Perhaps the best way to explain fractional-reserve banking is by analogy. Just as a bank note was originally a metaphysical paper representation of a specific physical amount of precious metal money so too is a property title a metaphysical paper representation of a physical plot of land. Imagine the indignation a person would feel if he had exchanged his money for the title believing he had purchased a plot of land only to discover later that the unethical seller had copied the title and sold the paper title to ten other people. What was actually sold? Eleven people cannot own the same physical piece of land but they can own identical metaphysical paper representations of the land. The fraud, as a result, begins the moment the metaphysical representation no longer matches the physical reality. Legally, the seller is guilty of violating property laws and would face severe sanctions for his crime.

Curiously, however, when a bank behaves in a similar fashion and prints numerous banknotes representing titles to the same specific physical precious metals money, it is not considered a violation of property laws. Paradoxically, the same fraudulent behavior where multiple metaphysical copies a one physical item receives severe penalties in every other area, somehow is considered “legal” practices in banking and is termed fractional-reserve banking (FRB). For how can the same physical precious metals be sold (loaned) to numerous parties via its metaphysical paper representation anymore than the same physical land can be sold to numerous parties using the identical scheme? How, in essence, can several parties own the same property at the same time? The answer is a physical impossibility and a metaphysical fraud.

Another example conveying the injustice of FRB is to picture a person who decides to sell his motorcycle. He places an ad in the paper and receives a call with a strange request. The potential buyer states his wife is against him owning a bike, but he really wants one. He offers to purchase the bike if the seller will store the motorbike in his garage. The buyer will only use the bike on Saturdays and he even offers to pay a small storage fee. The seller agrees and the title is exchanged for the cash. After several months, the seller realizes the bike is just sitting there the other six days. At first, he casually takes the bike for a ride personally, realizing he practically owns the bike even though he sold it and receives a monthly fee to store it. Finally, however, he conceptualizes and even more devious plan. Why, he asks himself, not copy the title for the bike six more times (since there is seven days in the week and the “owner” needs his bike only one of the days) and sell the bike again to other unsuspecting “owners”? Not only would I seven times my profit but I would also be able to charge a storage fee to each “owner”.

The fraudulent seller proceeds to run the motorcycle ad specifically looking for husbands with limited time and protective wives. To the seller’s delight, over the next several months he identified six more buyers. The seller was careful to only select buyers who asked to store the bike and who only desired to use the bike on a specific day. Although each person believed he owned the motorcycle in full, the seller defrauded all of them for his illicit gains. Now, the storage owner had a new “owner” for each day of the week and received seven times the profit on the sale of his bike and still received storage fees on top of that! Is this fraud or an innovative fractional-reserve motorcycle selling system?

True, if each owner knew he was only buying one day’s ownership then its physically possible and metaphysically permissible because the titles would represent only a fraction of ownership. This, however, wasn’t true in this case nor is it true with FRB loans. Each owner believes he owns 100% of the bike title and paid for it in full. Accordingly, the seller has committed fraud by metaphysically representing he had seven bikes to sell even though he actually owned only one physically. The pragmatic argument that since the bike owners were not using their property the other six days of the week that the storage facility had a right to sell someone’s else’s property the other six days is simply ludicrous. Especially when the owner’s property was sold without his knowledge or consent.

The banks, however, systematically practice the same thing. For instead of storing society’s money (like most people believe they do) they actually sell (loan) the owner’s money to numerous third parties while acting like the money is available to the original owner on demand. How can the same money be loaned out to ten separate parties while still being available to the actual owners all at the same time? This simply is not possible in the physical world but as shown above it is possible when practicing a metaphysical fraud. Amazingly, the motorcycle seller’s fraud would be punished severely, but the bankers similar fraud is blessed by the State.

The Bank of England (one of the first central banks) utilized FRB to print over ten times as many banknotes as the actual precious metals stored in England’s vaults. As a result, the Bank of England quickly captured the English Empire’s money supply and called the shots as Master of the Puppets. However, the issuance of paper bank notes led to one further innovation in money creation that, strangely enough, was developed in colonial America, namely State fiat-paper.  Colonial America lacked precious metal money and did not like the control the Bank of England had on colonial commerce. Naturally, the question was asked, why not have the colonies issue their own paper notes and promise to redeem them with future tax revenues? In this way the government, businesses, and individuals would not have to pay the Bank of England interest on their paper notes.

The new Sovereign State backed money was a huge success (its still Fiat Money and has its problems but at least the public State does not pay interest to private international financiers) in usurping the need for the Bank of England notes. In fact, Ben Franklin was so impressed by the new innovation that he wrote a treatise in defense of the public Sovereign State backed paper money. Of course, the international bankers who controlled the Bank of England were not amused with the colonial upstarts cheekiness. The Bank of England restored its profits by applying pressure to King George III who forced the colonies to shutdown the colonial paper and return to the Bank of England notes. This, in reality, and not the infinitesimal taxes on colonial merchandise was the real cause of the American Revolution. No less an authority than Ben Franklin himself (considered by many, including me, to be the greatest diplomat in American history because of his keen understanding of humanity) believed this when he observed, “The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament, which has caused in the Colonies hatred of England and the Revolutionary War.”

In closing, one of the best principles I learned from economist Dr. Murray Rothbard was FTM – Follow the Money. For every one person motivated by ideals, there are a thousand who are bought and sold. Unfortunately, the more history I read with an eye on Cui Bono (who benefits) the more I realize that most of the history I thought I had learned is simply not so. LIFE Leadership is a company designed to help people learn the truth, escape The Financial Matrix, and live a life that matter. I promise to play my part and continue my quest for truth by helping the people understand the dangers of enslaving themselves body, mind, and spirit into the matrix.

Sincerely,

Orrin Woodward

Once the elites understood how much wealth could be pilfered from society by capturing the money supply, it was not a question of free money or controlled money. Indeed, the only real question was: who would control the money system and whether it would be led by State Power creating a national fraud or by the Money Power creating an international fraud.

In reality, it wasn’t much of a contest since the Money Elites knew the State’s Achilles heel – it’s all-consuming desire for more power. To increase the State’s power over society, at least in a money economy, the State must direct more of society’s resources, which is just another way of saying the State needs more money. This is a challenge for a States in every age but was especially problematical in the classical age when the money system of society consisted mainly of gold/silver coins. As a result, there were only two ways for the classical States to access more funds, namely, increase taxes or borrow money. Remember, this is before State had the ability to print paper money because this fraud had not been discovered yet. Society, in any event, would not have recognized it as money anyway since precious metal coins were used as money. The State elites (monarchs, emperors, and tyrants) found increased taxes harmed their popularity with the people; hence, they saw the Money Power as the lesser of two evils. The monarchs, choosing short-term good for longterm harm, simply borrowed money from the financial elites rather than upset their subjects by increasing taxes.

                         Master of the Puppets

The State, strangely enough, despite owning the “monopoly of force”, feared a current tax rebellion more than a future debt slavery. Ironically, it will probably end up with both. The State elites sold the nation’s financial future (freedom decreases as debt increases) for increased power in the present. Meanwhile, the savvy financial elites did not rely on just one State for profits. Indeed, they offered loans to every rival States to generate competition amongst the States, which increased the total debt and expanded their financial web. The Money Power, after all, understood as State debts increased, they could demand further privileges to ensure mastery over the State. The Money Power (international elites) now topped the power pyramid followed by the obedient State Powers (national elites) which then directed Societal Power (the masses). Over time, the State, regrettably, became just as oppressed by the Money Power as the people were by the State and Money Power combination.

Unfortunately, the bad news gets even worse. For the “loans” used to enslave the States were not based upon real gold and silver stored in bank vaults; instead, the international financiers used what is known as fractional-reserve-banking (FRB) to initiate numerous loans with only a fraction of gold/silver promised in reserves. In a word, the States enslaved themselves by loving money more than the people. Through the use of bank ledgers credits and an early form of bank note credits, the States accepted money created out of thin air, but forced the people to pay back the loans with precious metals! One may ask how the same precious metals can be loaned to numerous parties (States) at the same time? In the real world, this is physically impossible, but in the imaginary world of high finances, it is metaphysically possible (bank ledger notations) despite being morally impermissible.

It’s been said there is nothing new under the sun, only the history a person doesn’t know. The modern States seem to validate this statement as they appear to have learned nothing from their ancient predecessors – both borrowed themselves into bankruptcy. The Money Power has mastered the State and society with FRB loans created out of thin air. While this information may seem shocking, it is true nonetheless. Yes, the truth will set a person free, but usually only after it ticks him off.

The author has termed the private Money Power’s control over the banking system and money supply the Financial Matrix – a system of control where the Money Power creates money out of thin air to loan to society’s members for profit and power. The origins of the Financial Matrix can be traced back to ancient Babylonian banking practices.  In the early twentieth century, however, with the creation of central banks as lenders of last resort, the Financial Matrix now reigns supreme over the earthly world. This debt system not only enslaves individuals and captures corporations into debt, but it also neuters the nation’s of the world. The Bible admonition in Proverbs 22:7, “The borrower is slave to the lender,” could not be more relevant than it is today and each person must face up to what role he is playing with respect to the Financial Matrix.

For instance, when a person borrows money to buy things he does not need, he is feeding the matrix and losing his liberties. The people must learn to deny themselves short-term pleasures in order to avoid the longterm pain. One final bitter fruit of the Financial Matrix system is the stress and pain experienced when a person attempts to pay off debt with compound interest working against him. The profits and control, in effect, go to the Money Power while the pain and stress go to the debtors. Financial ignorance is not bliss but rather pain personified. When the State debt increases the governments must squeeze society for more tax dollars even though the people are already struggling with their own debt. The shortfall, is then made up by the State borrowing even more money that it cannot afford. This is a form of insanity. Unquestionably, the kick the can down the road strategy cannot last but today’s politicians hope to be out of office by the time the can is no longer kickable. 🙂 Politics is now like a game of musical chairs where the current political leader hopes he is out of office before the music stops.

Meanwhile, the St. Louis Federal Reserve announced the total US debt (the combination of government, business, mortgage, and consumer debt) has risen from $2.2 trillion total in 1971 (the year Nixon took the dollar and thus the world off the gold standard) to $59.4 trillion in the first quarter of 2014. This is not a typo. The debt in America, which took nearly 200 years to reach $2.2 trillion and included the debts from the Civil War, WWI, and WWII, is now (43 years later) 27 times higher! Even at just 5% interest, this amounts to over $3 trillion in interest to service the debt. That’s 3,000,000,000,000 dollars every year, which is more than our total debt was a mere 43 years before. What is going on?

When Nixon took America off the gold, the dollar still remained the world’s money system, but it freed the Money Power to create as much money as it wanted without and need for gold in reserve. This turbo-charged the ability of the Financial Matrix to loan money and the consumers naively accepted the bait. I believe it’s time for the citizens of the world to reject the debt seduction. True, you can, like the proverbial ostrich, put your head in the sand and ignore this entire article, but I promise you even though you may hide your head from the financial tiger, it will still be painful when you are devoured.  🙂

The chart below reveals how the Financial Matrix is siphoning off trillions of dollars of productive capacity in each nation. The debt for American governments, corporations, and individuals is now around $20 trillion each and the interest payments are causing significant price, tax, and debt payment increases. The average American family is at the breaking point and what is need is some financial wisdom to alleviate their personal debt and stress. There is a personal pathway out of the Financial Matrix and I promise to do my part in sharing the steps to freedom.

Without intending to sound overly dramatic, I truly believe this is liberty’s last stand. The Founders of LIFE Leadership intend to stand in the gap and educate the masses of the world on a plan to escape the Financial Matrix. Will you help us set the captives free?

Sincerely,

Orrin Woodward