In America, the US dollar is the nation’s fiat currency. It all starts off with the US Treasury whom creates bonds which are united states government IOU’s that are paid back using a specific time period with curiosity.
The Treasury holds each month auctions to sell off its bonds to primary marketers, who are the major bankers. Then the US Federal Park enters the game by getting all the bonds from the loan companies through something called “open market operations”.
Once again nothing backs those dollars except IOU’s. Furthermore, for the hard work every single US citizen does to earn his or her salary, a part of it eventually ends up in the Treasury in the form of income taxes. Goods on the market pays the principle and interest on the bond that your Fed bought with a verify from nothing. US citizens will be forced into paying duty for the use of our recent money supply system.
The entire system of making money from nothing is a total scam. It all starts together with the Federal Reserve and the YOU AND ME Treasury exchanging IOU’s. Your check is an IOU meant for cash and a bond is an IOU to be paid back with interest at a few later date. Cash makes existence once the Fed problems someone a check.
Which is then spend on wars, military, federal salaries, social programs, general public work projects and other debt spending that keeps at re-occurring. Next all those government employees and military staff take their salaries and deposit them into different bank accounts throughout the location. This is how the fiat revenue now enters the financial banking sector.
The next person consequently comes along, and borrows money. Once the new borrower gives the seller for what they bought the money again is 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 where by at some point your original $100. 00 deposit has grown to make sure you $1000. 00 (ten moments the amount of your original deposit) in fiat currency produced from the bank.
Thereby actually leaving your balance with only $10. 00 or ten percent of your finish deposit. However your lender statement will still demonstrate the entire $100. 00 dollars or one hundred percent of your money, on deposit in your bank account.
The person who received your hard earned cash from the bank as a lending product will use it to buy some thing such as a car. Then see your face will pay the car dealer along with the money he borrowed. Nowadays 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 Three months percent again or $81. 00 and lend this out.
Within the commercial banking sector we now have the things I refer to as “magic money creation” which is literally called “Fractional Reserve Lending”. Here is an example of how fractional reserve lending works. Say someone deposits $100. 00 into a bank account, the bank that received that deposit is right now legally allowed to remove $90. 00 or ninety percent of your deposit and re-lend it to someone else.
Once again that banks go back to the US Treasury auctions the next month investing in more bonds and merchandising them to the Federal Save. And every month this pattern of buying and selling may keep on getting repeated.
Finally over time, there becomes an excessive amount of bonds at the Fed and cash in the Treasury. That Treasury now takes this kind of excess cash and build up it into the various branches of government.
Nevertheless it’s important to note, that when any Fed writes and problems a check, there is no funds what so ever inside the account to cover the amount of which usually check. The account a lot of these checks are written with will always carry some zero balance. Therefore each dollar that exists, is actually borrowed and must be refunded.
This can be the Ultimate Government backed and sponsored pyramid scheme, when only the banking elite who own the Federal and other central banks world wide, massively profit by stealing with generations of innocent residents.