interest amount is never created
The only way new money (which is not true money,
but rather credit representing a debt), goes into circulation in
America is when it is borrowed from the bankers. When the State and
people borrow large sums, we seem to prosper. However, the bankers "create" only
the amount of the principal of each loan, never the extra amount
needed to pay the interest. Therefore, the new money never equals
the new debt added. The amounts needed to pay the interest on loans
is not "created," and therefore does not exist!
Under this system, where new debt always exceeds new money no matter
how much or how little is borrowed, the total debt increasingly outstrips
the amount of money available to pay the debt. The people can never,
ever get out of debt!
The following example will show the viciousness of this interest-debt
system via its "built in" shortage of money.
Tyranny of Compound Interest
When a citizen goes to a banker to borrow $100,000 to purchase a home
or a farm, the bank clerk has the borrower agree to pay back the
loan plus interest. At 8.25% interest for 30 years, the borrower
must agree to pay $751.27 per month for a total of $270,456.00.
The clerk then requires the citizen to assign to the banker the right
of ownership of the property if the borrower does not make the required
payments. The bank clerk then gives the borrower a $100,000 check or
a $100,000 deposit slip, crediting the borrower's checking account with
The borrower then writes checks to the builder, subcontractors, etc.
who in turn write checks. $100,000 of new "checkbook" money
is thereby added to the "money in circulation."
However, this is the fatal flaw in the system: the only new money created
and put into circulation is the amount of the loan, $100,000. The money
to pay the interest is NOT created, and therefore was NOT added to "money
Even so, this borrower (and those who follow him in ownership of the
property) must earn and take out of circulation $270,456.00, $170,456.00
more than he put in circulation when he borrowed the original $100,000!
(This interest cheats all families out of nicer homes. It is not that
they cannot afford them; it is because the bankers' interest forces them
to pay for nearly 3 homes to get one!)
Every new loan puts the same process in operation. Each borrower adds
a small sum to the total money supply when he borrows, but the payments
on the loan (because of interest) then deduct a much larger sum from
the total money supply.
There is therefore no way all debtors can pay off the money lenders.
As they pay the principle and interest, the money in circulation disappears.
All they can do is struggle against each other, borrowing more and more
from the money lenders each generation. The money lenders (bankers),
who produce nothing of value, gradually gain a death grip on the land,
buildings, and present and future earnings of the whole working population.
Proverbs 22:7 has come to pass in America. "The rich ruleth over
the poor, and the borrower is servant to the lender."
loans do the same thing
If you have not quite grasped the impact of the
above, let us consider an auto loan for 5 years at 9.5% interest.
Step 1: Citizen borrows $25,000 and pays it into circulation (it
goes to the dealer, factory, miner, etc.) and signs a note agreeing
to pay the Bankers a total of $31,503 over 5 years. Step 2: Citizen
pays $525.05 per month of his earnings to the Banker. In five years,
he will remove from circulation $6,503 more than he put in circulation.
Every loan of banker "created" money (credit) causes the same
thing to happen. Since this has happened millions of times since 1913
(and continues today), you can see why America has gone from a prosperous,
debt-free nation to a debt-ridden nation where practically every home,
farm and business is paying usury-tribute to the bankers.
Up On Cash
In the millions of transactions made each year
like those just discussed, little actual currency changes hands,
nor is it necessary that it do so.
About 95 percent of all "cash" transactions in the U. S. are
executed by check. Consider also that banks must only hold 10 percent
of their deposits on site in cash at any given time. This means 90 percent
of all deposits, though they may actually be held by the ban, are not
present in the form of actual cash currency.
That leaves the banker relatively safe to "create" that so-called "loan" by
writing the check or deposit slip not against actual money, but against
your promise to pay it back! The cost to him is paper, ink and a few
dollars of overhead for each transaction. It is "check kiting" on
an enormous scale. The profits increase rapidly, year after year.
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