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you are about to learn one of thebiggest secrets in the history of the world. it's asecret that has huge effects for everyone who liveson this planet. most people can feel deep down thatsomething isn't quite right the world economy, but few know what it is gone are the days where a family cansurvive on just one paycheck, every day it seems thingsare more and more out of control, yet only one in a millionunderstand why. you are about to discover
the system that is ultimatelyresponsible for most of the inequality in our world today. the powers that be do not want you to know about this, as this systemis what has kept them at the top of the financial food chain for the last 100years. learning this will change your lifebecause it will change the choices that you make. if enough people learn it, it will change the world... because it'll change the system. for this is the biggest hidden secret of money. never in human history have so many beenplundered by so
few, and it's all accomplished through this, thebiggest scam in the history of mankind they say that money doesn't grow ontrees but the truth is that the modern bankingsystem creates currency far faster than trees can grow. most people don't have a clue howcurrency is created economists and bankers make it sound socomplex that people think they can't understand it.
but i'm going to strip our monetarysystem down to its essence so you can see the scam behindthe curtain and just how it affects you. every modernsociety creates currency in pretty much the same way but since the us dollar is the majorityof the world's currency i'm going to use the united states asour example. it all starts when some politician says 'vote for me and i'llmake sure the government provides you more free stuff than my opponent will' but there's no such thing as a freelunch - so to provide that supposedly free
stuff the politicians vote for the country to spend more thanits income. this is called deficit spending. to pay for that deficit spending thetreasury borrows currency by issuing a bond. so what's a bond? if you think about it abond is really nothing but a glorified i.o.u. it's a pretty piece of paperwith numbers printed on it that says 'loan me a trillion dollars today and ipromise over a 10-year period i'm gonna pay you back that trilliondollars plus interest.' but what you need to understand is thattreasury bonds
are our national debt. these glorifiedi.o.u.s are to be paid back by you and i and ourdescendants through future taxation. therefore: when the government issues a bond itsteals prosperity out as the future so that it can spendit today. the treasury then holds a bond auction and the world's largest banks show up andcompete to buy part of our national debt and make a profit on by earning interest.you'll notice that as we move through this process
the big banks are there taking a cutevery step of the way. this isn't by chance as you'll seeshortly. then, through a shell game called open marketoperations the banks get to sell some of those bonds to the federal reserve at a profit. to pay for the bonds the federalreserve opens up its big old checkbook andwrites bad bogus counterfeit checks that shouldbounce because they're drawn on an account that always has a zero balance, there isn'tone penny in there. to quote from the bostonfederal reserve: 'when you are i write a
check there must be sufficient funds in our account to cover that check, but whenthe federal reserve writes a check there is no bank deposit on which thatcheck is drawn. when the federal reserve writes a checkit is creating money." the fed then hands those checks to thebanks and at this point currency springs into existence. the banks then take that currency andbuy more bonds at the next treasury auction. but what is a check? a check is alsoan i.o.u.
when you write a check you're making anote that says "here's my i.o.u. for cash, all you have to do is go to the bank andpick it up." now it's very very important that you understand this process because we're going to come back laterand show you the devastating effect this has on you. the treasury issues i.o.u.s, (bonds). the banks then buy those i.o.u.s withcurrency. the federal reserve then writes i.o.u.s (checks) and hands themto the banks in exchange for the
treasury's i.o.u.s (the bonds). and currency is created. sowhat's really happening is the federal reserve and the treasury are just swapping i.o.u.s, using thebanks as middlemen, and abracadabra presto currencymagically springs into existence. this process repeats and repeats over andover again enriching the banks and indebting thepublic by raising the national debt. the end result is that there's a buildupof bonds at the federal reserve and currency at the treasury. this processis also where
all paper currency comes from. thefederal reserve and the government mistakenly call it 'base money' because they didn't watch episode 1 ofthis series, and they don't know the difference between money and currency. but i will correctlyrefer to it as 'base currency' because it is not money... it is currency, and as we've learnedthere is a big difference: money has to be a store of valueand maintain its purchasing power over long periods of time.
we learned in episode 1 that earlierin our history our paper currency was just a claim check. it was a representation for real moneyof intrinsic value, the gold and silver that was held ondeposit at the treasury. you could walk into any bank and slapyour currency, like say a twenty dollar bill on the counter, and redeem it for realmoneyã‰a twenty dollar gold piece. but now this base currency that's pilingup back here is really nothing but a receipt or aclaim check on an i.o.u.
(that bond), so it's really nothing but asupply of numbers. the treasury then deposits the newlycreated currency in the various branches of the government, and the politicians say "hey thanks forthat!", and the government does some deficitspending on public works, social programs, and war. the government employees, contractors andsoldiers then deposit their pay in the banks. now this may come as a shock to you, but whenyou deposit your currency with the bank
you're not actually depositing it into an accountto be safely held in trust for you. instead, you're actually loaning the bankyour currency, and within certain legal limits they can dowith it pretty much anything they please. this includes gambling in the stockmarket, and loaning it out... at a profit of course. now this is where the machine of currencycreation really gets cranking, because this is where something called'fractional reserve lending' comes into play.
fractional reserve lending is exactlywhat it says. the banks are allowed to reserve only a fraction of yourdeposit and long the rest out. although reserve ratios may vary, i'mgoing to use a 10 percent reserve ratio as our example. if you deposit $100 dollars in youraccount, the bank can legally take ninety dollars of it and loan it out withouttelling you. the bank must hold ten dollars of yourdeposit in reserve just in case you want some of it. thesereserves are called 'vault cash'. but why does your bank account still sayyou have one hundred dollars if the bank
has stolen ninety dollars of it? because the bank left i.o.u.s itcreated called 'bank credit' in its place. now i know this soundscrazy, but here it is in black and white fromthe fed: "commercial banks create checkbook money when they grant a loan simply by addingnew deposit dollars in accounts on their books in exchange for aborrower's i.o.u." these are nothing but numbers that thebanks type into their computers, and even though these bank credit i.o.u.numbers
are very different from base currencynumbers (because they only exist in computers), they are still currency. so now there isone hundred ninety dollars in existence. now the reason people take out loansfrom the banks is to buy something. they're going to buy a house or a car orsomething like that. so the borrower takes the ninety dollars that the bank loaned to him from your account, and he pays the seller of item. butthen the seller deposits that currency into his account, and his bank loans out ninety percent ofthat,
and leaves bank credit numbers in itsplace. so now there's two hundred and seventy-one dollars in existence. this process repeats and repeats untilunder a 10 percent reserve ratio an initial deposit of just one hundreddollars can create up to one thousand dollars of bank credit all backed by one hundred dollars of vaultcash, just 10 percent. but as i said reserveratios vary wildly... on some deposits it's 10 percent onothers its 3 percent and on some forms of depositsreserve requirements
are zero! the result is that the expansion thecurrency supply by the banks is far greater than even this example wouldlead you to believe. so once again, when currency is depositedin the banks, the banks get to lend it out and then itgets we redeposited and relent, redeposited and relent, redeposited andrelent over and over again creating bank creditall the way. this is where the vast majority of ourcurrency supply comes from. in fact 92 to 96 percent of all currency in existence is creatednot by the government,
but here in the banking system. now, massive amounts of currency spewing intosociety may at first sound like a fun idea... that is until you remember one of themost important hidden secrets of money from episode 1: that the prices of everyday goods andservices act as a sponge on an expanding currency supply. the morecurrency we have the more prices rise. this is where inflation comes from. thetrue definition of inflation
is an expansion of the currency supply,rising prices are merely the symptom. so our entire currency supply is nothingbut a couple bucks whipped up in this hocus-pocus scam where the treasury and the federalreserve swap glorified i.o.u.s and a bunch of numbers that the banksjust type into their computers. that's itã‰that's our entire currency supply.it's nothing but a supply of numbers. some of them printed, most of them typed,
and there is nothing else. but if youthought that was crazy, get ready to enter the twilight zone ofmoderneconomics. we work for some of that currency supply. true wealth is your time, but we tradeaway moments in our lives hour by hour, day by day, and year by year for numbers that somebody printed onpieces of paper or just typed into a computer. now those numbers represent our blood,sweat, tears, labor, ideas and talent. we are what givesthe currency its value.
but here comes the really cruel joke...wework hard, so that we can save some of that currency, sothat we can pay the tax collector (in the united states it's known as the irs),they then turn it over to the treasury, so that the treasury can pay theprincipal plus interest on that bond that the federal reserve boughtwith a check drawn on an account that has nothing in it. now let's do a recap on thissection because this is where the system begins to rob you and i on a massive scale. much of our taxes arenot used for schools, roads and public
services, but to pay interest on bonds that thefederal reserve bought with a check drawn on an account thathas nothing in it. the federal reserve is committingfraud. but here's one of the biggest secretsof them all: before the establishment at the federalreserve there was no need for personal income tax. the federal reserve was createdin 1913 and that very same year the constitution was amended to allow income tax. do youreally think this was just a coincidence?
ask yourself how much income tax you've paid over your lifetime. much of it has beensilently siphoned away into the hands of those who own thesystem. yes this system has owners... who they are is an even bigger secretthat we'll get to shortly, but first we need to understand themumbo jumbo of the so-called 'debt ceiling'. it's all based on a hugeparadox: there was interest due on that bond, andthere was interest due on every one of those loans that the banks made.that means that there is interest due on every dollarin existence.
let me ask you something: if you borrowthe very first dollar into existence and that's the only dollar that exists onthe planet, but you promise to pay it back plusanother dollars worth of interest... where you get the second dollar to pay theinterest? the answer is that you have to borrow that one into existence and promise to pay it back withinterest as well, so now there are two dollars in existence but you owe fourã‰and so on and so on. the result is there's never enough currency to pay the debt.
there is always more debt in the system than there is currency in existence topay the debt. therefore, the whole system is impossible it isfinite it will come to an end one day. whatwould happen if the government stopped borrowing to do deficit spending? are the payments on those treasury bondsgoing to stop? what would happen if the public stoppedborrowing and going deeper into debt? are your house and car payments going tostop? no, there is a payment due
every month on the principal plus theinterest on every dollar in existence and those payments do not stop. if we stop borrowing then no newcurrency is created to replace the currency that we used to make thosepayments. whether you're making a payment on aloan or paying tax to make a payment on a bond, the portion of the payment that goes topay off the principal extinguishes that portion of the debt.but the debt also extinguishes the currency.
currency and debt are like matter andanti-matter. when they meet they annihilate eachother. if we just pay off the principal only on all the loans and bonds that existthe entire currency supply just vanishes. so if we don't go deeperinto debt every year look what happens: the whole thing goesinto a deflationary collapse under the weight of those payments. politicians and pundits alike talk aboutbalancing the budget paying down the debt and living withinour means. they don't understand that
that is deflationary, it is impossible to do under our currentmonetary system without collapsing the whole economy. this is why any talk of a debt ceilingis not only ridiculous... its delusional. the system is designed torequire ever-increasing levels of debt just tocontinue, and that's why politicians will always kick the can down the road and raisethis so-called 'debt ceiling' over and over again untilthe whole system finally collapses under
its own weight. in other words, they don't want it tocollapse on their watch. the founding fathers of the unitedstates knew the dangers of central banking and fought to free themselvesfrom this very thing. the revolutionary war started out as atax revolt, but now we must pay tax just to have amonetary system. having just suffered through thehyperinflation of the continental dollar which was printed into oblivion tofinance the revolutionary war,
they understood the dangers of fiatcurrency and debt based monetary systems. so to protect future generations frominstitutional theft and out-of-control government they wroteinto the constitution that only gold and silver can be money, for the simple fact that you can't printthem. our current system is not only unconstitutional, but it robs us of the liberty andprosperity our forefathers fought and died for. weare all feeling the effects of ignoring theconstitution right now.
by forcing more currency intocirculation our purchasing power is diluted.inflation is a slow and insidious stealth tax that is simply the result of this indept-based monetary system. this system empowers and benefits thosewho create the currency and receive it first as they get to spend it into circulationbefore it has an effect on the economy. they're stealing purchasing power fromyou and transferring it to the banks and the government
every hour of every day because of thisfalse monetary system. and it's not like the people at the topdon't know this. to quote the federal reserve "the decrease in purchasing powerincurred by the holders of money due to inflation imparts gains to theissuers of money." this is a fraud, it is a pyramid scheme,it is a ponzi scheme, it's a scam and it's a lie. our entiremonetary system is nothing but a form of legalized theft.but here's the biggest con job of them all: the federal reserve is not federal - ithas stockholders. there is no federal agency that hasstockholders.
what's a stockholder? a stockrepresents a percentage of ownership in a corporation, so thestockholders are the owners of that corporation.therefore the federal reserve is a private corporation with owners... and you can see it for yourself if yougo to the federal reserve's website and it will say: "the stockholdersreceive an annual dividend of six-percent." now we know that the stockin the federal reserve was originally issued to the largest banks in the unitedstates but because of mergers and
acquisitions through the years you can't actually trace who owns thestock in the federal reserve. that's a very closely guarded secret. my guesswould be that the owners are those primary dealers, the banks thatget to make a profit by selling part of our national debt-those bonds, to the federal reserve who buys them with a check from nothing!then we pay tax to pay the principal and the interest on those bonds so thatthe federal reserve can pay the banks a 6 percent dividend. don't be alarmed if you don't quitecomprehend the deception of this system
at first glance. very few people do. it ispurposely complex. the economist john maynard keynes oncewrote: "by this means government may secretlyand unobserved confiscate the wealth of the people and notone man in a million will detect the theft." i believe that presented correctly anyone can understand the system,regardless of how complex it is. so let's do a recap and break it downeven more... the way this system works is that step 1:
the government creates glorified i.o.u.sthese bonds increase our national debt, and put the public on the hook to pay itback. step 2: i.o.u.s are swapped to create currency. thetreasury sells the bonds to the banks. the banksthen turn around and sell our national debt at a profit to the federal reserve, whichthey probably own. the federal reserve then opens its checkbookthat doesn't have a penny in it and buys those i.o.u.s with i.o.u.s itwrites,
checks on a checking account that has a zerobalance. then they give those checks to thebanks and currency just springs into existence, and then the whole process repeats. thisresults in a build up of bonds at the federal reserve, and currency at the treasury...which isreally just a supply of numbers. the treasury then deposits the numbersin the various branches of the government and we get to step 3: the government spends the numbers onpromises,
public works, social programs and war. then the government employees,contractors and soldiers deposit their pay into the banks and we get to step 4: where the banksmultiply the numbers by magically inventing more i.o.u.s through fractional reservelending, where they steal a portion of everyone's deposit and lend it out. that currency gets redeposited and thena portion is stolen again, and the process repeats over and overmagnifying the currency supply
exponentially. then we work for some of those numberswhich brings us to step 5: where our numbers are taxed. we pay taxesto the irs who then turns our numbers over to thetreasury, so the treasury can pay the principal plus the interest on bondsthat were purchased by the federal reserve with a check from nothing. then we get tostep 6: the debt ceiling delusion. the system isdesigned to require ever-increasing levels and debt and willeventually collapse under its own weight because politicians
always kick the can down the road, theydon't want it to collapse on their watch. and finally step 7: the secret ownerstake their cut. the world's largest banks own the federalreserve, those banks make a profit selling our national debt top the fed, they make a profit when the fed paysthem interest on the reserves held at the fed, and the fed pays them a six percentdividend on their ownership of the fed. this system is fundamentally evil. it funnels wealthfrom the working population to the government and the banking sector.it is the cause of the artificial booms
and busts of modern economies, and it causes great disparity of wealthbetween the rich and the working class. and - it is only possible because we nolonger use real money, we use currency. but worst of all it is aform of enslavement. bond is the root word of bondage.whenever a government issues a bond it is a promise to make us pay tax in thefuture. nobody asked you if you wanted to paytax today for the prosperity we all enjoyed in the last century. nobody is asking our children if theywant to work hard in the future
to pay for the prosperity we're enjoyingnow. george washington once wrote to james madison: "no generation has the right to contractdebts greater than can be paid off during the courseof its own existence." by stealing prosperity from tomorrow sowe can spend it today we enslave ourselves and futuregenerations. now this all sounds pretty bad but thereis great hope for you are the greatest threat to thisfalse monetary system. this system relies on the public beingignorant of its workings.
please share this knowledge witheveryone you know because an informed public that fully understands the system canbuild a better future for generations to come. and now i leave youwith this quote, widely attributed to a former directorof the bank of england: "the modern banking system manufacturers money out of nothing. the process is perhaps the mostastounding piece of sleight of hand that was ever invented. banking was conceived in iniquity
and born in sin. bankers own the earth.take it away from them, but leave them the power to create money andcontrol credit and with the flick of a pen they will create enough money to buy itback again. if you want to continue as the slaves of bankers and pay the cost of your own slavery, letthem continue to create money, and to control credit." this the federal reserve in washingtondc it's located on constitution street, andthat is just as much a joke as the new
york fed being located on liberty street. both of them are unconstitutional bothof them limit our liberty, and they transfer wealth away from usevery second of every day to the federal reserve, to the governmentand to the banking sector. you are now among the one in a million that candetect theft of your prosperity... so the big question is, what can you doabout it? 1: watch this video until you candescribe and teach it to others. those whounderstand the system can make preparations for its unavoidablecollapse
and protect themselves. history shows that thosewho don't will probably wiped out. 2: share this video with everyone,especially those you care about. all it takes is a mouse click or two to get this message in front of millions. post this video on facebook, tweet it,email it to loved ones. please share it wherever you can. 3: join the conversation. the current worldmonetary system is based on a three hundred-year-old design
meant to enrich a few at the expenseof the many... there must be a better way. athiddensecretsofmoney.com we've created an open source platformfor the design and development of a new world monetary system. we're calling on every economist, every student, everycollege, every bright mind and anyone who caresto join the discussion. in educating ourselves and each other wecan prevent the further loss of our freedoms and maybe, just maybe win some of them back.
... stay tuned for ron paul... ã‰jim rickards, and steve forbes watch more episodes at hiddensecretsofmoney.com [ron paul] i think your episode 4 is very beneficial, very helpful, it's gonnaintroduce these ideas to a lot of people, and like i've just been talking about, we have to change people's minds and themore they understand it the better, and i think we're at this point nowwhere more people in the last
several years..four or five years havethought about the fed than they ever have in the previous ninety five years so i think i an explanation and diagramsto show it is very helpful because quite frankly they're not goingto get it in their grade school they're not going to get in their high school they're not going to get it in collegeunless they're in a very rare circumstance to understand how this works. [jim rickards] you know for yearsbefore i got involved in huh really studying gold and some of the thingsi write and talk about today i was a
monetary economist for decades you knowin your video you talk about the primary dealers i was chief counsel and chief credit officerfor one the largest primary dealers for ten years so i had an inside seat on the treasurymarket and have the privilege of working with several former vice chairman of the board ofgovernors: johnson and david mullins going back to the 80's and90's so i'm very immersed in what you're talking about i thought it was
extremely accurate, extremely clear, i didn't think you were stretching on anypoints it was is really like something out of a phd course except that it was very easyto understand, i think it's accessible, i think i think we're seeing a littlebit of a revolution in communications in the following sense you know as youpoint out the fed was created in 1913 well in 1913 there was no web therewas no youtube, no twitter there was really no one to stand up and oppose the fed or call them out if youwill, or really get into a discussion
that everyday americans could follow. that's not true now - with social mediaand everything else you can reach out to millions andtens of millions of people and tell them what's going onã‰i think you've done that, you've done it successfully i applaud it, i think it'sa great video i look forward to seeing it again, i knowmillions of people will enjoy it. [steve forbes] well as we know the federal reserve believes it can create money out of thin air, and not realize money is supposed to representreal products and services
and what people don't realize iswhen the fed does that in effect as keynes pointed outit's a form of taxation, it's a form of confiscation and becausepeople don't see it the politicos get away with it, but italso undermines social trust, it just is corrosive throughoutsociety. we're going to have a lot of turmoil inthe coming years, but it's going to be the kind of turmoilthat leads to positive things. so don't despair, get out there andfight because the tide is gonna turn. this is going tobe the statists last stand.
[mike maloney] thank you! [james anderson] this episode of mike maloney's hidden secrets of money was brought to you by goldsilver.comand the new silver pegasus round. to learn how to protect your family and turn the coming economic stormsand opportunity visit: goldsilver.com