The Great Money Scam

“If the American people ever allow private banks to control issue of their currency, first by inflation, then by deflation, the banks and the corporations that will grow-up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to ‘the people,’ to whom it properly belongs.” Thomas Jefferson

For most of us the subject of the inner workings of our financial system and the question of how money comes into being and the part it plays in everyday banking, always sounds so boring, uninteresting – and complicated. And that is exactly how the bankers like it… You are not meant to figure it all out or supposed to discover exactly how spectacularly simple the subject really is.

Indeed, the bankers literally create money from nothing, out of ‘thin air’ if you will. Forget all the media ‘talking heads,’ the so-called ‘economists,’ financial experts and government officials, because they are all working at the bankers’ behest, some knowingly and others are simply deceived by their so-called ‘education’ and/or are propagandised by their superiors all the way down the ‘pyramid.’ With an authoritative air, they stand before us, spouting endless, incomprehensible gibberish that they have heard second-hand or learned off-pat from a banker-written textbook, specifically designed to hide and confuse how we are all ‘robbed,’ each and every day. Indeed most of them are just programmed ‘repeaters,’ endlessly repeating so-called ‘facts’ they have been told or read.

healthy society

An honest, healthy, uncorrupted financial system is simplicity itself. It requires no taxation and is self-sustaining, generating no debt!

corrupt society

Again I would ask, how is money created?  If the average person on the street is asked this question, most of them have absolutely no idea.  This is rather odd, because we all use money – constantly.  One would assume that it would only be natural for us to know whence it came.  So what is the answer?  Many people assume that it is the government that generates the money, but that is absolutely not the case.  If governments could just print and spend whatever money it needed-to, the national debt would be zero.  But instead, to take the US national debt as an example, as of 1st January 2015, this stood at $18,096,707,199,355.91. That is over $18 trillion or put another way, $56,000 per citizen and this is growing at the rate of $2.43 billion daily.

We often hear these huge figures being bandied around, by financial ‘talking heads,’ but do any of us have any real concept of them? For example, what does a million dollars (pounds) look like? Or a billion… and how about a trillion? It is fair to say that most people have never even seen $10,000 or £10,000 let alone these telephone number-like sums we hear so much about on a daily basis.

The following illustrations provide some idea of the reality of the sums involved… so strap-in and prepare to be shocked…!



1 million

100 mill

However, now we are getting a little more serious. Below is $1bn…


However, here is $1 trillion… These are the kind of numbers to which I refer…


The 2011 US federal deficit was $1.412 trillion, 41% more than is depicted above. If you had spent $1m a day since the day Jesus was born, you would still not have spent $1 trillion by now, but only a ‘mere’ $700 billion which by coincidence, just happens to be the same amount that the banks received in their recent bailout.


In fact, the United States national debt is soon to pass 20% of the entire world’s combined economy (GDP / Gross Domestic Product).

If the national debt could be laid in a single line of $1 bills, it would stretch out from Earth, all the way past Uranus, a distance of some 2 billion miles.

And to whom is this vast sum of money owed… Yes, you guessed, to the banks, those nice, benevolent people who lend us ‘their’ money to buy cars and houses and to whom the governments of the world owe every penny of money currently in circulation

But why does any government need to borrow money from anyone?

The truth is that in a healthy, uncorrupted society a government does not have to borrow anything from anyone.  But under the central banking paradigm, governments have allowed themselves to be subjugated to a financial system which requires the constant, ongoing borrowing of ever larger and larger amounts of money.  Obviously, this arrangement is not permanently sustainable and the inherent structural problems caused by such a system are at the very heart of all our national debts and monetary crises of today.

To use the US government as a convenient example once again; if it wants to issue $1 billion, it has to go ‘cap in hand’ to the Federal Reserve to borrow the money. The FR then contacts the Treasury and instructs them print 10,000,000 Federal Reserve Notes in units of one hundred dollars. The Treasury charges the FR 2.3 cents for each note, resulting in a total of $230,000 for the 10,000,000 FRNs. The FR then lends the $1 billion to the government at face value plus interest. To add insult to injury, the government then has to create a bond for $1 billion as security for the loan. And thus do the banksters enrich themselves. However, in reality the FR does not even print the money, it is simply a computer entry in their accounting system.

“It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people.” Benjamin Franklin

All banks in the US are members of the Federal Reserve Banking System and worldwide are affiliated to their own country’s respective central bank. This membership makes it LEGAL for them to create money from nothing and lend it to us. Like the goldsmiths of old, they know that only a small fraction of the money deposited in their banks is ever actually withdrawn in the form of cash. Only about 4% of all the money that exists is in the form of currency. The rest of it is simply a computer entry, it exists DIGITALLY only.


Our worldwide monetary system is what is known as a FIAT currency.


Imagine sitting down to play Monopoly and having a friend claim that they are going to act as both the bank and a player. Then when the game starts and your friend, using bank money, buys every single property and fills them with every hotel. You and the other players would be quickly bankrupted because your friend has taken all your money and now owns everything. Who would ever play the game that way? Unfortunately, we all do. In 1913 and as previously related at length, the US financial system, like so many others before and since, was hijacked in much the same way as that Monopoly game when private banksters bribed, coerced and cajoled politicians into granting them the legal right to create money. It is illegal for you and I to print our own money, but our government willingly lets the banks create money out of thin air and then unbelievably, borrows it back from them in the form of interest-bearing loans. This is the ONE AND ONLY reason for the massive national debt and its spiralling increase and NOT government overspending or trade deficits or anything similar, as we are constantly being told. We are being lied to by the banks and their professional apologists 24/7, I’m afraid.

In a FIAT money system, money is not backed by a physical commodity (ie. gold or silver.) Instead, the only thing that gives the money value is its relative scarcity and the faith placed in it by the people that use it. In addition, there is no restriction on the amount of money that can be created. This allows for unlimited credit creation, initially leading to the mistaken belief that this represents solid economic growth, as spending and business profits grow and frequently there is a rapid growth in equity prices. In the long term however, the economy suffers even more by the following, inevitable contraction than it ever gained from the expansion in credit.

In most cases, a fiat monetary system comes into existence as a result of excessive public debt. When a government is unable to repay all its debt in gold or silver, the temptation to remove physical backing rather than to simply default becomes irresistible. This was the case in 18th century France as well as in the 1930s and more recently in the 1970s in the US, when President Nixon removed the last link between the dollar and gold and which is still in effect today.

Hyper-inflation is the terminal stage of any fiat currency. With hyper-inflation, money loses most of its value very quickly indeed. It often occurs as the result of increasing regular inflation to the point where all confidence in money is lost. In a fiat monetary system, the value of money is based on confidence and once that confidence is gone, money rapidly becomes worthless, usually irreversibly, regardless of its scarcity. The United States has so far avoided hyper-inflation by shifting between a fiat and gold standard over the past 200 years.

While fractional reserve banking mechanics are surprisingly simple, the implications of the system are not. Mechanically, fractional reserve banking depends on 3 factors:

Initial deposit: The amount of the initial deposit

Reserve requirement: The fractional reserve requirement is a number between 0 and 1

Iterations: The number of times that money is deposited or cycled through the system.

The initial deposit into the fractional reserve banking system comes from the government when they issue bonds and deliver them to the bank. These bonds are in effect ‘IOUs’ from the government as a promise to pay the amount of the bond back – with interest.

The reserve requirement is a number between 0 and 1 and sets the ratio of the amount of money that they bank can ‘print’ to loan out. For example, if the reserve requirement is 0.1 (10%) and the bank receives $100 in government bonds, then the bank can loan out $100 × (1 − 0.1) = $100 × 0.9 = $90.

So the basic mathematics of the system are extremely simple. Generally:

Loan = Deposit × (1 − Reserve Requirement)

  1. $90 = $100 × (1 − 0.1)

Or, in terms of what the bank must keep in reserve, i.e. the amount of money that it cannot loan:

Reserve = Deposit × Reserve Requirement

e.g. $10 = $100 × 0.1

But it does not stop there. Once a loan is made, the person that receives the loaned money spends it to obtain some form of wealth in the real world. That could be absolutely anything, a house, a car, groceries, a meal at a restaurant, etc. etc. The seller of the product or service then takes that money, goes back to the bank, and deposits it. That deposit is then subject to the same reserve requirement with the remainder being made available for the bank to loan out again.

“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.” John Kenneth Galbraith, Professor of Economics at Harvard

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” Henry Ford, founder of the Ford Motor Company.


The Federal Reserve Bank only creates the Principal, not the usury or interest that it lends to the US government. Therefore the interest can NEVER be repaid and the debt continues to spiral out of control and the end result is inevitably foreclosure and bankruptcy.

This provides the banksters with an incredible engine for wealth generation, which would not be at all possible in an ordinary economy. Imagine consistently loaning-out 9 times as much money as you actually possessed, how long would that be sustainable? But in our corrupted system, it all works out because the FRB is always able to create more money from nothing to keep it all going.

In her book ‘Web of Debt,’ author Ellen Brown provides a good example of just how profitable this is for the banks…

“You live in a small town with only one bank. You sell your house for $100,000 and deposit the money into your checking account at the bank. The bank then advances 90 percent of this sum, or $90,000, to Miss White to buy a house from Mr. Black. The bank proceeds to collect from Miss White both the interest and the principal on this loan. Assume the prevailing interest is 6.25 percent. Interest at 6.25 percent on $90,000 over the life of a 30-year mortgage comes to $109,490. Miss White thus winds up owing $199,490 in principle and interest on the loan – not to you, whose money it allegedly was in the first place, but to the bank. Legally, Miss White has title to the house; but the bank becomes the effective owner until she pays off her mortgage.

Mr. Black now takes the $90,000 Miss White paid him for his house and deposits it into his checking account at the town bank. The bank adds the $90,000 to its reserve balance at its Federal Reserve Bank and advances 90 percent of this sum, or $81,000 to Mrs. Green, who wants to buy a house from Mr. Grey. Over 30 years, Mrs. Green owes the bank $81,000 in principle plus $98,541 in interest, or $179,541; and the bank has become the effective owner of another house until the loan is paid off. Mr. Grey then deposits Mrs. Green’s money into his checking account. The process continues until the bank has ‘lent’ $900,000, on which it collects $900,000 in principal and $985,410 in interest, for a total of $1,885,410. The bank has thus created $900,000 out of thin air and has acquired effective ownership of a string of houses, at least temporarily, all from an initial $100,000 deposit; and it is owed $985,410 in interest on this loan. The $900,000 principle is extinguished by an entry on the credit side of the ledger when the loans are paid off; but the other half of this conjured $2 million – the interest – remains solidly in the coffers of the bank, and if any of the borrowers should default on their loans, the bank becomes the owner of the mortgaged property.”

So imagine if we borrow £10,000 to make some home improvements. The bank did not actually take £10,000 from its pile of cash and put it into your pile, they simply went to their computer and input an entry of £10,000 into your account in effect creating from nothing a debt which you have to secure with an asset and repay with interest. The bank is allowed to create and lend as much debt as they want, as long as they do not exceed the 10:1 ratio imposed by the FRB.

As we can see, betting with 100 times the amount of money you actually possess, can turn an outrageous profit when you’re winning, but even the slightest downturn can destroy you, which is exactly what happened to the banks during the last financial crisis. Of course this is not news, the biggest players know exactly how this game is played. In fact, the more volatile the market is, the more profit that can be made.

So whilst ordinary citizens are being ruined by boom and bust cycles, the reality is that the markets are behaving exactly as intended and money is constantly being siphoned-off by those privy to the scam.

“The few who understand the system, will either be so interested from its profits or so dependent on its favours, that there will be no opposition from that class.Rothschild Brothers of London, 1863

 There are many other examples of rigging the system such as the LIBOR scandal, or the more recent ISDA fix scandal, where banks were essentially caught colluding to manipulate global markets. But all that is not even the worst aspect of the scam. Whatever system of finance we use there will always be a minority who sell their souls, one way or another or lie and cheat to become obscenely rich, but the worst and most pernicious aspect of this scam by far, is inflation, because it attacks the wealth and well-being of every ordinary, honest, hard-working person.

Consider this… If all money is created as debt, which is being loaned out at interest, how is there ever enough money in the system to cover the interest accruing? The simple answer is that there is not. By definition, there is always more money owed-back than was created in the first place and that ever-escalating debt creates a mathematical inevitability where the harder we struggle to break even, the more indebted we become.

1 dollar

Since the money required to pay back the interest does not exist, more loans are required and then more loans and more loans, a process which ultimately inflates the value of currency, drives prices higher and higher, and cripples a nation with debt.

This in fact is the sole reason that people such as Charles Lindbergh Sr., John Jacob Astor IV, Benjamin Guggenheim, Isidor Straus and indeed many other wealthy individuals were so opposed to the Federal Reserve Act. They knew, as we now know to our great cost, that this system absolutely destroys the wealth of every individual by removing it into the already overflowing coffers of the banking industry. As people such as those mentioned above had so much more to lose than most, the reason for their vehement opposition to the banksters’ plans now becomes very apparent.

“If the American people ever allow private banks to control issue of their currency, first by inflation, then by deflation, the banks and the corporations that will grow-up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to ‘the people,’ to whom it properly belongs.” Thomas Jefferson


Sadly, the warning issued by Jefferson went unheeded by those who could have prevented the abomination of the FRB from becoming a reality. It is a fact that back in the 1970s with just an ‘ordinary,’ what is now termed a ‘minimum wage’ job, it was easily possible to buy a house AND support a family. But today, despite working at two jobs in some cases, many families do not have enough to put food on the table every day. Homelessness is becoming endemic and there are now (2015) almost 100 million people in the western world living below the ‘poverty line.’ In addition it was recently stated that there are approximately (the exact figures are unknown) 150,000 homeless people living on the streets of Los Angeles, alone. These trends run totally contrary to any reasonable standard of ‘progress’ to be expected from a society with a benevolent economy, especially considering all the many technological advancements of the last century. So much for ‘your friendly bank,’ eh?


To reiterate: Money is created from nothing at all and every time a loan is made, interest-bearing money is created out of debt.  This is surely the biggest, most insidious scam of all time. 



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