Money/Fractional-reserve banking

Money/Fractional-reserve banking  (“Disaster”,  Pyramid scheme,  Cantillon_effect)
Interest of	Martin Armstrong
a legal pyramid scheme

Fractional-reserve banking was introduced in the 17th century. It gradually replaced coins by pieces of paper, issued by a single monopolized private bank to the king, who would demand payments of taxes with this paper money and who had to repay it to the bank (of England) with interest at a later time.

Today, the amount of money which can be created is almost unlimited in theory. In practice national currencies compete for acceptance and demand on an international level. If, for example, nobody wants to accept a small countries' local currency it will have trouble buying oil or food on the international market and will need other countries' currencies to do so.

The worldwide demand for US Dollars reflects this dynamic and is an obvious advantage which the US government wants to maintain and is willing to fight for. Issuing banks collect interest for every dollar. The greater the demand for dollars the more profit can be made. The IMF gives credit to lesser developed countries who have to pay the interest by selling ever more resources to get the necessary dollars to do so.

The resulting scheme is a hierarchy of institutions and currencies which compete. At the top of the pyramid are international banks, such as the BIZ ("central bank of central banks"), the IMF and others. Further down are central banks, government banks, investment banks, public banks and private credits. The base if the pyramid is exponentially growing in number and amount of interest payments.

It is important to understand that however small the amount of interest, it results in exponentially growing profits for these supranational institutions at the top who need to invest in securities and commodities to "manage their risks". The end result is a transfer of resources, soil and most of all power and control to the top. The nation states are - from a perspective of international bankers - there to collect their interest payments.

This system promotes conflict, con games and rackets in several ways. The official narrative is, that humans are competitive by nature and money has no conscience. Therefore, if it is profitable to give credit or sell weapons to both warring parties in a conflict, that's the way it is. G. Edward Griffin argues otherwise and proposes the so called Rothschild formula: Creation of conflict, control of both parties (and their narrative) for power, profit and eventually to promote a "solution".

Exponential distribution of wealth, as would be expected for a pyramid scheme. Rough estimate for break even: >1%

This inherent drive to conflict promotes uncertainty and fear (because not everybody can "make it" in this scheme). The selling of security to people by governments resembles the classic insurance racket, where the threat or damage is created first to "motivate" the future customer to buy the policy.

There is a mathematical break even point in all pyramid schemes, where losses and gains are equal. The point in the pyramid where costs (i.e interest payments, taxes, etc.) equals the returns on investments (interest earnings, stocks, etc.) is approximately 400.000 dollars, depending on lifestyle (B. Lietaer) This does not include food, housing and other costs of living. It merely means that a person who stockpiles this amount pays in effect no interest. People higher up do profit. The percentage of the world population meeting this condition is less than 1%. 99% are net loosers.

 

Examples

Page name	Description
Cantillon effect	explains the natural unfairness of previous monetary systems
Federal Reserve Act	The 1913 law which secured operational control of the US dollar for the US Deep state up to the present day.
Petrodollar	The selling of the world's oil in U.S. dollars has been the backbone of U.S. dollar hegemony since the U.S. unilaterally terminated the rights of foreign central banks to convert dollars to gold in 1971.

 

Related Quotation

Page	Quote	Author
Money/Creation	“Generally speaking the zero sum game promotes conflict. Conflicting parties need money to stand competition (in the extreme case: fight a war) in order to maintain their positive balance position. The only regulatory principle to limit the promotion of violence in all shapes and colors is the monetary monopoly's need to manage risk. Fatally, the risk taken by banks is distorted by the doctrine that the monetary monopoly as a whole may not fail. This so called Moral Hazard caused by public bailouts encourages investments in exploitation and war. What really trickles down is violence, not wealth.”	'Smithy'

 

Related Documents

Title	Type	Publication date	Author(s)	Description
Document:The Occult Technology of Power	letter	June 1974	Anonymous	A letter and lecture transcripts addressed to a mature son from his father. Their purpose is to prepare the son for his taking the reins of a financial business empire.
File:The Federal Reserve conspiracy by Antony C Sutton.pdf	book		Antony Sutton	Historical perspectives on the money trust including critique of Karl Marx

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