In America, the US dollar is the country’s fiat currency. It all starts with the US Treasury exactly who creates bonds which are united states government IOU’s that are paid back over a specific time period with attraction.
The person who received your cash from the bank as a loan product will use it to buy some thing such as a car. Then that individual will pay the car dealer while using the money he borrowed. Right now the car dealer will deposit this money into an individual’s own account at the bank. Now there is $190. 00 on deposit and the loan company can legally steal 90 percent again or $81. 00 and lend this out.
Finally over time, there becomes too much bonds at the Fed and cash in the Treasury. The Treasury now takes this excess cash and build up it into the various organizations of government.
Thereby actually leaving your account with only $10. 00 or ten percent of your total deposit. However your loan company statement will still demonstrate to the entire $100. 00 dollars or one hundred percent of your bank, on deposit in your account.
Which is after that spend on wars, military, governing administration salaries, social programs, open public work projects and other shortfall spending that keeps with re-occurring. Next all those government employees and military people take their salaries and deposit them into several bank accounts throughout the usa. This is how the fiat money now enters the commercial banking sector.
Within the store-bought banking sector we now have everything that I refer to as “magic money creation” which is truly 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 which usually received that deposit currently is legally allowed to remove $90. 00 or ninety percent of your deposit and re-lend it to someone else.
However, it’s important to note, that when that Fed writes and problems a check, there is no money what so ever inside the account to cover the amount of that check. The account a lot of these checks are written from will always carry a zero balance. Therefore each individual dollar that exists, is in fact borrowed and must be paid back.
Once again all the banks go back to the US Treasury auctions the next month choosing more bonds and merchandising them to the Federal Reserve. And every month this pattern of buying and selling makes on getting repeated.
The Treasury holds each month auctions to sell off its bonds to primary marketers, who are the major banks. Then the US Federal Save enters the game by choosing all the bonds from the loan companies through something called “open market operations”.
This can be the Ultimate Government backed and sponsored pyramid scheme, where by only the banking elite who own the Federal and other central banks all over, massively profit by stealing out of generations of innocent locals.
The next person in that case comes along, and borrows revenue. Once the new borrower will pay the seller for what they bought the money again is usually re-deposited into the bank and after this there is $271 dollars at 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 make sure you $1000. 00 (ten moments the amount of your original deposit) in fiat currency produced from the bank.
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 portion of it eventually ends up for the Treasury in the form of income taxes. This is exactly what pays the principle and interest on the bond that your Fed bought with a check from nothing. US citizens will be forced into paying duty for the use of our current money supply system.
The entire system of producing money from nothing is an entire scam. It all starts with the Federal Reserve and the USA Treasury exchanging IOU’s. A check is an IOU designed for cash and a connection is an IOU to be refunded with interest at some later date. Cash has existence once the Fed issues someone a check.