For some, the US dollar is the country’s fiat currency. It all kicks off with the US Treasury who creates bonds which are government IOU’s that are paid back using a specific time period with curiosity.
In so doing actually leaving your account with only $10. 00 or ten percent of your 100 % deposit. However your lender statement will still show the entire $100. 00 pounds or one hundred percent of your lodge, on deposit in your bank account.
The next person consequently comes along, and borrows funds. Once the new borrower pays off the seller for what these bought the money again can be re-deposited into the bank and there is $271 dollars with deposit. This creation of money through deposits and loans (fractional reserve lending) keeps re-occurring to when at some point your original $100. 00 deposit has grown to $1000. 00 (ten moments the amount of your original deposit) in fiat currency constructed from the bank.
The Treasury holds monthly auctions to sell off it’s bonds to primary merchants, who are the major mortgage lenders. Then the US Federal Reserve enters the game by investing in all the bonds from the bankers through something called “open market operations”.
Once again any banks go back to the US Treasury auctions the next month investing in more bonds and trading them to the Federal Preserve. And every month this cycle of buying and selling keeps on getting repeated.
Within the industrial 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. Let’s pretend someone deposits $100. 00 into a bank account, the bank who received that deposit is now legally allowed to remove $90. 00 or ninety percent of your deposit and re-lend it to someone else.
The person who received your money from the bank as a mortgage will use it to buy something such as a car. Then see your face will pay the car dealer together with the money he borrowed. Now the car dealer will lodge this money into an individual’s own account at the lender. Now there is $190. 00 on deposit and the bank can legally steal 90 percent again or $81. 00 and lend it out.
This can be the Ultimate Government backed and sponsored pyramid scheme, when only the banking top notch who own the Given and other central banks world wide, massively profit by stealing from generations of innocent locals.
The entire system of getting money from nothing is a ready-made scam. It all starts with the Federal Reserve and the YOU AND ME Treasury exchanging IOU’s. A check is an IOU to get cash and a bond is an IOU to be repaid with interest at some later date. Cash has existence once the Fed issues someone a check.
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 at the Treasury in the form of income taxes. Goods on the market pays the principle and interest on the bond of the fact that Fed bought with a verify from nothing. US citizens are forced into paying income taxes for the use of our current money supply system.
At last over time, there becomes an excessive amount of bonds at the Fed and cash in the Treasury. The Treasury now takes that excess cash and deposits it into the various organizations of government.
Nonetheless it’s important to note, that when all the Fed writes and issues a check, there is no revenue what so ever inside the account to cover the amount of the fact that check. The account those checks are written from will always carry some zero balance. Therefore just about every dollar that exists, is in fact borrowed and must be reimbursed.
Which is then spend on wars, military, federal salaries, social programs, general population work projects and other deficit spending that keeps on re-occurring. Next all those government employees and military personnel take their salaries and deposit them into various bank accounts throughout the usa. This is how the fiat funds now enters the store-bought banking sector.