Why are they allowed? It's like this:
It's a private bank!
It's a quasi-government entity. There to help us control inflation-deflation in the money system while also acting as the bank of last resort.
Look at a dollar bill and see FEDERAL RESERVE NOTE on it or any other bill. We borrow that dollar from the Fed. With interest. So it's not even worth a dollar when it's brand new. Who pays that interest? You.
The fed says it this way….
“Banks do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What the Banks do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts.”
Promissory notes are loan contracts they create for you to sign and credits are just a fancy term for money. This is called Fractional Reserve Banking. It’s how our money system works.
The Bank creates money from thin air, which can add up to a lot compared to the original deposit. More than 9 times the amount.
This is why money is debt and debt is money. If every debt in America including Government and Private were paid off…there would be no money in the system.
Of course they cannot ever pay off all the debts because of interest.
Once you bring interest into the picture – you’ll see the major flaw. Our financial system creates only the principle amount of each loan. Where does the interest come from?
Someone else’s loan. This means the system is set up for someone to always fail. Someone will always come up short – someone will loose their home, their good credit, their car or their self-respect….only because of the system.
Interest is usury. Usury was considered unlawful and a sin by many scholars and churches at one time. They saw that interest only hurt the world and caused greed to be that much more tempting and easy to feed upon.
Bankers use interest on money to make slaves of us all. Slavery through debt. The Fed will try to fix a broken economy with more fake money. Then they will have the problem of how fast or slow to retract that money back out of the system to stop inflation.
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