Fractional reserve banking…what is it? Plainly put, fractional reserve banking is the method of a financial institution lending currency that it does not hold. To understand how the practice works, we must look truthfully into the stomach of the beast. All over the planet there are privileged entities known as central banks. Yes, that is correct, exclusive enterprises. In the United States, the exclusively owned central bank is referred to as the Federal Reserve Bank. It is imperative to know that this entity is not a government body, but has shareholders and is in big business for profits.
As soon as the United States government wants cash it produces treasurey notes. These notes hold an interest rate that the government has a duty to reimburse on top of the principle, just like a mortgage or credit card. The Treasury sends these treasury notes to the Federal Reserve Bank, and the Federal Reserve then “reproduces” cash and sends it to the Treasury as payment for the notes. Wait, it gets better…
Let’s apply an illustration. Let’s say the United Sates government is in want of $10,000,000. The Treasury will issue the treasury notes and the Federal Reserve will print federal reserve notes. The Treasury and the Federal Reserve then swap the notes with one another, in that way giving the Federal Reserve assets and the government gets liabilities. The treasury will then deposit the $10,000,000 into a commercial bank account. No big thing, right? This is where it gets out of control:
The bank retaining the funds is required to maintain 10% ($1,000,000) of the money in reserves and can loan out the additional 90%. So in our illustration, we’ll assume that a contractor gets a loan for $9,000,000 from the bank for his endeavor. The $9,000,000 is forwarded into the contractor’s checking account and the bank can now lend 90% of that money, having the 10% in mandatory reserves and the method replicates itself over and over again (remember, the contractor’s account still shows a balance of $9,000,000 and the government’s checking account still bares a balance of $10,000,000). In this fashion, additional cash is made and enter the financial system through loans. Each one of the loans has to be rewarded in exchange with interest, so even if all of the money were sent back to the banks, there would still be debt.
Makes you think twice on the subject of using that credit card, doesn’t it? While people cease using their credit cards and commence paying them back, there is deflation as the cash supply vanishes from the marketplace. This triggers the Federal Reserve to panic and they caution the representatives in our government that the cash supply needs to be increased to prevent a new great depression. So the government borrows, and the Federal Reserve lend. So what takes place if too much currency is made all at once? That is known as inflation, which initiates the cost of goods and services to grow, since the money is loosing value.
The Federal Reserve has a technique to regulate inflation, nevertheless. They dub it the Internal Revenue Service (IRS). The IRS, like the Federal Reserve, is a hush-hush entity which is ultimately the Federal Reserve’s debt collector. After you pay income tax on your hard earned wages, that cash goes for the interest on the government debt to the Federal Reserve (remember those treasury notes that we spoke about). In the meantime, you get no services from your government, your highways and bridges fall apart, and the municipal schools educate your kids on how to be fine taxpayers. They explain nothing concerning fractional reserve banking or monetary understanding. Why doesn’t the Treasury turn out it’s own money instead of borrowing duplicated money from a secret bank? Or perhaps a better question is, why doesn’t the government adhere to the Constitution?
It is vital to understand more in relation to fractional reserve banking. Click here to learn about the only GOVERNMENT APPROVED Facebook Money System online (you will need to approve the app).
Fractional reserve banking…what is it? Plainly put, fractional reserve banking is the method of a financial institution lending currency that it does not hold. To understand how the practice works, we must look truthfully into the stomach of the beast. All over the planet there are privileged entities known as central banks. Yes, that is correct, exclusive enterprises. In the United States, the exclusively owned central bank is referred to as the Federal Reserve Bank. It is imperative to know that this entity is not a government body, but has shareholders and is in big business for profits.
As soon as the United States government wants cash it produces treasurey notes. These notes hold an interest rate that the government has a duty to reimburse on top of the principle, just like a mortgage or credit card. The Treasury sends these treasury notes to the Federal Reserve Bank, and the Federal Reserve then “reproduces” cash and sends it to the Treasury as payment for the notes. Wait, it gets better…
Let’s apply an illustration. Let’s say the United Sates government is in want of $10,000,000. The Treasury will issue the treasury notes and the Federal Reserve will print federal reserve notes. The Treasury and the Federal Reserve then swap the notes with one another, in that way giving the Federal Reserve assets and the government gets liabilities. The treasury will then deposit the $10,000,000 into a commercial bank account. No big thing, right? This is where it gets out of control:
The bank retaining the funds is required to maintain 10% ($1,000,000) of the money in reserves and can loan out the additional 90%. So in our illustration, we’ll assume that a contractor gets a loan for $9,000,000 from the bank for his endeavor. The $9,000,000 is forwarded into the contractor’s checking account and the bank can now lend 90% of that money, having the 10% in mandatory reserves and the method replicates itself over and over again (remember, the contractor’s account still shows a balance of $9,000,000 and the government’s checking account still bares a balance of $10,000,000). In this fashion, additional cash is made and enter the financial system through loans. Each one of the loans has to be rewarded in exchange with interest, so even if all of the money were sent back to the banks, there would still be debt.
Makes you think twice on the subject of using that credit card, doesn’t it? While people cease using their credit cards and commence paying them back, there is deflation as the cash supply vanishes from the marketplace. This triggers the Federal Reserve to panic and they caution the representatives in our government that the cash supply needs to be increased to prevent a new great depression. So the government borrows, and the Federal Reserve lend. So what takes place if too much currency is made all at once? That is known as inflation, which initiates the cost of goods and services to grow, since the money is loosing value.
The Federal Reserve has a technique to regulate inflation, nevertheless. They dub it the Internal Revenue Service (IRS). The IRS, like the Federal Reserve, is a hush-hush entity which is ultimately the Federal Reserve’s debt collector. After you pay income tax on your hard earned wages, that cash goes for the interest on the government debt to the Federal Reserve (remember those treasury notes that we spoke about). In the meantime, you get no services from your government, your highways and bridges fall apart, and the municipal schools educate your kids on how to be fine taxpayers. They explain nothing concerning fractional reserve banking or monetary understanding. Why doesn’t the Treasury turn out it’s own money instead of borrowing duplicated money from a secret bank? Or perhaps a better question is, why doesn’t the government adhere to the Constitution?
It is vital to understand more in relation to fractional reserve banking. Click here to learn about the only GOVERNMENT APPROVED Facebook Money System online (you will need to approve the app).
Fractional reserve banking…what is it? Plainly put, fractional reserve banking is the method of a financial institution lending currency that it does not hold. To understand how the practice works, we must look truthfully into the stomach of the beast. All over the planet there are privileged entities known as central banks. Yes, that is correct, exclusive enterprises. In the United States, the exclusively owned central bank is referred to as the Federal Reserve Bank. It is imperative to know that this entity is not a government body, but has shareholders and is in big business for profits.
As soon as the United States government wants cash it produces treasurey notes. These notes hold an interest rate that the government has a duty to reimburse on top of the principle, just like a mortgage or credit card. The Treasury sends these treasury notes to the Federal Reserve Bank, and the Federal Reserve then “reproduces” cash and sends it to the Treasury as payment for the notes. Wait, it gets better…
Let’s apply an illustration. Let’s say the United Sates government is in want of $10,000,000. The Treasury will issue the treasury notes and the Federal Reserve will print federal reserve notes. The Treasury and the Federal Reserve then swap the notes with one another, in that way giving the Federal Reserve assets and the government gets liabilities. The treasury will then deposit the $10,000,000 into a commercial bank account. No big thing, right? This is where it gets out of control:
The bank retaining the funds is required to maintain 10% ($1,000,000) of the money in reserves and can loan out the additional 90%. So in our illustration, we’ll assume that a contractor gets a loan for $9,000,000 from the bank for his endeavor. The $9,000,000 is forwarded into the contractor’s checking account and the bank can now lend 90% of that money, having the 10% in mandatory reserves and the method replicates itself over and over again (remember, the contractor’s account still shows a balance of $9,000,000 and the government’s checking account still bares a balance of $10,000,000). In this fashion, additional cash is made and enter the financial system through loans. Each one of the loans has to be rewarded in exchange with interest, so even if all of the money were sent back to the banks, there would still be debt.
Makes you think twice on the subject of using that credit card, doesn’t it? While people cease using their credit cards and commence paying them back, there is deflation as the cash supply vanishes from the marketplace. This triggers the Federal Reserve to panic and they caution the representatives in our government that the cash supply needs to be increased to prevent a new great depression. So the government borrows, and the Federal Reserve lend. So what takes place if too much currency is made all at once? That is known as inflation, which initiates the cost of goods and services to grow, since the money is loosing value.
The Federal Reserve has a technique to regulate inflation, nevertheless. They dub it the Internal Revenue Service (IRS). The IRS, like the Federal Reserve, is a hush-hush entity which is ultimately the Federal Reserve’s debt collector. After you pay income tax on your hard earned wages, that cash goes for the interest on the government debt to the Federal Reserve (remember those treasury notes that we spoke about). In the meantime, you get no services from your government, your highways and bridges fall apart, and the municipal schools educate your kids on how to be fine taxpayers. They explain nothing concerning fractional reserve banking or monetary understanding. Why doesn’t the Treasury turn out it’s own money instead of borrowing duplicated money from a secret bank? Or perhaps a better question is, why doesn’t the government adhere to the Constitution?
It is vital to understand more in relation to fractional reserve banking. Click here to learn about the only GOVERNMENT APPROVED Facebook Money System online (you will need to approve the app).



