The Fractional Reserve Banking System

There is a game being played all across the globe. It is a game that no one can win, unless of course you are one of the few who already runs the board. Fractional reserve banking is the predominant means of monetary exchange worldwide with the US leading the pack under the Federal Reserve Bank. These are all words I am sure each of you reading this have seen many times, but what do they mean?

Fractional reserve banking, “is the practice whereby a bank retains funds equal to only a portion of the amount of its customers’ deposits as readily available reserves (currency on hand at the bank plus deposit accounts for that bank at the central bank) from which to satisfy demands for payment. The remainder of customer-deposited funds is used to fund investments or loans that the bank makes to other customers. Most of these loaned funds are later redeposited into banks, allowing further lending. Because bank deposits are usually considered money in their own right, fractional-reserve banking permits the money supply to grow to a multiple of the underlying reserves of base money originally created by the central bank.” In simpler terms, the bank creates money, loans it to the public and is then repaid on that loan to pay other loans, but this idea goes even deeper.

In 1913, a deal was created on Jekyll Island, a barrier island off the Georgia coast. It was on that day that the Federal Reserve act was penned. The Federal Reserve act is an Act of Congress that created and set up the Federal Reserve System, the central banking system of the United States of America, and granted it the legal authority to issue Federal Reserve Notes (now commonly known as the U.S. Dollar) and Federal Reserve Bank Notes as legal tender. The Act was signed into law by President Woodrow Wilson.

Since that day, the Federal Reserve has printed all of the money in America, loaning it to the government in exchange for Government bonds as a promise of repayment. Another thing happened in 1913, and this is where things really get interesting. In 1913, Wyoming ratified the 16th Amendment, providing the three-quarter majority of states necessary to amend the Constitution. The 16th Amendment gave Congress the authority to enact an income tax. This was the birth of the Internal Revenue Service as we know it today. The 16th Amendment was very important for the Fed, because it created the means by which the United States Government could repay the loan of its Federal Reserve Notes. All of the tax money paid by the entire country is generated to pay this invisible debt.

The underlying problem with fractional reserve banking is the supply of money. Since the money itself is debt, there is no way to ever repay that debt and bankruptcy and default is worked into the system. If every dollar in circulation was put forward to repay the debt, the debt would still remain. How is that possible? So to recap, the money we hold so dear is printed out of thin air, loaned out of thin air, and we the people are expected to repay this illusory currency with real labor, and this is to take place indefinitely; slavery by the dollar. There is more debt than there is money, and if you do not see that as a fundamental flaw of the system, just wait, it gets better.

In late 2008, many of us had our first experience with a major financial crisis. The housing bubble popped resulting in millions of Americans losing their homes while some politically connected bankers received billions in bailouts. Lehman Brothers’ bankruptcy, the bailout of AIG, and a few days of 400+ point drops in the Dow led to a $700 billion bailout package presented by the very same wise rulers who didn’t see the crisis coming in the first place. The powers that be said that these banks were, “too big to fail.” At the same time, one can argue then that the 1.6 million people since 2008 that have been placed in foreclosure status on their homes are too small to succeed.

“The world is like a ride at an amusement park, and when you choose to go on it, you think it’s real because that’s how powerful our minds are. And the ride goes up and down and round and round; it has thrills and chills and it’s very brightly colored and it’s very loud and its fun… for a while. Some people have been on the ride for a long time, and they begin to question: “Is this real, or is this just a ride?” And other people have remembered, and they come back to us, and they say, “Hey – don’t worry, don’t be afraid -EVER- because, this is just a ride.” And we… KILL those people HAHAHA! “Shut him up! We have a lot invested in this ride – SHUT HIM UP! Look at my furrows of worry! Look at my big bank account, and my family! This just HAS to be real!”… But it’s just a ride. And we always kill those good guys who try and tell us that, you ever notice that? And let the demons run amok? Jesus – murdered; Martin Luther King – murdered; Malcolm X – murdered; Gandhi – murdered; John Lennon – murdered; Reagan… wounded HAHA! But it doesn’t matter because: It’s just a ride. And we can change it anytime we want. It’s only a choice. No effort, no work, no job, no savings of money. A choice, right now, between fear and love. The eyes of fear want you to put bigger locks on your doors, buy guns, close yourself off. The eyes of love, instead, see all of us as one. Here’s what we can do to change the world, right now, to a better ride: Take all that money that we spend on weapons and defense each year and instead spend it feeding and clothing and educating the poor of the world, which it would many times over, NOT ONE HUMAN BEING EXCLUDED, and we could explore space, together, both inner and outer, forever, in peace.” William Melvin Hicks

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