Dollars to pockets???

   Let’s take a peak into our monetary system.  How do the dollars and coins we hold actually make their way into our wallet, purse or pocket?

   Did you know that the Federal Reserve Bank is a private corporation owned by a consortium of very large multinational banks?  The government issues coins but dollar bills (Federal Reserve Notes) are created by the Federal Reserve Bank.  They then sell the dollars to the government, individuals and businesses.

   Coins and dollar bills make up less than 3% of the U.S. money supply.  The remaining 97% are loans on the bank’s books.  When a loan is entered on a bank’s records it becomes an asset. The loan made to an individual is entered in the borrowers’ deposit account.  The money that banks lend is not recycled from preexisting deposits but is new money which did not exist until it was lent.  Money is created not by the government but by debt to private banks.

   Banks often make loans for the immediate pay out of fees and interest to its owners and managers.   Therefore, they take on risky loans and are paid before there is realization of the profit from the interest over time.  The immediate income from the debt is profit to the banker but the long term sustainability of the debt becomes the responsibility of the government, insurers of the debt, or the taxpayers.  This structure forms the foundation of the debt-money system where the creation and control of money is by the bankers. 

   This article is an introduction to our money system.  The next issues will expand on this information.  A resource for this article is from the book “Web of Debt” by E. H. Brown.

Category: Investing · Tags:

Comments are closed.

Check the background of our Broker Dealer on FINRA’s BrokerCheck

Hansen’s Advisory Services is currently licensed in AZ, CA, CO, FL, IL, ME, MA, NJ, NM, NY, NC, OH, PA, RI, SC, VT, VA

Securities are offered through Cadaret, Grant & Co., Inc. Member FINRA/SIPC. Hansen’s Advisory Services, Inc. and Cadaret, Grant & Co., Inc. are separate entities.

Site Credits

Website by Lisa Goodlin Design

Solar-powered website hosting by AISO.