6139008-History-of-Money

checking account has decreased at all. There has been a net increase of $10,000,000. But this is only the beginning of theinflationary, counterfeiting process. For Chase Manhattan is delighted to get a check on the Fed, and rushes down todeposit it in its own checking account at the Fed, which now increases by $10,000,000. But this checking accountconstitutes the "reserves" of the banks, which have now increased across the nation by $10,000,000. But this means thatChase Manhattan can create deposits based on these reserves, and that, as checks and reserves seep out to other banks(much as the Rothbard Bank deposits did), each one can add its inflationary mite, until the banking system as a whole hasincreased its demand deposits by $100,000,000, ten times the original purchase of assets by the Fed. The banking systemis allowed to keep reserves amounting to 10 percent of its deposits, which means that the "money multiplier" – theamount of deposits the banks can expand on top of reserves – is 10. A purchase of assets of $10 million by the Fed hasgenerated very quickly a tenfold, $100,000,000 increase in the money supply of the banking system as a whole.Interestingly, all economists agree on the mechanics of this process even though they of course disagree sharply on themoral or economic evaluation of that process. But unfortunately, the general public, not inducted into the mysteries ofbanking, still persists in thinking that their money remains "in the bank." Thus, the Federal Reserve and other centralbanking systems act as giant government creators and enforcers of a banking cartel; the Fed bails out banks in trouble,and it centralizes and coordinates the banking system so that all the banks, whether the Chase Manhattan, or theRothbard or Rockwell banks, can inflate together. Under free banking, one bank expanding beyond its fellows was indanger of imminent bankruptcy. Now, under the Fed, all banks can expand together and proportionately. But even withthe backing of the Fed, fractional reserve banking proved shaky, and so the New Deal, in 1933, added the lie of "bankdeposit insurance," using the benign word "insurance" to mask an arrant hoax. When the savings and loan system wentdown the tubes in the late 1980s, the "deposit insurance" of the federal FSLIC [Federal Savings and Loan InsuranceCorporation] was unmasked as sheer fraud. The "insurance" was simply the smoke-and-mirrors term for the un-backedname of the federal government. The poor taxpayers finally bailed out the S&Ls, but now we are left with the formerlysainted FDIC [Federal Deposit Insurance Corporation], for commercial banks, which is now increasingly seen to be shaky,since the FDIC itself has less than one percent of the huge number of deposits it "insures." The very idea of "depositinsurance" is a swindle; how does one insure an institution (fractional reserve banking) that is inherently insolvent, andwhich will fall apart whenever the public finally understands the swindle? Suppose that, tomorrow, the American publicsuddenly became aware of the banking swindle, and went to the banks tomorrow morning, and, in unison, demandedcash. What would happen? The banks would be instantly insolvent, since they could only muster 10 percent of the cashthey owe their befuddled customers. Neither would the enormous tax increase needed to bail everyone out be at allpalatable. No: the only thing the Fed could do, and this would be in their power, would be to print enough money to payoff all the bank depositors. Unfortunately, in the present state of the banking system, the result would be an immediateplunge into the horrors of hyperinflation. Let us suppose that total insured bank deposits are $1,600 billion. Technically, inthe case of a run on the banks, the Fed could exercise emergency powers and print $1,600 billion in cash to give to theFDIC to pay off the bank depositors. The problem is that, emboldened at this massive bailout, the depositors wouldpromptly redeposit the new $1,600 billion into the banks, increasing the total bank reserves by $1,600 billion, thuspermitting an immediate expansion of the money supply by the banks by tenfold, increasing the total stock of bankmoney by $16 trillion. Runaway inflation and total destruction of the currency would quickly follow.Banks Licensed to Create (counterfeit) Money (make a killing) from Nothing!"The fact is that there is a serious danger of this country becoming a pluto-democracy; that is, a sham republic with thereal government in the hands of a small clique of enormously wealthy men, who speak through their money, and whoseinfluence, even today, radiates to every corner of the United States." William McAdoo, President Wilson's nationalcampaign vice-chairman, wrote in Crowded Years (1974)John Maynard Keynes (1838-1946), a well known English economist: "Lenin was certainly right. There is nosubtler, no surer way to overturn existing society than to debauch the currency. The process engages all the economicforces on the side of destruction which not one man in a million is able to diagnose."Money is needed to facilitate production. Ninety per cent of money is not cash, but private bank credit loans, whichare simply zeroes preceded by a number greater than zero in a bank computer. Banks do not just lend out other peoples’savings, they create credit out of thin air via the Fractional Reserve System. This means a trading bank could multiplyany deposit 13 or more times and loan out the 13 times expanded amount. There are almost no more limits now as tohow much money banks can create and charge interest on this money created from nothing. Because of the bribery andmafia tactics of the private non-governmental banks, the United States Government’s National Bank established in1791 by Congress was shut down in 1832. Throughout the nineteenth century, larger banks worked to get laws passedthat would consolidate all paper money issuance under the control of just a few private owners. They did so under theguise of standardized national money. They were successful in 1863 with the passage of the National Banking Act. Itallowed newly chartered national banks to create a uniform national bank currency. A few years later the federalgovernment taxed state bank notes out of existence. In 1873, the government stopped all free coinage of metals. Theybegan to use United States Certificates of indebtedness -- United States Bonds -- as security for the new nationalcurrency distributed by the privately owned Federal Reserve Bank. The private banking dynasties finally managed to usurpthe people’s power to create money into their own hands. When one borrows from a private bank, one merely exchangeshis IOU (I owe you) note with the Bank’s IOU known as the Federal Reserve Note or a credit in one’s bank account. Thenotes used to state on its face "THE FEDERAL RESERVE BANK (a private banking corporation) WILL PAY TO THE BEARERON DEMAND ONE DOLLAR". However, it no longer says a dollar of what. It also says "SECURED BY UNITED STATESThe Hidden History Of Money & New World Order Usury Secrets Revealed at last! Page 78