FRACTIONAL RESERVE MYTHOLOGY ... There is a pervasive myth about “fractional reserve banking” that creates money, via sequential deposits and loans. This is based on a lack of understanding of the function of a bank engaged in usury and money, itself. No bank “saves” money, nor holds it all in a vault. To earn interest (usury) it must lend it out, at interest. To satisfy demands for withdrawals, it holds a “reserve” of cash. The account holder’s balance is an obligation on the bank, not a credit. (It’s also an obligation on the account holder, but that’s another story) If a borrower spends money and that money is deposited in another bank, that other bank will lend it out, at usury. And may reserve a portion. There is no multiplication of money involved. There is a multiplication of DEBT, via usury, as well as account balances owed to the customers. This never ending pattern of loaning is part of the “Velocity of Money” transacting trades in a marketplace that is far larger than the actual sum of money tokens in circulation. Money that sits in a vault or wallet is useless. The function of money is to facilitate trade. I do not know the origin of the myth, but it is used as whipping boy that distracts people from the REAL PROBLEM of USURY. Usury (interest) is the problem, not fractional reserve banking or the mythological creation of money. In fact, since 1933, no real money (gold or silver coin) has been in circulation. Federal Reserve notes are repudiated debt instruments (IOUs). The obligated parties on said notes is the reason why they are “legal tender.” Parties who are not so obligated use them at their peril, for they have no par value, cannot be redeemed, and should be traded for real goods or services ASAP. Restating the situation, people who are signatories to FICA, are exercising the privilege to use worthless IOUs instead of lawful money. In addition, they can engage in usury, with said worthless notes. However, they are obligated parties on said notes. Let me clarify it more. Joe issues IOU. “Joe owes the holder TEN DOLLARS.” Jane comes along and signs up as an obligated party. Now the note really means, “Jane or Joe owes the holder TEN DOLLARS.” John comes along and signs up as an obligated party, too. Repeat process for 314 million “human resources.” (Oh, and let us not forget that JOE declares that he will not redeem his notes, because he’s bankrupt.) Jane goes to work, for a salary of ten dollars. But she is not paid lawful money. She is paid with a note, “Joe owes the holder TEN DOLLARS.” But SHE is an obligated party so she cannot object to HER note. So she decides to “make some money,” and deposits the IOU with a bank. The bank credits her account by “ten dollars.” But we all know that no bank will pay gold nor silver coin on such accounts. Wink, wink, nod, nod. The bank will only pay with “Joe’s notes.” (Which are Janes obligation, too) The bank dutifully promises to pay interest, and promptly loans out as much as it can, to keep the money (notes) in circulation, earning interest. Now WHO is liable on those notes? Joe isn’t. He declared that he’s bankrupt and will not redeem them. The rest of the folks who signed up as “contributors” and underwriters of Joe’s debt are the obligated parties. LEGAL TENDER STATUS treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything. This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are backed by all the goods and services in the economy. All YOUR labor and property underwrite those NOTES, used to engage in usury, an abomination and an impossible contract, of which not only are the loans underwritten by your pledged collateral, so are the money tokens you used. All the while the usurers are skimming bodacious amounts of goods and services for doing NOTHING. They never created any money. They only extended credit composed of worthless notes you underwrote, via FICA. Worse, you signed promissory notes denominated in dollars, in order to borrow credit from these usurers... composed of your own IOUs, underwritten by your own labor and your own property. [Dr. Evil voice overlay on] ARE YOU THAT FR!CK!N STOOFID? YES. [off] So make the bankers happy and shake your collective fists at “fractional reserve banking!” But keep signing up as “contributors” and keep engaging in contracts with usurers.
Posted on: Sun, 26 Jan 2014 08:15:41 +0000
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