Fractional Reserve Lending is Fraudulent

Ron Paul taught me that the federal reserve is a scam.  It was because of him that I even started researching economics because what he was saying sounded crazy yet it explained so many things. It was during this research which started in early 2007 that I started finding people like Bob Prechter, Peter Schiff, Mike “Mish” Shedlock, Marc Faber, Reggie Middleton, etc. who spoke plainly in common terms with the goal of educating as opposed to Greenspan, Bernanke, politicians and moneymen of all sorts whose actual goal is “the purposeful language of obfuscation” which Alan Greenspan called “fedspeak”.  Read the wiki on this term and if you aren’t a bit pissed off afterward, check your pulse to see if you are really alive.  What’s described is a clear strategy at conning the people by the elite.  Greenspan did not act alone.  He was part of a grand banking conspiracy.  It is no longer a theory folks.   It is more akin to a silent coup.  The bankers own our politicians and they are calling the shots.

I was able to suspend disbelief early and do the initial research because I was not indoctrinated into “the system” in college.  I instead spent those years in the USAF which was more of a school of hard knocks.  It had enough scammers and a$$holes for me to study yet they were unsophisticated enough in their ways that I was able to catch on.  It provided valuable lifelong experience for me.  Contrast that with the con men running the government.  They are well educated, sneaky and generally cover their tracks quite well.  They know every trick devised by man since ancient Egypt to deceive man.  They know how the human mind works and they use it against us.  They know how herding works and again, it is used as a weapon against the individual.  This is why so many people still just don’t (and won’t) get it.

I suspect that few people actually get it even after all that has happened since the crash of 2008.  If you are still unsure what to believe then try this on, a direct quote from Mish:

Fractional Reserve Lending Is Fraud

By lending out more money or gold than exists, asset prices reach unsustainably high levels before they crash. Sound familiar?

Greenspan compounded the problem in 1994 by allowing banks to "sweep" checking accounts (unknown to customers) into savings accounts (via accounting entry).

Savings accounts have no reserve requirements. Effectively, money that people think is in their checking accounts is not really there at all. In fact, it has been lent out multiple times over.

This fact exacerbated the run-on-the-bank problems we saw in 2008. As a side note, FDIC insurance is another form of fraud.

http://globaleconomicanalysis.blogspot.com/2012/07/notes-from-steve-keen-on-lending.html

Do yourself a favor and think about these words very carefully, line by line.  Here’s what I hope you can internalize from it:

·         Fractional reserve lending is indeed fraud.  It is government sponsored, government supported fraud, period.  It is not done without reason; someone is getting rich in the deal but it’s not you.

·         Fraud is crime.  Criminals should be prosecuted.  Apologies and clawbacks are not enough.  Punishments should fit the crime.  Fractional reserve banking has caused mountains of suffering in the USA and even more so abroad.  No serial murderer ever caused so much aggregate suffering.  Few wars have even done so and we are not even in the 4^th inning of this yet.

·         More money has been lent out than exists.  A LOT more.  So much more that it can never be repaid.  Add to that the Ponzi promises of social security, medicare and pensions (which are effectively loans by people to the controlling organization).  Add to that the fact that loans can, are, and will increasingly be dismissed as a result of bankruptcy.  The mathematical result is that a lot of people who think they have something coming to them are not going to receive it.  Plan on it.  Start now or don’t whine later because whining will not fix it.

·         Our banking system is based on fractional reserve lending which is a fraudulent practice.  Fraud is where someone steals your money quietly using guile, deceit, the art of the con, grifter’s tricks and of course sophistry.    In a fraud people don’t know what’s going on, they suspect nothing until it’s too late.  They only become aware when the fraud collapses and it collapses suddenly.  If a very well informed financial person like Mish tells you that you are caught up in someone else’s fraud game, you should listen.  Our banking system is a fraud game.   Don’t leave any more wealth in it than you need to because all fraud eventually is discovered and no con game ever ran indefinitely.  We are in the End Game now.

·         The US Dollar is the creation of our fraudulent federal reserve.  If you have all your assets in dollars you will eventually be defrauded of them.  Nobody can say when and I’m not predicting it will be tomorrow or even next year.  In fact, the dollar might even strengthen from here for a period of time as Euroland collapses, Japan collapses and China hits very hard times and has to print.  In fact, I’m on record many times as saying the dollar would strengthen vs. global currencies as the first stage of the collapse and indeed it has been strengthening as you can see from the UUP ETF chart.  But it is a conviction-less strengthening as can be seen by collapsing volume that has been accompanying the dollar’s rise.  People are only getting into the dollar out of fear, not out of real desire.  This is not the underpinning of a long term trend.   The collapse of the dollar is in the cards somewhere on the horizon.  Math will not be denied.

·         The FDIC will not save you.  The FDIC is another unfunded government promise.  The FDIC is another government fraud. 

·        Physical gold is outside of all this fraud.  It is real and true.  Paper claims on gold held by someone else are not the same as physical gold in your hand, not even close.  At some point everyone will give up on the fraudulent money system and everyone will pile into the only source of wealth that can be trusted: gold (and perhaps some silver if you want to have some additional volatility in your metals portfolio).  Gold price may come down even more as deflation of the fraudulent money supply sets in.  Just dollar cost average into it over time with no leverage and you will be a big winner in the end.  The end must arrive before all of the boomers retire because that will be the maximum load on the fraudulent system.  It is what will cause the collapse (if global bankruptcies don't do it before that).  In other words, this is not some open ended fear factor.  It must occur before the patsies get paid otherwise they weren't patsies.  But we know they won't get paid because they are in a fraudulent monetary system ergo the system must collapse in step with or before the mass retirement of the boomers.  There's still some time left to defend yourself but action is required.