bank

 banks 

banks

how a bank works

We all heard that it is said that money does not grow on trees but the truth is modern bank system is creating money faster than the tree. Most of the people have no idea how currency has been creating nowadays.

In this article, I will share how currencies have been created nowadays and also about the human history biggest fraud which is done to all of us.

Excluding some countries almost in every country currencies are created in the same way but the most dominating and the maximum currency is a dollar.

 So I will explain this scam by taking America as an example, and do remember that this system is made complicated deliberately so that we couldn’t understand it properly so if you do not understand it at once then don’t worry because even for me it was complicated at first to understand.

I will explain this system by dividing it into 6 parts

So if you find it difficult in any part then go through it again.

Government creates I.O.U

Everything starts from the time of election when a politician makes false promises related to money that I will do this that make things free for you and etc. by listening to the people gets overwhelmed and happy and vote for that candidate and he won the election.

However, nothing is for free in this world even the government has the need for money to fulfil the promises which they had made during the election because they vote to spend more than the countries income which they know as deficit spending  and for this extra expenses country treasury borrow money from the bank by issuing a bond.

Now what exactly a bond is?

Bond is nothing but a glorified IOU If I say in simple word IOU is nothing but a simple paper in which it has written you lend me a billion dollars and I will return this amount in 10 years with interest and these bonds are the country’s dept which is known as the national debt.

Now the important and interesting question arises who pays these debts?

Answer for this is we all pay this national debt?

Means WE, our parents and our future generation will pay all this debt will pay the national debt by paying the taxes when the government makes a bond we can say that to make our present little good they spoil our future.

Swapping IOU’S and creating money

The procedure of borrowing money for the government is like at start treasury makes a bond then treasury keeps the bond for an auction where the world’s biggest bank bids and one bank will buy that bond by giving money to the treasury, the bank knows that deal is profitable that why they buy a bond happily.

After this bank goes to Federal Reserve Bank, federal reserve makes a cheque in order to purchase that bond from the bank by which the bank gets the profits, here this cheque is nothing but an IOU.

Now the most important thing is actually federal reserve doesn’t have any money, in fact, they have zero amount in their account but when they make the cheque automatically amount has also been created and comes in the system means when federal reserve writes a cheque they just create money by writing just like a magic trick.

After which bank gets the cheque and money gets printed and banking receives the money now bank with this money again but bonds from government and this cycle get repeated again and again, here treasury and federal reserve make a deal with each other by keeping bank as a middle man who gets a commission at every step by which they become rich and on the other side the country and normal people become poor due to the national debt.

One more thing, this is the process from were all paper currencies came into existence and come in the market government calls it base money but actually it is just a currency, there is a lot of difference between money and the currency.

The government spends these numbers

After getting the money from the bank treasury gives that money to the government. Government spend that amount on deficit spending like in public work for programmers and for wars from where it goes to government employees, contractors and to soldiers again all will deposit their money in any bank and one important thing after listening maybe it will give a shock to you.

When you deposit money in the bank you don’t give money to the bank to save it or to protect it but in reality you lend your money to the bank by this they can do many things legally such as can do gambling on stocks market or can give money to another person from where they can earn profit etc.

Bank multiply the money

This is a very important part so do read to it very carefully now a day almost every bank work on the fractional reserve principle means if I explain this on the bases of 10% reserve ratio when you deposit your 100$ dollar in a bank legally then the bank can keep 10% of the amount from the money which you have deposited and remaining 90 dollar back can give to any person as a loan legally without your approval without informing you.

Here the bank keeps only 10 dollar with them so that if you require it at any point they can give it to you they call it to vault cash now when a bank uses your 90 dollars and has only 10 with them then how can 100 dollars can be seen on your account?

This happens because of the bank keeps that 90 dollars by making its IOU. IOU is nothing but a simple written number which is type and saved by banks in computer and this is not the actual paper currency but somehow it becomes the actual one because of which 190$ dollar come into existence in the world instead of 100.

100 which is yours and 90 dollars which they have given to someone else as a loan which was yours but now has become bank amount as well by doing this bank earn 90 dollar profit and also earns the interest not only this but many things happen further after taking loan.

 what are the possible things a person can do usually, loans are taken for the house car or anything which a person wants to buy so according to this example if I say that 90 dollars will reach to another person’s hand and what will that person do again that person will deposit that amount in a bank.

From that 90 dollar again bank will keep only 10% with them and will lend 90% to another person because of which total 270 dollar gets to create in the bank and this cycle keeps on repeating again and again and the end result for this because of your deposited 100 dollars, a total of 1000 dollar bank credit come into existence in the world.

 I am telling all this only on the bases of 10% ratio, however, the bank has its own ratios some works on 5% ratio and some even work on the 0% ratio and create a lot of currency.

 The bank is placed from where the country’s maximum currency has been creating and comes into existence in fact 92 to 96 per cent of currencies are created because of this system which is made by the bank just by typing it.

Now if you must have thinking why does it matter?

My amount is in them which is safe and I can withdraw whenever I want or whenever I need so let me tell you because of all this currency supply increases in the market because of which the value of money which you have earned with your hard work and with all your efforts decreases and thing become more expensive the reason behind the inflation is the increase in currency in the market.

One more thing we all think that our money is saved in the bank and we can withdraw whenever we need and use it but it's not true if we all or only 30 per cent people go and ask for their money withdrawal bank wouldn’t be able to give the entire amount to us because the bank doesn’t have our entire amount with them because of fractional reserve system.

This is our entire monetary a system which is nothing but a big scam where the money is just created by writing on the cheque as an IOU medium or maximum just by typing on the computer.

Systems which are nothing but a supply of numbers some are created by just printing and maximum are formed by typing.

Our number is taxed

Now if you are thinking this the worst thing which is happening with us then get ready to become more stupid why? Because we work for those few numbers with all our hard work and with full efforts and then save it by striving (with struggle and with efforts) so that the government can take the large part of it and can clear all their debts with the interest which they have taken from the bank.

Most of the taxes are not taken for schools or for development purpose instead taxes are used to clear all the debts which the government has taken.

Now you think about how many taxes we pay during our lifetime so many different taxes. In which maximum amount goes to the owner of this system and it’s a secret who actually is the owner of this system which I will explain further.

USA founding fathers already had an intuition regarding the danger of central banking and fiat currency. 

They fought for it and to protect others from this danger in future they had written in the constitution that only gold and silver can be the actual money only the reason was that people cannot create it as much as they want as time passed people gave less importance to it and we all got trapped in his system.

Today’s system is not only unconstitutional but also a big fraud and theft which is stealing our liberty and prosperity and reducing our purchasing power due to inflation which is nothing but the result of our system.

Owner of the federal system

This system is beneficial for those who are creating the currency and those who receive first because of they can use that currency much before the effect falls on the economy.

Now comes another secret Federal Reserve is not federal actually meaning it is not government controlled it is a private corporation which has stockholders who own it who gets the 6 per cent dividend and who all are the actual owner of it? Has been kept as a secret but these owners are the people from the big bank who receives and gets profits at every step.