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Money Creation
Surprisingly few people know how new money is created into our economical system. This is mainly because it's not taught in the schools. And parents can't teach it to their children either, because they don't know anything about it. And our friends also don't know. In fact, almost nobody knows anything about this subject.
But still our lives circulate around money. From an early age, we are taught to earn it. And most people automatically accept this teaching, without ever asking the obvious questions about the origins of money, and how it flows through the system.
And for many people, money has become the sole purpose of their lives. But even these greedy people often don't know how the system really works.
But don't worry, you have just stumbled upon a random article in some videogame website, and after reading this piece of text, you'll learn how the money system works.
And by the way, I didn't make the this theory up myself.
You can check the facts from:
http://en.wikipedia.org/wiki/Money_creation
http://en.wikipedia.org/wiki/Fractional-reserve_banking
http://en.wikipedia.org/wiki/Fiat_money
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The Amazing Tale of Money
New money is created through two ways:
1.
Firstly, central banks can "print" it. Although most of this "printing" is done digitally, so it's not real physical money, but rather just numbers in a computer screen.
But how can this digital "money" then have any actual value?
Hehe, well, of course it can't have any.
So it's worthless.
But, now we will do a magic trick: We will publicly declare, that this money has some value. So we just tell them something like; each of these numbers is actually worth "one dollar", or "one euro". And then we put a Dollar "$" or Euro "€" symbol after these numbers. And now we have created an illusion, that this "money" is "real", and has some value. And everyone will believe it, because this assurance comes from "highest authorities"; from the government, and from the central bank.
According to the Wikipedia article:
"First, a central bank introduces new money into the economy (termed 'expansionary monetary policy') by purchasing financial assets or lending money to financial institutions."
But this is just an additional trick, to make it seem like that the money wouldn't be created out of thin air. Instead new money is "introduced" when the central bank "purchases financial assets" or "lends money to financial institutions". But of course all this money has to originate somewhere...and that something is the "digital printing press"; numbers are typed in from a computer keyboard.
So this whole process is equivalent to someone illegally printing money at his home, and then buying something with that counterfeit money, or lending it to someone, and then justifying this action by saying that he is "introducing new money to the system". The only difference between the private person and the central bank doing it, is that the private person will go to jail if he's caught doing it, while the central bank goes unpunished.
2.
Then, we have a second money creation method.
It's called "Fractional Reserve Banking".
This is something that the private banks do.
Not the central bank, but the ordinary commercial banks, where the people have their bank accounts.
Not many people know what actually happens to the money they put into the bank. They assume that the bank just "holds it", and keeps it safe. But that's not the case. Instead, the banks give out most of that money as loans. Because where did you think that the banks get all that money to loan? How can they be so rich? Hehe, well, they aren't that rich actually, they just play with the money you trusted to them when you put money into your bank account.
Ok, but of course the banks can't loan out absolutely everything.
Otherwise they would be instantly busted when someone comes to withdraw money from their bank account.
So, because of this, the banks maintain a certain "reserve", which is usually around 20% of the money that people deposit into the bank. The remaining 80% can then be loaned out.
So if someone puts 100 dollars into the bank, the bank will keep 20 dollars of that as a "reserve", and use the remaining 80 dollars to issue new loans.
And this 80 dollars that's lent out will end up...where?
Into someone else's bank account of course!
And when this happens, this 80 dollars is treated as a normal deposit, that can again be used to create a new loan.
So following the 20% rule, the bank will keep 16 dollars of this sum, and loan out the remaining 64 dollars.
That 64 dollars lent out will again end up in someone else's bank account, creating yet another excuse to issue a new loan.
And so it goes on, until the original 100 dollars you deposited has been used to create multiple loans, most of which are actually loans based on already lent money.
But wait a second, where does all this new loan money come form?
If new loans are issued that are based on existing loans, then where does the actual money come from?
Hehe, well, that new money is created out of nothing.
It's "digitally printed", so again numbers are typed into someone's bank account, and we call it "money", or in this case, we call it a "loan".
And when the customer who takes the loan puts it into his or her bank account, which may be in the same bank or in a different one, that loan money magically turns into "real money", although it was originally based into nothing else than worthless numbers that some bank lady typed into the customers bank account when the customer took the loan. And this new "real loan money" that the customer has now put into his bank account, can and will be used to by the bank to issue out even more loans.
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Summary of the above
- All money is created out of nothing by the central banks.
- The value of money is based into nothing, except into an assurance from the government/banking system.
- Ordinary banks too create money out of thin air, when they give loans to people.
- And when ordinary banks do the above, they're running a pyramid scheme like "casino game" with the money you trusted to them.
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The purpose of all this
Okay, so the system seems a little bit suspicious, but what's the actual purpose of this all?
According to the linked Wikipedia articles, the purpose of the fractional reserve banking system is to keep the economy running and growing...
And yes, that's true, to grow the economy...But whose economy?
The wealth of the ordinary people doesn't seem to be increasing...
Let's see...surely we have missed something important here?
Oh yes, we need to read one more Wikipedia article to get the full picture:
http://en.wikipedia.org/wiki/Interest
Interest !
Yes, that's the missing piece from this picture.
Hehe, now you see, that maniacal loan giving urge of the banks did have some purpose after all.
Well, of course it had a purpose.
Banks are businesses, trying to make a profit.
And charging interest on loans is the most important way how banks make money.
According to Wikipedia:
"Interest is compensation to the lender, for a) risk of principal loss, called credit risk; and b) forgoing other investments that could have been made with the loaned asset."
So when you pay interest to the bank, you're actually paying a compensation to them for the "risks" that they are supposedly taking when they give you the money. But what they don't tell you, is that all that loan money is created out of nothing at the moment when you sing the loan agreement, and that when they're creating that money, it's value will be based into old debt money, which in turn was also created out of thin air earlier in the "money chain".
So:
1. First we make money out of nothing.
2. Then we loan it to people.
3. Then we create new loans and new money based onto these existing loans.
4. And then we charge interest on all of these loans that we have given out.
And this way we make huge profits for ourselves.
Also the whole system is designed so that ordinary people have to take loans in order to get anywhere in life. Student loans, house loans, credit cards, and so on...hehe, and of course if the majority of the people were wealthy, they wouldn't need to take these loans...and this is why the people MUST STAY POOR; so that they need to take loans, and then the bankers can make money through interest.
And this is how "the economy" gets bigger...the economy of the bank owners.
And who are these bank owners?
Almost all major banks are owned by elite banking families.
Perhaps the most well known banker family is the Rothschild family:
http://en.wikipedia.org/wiki/Rothschild_family
But there are many others...
And in those cases when a bank isn't owned by an "old money banker family", but rather by some "new player", like some "rising businessman", it'll still eventually become a family owned bank...because when the original owner dies, the family members will inherit everything, and so the bank stays "in the family". The sons of this businessman then continue from where he left off, growing the business further, and eventually they'll give that everything to their own sons as inheritance. And this is of course how all of the current super rich "banker families" came to existence in the first place; through a long series of inheritances.
And when you consider what awesome power the "banking industry" has in our current system, we can truthfully say that these banker families, who are allied with other business families, literally control the whole world.
Put together, these people form a very small group on the top, numbering roughly 6000 individuals, who run the world one generation after another.
We are their servants, and our sons will be the servants of their sons.
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The only way to destroy these elite families, is to implement a 100% inheritance tax.
The ownership of the banking system must be taken away from these elite family dynasties. Banks, just like all corporations, should be "socially owned"; the people should collectively own them, instead of a small group of elite families and oligarchs.
And of course, should the people own the banks, they might decide to abolish the whole banking system...because it's basically a huge pyramid scam designed to rob the people.
So, start spreading this Amazing Tale of Money to all those people you think might not have yet heard it.
Because this isn't some conspiracy theory. It can all be easily proven by just showing people some Wikipedia pages, just like I just did.
And when people ask you "but what can we do?", then tell them about the simple solution: the 100% inheritance tax. Remember that even if the elite's institutions look powerful and unbeatable from the outside, the only thing that we're up against here, is just a group of some 6000 people. Knock them out of the game, and humanity will be set free.
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