The interest amount is never created
The only way new money (which is not true money, but rather credit representing a debt),
goes into circulation in America is when it is borrowed from the bankers. When the State
and people borrow large sums, we seem to prosper. However, the bankers "create"
only the amount of the principal of each loan, never the extra amount needed to pay the
interest. Therefore, the new money never equals the new debt added. The amounts needed to
pay the interest on loans is not "created," and therefore does not exist!
Under this system, where new debt always exceeds new money no matter how much or how
little is borrowed, the total debt increasingly outstrips the amount of money available to
pay the debt. The people can never, ever get out of debt!
The following example will show the viciousness of this interest-debt system via its
"built in" shortage of money.
The Tyranny of Compound Interest
When a citizen goes to a banker to borrow $100,000 to purchase a home or a farm, the bank
clerk has the borrower agree to pay back the loan plus interest. At 8.25% interest for 30
years, the borrower must agree to pay $751.27 per month for a total of $270,456.00.
The clerk then requires the citizen to assign to the banker the right of ownership of the
property if the borrower does not make the required payments. The bank clerk then gives
the borrower a $100,000 check or a $100,000 deposit slip, crediting the borrower's
checking account with $100,000.
The borrower then writes checks to the builder, subcontractors, etc. who in turn write
checks. $100,000 of new "checkbook" money is thereby added to the "money in
circulation."
However, this is the fatal flaw in the system: the only new money created and put into
circulation is the amount of the loan, $100,000. The money to pay the interest is NOT
created, and therefore was NOT added to "money in circulation."
Even so, this borrower (and those who follow him in ownership of the property) must earn
and take out of circulation $270,456.00, $170,456.00 more than he put in circulation
when he borrowed the original $100,000! (This interest cheats all families out of nicer
homes. It is not that they cannot afford them; it is because the bankers' interest forces
them to pay for nearly 3 homes to get one!)
Every new loan puts the same process in operation. Each borrower adds a small sum to the
total money supply when he borrows, but the payments on the loan (because of interest)
then deduct a much larger sum from the total money supply.
There is therefore no way all debtors can pay off the money lenders. As they pay the
principle and interest, the money in circulation disappears. All they can do is struggle
against each other, borrowing more and more from the money lenders each generation. The
money lenders (bankers), who produce nothing of value, gradually gain a death grip on the
land, buildings, and present and future earnings of the whole working population. Proverbs
22:7 has come to pass in America. "The rich ruleth over the poor, and the borrower is
servant to the lender."
Small loans do the same thing
If you have not quite grasped the impact of the above, let us consider an auto loan for
5 years at 9.5% interest. Step 1: Citizen borrows $25,000 and pays it into circulation (it
goes to the dealer, factory, miner, etc.) and signs a note agreeing to pay the Bankers a
total of $31,503 over 5 years. Step 2: Citizen pays $525.05 per month of his earnings to
the Banker. In five years, he will remove from circulation $6,503 more than he put in
circulation.
Every loan of banker "created" money (credit) causes the same thing to happen.
Since this has happened millions of times since 1913 (and continues today), you can see
why America has gone from a prosperous, debt-free nation to a debt-ridden nation where
practically every home, farm and business is paying usury-tribute to the bankers.
Checking Up On Cash
In the millions of transactions made each year like those just discussed, little actual
currency changes hands, nor is it necessary that it do so.
About 95 percent of all "cash" transactions in the U. S. are executed by check.
Consider also that banks must only hold 10 percent of their deposits on site in cash at
any given time. This means 90 percent of all deposits, though they may actually be held by
the ban, are not present in the form of actual cash currency.
That leaves the banker relatively safe to "create" that so-called
"loan" by writing the check or deposit slip not against actual money, but
against your promise to pay it back! The cost to him is paper, ink and a few dollars of
overhead for each transaction. It is "check kiting" on an enormous scale. The
profits increase rapidly, year after year.
Save our U.S. Constitution index
Last Updated on 04/23/98 by Darren Perkins 