Fractional Reserve Banking
  • The "D" Word
  • And Why the Federal Reserve Can't Stand the "D"  Word


Most People think that when they deposit $1 in the bank

that they have $1 on deposit at the bank - Right ???

Wrong !!!

Here's Why:

The FED comes along and says that any bank in the

country only needs to keep a fraction of that $1 in Reserve

(i.e. on hand) in case some people come to the bank to

withdraw some of their money - HENCE THE TERM: FRACTIONAL RESERVE BANKING


Suppose the FED says that a bank only needs to keep 10%

of the funds on deposit - that means the other 90% of 

funds on deposit can be lent out.

With a reserve deposit requirement of 10% that $1 can be 

​turned into: $5.50 OR an Increase of 550% in the amount of money.

Truly "A SWEET DEAL" for the BANKS !!!


What do BANKS do with all this extra money ???

They lend it out !!!

To Whom do they lend it out ???

To anyone who wants a loan. For example:
  • Mortatges
  • Business Loans
  • Individuals who need money
  • ETC.

THESE BANK LOANS COME WITH INTEREST PAYMENTS AS WELL.

ALL GOES WELL AS LONG AS THE PERSONS WHO TOOK OUT THESE LOANS CAN PAY THESE LOANS BACK.

NOW FOR THE "D" WORD - THE WORD THAT THE FED HATES !!!

HERE'S WHY:

THE "D" WORD STANDS FOR DEFLATION - DEFINED AS A GENERAL DECLINE IN THE LEVEL OF PRICES IN

AN ECONOMY.

WHY DOES THE FED OR ANY CENTRAL BANKER HATE DEFLATION ???

BECAUSE IT IS A DOWNWARD DEATH SPIRAL THAT THEY CAN'T FIGHT - THE END RESULT IS

THAT IT CUTS INTO THEIR PROFITS AND THOSE OF BANK PROFITS - ULTIMATELY REDUCING THE VALUE 


THEIR PAPER MONEY TO ZERO. JUST THINK NO MORE CAVIAR, LEAR JETS, MANSIONS ON THE 

FRENCH RIVERA ETC. ETC.

SEE THE VIDEO BELOW FOR AN THE EXPLANATION OF HOW IF GOES TO ZERO.

WITH A GENERAL DECLINE IN THE PRICE LEVEL IN AN ECONOMY - MARGINAL BUSINESSES - THESE 

BUSINESSES FALL VICTIM FIRST - AND GO OUT OF BUSINESS - IT WOULDN'T BE JUST ONE

BUSINESS BUT HUNDREDS - ALL LAYING OFF ALL THEIR EMPLOYEES. THOUSANDS OF PEOPLE WOULD 

BE OUT OF WORK. ALL THESE UNEMPLOYED PEOPLE WOULD NOT BE ABLE TO SPEND NEARLY AS MUCH 

AS WHEN THEY HAD A JOB.  THIS CAUSES OTHER BUSINESSES TO HAVE DECREASED REVENUE - AND

LAY OFF THEIR EMPLOYEES AS WELL. AGAIN, THESE UNEMPLOYED PERSONS HAVE LESS TO SPEND AND 

THE DOWNWARD SPIRAL LEADS TO A DEPRESSION - WITH FORECLOSURES, BUSINESSES  NOT ABLE 

TO PAY THEIR LOANS, INDIVIDUALS WHO TOOK OUT LOANS CAN'T REPAY THEIR LOANS.

BANKS BECOMING INSOLVENT !!!

IN THE PAST THE FEDERAL RESERVE WAS THE LENDER OF LAST RESORT.

BUT RIGHT NOW (2017) THE "FED" HAS SO MUCH DEBT ON THEIR BOOKS THAT THEY CANNOT TAKE  ON

ANY MORE DEBT - AND AS OF 2017 - THEY HAVE STARTED SELLING THESE DEBT SECURITIES.

ANYONE REMEMBER THE HOUSING BUST OF 2008 ??? DO THE WORDS FANNIE MAE &  FREDDIE MAC 

COME TO MIND ???

GUESS WHO WOUND UP OWNING ALL THOSE "TOXIC" MORTGAGES ???

IF YOU SAID THE "FED" - YOU WOULD BE RIGHT.

BUT THIS IS ONLY SOME OF THE DEBT THE "FED" WANTS TO UNLOAD............AND THE LIST GOES ON !!! (How much DEBT does "The FED have on it's BOOKS???  $ 4.5 Trillion)

ADDITIONALLY "THE FED" HAS STOPPED BUYING BONDS - ALL TYPES OF BONDS - AND HAS BEGUN letting the bonds they have mature

What Is A Bond???

Bond Definition

https://www.youtube.com/watch?v=Afvs-o-heas

WHAT IS MEANT BY MATURE???
A BOND IS LLIKE AN IOU - SOMEONE HAS BORROWED MONEY - AND AT A CERTAIN FUTURE TIME HAS AGREED TO PAY IT BACK - IN THE CASE OF A BOND THIS IS CALLED ITS MATURITY DATE THE GOVERNMENT AGENCIES OR MUNICIPALITIES OR TREASURY MUST PAY BACK THE ORIGINAL AMOUNT LOANED TO THEM ALONG WITH INTEREST - THROUGHOUT THE LIFE OF THE BOND - UNTIL IT'S MATURITY DATE.

"THE FED" HAS $4.5 TRILLION WORTH OF BONDS ON IT'S BOOKS.
AS OF OCTOBER 2017 THEY ARE LETTING THESE BONDS MATURE AT A RATE OF $10 BILLION/MTH. LATER ON THAT FIIGURE WILL RISE TO $20 AND THEN $30 BILLION/MTH

BUT WHY ???

THE "FEDERAL" RESERVE BANK IS NO MORE FEDERAL THAN FEDERAL EXPRESS. SO WHO ARE ALL THE

OWNERS OF THE "FEDERAL" RESERVE BANK ???

NO PERSON IN THE WORLD KNOWS WHO ALL THE PRIVATE OWNERS OF THE "FEDERAL" RESERVE BANK

ARE EXCEPT A HANDFUL OF PEOPLE !!!

BUT YOU CAN BET YOUR "BOOTIES" THAT IT WOULD BE MEMEMBERS OF THE ELITES.

THESE "CHARACTERS" KNOW WHAT THE VALUE OF THE BONDS THE "FEDERAL" RESERVE WILL BE

WORTH IN THE FUTURE - NAMELY ZERO. THOSE MEMBERS OF THE ELITES KNOW THIS AND WHAT IT

MEANS TO THEIR MONEY - IT MEANS LOTS AND LOTS OF THEIR MONEY WOULD BECOME WORTHLESS.

SO WHAT BETTER WAY OF "SAVING" THEIR MONEY THAN TO LET THOSE BONDS MATURE AND STOP BUYING ANY MORE BONDS



Pink Floyd - Money (Official Music Video)

https://www.youtube.com/watch?v=-0kcet4aPpQ





​Causes of Deflation

  • In order to compete - as in Global Economy - where goods and services can be produced more cheaply overseas - businesses will lower their prices to compete
  • Increases in Productivity lowers the cost for businesses to produce their goods and services - such as out sourcing jobs overseas
  • Central Bankers Decreasing the Supply of Money


Once Deflation Starts - It Has TO Run It's Course - Since NO MATTER WHAT THE

CENTRAL BANKERS DO - THEY CANNOT COMBAT IT !!!



Fractional Reserve Banking Explained - Fraud Becomes

Legal 
​
https://www.youtube.com/watch?v=JobaR9LLcfA 



The Stranglers - Always the Sun (extended)
https://youtu.be/WM_QQ5rx32E