Mortgage Elimination
Part 1
Former Congressman Louis McFadden, chairman of the House Committee on Banking and Currency remarked about the Federal Reserve Bank: "A super-state controlled by international bankers and international industrialists acting together to enslave the world for their own pleasure."
Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States -- Sen. Barry Goldwater (R- AZ)
When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money. -- Putting It Simply, Boston Federal Reserve Bank
Our money is "pure fiat" through and through. Money by decree.
The second fact that needs to be clearly understood is that, in spite of the technical jargon and seemingly complicated procedures, the actual mechanism by which the Federal Reserve creates money is quite simple. They do it exactly the same way the goldsmiths of old did except, of course, the goldsmiths were limited by the need to hold some precious metals in reserve, whereas the Fed has no such restriction.
The Federal Reserve is candid. The Federal Reserve itself is amazingly frank about this process.
A booklet published by the Federal Reserve Bank of New York tells us:
Currency cannot be redeemed, or exchanged, for Treasury gold or any other asset used as backing. The question of just what assets 'back' Federal Reserve notes has little but bookkeeping significance.
Elsewhere in
the same publication we are told:
"Banks are creating money based on a
borrower's promise to pay (the IOU)...Banks create money by 'monetizing' the
private debts of businesses and individuals."
In a booklet entitled Modern Money Mechanics, now withdrawn, the Federal
Reserve Bank of
Chicago
says:
In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper. Deposits are merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face amount.
What, then,
makes these instruments -- checks, paper money, and coins -- acceptable at face
value in payment of all debts and for other monetary uses? Mainly, it is the
confidence people have that they will be able to exchange such money for other
financial assets and real goods and services whenever they choose to do so. This
partly is a matter of law; currency has been designated "legal tender" by the
government -- that is, it must be accepted.
In the fine print of a footnote in a bulletin of the Federal Reserve Bank of St.
Louis, we find this surprisingly candid explanation:
Modern monetary systems have a fiat base -- literally money by decree -- with depository institutions, acting as fiduciaries, creating obligations against themselves with the fiat base acting in part as reserves. The decree appears on the currency notes: "This note is legal tender for all debts, public and private."
While no individual could refuse to accept such money for debt repayment, exchange contracts could easily be composed to thwart its use in everyday commerce. However, a forceful explanation as to why money is accepted is that the federal government requires it as payment for tax liabilities. Anticipation of the need to clear this debt creates a demand for the pure fiat dollars
We don't expect you to believe all this without some proof. I mean, it's just insane, right? Read about the Story of the Federal Reserve System. The Creature from Jekyll Island, by G. Edward Griffin. Mr. Griffin is a well-respected authority on the creation of the Federal Reserve Banking System, and has written a best-selling book of the same name.
Until the control and issue of money and credit is restored to the government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and Democracy is idle and futile. - Mackenzie King, Prime Minister of Canada in 1935
Money would vanish without debt.
It is difficult
for Americans to come to grips with the fact that their total money-supply is
backed by nothing but debt, and it is even more mind boggling to visualize that,
if everyone paid back all that was borrowed, there would be no money left in
existence.
That's right, there would not be one penny in circulation -- all coins and all
paper currency would be returned to bank vaults -- and there would be not one
dollar in any one's checking account. In short, all money would disappear.
Marriner Eccles was the Governor of the Federal Reserve System in 1941. On
September 30 of that year, Eccles was asked to give testimony before the House
Committee on Banking and Currency. The purpose of the hearing was to obtain
information regarding the role of the Federal Reserve in creating conditions
that led to the depression of the 1930s.
Congressman Wright Patman, who was Chairman of that committee, asked how the Fed
got the money to purchase two billion dollars worth of government bonds in 1933.
This is the exchange that followed.
ECCLES: We created it.
PATMAN: Out of what?
ECCLES: Out of the right to issue credit money.
PATMAN: And there is nothing behind it, is there, except our government's
credit?
ECCLES: That is what our money system is. If there were no debts in our money
system, there wouldn't be any money.
It must be
realized that, while money may represent an asset to selected individuals, when
it is considered as an aggregate of the total money supply, it is not an asset
at all. A man who borrows $1,000 may think that he has increased his financial
position by that amount but he has not. His $1,000 cash asset is offset by his
$1,000 loan liability, and his net position is zero. Bank accounts are exactly
the same on a larger scale. Add up all the bank accounts in the nation, and it
would be easy to assume that all that money represents a gigantic pool of assets
which support the economy. Yet, every bit of this money is owed by someone. Some
will owe nothing. Others will owe many times what they possess. All added
together, the national balance is zero. What we think is money is but a grand
illusion. The reality is debt.
Robert Hemphill was the Credit Manager of the Federal Reserve Bank in Atlanta.
In the foreword to a book by Irving Fisher, entitled 100% Money, Hemphill
said this:
If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash, or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless situation is almost incredible -- but there it is.
With the knowledge that money in America is based on debt, it should not come as a surprise to learn that the Federal Reserve System is not the least interested in seeing a reduction in debt in this country, regardless of public utterances to the contrary.
Here is the bottom line from the System's own publications. The Federal Reserve Bank of Philadelphia says:
"A large and growing number of analysts, on the other hand, now regard the national debt as something useful, if not an actual blessing....[They believe] the national debt need not be reduced at all."
The Federal Reserve Bank of Chicago adds:
"Debt -- public and private -- is here to stay. It plays an essential role in economic processes.... What is required is not the abolition of debt, but its prudent use and intelligent management."
More on Equal Protection
Our founding
fathers knew about this type of banking. That's why there were provisions in the
Constitution of the united States of America to stop this type of banking system to infest
our nation.
Article 1, Section 8, clause 5 states:
"Congress shall have the power to coin money, regulate the value thereof, and of
foreign coin, and fix the standard of weights and measures."
Article 1, Section 10 in part states:
"No state shall use any Thing but gold and silver coin as a tender in payment of
its debts;"
Is it more difficult to create money with "creative bookkeeping," (or as
President Bush says, "Cookin' the Books") by depositing your promissory note and
not telling you? Or is it more difficult to mine the gold and silver to mint the
money?
Mining is difficult and expensive. Bookkeeping entries cost virtually nothing.
Take a look at the definition of "Bank" in the 4th Edition of Black's Law
Dictionary:
"An institution, of great value in the commercial world, empowered to receive deposits of money, to make loans, and to issue its promissory notes (designed to circulate as money, and commonly called 'bank notes' or 'bank-bills,') or to perform any one or more of these functions."
Debt Elimination Next to Part 2
Mortgage Elimination
Part 2
If a
promissory note is designed to circulate as money, like money it can be
deposited into a checking account, can't it? You bet.
That was never disclosed in the bank loan agreement, was it? No.
See, if gold and silver coin were the money, the current banking system could
not exist. Our founding fathers knew that.
Since the promissory note is a negotiable instrument, per the Uniform Commercial
Code, at what point did the bank "own" the promissory note? A note is an IOU. It
says "I owe you $X, which is to be repaid on this or that date, or through
payments."
Did you give the bank permission to turn your "promise to pay" into money?
Probably not. By the bank altering the note and turning it into a negotiable
instrument, they changed the cost and the risk to you and them. Before they
deposit the note into a checking account, you thought the agreement was that
they were going to loan you money. They were the ones at risk. It's your duty to
pay them.
When the bank deposited the note, the entire cost of the loan was funded by you,
and you're now supposed to pay them? That's not what you agreed to, is it?
Because of this banking system, you are in "debt" with "money" that you provided
the value for.
Banking was conceived in iniquity and born in sin. Bankers own the earth; take it away from them but leave them with the power to create credit, and, with a flick of the pen, they will create enough money to buy it all back again. Take this power away from them and all great fortunes like mine will disappear, and they ought to disappear, for then this world would be a happier and better world to live in. But if you want to be slaves of bankers and pay the cost of your own slavery, then let the bankers control money and control credit. - Lord Stamp, a Director of the Bank of England, in a speech in 1940
What's wrong with a little debt?
There is a kind
of fascinating appeal to this theory. It gives those who expound it an aura of
intellectualism, the appearance of being able to grasp a complex economic
principle that is beyond the comprehension of mere mortals. And, for the less
academically minded, it offers the comfort of at least sounding moderate.
After all, what's wrong with a little debt, prudently used and intelligently
managed? The answer is nothing, provided the debt is based on an honest
transaction. There is plenty wrong with it if it is "based upon fraud".
An honest transaction is one in which a borrower pays an agreed upon sum in
return for the temporary use of a lender's asset. That asset could be
anything of tangible value. If it were an automobile, for example, then the
borrower would pay "rent." If it is money, then the rent is called "interest."
Either way, the concept is the same.
When we go to a lender -- either a bank or a private party -- and receive a loan
of money, we are willing to pay interest on the loan in recognition of the fact
that the money we are borrowing is an asset which we want to use. It seems only
fair to pay a rental fee for that asset to the person who owns it. It is not
easy to acquire an automobile, and it is not easy to acquire money -- real
money, that is. If the money we are borrowing was earned by someone's labor and
talent, they are fully entitled to receive interest on it. But what are we to
think of money that is created by the mere stroke of a pen or the click of a
computer key? Why should anyone collect a rental fee on that?
When banks place credits into your checking account, they are merely
pretending to lend you money. In reality, they have nothing to lend. Even the
money that non-indebted depositors have placed with them was originally created
out of nothing in response to someone else's loan. So what entitles the
banks to collect rent on nothing? It is immaterial that men everywhere are
forced by law to accept these nothing certificates in exchange for real goods
and services. We are talking here, not about what is legal, but what is moral.
As Thomas Jefferson observed at the time of his protracted battle against
central banking in the United States, "No one has a natural right to the
trade of money lender, but he who has money to lend."
Let us, therefore, look at debt and interest in this light. Thomas Edison summed
up the
immorality of the system when he said:
People who will not turn a shovel of dirt on the project [Muscle Shoals] nor contribute a pound of materials will collect more money...than will the people who will supply all the materials and do all the work.
Is that an exaggeration? Let us consider the purchase of a $100,000 home in which $30,000 represents the cost of the land, architect's fee, sales commissions, building permits, and that sort of thing and $70,000 is the cost of labor and building materials. If the home buyer puts up $30,000 as a down payment, then $70,000 must be borrowed. If the loan is issued at 11% over a 30-year period, the amount of interest paid will be $167,806. That means the amount paid to those who loan the money is about 2 1/2 times greater than paid to those who provide all the labor and all the materials. It is true that this figure represents the time-value of that money over thirty years and easily could be justified on the basis that a lender deserves to be compensated for surrendering the use of his capital for half a lifetime. But that assumes the lender actually had something to surrender, that he had earned the capital, saved it, and then loaned it for construction of someone else's house. What are we to think, however, about a lender who did nothing to earn the money, had not saved it, and, in fact, simply created it out of thin air?
So how does the bank loan actually work?
- You want a loan for your home.
- The bank advertises that they loan money.
- You "apply" for a "loan."
- They put you through the ringer and make you glad and relieved that you were able to be approved for a loan. (You know, like they are doing you a really big favor.)
- They have you sign a promissory note.
And here's the part you're never supposed to know
- Since your promissory note can be sold for money, it's an asset.
- The bank deposits the asset into an account for approximately the amount of the note.
- The bank cuts you a check from the deposit you never knew about (or transfers the money to those who should be receiving it).
- And you think you owe money back on a loan, when in fact all that was made was an exchange.
If the promissory note is an asset, what funded the bank's ownership of the note?" Answer: They still don't really own it. They made an exchange - Your promissory note (asset to the bank) was exchanged for approximately the amount of the loan. You gave the bank an asset worth $100,000 and the bank returned $100,000 to you. Where was the loan? There wasn't one. But you really do have to admit, it's brilliant.
As an honest, ethical person who believes that all loans should be repaid, do you agree that the bank should repay your loan to them? After all, they deposited your promissory note. Your promissory note is an asset that they exchanged for a check. Where's the loan?
Factually, there isn't one. And since all lenders should be repaid, shouldn't the bank repay your loan to them? If so, you wouldn't have the "debt" and would live better.
Quickly, when you deposit money in your checking account, does the bank now owe you that money when you want it? Yes. The bank has a new asset, the $100 you deposited into your checking account. The bank also has a new matching liability that says the bank owes you $100. Assets = Liabilities.
The bookkeeping entries are nearly identical for a deposit into your checking account and for a new loan. By lending, the banks now have more assets and liabilities. If you were to lend me $500, your "pool of money" would be smaller. When a bank "loans" money, their "pool of money" increases.