The World’s Most Immoral Institution Tells You How

1 Apr

To understand why The Banking System is The World’s Most Immoral Institution, you need only to understand how it actually works.

Not how it works in the lofty, rarefied atmosphere of incomprehensible acronyms like ARM and RMBS and CFD and CDO and QE and LTRO.

Just the basics of banking.

The works that you and I deal with every day, at our local bank.

Fortunately, The Banking System has grown so proud of its near God-like power, it is happy to tell us how the basics really work.

From Modern Money Mechanics – A Workbook on Bank Reserves and Deposit Expansion, a complete booklet originally produced and distributed free by the Public Information Center, Federal Reserve Bank of Chicago, now out-of-print (emphasis added):

Who Creates Money?

Changes in the quantity of money may originate with actions of the Federal Reserve System (the central bank), depository institutions (principally commercial banks), or the public. The major control, however, rests with the central bank.

The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money. These liabilities are customers’ accounts. They increase when customers deposit currency and checks and when the proceeds of loans made by the banks are credited to borrowers’ accounts.

In the absence of legal reserve requirements, banks can build up deposits by increasing loans and investments so long as they keep enough currency on hand to redeem whatever amounts the holders of deposits want to convert into currency. This unique attribute of the banking business was discovered many centuries ago.

NB: This is why governments the world over are so obsessed with maintaining public “con-fidence” in the banking system. It is why they so fear any hint of a “run on the banks”. As we have seen previously ( “Think You’ve Got Cash In The Bank? Think Again” ), the Australian banking system only has around $183.50 in stored ‘reserve’ cash for every employed person in the country.  According to Australia’s central bank, the RBA, there is only $53.2 billion in actual cash notes in existence (or $4,655 per employed person) … even though Australian households and non-financial businesses believe that they have a combined $986 billion in total Deposits. If 1 in every 19 Aussies insisted on withdrawing their bank “Deposits” at the same time … all the cash would be gone. To add injury to insult, The Banking System is “earning” (?!) interest (thus, profits) from a grand total $1.95 Trillion in “loans” created out of thin air, and “lent” to Australian households and businesses.  Interest on “money” that does not exist … except as a series of electronic digits that a banking clerk typed into a computer.

It started with goldsmiths. As early bankers, they initially provided safekeeping services, making a profit from vault storage fees for gold and coins deposited with them. People would redeem their “deposit receipts” whenever they needed gold or coins to purchase something, and physically take the gold or coins to the seller who, in turn, would deposit them for safekeeping, often with the same banker. Everyone soon found that it was a lot easier simply to use the deposit receipts directly as a means of payment. These receipts, which became known as notes, were acceptable as money since whoever held them could go to the banker and exchange them for metallic money.

Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money. More notes could be issued than the gold and coin on hand because only a portion of the notes outstanding would be presented for payment at any one time. Enough metallic money had to be kept on hand, of course, to redeem whatever volume of notes was presented for payment.

Transaction deposits are the modern counterpart of bank notes. It was a small step from printing notes to making book entries crediting deposits of borrowers, which the borrowers in turn could “spend” by writing checks, thereby “printing” their own money.

Consider what this really means.

A bank creates “money”, authorised by your signature on a loan document.

Your signature is your legally-binding agreement, to become the bank’s debt slave.

With a few taps on the keyboard and clicks of a mouse, the “loan” that you must pay back, with interest, is created right out of thin air.

An electronic book-keeping entry is made under your name, as a new bank “Deposit”.

And another electronic book-keeping entry is made under the bank’s name, as an “Asset”.

Your legally-binding agreement to pay back the “loan” … with interest … is the bank’s “Asset”.

Every person, every business, every nation with a debt to a banking institution, is in plain truth a slave to their own wilful ignorance.

Working and slaving away, day after day, to pay back with interest something that came from nothing.

While the “Big Club” of elite bankers stride the earth like princes, on the back of everyone else’s daily toil and trouble.

Producing no thing.

Gaining every thing.

The Banking System.

It is the World’s Most Immoral Institution.

It is also the World’s Most Unnecessary Institution.

Here is my solution, for how we should do it.

Some of you, we all know, are poor, find it hard to live, are sometimes, as it were, gasping for breath. I have no doubt that some of you who read this book are unable to pay for all the dinners which you have actually eaten, or for the coats and shoes which are fast wearing or are already worn out, and have come to this page to spend borrowed or stolen time, robbing your creditors of an hour. It is very evident what mean and sneaking lives many of you live, for my sight has been whetted by experience; always on the limits, trying to get into business and trying to get out of debt, a very ancient slough, called by the Latins aes alienum, another’s brass, for some of their coins were made of brass; still living, and dying, and buried by this other’s brass; always promising to pay, tomorrow, and dying today, insolvent; seeking to curry favor, to get custom, by how many modes, only not state-prison offences; lying, flattering, voting, contracting yourselves into a nutshell of civility or dilating into an atmosphere of thin and vaporous generosity, that you may persuade your neighbor to let you make his shoes, or his hat, or his coat, or his carriage, or import his groceries for him; making yourselves sick, that you may lay up something against a sick day, something to be tucked away in an old chest, or in a stocking behind the plastering, or, more safely, in the brick banks; no matter where, no matter how much or how little.

I sometimes wonder that we can be so frivolous, I may almost say, as to attend to the gross but somewhat foreign form of servitude called Negro Slavery, there are so many keen and subtle masters that enslave both North and South. It is hard to have a Southern overseer; it is worse to have a Northern one; but worst of all when you are the slave-driver of yourself.

– Henry David Thoreau, Walden; or, a Life in the Woods, 1854

15 Responses to “The World’s Most Immoral Institution Tells You How”

  1. Tomorrows Serf April 1, 2012 at 6:56 am #

    Great article BI. Starting to work on the “ignorance of the masses”, are we?

    What did Henry Ford say? “It is well that the public don’t understand the monetary system or finance, for if they did, there’d be bloody revolution by morning”… (something like that.

  2. Kevin Moore April 1, 2012 at 8:03 am #

    If the subject is Banks and immorality then this is related –

    Full Spectrum Dominance The New World Order has a plan to implement a global border-less government. A global border-less government requires funding with a global border-less taxation system. Tax laws will need to change. This could pose insurmountable problems because national and international tax laws are already highly complex and would surely become even more so with the imposition of a global border-less form of government.

    What is required is a totally new form of taxation. One which is not concerned with issues such as whether the taxpayer is domicile or non-domicle or whether they are migrant workers moving from one place to another and thus hard to track and even harder to tax.

    What is needed in a globalized world such as the one the New World Order of the Rothschild/Rockerfella clans have planned, is a one size fits all kind of taxation system. A border-less tax which is in essence a tax on life itself. Enter the CARBON TAX.

    This form of tax is a centuries old wet dream of the ruling elite and they are just moments away from realising such a dream. The Climate Change summit at Copenhagen this coming December is set to be the platform from which this tax on life will be imposed.

    The pseudo environmentalists will be cheering loudly, suffering under the illusion that a carbon tax will protect the environment from that nasty CO2 pollution that we are pumping into the atmosphere year in year out. Totally oblivious to the real implications of a border-less taxation system.

    Global government is a direct threat to National sovereignty which in turn is derived from individual sovereignty. Individual sovereignty simply means individual freedom, or human rights. Global government and global taxation is a direct threat to the freedom of all the peoples of the world.

    The only way to beat the New World Order is to deny them their funding. If these Nazi fools have to dig into their own pockets to fund their plans for world government, it will be far less likely to succeed. This can only be achieved by exposing the “Man Made Global Warming scam”.

    • The Blissful Ignoramus April 1, 2012 at 8:40 am #

      “Global government is a direct threat to … the freedom of all the peoples of the world”

      Great summary Kevin. Wholeheartedly concur.

    • Betty Whiffin April 1, 2012 at 11:39 am #

      Congratulations to both Barnaby Is Right on the article and your
      contribution. I am only a humble “oldie” but have read all about the Big Banks and their agenda/greed – the Rochschilds, Rockerfella, BIS etc. and their stiving for the New World Order. In fact I have a complete file on these Banks. This artcle will go into that file. It is horrifying and I just wish for the sake of future generations people will wake up and stand up against funding them and especially by exposing the scam of “Man Made Global Warming”. Australia needs to take note and not be gullible by funding these Banks, the United Nations, and anyone else which takes away Australia’s sovereignty. The Greens have a lot to answer for. They are not an environmental party but a party of people who do not think of the ramifications of the ideas of Bob Brown and his pirates.

  3. Phil May 8, 2012 at 6:36 pm #

    Nice article on money creation.
    Whenever i speak on this i am always stumped by people saying lending comes from deposits and “wholesale funding overseas”.
    How do you explain this Wholesale funding issue??

    Thanks Phil

    • The Blissful Ignoramus May 8, 2012 at 9:42 pm #

      The banks have to borrow to meet their legal “reserve” requirements. Our banks are heavily reliant on achieving those levels through off-shore borrowing – since the GFC they’ve tried to reduce their reliance (and risk, viz another credit crunch) by attracting more domestic depositors.

  4. Kevin Moore May 9, 2012 at 7:04 pm #

    This site has some good pickings –

  5. Windsor October 30, 2012 at 6:54 am #

    i’m doing an assignment on this but i need to source the exact rba article you got these figures from “$53.2 billion in actual cash notes in existence (or $4,655 per employed person)” and “$986 billion in total Deposits”
    i’ve been hard pressed to locate them so far, could you please point me in the right direction, thanks in advance

  6. Windsor October 30, 2012 at 6:56 am #

    i need it the next 2 days or so as well, so if you could reply that would EXTREMELY helpful, if you could, could you send the link directly to [deleted for your privacy] thanks

    • Windsor October 31, 2012 at 10:06 pm #

      hahaha thanks for that, i took that extra precaution, (it’s a fake account) lol

  7. Kendi February 22, 2013 at 6:31 pm #

    The world needs to stop making babies, and reduce the world population to 1% of what it is now. Then, I suppose 100% of 1% will have plenty.

    • The Blissful Ignoramus February 22, 2013 at 6:49 pm #

      Careful what you wish for.

      I disagree completely. Advocates of so-called “population control” have always ignored the ugly truths about our (greedy, selfish, Western) galactic wastage of food, water and resources… and unsurprisingly, never seem too keen to volunteer themselves, their descendants, or “their own kind” to be the first one’s culled, sterilised, or subjected to govt-legislated “family planning”. It is always the developing world that they insist must stop breeding… while at the same time, our Western policymakers keep those countries in abject poverty in order to rape and pillage their resources.

      There is more than enough natural resources to support a far higher global human population than we have. The problem is inequitable distribution and waste. And above all, greed.

      I favour the logical, rational, egalitarian and deeply humanitarian spirit exemplified in Nikola Tesla’s “The Problem Of Increasing Human Energy” (not decreasing it). See in particular “THE FIRST PROBLEM: HOW TO INCREASE THE HUMAN MASS”.


  1. EU Madness: Bank Deposits Stolen For Bailout Of Cyprus | Barnaby Is Right - March 17, 2013

    […] The World’s Most Immoral Institution Tells You How […]

Comments are closed.

%d bloggers like this: