How credit cards & bank loans REALLY work - Learn, & this will change your whole life!!

[nuke em]

97% of all our Money is created as debt

 

The ostensible justification for allowing lenders to charge whatever the market will bear is that it recognizes the time value of money. Lenders are said to be entitled to this fee in return for foregoing the use of their money for a period of time. That argument might have some merit if the lenders actually were lending their money, but in the case of credit card and other commercial bank debt, they aren't. They aren't even lending their depositors money. They are lending nothing but the borrower's own credit.

 

Of course, {banks} do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do is to accept promissory notes (the loan document, mortgage document , Credit card agreement) in exchange for credits to the borrower's transaction accounts. Loans (assets) and deposits (liabilities) both rise by the same amount.

 

So here is how the credit card "scheme" works: When you sign (or use your PIN number) a merchant's credit charge slip, you are creating a "negotiable instrument". A negotiable instrument is anything that is signed and convertible into money or that can be used as money. The merchant (Tesco, Homebase for examples) takes this negotiable instrument and deposits it into their merchant's checking account, a special account required of all businesses that accept credit. That account goes up by the amount on the slip, indicating that the merchant has been paid. The charge slip is forwarded to the credit card company (Visa, Mastercard etc), which bundles your charges and sends them to a bank. The bank then sends you a statement , which you pay with a check (or internet banking transfer), causing your transaction ( ie current) account to be debited at your bank. At NO POINT has a bank lent you IT'S MONEY or it's depositors money. Rather, your charge slip (a negotiable instrument) has been an "asset" against which credit has been advanced. The bank (Crap one, Ambex, MBNAA, etc) has done nothing but monetize your own I.O.U or promise to repay. It has cost them NOTHING !!!!!!!!!!!

 

When you lend you someone your own money, your assets go down by that amount and the borrower's assets go up. But when a bank lends you money, it's assets go up ! It's liabilities also go up, since its deposits are counted as liabilities;but the money isnt really there. It is simply a liability - som,ething that is owed to back to a depositor. The bank turns your promise to pay into an asset and a liability at the same time, balancing it's books without actually transfering any pre-exsisting money to you.

 

The spiraling debt trap that has subjected financially-strapped people to sky-high interest charges FOR THE USE OF SOMETHING THE LENDERS NEVER HAD TO LEND IS A FRAUD ON THE BORROWERS !

 

THE SLEIGHT OF HAND IS THAT THE BANK JUST CREATE DEBT AS MONEY VIA ACCOUNTING ENTRIES ON THEIR ACCOUNTS ! if you or i did this we would be charged with fraud!!

 

In the case of mortgages or other "money" loans , they create the principle out of nothing (entries in their accounts) and advance to the borrower WITHOUT advancing the interest to pay it back. I wish a lawyer could get to grips with this principle, because under contract law there has to be a "consideration" and in the case of our loans / mortgages, they banks have not lent us any of their money, they just moneytized a document!

 

Debt enslavement follows for all.

 

MODS: please make this a sticky, everyone should know how the system really works - and how it is impossible to get out ( in its present form) from underneath it.

Edited July 7, 2009 by nuke em
typo

[pt2537]

sadly, however, while this may be true, it is establishing this as a fact that can be presented before the court that will be the biggest problem

[creditcardmug]

Thanks for this, ive read it before but in a different guise...this is a clearer version, everyone should be aware of it.

[nuke em]

sadly, however, while this may be true, it is establishing this as a fact that can be presented before the court that will be the biggest problem

 

i agree, most so called economists, including the ones who write for the "financial " pages don't even know this,so how the average person in the street is supposed to know ......i guess also that judges would be none the wiser as well. maybe this is part of the plan, keep the population totally in the dark about money matters. There has been a few cases in the States where people have successfully argued against mortgages and interest and won. Wonder when it will happen here?

 

It does also explain though why they can "sell debts" for 10% , because even that 10% is alsmost total profit for them ( save for their admin expenses), as they just created the "money" out of thin air in the first place. You or i can't afford to do that, they can.

Edited July 7, 2009 by nuke em

[upto the eyeballs]

excellent!!

[nuke em]

Thanks for this, ive read it before but in a different guise...this is a clearer version, everyone should be aware of it.

 

Education ( and Gold) is the thing the bankers fear, Also the Government printing its own debt-free money ( imagine that , no money lent at interest, just money printed by the Government, by the people and for the people as opposed to money as debt issued by the private banking cartels.. All Taxes could fall overnight by 80 to 90% . Most of our taxes go pay off the interest on the national privately owed debt - more money is paid in interest charges now than we spend on Social Security for example. Imagine if we spent that money on Schools, Roads, Public Projects that would benefit us all - All debt-free.

 

We had a debt free money system for many years, we financed our Empire out of it, debt free - that system was called the Tally Stick and yes it was based on a stick of wood. The tally stick system worked really well for 726 years. It was the most successful form of currency in recent history and the British Empire was actually built under the Tally Stick system, but how is it that most of us are not aware of its existence?

 

Perhaps the fact that in 1694 the Bank of England at its formation attacked the Tally Stick System gives us a clue as to why most of us have never heard of them. They realised it was money outside the power of the money changers ( central privately owned banks, (the very thing King Henry had intended).

 

Debt free money again....

 

Hitler financed the whole German economy ( after the German Private central bank kept printing debt-based marks which caused their hyper-inflation) and paid for the whole German economy , autobahns etc and then the 2nd WW machine with Debt-free money created by the state.

 

Money as debt or debt-free money, it should be our choice

Edited January 4, 2009 by nuke em

[banker_rhymes_with]

Money as debt or debt-free money, it should be our choice

 

I could not agree more.

 

Cheers,

BRW

[Stornoway]

Unfortuantely the whole argument is a little simplistic for me;

1. there is actually a cost to the banks because they need to hold c.8% capital to cover any loans they give out. In the current climate this capital is very expensive.

2. you dont have to have your current and loan accounts with the same bank - ie. you take a loan with barclays which is paid into your halifax current account which is spent buying a car and the garage selling the car banks with lloyds so they get the cash. Barclays need to balance their books so when they give the loan their assets go up and it is funded by an increased liability which in recent years has meant that they basically borrowed from the securitisation market (pension funds etc).

 

This is why the economy is in such a state 1) the banks have taken on too much securitiation debt and 2) joe public has too much debt.

 

IMHO the answer to our economic problems is that we need to go through a painful process of joe public spending less and using surplus cash to save and pay off debt. This will allow the banks to reduce their balance sheets and eventually people will have more cash in their pockets and start spening again.

[nuke em]

Unfortuantely the whole argument is a little simplistic for me;

1. there is actually a cost to the banks because they need to hold c.8% capital to cover any loans they give out. In the current climate this capital is very expensive.

 

Yes there is a cost to the bankers, they need BIG BIG buildings to house themselves in and yes they have staff to pay as well and BIG BIG Bonues to the Directors, but you are missing the point, the "money" they loan out is debt and they just create it as an accounting entry. Their "reserves" are made when they do the same trick to the Government, they create money out of nothing and exchange it for Government Bonds ( promise to pay) , they then use these as "reserves" as the basis for loans to people & businesses. Majors bank do not do what we think banks do

 

THIS IS WHY BANKERS PROSPER IN GOOD TIMES OR BAD ( and why we should NOT bail them out )

 

 

In the millions of transactions made each year like those above, little actual currency changes hands, nor is it necessary that it do so. 95% of all "cash" transactions in the UK. are by check, so the Banker is perfectly safe in "creating" that so-called "loan" by writing the check or deposit slip, not against actual money, but AGAINST YOUR PROMISE TO PAY IT BACK! The cost to him is paper, ink and a few £ in salaries and office costs for each transaction. It is "check-kiting" on an enormous scale. The profits increase rapidly, year after year.

 

 

2. you dont have to have your current and loan accounts with the same bank - ie. you take a loan with barclays which is paid into your halifax current account which is spent buying a car and the garage selling the car banks with lloyds so they get the cash. Barclays need to balance their books so when they give the loan their assets go up and it is funded by an increased liability which in recent years has meant that they basically borrowed from the securitisation market (pension funds etc).

 

This is why the economy is in such a state 1) the banks have taken on too much securitiation debt and 2) joe public has too much debt.

 

Of course , thats what they want, they make credit easy to obtain, everyone buys, then they pull credit back , recall loans, dont issue new ones, this tightens the money supply and causes the problems we have now. people know this as the up & down of the "business cycle". Its not that its just the banks allowing easy credit or not. One reason then not to advance further credit is to grab as many assets, houses, businesses as they can for pennies in the £ as repos & forced sales. Only then will they relax the credit and startover again, (selling those same assets for a big profit) - remember they created mortgages as "accounting entries" in the first place

 

IMHO the answer to our economic problems is that we need to go through a painful process of joe public spending less and using surplus cash to save and pay off debt. This will allow the banks to reduce their balance sheets and eventually people will have more cash in their pockets and start spening again.

 

Labour, Conservative, and Lib Dem voters who have wondered why politicians always spend more tax money than they take in should now see the reason. When they begin to study our "debt-money" system, they soon realize that these politicians are not the agents of the people but are the agents of the Bankers, for whom they plan ways to place the people further-in debt. It takes only a little imagination to see that if our Governments had been "creating," and spending or issuing into circulation the necessary increase in the money supply, THERE WOULD BE NO NATIONAL DEBT, and the over £1 Trillion of other debts would be practically non-existent. Since there would be no ORIGINAL cost of money except printing, and no CONTINUING costs such as interest, Income taxes would be almost nil. Money, once in circulation, would remain their and go on serving its purpose as a medium of exchange for generation after generation and century after century, just as coins do now, with NO payments to the Bankers whatever!

Edited July 7, 2009 by nuke em

[TryingToGetEven]

While doing some debt busting searching I came upon this:

 

Why don’t credit card balances have to be paid and how have we already paid?

 

Well there is one simple reason, yet for you to truly believe it and get your head around to the idea, you will have to do a little research yourself and then start looking at the financial system of this world very, very differently. But if you are already in controversy with banks, building societies or any credit card corporations, which is causing you great stress, then there is a quick and lasting fix that will deal with these deceivers. It works, and will give you plenty of time to then research how and why it works as it does. There will be pointers towards the areas of where to research, and then the rest of your journey is yours! The credit card corporation will obviously black-list you for your decision to not let them commit fraud and deception on you anymore, but that is the price!

 

Now their simple yet brilliantly executed trick (con) is in the name, ‘Credit’ card! You (well your signature or tick in a box on a pc screen and maybe a signature a few days later possibly, but not always) are a co-creator of credit with the credit card corporation. There was NEVER a debt incurred by anyone or anything. Don’t believe it? Then write to the CEO of the credit card corporation and ask for the validation of where a debt was incurred. You will not get one because a debt/loss doesn’t, and never did exist! That alone will get the fraudsters off your back as you now have proof that they have, and continue to commit fraud!

 

If you want to know why the corrupt banks operate like this, simply investigate a thing called Fractional Reserve Banking, and you will soon discover why the world is in the trouble it is right now!

 

Now remember that when you get a phone call from the crooked corporation/s, do not give them your name or D/O/B. Inform them (politely) that you would be more than happy to assist them, and they should contact you by letter using recorded post and put any claim they believe they have against you on paper and signed by the corporations Chief Executive Officer (CEO). By the way, this won’t happen, as the CEO knows they are already committing a crime against public policy and would be committing commercial suicide if they even thought about it for more than half a second!

 

If they keep troubling you by phone with various threats…oh they do make us laugh bless them; simply write to the CEO using Recorded Post with something very similar to the example below in black bold:

 

Oh, and if you are worried about threats of Bailiffs, visit a great site that shows you how to deal with them very effectively, peacefully and lawfully. Bailiffs commit fraud, it's just you probably are not aware of that yet! Click here to be taken to Screw The Bailiff - Clamping Down on Bailiff Crime!

 

You will soon start waking up to who you really are. This is to assist you whilst you're waking up and becoming confident with the realisation that no man or woman has power over you, as you have no pwer of them! All are, and is, equal under whatever label you use to mean Source/Being/Divine...

 

************************* ***************

 

CEO (WHATEVER) BANK

Full Address of their Head Office

 

Date:

 

Sent Recorded Post

 

NOTICE REGARDING ACCOUNT # (whatever the number is)

 

Dear Sir or Madam:

 

I would be happy to settle any financial obligation I might lawfully owe as soon as I have received the following documents from you.

 

1. Validation of the actual debt (the actual accounting).

2. Verification of your claim against me (a sworn affidavit or a hand signed invoice)

3. A copy of the contract signed by both parties and therefore binding both parties.

 

I hereby give you ten (10) days to reply to this notice with a notice sent using recorded post, and signed by the CEO under their full commercial liability and penalties of perjury, assuring and promising me that all of the replies and details given to the above requests are true and without deception, fraud or mischief.

 

Yours truly,

 

By: ____________________(agen t)_Date: ____________

 

************************* ***************

 

In the world of commerce, get used to autographing and using (agent) in brackets after your autograph. This is because you are an agent for NAME in ALL CAPITALS, and the NAME is NOT you!

 

Now the banks cannot validate/prove the debt because they never sustained a loss and a debt never existed. They cannot verify any claim against you because you are not the NAME they are billing. They cannot produce a copy of the contract because one doesn’t exist; all that exists is an unenforceable unilateral contract, or what the banks refer to as ‘your contract with us’ and this is not a valid bilateral agreement, since the four requirements of a lawful, binding contract were not met on the credit card application. These are as follows:

 

1. Full disclosure (we are not told that we are creating the credit with our signature).

2. Equal consideration (they bring nothing to the table, hence they have nothing to lose).

3. Lawful terms and conditions (they are based upon fraud).

4. Signatures of the Parties/Meeting of the Minds (corporations cannot sign because they have no right, or mind, to contract as they are legal fictions).

[nuke em]

Exactly !

[TryingToGetEven]

So does this mean that we need not worry about CCA, SAR, etc. Just send the letter as outlined and kiss debt goodbye?

[lookinforinfo]

I think you will find that the letter is based on American Law which is not the same as ours. If British lenders were to send you your correctly completed executed agreement that would be sufficient in our Courts to allow them to enforce the debt.

[nuke em]

So does this mean that we need not worry about CCA, Subject Access Request, etc. Just send the letter as outlined and kiss debt goodbye?

 

Your version of debt & mine maybe the same BUT to the bankers it is not, they believe they are owed the money and will use their court system, their press and any other method they can think of to make us BELIEVE the debt exists and is "true and real". It would take a test case in the Lords to decide it and you can bet you last pound that they would spend so much to try and defend their position. Worth a try though when it becomes popular knowledge and the word starts to spread

[lookinforinfo]

Nuk Em, I understand what you are saying about banks and loan accounts-I looked at it some years ago in fact.

However the situation with credit cards is surely diffferent. If I pay Tesco £50 on my credit card, but then do not pay my bank/credit card company when payment falls due, then the bank MUST have had to pay the £50 and thus must have lent either its own money or its depositors money- or have I missed something?

[nuke em]

Nuk Em, I understand

 

what you are saying about banks and loan

 

accounts-I looked at it some years ago in fact.

However the situation with credit cards is surely

 

diffferent. If I pay Tesco £50 on my credit card, but

 

then do not pay my bank/credit card company when

 

payment falls due, then the bank MUST have had to

 

pay the £50 and thus must have lent either its own

 

money or its depositors money- or have I missed

 

something?

 

**** UPdated 7th July 09*****

If you buy something at Tesco's for £50, Tesco makes you sign a slip, the amount of which is then redeemed as an accounting entry into their account. Their account goes up by £50 (and Tescos have been "paid")

 

-ok, so far so good

 

The charge slip you signed is then forwarded on to the bank who issued your card. The bank who issued your card sends you a statement saying you owe them £50 payable in full now or in time with interest added.

 

-still ok!

 

The IOU charge slip that you signed is sent to the bank. The IOU charge slip you signed is now monetized by the bank . When you signed your charge slip in Tescos it said on the slip that you agree to the charge ie you agree to pay it back. Therefore it is now an asset of the bank because it is an IOU & you agreed to pay it back. Remember loans & IOU's are ASSETS of banks and they monetized them

 

-on board now!

 

the charge slip you signed has now been turned into money by the bank, they have 100% monitized your charge slip, cost to them . NOTHING

 

-now it's gets bad

 

You dont pay them back their £50, They get upset. They add their interest , illegal charges , admin fees & whatever else crap they want to add to it. They say you now owe them £80

 

You do one of three things, say

1) you settle F&F at say £40

2) you agree to pay off at the rate of £2 per week for 40 weeks

3) you pay them nothing.

what does this mean in the above scenarios?

 

1) they make £40 profit - remember they took your charge slip and turned it into money - They monitized it

2) they they make £80 profit - remember they took your charge slip and turned it into money - They monitized it

3) They come out equal - remember they took your charge slip and turned it into money - They monitized it ( of course i know there is a cost in the real world for staff to ring and bother you, electric light & office costs etc, but you get the point - This also explains why they sell "bad" debt off at 8-10% of face value - that probably covers their operational cost and still a 5% profit for them - you see , they can't lose!

 

The bank monitizes your own IOU or promises to pay, That's the sleight of hand. If you did it it is fraud. but when they do it they can pay big bonuses to their staff!............

 

Q&A

-so where has this £50 that gets paid to Tescos come from

 

its just an accounting entry, 97% of all transactions, including even checks are just accounting entries, they therefore credit the account with the number 50 which represents in this case £50

It represents the number 50 , if Tescos had 100 showing on their account , they now have 150

Please don't confuse £ currency ( actual £ notes & coins) with the total amount of "money" in circulation. Anything can be Monitized - mortgage documents, loan documents, credit card slips, betting slips, lottery tickets etc

the current total banknotes & coins in circulation is approx £52 billion.

As of March 2008 , our national debt was £616 billion ( now it much nearer to £1 Trillion with all the bailouts )

the whole of the UK's net worth is approx £5 to £6 trillion . so as you can see coins and paper money have little to do with our economy

 

- Yep, I get what you are saying now, its all just numbers, no actual money changes hands

 

 

CORRECT

Edited July 7, 2009 by nuke em

[cosalt]

If you buy something at Tesco's for £50, Tesco makes you sign a slip the amount of which is then

redeemed into their account . Their account goes up by £50 (and Tescos have been "paid")

 

 

so where has this £50 that gets paid to Tescos come from ?

[nuke em]

its just an accounting entry, 97% of all transactions, including even checks are just accounting entries, they therefore credit the account with the number 50 which represents in this case £50

 

It represents the number 50 , if Tescos had 100 showing on heir account , they now have 150

 

please don't confuse £ currency ( actual £ notes & coins) with the total amount of "money" in circulation. Anything can be Monitized - mortgage documents, loan documents, credit card slips, betting slips, lottery tickets etc

 

the current total banknotes & coins in circulation is approx £52 billion.

As of March 2008 , our national debt was £616 billion ( now it much nearer to £1 Trillion with all the bailouts )

 

the whole of the UK's net worth is approx £5 to £6 trillion . so as you can see coins and paper money have little to do with our economy

[cosalt]

Yep, I get what you are saying now, its all just numbers, no actual money changes hands.

[ginger whinger]

Hi Guys n Gals

 

Based on what has been said in this forum how do i deal with a bank overdraft i am unable to pay due to reduced wages and other credit card and hire purchase loans .?(due to business failure )

 

Can i send them all the letter asking for debt validation , i sent one recently to crapital one and they wrote bank saying it only applies under american law and not british law.?

 

I am dealing with most of the credit card by way of cca's but the hire purchase and especially the large overdraft and credit cards outside the april 2007 deadline are killing me any ideas anyone .?

 

Ginger WHINGER

[nuke em]

Yep, I get what you are saying now, its all just numbers, no actual money changes hands.

 

Yes , you got it ! Clever system isn't it !

Edited January 5, 2009 by nuke em

[underdog13]

Fascinating - has anyone proffered this argument with creds? If so, what results have you obtained?

[nuke em]

Fascinating - has anyone proffered this argument with creds? If so, what results have you obtained?

 

 

We all know how they distort, lie & cheat just regarding producing valid CCA agreements. Preferring that we just "pay" or enter IVA's etc (IVA are another banker devised debt trap)

 

Imagine if someone got them in a test case regarding this. This, the mother of all defenses.

 

This is their Holy Grail, their "ability" to create "money" as debt out of an IOU.

 

It would open up the flood gates

 

Just think, All credit card "debts" null & void (as well as Mortgages, Car loans, personal loans and all other forms of debt-based money IOU's)

It would bring the Western based banks & the current economy (which is built completely on debt) down .

 

Now what's the chances of the Banksters & their Puppet Politicians ever allowing it to see the light of day in a court & to become case law ????

 

let me think for a minute.........!

[underdog13]

Couldn't agree more:)

 

Has anyone raised the issue with a CEO, though? Just interested in their response....

[nuke em]

Couldn't agree more:)

 

Has anyone raised the issue with a CEO, though? Just interested in their response....

 

 

it might be a new tact to try...