This post was most recently updated on December 2nd, 2019
I was making a research about the elites ability to create money from thin air and to invest it while others have to work for it and the first two results that came out after a google search were:
The first title reads: “The power to ‘create money out of thin air”
The article starts with this introduction:
“Modern finance is generally incomprehensible to ordinary men and women….. The level of comprehension of many bankers and regulators is not significantly higher.”
So basically nothing to see here move along.
The second result title reads “Why banks must be allowed to create money”. As the title says the article seems to justify why banks should be allowed to create money from the thin air.
The article starts with a quote:
“I know of only three people who really understand money. A professor at another university; one of my students; and a rather junior clerk at the Bank of England.” Attributed to Keynes
It is not something new the sayings that the way the monetary system works is not comprehensible for the normal people. Elites want us to think that some supermind capacities are needed to understand the monetary policies.
This is why elites got creative and invented terms like “quantitative easing“, “fractional reserve”, “credit easing”, “expanding the balance sheet”, “accommodation policy”, “monetary financing”, “expansion of open market operations”, “large-scale asset purchases”.
They could simply have said, “printing new money” to sum up the above complex terms.
The Evolution of the Monetary System
First, let see what the American founding fathers intended by a monetary system and how it evolved into a system with tools that create money from thin air causing financial problems like the 2008 crisis for example.
The founding fathers had based the monetary system on 4 most important principles:
- The Congres which represents the people has the duty to control the money system and guarantee that the money supply remains stable.
- To be a medium of exchange the money must be honest having “intrinsic” value. The knew that money based on gold and silver would guarantee this value.
- The fractional reserve banking is not allowed to happen “No one has a natural right to the trade of a money lender but he who has the money to lend.” Said Jefferson.
- Money from the treasury can only be spent for the 20 powers of Congres listed in Article 1, Section 8 with one condition which is to serve the “general welfare” or in other words benefit the whole country, not some groups.
However, during the years the bankers’ lobby took this power destroying the principles where the money value was based. Bankers and wall street took the permanent authority to control the money and as a result to control our lives.
Anything that has value it is because it requires energy to be obtained, but if something needs little or no energy it becomes worthless. Gold and silver worked as money for humanity for thousands of years. It provided an easy medium of exchange and a store of value. But as greedy politicians removed the gold standard from the monetary system it allowed them to print money at will.
To create an idea about how banks work read rule 11 of the Monopoly game.
The Fractional Reserve Banking
Physical money printing if only part of the problem, bankers create even more thought fractional reserve banking. The fractional reserve banking idea is several hundred years old.
When goldsmiths in Europe created big vaults for their precious metals, other people deposited there their gold for safekeeping receiving a deposit certificate to be used when they come back to claim their gold. These certificates became such easy to be exchanged that a major part of the people never went back to the goldsmiths to withdraw their gold. This gave the goldsmiths the ability to issue more gold certificates than the amount of gold they had in their vaults allowing them to use these certificates to buy properties or to loan it for interest. They only needed to keep a fraction of the gold for the small percentage of people that wanted to withdraw their physical gold and this is how the fractional reserve was born.
This is how the banking system expands its balance sheets by many times lending more money than they actually have. It is the same thing as if someone sold a house he does not own or if someone sold something that will not be ever created. Everybody knows this is criminal but bankers are allowed to do that because fractional reserve is legal as Wikipedia reads:
“Each bank is legally authorized to issue credit up to a specified multiple of its reserves, so reserves available to satisfy payment of deposit liabilities are less than the total amount which the bank is obligated to pay in satisfaction of demand deposits. Fractional-reserve banking ordinarily functions smoothly.”
It is this system that allows this fractional reserve that caused the 2008 crisis where millions lost their homes and banks got bailed out with $700 billion form the taxpayers’ money.
Satoshi Nakamoto could not have found a better moment to plant the bitcoin seed. But as ironic as may it seem, bitcoin was created to fight the fractional reserve and Mastercard has filed for a patent for a fractional reserve Bitcoin banking. Bitcoin’s total supply is limited to 21 million but these banker tools can create unlimited paper bitcoin out of thin air like CME and CBOE actually did with bitcoin futures.
A former CFTC official has gone so far to admit that the government created the bitcoin futures in 2017 to pop the bitcoin bubble.
This system that creates unlimited supply will eventually collapse resulting in a big reset of the monetary system and the only things that will preserve their value will be things that originally have”intrinsic” value like precious metals and bitcoin, while FIAT money may become worthless.
FIAT might be the biggest financial bubble of human history and maybe bitcoin is here to pop this bubble.