Tuesday, 5 November 2013

Scott Cundill Responds to A Financial Journalist

Scott Cundill from New Economic Rights Alliance in South Africa, was asked a question by a keen journalist today from a major mainstream newspaper. This is a great example how even the economic journalists, who are supposed to know how banking works, have been mislead and confused by  the biggest global scam in human history - and the largest organised crime syndicate ever unleashed on humanity - banking and the creation of private money.


Question: As far as I know, the credit that banks grant consumers, is derived or “created” from the purchase of long and short term bonds, which are promises by governments to repay loans from the market over a period of time. Long term bonds provide the collateral (asset) for banks to provide “long term” loans, while short term bonds provide the assets to provide shorter term loans. These bonds create the asset on the side of the bond, before they make a loan to the client. Is my interpretation of this wrong?
Thanks

Scott's Answer:
Haha – that’s what most “scholars” think. It is a very misleading statement. This is NOT how money is created in banks, but it can look like this is the case. Let me try and explain:

1.    A loan is the creation out of money. When you get a loan, money is NOT transferred from the banks account (where they supposedly borrowed from other banks or sold bonds, etc.)
2.    Instead, the loan is created using a book keeping entry. Your signature on a promise to pay, resulted in the bank recording your signature as an asset (creating a + (positive) account). An equally balanced liability is created on the other side of the ledger creating a – (negative) amount.
3.    What we call money is actually a bank’s liability (or a banks promise to you). Money does not exist, so money in your bank account reflects what a bank promises to pay you (ie. a banks liability).
4.    So when you get a loan, your asset (signed promise – in other words the piece of paper) was used to create the bank liability = the money they “loaned” you. So there was no loan in the ordinary sense of the word. The entire loan was created out of nothing.
5.    Because the banks have to have a minimum reserve requirement, where they get the reserve from is what you describe below. Because all money is merely a promise, banksters give each other’s promises all the time and this creates the illusion of cash being loaned.
6.    But reserves are STILL EMPTY PROMISES! Reserves are also created out of nothing, usually by the SARB writing a cheque with money it doesn’t have to create the illusion of a reserve which in turn allows the banks to make it look like they are lending money!
7.    And finally, interest is charged on these loans and if you do not pay it back, they take your house.

Welcome to hell on Earth, created and manipulated by the banksters. None of it is real, the whole thing is an illusion to serve a purpose – get people into debt so they will never, ever be able to pay it back.

Kind regards,
Scott