The united states, the US dollar is the place’s fiat currency. It all kicks off with the US Treasury whom creates bonds which are government IOU’s that are paid back on the specific time period with interest.
The person who received your hard earned dollars from the bank as a lending product will use it to buy some thing such as a car. Then that individual will pay the car dealer while using the money he borrowed. Right now the car dealer will deposit this money into his own account at the bank. Now there is $190. 00 on deposit and the loan company can legally steal Eighty percent again or $81. 00 and lend it out.
It is a Ultimate Government backed and sponsored pyramid scheme, where only the banking top dogs who own the Fed and other central banks all over, massively profit by stealing from generations of innocent people.
The entire system of producing money from nothing is a ready-made scam. It all starts with the Federal Reserve and the US Treasury exchanging IOU’s. A check is an IOU meant for cash and a connection is an IOU to be paid back with interest at a few later date. Cash comes into existence once the Fed issues someone a check.
The Treasury holds regular auctions to sell off a bonds to primary merchants, who are the major bankers. Then the US Federal Reserve enters the game by purchasing all the bonds from the banks through something called “open market operations”.
At last over time, there becomes surplus bonds at the Fed and cash in the Treasury. The Treasury now takes that excess cash and stores it into the various divisions of government.
Within the commercial banking sector we now have everything that I refer to as “magic money creation” which is literally called “Fractional Reserve Lending”. Here is an example of how fractional reserve lending works. Let’s pretend someone deposits $100. 00 into a bank account, the bank which usually received that deposit currently is legally allowed to remove $90. 00 or ninety percent of your deposit and re-lend it to someone else.
Once again nothing backs those dollars except IOU’s. Furthermore, for the hard work just about every US citizen does to make sure you earn his or her salary, a small piece of it eventually ends up with the Treasury in the form of income taxes. This is exactly what pays the principle and interest on the bond that Fed bought with a verify from nothing. US citizens are actually forced into paying taxes for the use of our current money supply system.
In that way actually leaving your account with only $10. 00 or ten percent of your total deposit. However your loan provider statement will still show the entire $100. 00 dollars or one hundred percent of your lodge, on deposit in your balance.
Once again all the banks go back to the US Treasury auctions the next month choosing more bonds and merchandising them to the Federal Park. And every month this action of buying and selling makes on getting repeated.
The next person then comes along, and borrows revenue. Once the new borrower pays off the seller for what they bought the money again can be re-deposited into the bank and now there is $271 dollars with deposit. This creation of money through deposits and loans (fractional reserve lending) keeps re-occurring to the place at some point your original $100. 00 deposit has grown to make sure you $1000. 00 (ten circumstances the amount of your original deposit) in fiat currency constructed from the bank.
Which is consequently spend on wars, military, government salaries, social programs, general population work projects and other debt spending that keeps with re-occurring. Next all those governing administration employees and military staff take their salaries and deposit them into different bank accounts throughout the nation. This is how the fiat capital now enters the commercial banking sector.
Nonetheless it’s important to note, that when all the Fed writes and difficulties a check, there is no money what so ever inside account to cover the amount of that check. The account a lot of these checks are written coming from will always carry your zero balance. Therefore each dollar that exists, is normally borrowed and must be reimbursed.