The Biggest Scam In The History Of Mankind - Hidden Secrets of Money 4 - Mike Maloney

You are about to learn one of the
biggest secrets

in the history of the world. It's a
secret

that has huge effects for everyone who lives
on this planet.

Most people can feel deep down that
something isn't quite right

the world economy, but few know what it is

Gone are the days where a family can
survive on

just one paycheck, every day it seems things
are more and more

out of control, yet only one in a million
understand why.

You are about to discover

the system that is ultimately
responsible for most of the inequality in our

world today. The powers that be do not

want you to know about this, as this system
is what has kept them at the top of

the financial food chain for the last 100
years.

Learning this will change your life
because 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 been
plundered by so

few,

And it's all accomplished through this, The
Biggest Scam

In the History of Mankind

They say that money doesn't grow on
trees

but the truth is that the modern banking
system creates currency far faster than

trees can grow.

Most people don't have a clue how
currency is created

economists and bankers make it sound so
complex that people think they can't

understand it.

But I'm going to strip our monetary
system down to its

essence so you can see the scam behind
the curtain

and just how it affects you. Every modern
society creates currency in pretty much

the same way

but since the US dollar is the majority
of the world's currency

I'm going to use the United States as
our example. It all starts when some

politician says 'Vote for me and I'll
make sure the government provides you more

free stuff than my opponent will'

But there's no such thing as a free
lunch - so to provide that supposedly free

stuff the politicians

vote for the country to spend more than
its income. This is called deficit spending.

To pay for that deficit spending the
Treasury borrows currency by issuing a

bond.

So what's a bond? If you think about it a
bond is really nothing but a glorified

I.O.U. It's a pretty piece of paper
with numbers printed on it that says

'Loan me a trillion dollars today and I
promise over a 10-year period

I'm gonna pay you back that trillion
dollars plus interest.'

But what you need to understand is that
Treasury bonds

are our national debt. These glorified
I.O.U.s

are to be paid back by you and I and our
descendants through future taxation.

Therefore:

When the government issues a bond it
steals prosperity

out as the future so that it can spend
it today. The Treasury then holds a bond

auction

and the world's largest banks show up and
compete 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 cut
every step of the way.

This isn't by chance as you'll see
shortly. Then,

through a shell game called Open Market
Operations the banks get to sell some of

those bonds to the Federal Reserve

at a profit. To pay for the bonds the Federal
Reserve

opens up its big old checkbook and
writes bad

bogus counterfeit checks that should
bounce because they're drawn on an account that

always has a zero balance, there isn't
one penny

in there. To quote from the Boston
Federal Reserve: 'When you are I write a

check there must be sufficient funds

in our account to cover that check, but when
the Federal Reserve writes a check

there is no bank deposit on which that
check is drawn.

When the Federal Reserve writes a check
it is creating money."

The Fed then hands those checks to the
banks and at this point currency

springs into existence.

The banks then take that currency and
buy more bonds at the next Treasury

auction.

But what is a check? A check is also
an I.O.U.

When you write a check you're making a
note that says "Here's my I.O.U. for

cash,

all you have to do is go to the bank and
pick it up." Now it's very very important

that you understand this process

because we're going to come back later
and 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 with
currency. The Federal Reserve

then writes I.O.U.s (checks) and hands them
to the banks in exchange for the

Treasury's I.O.U.s

(the bonds). And currency is created. So
what's really happening is the Federal

Reserve and the Treasury

are just swapping I.O.U.s, using the
banks as middlemen,

and abracadabra presto currency
magically springs into existence.

This process repeats and repeats over and
over again

enriching the banks and indebting the
public by raising the national debt.

The end result is that there's a buildup
of bonds at the Federal Reserve

and currency at the Treasury. This process
is also where

all paper currency comes from. The
Federal Reserve and the government

mistakenly call it 'Base Money'

because they didn't watch Episode 1 of
this series, and they don't know the

difference between money

and currency. But I will correctly
refer to it as 'Base Currency' because

it is not money...

it is CURRENCY, and as we've learned
there is a big difference:

Money has to be a store of value
and maintain its purchasing power over

long periods of time.

We learned in Episode 1 that earlier
in our history our paper currency was

just a claim check.

It was a representation for real money
of intrinsic value,

the gold and silver that was held on
deposit at the Treasury.

You could walk into any bank and slap
your currency, like say a twenty dollar

bill

on the counter, and redeem it for real
moneyÉa twenty dollar gold piece.

But now this base currency that's piling
up back here

is really nothing but a receipt or a
claim check on an I.O.U.

(that bond), so it's really nothing but a
supply of numbers.

The Treasury then deposits the newly
created currency in the various branches

of the government,

and the politicians say "Hey thanks for
that!",

and the government does some deficit
spending on public works,

social programs, and war.

The government employees, contractors and
soldiers then deposit their pay in the

banks.

Now this may come as a shock to you, but when
you deposit your currency with the bank

you're not

actually depositing it into an account
to be safely held in trust for you.

Instead, you're actually loaning the bank
your currency,

and within certain legal limits they can do
with it pretty much anything they please.

This includes gambling in the stock
market, and loaning it out...

at a profit of course.

Now this is where the machine of currency
creation really gets cranking,

because this is where something called
'Fractional Reserve Lending' comes into

play.

Fractional Reserve Lending is exactly
what it says. The banks are allowed

to reserve only a fraction of your
deposit and long the rest out.

Although reserve ratios may vary, I'm
going to use a 10 percent reserve ratio

as our example.

If you deposit $100 dollars in your
account, the bank can legally take ninety

dollars of it and loan it out without
telling you.

The bank must hold ten dollars of your
deposit in reserve

just in case you want some of it. These
reserves are called 'Vault Cash'.

But why does your bank account still say
you have one hundred dollars if the bank

has stolen ninety dollars of it?

Because the bank left I.O.U.s it
created called 'bank credit'

in its place. Now I know this sounds
crazy,

but here it is in black and white from
the Fed: "Commercial banks create

checkbook money

when they grant a loan simply by adding
new deposit dollars in accounts

on their books in exchange for a
borrower's I.O.U."

These are nothing but numbers that the
banks type into their computers,

and even though these bank credit I.O.U.
numbers

are very different from base currency
numbers (because they only exist in

computers),

they are still currency. So now there is
one hundred ninety dollars in existence.

Now the reason people take out loans
from the banks is to buy something.

They're going to buy a house or a car or
something 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. But
then the seller deposits that currency

into his account,

and his bank loans out ninety percent of
that,

and leaves bank credit numbers in its
place. So now there's two hundred and

seventy-one dollars in existence.

This process repeats and repeats until
under a 10 percent reserve ratio

an initial deposit of just one hundred
dollars can create up to one thousand

dollars of bank credit

all backed by one hundred dollars of vault
cash,

just 10 percent. But as I said reserve
ratios vary wildly...

on some deposits it's 10 percent on
others

its 3 percent and on some forms of deposits
reserve requirements

are zero! The result is that the expansion the
currency supply by the banks is

far greater than even this example would
lead you to believe.

So once again, when currency is deposited
in the banks,

the banks get to lend it out and then it
gets we redeposited and relent,

redeposited and relent, redeposited and
relent

over and over again creating bank credit
all the way.

This is where the vast majority of our
currency supply comes from.

In fact 92 to 96 percent of

all currency in existence is created
not by the government,

but here in the banking system. Now,

massive amounts of currency spewing into
society may at first sound like a fun

idea...

that is until you remember one of the
most important Hidden Secrets Of Money

from Episode 1:

That the prices of everyday goods and
services act as a sponge

on an expanding currency supply. The more
currency we have

the more prices rise.

This is where inflation comes from. The
true definition of inflation

is an expansion of the currency supply,
rising prices

are merely the symptom.

So our entire currency supply is nothing
but a couple bucks whipped up in this

hocus-pocus scam

where the Treasury and the Federal
Reserve swap glorified I.O.U.s

and a bunch of numbers that the banks
just type into their computers.

That's itÉthat'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 you
thought that was crazy,

get ready to enter the twilight zone ofmodern
economics. We work for some of that

currency supply.

True wealth is your time, but we trade
away moments in our lives

hour by hour, day by day, and year by year

for numbers that somebody printed on
pieces of paper or just typed into a

computer.

Now those numbers represent our blood,
sweat, tears, labor,

ideas and talent. We are what gives
the currency its value.

But here comes the really cruel joke...we
work hard,

so that we can save some of that currency, so
that 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 the
principal plus interest

on that bond that the Federal Reserve bought
with a check drawn

on an account that has nothing in it.

Now let's do a recap on this
section because this is where the

system begins to rob you and I

on a massive scale. Much of our taxes are
not used for schools, roads and public

services,

but to pay interest on bonds that the
Federal Reserve

bought with a check drawn on an account that
has nothing

in it. The Federal Reserve is committing
FRAUD.

But here's one of the biggest secrets
of them all:

Before the establishment at the Federal
Reserve there was no need for personal

income tax. The Federal Reserve was created
in 1913

and that very same year the Constitution

was amended to allow income tax. Do you
really think this was just a coincidence?

Ask yourself how much income tax you've paid

over your lifetime. Much of it has been
silently siphoned away

into the hands of those who own the
system. Yes this system has owners...

who they are is an even bigger secret
that we'll get to shortly,

but first we need to understand the
mumbo jumbo of the so-called

'debt ceiling'. It's all based on a huge
paradox:

There was interest due on that bond, and
there was interest due on

every one of those loans that the banks made.
That means

that there is interest due on every dollar
in existence.

Let me ask you something: If you borrow
the very first dollar into existence and

that's the only dollar that exists on
the planet,

but you promise to pay it back plus
another dollars worth of interest...

where you get the second dollar to pay the
interest? The answer is that you have to

borrow that one into existence

and promise to pay it back with
interest as well, so now there are two

dollars in existence

but you owe fourÉand 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 to
pay the debt. Therefore,

the whole system is impossible it is
finite

it will come to an end one day. What
would happen if the government stopped

borrowing to do deficit spending?

Are the payments on those treasury bonds
going to stop?

What would happen if the public stopped
borrowing and going deeper into debt?

Are your house and car payments going to
stop?

No, there is a payment due

every month on the principal plus the
interest on every dollar in existence

and those payments do not stop.

If we stop borrowing then no new
currency is created to replace the

currency that we used to make those
payments.

Whether you're making a payment on a
loan or paying tax to make a payment on

a bond,

the portion of the payment that goes to
pay off the principal

extinguishes that portion of the debt.
But the debt also extinguishes the

currency.

Currency and debt are like matter and
anti-matter.

When they meet they annihilate each
other. If we just pay off the principal

only

on all the loans and bonds that exist
the entire currency supply

just vanishes. So if we don't go deeper
into debt every year

look what happens: the whole thing goes
into a deflationary collapse under the

weight of those payments.

Politicians and pundits alike talk about
balancing the budget

paying down the debt and living within
our means. They don't understand that

that is deflationary,

it is impossible to do under our current
monetary system without collapsing the

whole economy.

This is why any talk of a debt ceiling
is not only ridiculous...

its delusional. The system is designed to
require

ever-increasing levels of debt just to
continue, and that's why politicians will

always

kick the can down the road and raise
this so-called

'debt ceiling' over and over again until
the whole system finally collapses under

its own weight.

In other words, they don't want it to
collapse on their watch.

The founding fathers of the United
States knew the dangers of central

banking and fought to free themselves
from this very thing.

The revolutionary war started out as a
tax revolt,

but now we must pay tax just to have a
monetary system.

Having just suffered through the
hyperinflation of the Continental

Dollar

which was printed into oblivion to
finance the Revolutionary War,

they understood the dangers of fiat
currency and debt based monetary systems.

So to protect future generations from
institutional theft and

out-of-control government they wrote
into the constitution that only gold and

silver can be money,

for the simple fact that you can't print
them. Our current system is not only

unconstitutional,

but it robs us of the liberty and
prosperity

our forefathers fought and died for. We
are all

feeling the effects of ignoring the
Constitution right now.

By forcing more currency into
circulation

our purchasing power is diluted.
Inflation

is a slow and insidious stealth tax

that is simply the result of this in
dept-based monetary system.

This system empowers and benefits those
who create the currency and receive it

first

as they get to spend it into circulation
before it has an effect on the economy.

They're stealing purchasing power from
you and transferring it to the banks and the

government

every hour of every day because of this
false monetary system.

And it's not like the people at the top
don't know this. To quote the Federal Reserve

"The decrease in purchasing power
incurred by the holders of money

due to inflation imparts gains to the
issuers 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 entire
monetary 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 - it
has stockholders.

There is no federal agency that has
stockholders.

What's a stockholder? A stock
represents a percentage of

ownership in a corporation, so the
stockholders

are the owners of that corporation.
Therefore the Federal Reserve is a

private corporation with owners...

and you can see it for yourself if you
go to the Federal Reserve's website

and it will say: "The stockholders
receive an annual dividend of

six-percent." Now we know that the stock
in the Federal Reserve was originally

issued

to the largest banks in the United
States but because of mergers and

acquisitions through the years

you can't actually trace who owns the
stock in the Federal Reserve. That's a

very closely guarded secret. My guess
would be that the owners

are those primary dealers, the banks that
get 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 that
the Federal Reserve can pay the banks a 6

percent dividend.

Don't be alarmed if you don't quite
comprehend the deception of this system

at first glance. Very few people do. It is
purposely complex.

The economist John Maynard Keynes once
wrote:

"By this means government may secretly
and unobserved

confiscate the wealth of the people and not
one 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 down
even more...

The way this system works is that Step 1:

The government creates glorified I.O.U.s
These bonds increase our national

debt,

and put the public on the hook to pay it
back. Step 2:

I.O.U.s are swapped to create currency. The
Treasury

sells the bonds to the banks. The banks
then turn around and sell our national

debt

at a profit to the Federal Reserve, which
they probably own.

The Federal Reserve then opens its checkbook
that doesn't have a penny in it

and buys those I.O.U.s with I.O.U.s it
writes,

checks on a checking account that has a zero
balance.

Then they give those checks to the
banks and currency just springs into

existence,

and then the whole process repeats. This
results in a build up of bonds at the

Federal Reserve,

and currency at the Treasury...which is
really just a supply of numbers.

The Treasury then deposits the numbers
in the various branches of the

government and we get to Step 3:

The government spends the numbers on
promises,

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 banks
multiply the numbers by magically

inventing more

I.O.U.s through Fractional Reserve
Lending, where they steal a portion of

everyone's deposit and lend it out.

That currency gets redeposited and then
a portion is stolen again,

and the process repeats over and over
magnifying the currency supply

exponentially.

Then we work for some of those numbers
which brings us to Step 5:

Where our numbers are taxed. We pay taxes
to the IRS

who then turns our numbers over to the
Treasury, so the Treasury can pay the

principal plus the interest on bonds
that were purchased by the Federal Reserve

with a check from nothing. Then we get to
Step 6:

The Debt Ceiling Delusion. The system is
designed to require

ever-increasing levels and debt and will
eventually collapse under its own weight

because politicians

always kick the can down the road, they
don't want it to collapse on their watch.

And finally Step 7: The Secret Owners
Take Their Cut.

The world's largest banks own the Federal
Reserve, those banks make a profit

selling our national debt top the Fed,

they make a profit when the Fed pays
them interest on the reserves held at the Fed,

and the Fed pays them a six percent
dividend on their

ownership of the Fed. This system

is fundamentally evil. It funnels wealth
from 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 wealth
between the rich and the working class.

AND - it is only possible because we no
longer use real money,

we use currency. But worst of all it is a
form 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 the
future.

Nobody asked you if you wanted to pay
tax today for the prosperity we all

enjoyed in the last century.

Nobody is asking our children if they
want to work hard in the future

to pay for the prosperity we're enjoying
now. George Washington once wrote to

James Madison:

"No generation has the right to contract
debts greater

than can be paid off during the course
of its own existence."

By stealing prosperity from tomorrow so
we can spend it today

we enslave ourselves and future
generations.

Now this all sounds pretty bad but there
is great hope

for YOU are the greatest threat to this
false monetary system.

This system relies on the public being
ignorant of its workings.

Please share this knowledge with
everyone you know because an informed

public

that fully understands the system can
build a better future

for generations to come. And now I leave you
with this quote,

widely attributed to a former Director
of the Bank Of England: "The modern banking system

manufacturers money out of nothing.

The process is perhaps the most
astounding 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 and
control credit and with the flick of a

pen

they will create enough money to buy it
back again. If you want to continue as

the slaves of bankers

and pay the cost of your own slavery, let
them continue to create money,

and to control credit."

This the Federal Reserve in Washington
DC

it's located on Constitution Street, and
that is just as much a joke as the New

York Fed being located on Liberty Street.

Both of them are unconstitutional both
of them limit our Liberty,

and they transfer wealth away from us
every second of every day

to the Federal Reserve, to the government
and to the banking sector. YOU

are now among the one in a million that can
detect theft of your prosperity...

so the big question is, what can you do
about it?

1: Watch this video until you can
describe

and teach it to others. Those who
understand the system

can make preparations for its unavoidable
collapse

and protect themselves. History shows that those
who 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 world
monetary system is based on a three

hundred-year-old design

meant to enrich a few at the expense
of the many...

there must be a better way. At
HiddenSecretsOfMoney.com

we've created an open source platform
for the design and development of a new

world monetary system. We're calling on

every economist, every student, every
college,

every bright mind and anyone who cares
to join the discussion.

In educating ourselves and each other we
can prevent the further loss of our

freedoms

and maybe, just maybe win some of them back.

...

...

Stay tuned for Ron Paul...

ÉJim Rickards, and Steve Forbes

Watch more episodes at
HiddenSecretsOfMoney.com

[Ron Paul] I think your Episode 4 is

very beneficial, very helpful, it's gonna
introduce these ideas to a lot of

people, and like I've just been talking about,

we have to change people's minds and the
more they understand it the better,

and I think we're at this point now
where more people in the last

several years..four or five years have
thought about the Fed than they ever have

in the previous ninety five years

so I think I an explanation and diagrams
to show it is very helpful

because quite frankly they're not going
to get it in their grade school they're

not going to get in their high school

they're not going to get it in college
unless they're in a very rare

circumstance to understand

how this works. [Jim Rickards] You know for years
before I got involved in

huh really studying gold and some of the things
I write and talk about today I was a

monetary economist for decades you know
in your video you talk about the primary

dealers

I was chief counsel and chief credit officer
for one the largest primary dealers for ten

years so

I had an inside seat on the Treasury
market and have the privilege of working

with several

former Vice Chairman of the Board of
Governors: Johnson and

David Mullins going back to the 80's and
90'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 any
points it was is really like something

out of a

PhD course except that it was very easy
to understand, I think it's accessible,

I think I think we're seeing a little
bit of a revolution in communications in

the following sense you know as you
point out the Fed was created in 1913

well in 1913 there was no web there
was no YouTube, no Twitter

there was really no one to stand up and

oppose the Fed or call them out if you
will, or really get into a discussion

that everyday Americans could follow.

That's not true now - with social media
and everything else

you can reach out to millions and
tens of millions of people and tell them

what's going onÉI think you've done that,

You've done it successfully I applaud it, I think it's
a great video I

look forward to seeing it again, I know
millions 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 represent
real products and services

and what people don't realize is
when the Fed does that

in effect as Keynes pointed out
it's a form of taxation,

it's a form of confiscation and because
people don't see it

the politicos get away with it, but it
also undermines social trust,

it just is corrosive throughout
society.

We're going to have a lot of turmoil in
the coming years,

but it's going to be the kind of turmoil
that leads to positive things.

So don't despair, get out there and
fight because

the tide is gonna turn. This is going to
be 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.com
and the new Silver Pegasus round. To

learn how to protect your family

and turn the coming economic storms
and opportunity visit:

GoldSilver.com