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What is "the Value" backing our currency? & Pricing our Work

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What is "the (ultimate) Value" backing our currency ?


How do we create a fair system to spread the wealth, and create incentives?




(What backs our currency? Over a year ago, a short piece was published on Jean Haines' website,

addressing the vague explanations we used to hear from the OPPT camp for their phrase: "We are the Value."

- I would have preferred a more clear and simple answer : that TRUST and the willingness to exchange one's work, and

one's wealth in exchange for a currency, is ultimately what gives it value, but here's how Mr Dunn explained it


“Value” is determined through the prism of the endless variety of human aspirations, needs, and cultural differences.

Awakening to our planet’s enormous abundance of the currently accepted “durable holder of value” (gold) will allow us to gradually get used to the idea of freedom from want, freedom from fear, freedom of thought. We can then naturally evolve toward a freer system of exchange based on a new understanding of “value,” honoring our variety of wants, needs, aspirations, and cultural differences. Not “One People” or “One Trust” or one new currency of “Being and Doing” – these are all just cloaks behind which the old globalists are waiting to reimpose a one world order.


- Michael Henry Dunn


Jean liked this explanation, and responded:


Michael, this is a great response! As I read it, all I could think of was something we all can understand: Why can’t a man hold a job which pays him enough for his wife, children – family – to live on? Why must a couple hold two-three jobs just to get by? Why is there always a shortage? Why is there always struggle?


It is not necessary to forever be fearful of medical expenses, of the cost of raising children, of the cost of retiring in our old age, of the cost of having a roof over our heads, of the simply cost of feeding our family!

There is abundance for us on this planet, and while we will have to work to have it – WE WILL NOT HAVE TO SLAVE TO HAVE IT. If women choose only to be mothers, this is easily possible. There is no need for everyone to ‘dance as fast as they can.’ NOT ANYMORE!!!

. . .


In order to share with everyone on this planet, this may mean in America, for instance, we will not have huge homes for two people, or the fanciest of cars, and so on, but what we will have is a sense of PEACE, A SENSE OF CARING, A SENSE OF COMMUNITY, A SENSE OF SATISFACTION WITH OUR LIVES THAT WE NO LONGER HAVE

- Jean (Haines)


> http://jhaines6.wordpress.com/2013/08/15/michael-henry-dunn-responds-to-a-comment-and-jean-adds-her-two-cents/

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(My own response was posted there too):


DrBubb says:


Many of the New Currency ideas will not work.

For instance, if – as the One People/OPPT gang suggests – everyone got 10 Billion Energetic Value Units in their accounts, then there would be near instant hyperinflation. Very soon, a simple meal would cost EV-10 million, or EV-100 Million, and a small house would cost EV-10 Billion or more. And no one would be willing to extend credit. Speculators who saw what was coming would be kings, and the average person would soon be worse off than today because the hyperinflated system would soon head into breakdown. Why those promoting the OPPT system do not tell you this is a mystery to me. Have they never read about the disaster that came to Weimar Germany?




A basic problem with any currency is that there is unappealing, low paying “dirty work” to be done: collecting garbage, looking after sick people, or whatever you may imagine an unattractive but necessary job might be. And how do you provide incentive to people to do that work?, if everyone suddenly has almost unlimited funds in their accounts. While people are out spending their windfalls, all those crucial systems will breakdown, as people quit their jobs and/or call in sick. Anyone who proposes a new system, without confronting these realities, is just blowing smoke, and you can dismiss their ideas as a pipe dream. (Michael Tellinger supporters, are you reading this?)


Likewise, those who talk about a Debt Jubilee are also a promoting a dream, which may be a nightmare for those who have been prudent and not overspent and overborrowed. Since after the Jubilee, irresponsible borrowing would have been shown to be a pathway to a higher living standard. This may well encourage even more irresponsibility – if anyone can get any credit at all after a Jubilee.


I have a solution, which involves some reduction in debts, but not full forgiveness. And I do think it will need to be combined with a replacement for the Federal Reserve system, and a new focus on job creation. As well as some redistribution of wealth, away from the 1%. But I prefer to reject all the dreams, which are obviously unworkable – such as the OPPT nonsense.


( Jean responded ):

Jean says:


There is no question in my mind that OPPT is a scam operation. People continue to believe in it, however, and that is their choice. What about “unappealing, low paying, ‘dirty’ work”, though, because it seems we (or the cabal) have defined it that way. Actually, to my mind it is extremely important, necessary work and also deserves a good wage! If we are honest, and there is enough money – as, indeed, there is – why should anyone do without?!

Why shouldn’t all jobs pay a good, solid living wage?

Isn’t this all involved with our human value system? And whose system is it, actually? Is it ours, or is it the cabal’s, perpetrated on us in our state of unconsciousness?


I happen to believe we will never enter the Golden Age while there is financial inequality! It seems to me, then, if I am anywhere near correct that we are going to have to change our value system! Do we really choose to value some humans less than others?


If we do come here to learn lessons, and someone chooses to come as what we now consider to be a lowly service worker, perhaps a garbage collector, does it not behoove us to remember that this individual might have been a prince in another life, returned to learn something of the other side of the coin? Perhaps, also, this person might just be starting on the evolutionary scale, just beginning to learn spiritual lesson in order to advance. Why, then, do we want to treat such a person as if they have no value. Like our children, these people are out future, are they not?


Can you begin to understand that we cannot value some human beings as less than others, and that is clearly what we have been doing . . . Oh, yes, we can choose to continue to do so, but I can tell you that it is my belief that we will never enter the Golden Age if we continue in that way of thinking . . . There is plenty for everyone on this planet. Everyone! Not just the bright people, not just the well-educated, but everyone, and we need to begin to understand this fact.


Also, I absolutely think there must be some sort of a debt jubilee. The debt is all false, used to steal from us. This debt is only paper debt and is not a true representation of value. We have been duped by these criminals, and the only way to set things straight, IMO, is to cancel all debt, return the money system to the Treasury, where it constitutionally belongs – the Federal Reserve is a criminal, illegal organization outside the constitution- and start again under the ‘real’ constitution, which means common law, not maritime law.


Lincoln was assassinated because he refused to fund the Civil War under and early version of the Federal Reserve. Kennedy was assassinated because he tried to free us from the Federal Reserve. There is a whole ‘secret’ history that has been kept from us. We have been lied to, the MSM is totally complicit in it, and the whole, sick facade is coming down, and very soon. The amount of evil perpetrated on humanity is so terrible that simple, good people have trouble comprehending it. The cabal is depending on this, counting on it. Conspiracy theorists are not crazy people, but they do seem to have the inner strength to look at true reality.


( And to that, I gave a further response):


DrBubb says:


Thanks, Jean.
I do agree with you. “Dirty jobs” are often essential jobs, and I see no shame in that kind of work, and I respect those who do it. In fact, my main point is that this is the sort of job that we must think about as we redesign our currency and economic system.


Consider what is happening in America at the moment. Illegal immigrants are flooding into the country, and they are the ones who are doing many of those “dirty” jobs at a lower wage than Legal Americans will do the work. Perhaps if Mexicans and others could get a living wage at home, they would not cross the border, and the pay given to those who do those jobs would go up. But I think many who COULD do such jobs may prefer to just live on state benefits and food stamps unless the wages for working were much higher than one comes for free. So those who design an new economic structure have a real challenge: They need to make sure that the benefits they give freely to everyone, are not so high that they rob people of all incentive to work. On the other hand, if street cleaners are paid more than bankers and more than doctors and lawyers, then what would be the quality of finance, medicine, and law? Would people work hard, in all those extra years of education, if menial work requiring no advanced education paid nearly the same? It is a tricky thing, getting the balance right.


There are four main areas were we can make vast improvement in our current econiomy, as it exists today:


+ Medicine is highly inefficient in the US, where it is essentially a system of disease maintenance, which profits big pharma and insurance co’s at everyone’s cost, Now, under Obamacare, must of that cost will be born by hard pressed taxpayers, The whole system needs reform, and we need to have doctors who are more than pill pushers, incentivized to prescribe expensive drugs.


+ The War-making Industry, which we call defense, is far too big, and should be cut in half, and then cut in half again. The world would be a safer and less agressive place, if we had fewer bases oversea, and Americans were not manipulated into being bullly-boys to support Israel’s agenda.


+ Banking now finances speculation and outsized salaries and bonuses for bankers. Itr should be cut bank to half of its current size, and focus on boring but essential lending, not speculation. Ending the Fed might be a good first step,

– and finally:


+ American are far too dependent on their cars. There’s a better and healthier future in wlakable communities and small towns. The suburbs have destroyed community life, while making the US dependent on foreign oil producers. (Check any of the excellent books by JH Kunstler on these subjects.)


We do not have to await ET help, and ascension event, or a pole shift. We can start addressing these issues immediately, if we have merely have effective leadership, rather than politicians who have been bought by corporate interests. So I reckon that something as important is ending the Fed and reforming our currency system, would simply be changing the way that politicians raise money, Allowing corpoartions to be treated as people, where donating money to political campaigns is seen as free speech was a huge mistake. That’s one of the first things that an Awake and Aware population would insist on changing: by reforming the campaign financings laws, we can get politicians to once again become responsive to individuals, rather than corporate donars.. A Congress that fears the people, would be a huge change from what we have now, where the politicians want us to fear them, and obey their edicts.


Kudos (and Hugs) to you, for all you do to get the truth out. I think you were one of the first to see through the Happy Talk of the OPPT crowd. Most people know that “something for nothing” dioes not work, and we cann just wish unlimited wealth into existence. Hard work, and incentives to do it are needed to keep any complex human society functioning.


(Jean's answer):


Jean says:


DrBubb, I can’t address all your words here. I simply haven’t time. Let me share my observations about immigration: there hasn’t been and there isn’t ever going to be under the present circumstances every to really resolve the immigration problem The reason is that to get people in the United States to do the work that immigrants do, living and being treated much like slaves, is that the cabal would have to raise the minimum wage to pay people decently to do that work, and they have no intention of doing so. Either that, or they would have to subsidize farmers, and all they’ve done in recent years is to try to break them – probably so they can continue to steal their farms and put Monsanto in charge. IMO, it ain’t gonna happen! Granted, this is an over- simplification, but you can see the underlying principle. There’s lots of talk, huge, loud talk, and absolutely no action of any real value.


Other areas that are basic and important are education – we have to get rid of an education that prepares people to function as cogs in the wheels of corporations. People need to be helped once again to think critically, to see through the garbage that has been thrown at us in the media, and so on. They need an education that is not from the outside in – memorize for tests – but from the inside out – what are our gifts, and how do we choose to use them.

Besides medicine, pharmacology is a total sham. It only drugs people and treats our problems as separate from the whole of our Self. From my personal experience, illness is a result of blocked energy – in the form of emotions – and you can’t cut that kind of sickness out or drug it away. It only migrates and shows up elsewhere, or else you have a large population on drugs that leave them living like zombies.

Thanks so much for sharing and permitting me to add to your excellent list.


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WHAT IS MONEY ? "A symptom of a disease"? Really?


mhenrydunn says:

I am reminded of a scene in Spielberg’s “Lincoln.” Abolitionist ideologue Thaddeus Stevens (Tommy Lee Jones’ best work of his career) has a private meeting in the basement of the White House with Abraham Lincoln. Lincoln asks the fiery Stevens to moderate his rhetoric in the upcoming debate in the House over the amendment to abolish slavery, so as not to scare off the moderate and conservative votes needed to pass the historic measure. Stevens tells Lincoln of his plans to confiscate all Southern property in the wake of the Civil War, warning him that the “moral compass” that should point the soul of the nation toward justice has “ossified in America through tolerating the evil of slavery. “The nation needs to know we have such plans.”


Lincoln, ever practical, and mindful of what is politically possible and what is not, calls up a lesson from his young days surveying land in the wilderness. “A compass will point you toward true north. But it’s got nothing to say about the swamps, and hills, and deserts that may lie in your path. If you go forth heedless of the obstacles, and wind up stuck in a swamp, what’s the use of knowing true north?”


It may be perfectly true, in a moral sense, to say that money is a symptom of a disease that wormed its way into the human soul over the dark centuries of cabal domination: the cultivation of greed, the sanctification of the sin of usury, the cunning weaving of the veil of confusion, and the slow forging of the chain of debt slavery. Yes, in the perfection of divine abundance, money is a travesty and will, in some not too distant day, be looked back on as a barbaric relic of a dark age.


But that day lies in the direction of true north. And in our path are swamps, canyons, deserts, and mountains. We cannot overleap them in a single bound. We must take the steps that can be taken today. To talk of abolishing money, or to disparage the efforts of those who are working with the legitimate depositors in the Global Accounts – saying that they are merely cooperating in the recycling of a new system of control – is to stand righteously at the edge of a precipice, passionately urging followers to take a leap beyond their reach toward the one true goal…while the cliff face crumbles away beneath our feet.


Take the step that this day allows, and one day soon we will all take a step that leaves the past behind us forever. If Neil Keenan and his allies gain control of the Accounts and the cabal can no longer control their paid liars in the media, that step will be momentous and will change everything. If a breath of freedom blows through the news rooms, and someone with the moral credibility of a General Dempsey goes before the cameras to share incontrovertible proof of the truth behind September 11th – that would change everything. The righteous anger of the people would know no bounds, and the true history of our debt slavery would be revealed in a way no one could ignore – and that would change everything. If one key family in the cabal is given immunity, and provides evidence that none can ignore of their centuries-long plans of slaughter and slavery, that would change everything.


But we cannot get to that world-changing day by speaking in this day of such righteous follies as the abolition of money, or of the complete dismantling of the banks. Let Neil Keenan and his allies take the steps that can be taken today to shut down the cabal’s financial lifeblood. Let the truth be known, let the astounding abundance begin to flow, and antiquated old systems of control will be swept away as the Energy of Human Value cuts deep new channels (the nature of which none can now predict) toward the ocean of infinite abundance.


And that will change everything.

And I’ll meet you at true north.

Michael Henry Dunn


(response from Jean):

Michael, once more your words take my breath away! Thank you so much for this statement with which I am in total agreement! Hugs,

PS You guessed it – I am going to publish it


( DrBubb says ):

Grand words, Michael, and they are a pleasure to read.

But tell me please, what changes will be wrought on Day One, if Keenan and Co’s aims are successful?


( Jean ):

Jean says:

Why is day one so important, DrBubb? I don’t get it. Doesn’t sound very nice to me . . . but I’ll leave Michael to respond if he chooses. . . Hugs, ~Jean


( Michael Dunn ):

What will happen on Day One? If I knew, I couldn’t tell you. Day One will still be a dangerous place.

What happens first is a strategic secret above my pay grade, as there is a war on, and there is really no upside to surrender for this enemy (I expect visions of Mussolini are dancing through their heads, and his end wasn’t exactly pretty). If I were in their place, I would cooperate to the max and ask forgiveness and the opportunity to serve. That would affect what happens on Day One, I would think.


But NK and the other allies have made the agenda pretty clear. Call in the notes. Bankrupt the Fed. Take down the cabal. Free the media to tell the truth about 911 and the rest of our hidden history. Wipe out the phony global debt. Implement humanitarian programs, starting with emergency relief.

That ought to keep us busy for the first five years. Disclosure and free energy are in there somewhere pretty promptly I would think.

But again, these are just my speculations – what happens first is not my call.

For the unawakened, Day One is mostly a shock to the core, followed by disbelief, denial, gradual acceptance, cautious optimism, and then the joy of freedom.



( DrBubb says: August 16, 2013 at 9:38 pm )

Thank you kindly, Michael, for those comments on “Day One”.
That is certainly food for thought, and loads more realistic than the things I am hearing from the One People gang. I am trying to get my mind around these elements, here: http://tinyurl.com/GEI-newFX / If anyone is interested in pursuing this thinking further


( Jean ):

DrBubb, do we need a new currency system? Wasn’t it good enough when we had our own ‘national’ currency? That is, when things were relatively honest?

Why do we need a new system? If the old one were used honestly and transparently, wouldn’t it be just fine? Hugs, ~Jean


... continues ...

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WHY Do we need a NEW Currency system ?


WHAT IS MONEY ? "A symptom of a disease"? Really?


( Jean ):

DrBubb, do we need a new currency system? Wasn’t it good enough when we had our own ‘national’ currency? That is, when things were relatively honest?

Why do we need a new system? If the old one were used honestly and transparently, wouldn’t it be just fine? Hugs, ~Jean


... continues ...


DrBubb says:


Why do we need a new financial and currency system?
+ The US has issued too much debt, and country is insolvent.
As soon as confidence fades, the US dollar will collapse, losing a big part, or even all, of its current spending power,
+ The present system means that Tax payers must pay interest to others on the debt created, so as the government spends more than it takes in, the future debt service burden on the US taxpayer grows and grows. Instead of “selling new debt” through the Fed, the US Treasury, could sell the debt to itself – and in effect, just print money when it needs it, and there would be no interest to pay

+ Bankers, who are close to the Fed have better access to cheap credit than anyone else, and the use their influence in Congress to set the rules about how credit gets extended, (We saw many abuses of this in mortgage lending over the past decade),
+ When big banks fail, they turn to the Fed for bailouts, and often get them, allowing incompetent management to keep their jobs,

+ Those whose job it is to investigate and prosecute banking crimes have been co-opted, and so financial crimes go unpunished.

Is that enough? We could all add more reasons, if anyone was really interested


( Jean )

Well, maybe I’m crazy, but I think all we need to do is clean up the one we have – and make it legal. There is so much corruption, so much illegality – all blatant now . . . but do we have to start from scratch? I think we are likely more in agreement here, than not, and that much of it is just our terminology . . . Hugs, ~Jean


( kibitzer3 says):


We need to replace the interest-bearing – debt-creating – money system toot sweet; along with its other wheel of the current system’s ‘vehicle’, fractional-reserve banking. They are part of the problem, which need to be left behind asap.


If we’re going to look at this thing step by step – and I think MHD has done a pretty good job of pointing out the value of that approach – we build it up from the grass roots: local currencies for local energy exchanges. This can be in the form of paper notes (call them whatever you want; as many communities are already doing) or computer entries, or a combination thereof. The system works by toting simple credits and debits: You offer some good or service at a given LETS price value (it can be interchangeable with your national currency, to start with, to keep things simple), and your ‘taker’ pays your energy-exchange offer in a paper LETS note to you or a notation in your LETS account, and their account is debited that amount. (A nominal fee out of each transaction is paid to a ‘banker’ to run the accounting system. And this can also be a community, e.g., contracting, via taxes, to pay a member of the community to do the ‘dirty’ work of the community.) The same principle is then taken up to the national and international levels.


It’s not that everything is somehow of equal value; but everything is honored. And: the whole thing operates under the understood principle that we are ‘spiritual beings having a human experience’ – that we are all sons and daughters of our One Source. And energy follows thought: very soon into the operation, we will ‘get’ that we can move into a totally moneyless system, whereby everyone gives of their best to the system out of the new motivating factor (as I’ve shared here before): out of gratitude to our Creator for life with meaning. Out of, in a word: Love.


Thus, nothing in this system keeps free energy devices from hitting the ‘market’, e.g., because making a profit is not part of the picture. The ‘picture’ is to honor our true Being; our true Essence.

So, some of that spirit needs to be in the equation early on, to give people an understanding of what we are shooting for. It’s no longer ‘business as usual’ time on planet Earth.

Going Up!


( Jean )

Keeping it simple, stupid, because I’m short on time this morning – but if the criminals go, if the illegal laws go, if the Fed goes . . . if there is transparency – if we just clean up the mess that has been created, why do we have to start from scratch? We have the basis, the foundation, for our money system. Don’t we just have to get rid of all that has been corrupted? It would take years to start over from scratch. Do we have that kind of time? Do we want to take that kind of time? Or do we want a planet that ‘works’ and do we want to start functioning as a civil society as quickly as possible? Do we want chaos, or do we want peace?


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If Practical Issues could be discarded - These (dreamy) ideas might work...


( N. T. ):

I see a world full of abundance and sharing for all. If one must have a Lamborghini, so be it. I see LOVE being the exchange of energy, not a physical object, which was created to enslave us.

This is what we want to create at PurpleParadiseResort.com; a community of Love, cashless, elf-responsibility and caring for one another in a higher consciousness. I believe it can be done and we’re about to pave the way.

Thank you for this wonderful forum, Jean, to share our views, and thanks to Michael Henry Dunn for his intuition as well.


( honestangel2012 says):

This was a good article,but I don’t know why you had to mention The one Peoples Trust in a negative way.It seems like untill we see the money come from anyone,we don’t really know who is gona be able to do it. And I’m sure negative things could be said about any of us. Can we turn this world around or not ? It’s gona take all of us to do that. Money or not. With Love and Light to all of us.


( Jean )

No, it is difficult to turn a pig’s ear into a purse. . . I am sorry. We know they are con artists. Hugs, ~Jean


( M.B. )

“You can’t make a silk purse out of a sows ear.” Seldom said, though totally accurate when my grandmother did make this observation. I think you are terrific, Jean


( Jean )

I couldn’t remember the exact expression, but I figured folks would recognize it. It seemed appropriate … Hugs, ~Jean


( Anne says):

Oh my goodness Jean. Please take some time to truly listen to them. The goal is the same for everyone. Take the duality out of the discussion.


( Jean )

I have listened, Anne, and if you speak of OPPT, they are con artists. . . they are not honest people. We will have to agree to disagree here. . . Hugs, ~Jean

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Womens "Liberation" - The Economic Impact


Ilex says:


Jean and Michael, I agree. I read an article about three years ago that the ‘women’s lib” era was created by the illuminati, bankers, Rothchilds, etc. to get mom out of the house and in the workplace. Once mom is out of the house, the kids have to get their Common Core indoctrination AND mom is now in the workforce as a tax paying slave. So, mom and dad are debt slaves and the kids are being test subjects for the new world order. Now, is this true? If it wasn’t planned, it certainly turned out well for the cabal. Definitely time to turn the tables……. and get the family unit back to being a family.

  • Jean says:

    You got it, Ilex! Hugs, ~Jean

  • SpaceAce says:

    Feminism, aka women’s lib is something 98% of women are asleep to. When I try to point this out, women simply attack me and call me “misogynist”. I and millions of men have given up on women and we will wait for the release of suppressed tech to give us substitutes such as VR and robot girls that look/act human. You may have seen examples of this in movies.

  • Jean says:
  • August 15, 2013 at 5:06 pm
  • Tough, isn’t it – to live in a world where people are stuck in what they think is true – and won’t even consider a different idea, no matter how reasonably it is expressed. Hugs, ~Jean
  • A fellow named Dr. George Guilders put out a book in the early 1970’s called: “Sexual Suicide” which was later retitled “Men and Women.” I recall listening to a talk show radio interview with Dr. Guilders in the early 1990’s when I was travelling (in South Carolina, I think) in the US on business. To be honest; I haven’t read it; I was much more active in Criminology and the Underworld at that time, but; the substance of the interview was congruent with Ilex’s comment. Has any one else heard/ read it?

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  • 2 weeks later...

At just before 20 minutes in, EVG says:

"I think the dollar will fall. It has already over the last few decades. But I think it will accelerate and fall to its

intrinsic value, which is Zero."

"Ponzi schemes work for a while... Best for those who sound close to the printing press, such as banks..."

"Then you get people with wheelbarrows full of money, and after a while they don't want the money any more,

they want the wheelbarrows."



Egon von Greyerz-Reset Will Be Dramatic

= https://www.youtube.com/watch?v=q-sqBwsMd34 =

Published on Oct 28, 2014

Egon von Greyerz, Founder of Matterhorn Asset Management, says, "You can’t have governments borrow more than ever and have interest rates at zero. You can only do that temporarily because you have governments printing money and artificially holding interest rates down. That will not last either. So, the reset will be dramatic. It won’t happen overnight, but there will be events that trigger short term pitfalls, but this is a long term thing."

Printing money to support the stock market and the bond market will work for a while, but Greyerz warns, "The ammunition that they have will, of course, be so devalued that nobody will want it. So, any support they try to muster in the future will have no effect. This is why markets are going to be in a terrible state in the next few years. It will be all the bubbles that have been created over a very long period."

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  • 1 year later...

PROMISES ! That;s what backs the currency now


The Reality of Money Creation is badly misunderstood


Maybe someone should show this to RVD because he always uses the excuse banking is a fraud and that's why it was okay to fraud the bank who loaned him money:

Retail banking also known as Consumer Banking is the provision of services by a bank to individual consumers, rather than to companies, corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.

I found this video of a politician exposing the CENTRAL bank scam and if someone doesn't explain the difference between retail which he committed fraud on and central banking, he will continue to see it as all banking.



He sounds like he does not truly understand banking, and especially money creation. NO FREE MONEY is created.

A deposit and a loan are created at the same time, as part of a "web of promises" that is the reality of money creation under fractional reserve banking. This means, if the loan is not paid back, the bank will lose money, because it is responsible to the depositor.


Maybe an over-simplified example with help to explain how MONEY CREATION really works:


1/ Mr Jones borrows $100,000 from ABC bank - when he signs the Loan agreement, both the Loan and a Deposit are created similtaneously. Initiallly the Loan is funded by the deposit sitting in the account of Mr Jones. In some sense, these were both created "from thin air" - but the bank gets no richer from this act of money creation. It will only make money, if the interest it receives from Mr Jones exceeds the cost of the deposit that funds the loan


2/ Mr Jones instructs the bank to send $100,000 to the bank account of the seller of the house he is buying. To keep this simple, I will assume it is the same bank. So as this happens, the bank removes the $100,000 deposit from the account of Mr Jones, and credits the account of the seller, Mr Smith. At this point, Mr Smith's deposit is funding the Loan the bank made to Mr Jones.

3/ Smith is free to move the money out of the bank, since he fully controls it. So the bank may offer him an interest rate, let's say 1%, to keep the money on deposit for one year.

4/ If the bank is charging 2.5% to Mr Jones for the loan, then the "spread" it makes for the first year is 1.5%, being the difference the 2.5% Jones pays, and the 1.0% that it pays out to Mr Smith. From the spread, it must cover its various salary costs and operating expenses if it is to make a profit.

5/ If Mr Jones defaults, and refuses to repay the loan, the bank can foreclose. But if the value drops, and the bank gets only $50,000 in the foreclosure, the bank will suffer a very real loss of $50,000 - since it must still pay back the $100,000 represented by the deposit from Mr Smith
CONCLUSION: It isn't fractional banking that weakens the banking system, it is poor lending decisions. So the Video is loaded with misinformation!

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Remember: There's a web of promises.

The banks do not get money as free equity, they get it as something they have to repay - as a deposit or as a loan




The thing that undermines the economy is that the interest rates may be so low that money flows into unproductive and speculative activities,

and assets get pushed to prices that are unsustainable. The insiders are best positioned to benefit from rises and collapses in asset vaues,

because they can watch the hand that controls the yoyo strings

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