For many, the US dollar is the place’s fiat currency. It all starts off with the US Treasury whom creates bonds which are federal IOU’s that are paid back on the specific time period with desire.
The person who received your hard earned cash from the bank as a lending product will use it to buy an issue such as a car. Then the face will pay the car dealer with the money he borrowed. Now the car dealer will deposit this money into an individual’s own account at the loan company. Now there is $190. 00 on deposit and the loan provider can legally steal 90 percent again or $81. 00 and lend that out.
Which is then spend on wars, military, governing administration salaries, social programs, open public work projects and other deficit spending that keeps on re-occurring. Next all those united states government employees and military workers take their salaries and deposit them into a variety of bank accounts throughout the usa. This is how the fiat revenue now enters the financial banking sector.
Finally over time, there becomes too much bonds at the Fed and cash in the Treasury. Any Treasury now takes the following excess cash and build up it into the various divisions of government.
Once again nothing backs a lot of these dollars except IOU’s. Furthermore, for the hard work each individual US citizen does to make sure you earn his or her salary, a small piece 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 will be forced into paying fees for the use of our current money supply system.
The entire system of producing money from nothing is a complete scam. It all starts together with the Federal Reserve and the YOU Treasury exchanging IOU’s. A check is an IOU for cash and a relationship is an IOU to be paid back with interest at several later date. Cash has existence once the Fed problems someone a check.
The Treasury holds each month auctions to sell off a bonds to primary marketers, who are the major banks. Then the US Federal Park enters the game by purchasing all the bonds from the loan companies through something called “open market operations”.
However, it’s important to note, that when any Fed writes and concerns a check, there is no funds what so ever inside the account to cover the amount of that check. The account a lot of these checks are written with will always carry a zero balance. Therefore each dollar that exists, is actually borrowed and must be refunded.
Once again all the banks go back to the US Treasury auctions the next month buying more bonds and selling them to the Federal Save. And every month this cycle of buying and selling keeps on getting repeated.
In that way actually leaving your account with only $10. 00 or ten percent of your finish deposit. However your bank statement will still demonstrate the entire $100. 00 greenbacks or one hundred percent of your bank, on deposit in your account.
Within the store-bought banking sector we now have what precisely I refer to as “magic money creation” which is actually called “Fractional Reserve Lending”. Here is an example of how fractional reserve lending works. As an example someone deposits $100. 00 into a bank account, the bank that received that deposit is now legally allowed to remove $90. 00 or ninety percent of your deposit and re-lend it to someone else.
This can be a Ultimate Government backed and sponsored pyramid scheme, where by only the banking high level who own the Federal reserve and other central banks around the world, massively profit by stealing from generations of innocent locals.
The next person then comes along, and borrows capital. Once the new borrower pays off the seller for what these bought the money again is normally re-deposited into the bank and after this there is $271 dollars concerning deposit. This creation from money through deposits and loans (fractional reserve lending) keeps re-occurring to when at some point your original $100. 00 deposit has grown to help you $1000. 00 (ten times the amount of your original deposit) in fiat currency made out of the bank.