Debt Money

On “Dishonest Money” a book by Joe Plummer

Oct 15, 2023

I received this email from Joe Plummer yesterday and decided it’s time I write something about Money.

I've committed to giving away 1,000 free copies of Dishonest Money: Financing the Road to Ruin by the end of this year. So far I've handed out 300 copies, I've got 700 more to go.

If you're in the United States and you're willing to hand out 25 copies, please let me know. I'll send the books to you for free. You can reach me at Joe@JoePlummer.com

Each book is in its own / clear "ziplock" bag with a letter explaining why I'm giving it away. (I've included the text of the letter below.) Also, each book contains a Tragedy & Hope 101 bookmark that directs readers to a free version of Tragedy & Hope 101 if they want to learn more.

If just 20 of you respond, that will equal 500 books. It will help a LOT.

Thank you,
Joe

The majority of my readers are in the US, so if you are open to spreading the word, please help Joe and take him up on his most generous offer.

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I stumbled into financial services in Australia in February 1993 and have been “in and around money” for over 30 years.

I can confidently say that I am only now starting to understand what “Money” and the system that “Creates” it means. Only now.

My constructed ignorance was complete.

It was around 2008 that I first came across the idea that money was “created out of nothing” and yet you paid “real” money as interest on “fictional money”. I remember thinking about it for a bit, until my head hurt, but then life and my incuriosity at the time meant that I didn’t investigate it further to come to terms with what it actually meant, so I dropped it and never thought about it again, until recently.

I have to give credit to Feargus Greenwood who fleshed out the problem for me, and for also pointing me to Joe Plummer who has developed the explanation even further, with an entire book on the subject.

The subject of money is incredibly complex, by design. That complexity is then buried under generations of constructed ignorance. But let me see if I can “write out loud” my current thoughts on the subject, in as simple a manner as possible, and at a meta, national and supranational level, as these are the forces that have come out from behind the curtain to dominate our lives for the last 3.5 years.

Empire is real. It is as old as man.
Empire is a vehicle. It is the body.
Those that control Empire are real. They are as old as man.
Those that control Empire, the few, are the mind.
Empires grow and fade and are replaced by newer bigger Empires.
Those that Control one Empire will “swap seats” to Control the next.
Without Capital there is no Empire.
Capital demands protection and freedom of movement.
Empire’s purpose is to protect Capital while eliminating all Friction on its movement.
To do this, they must Control Nations.
Empire’s highest purpose is Control.
The most effective means of Control is Debt.
If you can Create Debt, you can Create Control.
If you can Create Debt out of Nothing, you can create Control out of Nothing.
Creating Control out of Nothing is the mightiest human power.
Whoever has the right to Create Debt and Control out of nothing, Controls the World.
This is the beating heart and soul of Globalism.
Globalism is the new emerging Empire.

This from 180 Degrees. It might be the hardest thing for us to understand but I now believe it to be true:

You can count on two fingers the number of economists that would actually admit to this point. Are we merely being presented with a thesis and antithesis (the dialectic) in order to achieve an end goal? The most insightful piece of information on this was from Christian Rakovsky, (born Chaim Rakover), a former Soviet ambassador to France, and top level Trotskyite insider who told us exactly how the system really operates. And that was back in 1938:
"Do you not see that already? In Moscow there is Communism: in New York Capitalism. It is all the same as thesis and antithesis. Analyze both. Moscow is subjective Communism but [objectively] state Capitalism. New York: Capitalism subjective, but Communism objective. A personal synthesis, truth: the Financial International, the capitalist-communist one. And above all, ‘They’.” - Christian Rakovsky, Red Symphony, 1938
The capitalist-communist system is in fact just an oligarchical one under the banner of two opposites. Capitalism and Communism are, in fact, two sides of the same collectivist coin. Complete opposites in terms of academic theory, productivity and veneer (public face) but not in terms of outcome (concentration of wealth in the same few hands).

Let’s next look at story from Plummer.

Ten Humans and a Banker
Ten humans decide they want to start their own community, but they have no common “money” to build their economy on. A banker from a nearby town offers to help them out, and they accept. So, the banker prints $100 worth of new money in his basement, loans each person in the community $10, and agrees to accept interest-only payments on the loans at a rate of ten percent. (A tiny $1.00 interest payment per person, per year.)
So, the new community begins with a total money supply of $100. Prices in the community are set according to this money supply and everything seems fine.
At the end of the first year, the banker gathers everyone together to collect his interest. Each of the ten people surrenders their $1 interest-only payment, but none of them stops to consider that, after making the payment, all ten of them still owe the banker $10 each. How can everyone pay their debt if the community’s total money supply is now only $90? There are no longer enough dollars in circulation to pay the banker the $100 he is owed.
Side Note: The banker could spend the $10 worth of interest payments he collected back into the economy and this would raise the community's money supply back to $100, but he won't do that. For now, the people will be left with only $90 to pay $100 in debt.
Although the common people might not have figured out their debt predicament, they have noticed that getting a fair price for their products and services seems a little tougher than the year before. Prices, across the board, are dropping and they're not sure why. …But the banker understands why. He knows that there are fewer dollars in circulation and this raises the value or purchasing power of each dollar. As the value of each dollar goes up, the number of dollars a customer is willing to pay (in exchange for another person's products or services) goes down.
By the end of the second year a successful businessman, who has managed to accumulate $15, makes his interest payment AND pays off his debt in full. So, as everyone else makes their second $1.00 “interest-only” payment, he pays both the interest due and the $10 he originally borrowed. This reduces the community’s total money supply by another $20. ($10 is lost to interest payments, plus another $10 leaves the economy due to the businessman’s $10 principal payment.) There are now only 70 dollars to be shared by all ten people in the community and nine people still owe the banker the full $10 they originally borrowed ($90 in total debt).
Two more years pass and two more people manage to earn enough to pay off their debts. By the end of the fourth year, the money supply has shrunk by another $38. ($18 in interest payments plus another $20 from the two individuals who, despite the difficulty, earned enough from the shrinking money supply to pay off their loans.) There are now only $32 left in the community, to be shared among all ten people and seven of those people still owe the banker $10 each ($70 total).
At this point, it will be nearly impossible for those who are still in debt to make their $1.00 interest payments, let alone pay off their debt. Where once there was $10 for each person in the community, there is now only $3.20. With so few dollars left in circulation, the purchasing power of each dollar has gone through the roof. Prices have fallen drastically and the economy is in shambles. If the banker does not help the people out (by putting more money back into the community), bankruptcies are inevitable; bank seizure of property is inevitable, financial ruin is inevitable.1
The successful businessman who paid his debt off first approaches the banker. He explains to the banker that the people want to work; it’s just that times are tough. At its height, his business employed half the town. Now, he is down to just a couple employees and he has had to cut their pay…he just can’t afford the $2.00 per year salary anymore, and even at that rate, HALF of their pay is being eaten up by their annual interest payment. They can barely feed themselves!
He points out, if the banker agrees to fund a new and ambitious project, the town will spring to life. There will be jobs for all and the suffering will end. But he also points out, without the project, many people are likely to default on their loans…the businessman just doesn’t see how the people will be able to continue making their payments in such a depressed economy. “Please Mr. Banker,” he says, “you’ve got to help us out.”
The banker agrees to the loan, and it’s a whopper ($100). The businessman is ecstatic. Shaking the banker’s hand, he promises to make good on the loan. He’s not only certain his new venture will be profitable, he’s certain the whole town will benefit. “Oh, thank you Mr. Banker” he says sincerely, “you have done a good thing here!”
But nobody stops to think that there is now $132.00 in the economy to cover $170.00 of debt. And each year, $10 in interest will be due on the new $100 loan and $7 will be due on the $70 that was unpaid from before. The banker knows the math…and with a smile on his face he creates the $100 out of thin air and the cycle starts over.
Welcome to the debt-based monetary system. Whether it is a small community or a powerful nation, any economy built on this fraudulent system is doomed. Its debt is mathematically inescapable and, if the people start paying down their debts, or if the banks simply refuse to renew loans, the money supply will evaporate and financial ruin will follow.
When the Federal Government talks about “paying off the national debt” it is LYING to you. It cannot do this without destroying our economy. The bankers that created our Federal Reserve System in 1913 built dependency into the system. It was designed to create ever-expanding, inescapable debt. By inflating and deflating the money supply, our wealth (as a nation and as individuals) is at the mercy of the bankers.
We must free ourselves from this monetary system. We must demand honest money.

If Debt is Control, and that is the primary purpose, what if a country doesn’t want to go into debt, what happens. Again 180 Degrees explains:

All this begs the question as to why the loans are taken out in the first place if the deals are so bad for the countries involved. Clearly, what doesn't help is politicians' demonstrable financial illiteracy. However, the real answer to that has been given by John Perkins, author of Confessions of an Economic Hitman.
Here is what he had to say during a number of interviews:
"We raised these huge loans for these countries, but the money never actually went to the countries, it went to our own corporations to build infrastructure in those countries. And when the countries could not pay off their debt, we insisted that they privatize their water systems, their sewage systems, their electric systems." - John Perkins interviewed by Sarah Van Gelder for Yes Magazine, 2016
"These leaders are very aware that if they do not accept these deals - the jackals are likely to show up. These are people that will either assassinate those leaders or overthrow the governments. I talk ... about my own experiences with the democratically elected president of Ecuador, Jaime Roldos, and the Head of State of Panama, Omar Torrijos. They had integrity. They would not accept the deals I was trying to convince them to take and they were both assassinated."" - John Perkins interviewed by Chris Martenson for Peak Prosperity, 2016
"Either cooperate and get rich in the process ... or get overthrown or assassinated. It's a very strong message."" - John Perkins
As we can see, debt controls are enforced by death controls. Unfortunately, these examples of banking misdeeds only offer a glimpse into the full spectrum dominance central bank warfare model being deployed - also known as the debt and death paradigm, it relies on genocide in order to 'function' properly.
"You see, the real value of a conflict, the true value, is in the debt that it creates. You control the debt, you control everything. You find this upsetting, yes? But this is the very essence of the banking industry, to make us all, whether we be nations or individuals, slaves to debt." - Luca Barbareschi as Umberto Calvini in The International, 2009

In gifting his book, Plummer provides this cover letter:

Dear Neighbor,
I’ve spent the past 20+ years researching and writing about money and politics because, quite frankly, we’re in trouble. I appreciate your time, so I’ll cut to the chase.
I'm giving you a free copy of my first book, Dishonest Money, because our nation is heading into rough economic waters. This book not only reveals who led us into the storm—it reveals how they benefited from doing so. It simplifies the confusing nature of our so-called “Central Bank / Federal Reserve System” and, 15 years after its publication, the information contained in this book is more relevant than ever.
I realize that finding time to read an entire book is challenging. That's why, if you can only read one chapter, I urge you to read Chapter 8. In just a few minutes, you'll gain insights that will change your understanding of both “banking” and money. By the time you’re done, you’ll know why prices keep going higher, and why the average person’s ability to “make ends meet” continues to decline.
In 2023, I'm giving away 1,000 copies of this book. If you find value in this and would like to support my efforts, consider donating $5 to help cover costs at JoePlummer.com. Or, for information that specifically deals with our broken political system, check out my most recent book on the topic: Tragedy and Hope 101, available on Amazon.
Together, we can learn how our “monetary system” is being used against us. We can learn how those who’ve been pulling the strings divide us; how they turn us against one another to protect themselves. Then, we can help others learn the same. The more of us there are, the sooner we can free ourselves from the rigged financial / political system they’ve built over the past 100+ years.

Thank you,
Joseph Plummer
Joe@JoePlummer.com

PS: If you’re not interested in this information, please consider gifting this book to somebody who would be. If you belong to a club, an organization, a church, or any other group that would be interested in free copies of this book, please contact me at the email above.

Plummer refers to Chapter 8, and we will end with that but before we do so, Greenwood in my interview with him published yesterday, and in answer to the first question, said this:

Do you remember the moment you first "woke up"? What triggered it?
Yes. Watching a video called Money as Debt by Canadian artist and filmmaker Paul Grignon in 2006. Prior to that, I had just been too busy - working 14 hour days whilst also completing a masters degree from TIAS business school in the Netherlands.

Here is the documentary, it is worth watching.

Money as Debt is a short animated documentary film by Canadian artist and filmmaker Paul Grignon about the monetary systems practiced through modern banking. The film presents Grignon's view of the process of money creation by banks and its historical background, and warns of his belief in its subsequent unsustainability.

10 Standout Quotes

"What is love is a question that has been endlessly explored, but the same cannot be said about the question, what is money?"
"Banks create the money they loan, not from the bank's own earnings, not from the money deposited, but directly from the borrower's promise to repay."
"The moneylenders will end up with all the money and after the foreclosures and bankruptcies are all filed, they'll get all the real property too."
"We are totally dependent on continually renewed bank credit for there to be any money in existence."
"What we have been taught to believe is democracy and freedom has become in reality an ingenious and invisible form of economic dictatorship."
"The current system is fundamentally unsustainable and needs to be reformed."
“The idea that the banker would just create money out of nothing was too outrageous to believe.”
“It is clearly impossible for everyone to pay back the principal plus interest because the interest money doesn't exist.”
“Could it have all happened by accident or is it a conspiracy?”
“The system is now worldwide, creates virtually unlimited amounts of money out of thin air, and has almost everyone on the planet chained to a perpetually growing debt that can never be paid off.”

In conclusion, here is Chapter 8 of Dishonest Money.

With thanks to Joe Plummer for being such a great teacher.

CHAPTER 8 - How They Do It

Ok, now it is time to show exactly how the Federal Reserve System creates money out of nothing. But before we do that, let’s quickly recap the different forms of money discussed up to this point.

1. Commodity money:

Commodity money is any form of money that has intrinsic value. Sheep, cows, corn, wheat; all of these served as early forms of commodity money. When mankind discovered metal and learned to craft it into tools and weapons, the metals themselves became a new (more convenient) form of commodity money. Unlike livestock, metal didn’t need to be fed, watered and cleaned up after. And, unlike wheat and corn, you didn’t have to worry about metal going bad, becoming contaminated with bugs or mold, etc.

Also, metal was easily divisible. Assuming a cow was equal in value to 100 pounds of iron, and an item was for sale valued at 10 pounds of iron (or “1/10th” of a cow), the individual buying with iron had a distinct advantage; he could easily produce the exact amount of money needed. For these reasons, metal became the most common form of commodity money. Though different metals were used (iron, tin, copper, etc.), gold and silver coins became the standard.

2. Receipt money:

Gold and silver coins were a much improved form of commodity money, but they still had some drawbacks. For instance, if you were even moderately wealthy, carrying all of your gold or silver coins around with you was cumbersome and potentially dangerous. Finding a place to safely hide your coins wasn’t easy either.

Seeing an opportunity to earn a little extra money, goldsmiths solved this problem by renting storage space in their vaults. When a citizen came in to deposit their coins, the goldsmith would give them a paper receipt as proof of their deposit. So, if a customer deposited $1,000 in gold coins, they were given a receipt (or receipts) valued at $1,000 worth of gold.

These receipts were “payable on demand” meaning the depositor, at any time, could come in and exchange the receipts for their gold. Because they were literally “good as gold,” citizens began accepting the receipts as payment for products and services. From that point forward the receipts became a legitimate form of paper money, 100% backed by gold (or sometimes backed by silver).

As time passed, it became increasingly rare for individuals to visit the goldsmith and demand coins in exchange for their receipts. (Although receipt holders had the right to exchange their receipts for gold at any time, they were happy to leave it locked up in the goldsmith’s vault.) It was much more convenient to use the paper money, instead of the physical coins they represented, in commerce.

3. Fractional Money:

At some point, the goldsmiths realized that almost nobody ever came in to withdraw their coins, and this sparked an idea. Why leave all that gold gathering dust in the vault (earning only a small storage fee) when instead it could be loaned out (at interest) for a much greater profit? Since receipt money was already in use, the goldsmith wouldn’t even have to remove the coins from storage. When a borrower came in seeking $1,000, the goldsmith could simply print up $1,000 worth of new receipts!

This, of course, was an act of pure fraud. The goldsmith had no right to give a borrower (or anyone the borrower gave his borrowed receipts to) the right to claim somebody else’s gold. Additionally, the only reason citizens accepted receipts as payment was because they believed the value stamped on every receipt was backed by an equal amount of coins in storage. Unbeknownst to them, this was no longer the case.

What began as legitimate receipt money (backed 100% by coins held in reserve) was now fractional money. By creating new receipts, the goldsmith had secretly driven down the percentage of “reserves” backing each receipt. (And with each new printing, the fraction became less and less.) Before long, citizens were, unknowingly, accepting receipts backed by only half its printed value, a quarter its printed value, a tenth its printed value. When people finally figured out what was going on, they rushed to exchange their receipts for coin.

Of course, only the first few in line were able to do so. The rest were left holding worthless paper.

4. Fiat Money:

Encarta defines fiat money as: “paper money that a government declares to be legal tender although it is not based on or convertible into coins…” Another way to put that would be: Fiat money is paper (backed by nothing) and because so, government must force people to accept it via legal tender laws.

But believe it or not, there is actually something worse than fiat paper money. And this brings us to the final form of money we’ll be discussing in this book. The form of money we’re using today is:

5. Debt Money:

Take the inherently fraudulent characteristics of a fractional money system; add in the greater fraud of pure fiat, top it off with a mechanism designed to generate inescapable perpetual debt and presto: You’ve got the greatest monetary fraud ever perpetrated against mankind. And, wouldn’t you know, you also have all the components that make up our current monetary system. (It is dishonest money at its worst.)

Rather than openly print the money it needs to cover its reckless spending, our government uses a less obvious tactic. Make no mistake, it still ends up “creating money out of nothing” for its own purposes, it simply uses its friends at the Federal Reserve to do so. And in exchange for helping our government obtain the money it needs, the banking system reaps financial benefits that are nothing short of obscene. (At a cost to our country that is incalculable.)

You see, unlike a normal fiat money system (where the government simply creates its own worthless paper money, spends it into the economy, and demands everyone accept it), our entire money supply is built on debt. That means, not a single dollar comes into existence but by the act of borrowing it into existence. First let me explain this in the simplest terms possible, and then we’ll get into a more detailed explanation.

Assume the government needs (wants) 1 billion dollars. Rather than print the money itself, the government goes to its banking buddies at the Federal Reserve. The Federal Reserve is ALWAYS happy to loan whatever amount of money the government “needs.” The problem is the Fed doesn’t actually loan anything. Yes, when the government shows up with its 1 billion dollar bond, the Fed will give it a 1 billion dollar check in exchange; but that 1 billion dollar Federal Reserve check doesn’t have anything backing it. The money (keystrokes in the Fed’s computer system) is created on the spot out of thin air; poof, there it is.

The government signs its new Federal Reserve check, deposits it in its Federal Reserve bank account, and immediately begins “paying its bills.” (Writing checks to government employees, contractors, etc. and inflating our money supply by $1 billion in the process.) But that’s just the beginning of the inflation. The government employees, contractors, etc. take their government checks and deposit them in their local bank accounts. Now the local banks, using the original 1 billion dollars worth of government checks as “reserves,” are permitted to inflate our money supply by another $9 billion! (And they accomplish this by making yet more loans of “money created out of nothing” to businesses, individuals, and government.)

The bottom line is that the Congress and the banking cartel have entered into a partnership in which the cartel has the privilege of collecting interest on money which it creates out of nothing, a perpetual override on every American dollar that exists in the world. Congress, on the other hand, has access to unlimited funding without having to tell the voters their taxes are being raised through the process of inflation.

Such is the nature of our entire money supply. Our purchasing power is stolen via inflation, our collective purchasing power is eroded by inescapable interest on every dollar in existence, and if we (as a nation) attempted to pay off any significant portion of our debt, within the rules of the current system, our country would be thrust into economic chaos. Why? Because just as the “debt dollars” are created out of nothing when a loan is issued, they are “erased” when the debt is repaid (and this deflates our money supply). But the remaining debt (the only thing keeping ANY money in circulation) does not “adjust” downward. As the money supply gets tighter, those who are trapped in high-dollar loans (say home loans based on prices that reflected a larger money supply) will find it increasingly difficult to make their payments. There are simply too few dollars to service the debt and fuel the economy.

It’s sobering to consider, under our current system, there can never be another debt-free generation…not even close. To pay off a large portion of our debt would be disastrous; to pay it all off, impossible. Does this sound like a system designed with our best interests in mind?

The Nuts and Bolts

Alright, we’ve given the easy explanation, now a slightly expanded overview of how the Federal Reserve System creates and expands our nation’s debt money supply. As in the previous example, we’ll focus on the primary method used; it’s called the “open market operation.”

1. The government needs money, but under our current system it can’t just create it. So instead, it creates the next best thing. The government “…adds ink to a piece of paper, creates impressive designs around the edges, and calls it a (Treasury) bond or Treasury note.” – Griffin. These pieces of paper are generically referred to as Treasury securities and they are offered as collateral to potential lenders.

As a simple example: The government creates a bond in a denomination of $100,000 with a maturity date of ten years. All that means is, a lender can acquire the bond for $100,000, he will earn interest on the loan for ten years, and when the bond matures (at the end of ten years) his principal loan amount ($100,000) will be repaid. Treasury securities are offered in many different denominations and maturity can vary between 30 days (very short term loan) to 30 years.

SIDE NOTE: If you or I purchase these Treasury securities, it does not inflate the nation’s money supply. That is because when you or I loan the government money, we are not allowed to create a new pile of money to do it. We must use money we’ve already earned. The same is true when a business or other institution acquires these securities; money already in circulation must be used. Only Federal Reserve banks, and commercial banks, are allowed to create money out of nothing for the purpose of lending money to the government.

…continuing…

2. The government, looking to convert its “Treasury securities” into something it can spend (Federal Reserve Notes and checkbook money), turns to the Fed. The Fed is happy to oblige. It pulls a check out of its magic checkbook, writes in whatever dollar amount is needed, and gives it to the government in exchange for the securities.

There is no money in any account to cover this check. Anyone else doing this would be sent to prison. It is legal for the Fed, however, because Congress wants the money, and it is the easiest way to get it. (To raise taxes would be political suicide; to depend on the public to buy all the bonds would not be realistic…and to print very large quantities of currency would be obvious and controversial.) This way, the process is mysteriously wrapped up in the banking system. The end result, however, is the same as turning on government printing presses and simply manufacturing fiat money…to pay government expenses.

3. The government endorses its Federal Reserve check, and then deposits it with one of the Federal Reserve banks. The check amount is added to the government’s account balance and, just like that, the government can begin spending the money, which it does by writing checks of its own. “These checks become the means by which the first wave of fiat money floods into the economy. Recipients now deposit them into their own (commercial) bank accounts…” –Griffin. And this is where the real action begins.

SIDE NOTE: Some like to point out Federal Reserve banks are “not operated for profit” and that they “return to the U.S. Treasury all earnings in excess of Federal Reserve operating expenses.” Assuming we accept all excess earnings really are handed over (the Fed has never been properly audited; how could we know?), this fact is still largely irrelevant. Huge profits are made when commercial banks get their hands on the newly created Fed money. (This should come as no surprise; it was the commercial banking interests of Rockefeller, Morgan, Rothschild, Kuhn Loeb, and Warburg that crafted the system.) And if those profits weren’t enough, as we’ve already covered, the biggest profit gained in this game is control.

…continuing…

4. So assume the government pays Joe Contractor $1 million by check and Joe promptly deposits that check at his commercial bank. Joe is happy because his bank account balance is now 1 million dollars bigger. But the bank is even happier. In accordance with the rules of our Federal Reserve System, commercial banks only need to keep 10% reserves on hand. In short, that means the bank Joe deposited his million dollars with immediately has $900,000 in “excess reserves.” ($1 million minus 10% in required reserves leaves $900,000 excess reserves.) Guess what that means? It means the bank is allowed to create $900,000 in new money (for loans) out of thin air.

5. But that’s not all!!! When that $900,000 in newly created debt money is spent into the economy, it finds its way right back into the banking system as new deposits and those deposits create “excess reserves” too. As a simple example, if the $900,000 all winds up in one bank, that bank is only required to keep 10% of $900,000 in reserves. So that means it can now create $810,000 in new loans out of nothing; again the debt money supply increases! And when that newly created $810,000 is deposited, it can be used to create another $729,000 in loans “created out of nothing.”

This continues over and over again. By the time the process reaches its legal limit, the commercial banks will have created 9 million new debt dollars on top of the original $1 million Federal Reserve loan (also created out of thin air) for the government. (A total increase in our money supply of $10 million!) Even if the Fed bank hands over every penny of interest it earns on the $1 million loan to the government, the commercial banks can earn ten times as much (or more depending on the interest rates) on the $9 million they created.

Try to imagine the wealth and power you could amass under a system that allowed YOU to do this. Imagine being legally allowed to loan out money that you never had to earn…money that you could simply “create” and then collect interest on. With only 1 billion dollars you could easily generate 50 -100 million dollars per year in interest payments. Even the best among us, given the chance to acquire such a lucrative government-backed monopoly, might find it hard to resist. …To say nothing of a group of unscrupulous, yet highly intelligent, bankers.

The total amount of fiat money created by the Federal Reserve and the commercial banks together is approximately ten times the amount of the underlying government debt. To the degree that this newly created money floods into the economy in excess of goods and services, it causes the purchasing power of all money, both old and new, to decline. Prices go up because the relative value of the money has gone down. The result is the same as if that purchasing power had been taken from us in taxes.

…Since our money is an arbitrary entity with nothing behind it except debt, its quantity can go down as well as up. When people are going deeper into debt, the nation’s money supply expands and prices go up, when they pay off their debts and refuse to renew, the money supply contracts and prices tumble. This alteration between periods of expansion and contraction of the money supply is the underlying cause of booms, busts, and depressions.

Who benefits from all of this? Certainly not the average citizen. The only beneficiaries are the political scientists in Congress who enjoy the effect of unlimited revenue to perpetuate their power, and the monetary scientists within the banking cartel called the Federal Reserve System who have been able to harness the American people, without their knowing it, to the yoke of modern feudalism.

That covers the most common method by which the Fed System inflates our money supply; by “monetizing” government debt. (Converting government IOUs like Treasury bonds into “money” by simply creating the money out of nothing and loaning it to the government.) The government spends the money and then commercial banks “inflate” on top of what was originally created. But if the government isn’t borrowing enough from the Fed, there are plenty of other ways for “the system” to work its magic.

Another inflation mechanism is known as the “discount window.” The discount window is where commercial banks go to borrow money from the Fed. The inflationary process is similar to the open market operation, only a little more direct.

Rather than loan the government money (which then becomes government checks, then eventually becomes deposits in commercial banks, then is counted as reserves, which then can be multiplied by up to 10 times the original loan amount), the Fed simply loans money to the commercial banks directly. It’s a much easier process. If a bank borrows $1 million, it can immediately start the process of creating more money. (Subtract 10% for reserves, create $900,000. When the $900,000 makes its way back, subtract 10% for reserves, create $810,000, etc.)

The enormous increase in our nation’s money supply leading up to the stock market crash in 1929 (and the Great Depression) was not due to government borrowing. The government, prior to the crash, was doing well and had little need to borrow. No, the bulk of new money originated out of the Fed’s discount window. At this point in our history, there is little doubt about whether or not Fed policy Is what crashed our economy and led to the Great Depression. It most certainly did. Today, the arguments should be based on whether or not the monetary scientists, working through the Fed, did it on purpose.2

Another method the Fed can use to increase our money supply is to simply change the required “reserve ratios” that commercial banks must hold. The current requirement of 10% is purely arbitrary. If there is a need for more money, it could be easily cut in half to 5% (doubling the amount of new money that can be created from deposits), quartered to 2.5%, or even dropped all together. It’s the Fed’s call.

And as if all this weren’t enough, the Monetary Control Act of 1980 handed the Fed even more power. Now, the Fed has the authority to legally monetize foreign debt too! (Which it has already done, to the tune of many billions of dollars.)

The apparent purpose of this legislation is to…bail out those governments which are having trouble paying the interest on their loans to American banks. When the Fed creates fiat American dollars to give foreign governments in exchange for their worthless bonds, the money path is slightly longer and more twisted, but the effect is similar to the purchase of Treasury Bonds. …they flow back into the Money pool (multiplied by nine) in the form of additional loans. The cost of the operation is once again borne by the American citizen through the loss of purchasing power. …As long as someone is willing to borrow American dollars, the cartel will have the option of creating those dollars specifically to purchase their bonds and, by so doing, continue to expand the money supply.

By confiscating and “redistributing” purchasing power, the elite are able to shape the world as they see fit. (Rewarding those who comply with their wishes, and punishing those who insist on independence.)

Lies are Unbekoming

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