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The united states, the US dollar is the nation’s fiat currency. It all begins with the US Treasury just who creates bonds which are federal IOU’s that are paid back for a specific time period with interest.

Which is consequently spend on wars, military, governing administration salaries, social programs, open public work projects and other shortfall spending that keeps at re-occurring. Next all those governing administration employees and military workers take their salaries and deposit them into a variety of bank accounts throughout the location. This is how the fiat money now enters the industrial banking sector.

The Treasury holds regular auctions to sell off it’s bonds to primary dealers, who are the major loan companies. Then the US Federal Park enters the game by getting all the bonds from the bankers through something called “open market operations”.

Once again nothing backs a lot of these dollars except IOU’s. Furthermore, for the hard work each individual US citizen does to help 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 what pays the principle and interest on the bond that your Fed bought with a check from nothing. US citizens are forced into paying duty for the use of our present-day money supply system.

The entire system of producing money from nothing is a ready-made scam. It all starts along with the Federal Reserve and the YOU AND ME Treasury exchanging IOU’s. A good check is an IOU for cash and a connection is an IOU to be refunded with interest at a few later date. Cash makes existence once the Fed issues someone a check.

Once again all the banks go back to the US Treasury auctions the next month investing in more bonds and trading them to the Federal Reserve. And every month this pattern of buying and selling makes on getting repeated.

Therefor actually leaving your account with only $10. 00 or ten percent of your total deposit. However your loan provider statement will still exhibit the entire $100. 00 greenbacks or one hundred percent of your deposit, on deposit in your account.

This can be a Ultimate Government backed and sponsored pyramid scheme, when only the banking top dogs who own the Fed and other central banks around the world, massively profit by stealing out of generations of innocent locals.

The person who received your hard earned cash from the bank as a mortgage will use it to buy an item 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 loan company. Now there is $190. 00 on deposit and the lender can legally steal 90 percent again or $81. 00 and lend that out.

At last over time, there becomes an excessive amount of bonds at the Fed and cash in the Treasury. The Treasury now takes the following excess cash and stores it into the various divisions of government.

Nonetheless it’s important to note, that when all the Fed writes and concerns a check, there is no capital what so ever inside the account to cover the amount of that check. The account those checks are written with will always carry your zero balance. Therefore every single dollar that exists, is usually borrowed and must be refunded.

Within the industrial banking sector we now have what I refer to as “magic money creation” which is truly 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 the fact 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.

The next person consequently comes along, and borrows money. Once the new borrower will pay the seller for what they will bought the money again is usually re-deposited into the bank and after this there is $271 dollars on deposit. This creation in 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 help you $1000. 00 (ten circumstances the amount of your original deposit) in fiat currency created from the bank.