Fractional Reserve Banking System

The creation of money begins in the United Stated Government. The United States Government gives the Federal Reserve a document called "treasury bonds" that has an added monetary value. The Federal Reserves gives the U.S Government an amount of dollars equal to the value of the bonds. The US Government deposits this money in a bank and money is created. However, most of this transaction are digital. 97% Of the US money is digital while only 3% is in paper. This is how money is basically created. We can say money=debt because it was initially created by a debt the US Gov. has with the Federal Reserve.

This process occurs every time you deposit money or borrow money. For example, I deposit 100 dollars in a bank. This 100 dollars are given away to people that borrow money. That money now belongs to me and to the other people that borrowed it. This happens with every transaction that occurs. However, a bank can't only give 90% of the money it is given. They must keep 10% of the money as a deposit. More money is further created when a bank charges interests. Money wasn't initially created with this additional interest taken into account; however, it must be paid to banks. This process goes on and on and money is without control.

Sadly, this process will eventually collapse. Most of the money that exists is not really money. The majority is money in debt, which is promised to be paid. This system only works because we the people believe it works. Also, poverty and inflation built within this system. This makes this system inefficient and one day this system will collapse and a change will have to occur.