American
Civics Research Library
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Bank Loans, Credit Cards and Counterfeit Money:
The Fraud of Contracts<= o:p>
©=
2006 David Deschesne, Al=
l rights
reserved. This text may be reproduced in its entirety and distributed
electronically, or in print for educational purposes only.
By: David Desches=
ne,
Edito=
r, Fo=
rt
Fairfield Journal
FORT
A common miscon=
ception,
which has been sold to the American People, is that banks loan either their=
own
money, or their depositors’ money.&n=
bsp;
Nothing, however, could be further from the truth. Banks, as well as Credit Card comp=
anies
(they are banks, too) don’t loan any pre-existing money at all. They loan fresh new money, as need=
ed.
Like a counterfeiter, banks
manufacture money as needed. =
The
difference is, that they don’t crank up a
printing press and print out the new money; they have a much more efficient=
way
of doing it. They simply enter
digits into a computer and let electronics do the work. =
All borrowers today fund th=
eir
own loans with their own property - their signature. Since the bank doesn’t discl=
ose
this term in the contract, the contract is fraudulently conceived.=
Suppose you had some R=
ussian
Rubles. You can not take those Rubles to a grocery store and purchase your =
food
because they is not a recognizable form of money=
. You
must first go to a bank and exchange them for American dollars. When you go=
to
the bank, you set the Rubles on the counter and the clerk sets dollars on t=
he
counter. Both of you swap currencies at the value the two were determined t=
o be
to each other. There is an even exchange and the bank does not require you =
to
pay back those dollars, because they received rubles in exchange for them. =
You
can then take those dollars to the grocery store and, because they are a
recognizable form of money here in the
The sa=
me thing
happens when you "borrow" money. You sign a promissory note that
becomes a negotiable instrument at the time it is signed
It is because of this slight=
of
hand, that the banks perpetrate on unwitting "borrowers," that mo=
st
never realize that, since the banks never loaned any of their own money, they ar=
e never
“damaged” as a result of non-payment.
“...suppose that a ban=
k buys
part of a new issue of municipal bonds. The bank's=
cashier
draws a check to pay for the bonds - a check addressed to himself
, and calling on himself to pay money to t=
he
order of the city which sold the bonds. This check goes to increase t=
he
city's bank balance, just as much as if the bonds had been bought by a priv=
ate
citizen. But the check does not come out of any private bal=
ance
with the bank...The check with which the bank pays for the bonds
immediately becomes a deposit liability of the bank...This =
leaves
the bank's books in perfect balance because at the same moment the bonds be=
came
an asset. An extra deposit has been ‘created.’ The =
same
thing happens when the bank makes a loan, or buys stationary.”
The Federal government does =
NOT
control our money.
The Federal Reserve is not o=
wned
or a part of the Federal government.
“Legally, the Federal Reserve banks are owned by the
member banks.”5
Indeed, in the 1960’s,=
banks
could create $5.00 for every $1.00 they had in reserves.6
Today, the reserve
requirement is about 10 percent. That m=
eans
that for every ten dollars in existence, nearly nine more can be created ou=
t of
nothing. The ba=
nk is
able to issue a check/“loan” for nine dollars out of every ten =
on
hand. Once that
nine dollars gets deposited, it will have $19 where it only had $10 to start
with. Poof! Money is created from nothing.
“It is through this pr=
ocess
of lending the free reserves, that money is created.”7
Senator Thomas H. Benton was vehem=
ently
opposed to this form of paper money system as early as the 1830s, when he
wrote: “It was a reproach to the federal government to be unable to
correct this state of things - to see the currency of the constitution driv=
en
out of circulation, and out of the country; and substituted by depreciated
paper; and the very evil produced which it was a main object of the
constitution to prevent. The framers of that instrument were hard-money men=
. They h=
ad seen
the evils of paper money, and intended to guard their posterity
against what they themselves had suffered. They had done so, as they believ=
ed,
in the prohibition upon the States to issue bills of credit; and in the
prohibition upon the States to make any thing but gold and silver coin a te=
nder
in discharge of debts.”8
Notes:
1. UCC §3-104
2. Fundamentals of American Law,
©1996 NYU
3. Money, Debt and Economic Acti=
vity,
©1948 Albert Gailord Hart (professor of
Economics,
4.=
Economics: Theory a=
nd
Practice, 3rd Ed. ©1965 Melville J. Ulmer, p. 253
5.=
ibid, p. 241
6.=
ibid, p.247
7.=
Economics: The Science of Common Sense, ©1992 South-West=
ern
Publishing Co., p. 131.
8.=
Thirty Years in the U.S. Senate, 1856 Sen. Thomas H. Benton, =
Vol.
II, p. 43.
*** Radio Program ***
This teaching was originally produced and aired as a 30 minute radio
program on WEGP Radio, 1390AM, Presque Isle. For a free CD copy of this broadca=
st,
send a self-addressed stamped envelope with your request to: David Desches=
ne,