Sunday, July 24, 2011

Fractional Reserve Banking

Money plays a large role in the life of 3D humans, so the coming financial collapse foreseen by the Founders will have a significant impact on the lives of those humans. For those waiting for NESARA, the Founders feel it won't happen, just like they don't expect Disclosure to happen. I'll present the Founders thoughts on NESARA in a future post, but for this post we start with their view of the financial system in place today.

The control of the world's monetary systems by a ruling elite has been going on for thousands of years, although the methodology has changed since the earlier civilizations. During the so-called Roman empire, taxation was a primary scheme. Tax collectors for the government would go door to door and would often take up to 90% of the assets of the people. In your present technological environment, this brazen form of control has been replaced with a more subtle, yet also more insidious, means of extracting assets from the common people and concentrating them in the hands of a few individuals.

As detailed in many of your alternative economic writings, you have a system that is called "fractional reserve" banking, in which money is printed and distributed in such a way as to cause the fictional assets of the banks to be replaced with real assets, meaning that paper is exchanged for things that have real value in your world, such as houses, land, crops, etc. Banks print and then loan these fictional assets (paper money) to borrowers, who then pay interest on the loan. The interest is compounded, which drives the "value" of the paper money lower (as if you could subtract something from zero in the first place). When the borrower is unable to pay (often due to inflation caused by the fractional reserve system itself), the bank repossesses the borrower's property (having real value). Now the bank has received something for nothing, and the owners of the bank have acquired resources with real value in exchange for the inconvenience of running a few printing presses and distributing a few pieces of paper.

The Founders have explained things in the simplest way possible, but for those looking for a more detailed and technical explanation, I would recommend my post "Gold for the Golden Age". For those keeping score, the value of gold in $US has increased by 29% since that post was written over a year ago.

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