The Fed: Anatomy of a Fraud
by Hamad Subani
January 10, 2011
The Fed: Anatomy of a Fraud (Jan. 10, 2011)
Editor's Note: This information is familiar to most of you but Hamad Subani's presentation has a clarity worth showcasing. The banker fraud is the mother of all frauds. The myriad lies that pass for our "civilization" all stem from it.
Society is complicit in its own robbery by agreeing to repay money created from nothing, plus interest. Essentially everybody in a position of power is an accomplice in this racket which extends to every facet of society. Complicity is the price of "success."...Henry Makow
(Excerpt from "The Federal Reserve as an Instrument of War" )
The basic explanation on how the Federal Reserve System allows its member banks to profiteer runs like this. Suppose the government desperately needs $1 billion.
In the absence of the Federal Reserve System, it would raise taxes, or use up accumulated taxes. But with the Federal Reserve System, it asks the member banks for a loan. The member banks grant the loan, and the Federal Reserve prints the $1 billion and issues it to the government at interest.
How the banks "grant" the loan is hazy. They certainly do not transfer cash from their own private holdings to the Federal Reserve. To add another layer of abstraction, these processes are "computerized."
To pay back the loan plus interest to the banks, the government taxes the American people (income taxes constituted 43% of Federal receipts in 2009). It is important to note that when the government pays back the loan plus interest to the banks, the banks receive actual cash transfers from the government.
If the loan is too big to pay (as is always the case), the government merely pays the interest on it (which accounted to 5% of Federal expenditure in 2009), and the banks become holders of American debt. Holding American debt has asset value, as it guarantees a steady trickle of interest by none other than the United States government. And therefore, it can be inferred that the banks in question are not that keen about repayment of the principle.
The government could accomplish the same results by having the Treasury print the money whenever needed, resulting in similar levels of inflation. But by inviting the banks to the table, the Powers That Be have managed to divert Federal expenditure towards paying "interest" for the banks' "loans."
And in this process, these private banks have become the holders of American debt. More than half of American debt is held by foreign interests.
When we try to understand how the banks "grant" the loan to the government in the first place, we are reminded of Class Action Suit filed by John Dempsey against major Canadian financial institutions at the Supreme Court of British Columbia on 15th April 2005.
The lawsuit was dismissed as frivolous. But Dempsey's objections to how banks "granted" loans to the Bank of Canada are still pertinent. To quote,
At all material times, these defendant banks and all of them have no legal standing to lend any money to borrowers, because:
1) these banks and credit unions did not have the money to lend, and therefore they did not have any capacity to enter into a binding contract;
2) the defendants did not have any cash reserve, they are not legally permitted to lend their depositor's or member's money without expressed written authorization from the depositors, and:
3) the defendants have no tangible assets of their own to lend and all their "assets" are "paper assets" which are mainly in the form of "receivables" created by them out of "thin air," derived out of loans whereas the monies loaned out were also created out of thin air.
Other than bookkeeping and computer entries, no money or substance of any value was loaned by the defendants to the Plaintiff. In all of the loan transactions entered into between the Plaintiff and the Defendants, the financial institutions did not bring any equity to any of the transaction.
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