Debt = Money, Money = Debt

Posted: December 2, 2010 in Current Events, Federal Reserve, Financial Fraud

We all should understand how money is created. The institutions that create money have control over the economies. These institutions can create economic conditions by expanding or contracting money supply. The corrupt organizations that create money are the for profit bank known as the Federal Reserve and banks through fractional reserve banking. So what is fractional reserve banking? According to the NY FED fractional reserve banking can be explained as follow:

“If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000).”

As you can see when you take the irresponsible Federal Reserve and fractional reserve banking you have a recipe for disaster that can only lead to massive deficits and eventually total collapse.

Ron Paul states the following regarding money creation

“The Federal Reserve in collaboration with the giant banks has created the greatest financial crisis the world has ever seen. The foolish notion that unlimited amounts of money and credit created out of thin air can provide sustainable economic growth has delivered this crisis to us. Instead of economic growth and stable prices, (The Fed) has given us a system of government and finance that now threatens the world financial and political institutions. Pursuing the same policy of excessive spending, debt expansion and monetary inflation can only compound the problems that prevent the required corrections. Doubling the money supply didn’t work, quadrupling it won’t work either.”

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