The treasury needs money. They have to borrow it. Here is how that is done:
The first step is, the Treasury issues a bond. This is how our national debt is created. The Treasury then holds a bond auction and banks compete to buy a portion of our national debt and earn interest on it.
Then the banks sell some of those bonds to the Federal Reserve at a profit in what is known as Open Market Operations.
The Federal Reserve pays for those bonds by issuing a check drawn on an account that has no money in it. This is how the Federal Reserve creates money.
When the Federal Reserve hands those checks to the banks, new money is created and it suddenly springs into existence. The banks take that newly created money and bring it to the next bond auction and buy more treasury bonds.
The Treasury then takes that newly created money from the banks and uses it for its deficit spending where the money is then infused into the currency system and eventually into citizens’ pockets.
So whenever the Government wants to do deficit spending, the banks profit as middlemen between the treasury and the Federal Reserve. This middleman profit essentially acts as a tax on all of society. And this tax will continue to be paid by future generations.
It is in the best interest of the banks that the Government does as much deficit spending as possible. And that is what our Government has been doing. Our Government which is run by politicians from both parties who had to rely on campaign contributions from banks in order to get elected.
It is NOT in the best interest of the voters of America that the Government does any deficit spending at all. It’s time the voters of America cut out the middleman. Our national debt is over $18 trillion!
But this is only the beginning. The next step is where private bank created currency really steps up to a higher level. The next step is called Fractional Reserve Lending, or Fractional Reserve Banking.
Because when the money ends up in a person’s paycheck, for example, and that person takes that paycheck to the bank to deposit it, the bank does NOT hold that money in an account for safekeeping. That is how most people believe private banks operate. That is how private banks should operate.
Instead that bank holds 10% in reserves and loans the other 90% out in newly created credit. So if you deposit your $100 paycheck into the bank, the bank would then keep $10 in reserves and lend out $90. A private bank has now created $90 in new money. This new money is infused into the stream of currency when that newly created $90 is spent, for example, at a merchant's store.
Now this $90 of new money can be deposited by that merchant into a different bank and that bank can lend out $81. This process continues until your $100 paycheck allows private banks to create a potential $900 in new money in the form of loans to the People of America.
This means our entire money system is designed in such a way that at any given time there is never enough money in existence to pay off all of the debt that exists. The more new money that is created, the more debt that there is.
The only possible way for the current debts in existence to be paid off is if the banks create more new debt. With compounding interest, the banks profits continue to grow while the American people fall further and further into debt. This is happening right now on a federal, state, municipal and household level. This is the way our whole money system is designed.
This means our whole money system is designed in such a way that the more debts incurred by the Government and the People of America, the more profits made by the banks.
This also means that our entire monetary system is designed in such a way that it has to eventually collapse as a mathematical certainty if it is not repaired.
Until this eventual collapse, it is in the best interest of the banks that the Government, every state, every municipality and every household continue to take on more debt in order to make the minimum interest payments on the current debt in existence.
Banks are owned by shareholders, and banks owe a duty to their shareholders to make decisions in the best interest of those shareholders. Banks fulfill their duty to those shareholders when they take measures to ensure that American debt (and therefore bank profits) continue to grow. Banks fulfill their duty to their shareholders when they fund candidates from both major parties that will continue with deficit spending and will not talk about changing our monetary system.
The banks are only fulfilling their legal duty to their shareholders. But the American voters can change all that. The American voters can do what is right for the People of America and not the banks' shareholders.
The first and foremost issue of this election needs to be Monetary Reform. We need Congress setting our monetary policies in the best interest of the American People and not in the best interest of the banks’ shareholders.
The next issue must be campaign reform. Americans need to trust that their Congress is setting monetary policy without any undue influence from campaign contributions.
These two issues have to preclude all other issues.
It’s time the voters of America stop allowing private banks to create our money and set our monetary policy. It’s time the voters of America stop allowing campaign contributions to rule our election process.
I am Jason Woodward. I am a financial attorney and I am running for President of the United States because I want to educate the People of America about the real facts behind our monetary system.
My campaign will never accept contributions. I use free resources to market my concepts.
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