ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

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

Updated on May 13, 2019

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!

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.

-* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--*

"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.

-* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--*

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?).

-* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--*

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.

-* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--*

'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.

-* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--*

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.

-* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--*

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

-* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--*

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

-* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--* -*--*


    0 of 8192 characters used
    Post Comment
    • icehubber profile image


      8 years ago from Iceland

      good one

    • shazwellyn profile imageAUTHOR


      8 years ago from Great Britain

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

    • Simone Smith profile image

      Simone Haruko Smith 

      8 years ago from San Francisco

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

    • shazwellyn profile imageAUTHOR


      8 years ago from Great Britain

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

    • idreesfarooq profile image


      8 years ago from fiverr dot com/idreesfarooq

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

    • shazwellyn profile imageAUTHOR


      8 years ago from Great Britain

      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?

    • Pamela99 profile image

      Pamela Oglesby 

      8 years ago from Sunny Florida

      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 imageAUTHOR


      8 years ago from Great Britain

      msorensson - glad you got it too! *wink*

    • msorensson profile image


      8 years ago

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

    • shazwellyn profile imageAUTHOR


      8 years ago from Great Britain

      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 :)

    • shazwellyn profile imageAUTHOR


      8 years ago from Great Britain

      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 :)

    • Happyboomernurse profile image

      Gail Sobotkin 

      8 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.

    • Jed Fisher profile image

      Jed Fisher 

      8 years ago from Oklahoma

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


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)