Connect with us

Uncategorized

Are All Banks Are Subject to a “Run on Deposits?”

Published

on

Not the 12 Federal Reserve Banks. Why?

With the exception of the 12 Federal Reserve Banks, all banks are subject to a “run on deposits” because they practice what is called “Fractional Reserve Banking.”

According to Investopidia.com,

Fractional reserve banking is a system in which only a fraction of bank deposits are required to be available for withdrawal. Banks only need to keep a specific amount of cash on hand and can create loans from the money you deposit.

…When you create an account at a bank, in the contract, you agree to allow that bank to use a percentage of your deposits as loans to other bank customers. This doesn’t mean you don’t have access to the money you deposited; it only means that if you want to remove more than the percentage a bank keeps on hand, such as the entire balance, from the account, the bank will need to access funds from somewhere else to give you your balance.

You receive interest as an incentive for keeping money in an account the bank can use to create loans.

…Fractional reserve banking supposedly has its roots in an era when gold and silver were traded. Goldsmiths would issue promissory notes, which were later used as a means of exchange. The smiths used the deposited gold to issue loans with interest, and fractional banking was born.

I am sure that the “Court Factor” who came up with that brilliant stroke of deception was handsomely rewarded by his peers. I take your money on deposit, pay you an interest rate that is lower than the rate I will charge my borrower(s), and as long as you don’t want or need your money immediately back, I can lend it to many others, and earn money on your deposited money that you have trusted me to hold on your behalf, at your request.

To answer the second question, one needs to know that the Federal Reserve Banking System is a group of 12 privately owned Regional Banks that determine the supply of money, and the cost of money (interest rate). The Fed is the Central Bank of the United States of America, and therefore, the world (or at least it used to be).

…The National Bank Act, passed in 1863, imposed 25% reserve requirements for U.S. banks under its charge, and required banks to keep reserves on hand to protect depositor funds from being used in risky investments. In 1913 the Federal Reserve Act created the system of Federal Reserve banks that we know collectively as the Federal Reserve System. Banks were then required to keep reserve balances with the Federal Reserve Banks.

Reserve Requirements for banks under the Federal Reserve Act were set at 13%, 10%, and 7% (depending on the type of bank) in 1917. In the 1950s and ’60s, the Fed had set the reserve ratio as high as 17.5% for certain banks, and it remained between 8% to 10% throughout much of the 1970s through the 2010s.

During the pandemic of 2020, the Federal Reserve reduced the reserve requirements to 0%. On March 26, 2020, the 10% and 3% required reserve ratios against net transaction deposits were reduced to 0% for all banks, essentially removing the reserve requirements altogether.

Consumer panic can cause mass withdrawals and lack of capital. When consumers, investors, and businesses panic about economic circumstances, they tend to run to their banks to withdraw everything they can to prevent further losses. This is called a bank run, and a fractional reserve system keeps them frow withdrawing their capital because the banks do not physically have it.

Before the introduction of the Fed in the early 20th century, the National Bank Act of 1863 imposed 25% reserve requirements for U.S. banks under its charge.

Nobody knows when fractional reserve banking originated, but it is certainly not a modern innovation. Goldsmiths during the Middle Ages were thought to issue demand receipts for gold on hand that exceeded the amount of physical gold they had under custody, knowing that on any given day, only a tiny fraction of that gold would be demanded.

The Board of Governors of the Federal Reserve has the sole authority over changes in reserve requirements within limits specified by law. As of March 26, 2020, the reserve requirement was set at 0%. That’s when the board eliminated the reserve requirement due to the global financial crisis. This means that banks aren’t required to keep deposits at their Reserve Bank. Instead, they can use the funds to lend to their customers.

So when banks such as Silicon Valley Bank and Signature Bank make bad loans that weren’t repaid, those banks lost their depositors funds. When that happened, the banks tried to raise funds to shore up their cash on hand. Then word spread, and businesses ran to SVB and Signature demanding their deposits be returned. Since the reserve requirements had been lifted during Donald Trump’s Presidency, the banks had no cash, or reserves to satisfy their customers, and they were forced to close their doors.

As Senator Elizabeth Warren, Massachusetts (D) said,

“In 2018, I rang the alarm bell about what would happen if Congress rolled back critical Dodd-Frank protections: Banks would load up on risk to boost their profits and collapse, threatening our entire economy — and that is precisely what happened,” Warren said. “President Biden called on Congress to strengthen the rules for banks, and I’m proposing legislation to do just that by repealing the core of Trump’s bank law.” — nbcnews.com, March 13, 2022

The answer to the second question of why the 12 Federal Reserve Banks are not subject to a bank run is simple. They are the Bank, to banks; and a bank can’t run on another bank, only depositors can do that. Anytime the Fed needs money, it has the US Treasury Department print whatever amount it needs to resolve the issue.

I know it is hard to wrap your head around it, but the Federal Reserve Act of 1913 bestows the Fed the right to determine the supply of money in circulation. The Fed doesn’t use customer deposits and fractional banking to make loans. They just have the Treasury Department fire up the printing presses, and magically, new money is created out of thin air. Please see The Web of Debt by Ellen Brown.

The 12 privately owned Federal Reserve Banks don’t take deposits from customers (they do hold the fractional reserves of all banks who are a member of the Federal Reserve System, but not for lending purposes), nor do they borrow money from anyone else. The Fed just has the Treasury Department fire up the printing presses, and for the 4 cents that they pay the U.S. Treasury for each bill ($1, $5. $10, $20, $100, $1,000 bills) that they circulate throughout the economy by lending to the bank customers who are a part of their system.

It may take a while for this to sink in, but once it does, you will understand that the privately owned Fed can’t be run on. The Fed doesn’t take deposits from banks for purposes of relending, and the Fed doesn’t borrow from anyone. They are the BANK.

You were probably warned to “neither a lender nor a borrower be.”

The Fed got half of it correct; they are not the borrower, but they are the Lender, to the entire world. A world indebted to its private bankers.

Continue Reading

Uncategorized

Our Mind Is Powerful: Prayer Is A Source!

Published

on

Yesterday, I was commenting to my youngest daughter, Akima, that I would pray for a friend of mine. He was hospitalized and not doing very well. His wife had asked me to say a prayer for his successful recovery. Inquisitively, she asked, “dad, if you are an atheist, how can you say a prayer for your friend?”

Here is my response to her, and you.

I pray, but not to a spook ‘God.’ I believe prayer is a conversation with self. It is a request to self, and a reminder to self, of what I want to occur. For me, there is no ‘spook god’ involved in the process.

Prayer is self-programming the human computer (our mind) to provide for our individual, as well as collective human need. And just like the computer, you can only get out of it what you put into it, something the ruling elite fully understand, and implement via religion.

“Religion keeps the poor from killing the rich.  Napoleon Bonaparte

“Religion is an opiate for the masses.” — Karl Marx

“We have used the Bible as if it were a mere special constable’s handbook, an opium dose for keeping the beasts of burden patient while they were being overloaded, a mere book to keep the poor in order.”  Charles Kingsley, Canon of the Church of England

“When the missionaries came to Africa, they had the Bible and we had the land. They said: ‘Let us pray. ‘ We closed our eyes. When we opened them, we had the Bible and they had the land.” — Jomo Kenyatta, Independence Leader of Kenya

And one more, from an Amer-African centered perspective.

It’s not what you know that hurts you. It’s what you know, that just ain’t so. — Leroy ‘Satchel’ Paige

There are many who discuss the origins and history of religion, but no one does it better than Will Durant in The Story of Philosophy and The Lessons of History . Here are three examples from Durant, and though they refer directly to Christianity, the same could be said about the other major religions as well.

“Religion does not seem at first to have had any connection with morals. Apparently (for we are merely guessing, or echoing Petromius, who echoed Lucretius) ‘it was fear that first made the gods — fear of hidden forces in the earth, rivers, oceans, trees, wind and sky’. Religion became the propitiatory of worship of these forces through offerings, sacrifices, incantation, and prayer. Only when priest used these fears and rituals to support morality and law did religion become a vital force and rival the state. It told the people that the local code of morals and laws had been dictated by the gods. It pictured the god Thoth giving laws to Memes for Egypt, the god Shamash giving Hammurabi a code for Babylonia, Yahveh giving the Ten Commandments and 613 Precepts to Moses for the Jews, and the divine nymph Egeria giving Numa Pompilius laws for Rome. Pagan cults and Christian creeds proclaimed that earthly rulers were appointed and protected by the gods. Gratefully, nearly every state shared its lands and revenues with the priests.

…The Church was manned with men, who often proved biased, venal, and extortionate. France grew in wealth and power and made the papacy her political tool. Kings became strong enough to compel a pope to dissolve that Jesuit Order which had so devotedly supported the popes. The Church stooped to fraud, as with pious legends, bogus relics, and dubious miracles; for centuries it was from a mythical Donation of Constantine: that had allegedly bequeathed Western Europe to Pope Sylvester I (r. 314–35), and from the “False Decretals”(c. 842) that forged a series of documents to give a sacred antiquity to papal omnipotence.

…History has justified the Church in the belief that the masses of mankind desire a religion rich in miracle, mystery, and myth. Some minor modifications have been allowed in ritual, in ecclesiastical costume, and in Episcopal authority; but the Church dares not alter the doctrines that reason smiles at, for such changes would offend and disillusion the millions whose hopes have been tied to inspiring and consolatory imaginations. Catholicism survives because it appeals to the imagination, hope and the senses; because its mythology consoles and brightens the lives of the poor.”

A very wise man told me that “work is better than prayer.”

I believe that work is the actualization of what is programmed in our mind. Work is the physical activity that one carries out as a result of the data that the brain has processed to determine what must be done to sustain life.

If your brain tells you that you must serve the European in order to sustain life, then that’s what you will do. Religion is the great programmer of the mind to ensure that behavior. Presently, humanity serves the ruling elite.

And speaking of the ‘mind’, Carter G. Woodson, in his book The Miseducation of the Negro, 1932, had this to say regarding the mind of the Negro.

“No systematic effort towards change has been possible, for taught the same economics, history, philosophy, literature, and religion which have established the present code of morals, the Negro’s mind has been brought under the control of his oppressor, the problem of holding the Negro down, therefore, is easily solved. When you control a man’s thinking you do not have to tell him not to stand here or go yonder. He will find his ‘proper place’ and will stay in it. You do not need to send him to the back door. He will go without being told. In fact, if there is no back door, he will cut one for his special benefit. His education makes it necessary.

The same educational process which inspires and stimulates the oppressor with the thought that he is everything and has accomplished everything worthwhile, depresses and crushes at the same time the spark of genius in the Negro by making him feel that his race does not amount to much and never will measure up to the standards of other peoples. The Negro thus educated is a hopeless liability of the race”.

Sound familiar? That was over 100 years ago, and the same conditions exist today.

Power is required to be a free people. Caucasian/European power comes from the barrel of a gun.

Whoever said the pen is mightier than the sword obviously never encountered an automatic weapon.” — General Douglas MacArthur

MacArthur said it facetiously, mocking General Bonaparte’s famous “The pen is mightier than the sword” speech.

“There are only two powers in the world, saber and mind; at the end, saber is always defeated by the mind.” — Napoleon Bonaparte

Our power comes from our mind.

“Our life is shaped by our mind. We become what we think.” — Buddha

Continue Reading

Uncategorized

The Mysterious ‘Invisible Hand’ Is White, Not Black!

Published

on

It seems as if we are always dealing with something mystical or transcendental when it comes to an explanation of phenomena that humans can’t see, hear, feel, smell, or touch, whether it be ‘God’, the ‘Devil’, or an ‘Invisible Hand.’ In the West, Spookism must prevail.

In religion folk are taught to walk by faith, not by sight. Don’t believe what you see with your own two eyes; believe what you are told by “God’s” vicegerent on Earth.

In economics, Adam Smith, working for his European masters — the banking cartels — developed an incredibly useful tool for them. Smith convinced people that an ‘invisible hand,’ controlling economic activity, was good for society and would produce a fair and equitable distribution of humanity’s need for food, clothing, shelter. In today’s world, that list must also include the health care, education, communication, and transportation needs of society.

Needless to say, that hasn’t happened. And it won’t happen. Because it can’t happen.

“Interest Is The Invention of Satin!” Are Bankers The Devil?

Since usury (charging interest on a loan) is forbidden in both Christianity and Islam, why is it a practice throughout…

medium.com

The ‘hand’ controlling global economic activity is not ‘invisible’, though it is definitely hidden from most folk; but it is hiding in ‘plain sight’ if one has eyes to see.

Here is one example, regarding the issue of the cost of goods and services, which many people are not able to pay, as a result of the never-ending cycle of inflation. Cost/price is of utmost importance today, particularly among the poor and impoverished.

The prices of goods and services on this planet are controlled by a number of factors.

1. Supply and Demand

2. Government Intervention, or lack thereof

3. Cost of Production (materials and labor)

4. Inflation, which is a general increase in prices over time (Capitalism requires an ever-expanding market)

5. Exchange Rates between two currencies also affect the prices of imported and exported goods and services

All of the above are controlled by the European banking cartels.

Twin Elephants in the Room: The Rothschilds and Antisemitism/Anti-Semitism

Let me briefly deal with each one, starting with antisemitism, which was birthed first. On October 27, 2022, the…

medium.com

Capitalism, their Western economic ideology, strengthens, fortifies, and governs European hegemony and their global domination; at a severe cost to CHOSSA (Children of Stolen and Sold Africans) and other Indigenous peoples in the Americas, Africa, Asia, Australia, and the South Pacific.

To further elucidate, I must return to the guru of modern economic theory, Campbell R. McConnell, author of Economics, 1987 McGraw-Hill, New York, NY, now in its 21st edition.

Professor McConnell detonates a very powerful atomic bomb, the sound of which will soon be heard around the world. His nuclear truth completely shatters the myth of capitalism as a fair, just, and equitable economic system.

He states that“we should emphasize that there is nothing particularly ethical about the price system for distributing output”. There is nothing ethical about the price system as a mechanism for distributing output fairly.

The price system, a Western invention, developed during the evolution of capitalism, via the Monetary Economy (1694), gives the European complete control over the marketplace, as well as the control and use of our Earth’s natural and human resources. The Caucasian gives value to everything by controlling both the supply and demand of all resources, thereby allowing him to assign a “price” or cost to each of them. Men are making those decisions, not an ‘invisible hand.’

To increase the devastation of his detonation, McConnell further blasts, “Those households which manage to accumulate large amounts of property resources by inheritance…or by crook will receive large incomes and thus command large shares of the economy’s output”which in turn only produces more property resources, commanding a still greater share of the society’s output. [“by crook”, the European rich get richer, and the poor people of color get poorer].

The Europeans have made it their business to steal all of the world’s natural resources and they gained tremendous wealth with those resources acquired; and they now determine the price of our labor, as well as the price for the goods produced by our labor.

With this present structure, what would make you think that you can ever achieve financial independence in America, Europe, or any part of the planet ruled by a white supremacist economic ideology that is structured solely to maintain European hegemony over the world and its natural resources, and the people and their human resources?

As long as:

1. Banks are privately owned, and issue a sovereign Nation’s currency

2. Interest is charged, and Debt is an acceptable business practice

3. There is private ownership of Power Generation (nuclear, electric, fossil)

4. Health Care is privately owned, and a cost to citizens

5. Foreign ownership of Sovereign lands is permitted

6. There is cost for Education

7. Media is operated, controlled, and owned by Oligarchs and their families

8. The Utilities (electricity, water, gas, internet) of a nation are privately owned

9. There is no efficient, cost-effective Public Transportation System

10. War is the only means to conflict resolution

11. The development of Artificial Intelligence is privately owned and financed

12. Aeronautical operations and Space exploration is privately owned

13. Privately owned businesses exploit sovereign land (metals and minerals)

14. The business of Insurance is privately owned

15. White supremacy/racism is alive

16. Federal Judges are appointed, and not elected; democracy doesn’t exist

17. A nation’s food production is controlled by cartels and conglomerates

18. Nationalism, Imperialism, and Militarism are endemic to Western Culture.

There will be:

1. Slavery

2. Poverty

3. Famine, Sickness and Disease

4. War, and its Devastation

5. Man-made Climate Change

6. Inflation and Deflation

7. Unemployment

8. Crime

9. No civil, or human rights

Yesterday I received some feedback from my recent essay, Capitalism Is Good For White People: Why Is It Bad For Black Folk? It was suggested that I provide a list of why Capitalism is bad for black folk because the headline begged the question, without any specific reasons being enumerated. I believed the narrative sufficiently explained that an economic ideology based on lies, while simultaneously empowering white folk, cannot, nor will not, ever be good for black folk. I hope the above list helps to better understand why Capitalism is bad for black folk.

Capitalism Is Good For White Folk: Why Is It Bad For Black Folk?

The guru of modern economic theory, Campbell R. McConnell, author of Economics, 1987 McGraw-Hill, New York, NY, now in…

medium.com

If my writing interests you, here are two other examples that I hope you will find informative.

Africans On The Continent, And In The Diaspora: Please Know That Economics Is the Driving Force in…

“Why does economics matter? Because everything that one does each day, hour, minute, and second, is precisely…

medium.com

A Major Display of ‘Whiteness’ By Richard Dreyfuss Sparked A Major Display of ‘Africanity’ In Me

I try to stay away from writing about Hollywood and the Motion Picture Industry so I don’t have to spend time dealing…

medium.com

Continue Reading

Uncategorized

Capitalism Is Good For White Folk: Why Is It Bad For Black Folk?

Published

on

The guru of modern economic theory, Campbell R. McConnell, author of Economics, 1987 McGraw-Hill, New York, NY, now in its 21st edition, in his opening remarks tells us:

Two fundamental facts provide a foundation for the field of economics [capitalism]. It is imperative that we carefully state and fully understand these two facts, since everything that follows in our study of economics depends directly or indirectly upon them.

a. Society’s material wants, that is, the material wants of its citizens and institutions, are virtually unlimited and insatiable.

b. Economic resources — the means of producing goods and services, are limited or scarce.

These are lies that underpin and provide the foundation for the European economic ideology and philosophy called Capitalism. Their foundation was weak and defective from its inception.

It is absurd to say that the “material wants of its citizens and institutions are virtually unlimited or insatiable.” Human wants are tied to human needs. Humans, and their needs are not unlimited or insatiable. In fact, physical human needs are quite quantifiable, and can be satisfied.

Within range, humans can only consume a quantifiable amount of food before their bodies reject it (through regurgitation). We can easily determine the amount of food (for nutritional purposes) that humans need on a daily basis. With regard to clothing, it is also a simple task of quantifying the clothing needs of humans.

Depending on geography and ecology, reasonably, one can only wear one pair of shoes at a time. One can only wear one pair of pants or a skirt at a time. One can only wear one shirt or blouse at a time. The same for a hat, or coat, or underwear. From the standpoint of shelter, it is the same thing. A human can only live in one house at a time, sleep in one bed at a time, and only use one toilet at a time.

Yes, you could postulate that one could want more than three meals a day, want more than a closet or dresser full of clothes, and/or want two or three residences scattered throughout the country. But let’s be certain that those wants are based on greed, not need. It really goes to a value system based on individualism, not one based on a communal spirit of collective cooperation.

In the second fundamental assertion providing the foundation for capitalism McConnell states, “Economic resources — the means for producing the goods and services are limited.” It is an equally absurd lie used to justify their control of the natural and human resources that provide the means for producing the goods and services necessary for human growth and development.

Economic resources are in such significant supply that they can be said to be unlimited. One kernel of corn, planted in the ground, will yield a stalk with seven ears of corn containing 100 kernels on each ear. This represents a return of 700 to 1. Nature is plentiful, bountiful, and beautiful.

“Surplus, not shortage, has been the driving force in the building of markets, creating supply, and determining prices. Indeed, it can be argued that a central concern of the modern world economic system [capitalism] during this century has been to organize and promote markets so that they are protected from ruinous surplus.

Two important cases illustrate the point.

…with the Nixon administration the government formally encouraged the concept of the agribusiness — that is, supported management of the surplus by the private sector, not by the government. As a practical matter, that meant disposal of the surplus was increasingly the job of the major grain companies, not the government.

Ironic as it may seem, the recent humanitarian concerns for making the food surplus available to millions of poor, undernourished people must be viewed as almost incidental to the overall march of U.S, agricultural policy, which has sought the winning of a profitable and stable market for the surplus over the last century.

…Surplus, not shortage, has governed the oil industry since its inception. Through the Standard Oil Trust, John D. Rockefeller, sought to organize the industry so that is would not be overwhelmed by unbridled competition fed by surplus.

…One reason the oil companies moved into the coal industry was because they feared that this abundant resource might be turned into a devasting, and uncontrollable river of synthetic oil.” — Wealth by Stealth, Rolf Hackman, 2013

There were many goals and objectives to be achieved from the holocaust called World War II, including the birth of the State of Israel; but we must not forget that both Japanese and German scientists had simultaneously developed synthetic oil that threatened the world-wide supply. The Germans produced synthetic oil from coal, while the Japanese produced synthetic oil from plants, both abundant resources on our planet.

Another reason for the war was to control the rich minerals found in Africa.

Mineral exploration and exploitation of Africa by European and American interests served a major purpose. Africa supplied their need for gold, diamonds, and other ‘precious’ gemstones and metals; as well as iron, chrome, titanium, platinum, and uranium, just to name a few of the minerals used in the production of weapons, including most importantly, nuclear weapons, in order to maintain their hegemony of the world and its peoples.

“Historically, the extraction of raw materials was the business of large international corporations, some of them founded in the colonial period, which obtained rights to the minerals for relatively insignificant sums. Little processing of the raw material was carried out in the poor countries.

Many of the international corporations that operate in raw materials are vertically integrated — that is, they control each stage of the production-to-consumer process. Very little of raw or processed materials are traded on the open market through such exchanges as the London Metals Exchange.

In other words, as long as the poor countries are dependent on transnational corporations to reach markets abroad, there is little real meaning to their sovereignty over natural resources. [The history of the Ghana Cocoa Industry is a great example] It is a legal, not a commercial, distinction.

Much of the industry in raw materials today remains based on the mine, as it has been for centuries. And it is the mine which sums up the meaning of the business, or bitter relationships between first and third worlds, of the debasement of humankind. Since the fourteenth century when modern warfare was first invented, the output of the mine has been closely dependent on military industry, for it yields up the stuff with which we make cannon and shells and warships and planes.

Continue Reading

Trending