Your Money, Your Debt?

According to the New York Federal Reserve Bank, fractional reserve banking can be explained this way....
"If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money($100+$90+81+$72.90+...=$1,000)."

As long as the Federal Reserve system exists, the national debt will keep going up, the money supply will keep going up and the U.S. dollar will continue to decline in value.This is not because of some big mistake.  This is what the Federal Reserve system was designed to do.  It was designed to trap the U.S. federal government (and by extension all of us) in perpetual debt.

There is a legitimate sense in which even the Federal Reserve notes in your wallet or purse are "debt-based money." We have to ask, how did these notes come into existence? The first thing to realize is that the Fed can control the size of the monetary base, but it can't directly control its composition. Specifically, if the public wants to hold more paper currency — rather than keeping their "money" sitting in checking accounts at the bank — then they can begin withdrawing green pieces of paper either from bank tellers or ATMs. Seeing their physical currency depleting, the commercial banks then go to the Fed and draw downtheir reserves, which basically are the banks' own "checking accounts" with Janet Yellin.

If the U.S. government really wanted to get out of debt it would take back control of our currency from the bankers and would start issuing debt-free money.  But don't expect that to happen any time soon.

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