Fractional Reserve Banking: Stop Giving Satan the Gold

We need to stop giving the globalists our Money. If you look at our current bankings, lending, and monetary system; there is no way we can prevent total and complete collapse. We aren't talking Chapter 11 here, we are talking complete failure of the currency and our country. The Constitution specifies that the Federal Government has the power to coin the currency. However, since the Federal Reserve Act, the Beast from Jekyll Island where all the bankers and globalist leaders came up with the G20 system of private national banks will bankrupt the entire globe. The US government alone is now over 13 Trillion in debt. In actual fact, the number could be as high as several hundred trillion. The total number of worthless and speculative derivatives trades is near 1 Quadrillion worldwide. Since the Federal Reserve was put in place, the US economy has just been swirling and now we are just about the point where we get flushed down the toilet.

So how does the current fractional-reserve federal reserve banking system work? Most people when I explain it to them don't and can't believe me when I tell them. I have talked to accomplished business men who can't believe it. Here is how it works. In our current fractional reserve federal reserve banking system there are 4 major players: government, federal reserve (private central bank), big banks (JP Morgan/Chase, BoA, Wells Fargo), and the individual US citizen. The US took its money off the gold standard in 1971. So, there really is no value to the US currency. The US government has contracted with the Federal Reserve to print the money. Several times a year the FED buys US T-Bills from the US government and prints money according to the value of those T-Bills. Therefore, the US government fiat currency is based on debt alone and has no value and the debt created to created the money can never be paid off unless all the money created by the debt was given back.

The FED then prints money according to the value of the T-Bills it purchased from the US government. The FED then turns around and loans that money to the Big Banks who are FED members. The Big Banks that for every 1$ that they borrow from the FED, lend 10$ to US citizens for home and business loans. This 1:10 ratio is the money multiplier and is the basis for the fractional-reserve banking system. The reality and unconstitutionality of this system is that the Big Banks end up creating most of the money in the system and not the US government nor the FED.

For example: if the US wants 10,000$ printed then it sells 10,000$ in T-Bills to the FED. Yep, the US currency is based on Debt. The FED then prints 10,000$ in cash which it lends to a Mega Bank. The Mega bank due to the 10:1 money multiplier M3/M0 and fractional reserve lending then can lend 100,000$ based on that 10,000$ in cash. At 5-6% interest over 30 years the US citizen will likely end up paying back the Mega Bank 200,000$. the Mega Bank pays back the FED 20,000$ for the 10,000$ borrowed, and the US government pays the FED $10,000 at 3-4% interest for holding the T-Bills.

US Government --- $10,000 T-Bills--> FED ---$10,000 Cash--> Mega Bank
Mega Bank ---$100,000 Loan --> US Citizen --- Income Tax --> US Government
US Government --- $20,000 Interest --> FED <--$20,000 Interest--- Mega Bank
Mega Bank <--$200,000 Interest --- US Citizen <-- Socialism--- US Government

The FED does turn over some of it's profits back to the US government. This amounts to about 50 billion dollars annually. However due to the money the US owes the FED, it probably doesn't amount to a real profit or if it does it only a very minuscule profit on the total amount of money created (m3). Lately, the Banks have been purchasing T-Bills directly from the US government bypassing the FED altogether. That means even bigger profits for the Banks and bigger debt for the US government.

US Government --- $10,000 T-Bills--> Mega Bank ---$100,000 Loan --> US Citizen
US Government --- $20,000 Interest --> Mega Bank<--$200,000 Interest --- US Citizen

The reality of this system is that Mega Banks are not hurt when you default on your mortgage. Since they created 90% of the money out of thin air, and only borrowed 10c on the 1$, that means that when you default on your mortgage and they repo your house and sell it for 60c on the $1, they still made 40c and all the interest which they collect up front on an amortized loan. So, on a $10,000 initial investment they are collecting upwards of $220,000. What hurt banks in this latest economic downturn was the Banks and Communities buying or debt swapping CDO/Mortgaged Backed Derivatives instead of AAA Municipal or Corporate Bonds. Instead of the 4% interest on a Corporate Bond the Goldman Sachs CDO was promising 6%. Instead the toxic CDO derivatives became worthless and all that money went into the pockets of Goldman Sachs who was shorting the very same CDOs they were selling. Without financial reserves, the banks couldn't lend and couldn't do business and if they were not a FED member, didn't get bailout money.

So, how to fix this. Ending the FED is not enough. Again, the problem is not the FED alone. The instrument of death and destruction is the fractional-reserve banking system and the amortized mortgage. If you just simply end the FED, the Mega Banks will still be creating all the money and earning obscene profits while bankrupting the US government. What needs to be done is what Nobel Laurette Milton Freedman said, which was to switch to Full-Reserve Banking. We need to stop voluntarily giving the gold to the bad guys. We are responsible for funding all the evil these globalists/communists do. Every time we think, the price of my house is going to go up and that means more equity and profits for me is failing to think of the next buyer. How is the next buyer going to afford that same house which is 5 years older yet $30,000 more expensive?

Instead, what if state and community banking institutions were non-profit. What is they just charged an administrative fee for the loans they services just like local banks do today. Then these banks could go to the US Treasury and borrow money based on ability to repay, and then lend that money to the individual borrower. But instead of lending, the bank could purchase the prosperity or asset together with the borrower who brings 10% down. Then the borrower would make monthly payments and pay down the principle on the loan with each payment until the borrower became 100% owner and the debt obligation was paid in full. The borrower could be late on a payment but then would loose equity in the asset. The asset would not be repossessed by the bank until the borrower had missed enough payments such that he became completely divested from the asset of property. In other terms, missed payments end up getting deducted from the equity as rent. Any profits or losses in the value of the asset are the sole responsibility of the borrower, and the borrower has all rights to control, sell, rent, sub-let the asset until they have have paid 100% of the loan, or have lost all equity in the asset and the asset becomes the sole property of the bank.

In this system the US government could earn a small fee on all the money created in the economy and not just a fraction of it. And states and companies and individuals could borrow all the money they could possibly need at any time based on their ability to repay the loan.