What Is Money? Money Is Debt - Banker's Are Legal Counterfeiters!

Not many people have asked the question what is money? Not many realise that money is debt. Sounds impossible, doesn't it? Well, the truth of the matter is that when you look at it, today's monetary system runs on debt and nothing else!


What does this mean to you and the world as a whole? It means meltdown - your money and the world's money is worthless. It has been created, not on wealth, but fresh air! Literally!


So, where does money come from?  The mint, of course!  They print the bills and stamp the metal and voilà - MONEY!  So, is it as easy at that?  Surely there is more to money than the printing?  Well, yes, there is - as you are about to learn!

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Banks Create Loans

The agency of the government is called the mint, but it is the financial institutions that create huge amounts of loans in the form of debtors notes. These financial institutions are known as banks.

Banks create the loans, not from gold assets that are kept in vault reserves, but directly from the 'promise to pay' note. This promise is a contract that the customer signs. This states that should they default, the house or asset would be given to the bank and acts as a guarantee to the promise.

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"Permit me to issue and control the money of a nation, and I care not who makes its laws" - Quote by Rothschild (Banker).

Bankers Are Magicians!

So, where does the bank get the money from?  Well, they can just magic the figure from thin air and add it to the account of the customer.  Really!  This is the truth!  Bankers are, essentially, magicians!


Money is a spiral of debt
Money is a spiral of debt
Have you seen the light?
Have you seen the light?

History of Banking - Said Simply

There was a time that bartering was an economy. If you had a service or item, you could swap it with someone else who had a service or item that you needed.

Gold was much easier to use as it was a token of a number of services, items or item. Some cultures used this because it was more convenient.

The early banker stored his Gold in a vault and created notes to represent the gold for ease of redemption. Notes were easier to carry and safer too - 'I promise to pay the bearer on demand, the sum of one pound'. This type of promise can be found on bank notes today. Storing gold and creating notes against it was convenient. In fact, so convenient, people with gold would ask the banker to store their gold (for a nominal fee, of course) in the banker's vault.

The banker got to thinking... why not create notes against the other people's stored gold? They wouldn't know and this would increase the capacity to lend and make lots of money off of the backs of others in the form of interest! He did this and got very rich!

Industry expanded and more people needed loans to grow the economy. All the banker had to do was write notes and give it to people who asked for it. These notes were used in markets and retailers, so no one actually saw or knew how much the banker had in his vault. They took it on trust that the banker had the money there! As long as the loans were repaid, no one - including his depositors - would be none the wiser.

Concerns were only raised by his depositors, with the flaunting of his wealth and it was only then that the depositors came in great numbers to withdraw their gold from the Banker's vault.

The depositors saw that they hadn't lost anything, so struck a deal with the Banker for a cut in the interest that he earned. This legitimized the practice of banking. The Banker charges interest on the loan at a higher rate than what is given on depositor's savings. Bankers then keep the difference.

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Banking Today - Magic Money Pulled From the Hat!

What happens when you have too many people requiring loans and not enough gold in the vaults?

Banking today has overcome this problem by simply creating more notes based on an unknown gold stash. They simply pull magic money from a hat in the form of new rules. The Banker had the power to just invent money from nothing. What is worse, Governments gave them licence to do so in the form of legislation - Governments did not want to see a collapse in their economies (sounds familiar, doesn't it?).


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The Fractional Reserve System

Bankers now are bound by the rules and regulations of Government. They have been allowed to lend on the basis of 9 to 1 (one part gold equates to the lending potential of the same in notes x 9). This is called The Fractional Reserve System.

To avoid a 'run on banks' (all depositors demanding their gold back from the bank), the Governments agreed to use the Central bank as an emergency source to smaller banks. This system now dominates the world economies and runs on nothing but a thought creation.

If you lend 9 x the amount you actually have, effectively, you run a system on debt. If you were to pay back all the debt, essentially, there would be no money!! Money wouldn't exist because money has been created from nothing.

'I'm afraid that the ordinary citizen, will not like to be told that banks can and do create money... and they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hands the destiny of the people'. Quoted From Reginald McKenna Past Chair of the Bank of Midland, England.

Money As Value, Money As Debt

Money used to represent value (in the form of gold). Now money represents debt. In the past money was used as a receipt to redeem on a fixed piece of gold. In the above example, you can see the promise note stating 'I promise to pay the bearer on demand the sum of five pounds'. This represents five pounds worth of gold. But how can you redeem on something that isn't really there? You can't. This means money is useless and represents nothing but debt! It is not a receipt but a debt note.

You can only redeem money on money - a dollar for a dollar or collection of cents. Of course, these represent nothing but what is deb-ted to you. So, as you can see, it is banks and Governments that create money from nothing.

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'That is what our money system is.  If there were no debts in our money system, there wouldn't be any money.'  Quoted from Eccles, Chairman and Governor of the Federal Reserve Board.

'This is a staggering thought.  We are completely dependent on commercial banks.  Someone has to borrow every dollar in circulation, cash or credit.

If the banks create ample synthetic money, we are prosperous; if not we starve.

We are absolutely without a permanent money system. 

When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is.' Quoted by Robert H Hemphill - Credit Manager of the Federal Reserve, Georgia.

So, How Much Money Actually Does Exist?

O.k., so how much money actually does exist? In the past, in order to create more money, more precious metals like gold and silver had to be dug out of the ground. Today, new money is created from debt. There is no limit to the fractional reserve system. Here is an example:

Suppose we start a new commercial bank. £10,000.00 is created for a loan from central bank. It comes from nowhere, it is just paid into the bank account of the person requiring the loan. This is spent on a second hand car. £10,000.00 is then added to the account of the old car owner's account. As this a commercial bank, this bank now have the power to create £9,000.00 of debt formed on the asset of the original £10,000.00 (It is divided - 9:1 fractional reserve system). If this £9,000.00 is deposited by a third party, it can potentially create £8,100.00 and so on, thereby creating more debt. The only way to stop this process is by no longer depositing, and as this never happens, the debt just keeps on getting bigger.

All the banks, therefore, depend on each other to create money. Even worse, other banking economies allow a fractional reserve system of up to 30:1 and Government created money is only 5%. The rest of the 95% comes from bank created money.

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It is worth noting that this system can not work without the co-operation of Governments.

The simple truth is that money does not exist, only debt. Banks create money that they don't have formulated on debt! As debt is unlimited, therefore, so is the supply of money. Likewise without debt, there is no money.

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Recommended Story on Foreclosure

What madness to think that a man has foreclosure from a banking system that has created money from nothing and charged him with the debt!

This true story suggests a way for people to redress the balance and destroy a system that works on debt.

Resource Activity Sustains The Money System

It is only a matter of time that the escalating debt will catch up and grab the economy. It is only through the use of creating and grabbing resources, that eventually end up in land-fill, that the system can be maintained. For the present monetary system to work, the cycle of manufacture and waste has to keep on grinding on.

Kenneth Boulding, Economist, says this:

'Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist'.

This says it all. The only way to survive, is by changing the way we think about money. I.e. not as debt.

Money As Debt

Money as debt is a DVD that teaches you to see the monetary system in a clearer light. It is from this that inspired this article. Hopefully this has made it clearer to you too. When you are asked 'what is money?', you will know that money is debt. However, if you didn't quite get it, feel free to take a look at this sampler of the DVD. It is simple, concise and worth a view. In fact, why not buy the DVD. If money is worthless, then why not get something for nothing by clicking on the Amazon link capsule. Money As Debt really will revolutionise your life and provide you more than in this simple article. Enjoy!

© This work is covered under Creative Commons License

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In Other Words...

And Now For The Good News... New Order...

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Comments 13 comments

Jed Fisher profile image

Jed Fisher 5 years ago from Oklahoma

You are correct. Debt-free is the best way to live.


Happyboomernurse profile image

Happyboomernurse 5 years ago from South Carolina

Great hub about how the monetary system really works. Thanks for sharing this information. I've known it for awhile, but it's still shocking to realize this is how the banking system actually works with our governments' involvement.


shazwellyn profile image

shazwellyn 5 years ago from Great Britain Author

Jed, you have missed the point. It is not about a debt free life, this is about the monetary system and that it all works on debt. The point is that money is only symbolic of debt! I hope this helps :)


shazwellyn profile image

shazwellyn 5 years ago from Great Britain Author

happyboomernurse - it is the result, in the end, that is inevitable. When the debt monster catches up with this system, it will lead to collapse.

Thanks for stepping by :)


msorensson profile image

msorensson 5 years ago

Wow...awesome hub. You got it...Thank you for sharing!!!


shazwellyn profile image

shazwellyn 5 years ago from Great Britain Author

msorensson - glad you got it too! *wink*


Pamela99 profile image

Pamela99 5 years ago from United States

Shaz, Unfortunately, what you said is true. They just print more money anytime they want to with nothing to back it up, so it is debt. This is a sad state of affairs. Very goo hub, rated up.


shazwellyn profile image

shazwellyn 5 years ago from Great Britain Author

Thanks Pamela - it really is an illusion. What are we working for? Did you know that the Government has the right to take your property away from you to help with finances? Is this a democracy?


idreesfarooq profile image

idreesfarooq 5 years ago from fiverr dot com/idreesfarooq

Awesome. I am a banker and I really appreciate your words Bankers are megicians. Smiling!!


shazwellyn profile image

shazwellyn 5 years ago from Great Britain Author

idreesfarooq - great! Now we all know the truth, not just bankers! hehehe


Simone Smith profile image

Simone Smith 5 years ago from San Francisco

Wow, this is quite the guide! Thanks for writing it :D


shazwellyn profile image

shazwellyn 5 years ago from Great Britain Author

Thanks Simone! Great to be encouraged by you - hope it was helpful :)


icehubber profile image

icehubber 5 years ago from Iceland

good one

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