It is an assertion of mine that until we as individuals in this country have a general understanding of the impact banking has on our way of life, then our current state of affairs around the globe will never be fully understood and dealt with. We will continue to be fooled by the headlines in the newspapers and in the end not realize that we have given our sovereign power over to people we are not even aware of.
Many of the people I work with and know as friends find little or no interest in the world of finance. That is until the system goes off the rails as it has now. All along running in the background of our everyday lives, actions are taken which compound themselves, and over time build to a point where the system breaks. Many people assume that situations like the one we have facing us now, economic collapse, is brought about by consumers getting greedy, or stock brokers and CEO’s grabbing for all they can get and to all that I would have to agree that the consciousness of greed, once in the atmosphere, can be epidemic. But behind all this, there is more taking place. There is something driving these events and the actions that lead up to them. The following quote reveals an understanding of the forces at work behind the scenes. This paper will attempt to draw more of this awareness out into the open.
"'The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution... Bankers are more dangerous than standing armies... (and) if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and CORPORATIONS that will grow up around them will deprive the People of all their property until their children will wake up homeless on the continent their Fathers conquered.'
-Thomas Jefferson
Every time I see this quote I have to read it several times, reminding me that it was uttered over 200 years ago. At that time the world already had experience of Central Banking and it appears that Jefferson was well aware of the consequences. It is due to his insight and others who wrote the Constitution of the United States that within the constitution it is clearly mandated that only the Department of Treasury of the United States has the power to issue currency and coins, and that the currency and coin would be backed by gold and silver. The reason for backing currency with precious metals is to ensure that there will only be as much currency printed as there is in value of gold and silver in the treasury. By reason of this relationship between the amount of currency and precious metals in the treasury, governments are constrained in their spending.
The ink was barely dry on the fledgling Constitution when those in support of a privately owned Central Bank, that would act on behalf of the U.S Government, to lend money to the government (with interest) and manage the creation and distribution of its money supply, were actively engaged in undermining the sovereignty of the United States and its citizens. Alexander Hamilton was one of the more vocal proponents for centralized banking (possibly due to the fact that he was instrumental in creating the Bank of New York which later became one of the banks in the Federal Reserve system).
As our nation evolved, central banking finally found its way back onto the scene with its’ present incarnation starting in 1913. Since 1913 incremental changes to our system of finance brought us to a point where nothing backs our currency. Both gold and silver were gradually de-monetized and as a result the Federal Reserve Note you carry in your wallet or purse has less intrinsic value than your wallet or purse. It is backed by government debt. The change to central banking brought with it a monetary system where money is created every time the government sells a U.S Savings bond. More debt, more money created. It is interesting just how much power has been given to banks. By walking into your local bank and acquiring a mortgage for $100,000.00 the bank registers that loan in its book keeping system as an asset. The bank can now make a loan based on that $100,000.00 that you borrowed. It doesn’t stop there either. Banking laws allow banks to loan 10 times the value of their assets. Your original $100,000.00 loan allows your bank to loan out $1,000,000.00 more. Of course every loan made from that $1 Million allows that bank to loan another 10 times that amount. The only restraints on a bank are that they are required to have 10% of the amount they have lent out in reserves.
What a great deal! Let’s form a bank! We each put $100,000.00 in the pot. Let’s say we get 10 investors to do that. Now we have $1 million dollars to lend. For every $1.00 we are capable of lending out, we get to lend out $9.00 more!!! If we were able to lend out the entire $90,000.00 we raised to create our bank (remember 10% in reserves) we get to create $9 million new dollars to lend!! What a deal! Of course that $9 million can turn into almost $90 million if we keep getting customers to borrow from us. Welcome to the banking “bidness”. Our income comes from the interest we charge on these loans. What is really interesting is that while we have nothing to back up all this money we are creating(except the 10% in reserves), the people we are lending it to are required to have collateral in order to get us to lend them the money!! Hahahahahahaha what a deal, this keeps getting better all the time! We create money out of nothing, and get people to sign over their house, cars, boats to us if they can’t pay the loan back!! Even if they can’t make the very last payment on their mortgage, we get the whole house!!
I know I mentioned it earlier that the Federal Reserve Bank of the United States is a privately owned bank. Imagine the deal that was made to allow that to come about!! Who do you think holds the loans for these massive government spending deficits? Is it common knowledge that over 30% of the United States governments’ annual budget goes to pay the interest for the national debt? That makes a tidy sum of $600 billion or so in interest per year! What the ……….? Who the …………? How the ………….?
And this, my friends, is just the tip of the iceberg!
If you like this type of topic and are curious for more, I also put out a bi-monthly newsletter ($20.00 per month) which focuses on the macro-economic world, the larger cycles that playing out and how you might position your finances in response to these megatrends. My bi-monthly articles are much shorter and more specific. Just let me know if you would like to try it!
dacelestino@gmail.com
