Biggest Banking Myth Explained
Bank’s Don’t Lend Money!
Professor Richard A Werner: https://professorwerner.org/
“Essentially if we want to produce something we need funding so there’s a role for banks in almost everything that’s happening in the economy. But what exactly is that role? Quickly I’d like to reflect on that. Banks are being thought of as intermediaries, but are they? That’s not really what is happening. Banks are creators of money. Banks are creators of the money supply. In the 5,000 year history of banking, banks are thought of as deposit-taking institutions that lend money. The legal reality is that banks don’t take deposits and banks don’t lend money. A deposit is not actually a deposit. It’s not a bailment; it’s not held in custody. At law the word deposit is meaningless. The law courts and various judgments have made it very clear that if you give your money to a bank, even though it’s called a deposit, this money is simply a loan to the bank. So there is NO such thing as a deposit. The banks borrow from the Public. OK? That much we have established. Banks DON’T lend money. Banks, again at law it’s very clear, are in the business of purchasing Securities. That’s it! So you say, OK. I want a loan. So here’s a loan contract and here’s the offer letter that you signed. At law, it’s very clear. You have issued a Security, namely, a Promissory Note, and the bank is going to purchase that, that’s what’s happening. It means that what the bank is doing is very different from what it presents to the public that it’s doing. How does this fit together? You say, fine, the bank purchases my Promissory Note, but how do I get my money? I don’t care about the details. I want my money. The bank will say, “you’ll find it in your account with us.” That would be technically correct. But if they say “we’ll transfer it to your account”, that’s wrong, because no money is transferred at all from anywhere inside or outside the bank. Why? Because what we call a deposit is simply the bank’s record of its debt to the public [meaning the National Credit.] Now it owes you money and its record of the money it owes you is what you think you’re getting as money. And that’s all it is. And that is how the banks create the money supply. The money supply consists of 97% of bank’s deposits and these are created out of nothing, by banks when they lend, because they invent fictitious customer deposits. Why? They simply restate, it’s like correct in accounting terms, what is an accounts-payable liability arising from the loan contract of having purchased your Promissory Note as a customer deposit, but nobody has deposited any money. I wonder how the FC deals with it, because in the financial sector you’re supposed to not mislead your customer.” — by Professor Richard A Werner: https://professorwerner.org/
What is missing, and NOT being said:
Banks part with nothing except paper and ink. Banks give no lawful consideration to bind the Promissory Note that you sign. And this is accepted by the general public because they know nothing about this bank scam.
Yes. Banks create credit on their books by ledger entry. Money first comes into existence in this way. And no United States Law gives the banks the authority to do this (according to the 50-year-old “Credit River Decision” of 1968).
You give your Promissory Note to the Bank and the bank gives you the money in return. It’s an even quid pro quo exchange. Then it cons you by its illegal contract into paying them again a second time in many monthly installments over time.
The Bank accepts the value of your Promissory Note as a value you loan to the bank and then endorses it as a Security and sells it on the market to fund the so-called “loan” that it makes to you. Then, as state above, it cons you by its illegal contract into paying them again a second time in many monthly installments over time.
The “Credit River Decision” is one of the great unknown documents of Amerian History. It is the most important legal decision ever decided by a Jury of 12 women and men.