The Federal Reserve: Biggest Scam In The History Of Mankind – Hidden Secrets of Money Ep 4

You are about to learn one of the
biggest secrets
in the history of the world. It’s a
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
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
And it’s all accomplished through this, The
Biggest Scam
In the History of Mankind
They say that money doesn’t grow on
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
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
are to be paid back by you and I and our
descendants through future taxation.
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
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
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
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
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
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
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
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
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
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.
are very different from base currency
numbers (because they only exist in
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
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
just 10 percent. But as I said reserve
ratios vary wildly…
on some deposits it’s 10 percent on
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
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
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
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
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
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
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
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
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
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
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 and debt are like matter and
When they meet they annihilate each
other. If we just pay off the principal
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
ever-increasing levels of debt just to
continue, and that’s why politicians will
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
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
but it robs us of the liberty and
our forefathers fought and died for. We
are all
feeling the effects of ignoring the
Constitution right now.
By forcing more currency into
our purchasing power is diluted.
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
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
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
What’s a stockholder? A stock
represents a percentage of
ownership in a corporation, so the
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
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
“By this means government may secretly
and unobserved
confiscate the wealth of the people and not
one man in a million will detect the
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
and put the public on the hook to pay it
back. Step 2:
I.O.U.s are swapped to create currency. The
sells the bonds to the banks. The banks
then turn around and sell our national
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
checks on a checking account that has a zero
Then they give those checks to the
banks and currency just springs into
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
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
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
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
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
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
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
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
and teach it to others. Those who
understand the system
can make preparations for its unavoidable
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.
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
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
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
and maybe, just maybe win some of them back.

Stay tuned for Ron Paul…
ÉJim Rickards, and Steve Forbes
Watch more episodes at
[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
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
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
and the new Silver Pegasus round. To
learn how to protect your family
and turn the coming economic storms
and opportunity visit:


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