How It Works… - Posted by MNChicago
Posted by MNChicago on September 05, 2003 at 15:39:03:
Banks, contrary to popular belief, do not actually
lend money. They create it out of air.
The Federal Reserve is a private company, nothing more.
When you go to a bank for a loan, you provide a
promissory note. The bank endorses it on the back and
deposits the note into an account and shows it as an
It then lists an equal amount as a liability because
they are going to loan that amount out Use a $100,000
mortgage as an example.
The bank creates an asset of $100,000 based upon the
signed promissory note. Think of a “T” acount.
It creates a liability of an equal amount, and charges
10%, for example. The bank will be repaid $100,000
plus $10,000 in interest, for purposes of illustration.
This is the liability side of the “T” account.
Banks earn their money from INTEREST.
As the loan is paid off, the payments received are
credited on the asset side to offest the liability
side, and provide the bank’s profit of interest.
One of a few pertinent questions to ask is, once the
bank is repaid the $110,000, who keeps the asset they
raised on their books? It’s still there, if you used
the “T” accounting.
With the Fed’s fractional reserve system, that asset
raised from one’s promisory note is loaned out up to
$900,000. So that additional asset they raised by
using the promissory note also expanded their loaning
cpacity rather dramatically.
Another pertinent question to ask the bank is, where in
the contract does it say the bank will raise an asset
using your signature to loan you back your own money?
Where in the signed contract…oh, the bank never
signs any contract…does it say the bank can withhold
this material informntion?
What considration does the bank provide on their part?
This is called transaction accounting, or checkbook
accounting. The Federal Reserve spells it out in
one of their publications, Modern Money Mechanics,
surprisingly no longer available…(except on the
Is what the bank does legal? Ask them to cite a single
statute that permits them to loan their own credit or
print money. Of course, one would have to be in court
to get them to even entertain the question, but the
Constitution and statutes do not support their practice.
Our money system is issued and controlled by a private
corporation, most of whose stockholders are foreigners.
Look up the Federal Reserve Bank in the phone book
under US Government. (Hint: Not there.)
You will have better luck finding them in the white
pages listed closer to Fed Ex. The Federal Reserve is
a private corporation. Most people fail to grasp the
significance of that piece of information.
Mayer Rothschild is quoted, “Let me contol a nation’s
money supply, and I care not who makes the laws.” Did
I mention the Fed is owned mostly by foreign interests?
The United States has had fiat money since 1971. Our
currency is not backed by anything. Our currency is
not even issued by the US Treasury. It is printed by
the Treasury and then sent to the Federal Reserve as
mere paper and ink. The Federal Reserve then issues
it in the form of Notes, not money.
Mr Starr, what the banks are doing is illegal, and I am
not a chest-beating patriot or a “screw the IRS and
don’t pay your taxes” type of person. By the way, the
paying of taxes is VOLUNTARY in this country, NOT
required. There are procedures that the IRS, if they
were required to follow, would legally preclude them
from collecting taxes. That is another story.
“There is an incredible pool of ignorance and credulty
in the human gene pool.”
You are so right, but I think for the wrong reasons.
What is being perptrated by the Federal Reserve and
the banking industry is not just illegal, it is
immoral. Unfortunately, our laws are not based on
morals, and most all of us live by morals, codes of
ehtics, etc. The Fed and banks count on it, as does
the IRS and our own government.
Go on a shopping spree at some store, and when it
comes time to pay, issue them a note in payment and see
if they will accept it. This is exactly what the
banks do. Why can they do it an we can’t?
The Federal Reserve can cite you statutes that justify
their existence (as a private corporation). State
banks can justify, by statute, their existence.
Neither can justify, by statute, issing money, and it
is illegal for any bank to lend its credit. Read any
bank’s charter. Do you know what ulta vires is?
Can mortgages be eliminated? Yes, under certain
circumstances, and quite legally. Knowledge can be
There are much bigger issues at stake than beating a
bank at its own game. Few people in the government
are not even aware of how our monetary system works.
Secrecy is an insidious means for doing harm. The
Fedreal Reserve is built upon secrecy, but do not take
my word for it. As you so often warn others about
learning the foreclosure business before they get into
it (i.e. do your homework), all this information can
be gleaned through research, so you can draw your own
There is much more I could expound on. Am I calling
for people to not pay thier mortgages and destroy the
banking system…the same with the IRS?
But how about requiring honesty?
Look. The Federal Reserve (foreign controlled) lends
money by issuing credit. Cost to them: paper and ink.
They charge INTEREST for that “money” loaned.
How much debt of our nation’s economy is now devoted
to just paying for the INTEREST on our debt, and by
now, you should know to whom that interest is owed?
What do you think would happen if we stopped letting
the federal reserve issue fiat money and charge us
interest for the privilege of doing so, and instead
had the US Treasury issue the same amount of fiat
moeny? The Treasury would not have to charge any
interest to themselves now, would they? We would
elininate one of the largest portions of our debt
Do you think for one moment the powers who control the
fedreal reserve would ever dare let this country retake
control of its own currency? (Remember Rothschild’s
Wouldn’t that be a tremendous savings to our government
and the rest of us being saddled with this onerous
debt that is exponentially consuming us?
One more quick leson on the federal reserve. It was
created in 1913 Since then, the value of the dollar
is worth 6 cents. Why? Inflation. What causes
inflation? Issuing fiat money. Infaltion is one of
the worst hidden taxes on any populace…a devaluation
of their own currency.
Did you know the Fed has written into law that in the
event of any bank failures, the US Government will bail
them out? Do you know of any other private
corporation that has the govenment protecting them against
their own created failure?
It is in the fed’s interest to keep issuing money
because they charge INTEREST on every single Note they
create and issue.
I will suggest to you, Mr Starr, your personal morals
and ethics would not allow you to conduct your business
the way the Fed and banks conduct theirs. And when you
point the finger of credulty, remember, three fingers
are pointing back in your direction.
I would applaud anyone who elimintes their mortgage
and beats the banks at their own dirty game, but that
is not a solution.
For me, the solution is in having an honest system
under which we could all abide. The solution is in
educating people to what is wrong so it can be fixed.
The reason why I answered you is to help spread some
"education," and asking from our government the same
standards most of us labor under. The privately-owned
federal reserve is killing us.
Democracy is buckling under the strain.