Debt slave Part 2: Mortgages

In my last article I briefly spoke about the debt enslavement of mortgages. I would like to dig deeper into this sleight of hand and reveal the truth behind the curtain.

Throughout the globe all banks work on what is called a Fractional Reserve Banking System. What this means is that a fraction of every deposit must be kept in reserves as the balance is lent out. For example, if you deposit $100,000 into the bank, the bank can lend this out many times over to the extent that a fractional amount of every loan must be held as a reserve. In the US the reserve requirement is approximately 10%. So a $100,000 deposit can morph into $1,000,000 in loans. Thus, $900,000 is created magically. How can this be you ask? Welcome to the magic (or should I say “deception”) of banking. In Canada the reserve requirement is 0%. So technically, a $100,000 deposit can be loaned out infinite times.

I’m sure you can already see where I am headed with this. That’s right, at the end of the entire process; money in the banking system is essentially created out of thin air. Now let’s apply this to a mortgage. When a person receives a mortgage from their bank, the bank in essence digitally creates these funds out of thin air. The banker does not walk back to the vault and pull out $500,000. Now here’s where it gets interesting. The borrower will then spend the next 25 years sweating and toiling to repay the debt with “real” money. Now even the greediest of the greedy would be content with receiving $500,000 in real money when at the outset of the loan no real money actually changed hands. Here comes the salt in the wound. The bank actually has the audacity to charge interest on the phoney money. At a rate of 5% interest on a $500,000 mortgage over 25 years, the borrower will have to pay back $872,409 in real money on a mortgage that was created out of thin air.

With this concept fresh in your mind I would like to leave you with a few quotes;

“I believe that banking institutions are more dangerous to our liberties than standing armies.” – Thomas Jefferson

“The bank hath benefit of interest on all moneys which it creates out of nothing.” - William Patterson, founder of the Bank of England

“Let me issue and control a nation’s money and I care not who writes the laws.” -Mayer Amschel Rothschild

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” -Henry Ford

The opinions and comments of the preceding article are strictly those of the author and are not necessarily shared by Western Union Business Solutions.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.