Posted on another thread that seemed done - Thanks KOS.

Gentlemen, It's seems most here see and agree the FED and the banking system CREATES money by lending. Correct? There are two real points. 1.What are the rules to lending? 2.Who makes those rules and who profits from them?

From talking with bankers that are friends, or even in the lobby of several, the current Capitalization Rate is about 15 or 16. That's what Fractional Reserve Banking is. Currently, a bank can loan out 15 -16 times what it has in reserve. For every Dollar it has it can loan out 15 Dollars. Now, if I put 1 dollar in - at the end of the year it will have paid me (lets say %5 interest) 5 cents. But it will have collected $1.50 from the people it lent the 15 Dollars to. (Charging them say, %10 interest) It's hard to see how a bank can fail! The problem is, notice that they never lend you the INTEREST. You can see that unless one paid back the money immediately, there IS NO MORE MONEY IN THE SYSTEM to pay the interest back with! Forgetting the "But I can trade my services for something I need" argument, because a Bank won't be interested in your services - they want the MONEY back, or they will screw up your credit and life etc. One then realizes that the only way to pay back the loan + the INTEREST is to BORROW MORE MONEY from somewhere. And then one realizes that ALL MONEY COMES FROM A BANK.

Eventually, everyone is in debt to the BANKERS - even Countries. That's why the IMF act's as the world's Chase Manhattan. When you owe the BANKERS money, they have a large influence on one's future. One might have to give them that collateral (Say in the case of Brazil or Indonesia - mining rights that you can give to some of your favorite boys because the favor you'll ask of them down the road is of value to you, etc. etc.)

Anyway, we become more and more in debt. I was looking at the Depression in the Encyclopedia Brit. - thought it would be nice to see what life was like then, and saw a graph of the debt of the U.S. since it's inception. Wouldn't you know it. The debt graph spiked -guess when? 1913 - the year the FED was created.

Flint, the FED to my knowledge has NEVER been audited. Constitutionally, only the U.S. Congress has the authority to print and coin money. Supposedly, this was ratified by the Federal Reserve Act of 1913. Yet, Wilson himself in 1916 realized he'd turned the Government over to a "Secret Government". You may read about it as well in the 1935 House Banking Committee's notes -I forget the Senator or Congressmen that was accusing the FED of stealing the U.S. people blind, and that they should give back everything, and we'd be out of debt and own our own stuff. By the way, I've tried to find the Federal Reserve Act of 1913 and it can only be obtained by writing the Board of Governors of the Federal Reserve, no Library has a copy!

So see the big picture, we have all traded our real wealth, our pink slips or title to our homes or whatever, for PAPER. The Central banks have most of the Gold, and title to most of what we own. (This is probably the best analysis of the Gold Play - to drive the mines out of business, take control of them. Therefore, unless there is a real Public Blowup re: Y2K, I think Gold will be hard pressed to clear 340.)

In the depression, where did all the MONEY come from to put everyone back to work building more crap than we ever had? We had to borrow from somewhere. Yes, the Rothchilds (and others). They were lending to Germany as well.

It would be possible to have a Credit Banking system instead of a Debit Banking System. One poster was right, there doesn't need to be a usury charge of money. The U.S. should have it's own Bank, one that lends to it's people and charges only administration fees (NOT FOR PROFIT), and maintains money supply that reflects production.

If one ever seriously starts to look in to the banking laws and regulations, it's clear that they have made it so complicated as to throw most people off the path. I have seen a shareholders chart showing the major players in the FED. Rothchild, Rockefeller, Morgan, Lehman, and some Foreigners.

By getting us (the people) to agree to use their MONEY (notice all bills have Federal Reserve Note - not U.S. Reserve Note on the bottom), the Bankers get a piece of everything we do, for economic exchange!!!!! All they are providing is the MEDIUM with which we transact - is that worth TRIPLE the Price of something?? (The interest on a House is about 3 x's the purchase price)

I don't care who owns the Banking system, it's fraudulent from the very concept the way it is currently practiced.

-- aasb (aasb@starting-point.com), October 15, 1999.

-- Mark (aasb@starting-point.com), October 15, 1999

Answers

The unschooled, poor spelling Andrew Jackson was probably the most recent President of the United States that truely understood banking.

-- Ken Seger (kenseger@earthlink.net), October 15, 1999.

Mark:

I seem to be missing something here. If I take out a 30-year mortgage today and win the lottery tomorrow and pay it all back, I don't pay triple what I borrowed. I pay the same amount in number of dollars.

Someone pointed out on another thread that the dollar doesn't buy nearly what it did 30 years ago -- we need a lot more dollars today to buy essentially the same thing. But the mortgage payment amount is fixed -- it doesn't grow as the dollar shrinks. Let's say I buy a house from someone who has it nearly paid off. Say my mortgage payment is $500/month. But HIS payment was only $150/month. At the time (30 years ago) that was a LOT. So we pay off the mortgage with constant dollars as of the purchase date, not with dollars adjusted for inflation.

So you are not paying back anywhere near triple the *buying power* of what you borrowed. In terms of actual buying power, you're paying back essentially what you borrowed over the life of the mortgage.

Look at it another way. Say you buy a house today for $100,000. Yes, over 30 years, you've paid back a total of $300,000. But after 30 years, your house has a market value of $300,000 in 2029 dollars. So you paid market value for the house in total dollars. And during the life of that mortgage, your payments keep pace with that market value. If you should sell the house during that period, you will receive in buying power (at the time you sell it) the amount that you've paid (in buying power at the time you sell it).

I don't see the problem with this.

-- Flint (flintc@mindspring.com), October 15, 1999.

Mark,

You NEED to read, "The Creature from Jekyll Island", by G.Edward Griffin.

ALL, I say all, of your questions will be answered and then some! Whew.

-- I'm (with@titude.now), October 15, 1999.

Flint- I'll try one last time to explain.

The bank creates that $100,000 that was paid for that house. Out of thin air-at a cost of .02 cents per bill-if they even use bills. If the transaction is done online the actual cost is 0.

Now you end up paying $300,000 to the bank over time. Have they gained the $200,000 from interest OR did they gain the full $300,000 of interest AND principle???

Since you either don't believe me or can not understand me, please goto the nearest branch of the Federal Reserve and get their information on it. They actually do tell you what they do. They just figure that we the people are too stupid to uderstand it or act on it.

-- Brent James Bushardt (brentj@webt.com), October 15, 1999.

Flint, You know even less than Mr. Decker... the reserve rate is 1.7% as we speak. That means for every $100.00 on deposit, there is a whopping $1.70 available. What is it with people that wish to speak to subjects for which they have no clue? Go play Sherlock Holmes with some of the above references I've listed... until you do, you'll continue to sound more like Larry Holmes.

-- Patrick (pmchenry@gradall.com), October 15, 1999.

Patrick:

I wrote nothing about the reserve rate. If you didn't attack quite so reflexively, you'd realize that, I'm sure. Are you that insecure about your fantasies, that you must defend them against imagined attacks? I see no reason to debate anything you've written.

-- Flint (flintc@mindspring.com), October 15, 1999.

Flint, The reserve rate is what you were discussing on the last thread. And I wish these were only fantasies. Don't you ever address the point at hand?

-- Patrick (pmchenry@gradall.com), October 15, 1999.

If my memory serves me, President Jackson, who was vehemently opposed to the establishmentof the Second(?)US Bank(equivalent of the present FED), was nearly assassinated over it, and was only saved by the very fortuitous fact that NEITHER of the would-be assassin's revolvers fired!

I am positive this is mentioned in "The Creature From Jekyll Island" book.

I also recall a quote from FDR himself, when asked about disbanding the bandits, replying something like"what, you don't think I value my life?" Compared to TPTB, Clintonista is not even a small-time hood.

-- profit_of_doom (doom@helltopay.ca), October 16, 1999.

Flint, Patrick is correct. On the last thread you were talking about the Fractional Reserve Rate. Wheather the BANK makes all of my interest payments as profit, due to inflation, is beside the point. The point is, they shouldn't make any profit beyond the cost of administering the loan. Their "cost" of the money is practically nothing.

-- Mark (aasb@starting-point.com), October 16, 1999.

Mark:

I think we might be talking right past one another. If you'd like to discuss this more offline, my email is real. As an immediate reply, I'm uncomfortable with the notion of a private business prohibited from making a profit. Nobody would invest in such a business. Since we need banking, that would mean banks would be government institutions, which tends to make everything politicized and horribly inefficient.

I should also mention that banking doesn't seem to be a no-brainer. Poorly run banks do fail, often enough.

-- Flint (flintc@mindspring.com), October 16, 1999.

I probably shouldn't post when I'm angry at EVERY enterprise, but some things are just bugging me lately.

I recently cancelled my long-distance carrier (both for my voice-line and my computer line.) WHY? I found myself paying for things that I never used...EACH month. I cancelled my mom's long-distance carrier several months ago. She NEVER makes a long-distance call, but I was paying a bill for taxes, contributions to internets in schools, a fee for NOT making a long-distance call, etc.

My experience with cancelling my long-distance carrier (and NOT providing a new one) resulted in a $5.00 charge for the cancellation as well as a new fee of $.65/month for NOT having a long-distance carrier.

Okay...let's move on. I have ONE credit card and (if I don't forget to pay the bill), tend to pay the entire amount each month. AFAIK, if I want to maintain internet access, I need a credit card on which to bill my monthly fee. AFAIK, I can't get my mom's prescription medicine through the mail (3-months at a time) without a credit card.

Yesterday we heard on the news that those who pay their entire credit- card bills each month will be charged a monthly fee anyway. I can't verify this, but have heard the rumor for quite some time.

I don't own a house, but live with someone who does. When he bought this house last year in August, he decided to settle on a 15-year mortgage. I pay half the mortgage payment each month, so he may be able to pay off the house in 7.5 years. This reduces the overall payment considerably. Of course the value of the house increased $20,000 in two weeks!

It's a toss-up if you want to engage in these things. My folks never had credit and never had a house. They paid all their bills in cash. They never even had a checking account. My cousin had the same type of parents. His philosophy is to have the house and pay the piper later. That seems to be the American way.

You can go off all you want about the banks, but I'm looking at my phone bill right now (just my regular phone bill...not the separate one from the long-distance carrier.)

Municipal charge...........................$2.83 Expanded Local Calling Service Surcharge...$0.32 Number Portability Service Charge..........$0.66 FCC Approved Customer Line Charge.........$12.14 911 Service Fee............................$0.40 Texas Universal Service....................$2.21 Federal tax................................$2.01 State and Local taxes......................$5.17

-- Anita (notgiving@anymore.com), October 16, 1999.