The New Earth Exchange
yet been created – hence the perpetual
and intentional cycle of boom and bust).
•
Income taxes pay the interest to the
bondholders.
It’s no great secret that today’s modern
economy does not serve the people of our
beautiful planet – it has been made in the
•
The central bank can control the supimage of those with an insidious need for
control. Genius is its design, and chaotic its ply of credit money by buying and selling
its holding of government bonds at will. In
nature…
this way does one single corporation conHow is money created in the legacy trol the entire economy.
system?
•
It is the promise of the future labour
Under the current fractional reserve banking of mankind which underwrites this entire
operation. The ‘security of the person’
model, operating in almost every country
(birth certificate) of every man, woman and
across the globe, money is created in the
child alive today is collateralized to fulfil
following way:
this function, based on the presumption
•
The central bank decides to increase that we all will agree to stand as surety for
the debt money created... indentured servithe money supply by say £1m. It does so
by purchasing government bonds/treasury tude.
bills from a dealer in government securities.
The £1m created by the central bank can
then be expanded to a theoretical £10m
•
In order to pay for these bonds the
central bank creates a liability against itself through the following process:
– a simple accounting exercise.
•
The dealer’s bank account is credited
with £1m as payment for the bonds.
•
£1m of credit money that did not
previously exist, now exists in the banking
system.
•
Because the government bonds are
interest bearing, the government has effectively borrowed the credit money for its
banking system, from what is effectively a
private corporation, at interest (there can
never be enough money in circulation to
pay back this loan because the interest
payable on the government bonds has not
•
The high street bank(s) who received
the £1m from the dealer’s transaction is
allowed to lend £900,000 of the original
£1m, assuming a 10% fractional reserve
requirement.
•
However it does not lend any of the
original £1m, if it did this no new money
would be created. Instead it keeps the
whole £1m in its vault and creates, out of
thin air, up to another £9m to satisfy the
10% requirement.
•
It can do this because it accepts
promissory notes [loan application forms
and offers] in exchange for credits to the