(Mises)—Suppose you bring a fur coat to a dry cleaner and later discover that the owner allowed his wife to wear it before cleaning it (an episode from Seinfeld). Or suppose you gave your car keys to a hotel valet and was told he lent your car to teenagers who took it for a joyride while you were sleeping at the hotel. You would not be too happy and for good reason. When you surrendered your clothes or your car keys, it was a bailment. You retained ownership and gave the clothes or car keys for safekeeping. In no shape or form did you surrender ownership of the items or lend out your property.
Suppose you lived in the eighteenth century and had a hundred ounces of gold. It’s heavy, and you do not live in a safe neighborhood, so you decide to bring it to a goldsmith for safekeeping. In exchange for this gold, the goldsmith gives you ten tickets on which are clearly marked as claims against a total of ten ounces. Now, gold is heavy and burdensome to carry, so in a short period of time, those claims will start circulating in place of gold. This is the creation of near monies. This doesn’t mean you have given up your ownership claims on gold but have instead used a simpler way of transferring ownership on this gold.
Of course, the gold now just sits in the vault, and no one usually comes to get some of it or even checks that it is still there. Quickly, the goldsmith realizes there is an easy, fraudulent way to get rich: just lend out the gold to someone else by creating another ten tickets. Since the tickets are rarely redeemed for actual gold, the goldsmith figures he can run this scam for a very long time. Of course, it is not his gold, but since it is in his vault, he can act as though it is his money to use.
This is fractional reserve banking with a reserve of 50 percent. This is also how the banking system can create money out of thin air, or basically counterfeit money, and steal the purchasing power from others without having to produce real goods and services. On March 26, 2020, the United States central bank reduced reserve requirements for US banks to 0 percent from 10 percent in reaction to the economic effects of the covid pandemic.
Now the goldsmith, or what we will now call a bank, is limited in the amount of fraud or counterfeiting it can commit. There is a hundred ounces of gold and claims on two hundred ounces of gold. The bank must keep a certain amount of gold in its vaults since depositors on occasion will exchange tickets for gold. Another constraint is that depositors, if they get suspicious that there are more claims than available gold, may run to the bank demanding to redeem their “on demand” claims into gold.
This run, really, only reflects the totally fraudulent nature of banking. Banking holidays, which were implemented in the ’30s, or capital controls, which were implemented recently in Cyprus, are actions to benefit the fraudster (the banks) instead of the victim (the depositors). Of course, the European Central Bank supported these actions by Cyprus. The world has been turned on its head.
Suppose you are the goldsmith, and your rich uncle promises to lend you as much gold as you need if you happen to run out (the lender of last resort function of the central bank). Are you likely to commit more fraud? Suppose this rich uncle tells you that if things go bad, he will make sure everyone gets their gold back (deposit insurance). Again, are you likely to commit fraud? Since you have no skin in the game, are you likely to take even more risks, for higher returns, in your lending activities?
Austrian economists have a hard time explaining why fractional reserve banking is fraudulent. The standard response from the average Joe is that “everyone knows that the bank loans out your money.” Or they will say that “all banks in the US include a clause in the depositor’s contract that specifically says that the relationship between the depositor and the bank is exclusively one of creditor and debtor.”
Suppose the bank takes your money and loses it all. How does the bank satisfy your expectation that the money is there on demand to pay your rent and electricity bills? It’s simple. They take the money from someone else. If the bank had told you that the money is unfortunately lost, there would be no fraud (if you had signed a clear statement on the use of your funds). The fraud occurs the minute the bank takes someone else’s money. The victims of the fraud are the other depositors.
The bank essentially runs a Ponzi-like scheme (a fraudulent activity) that can continue for a very, very long time, but it is no less a fraudulent activity and should be treated as such. Although you and the bank may be aware of what is going on, it still should be treated as fraud. The fact that you are aware, or even unaware, of the Ponzi-like scheme does not diminish the fraud. Government deposit insurance just shifts the ultimate cost of the fraud to other depositors, taxpayers, or anyone using currency to conduct transactions.
Why is counterfeiting illegal? The counterfeiter is happy since he gets real goods and services, and the store owner is happy since he made a sale and can also get more real goods and services if he spends the money quickly before prices go up. So where is the problem? The transaction has been beneficial to both. It is illegal because of third-party effects.
The counterfeiter takes from the economic pie but does not contribute to the economic pie. He has basically stolen real goods and services by reducing the purchasing power of the money in everyone else’s pockets. When the fractional reserve banking system creates money out of thin air, it is also a form of counterfeiting and has undesirable third-party effects. Economists know that it is the rapid expansion of money and credit, unjustified by the growth of slow-moving savings, that has created the booms and busts of the last two centuries, and the hardships that have gone along with them.
Eliminate fractional reserve banking and you eliminate booms and busts. Unable to create money out of thin air, banking would now just be another sector without the ability to sink the entire world economy.
We need to start a serious discussion about ending fractional reserve banking, and central banking at the same time. Our current banking system is not free market capitalism. Banking in its current form should be outlawed because it is both fraud and theft.
Why One Survival Food Company Shines Above the Rest
Let’s be real. “Prepper Food” or “Survival Food” is generally awful. The vast majority of companies that push their cans, bags, or buckets desperately hope that their customers never try them and stick them in the closet or pantry instead. Why? Because if the first time they try them is after the crap hits the fan, they’ll be too shaken to call and complain about the quality.
It’s true. Most long-term storage food is made with the cheapest possible ingredients with limited taste and even less nutritional value. This is why they tout calories so much. Sure, they provide calories but does anyone really want to go into the apocalypse with food their family can’t stand?
This is what prompted the Llewellyns to launch Heaven’s Harvest. They bought survival food from multiple companies and determined they couldn’t imagine being stuck in an extended emergency with such low-quality food. They quickly discovered that freeze drying food for long-term storage doesn’t have to mean sacrificing flavor, consistency, or nutrition.
Their ingredients are all-American. In fact, they’re locally sourced and all-natural! This allows their products to be the highest quality on the market, so good that their customers often break open a bag in a pinch to eat because they want to, not just because they have to due to an emergency.
At Heaven’s Harvest, their only focus is amazing food. They don’t sell bugout bags, solar chargers, or multitools. They have one mission – feeding Americans in times of crisis.
What they DO offer is the ability for people to thrive in times of greatest need. On top of long-term storage food, they offer seeds to help Americans for the truly long-term. They want them to grow their own food if possible which is why they offer only Heirloom, Non-GMO, Non-Hybrid, Open-Pollinated seeds so their customers can build permanent food security on their own property.
Visit the Heaven’s Harvest website and use promo code “Patriot” for a discount today!
Did the Rothschilds create it? Or the Medicis of Renaissance Italy?! The 1400s was the era the Italian monks were supposed to have created double–entry bookkeeping —— also the time the Dutch created the STICHTING (Dutch for “foundation”), the all–encompassing financial magic allowing for the 2018 “news” reported by NPR that a billionaire “donated $1 billion to charity” — his tax attorneys moved his $1 billion in assets, stocks and bonds on his personal financial statement, to a newly created foundation he controls, so they removed $1 billion he could be directly taxed for to a legal entity (stichting) he still controls — a tax dodge making his stocks invulnerable to any hostile takeover!
Double–entry bookkeeping plus the stichting —— a killer combination! (The congressional populist, Wright Patman, did most of the government studies into foundations & trusts, while Ferdinand Lundberg explained them in his classics, “The Rich and Super—Rich” and “The Rockefeller Syndrome”! Highly recommend all books by Dimitri Chorafas as well. A most remarkable financial guy and financial history scholar!)
Credit deratives are the ultra–extension of the fractional reserve system; while rendered seemingly hyper–complex, they are really quite simple: the layered fractionalization of the fractionalization of the fractionalization –ad infinitum – of the fractional reserve system, hence so many classes and categories of credit derivatives, quite the shell game of Deep Finance! (So instead of $8 loaned for every $1 on deposit — the classic example of the fractional reserve system — that $1 on deposit yields $1 million or $100 million with excessive credit derivatives –– but since such isn’t on hand, government [central banks and central bankers] must remonetize with neverending BAILOUTS! So to speak!?)
(Cap–and–trade, carbon permits, etc. are a small subset of the extension of the fractional reserve system, yet another financial scam!)
https : //rumble [dot] com/v4kr9i6-g.-edward-griffin-one-world-government-exposed-what-now [dot] html
https : //www [dot] jonesday [dot] com/-/media/files/publications/2016/02/shedding-light-on-the-dutch-istichtingi-the-origin/files/shedding-light-on-the-dutch-stichtingpdf/fileattachment/shedding-light-on-the-dutch-stichting.pdf
The national debt can be easily explained by one simple example: when hedge fund “genius” (super crook) John Paulson got together with Goldman Sachs in the early 2000s and created trash CDOs pumped out by them, they then purchased “unregulated insurance” called CDSes, or Credit Default Swaps: spending $1.4 million per CDS, with payouts of $100 million for each CDS when those trash CDOs were officially designated as worthless, having “no valuation”!
Who ultimately paid for that? The American tax base! Thefts from the tax base! There’s a one–to–one correlation between the rise in American billionaires and the rise in the national debt ——— NO COINCIDENCE!
So when BILL GATES’ Gates Foundation makes a “donation” (actually tax–subsidized investment) to a corporation which has declared some process they are involved in as “charitable in nature” — his investment is subsidized, or paid for, by the American tax base –double profit at the expense of the national debt!
Why the Gates Foundation is in actuality the largest biopharmaceutical corporation in existence, although “officially” the #1 is Pfizer, the Gates Foundation is around 100 times Pfizer’s size!
The GATES FOUNDATION is PHARMA!