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Alternative:
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The One Dollar BankUnderstanding the illusion of real wealth.
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Bank |
Citizen |
Acc. |
Principle |
|
Banker |
$1 |
$1 |
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Baker |
$1 |
$1 |
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Butcher |
$1 |
$1 |
|
|
Grocer |
$1 |
$1 |
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|
Barber |
$1 |
$1 |
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|
Farrier |
$1 |
$1 |
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Farmer |
$1 |
$1 |
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Mechanic |
$1 |
$1 |
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|
Worker |
$1 |
$1 |
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|
$1.00 |
Citizen |
$1 |
$1 |
figure 1
In the above first bank of figure 1 we see that the bank is charted with $1 dollar as its total foundation reserve holdings. The bank may have had lots of gold and silver but it only ever started with the first $1. Now I will show you the important principle of how banks create money from thin air, yes from absolutely nothing at all. In our very real world to date government law and legislation allows banks to loan out 10 times the money they have in their total reserve. This very legal and factual practice is known by the name of 'fractional reserve banking'. By using the fractional reserve banking practice banks can literally create money out of thin air. Money is simply a stroke of the pen. It's a game of numbers where the only value given to it is by peoples own individual minds.
As we look at the above chart of accounts in figure 1 we see that 10 business/citizens have each received a loan from the bank for 1 dollar each. One of the magic tricks of fractional reserve banking is that the bank still has its original $1 in its reserves. The banks reserve money does not dwindle at any time. So now we have a very real $10 worth of money in our society that can be passed around an used by our ten citizens. This is very real banking magic, it is real money created from out of nowhere. The problem now exists that the bank has loaned out all the money to the maximum extent of the law. How can the bank recoup some of the imaginary money to increase their own reserves ? Remember the banks are allowed by law to loan out 10 times their actual reserve. So the banks will have to increase their reserve some how so they can loan out more money. So the magic of interest rates on outstanding loans where developed and put in place. The banks can now recoup some of the imaginary money loaned out to the citizens an increase their own actual reserves, which again can be magically loaned out again at 10 times the amount. So the banks have a mechanism in place that automatically ensures their own reserves increase, which government law then allows to increase further to ten times the actual reserve amount. Furthermore, by the practice of economic inflation, increasing the interest rates and removing money back out of society, the bank ensures that every citizen continually returns back to the bank for more loans; thus continuing the never ending cycle.
Society Control Via Interest Rates %
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Bank |
Citizen |
Acc |
Loan |
Owe |
1 |
|
Banker |
$1 |
$1 |
90 |
10 |
|
|
Baker |
$1 |
$1 |
90 |
10 |
|
|
Butcher |
$1 |
$1 |
90 |
10 |
|
|
Grocer |
$1 |
$1 |
90 |
10 |
|
|
Barber |
$1 |
$1 |
90 |
10 |
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|
Farrier |
$1 |
$1 |
90 |
10 |
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|
Farmer |
$1 |
$1 |
90 |
10 |
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Mechanic |
$1 |
$1 |
90 |
10 |
|
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Worker |
$1 |
$1 |
90 |
10 |
|
|
$2.00 |
Citizen |
0 |
$1 |
90 |
10 |
figure 2
In the chart of accounts of figure 2 we see that each citizen has paid their first instalment of interest back to the bank. But where did the money come from to pay the bank their interest payments ? It could not have come from the bank because the bank are not allow by law to loan out any more than 10 times their actual reserve. The bank has reached its legal limit, it has loaned out all the money it can by law. The money then must have come from the citizens own borrowed money. In fact this is exactly where the money came from. Every person in society today provides a product or service, or a combination of both product-service. For the above business/citizens to be able to pay the due interest back to the bank they must persuade all other citizens to legally part with their money by providing either a product or a service.
So now the banks have created a situation in society were the people must be clever at persuading other citizens to part with their money. Otherwise the bank will foreclose on their loan an seize all of their assets, which will be sold off. The banks have now created a situation where survival of the fittest, cleverest, or out right criminal element only survives in society. There is no place for nice, or humble people in this very real financial world. It really comes downs to service-to-self control over others, or service-to-others poverty an hardship. This situation should be totally the opposite if our society is to truly survive.
In our sample perfect society here we will assume that every law biding person only charges enough money to cover their 10cents in interest rate without over charging or making any profit from society. This will ensure the banks get paid their 10cents in interest every month for the next 10 months. In fact in a true society the situation is much worse as every person will attempt to persuade 2-3 times more money out of the hands of every other citizen. With this greed mechanism instilled in society it would not take long before the imaginary magic money circulating in society is focused quickly into the hand of a few power seekers. Once created, wealth is not destroy; it is merely transferred from one person to another. For now assume that each perfect person in our sample society seeks to make interest payments only from the total wealth of our sample society. See the rest of the first banks monthly chart of accounts below.
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Bank |
Citizen |
Acc |
Loan |
Owe |
1 |
2 |
|
Banker |
$1 |
$1 |
80 |
10 |
10 |
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Baker |
$1 |
$1 |
80 |
10 |
10 |
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Butcher |
$1 |
$1 |
80 |
10 |
10 |
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Grocer |
$1 |
$1 |
80 |
10 |
10 |
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Barber |
$1 |
$1 |
80 |
10 |
10 |
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Farrier |
$1 |
$1 |
80 |
10 |
10 |
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Farmer |
$1 |
$1 |
80 |
10 |
10 |
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Mechanic |
$1 |
$1 |
80 |
10 |
10 |
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Worker |
10 |
$1 |
80 |
10 |
10 |
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$2.90 |
Citizen |
0 |
$1 |
90 |
10 |
X |
figure 3
In the second month we see the bad news starting to take hold. There was only ever a maximum of $10 circulating in society, there is no other wealth from any other source. All people must at least obtain a minimum 10cents per month from some person or business to cover the bank interest charges. A task which you will soon start to realise is totally impossible. We see the Citizen in figure 3 above who was unable to provide a product or service has defaulted on his second interest payment. He had to pay 10cents to all the other business people who where looking for money to cover their own monthly interest payment. After paying all of his loan money out in bills he was unable to pay the bank the 10 cents interest due on his loan. The fact is that he will never be able to pay it as no money was released back into society to be able to pay the interest owed. All the other business/citizens where forced to charge someone for a service or product so they could cover their own minimum 10 cents in interest and be able to pay the bank. Remember we are only using the example of interest charges. In reality every business or service charges 2-3 times more, which removes the actual money circulating in society 2-3 times faster.
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Bank |
Citizen |
Acc |
Loan |
Owe |
1 |
2 |
3 |
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Banker |
$1 |
$1 |
70 |
10 |
10 |
10 |
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Baker |
$1 |
$1 |
70 |
10 |
10 |
10 |
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Butcher |
$1 |
$1 |
70 |
10 |
10 |
10 |
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Grocer |
$1 |
$1 |
70 |
10 |
10 |
10 |
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Barber |
$1 |
$1 |
70 |
10 |
10 |
10 |
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Farrier |
$1 |
$1 |
70 |
10 |
10 |
10 |
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Farmer |
$1 |
$1 |
70 |
10 |
10 |
10 |
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Mechanic |
20 |
$1 |
70 |
10 |
10 |
10 |
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Worker |
0 |
$1 |
70 |
10 |
10 |
10 |
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$3.80 |
Citizen |
0 |
$1 |
90 |
10 |
X |
X |
figure 4
At the end of the 3rd month we see that the Worker and the Mechanics personal bank accounts are low and they are struggling to survive. They had only sufficient funds to make bank interest payments. The Worker like the Citizen had to pay his own personal money to all other businesses. The other business/citizens where forced to charge some person 10cents to cover their own bank interest charges. In truth there is no money left in society for the Worker to be able to pay the bank interest. Remember our sample society here is making interest payments only, they are not making any profit at all else the situation in our sample society would be much worse. The interest accumulated is being paid back to the bank who is not releasing any new loans or circulating money back into society. The banks have already increase their foundation reserve amount from $1.00 to $3.80 which is an increase of 280 %. If they so desire, the bank can legally loan this money out again at 10 times the actual reserve value creating a further $38.00 imaginary dollars in our real or sample society. The Citizen above has defaulted on his loan so his assets are now seized and value appraised to be sold at a later date.
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Bank |
Citizen |
Acc |
Loan |
Owe |
1 |
2 |
3 |
4 |
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Banker |
$1 |
$1 |
60 |
10 |
10 |
10 |
10 |
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Baker |
$1 |
$1 |
60 |
10 |
10 |
10 |
10 |
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Butcher |
$1 |
$1 |
60 |
10 |
10 |
10 |
10 |
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Grocer |
$1 |
$1 |
60 |
10 |
10 |
10 |
10 |
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Barber |
$1 |
$1 |
60 |
10 |
10 |
10 |
10 |
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Farrier |
$1 |
$1 |
60 |
10 |
10 |
10 |
10 |
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Farmer |
40 |
$1 |
60 |
10 |
10 |
10 |
10 |
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Mechanic |
0 |
$1 |
60 |
10 |
10 |
10 |
10 |
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Worker |
0 |
$1 |
70 |
10 |
10 |
10 |
X |
|
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$4.60 |
Citizen |
0 |
$1 |
90 |
10 |
X |
X |
X |
figure 5
At the end of the 4th month we see that the Worker has defaulted on the 4th interest payment. The Farmer is going backwards fast. The Worker like the Citizen has no money to pay the interest as it was paid to all other businesses. The other business/citizens where forced to charge some person 10 cents to cover their own bank interest charges. There is no money left in society for the Worker to be able to pay his bills or bank interest. It does not matter where or from whom the 10 cents come from each month. It does not matter that it all comes from one person or a little bit from every other person. There is always only a fixed amount of money released an in circulation in society. The fact remains that the banks want their full entitlement to interest payments to so they can justify the imaginary money in society as earned an valid, so they can increase their reserve and further increase their loan capacity. In effect the banks loan out imaginary money an accumulate the interest back in as laundered clean valid working money. This money is then recognised as legitimately earnt capital by governments. This money is then useable by the bank to increase their loan reserve capabilities 10 times over. Money from absolutely nowhere as you may now realise...
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Bank |
Citizen |
Acc |
Loan |
Owe |
1 |
2 |
3 |
4 |
5 |
|
Banker |
$1 |
$1 |
50 |
10 |
10 |
10 |
10 |
10 |
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Baker |
$1 |
$1 |
50 |
10 |
10 |
10 |
10 |
10 |
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Butcher |
$1 |
$1 |
50 |
10 |
10 |
10 |
10 |
10 |
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|
Grocer |
$1 |
$1 |
50 |
10 |
10 |
10 |
10 |
10 |
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Barber |
$1 |
$1 |
50 |
10 |
10 |
10 |
10 |
10 |
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Farrier |
70 |
$1 |
50 |
10 |
10 |
10 |
10 |
10 |
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Farmer |
0 |
$1 |
50 |
10 |
10 |
10 |
10 |
10 |
|
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Mechanic |
0 |
$1 |
50 |
10 |
10 |
10 |
10 |
X |
|
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Worker |
0 |
$1 |
80 |
10 |
10 |
X |
X |
X |
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$5.30 |
Citizen |
0 |
$1 |
90 |
10 |
X |
X |
X |
X |
At the end of the 5th month we see that the Mechanic has defaulted on the 5th interest payment. The Farrier is going backwards also. The Mechanic like the Worker has no money to pay the interest as it was paid to all other businesses. The other businesses where forced to charge some other person 10cents to cover their own bank interest charges. There is no money left in society for the Mechanic to be able to pay his bills or bank interest. The greatest swindle ever perpetrated on any society was the overall compounding interest principle developed by the banks. In our sample society the banks loan out $1 to all 10 citizens. You would think that 10 percent interest on $10 equals a bank profit of $1, not so. The banks charge 10 percent interest per month on the principle of the loan which is returned back to them at 10x10 by our sample society. In a perfect world the banks would loan out an imaginary $1 to 10 citizens = $10 and receive back $10 from interest payments alone. How's that for a perfect money laundering system? Trouble is that the imaginary interest is paid back to the banks via the blood, sweat and tears through the very real services of each citizen in society. The same citizens who have been brainwashed from a child into believing that money has some type of real value and worth. When in fact wealth is now, an for every will be, created out of absolutely nothing. It is further backed up by nothing. By law wealth was once backed up dollar-for-once by factual gold reserves. The gold reserve is no longer required as the imaginary monetary system is fixed firmly into the society mind set.
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Bank |
Citizen |
Acc |
Loan |
Owe |
1 |
2 |
3 |
4 |
5 |
6 |
|
Banker |
$1 |
$1 |
40 |
10 |
10 |
10 |
10 |
10 |
10 |
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|
Baker |
$1 |
$1 |
40 |
10 |
10 |
10 |
10 |
10 |
10 |
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|
Butcher |
$1 |
$1 |
40 |
10 |
10 |
10 |
10 |
10 |
10 |
|
|
Grocer |
$1 |
$1 |
40 |
10 |
10 |
10 |
10 |
10 |
10 |
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Barber |
$1 |
$1 |
40 |
10 |
10 |
10 |
10 |
10 |
10 |
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Farrier |
10 |
$1 |
40 |
10 |
10 |
10 |
10 |
10 |
10 |
|
|
Farmer |
0 |
$1 |
50 |
10 |
10 |
10 |
10 |
10 |
X |
|
|
Mechanic |
0 |
$1 |
60 |
10 |
10 |
10 |
10 |
X |
X |
|
|
Worker |
0 |
$1 |
80 |
10 |
10 |
X |
X |
X |
X |
|
|
$5.90 |
Citizen |
0 |
$1 |
90 |
10 |
X |
X |
X |
X |
X |
figure 7
At the end of the 6th month we see that the Farmer has defaulted on the 6th interest payment. The Farrier is going backwards fast. The Farmer like the Mechanic has no money to pay the interest as it was paid to all other businesses. The other businesses where forced to charge some person 10cents to cover their own bank interest charges. Like usual, there is no money left in society for the Farmer to be able to pay his bills or bank interest. The money circulating in society is being accumulated back to the bank in interest charges. The bank is not releasing any new loans which releases money back into circulation to maintain a health economy. Any citizens who believes they have accumulated wealth will soon have that wealth devalued by the banking practice of inflation. Banking practices of economic Inflation will deliberately devalue their monies buying power so that each citizen must return to the banks for more loans. And so the loan cycle continues over once again for each generation in society.
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Bank |
Citizen |
Acc |
Loan |
Owe |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
|
Banker |
$1 |
$1 |
30 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
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|
Baker |
$1 |
$1 |
30 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
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Butcher |
$1 |
Alternative
