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Q8: Is the US Federal<br />
Reserve evil?<br />
Q8: Is the US Federal Reserve evil?<br />
In traditional banking, a bank offers loans at a higher rate<br />
than it pays <strong>for</strong> deposits from the public. It makes a profit<br />
(after accounting <strong>for</strong> expenses, tax, and reserves) using<br />
the margin between loans and deposits. But American<br />
banks operated under a system called fractional reserve<br />
banking. Banks could make loans <strong>for</strong> $100 even if they<br />
have only $10 as deposits. So, from where does the new<br />
money come <strong>for</strong> these loans? Out of thin air, of course.<br />
Yes. All of that loan money need not be printed. Nobody<br />
takes the entire loan amount out as cash! The new money<br />
remains in the banking system as book entries.<br />
In 1913, Rothschild agents in the US Congress established<br />
a permanent US central bank cunningly named as the the<br />
Federal Reserve. From then on, the Federal Reserve has<br />
issued debt notes as currency on behalf of the US<br />
<strong>government</strong>.<br />
When the US <strong>government</strong> issues currency (that is, pays its<br />
debts), it has in effect “borrowed” the money from the<br />
Federal Reserve. The Federal Reserve also issues currency<br />
to American banks when someone takes a loan. All money<br />
that comes into the American financial system is via loans.<br />
A few favoured big banks can borrow money from the<br />
Federal Reserve at low interest rates and lend them to<br />
consumers at high rates.<br />
34 <strong>World</strong> Government Slave Handbook
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