards our system rests upon is going to collapse, and when it does the people are going to want to punish those responsible for it…THEM.
And you, Americanus Ignoramus, is falling for it because you fear becoming a victim of a mass shooting; because your government promises you that it is in the name of keeping you safe that they deprive you of the right of self-defense.
I’m sorry, I see government for what it truly is, an evil entity that seeks to enslave us all, and I refuse to surrender my only means of defending my rights, my liberty, and my property. You can vote all you want, but government never truly changes. Sure, the two parties may disagree on certain issues, but on the core premises they both remain constant.
As Professor Carroll Quigley wrote in his book Tragedy and Hope, “The argument that the two parties should represent opposed ideals and policies… is a foolish idea. Instead, the two parties should be almost identical, so that the American people can throw the rascals out at any election without leading to any profound or extensive shifts in policy. Then it should be possible to replace it, every four years if necessary, by the other party which will be none of these things but will still pursue, with new vigor, approximately the same basic policies.”
You need to wake up people; unplug yourselves from your TV’s, your video games, and your social media and pay attention to how close the whole thing is to crumbling, or erupting into open conflict between those who seek to oppress us and those who seek to regain their lost liberty.
We were at this point twice before in our history; the first time was 1776 and the second came in 1860. Both resulted in violence and death, and when it happens again it will be on a scale unseen in America’s history.
In 1787 Thomas Jefferson wrote a famous letter to William Stevens Smith in which he said, “God forbid we should ever be 20. years without such a rebellion. The people can not be all, and always, well informed. The part which is wrong will be discontented in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions it is a lethargy, the forerunner of death to the public liberty. We have had 13. states independant 11. years. There has been one rebellion. That comes to one rebellion in a century and a half for each state. What country ever existed a century and a half without a rebellion? And what country can preserve it’s liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to facts, pardon and pacify them. What signify a few lives lost in a century or two? The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
We are one misstep away from it happening again and all people care about is who is going to get into the Super Bowl, whether we are going to war with Iran, or if Trump will be convicted on the charges of impeachment which have been leveled against him.
I don’t want to see it happen; unlike many I know who say they want it to come to settle things once and for all. But, if it does come, you can damn sure rest assured that I will not be on the side of those who defend and support those who brought it upon us.
Which side will you take?