Federal Reserve System: Creating Money from Debt

Creating money from debt? Sound absurd? But that’s exactly how the United States of America money system works. Fiat money is created out of thin air-without the backing of intrinsic assets to back up the receipts (money) to ensure credibility and value. Clearly, the private Federal Reserve System was implemented without the citizens’ long term survival in mind.

G. Edward Griffin, author, The Creature From Jekyll Island, Fourth Edition, American Media said it best in the following quote taken from pages 193 and 194:

“There are three general ways in which the Federal Reserve creates fiat money out of debt. One is by making loans to the member banks through what is called the Discount Window. The second is by purchasing Treasury bonds and other certificates of debt through what is called the Open Market Committee. The third is by charging the so-called reserve ratio that member banks are required to hold. Each method is merely a different path to the same objective: taking the IOUs and converting them to spendable money.”

One has to wonder how any purchasing power has managed to survive at all with that kind of Dollar dilution. The U.S. Dollar will buy about three percent of what it would buy in 1913, the year the money system was handed over to the private Federal Reserve System through the Aldrich plan.

Unfortunately, few Americans and many professionals working in the field of finance, banking, and investing to not understand the money system and do not understand how money is created from debt. How does that work, exactly?

A simplified explanation is as follows:

The U.S. Treasury has no money. What about all those Treasury bills and notes sold every week and several times a month? Treasury borrows that “money” from the Federal Reserve who loans it to them and then charges interest for money it did not have and created out of nothing. And that’s the way your money system functions. It is not surprising that money loses value so quickly.

James Clark King, LLC



Do you believe in magic and Federal Reserve System?

Paper receipts provided for the convenience of trading valuables. That’s what “money” was intended to be. Asset-backed, paper is the only credible money source. Unless you’re the Federal Reserve, that is.

The “Fed” is neither federal nor do they have assets backing the currency printed for the U.S. treasury. Or do they?

How about human collateral? People who are forced to pay the debt created from thin air by the Fed, loaned to the government at interest may be considered the best form of loan collateral-as long as they continue to pay.

Think your tax dollars go for services such as roads, highways, bridges, city services? They don’t. Every dime paid to the Internal Revenue Service goes to one source; payment of debt and interest to the Federal Reserve System-the private corporation “hired” by congress in 1913 to control monetary policy as the privately-owned central bank of the United States of America.

Does any of this make any sense based on your educational background and those business and economics courses you struggled through? Never knew that the “Fed” was a private corporation, I’ll bet.

Check out these references to enhance your education on the subject-the controllers of your devalued dollars;

1. Secrets of the Federal Reserve by Eustace Mullins

2. The Creature from Jekyll Island by G. Edward Griffin

Once you’ve got the books, refer to the bibliography and footnotes. Check those often.

While Griffin’s book is a near-best seller over many years, the public at large generally remains ignorant of the source of their money, and seeming buy the inflation argument as an explanation of why so many wind up poor in their later years. In fact, this fiat money creation system, a pyramid scheme is the reason for devaluation of the currency, and your loss of purchasing power.

Grant Hall