Intentional inflation and how to stop it. An explanation of misused financial laws that allow a few people to get infinitely rich and decadent by intentionally inflating the inventory of dollars.

Abstract

Shockingly, university textbooks still need to teach 10 necessary specifications to their students, primarily the loopholes used to inflate the inventory of dollars. These are intentional loopholes built into the system, evidence of mischief. The full title of the system, the 1913 “Act To provide for the establishment of Federal Reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish more effective supervision of banking in the United States” a.k.a. the Federal Reserve Act, is quite a mouthful. However, Make America Financially Great is an insightful book that breaks down the complex money creation system and exposes its potential for intentional inflation. This well-researched book meticulously assembles these specifications into a coherent strategy, telling the built-in inflation that plagues our financial system. It is essential for university finance, economics, political science, accounting, and law professionals passionate about teaching their students the correct specifications and interpretations of the Federal Reserve’s money creation system. Understanding the intentional inflation that plagues our financial system is crucial to freedom in the U.S.

Synopsis

This book includes a forensic study of past central bank charters that pinpoint legal precedents that originated in history and are plaguing us today. Those have the unappreciated fact that accounting is the basis for Central Bank mischief dating back to the 1694 Bank of England corporate Charter [Chapter 7]. The Central Bankers originated national debt loans on accounting books [Chapter 6 Bank of England Corporations-Maximum Debt], which were repaid with gold from citizen tax payments, thereby laundering an accounting entry into gold, dubbed in Chapter 2 as the Paper Money For Gold Franchise. Alexander Hamilton brought these accounting tricks to the U.S. by authoring the 1791 [First] Bank of the United States [Chapter 12], which led to its big sister, the 1816 [Second] Bank of the United States [Chapter 14], which due to an error from Justice John Marshall in the 1819 Supreme Court case McCulloch v. Maryland [Chapter 16] ruled a privately owned for-profit corporate national bank is constitutional. These franchises created a path to move tax dollars, which were gold, out of the Treasury’s control and into private hands. That is the original Central Banker’s mischief.

The 1913 Federal Reserve Act converted the US dollar from gold-as-money to accounting-as-money, bank account balances, the source of worthless money made out of nothing, aka elastic currency. Transferring an account balance from buyer to seller created currency [see Chapter 3 Accounting as Money]. Coining new dollars with a Single-Entry in Double-Entry Accounting facilitates elasticity [Chapter 22].

A discovery introduced in Make America Financially Great is that the 12 district Reserve Banks did not perform the mischief. The mischief makers are the 5 Federal Reserve Bank Corporations authorized to file a Comptroller of Currency Certificate of Organization in Section 4.2 of the 1913 Fed Act. The 1864 National Currency Act was the predecessor to the 1913 Fed Act. The first of three 1864 National Currency Act specification that is wrecking the U.S. today is the Comptroller of Currency Certificate of Organization. It is required for a Reserve Bank Corporation to buy Treasury bonds directly from the Treasury. The mischief is the Five Certified Reserve Banks buy the Treasury bonds with misused clearinghouse certificates. The second hurtful specification is the clearinghouse certificate was authorized to function as Lawful Money, which is why the Five Certified Reserve Banks can buy all Treasury bonds with reserves in the Federal Reserve System. The third insult is that Fed Act Section 4.4 Eighth refers to the 1864 National Currency Act precedent that authorized free Fed notes to be given to Treasury bond purchasers, doubling the mischief, and profit, for the Five Certified Reserve Bank Corporations.

Unlike the others who insist on destroying the Fed, Make America Financially Great directs us to understand the written law and then use that established law to adjust administrative procedures to the citizen’s benefit. Bypass the Reserve Bank Corporations using the U.S. Treasury to coin new Lawful Money. Technically speaking, creating a Treasury bond is coining new Lawful Money. Simply register the Treasury Bond to Congress and deposit it into the U.S. Treasury to increase its account balance. Congress then writes a warrant deposited in the U.S. General Funds to be distributed through the demand deposit system. In addition, Congress gets an equal amount of Fed notes for free. This simple administrative procedure saves one billion dollars per day in principal and interest payments already in the budget that Congress can reroute from paying the Five Certified Reserve Bank Corporations to rebuilding the U.S. infrastructure. That action will Make America Financially Great!

Answers the questions about the Federal Reserve Act long title:

In addition, this website expands on the book by answering long-time questions such as:

The Federal Reserve Act set up a money laundering scheme to launder Reserves into demand deposits [regular checking account]. The Federal Reserve System cohorts buy every Treasury bond with “Reserves” but collect consumer demand deposits as principal and interest payments from citizens. The mischief is that the Federal Reserve cohorts get reserves for free. After laundering reserves through Treasury bonds, the Federal Reserve Bank corporations use Open Market Operations to pass funds to Wall Street corporations. Then hedge fund derivatives move demand deposits out of Wall Street and into the cohort’s hands. They can then buy anything for sale in the U.S. with demand depositsMake America Financially Great points to the specifications that created this confusing money laundering system.

Make America Financially Great proposes using the Treasury to bypass the money laundering scheme while maintaining the Federal Reserve payment transfer system. By doing so, citizens can save more than $1 billion per week already allocated for paying principal and interest on Treasury bonds. Congress can then repurpose this money to rebuild infrastructure without increasing the budget. Additionally, this approach will decrease the power of Federal Reserve System cohorts to influence politicians with blind-tax-free trust accounts from trust companies in Washington, DC. By implementing this strategy, we can genuinely Make America Financially Great.

Introduction

This book can make America financially great by introducing new interpretations of old legal facts that intentionally inflate the inventory of dollars in today’s economy. Drawing from old facts not taught by university professors, the book Make America Financially Great provides unique insights into the first legal step to create new United States dollars. By delving into the 1913 Federal Reserve Act, the book identifies loopholes used against citizens and offers an administrative solution to stop this intentional inflation. 

The beauty of this solution is that it leverages existing mechanisms within the Federal Reserve System, so there is no need to destroy the system or pass new laws. Instead, with this book, congressmen/women can gain a deeper understanding of the financial details of the Federal Reserve Act and identify the legal loopholes used against citizens. By doing so, they can then implement administrative methods to bypass those loopholes and end intentional inflation.

The Author, Rick Nichols, promises that a few simple explanations of complicated financial concepts created in legal documents can Make America Financially Great. A simple administrative change to cut out an obsolete mediator will reduce the costs associated with the national debt and shift $1 billion per week from principal and interest payments to social and infrastructure projects.

Website Notes

Financially Great is the short name for the book Make America Financially Great. Rick Nichols is called The Author. The chapters in square brackets point to the explanation of a specific topic, for example: [See Chapter 1: That’s Not Right].

The Author takes a different approach to financial conspiracy theories by backing up his system design claims with official government documents. The book quotes 13 such documents. A copy of these documents is printed in the appendix for easy reference. In addition, the sections quoted in Financially Great are identified in bold font. Finally, this website uses square brackets to deliver reference notes to help readers navigate the material. For example: [See Appendix A: 1913 Federal Reserve Act.]

Universities are the Obstacle and Solution

The first hypothesis is that the United States of America is under attack by those with the power to cause inflation intentionally. Instead of a gun war, we have a legal battle, which is an academic fight. Our academic soldiers are professors and their students, former and future. Citizens need professors to lead us to victory over those trying to conquer the United States of America by controlling our dollar.

The second hypothesis is that if professors of finance, economics, political science, accounting, and the law could fix the problems of never-ending intended inflation and economic crashes, they or one of their students would have done so by now. But instead, the situation is that they need more legal information to solve our financial problem. 

One of the most significant discoveries shared in Financially Great is that professors need a deeper understanding of the Federal Reserve System. Unfortunately, they were not required to study the 1913 Federal Reserve Act document text to become professors. Their universities should have provided them with a copy of the congressional action and lectures on its specifications. It is worse because today’s universities still need to provide a copy of the 1913 Federal Reserve Act and test their students, who will become tomorrow’s professors, congressmen/women, and financial and legal professionals. Professors feel insulted by this revelation because they already comprehend the system taught to them. However, the university’s version of the Federal Reserve’s money-creating system still needs to be completed.

Math Failure

Here is the first discovery that The Author made while earning his finance degree in 1983. Universities need help understanding macroeconomic math because their textbook math doesn’t work. That is the math about inflating the inventory of dollars, which increases the prices of goods and services. The rule is that the system is only understood if the math works

Commonly found in textbooks are math, formula, and propagational analysis. A formula example involves travel: Distance = Rate x Time. For example, this formula can answer the question: If there is a 1 mile per hour increase in Rate, then what is the effect on Distance traveled? 

A propagational analysis is commonly known as statistics. Flipping a coin is understood by statistics. For example, statistics can answer the question: flip a coin once, then what odds will it land on heads? 

Here is an unsolved Federal Reserve System math question by formula or propagational analysis: Add $1.00 to the system, then what is the effect on inflation? Here is another math question that needs answering in textbooks: Add $1.00 to the system, then what is the impact on employment? Finally, another unanswered textbook question: Add $1.00 to the economy; what is the effect on producing goods and services? 

Even forty years since The Author earned his finance degree, these math questions still need to have a mathematical solution published in textbooks. It seems almost improbable since double-entry accounting accounts for almost every sale, and auditing is part of accounting. A dollar can be tracked going into a company as income and then out as an expense, and every business and individual file an income tax return, making it almost possible to track the passing of a dollar from person to person. However, universities still need a new math model to calculate expected future outcomes. As the rule goes, if the math does not work, the system is not understood, meaning universities do not understand the Federal Reserve System. So it is good to know that Financially Great is here to provide universities with the specific legal information they need as quickly and efficiently as possible.

Wrong Teachings

The wrong information leads to the common misconception that the government printing too much money causes inflation. It is true that “too much” money causes inflation of prices. However, that isn’t the wrong teaching.

 As hard as it is to believe, Financially Great hypothesizes that the statement that “the government prints money” is incorrect in practice. Specifically, the three words, government, prints, and money, communicate the wrong information to students and citizens. Remarkably, the idea that the constitutional government of the United States orders the printing of money that causes inflation is false teaching. In addition, the concept of printing Federal Reserve notes and letting them multiply by fractional reserve banking needs to be corrected. Another uncorrected idea is that the Federal Reserve Act created Fed notes as an elastic currency. Let us start with an explanation of why the term “the government” is misleading.

US Constitutional Government

Two documents are the basis for the United States of America’s (US) constitutional government, aka The Government. First,the Declaration of Independence stated the problem, and then the US Constitution solved the problem.  

Define Freedom and Enslaved

Financially Great intends to add a new interpretation of the Declaration of Independence. It defines the problem: Freedom is the power to make decisions. To be free, citizens must make decisions for their country. If someone else makes the decisions, then citizens are enslaved to the decisions of others

The Declaration of Independence is associated with the slogan “No taxation without representation.” The tagline says it’s not so much the tax as much as not having a representative to voice their concerns during the decision-making process. That is the problem that needs solving.  

Define US Constitutional Government

The US Constitution solved the decision-making problem by creating a system of representatives and a list of decisions they must make. US Constitution (Constitution) Article 1, sections 1-7 established the elected representative government. Designated were three elected representatives. Congress represents citizens in law-making decisions. Two sets of representatives make up Congress. The House of Representatives represents citizens on a local neighborhood level. The Senate represents citizens based on the State they reside. The US President represents all citizens on daily operations. These elected representatives are the US Constitutional Government (The Government). The hypothesis is If Congress and the president can’t veto a decision then that decision wasn’t made by The Government

Inventory of Dollars

US Constitution Article 1 Section 8 enumerates [lists] the decisions that Congress must make. Power is making decisions. The relevant finding in Section 8 [5] is that only Congress shall have the power to coin money. The 1792 Congress denominated money as the US dollar (dollar). Financially Great intends to add the following new interpretation to university teachings. When money is coined, then new money is created. The new money is added to the supply of previously coined money. The newly coined money increases the inventory of money. Therefore, if the inventory of dollars increased, then money was coined.

Further, if Congress didn’t coin it, it’s not money! In addition, If another entity is authorized to coin money, then that money is classified as unconstitutional money, which is counterfeit. Finally, US Constitution Article 1 Section 8 [6] requires that Congress provide for the punishment of counterfeiting.

The Term “Government”

The tagline, “Government prints too much money,” why is the term Government incorrect? Our elected Congress and president do not decide to increase the inventory of dollars. Also, they don’t profit from the inventory of new dollars. The controllers of the 5 Certificate Reserve Bank Corporations that filed the Comptroller of Currency Certificate of Organization make the decisions and reap the profits. Our elected government is simply a customer.

The term “government” leads citizens to believe that the elected representatives of the constitutional government (The Government) of the United States of America (U.S.) are making the decisions to increase the inventory of US dollars (dollars). That is incorrect. Our elected President and Congress do not decide to increase the inventory of dollars. The fact is that the Federal Reserve System makes the decisions to increase the inventory of dollars. The confusion arises because the entire Federal Reserve System does not function as part of the constitutional government of the U.S.

Federal Reserve Parts

Did you know that there are three distinct parts to the Federal Reserve System? The first part is the Office of the Federal Reserve, a part of the constitutional government. The second part is the Federal Reserve Board of Governors, and interestingly enough, the members of this board are not part of the elected constitutional government. Then, finally, we have the Federal Reserve Bank corporations, which are also not considered a part of the constitutional government.

First part: Office of the Federal Reserve System

The constitutional government of the U.S. wholly owns the Office of the Federal Reserve. The Author is adding new information: The Office of the Federal Reserve holds the power to increase the inventory of dollars as checking account balances on accounting ledgers. These are the dollars that cause most of the inflation. 

Second part: Members of the Board of Governors

The individuals who hold the most power over the creation of dollars as electronic money are the members of the Board of Governors. Unfortunately, these individuals operate independently from the constitutional government of the United States.

Universities teach that the Board of Governors is independent and uncontrollable by the President and Congress. Universities teach that this is a good thing. The new hypothesis added by this book is that our constitutional government doesn’t control the power to increase the inventory of dollars as electronic money because they don’t control the Board of Governors. The result is that the Board of Governors is separate from our constitutional government (The Government). Several facts support this conclusion.

Fact 1. The Board of Governors are not employees of The Government.

That is evident because Congress does not pay them through the U.S. general fund. Instead, the Board of Governors is paid directly from the profits taken from citizens by the Federal Reserve Bank corporations. [See Chapter 20: Federal Reserve – Corporate Owners, Additional Profits from Expenses.] Professors are taught that is good because citizens do not have to foot the expense. However, the reality for citizens is that we end up paying either by budgeting expenses through Congress or paying profits to the Federal Reserve Bank [Reserve Bank] Corporations. The advantage of paying through Congress is that our representatives can have a say in Reserve Bank expenditures.

Not being paid by Congress means the Board of Governors does not answer to Congress on budget issues and does not have to ask Congress for money. That is independence from The Government.

The Federal Reserve Act Section 10.3 was amended so the Board of Governors can use profits from the Reserve Bank Corporations to buy land and buildings and furnish those buildings anywhere in the world without asking for consent from Congress or the President. Subordinates need permission to do that. Therefore the Board of Governors is not subordinate to The Government. [See the 2022 version of Section 10.3: https://www.federalreserve.gov/aboutthefed/section10.htm]

Fact 2. The Board of Governors are not civil servants.

The Board of Governors does not follow the January 16, 1864, Pendleton Act, the civil service rules of government employment. This is because the members of the Board of Governors are not civil servants like the president, his cabinet, and Congress are. [See Section 11(L), 1913 Federal Reserve Act in Appendix A.]

Fact 3. The Board of Governors are not fiduciaries

The members of the Board of Governors do not have a fiduciary responsibility to citizens. That’s because the Federal Reserve Act does not require the Board of Governors to make decisions as fiduciaries. Instead, they support the “Business of Banking.” To paraphrase the definition in the 1864 National Currency Act Section 8 Corporate Powers: The Business of Banking is loaning citizens paper and collecting gold as principal and interest payments. Financially Great named this process The Paper Money for Gond Franchise.[See Chapter 2, The Paper Money for Gond Franchise and Appendix H: 1864 National Currency Act]

Fact 4. The President cannot Veto the Board of Governors

It is important to note that the Federal Reserve Act does not grant the President veto power over the Board of Governors’ decisions. Universities teach that this ensures that the Board of Governors can make independent decisions free from political influence. However, it also means that the Board of Governors can not be stopped from making selfish and dangerous decisions like crashing a recovering economy with constant interest rate hikes.

Fact 5. Congress cannot veto the Board of Governors

That is because the Federal Reserve Act grants Congress the power to oversee the Board of Governors but not the power to override the Board of Governors’ decisions.

Fact 6. The Board of Governors’ Statement of Self Freedom

The Board of Governors made up and self-published this technically true statement: “The Federal Reserve System is considered to be an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive branch of the government.”

The Federal Reserve Act does not state that. Simply put, the Act does not explicitly state that Congress and the President have veto power. It is not that the 1913 Congress purposely took control away from themselves and gave it to the Board of Governors, thereby leaving Congress powerless. Congress fell victim to Supreme Court Chief Justice John Marshall’s ruling that Congress does not automatically have power unless given that power in the Act. [See Chapter 17: Supreme Court Errors 2 and 3 and Appendix G: 1824 Bank of the U.S. v. Planter’s Bank of Georgia]

Fact 7. The Board of Governors are the most powerful people in the United States

The Board of Governors are the most powerful people in the United States because they do not have to ask anybody for dollars. The President has to ask Congress for dollars. Then Congress borrows the dollar. The Board of Governors refer to themselves as the lender of last resort because they can make all the Reserve dollars they want on accounting ledgers. If all were right in the financial world, that title would belong to the US Treasury.

Fact 8. The Board of Governors Parasite Statement

The Board of Governors has proclaimed themselves “independent within the government,” although it does not state that in the Federal Reserve Act. This statement exemplifies a situation when “what is not stated” in the Federal Reserve Act is significant.

The “independent within the government” proclamation describes the Board of Governors as independent parasites within the body of The Government. Therefore, instead of saying that the “government prints too much money,” it is more precise to declare that a “parasite prints too much money.” A picturesque way to say that is the parasite defecates money, infecting the host.

Tip of the Hat for The Board of Governors

Do not consider the Members of the Board of Governors, past and present, as little pests. As an organized group, over time, they are the “smartest people in the room!” Although The Author deplores their harm to citizens, he has to tip his hat and acknowledge their fantastic success, coordination, discipline, dedication, and original and creative planning. Nevertheless, unfortunately, they are controlling the US government by controlling the US dollar. Nobody can stop them, including finance, economics, political science, accounting, law professors, and their former students. They realize that our democratic government is being eaten alive from the inside, but they do not know that the 1913 Federal Reserve Act text is the source of our problems. [See Chapter 20: Federal Reserve-Corporate Owners, Independent Corporation]

Were enough facts provided to prove that the members of the Board of Governors are independent and, thereby, not part of our elected constitutional governments’ decision-making process resulting in enslaving citizens to the Board of Governors’ decisions?

Third part: Reserve Bank Corporations

Why are Federal Reserve Banks organized as corporations? Two reasons. First independence from government. The government can’t interfere with the daily operations of privately owned corporations. Second, corporations provide a path to move money inside the government to outside the government, such as from a Federal Reserve Bank Corporation to a Wall Street corporation. 

Universities teach that 12 district Federal Reserve Banks were organized as corporations. Financially Great adds new interpretations of old facts that introduce five unappreciated Reserve Bank Corporations that filed the comptroller of currency certificate of organization. This certificate is significant because it is why the Board of Governors declared themselves the lender of last resort. [See Chapter 21: Federal Reserve – Monopoly] 

Reserve Bank Corporation Co-op

Universities teach that organizing the 12 district Reserve Banks as corporations is acceptable because commercial banks in their district organized the corporations as a cooperative (Co-op). That is because the Co-op structure ensures that dominant stockholders do not have traditional control over corporate decision-making. Another reason for legitimacy is that the US Treasury receives a refund from Co-op Reserve Bank Corporation operations. Both teachings are misleading.

Board of Governors’ Power Over the Co-op

Universities teach that organizing Reserve Banks as corporations is acceptable because these corporations are a co-op of commercial banks in their district. The benefit is that no one commercial bank can dominate the Reserve Bank’s decisions. However, this benefit is misleading because the Board of Governors have an added level of control because they appoint the chairman of the board of directors for each Reserve Bank co-op. Federal Reserve Act Section 4.12. Class C Directors; “The Board of Governors shall appoint the class C directors and shall designate one of such directors as chairman.” That creates an employer-employee relationship between the Board of Governors and the Reserve Bank Corporations. Moreover, since the Board of Governors is not part of The Government, it can be said that a non-government entity controls the Reserve Bank co-ops.

In addition, since the Federal Reserve are not a civil servant, the Board of Governors may dismiss officers or employees at their pleasure. This fact provides the leverage the Board of Governors needs to control the decision-making of Reserve Bank Corporation Co-ops.

Reserve Bank Corporation’s Profits

The Reserve Bank corporations pay a portion of their surplus profits in demand deposits; according to the Federal Reserve Act, what form of lawful money should those corporations pay? According to Section 7(b), Treasury bonds are a form of lawful money that was supposed to be paid to Congress. [See Chapter 20: Federal Reserve: Corporate Ownership – Dividends Paid form Profits – Overcharged Citizens, page 316] 

Universities understand that the Reserve banks are organized [created] as privately owned and for-profit corporations. However, they consider that surplus profits paid to the Treasury by Reserve Banks make them part of The Government.

Because universities do not routinely teach the Federal Reserve Act, they need to realize that paying back profits is a relatively recent occurrence. For example, the Reserve Bank corporations did not pay back profits when The Author earned his finance degree in 1983.

The original Federal Reserve Act contained this line when Congress passed it in 1913: “After the aforesaid dividend claims have been fully met, all the net earning shall be paid to the United States as a franchise tax.” This specification appears generous enough to sway some of the members of Congress to vote for the act. The problem was that specification was removed 20 years later. 

Did you assume that Reserve Bank Corporations always paid profits to citizens?

It was in 1999 that the Federal Reserve Act changed to say that the Co-op Reserve Bank Corporations paid some of their profits [surplus fund] to Congress in 2000. However, future payments were not mandatory, and future payment amounts were not specified. That changed in 2018 when a formula was established to calculate a compulsory refund amount.

Form of profit payments that counts

Interestingly, every dollar of the surplus [profit] paid back to the Treasury by the Reserve Bank Corporations represents a dollar that Congress budgeted but did not need. This is because the US is always running a budget deficit, which means that the budget was too high by the surplus payback amount. Therefore, to finance the Reserve Bank surplus, Congress had to use Treasury Bonds, meaning citizens still had to pay interest on Treasury bonds even though the borrowed amount was paid back through the surplus of profits. However, if the excess profits were refunded by returning Treasury Bonds to Congress, it would stop future principal and interest payments from inflating the budget again and again.

It is important to note that the failure to refund Treasury bonds is a significant issue. According to the Federal Reserve Act Section 7 Division of Earnings Section (b)-(b), “The net earnings derived by the United States from Federal reserve banks shall, in the discretion of the Secretary… shall be applied to the reduction of the outstanding bonded indebtedness of the United States.” [See Chapter 20: Federal Reserve-Corporate Owners – Division of Earning from Profit, and also check the website at: https://www.federalreserve.gov/aboutthefed/section7.htm]

If the Secretary of the Treasury chooses to receive our refund from Co-op Reserve Bank Corporation in the form of Treasury Bonds, it would positively impact the following year’s budget amount and reduce the amount of new Treasury bonds issued. Additionally, this action would decrease the overall amount of the National Debt. However, some citizens may argue that the Secretary of the Treasury and Board of Governors are attempting to deceive them and that their ultimate goal is to maximize the national debt and interest payments.

Hidden Federal Reserve Bank Corporations

The 1999 Federal Reserve Act added Section 7. Division of Earnings(b) Transfer For the Fiscal Year 2000“The Federal reserve banks shall transfer from the surplus fund of such banks to the Board of Governors of the Federal Reserve System for transfer to the Secretary of the Treasury for deposit in the general fund of the Treasury…” 

This specification perplexed The Author. The Board of Governors instructs the 12 Co-op Reserve Banks (12 Co-ops) to transfer the surplus refund to the Board of Governors instead of directly to the Treasury. Does that mean there is another Reserve Bank besides the 12 Co-ops with which the Board of Governors works? 

Comptroller of Currency Certificate of Organization

This specification perplexed The Author. The Board of Governors instructs the 12 Co-op Reserve Banks (12 Co-ops) to transfer the surplus refund to the Board of Governors instead of directly to the Treasury. Does that mean there is another Reserve Bank besides the 12 Co-ops with which the Board of Governors works?

The significance is that the Treasury only does business with banks that file a Comptroller of Currency Certificate of Organization. So have the hidden Reserve Banks that the Board of Governors works with filed a Comptroller of Currency Certificate of Organization and are registered with the Treasury?

Financially Greats’ answer is Yes. The Federal Reserve Act Section 4.2 states that “the organization committee shall designate any five banks of those whose applications have been received, to execute a certificate of organization.”

The Hidden Five Certificate Federal Reserve Bank Corporations

“The organization committee shall designate any five banks?” Now that random choice stood out as a set-up for a “not so random” selection the first time The Author read the Federal Reserve Act in 1983. Moreover, section 2.1 supports that hypothesis because it specifies that the president’s appointees for “the Secretary of the Treasury, the Secretary of Agriculture and the Comptroller of the Currency, acting as “The Reserve Bank Organization Committee,”… A majority of the organization committee shall constitute a quorum with authority to act.

The hypothesis is that these presidential appointees are cohorts with bankers who financed the president’s election. Further, these bankers were the same bankers famous for the Jekyll Island meeting, credited for originating the 1913 Federal Reserve Act. In case you did not hear, the 2010 Board of Governors has confirmed that the meeting did occur. Moreover, they celebrated the Jekyll Island bankers for establishing the Federal Reserve System. That makes sense because the Act they engineered affords today’s Board of Governors the decision-making power to act decadent and makes them infinitely rich. That is a fancy way of saying they can coin all the money they want in a checking account, and nobody can veto their decisions. Unappreciated by professors, the Comptroller of Currency Certificate of Organization is critical to that power.

Financially Great refers to the five Federal Reserve Banks that filed a Controller of Currency Certificate of Organization as the Five Certificate Reserve Bank Corporations (Five Certificates). 

The Five Certificates are not co-op banks. Instead, they are full-on, privately-owned, for-profit corporations authorized to start their Federal Reserve Bank with no money down, with a nod from two Reserve Bank Organization Committee members. Section 2.3 allows the organization committee to put all payments on call.

The Five Certificates Reserve Bank Corporations are unknown to the president, Congress, universities, and finance, economics, political science, accounting, and law professions. That supports the hypothesis that the Five Certificates are not part of the constitutional government of the US (The Government).

Established Chain of Command

Here is a question. Are the Five Certificates working for the Board of Governors? Or is the Board of Governors working for the Five Certificates?

An important factor is the members of the Board of Governors’ changes. Therefore their decision-making power is limited to the time they are in office.

Financially Great does not model the Five Certificates as co-op banks. Instead, the model works best when the Five Certificates are full-on, privately-owned, for-profit corporations authorized to start their Federal Reserve Bank with no money down, with a nod from two Reserve Bank Organization Committee members. Section 2.3 allows the organization committee to put all payments on call. [See Chapter 21: Federal Reserve – Monopoly]

The Five Certificates are modeled as privately owned corporations, meaning family members can inherit them. What is more important is that these corporations retain all of their decision-making power, which is passed down to the next generation of family members. This is how rich and powerful individuals can maintain their influence even as politicians come and go. The conclusion is that the Board of Governors is working for the Five Certificates. These corporations are at the top of the hierarchy when making money-related decisions.

Corporation as a Tool

The use of a corporation to keep power over time is a standard weapon for central bankers. Central banks are strategic structures designed to pass control to family members. Here are a few historical examples from Financially Great.

1694: Charter of the Corporation of the Governor and Company of the Bank of England,

To incorporate all and every such Subscribers And contributors, their heirs, successors, or assignees, to be one body corporate and [body] politic, by the name of The Governor and Company of the Bank of England, to have perpetual succession and with such privileges and powers.” [See Chapter 6: Bank of England Corporation and Appendix I] 

97 years later, in 1791: Act to Incorporate the Subscribers to the [First] Bank of the United States, Section 3

And be it further enacted, That all those, who shall become Subscribers to the said bank, their successors and assigns, shall be, and are hereby created and made a corporation and body politic, by the name and style of The President, Directors and Company, of the Bank of the United States; and shall so continue, until the fourth day of March, one thousand eight hundred and eleven:” (March 4, 1811, 20 years) [See Chapter 10: [First] Bank of the US – Copy the Bank of England Corporation and Appendix: J]

25 years later in 1816: Act to Incorporate the Subscribers to the [Second] Bank of the United States, Section 7, Create a Corporation

And be it further enacted, That the Subscribers to the said bank of the United States of America, their successors and assigns, shall be, and are hereby, created a corporation and body politic, by the name and style of “The president, directors, and company, of the bank of the United States, and so shall be until the third day of March, in the year one thousand eight hundred and thirty-six.” (March 3, 1836, 20 years) [See Chapter 14: [Second] Bank of the United States 1816 – Perpetual Tax Machine and Appendix K]

38 years later in 1864: Act to provide a National Currency, secured by a Pledge of United States Bonds, and to provide for the Circulation and Redemption thereof. SEC. 8.

“And be it further enacted, That every association formed pursuant to the provisions of this act shall, from the date of the execution of its organization certificate [comptroller of currency certificate of organization], be a body corporate …and shall have succession…for the period of twenty years [See Chapter 18: 1864 National Currency Act: Clearinghouse Certificates and Appendix H]

49 years later, in 1913: Federal Reserve Act, Section 4.4-Second, Federal Reserve Banks, General Corporate Powers: 

Upon filing of such certificate with the Comptroller of the Currency as aforesaid, the said Federal reserve bank shall become a body corporate and as such, and in the name designated in such organization certificate, shall have power— To have succession for a period of twenty years…”

Unfortunately, the Federal Reserve Act deleted the “twenty-year succession period” specification. Current Section 4.4-Second states, “To have succession after the approval of this Act until dissolved by an Act of Congress or until forfeiture of franchise for violation of law.” [See Chapter 20: Federal Reserve – Corporate owners}

Without an end date, the Five Certificate Reserve Bank Corporations established over 100 years of succession for its subscribers, their heirs, successors, and assignees. These heirs qualify as “the establishment.” They are independent of the constitutional government of the United States because they have wristed government decision-making power from The Government.

Chairman Governor of the Federal Reserve System

Financially Great models The Five Certificates Reserve Bank Corporations at the top of the chain of command. The members of the Federal Reserve Board of Governors work for them. The Board of Governors’ leader and chief executive is the chairman of the Board of Governors. Accordingly, The Author has named that chairman the Chairman Governor. The Federal Reserve Act does not have a quorum limitation to make decisions. Therefore, as chief executive, the Chairman Governor is a quorum of one. Hence, members of the Board of Governors cannot veto his decisions.

The Chairman Governor has veto power over the entire Federal Reserve System. The president and Congress canot veto the Chairman Governor’s decisions. The adaptation is that the “Chairman Governor prints too much money.”

Congressman’s Attempt at Control

Still, another proof that the Federal Reserve Bank Corporations are not part of The Government is that former Congressman Ron Paul is famous for failing to get permission to appoint auditors to perform a congressional audit of the Reserve Bank Corporations. His audit included Open Market Operations and discount window trades of customer mortgages and loans to buy reserves.

Former Congressman Ron Paul advocated destroying the Federal Reserve System. His downfall was that he needed a replacement system. He saw the Federal Reserve as a truck that was running over citizens. The Author of Financially Great strongly disagrees. His solution is to understand the truck thoroughly. Then stop filling the truck with so much free gas. Also, change the driver to a citizen whom the truck hit. There is no sense in ruining a good truck when the driver with too much free gas is causing the problems. Financially Great explains how to do this. 

Summary: The Government doesn’t Print too Much Money

The Declaration of Independence and the US Constitution work together to create an elected representative government, referred to as The Government. The 1913 Federal Reserve Act established the system that increases the “inventory of dollars.” The operational decision to intentionally increase the inventory of dollars belongs to the Chairman Governor of the Federal Reserve System. The problem is that the Chairman Governor is separate from The Government because our president and Congress cannot veto his-her decisions. Therefore any decision to increase the inventory of dollars is not The Government’s decision. The result is that the statement that “The Government prints too much money” is incorrect. However, it is accurate to say, “The Chairman Governor prints too much money.”


A Forensic Study of the specifications written in the Federal Reserve Act

Answer the question: Which laws can we use to stop “Printing too Much” and “Borrowing too Much” at the same time?

Shouldn’t it be either print too much and pay bills, or the other choice is to borrow too much and pay bills. Printing and borrowing at the same time is considered an anomaly that bears investigation.

Please Buy the Book

Paperback ISBN: 978-1-6624-12383-7 eBook ISBN: 978-1-6624-1284-4

Page Publishing promises fast delivery of a free copy to the publishing industry: 866-315-2708

Money

Why is the term “money” incorrect in the tagline, the “Government prints too much “money”? Today, money is numbers on accounting books. It can’t be touched. Money is a number in a column of numbers. Money is now accounting-as-money, essentially a scorekeeping system. The mischief is that citizens borrow scorekeeping points as our national debt. Borrowing the National debt from a Reserve Bank Corporation is as silly as Major League Baseball borrowing points to keep score. Grasping this concept is necessary to understand the Federal Reserve System. 

Our broken money creation system has yet to be fixed because the operations manual needs to be appropriately studied by universities. For money creation in a bank account, aka electronic money, the manual is called the Federal Reserve Act. Are you opposed to using Make America Financially Great (Financially Great) as a manual to learn how to fix the legal problems caused by the Federal Reserve Act?

This section continues the explanation that the phrase “The government prints too much money” communicates the wrong picture—precisely the words government, prints, and money. The first section of this website explained that it is not the elected constitutional government (The Government) that decides to increase the inventory of dollars. Instead, the decision maker is the Federal Reserve Board of Governors chairman (Chairman Governor). This executive is not part of the constitutional government. Therefore, this website section concentrates on the types of dollars the Chairman Governor can increase.

The Money Hypothesis

The hypothesis is that university teachings that the Federal Reserve note (Fed note) is the elastic currency established in the 1913 Federal Reserve Act need to be corrected. That document installed a nonpaper currency as a medium of exchange. In doing so, the Federal Reserve Act converted the dollar from gold-as-money to accounting-as-money. 

Accounting-as-money is a bank account balance. It is the balance that is elastic. The ability to transfer the balance to make payments by check qualifies as a currency. 

The Federal Reserve Act created two elastic currency checking accounts with two different authorizations. One authorization is legal tender, and the other is lawful money. Rick Nichols (The Author) named them the Transferable Deposits Legal Tender Fiat Checking Account System and the Fed Fund Lawful Money Reserve Checking Account System

Money Constitutionally Defined

“A financial conspiracy fact finder” is the moniker that The Author embraces by quoting government documents to establish facts that universities, professors, finance, economics, political science, accounting, and law professionals can confirm. The Constitution is one of those documents. It established the Supreme Court in Article 3. Financially Great uses the definition of money from a Supreme Court Justice as a fact. 

Here is an old constitutional definition of money that university textbooks need to add. In 1837, Supreme Court Justice Brown defined money as that which “passes from hand to hand in the ordinary transactions of life.” [See Briscoe v. Bank of Commonwealth of Kentuckyhttp://supreme.justia.com/us/36/257/case.html]

The “ordinary transactions of life” occur as one human buys or sells a product or service with another human. Therefore, the constitutional logic is that only Congress shall increase the inventory of dollars passed from hand to hand to buy and sell products and services. Further, since the Constitution states that only Congress shall coin money, if Congress did not coin that dollar, it is not money. 

Money – Currency Correlation

The American Heritage Dictionary 2nd College Edition, copyright 1982, was the go-to reference book for The Author during his finance degree studies. According to this dictionary, currency is defined as “1. Any form of money in actual use as a medium of exchange. 2. A passing from hand to hand, as a medium of exchange.”

The point is that the function of money and currency is the same. Both are passed from hand to hand as a medium of exchange.  

The Chairman Governor provided a supporting definition of money in the 2005 brochure The Federal Reserve System Purposes & Functions, “Anything that serves as a generally accepted medium of exchange, a standard of value, and a means of saving or storing purchasing power. In the United States, currency (the bulk of which is Federal Reserve notes) and coin as well as funds in deposit accounts at depository institutions are examples of money.” 

Money passed from hand to hand includes Federal Reserve notes (Fed notes) as currency as well as funds in deposit accounts at depository institutions, which are bank account balances. The point is that bank account balances are just as much a curency as paper fed notes.

New legal Tender Statement

Even though universities teach that Fed notes are legal tender for public and private debt, that’s not what it says in the Federal Reserve Act. The official specification Section 16.1, “The said [Fed] notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues.”

The statement does not say the Fed note is legal tender for private debt. Instead, that currency “shall be receivable by all national and member banks and Federal reserve banks.” So the new legal tender statement for private debt is passing from bank account to bank account.

Bank Account Balances as Legal Tender

The 1913 Federal Reserve Act adds an unappreciated currency as a medium of exchange. The new medium of exchange from old facts that functions as new legal tender is bank account balances. Bank account balances are transferred from one bank account to another as if a Fed note is passed from hand to hand. Here is Federal Reserve Act Section 16.13. Every Federal reserve bank shall receive on deposit at par [face value] from member banks [Depositary, savings, or investment company] or from Federal reserve banks checks and drafts drawn [withdrawn] upon any of its depositors, and when remitted [paid] by a Federal reserve bank, checks and drafts drawn by any depositor in any other Federal reserve bank or member bank upon funds to the credit of said depositor in said reserve bank or member bank.

Funds to the credit of said depositor are a bank account balance. Bank checks transfer account balances from account to account. All banks must receive bank checks on deposit at par. Therefore, these account balances have the same legal tender statement for private debt as Fed note currency. 

Section 16.13 adds checks and drafts as a paper currency that passes bank account balances from bank account to bank account in “the normal transactions of life.” [See Chapter 22: Federal Reserve – Elastic Currency]

Draft Scam

What is the legal difference between a check and a draft? A check transfers the balance from one customer’s account to another. A draft is different. It is accounted for as an asset that coins new money on accounting books. If there was $10 in the world and a check was processed, then there would still be $10 in the world. But if a draft is processed, there would be $20 in the world.

University textbooks need to include a side note regarding Section 16.13. This section is responsible for creating one of the biggest scams affecting citizens. The problem is that it combines checks and drafts under the same law, despite being vastly different. A bank check transfers the balance from one account to another, which is legitimate. However, a draft is an entirely different matter. It creates new bank balances out of nothing, which means that a draft increases the inventory of dollars. 

The standard definition found in textbooks is that the issuing bank guarantees a draft because, unlike a check, it isn’t dependent upon funds to the credit of a depositor. That is true but incomplete and misleading. The scam is that a draft is a loan that a banker gives to himself and then loans those borrowed funds to a customer as an accounting entry. In short, a check transfers money, but a draft creates new money that wasn’t there before the bank issued the draft. A draft is one of the sources of “free money made from nothing”.

In short, a check transfers balances on the liability side of an accounting ledger. In contrast, a draft is accounted for as an asset.

The 1864 National Currency Act officially classified a draft as Evidence of Banker’s Debt. One of the Jekyll Island banker’s tricks was to avoid defining drafts by piggybacking them on checks in the 1913 Federal Reserve Act. [See Chapter 2: The Paper Money for Gold Franchise – The Business of Banking – Evidence of Banker’s Debt]

Elastic Currency is Accounting-as-Money

What are the two elastic currencies furnished? (Hint: Fed note is not one of them!) The first is bank accounts established in the 1913 Federal Reserve Act as Demand Deposits, Timed, and Savings accounts. The second is Fed funds Reseves, which the Federal Reserve Act didn’t directly create. Financially Great named these elastic currencies: Legal Tender Checking, and Reserve Checking. [See Chapter 2: Paper Money for Gold Franchise – Elastic Currency, page 66] 

The 2005 Federal Reserve System Purposes and Functions brochure defines elastic currency as “Currency that can, by the actions of the central monetary authority, expand or contract in amounts warranted by economic conditions.” We know by experience that the Chairman Governor, the central monetary authority, can expand elastic currency even if economic conditions do not warrant it.

Universities teach that paper Fed notes are the elastic currency created in the 1913 Federal Reserve Act. However, they would know that’s not true if they studied the 1864 National Currency Act. The Fednote is essentially a conceptional copy of the national currency note, which was neither new nor considered elastic. Both are Treasury-backed securities, as explained in the section about “printing too much money.”

Did you know that the only place the term elastic currency exists in the Federal Reserve Act is in the long title? There is not a section labeled the creation of elastic currency. Instead, you have to figure it out based on other specifications, such as bank accounts with similar legal tender specifications as Fed notes hinting that transferring bank account balances functions as a currency.

Financially Great supports the hypothesis that the 1913 Federal Reserve Act replaced gold-as-money with accounting-as-money. Bank account balances transferred from account to account use accounting to function as money passed from hand to hand. This transfer functions as a currency. The Federal Reserve Act named bank account balance transfers “elastic currency.”

Instead of printing currency on paper, the elastic currency is created with a concept The Author named “Single Entry in Double Entry Accounting,” which creates elasticity. There are two Single Entries. Deposit to one account without withdrawing from another to increase the inventory of dollars. Then decrease the inventory of dollars by withdrawing from one account without depositing in another. Single Entry in Double Entry Accounting is the fast and easy way to coin and un-coin dollars. That is elasticity.

The hypothesis continues to explain that the Federal Reserve Act established two elastic currencies with different authorizations and functions—essentially two checking accounts.

  1. Transferable Deposits Legal Tender Fiat Checking Account System
    1. (Legal Tender Checking)
    2. Checking for citizens
  2. Fed Funds Lawful Money Reserve Checking Account System
    1. (Reserve Checking)
    2. Private checking system owned by the Five Certificate Reserve bank Corporations

These two checking account systems replaced the functions of gold. Legal Tender Checking substitute for gold being passed from hand to hand. Reserve Checking replaced gold as reserves.

Legal Tender Checking

The first step was establishing demand deposit, timed, and 30-day savings accounts in Section 19 of the Federal Reserve Act. These are checking, saving, and investment accounts used by citizens. Account balances are transferable between all accounts. Section 15.1 establishes legal tender for “public due” by bank transfer. Section 16.13 authorized balance transfers as legal tender for “private due.” Checking, savings, and investment accounts with these authorizations establish the Transferable Deposits Legal Tender Fiat Checking Account System as elastic currency.

Fiat Money

Universities teach that a commodity does not back fiat money. Citizens perceive the message that fiat dollars are worthless money made out of nothing. This teaching needs to be corrected. Fiat means authorized. The fact is that checking, savings, and investment balances are authorized to function as legal tender. This authorization indicates that one can buy any commodity for sale in the US, including gold. The backing for checking, savings, and investment balances is everything for sale in the United States. Being 100% sure that a seller will accept legal tender in exchange for a Harley Davison motorcycle gives the dollar value. It is not worthless money. In fact, fiat money replaced the trust that gold provided. Therefore, we do not need to inventory more gold to increase the dollar’s value. Instead, we must expand the inventory of products and services that can be sold using the Transferable Deposits Legal Tender Fiat Checking Account System (Legal Tender Checking). 

Fed Funds Lawful Money Reserve Checking Account System

Clearing-House Certificates

How did the Federal Reserve Act create a reserve? By giving the power to clear checks to the Federal Reserve Bank Corporations. Those Corporations then inherited the power of the Clearing-House Certificate as Lawful Money from the 1864 National Currency Act.

Section 16.14 provided a clue. “The Board of Governors of the Federal Reserve System shall make and promulgate from time to time regulations governing the transfer of funds and charges therefor among Federal reserve banks and their branches, and may at its discretion exercise the functions of a Clearing House for such Federal Reserve banks, or may designate a Federal Reserve bank to exercise such function, and may also require each such bank to exercise the functions of a Clearing House for its member banks.” 

Here is one of the most significant legal tricks in history. “The Board of Governors may…designate a Federal Reserve Bank [corporation] to exercise the functions of a Clearing House” This innocent-sounding phrase triggered the specification that created the source of “worthless money made out of nothing” that is inflating prices today. That source is commonly known as reserves. [See Chapter 22: Federal Reserve-Elastic Currency-Legal Tender Conversion- Step 3 Section 16.4 Check Clearing, page 356]

Reserves

In the past, Clearinghouses were used to transfer gold from one bank to another when they accepted checks from each other. The banks would first deposit gold into the Clearinghouse as reserves to make this happen. After that, when one bank would issue a check, the second bank would accept it as a deposit and send it to the Clearinghouse. Finally, the Clearinghouse would transfer the gold from the check’s issuing bank’s reserve account to the accepting bank’s reserve account to clear the check. This process ensured that all banks had the necessary reserves to back up the checks they issued and received.

Lawful Money

What is a reserve in the Federal Reserve System? A reserve is a checking account balance referred to as Fed funds. They were created from clearinghouse certificates that originated in the 1864 National Currency Act. The Federal Reserve System is misusing the clearinghouse certificate. Did you know the Federal Reserve Act does not explicitly define a reserve?

The Author had to research the congressional Act before the 1913 Federal Reserve Act to find the connection. That was the 1864 National Currency Act. The significant specification is in Section 31, “That clearing-house certificates, representing specie [gold] or lawful money specially deposited for the purpose of any clearing-house association [corporation], shall be deemed to be lawful money in the possession of any association belonging to such clearing-house holding and owning such certificate, and shall be considered to be part of the lawful money which such association is required to have” [as reserves]. [See Chapter 18: 1864 National Currency Act-Legal Counterfeit Lawful Money- Clearinghouse certificates as lawful money, page 281]

Clearinghouse certificates as lawful money is a big deal because it is the first time that a privately owned for-profit corporate bank, as a clearinghouse, could coin a US dollar. Old time bank corporations could print IOUs for dollars but not congressionally authorized money. Clearinghouse certificates were limited to representing gold or lawful money. However, the lawful money referred to was the United States Note, declared lawful money in the February 25, 1862 Act to authorize the issue of United States Notes.    

Fed Funds

What is a Reserve in the Federal Reserve System?

Clearing-house certificates deemed lawful money are the basis for reserves in the Federal Reserve System. The Board of Governors used its power to promulgate regulations governing the transfer of funds to convert lawful money clearinghouse certificates into reserve accounts called Federal Funds (Fed funds). A significant fact is that there are only two restrictions. First, Fed funds are lawful money only when held by a Federal Reserve Bank. Second, Fed funds are supposed to represent gold or lawful money. The fact is that Fed funds do not represent gold. Here is the loophole, every new Fed fund represents lawful money because it is lawful money. “Free worthless money made out of nothing” originates from this loophole. That allows an endless amount of Fed funds as lawful money reserves. Instead of printing certificates, the Jekyll Island bankers created the Fed Funds Lawful Money Reserve Checking Account.”

Reserve Checking

The idea that Fed funds are a checking account came from Federal Reserve Act Section 19(f). “The reserve carried by a member bank with a Federal reserve bank may be checked against and withdrawn by such member bank for the purpose of meeting existing liabilities.”

Checking against reserves is a big deal for several reasons. Here are two of those reasons. First, it defines reserves as a balance in a checking account. Second, it creates a path between the Fed Funds Lawful Money Reserve Checking Account System (Reserve Checking) and the Transferable Deposits Legal Tender Fiat Checking Account System (Legal Tender Checking).

Reserve Checking is actually considered as M0, which is the monetary base where lawful money is created in Fed fund accounts. Section 19f provides the authorization for reserves (M0) to be transferred into Legal Tender Checking, which then transforms into the money supply M1, M2, and M3.

Member banks are neighborhood commercial banks where citizens have their accounts. Legal Tender Checking includes checking, savings, and investment accounts. Legal Tender Checking is the system that the Reserve Checking floods with lawful money dollars that inflates prices.  

Summary: Money

Accounting-as-money replaced gold-as-money. Accounting-as-money is our bank account system, which is an elastic currency. The total balance of all bank accounts is elastic because it can be easily increased or decreased with a Single Entry in Double Entry Accounting. Transfer of account balance from buyer to seller qualifies as a currency.

The 1913 Federal Reserve Act created two elastic currencies. Transferable Deposits Legal Tender Fiat Checking Account System (Legal Tender Checking) was the first. Legal Tender Checking can purchase anything for sale in the US, which makes it valuable.

The Fed Funds Lawful Money Reserve Checking Account (Reserve Checking) is the second form of elastic currencyReserve Checking is the reserve in the Federal Reserve System, which makes it valuable. It originated from clearinghouse certificates authorized to be lawful money in 1864. Reserve Checking can coin an unlimited amount of  Lawful money.

Transferring lawful money from Reserve Checking to Legal Tender Checking causes inflation. That is because the deposit of lawful money into Legal Tender Checking increases the total balances of all accounts in Legal Tender Checking. That is the “too much” money that inflates the price of goods and services. 

This website explains why the statement that “The Government is printing too much money” is incorrect. The first part explains that The Government does not decide to print “too much” money. Instead, that decision-making power rests with the Chairman Governor, who is not a government employee.

This second part of this website considered the specific type of money that the Chairman Governor is printing “too much.” It is the chain reaction of increasing reserves that inflates legal tender. Therefore the saying should be “The Chairman Governor prints “too much” reserves.”

The following third part is to find out how the Chairman Governor prints reserves.

Printing

Why are loans accounted for as assets? It is an accounting trick that allowed Central Bankers to loan what they didn’t have to a borrower. It is a method to print money on accounting ledgers without increasing the inventory of real gold coins or paper money in the banker’s vault. Loans as assets are part of the system called Evidence of Banker’s Debt, a.k.a. financial instruments, a.k.a. fractional reserve banking, which Financially Great refers to as Bank-Run Money. The following sections of this website will explain how farmers started the system by purchasing equipment today but promising to pay later at harvest time. It is a tediously long explanation that needs understanding to realize the mischief of accounting-as-money. When loans are accounted as assets, if there was $10 in the world and the banker lent $10 to a borrower, there would be $20 in the world.

How should loans be accounted for if not as assets? Withdraw from the banker’s owner’s equity account and deposit to the borrower’s account just like you would take money out of your pocket to loan a borrower who put it in their pocket. When loans are not accounted for assets, if there was $10 in the world and the banker loaned $10, there would still be $10 in the world.

Based on the 1913 Federal Reserve Act specifications, the tagline “The Government prints too much money” is technically incorrect. So far, this website has attempted to correct that mistake by modifying the saying to read, “The Chairman Governor prints too many Reserves.” 

Reserves aren’t a traditional paper currency stamped out in a printing press. Instead, the book Make America Financially Great (Financially Great) defines reserves as one of the two elastic currencies created in the 1913 Federal Reserve Act. The basis for elastic currency is accounting-as-money. So, how does the Chairman Governor increase the reserve’s inventory in an economy based on accounting-as-money? 

To fully grasp the intricacies of the Federal Reserve System and make informed decisions about administrative policies, it is crucial to have a deep understanding of the origins of accounting-as-money. This knowledge will also reveal how a select group of affluent individuals utilized the concept of accounting-as-money to establish the debt economy and, ultimately, fractional reserve banking, which further enriched them.

Did you know that bookkeeping evolved into accounting-as-money for central banks around the 17th century? The hypothesis is that wealthy land barons were the ones who initiated this process. Accounting-as-money involves two crucial steps. The first step is when the seller accepts a deposit to their account as payment. The second step is when the seller becomes the buyer and pays the new seller with an account transfer.

Interestingly, these two transactions did not involve gold or silver coins, paper money, or bushells of grain as payment. Instead, the payment was simply an increase in the balance of an account, which is accounting-as-money. It is a scorekeeping system that replaced gold as money. If you understand this two-step process, it will be easy to comprehend today’s dollar creation system and why fixing the Federal Reserve’s intentional inflation system will not be difficult.

The following is an unsubstantiated example used to communicate two core central banking concepts. The first concept is accounting-as-money. This concept is understandable because we use accounting-as-money daily by transferring our account balance to pay sellers for goods and services. The second concept, the debt economy concept, is challenging to grasp. After all, it doesn’t make sense because it is a scam. The debt economy uses two loans that are interlaced. First, the Central Banker borrows from himself. Second, the Central Banker loans what he borrowed from himself to the borrower bank. Look for the part in the land baron examples below when it is before the harvest, and he lends bushels of grain that he doesn’t have to a borrower. 

Harvest

Except for sunlight, the earth provides all the resources that man has. He adds human effort to produce products for food, water, shelter, and tools. One of the places human action makes a product that is food is farming. Before the 17th century, a land baron would farm his land. He would grow grains and then barter the grain with tradespeople such as metalsmiths, saddlers, hunters, and fishermen for products such as metal tools, horse tack, fish, meat, and skins.

Bookkeeping the harvest

The land baron kept track of his inventory of grains with simple bookkeeping. It is a multiple-column list that would account for the inventory ins and outs of the harvested grains. The first column identifies the grain source, such as the north field, south field, or sharecropper number 1 or 2. The second column counts the amount of grain put into the barn for storage. The third column accounted for the grain taken out of the barn. A typical example is grain taken out of the barn to exchange for products and services from tradespeople and for personal use. Finally, the fourth column shows the balance of grain still in the barn.

In this case, the harvest consists of four hundred bushels of grain from multiple fields and sharecroppers. His bookkeeping is from the land baron’s point of view. It is the inventory of grains stored in the barn.

Grain Harvest Inventory Stored in Barn

Line #SourceInto Barn (plus +)Out of Barn (minus -)=Balance
1North Field+100-0=100
2South Field+200-0=100+200=300
3Share Cropper 1+50-0=300+50=350
4Share Cropper 2+50
-0=350+50=400
5Total Balance+400-0400
Total Harvest

Much of the economy in the 17th century was barter—exchanging a product or service for another product or service. For example, the land baron would barter for metal tools, saddles, fish, meat, and skins with grain as his product to exchange. The list of transactions decreases the inventory of grain in the barn. 

Grain Inventory after Trades

Line #SourceInto Barn (plus +)Out of Barn (minus -)=Balance
1North Field+100-0=100
2South Field+200-0=100+200=300
3Share Cropper 1+50-0=300+50=350
4Share Cropper 2+50
-0=350+50=400
6Metalsmith+0-50=400-50=350
7Saddler+0-50=350-50=300
8Hunter+0-20=300-20=280
9Fisherman+0-20=280-20=260
10Total+400-140=260
Bookkeeping for the Trade of Grain for goods and services from Trades People

Payment to tradesmen

Develop Economy

These tradesmen, metal-smiths, saddlers, hunters, and fishermen also needed products and services from each other. So they created a chain of exchanges. For example, the metal-smith is paid 50 bushels of grain in exchange for metal tools. Next, he would barter 30 bushels with a saddler. The saddler would then trade 10 bushels for meat and skins from a hunter. Finally, the hunter would sell 1 bushel of grain for fish. Once the products changed hands, the transaction was complete without using gold or silver coin. This chain of barters developed an economy.

The land baron would consume 270 bushels of grain during the winter to support his family and servants. Consuming the remaining grain leaves the barn empty. The inventory of grain is zero.

Accounting for Next Year’s Harvest

Delayed gratification is one of the signs of human intelligence. That is the ability to work now for a benefit later. A great example is farming. The farmer must work for months to receive the gratification of the harvest. 

He can then exchange part of the harvest with tradespeople for products he needs, such as metal tools, skins for clothing, and fish to eat. The problem is that he needed these products and services before the harvest. Tradesmen also learned delayed gratification by providing the farmer products and services today in return for grain at harvest time. As a result, land barons developed rudimentary accounting to keep track of the agreements.  

The Debt Economy Begins

There comes the point when last year’s harvest runs out, but the land baron needs other metal tools from a smith, a saddle from a saddler, animal skins from a tanner, fur from a trapper, more meat from a hunter, and fish from a fisherman before the next harvest. So he asks them to provide their products and services today but wait until harvest to collect the grain. He can pay them when the harvest arrives, but in the meantime, he has to go into debt by promising a share of his harvest tomorrow but receive tools, skins, meat, and fish today. Bookkeeping changed to accounting when the land baron did not have grain to trade today but promised to pay in the future. This promise inspired Central Bankers, who did not have all the gold coins to pay today but promised to pay in the future, a.k.a. fractional reserve banking.

The land baron keeps track of his promises in accounting books. The land baron’s promise to pay his debt with the expected future harvest is the beginning of the debt economy. Google says the origin of the word debt refers to “what is owed.” 

Bookkeeping to Accounting

Bookkeeping changes to accounting when the land baron goes into debt. That is when the grain inventory from the last harvest runs out, and he promises grain from the next crop. So the title of the bookkeeping columns and rows change. The old bookkeeping terms convert to new accounting meanings. And a second book is added. 

Title Change – Expected Future Grain Harvest

The title of the previous bookkeeping entries was Inventory of Grain In the Barn. Since the land baron does not have grain in the barn to trade, the accounting title changed to Expected Future Grain Harvest.

Column Change – Asset

The first bookkeeping column label was the source of grain. However, there is not any grain. Instead, there is only the land baron’s promise to pay his debt with grain harvested in the future, so the source label changed to assets. Google says the origin of the word asset has to do with having sufficient estate to compensate for debts. The land baron uses his future harvest to compensate for his debts.

Asset Column Name Change – Debit

The second bookkeeping column accounted for the number of grain bushels added to the inventory of grain stored in the barn. Since there is no grain, the asset debit column is the new accounting name for the second column. Google says the original meaning of the word debit is “to owe.” The land baron owes grain in the future. The asset debit column increases with each promise to pay in the future. 

Asset Column Name Change – Credit

The third bookkeeping column counted the number of grain bushels taken from the barn inventory to pay tradespeople. Again, since there is no grain, the third column is renamed the credit column. So, like taking grain out of the barn to pay tradespeople directly, the asset credit column reflects a payment from the land baron.  

Asset Balance

The fourth column is the balance. That name does not change. The balance results from asset debit minus asset credit. In other words, The amount the land baron promised to pay minus the amount the land baron paid. The balance is the amount the land Barron still owes.  

A promise is a Bond 

The land baron promises to pay 100 bushels of grain in the future. The key word is “promise.” Google says to promise is to “assure beforehand.” So the land baron “assures” the tradespeople he will provide 100 bushels “before” he delivers it.   

In accounting, the land baron’s promise is called a bond. Google says a bond is something that unites people. Everybody promised payment from the future expected harvest is united in the land baron’s bond to pay. 

The land baron’s bond concept is similar to a Treasury bond. Both are accounted for as assets. The land baron’s bond is an asset debit for 100 bushels. Here is the accounting. 

Chart: Expected Future Grain Harvest

Expected Future Grain Harvest

Line #AssetsDebit (+)Credit (-)=Balance
1Land Baron’s Bond+100-0=100
Total100
Land Baron goes into debt by giving his bond to pay 100 bushels of grain from the next harvest

Beginning the Debt Economy

The land baron’s 100-bushel bond is the basis for the debt economy. In other words, the 100-bushels is like $100. That is the amount of money that can pass from hand to hand. The second list identifies the people who can pass the promise of 100-bushels of future grain from hand to hand.

The Second List

In the first bookkeeping example, the land baron took the grain from the barn to exchange for tools, products, and food. The land baron does not have grain to trade today, so he makes a deal with tradespeople. He promises to pay grain from an expected future harvest in exchange for today’s tools, products, and food. 

When the tradespeople hand the land baron the tools, products, and food, the tradespeople get nothing in return except the land baron’s bond that he will pay in the future. That changes the bookkeeping from taking grain out of the barn now to a promise to take grain out of the barn in the future.

Accounting for the land baron’s promise requires a second accounting book, a second list. This book keeps track of the land baron’s promise to each tradesperson. First, it accounts for the number of bushels promised to pay and then for the amount paid.

Liabilities

The second accounting list is titled Liabilities. Google says that the origin of the word liability is to bind by obligation. So the list of the land baron’s liabilities is the list of tradespeople he is obligated to pay grain in the future. In short, liabilities are the people bound to the land baron because of his bond. In other words, liabilities are people the land baron promised to pay in the future.

Accounting for Liabilities

The accounting for the land baron’s liability is like the bookkeeping for the grain inventory in the barn, but with some differences:

  1. The column titles have different meanings.
  2. Each column’s plus and minus (debit and credit) effects are opposite from the asset list.
  3. Accounts have their balance calculated separately.  

The first column is the liability Account column. Each tradesperson has an account. Each account carries a balance. That balance changes with each additional promise from the land baron or when the land baron pays grain to a specific tradesperson.

Liability Debit

The second liability column is the debit column. The point is to remember that accounting is from the point of view of the land baron. Therefore, the liability debt column reflects payment by the land baron, reducing the amount he owes the tradespeople. Thus, subtracting the debit column reduces the tradesperson’s account balance on the liability list. 

Liability Credit

The third column is the credit column. The credit column adds to the tradespeople’s account balance on the liability list. The original meaning of the word credit is “to entrust.” From the land baron’s point of view, this increases the amount the tradespeople have entrusted him to pay. When the tradesman gives the land baron more products and services, the land baron’s promise to pay is credited (added) to the balance owed to the tradesman’s account.

Here is a quick summary of the Liabilities list:

  1. Each tradesperson gets a liability account.
  2. The liability credit column shows the amount of grain the land baron promised to pay the tradesperson. 
  3. The liability debit column shows the amount of grain the land baron paid the tradesperson.
  4. The liability credit minus Liability debit is the balance the land barron still owes the tradesperson.

On the asset list above, the land baron gave his bond to pay 100 bushels of grain from the next harvest. The liabilities list below shows the tradesmen he promised to pay with the bond. Here is the list of liabilities the land baron owes each tradesperson.

Chart: Liabilities List of Grain Owed in the Future

Land Baron Loans Promise of Future Grain Harvest

Line #AssetsDebit (+)Credit (-)Balance=LiabilitiesDebit (-)Credit (+)Balance
1Land Baron’s Bond+100-0100
2Metalsmith-0+4040
3Saddler-0+3030
4Hunter-0+2020
5Fisherman-0+1010
Total Assets+100-0100Total Liabilities-0+100100
Land Baron goes into debt by giving his bond to pay 100 bushels of grain from the next harvest

Accounting as money – The Point of this Section!

The fisherman, hunter, saddler, and metalsmith had grain shares to their credit on the land baron’s accounting books. However, they encountered the same problem as the land baron: they needed products and services from other tradespeople. Therefore, they would trade their share of grain expected in the future harvest for a product today. For example, the metalsmith could barter 10 bushels of grain from future harvest for horse tack today. The saddler would accept the promise of future grain as currency to sell his horse tack to the metalsmith today. This trade of future grain is an example of accounting-as-money. No actual delivery of grain occurs at the time of the agreement. Instead, both tradesmen depend on the land baron’s accounting books to direct payment to the correct person. Directing payment with accounting is accounting-as-money.

In this example, the metalsmith writes a bill [note] to the land baron, telling him he sold 10 bushels of future grain to the saddler. Therefore, ten bushels would be subtracted (debited) from the metalsmith’s account and then credited (added) to the saddler’s account.  

Table: Payment by Transfering Balances 1

Payment by Transfer

Line #AssetsDebit (+)Credit (-)Balance=LiabilitiesDebit (-)Credit (+)Balance
1Land Baron’s Bond+100-0100
2Metalsmith-0+4040
3Saddler-0+3030
4Hunter-0+2020
5Fisherman-0+1010
6Metalsmith-10+040-10=30
7Saddler-0+1030+10=40
Total Assets+100-0100Total Liabilities-10+110100
Metalsmith transferred 10 bushels of grain from the next harvest to the Saddler thereby using accounting as money.

The point is that the metalsmith paid the saddler for horse tack with a number in an accounting book. The trade completed their business without using gold, silver, or grain. Instead, they accomplished the transaction with accounting-as-money.

Please notice that the land baron still owes 100 bushels of grain; that part did not change. So the only change for him is whom he pays the grain.

Bill or Notes as Currency

The way the tradespeople communicated their transaction was with a bill. According to Google, the 15th-century definition of the bill is an “order addressed to one person to pay another.” A bill operates like a check. For example, the hunter trades 5 bushels of grain from the next harvest in exchange for fish today:

  1. The fisherman gives the hunter the fish.
  2. The hunter provides the fisherman with a bill.
  3. It orders the land baron to withdraw (liability debit) 5 bushels from the hunter’s account balance and deposit (liability credit) those 5 bushels to the fisherman’s account.

Table: Payment by Transfering Balances 2

Payment by Transferring Balances 2

Line #AssetsDebit (+)Credit (-)Balance=LiabilitiesDebit (-)Credit (+)Balance
1Land Baron’s Bond+100-0100
2Metalsmith-0+4040
3Saddler-0+3030
4Hunter-0+2020
5Fisherman-0+1010
6Metalsmith-10+040-10=30
7Saddler-0+1030+10=40
8Hunter-5+020-5=15
9Fisherman-0+510+5=15
Total Assets+100-0100Total Liabilities-15+115100
Hunter transferred 5 bushels of grain from the next harvest to the Fisherman thereby using accounting as money.

Double-Entry Accounting

The hunter’s account was debited (decreased) by 5 bushels of grain. Conversely, the fisherman’s account was credited (increased) by 5 bushels. The result is that the hunter bought fish with a transfer on accounting books. This transfer system is called double-entry accounting.

Please notice that the land baron still owes the same 100 bushels of grain. So the only thing that changed is who receives the grain. The land baron promised to pay in the future while those he promised traded their shares before the harvest; this is part of the debt economy with accounting-as-money functioning as currency.

Loaning the borrowed

The most confusing part of the debt economy comes when a metalsmith goes to the land baron. Instead of trying to sell tools to the land baron, the metalsmith asks the land baron to loan him ten bushels of grain from the next harvest to purchase raw materials today. Two loans become nested together. First, the land baron used a bond to lend himself ten bushels of future grain. Then that promise of future grain was loaned to the metalsmith

The metalsmith agreed to pay back one extra bushel of grain as interest. So naturally, this extra grain bushel attracts the land baron’s interest.

The metalsmith buys his raw materials with a bill that orders the land baron to debit [withdraw] the metalsmith’s account and credit [deposit] the raw materials supplier’s account for 10 bushels of grain. The metalsmith manufactures new tools and sells tools to “other farmers” in exchange for real grain today. The metalsmith delivers 11 bushels of real grain to the land baron to repay his loan. The land baron then uses 10 bushels of grain to pay back his bond, which is the loan he made from himself to himself on the accounting books. The trick is that the land baron only loaned an entry in the accounting books but was paid back with 10 bushels of real grain. That grain is owed to the metalsmith’s raw materials supplier. Plus, the land baron received an additional bushel of grain as interest.

So now the land baron gets one free bushel of grain just for working accounting books. He started with zero, loaned what he did not have but ended up with +1, which is a profit. Who else will lend what they do not have and make a profit?

Grain and Gold work the Same Way

Now adapt this example from bushels of grain to coins of gold. The metalsmith goes to the land baron to borrow ten gold coins, agreeing to pay back 11. The metalsmith gives his bond that he will repay. The land baron uses accounting-as-money to loan himself the equivalent of ten gold coins based on the metalsmith’s bond that increases [debits] his Asset account balance. He is borrowing from himself. Borrowing from himself to create a loanable account balance is the basis of the debt economy

The land baron then credits [deposits] the metalsmith’s account for ten coins. Later the metalsmith pays back his loan with 11 gold coins. The land baron uses ten coins to pay his bond. The land baron gets one gold coin as profit. It cost him nothing but three accounting entries. That is the Banker’s Debt Economy, which is money for nothing for the Central Banker. That is a lot easier than digging a dollar out of the ground.

The banker lends an accounting entry and receives payment in gold coins. That is the scam. Financially Great refers to this concept as the Paper Money for Gold Franchise. [See Chapter 2: The Paper Money for Gold Franchise]

Learned Tricks

The land barron learned six tricks about accounting-as-money that Central Bankers learned to weaponize against citizens:

  1. The Debt economy: The land baron and Central Banker learned they could loan grain or gold that “they did not have” by promising to pay later. That is the beginning of the debt economy.
  2. Loaning credit: The land baron and Central Banker originate loans by crediting (depositing) to the buyer’s (borrowers) account balance on the liability list. 
  3. Accounting-as-money: The land barron and Central Banker learned to create accounts for every buyer and seller they work with. By doing so, they can facilitate the transfer of account balances between customers, effectively using them as a form of currency. Using account balances as currency allows sellers to become buyers and purchase products or services from other sellers using account transfers.
  4. Elastic Currency: Increase the accounting-as-money inventory by giving liability credit to a borrower (buyer) without depositing more gold.
  5. Fractional [gold] Reserve Banking: In the past, the Central Banker would accept gold deposits from customers and apply a liability credit to their accounts, known as full gold reserve banking. However, if the Central Banker originated a loan by giving the same liability credit to the buyer’s account without having gold deposited, this is considered zero reserve banking. As a result, the combination of full and zero reserve banking is known as fractional gold reserve banking. This system enabled Central Bankers to lend more money than they had in reserves, which is why it is called fractional reserve banking.
  6. Paper Money: In Fractional [gold] Reserve Banking, there needs to be more gold in reserve for customers and borrowers to withdraw their account balance in gold. Introducing paper money gave customers and borrowers something more to withdraw. .  
  7. Paper Money for Gold Franchise: Governments borrow from Central Bankers as their national debt. This loan originated as a liability credit to the government’s account; even so, the government had to pay it back with gold. The fact is that the Central Banker loaned an accounting entry on paper but collected gold as repayment. That way, the Central Bankers could buy anything they wanted with gold. Nowadays, the loaning system is similar in giving a liability credit to the government’s account. The difference is that the Federal Reserve cohorts lend the U.S. Treasury elastic currency from the Reserve Checking System. However, the repayment of principal and interest is through the Legal Tender Checking System. Legal tender gives Federal Reserve cohorts the power to buy anything for sale in the U.S., just like gold, which is the Central Banker’s advantage designed into the Federal Reserve Act in 1913.

The land baron and Central Banker learned that transferring a liability account balance from a buyer to a seller would complete a transaction. First, the buyer would get the product or service today. The seller then had to deal with the land baron or Central Banker for payment in the future—the seven lessons created accounting-as-money, used as currency in the debt economy. The official name for the debt economy is Evidence of Banker’s Debt.

Evidence of Banker’s Debt

Which laws established fractional reserve banking, and how did it start? The 1694 Bank of England Corporate Charter started fractional Reserve Banking in By-Law VIII by authorizing the bank to be in debt by bills and bonds. This by-law made the national debt system very profitable for the Central Banker.

The Evidence of Banker’s Debt concept started the Debt Economy. The original Evidence of Banker’s debt is bills, bonds, and other loan agreements as stated in the 1694 Charter of the Corporation of the Governor and Company of the Bank of England, By-Law VIII, Borrowing on the Seal by BillBond or Other Covenant.

bill is paper currency ordering the bank to pay gold to the person named on the bill. A bond borrows a country’s national debt. Other Covenants are loan agreements. The confusing part is that billsbonds, and other loan agreements are also IOUs for gold from the Central Banker. [See Chapter 6: Bank of England Corporation – Maximum Debt and Appendix I 1694 Charter of the Corporation of the Bank of England.]

Borrowing on the Seal by billbond, or other loan agreement is like the land baron borrowing grain from himself by promising to pay back grain with a future harvest. It is tricky to understand, but the Central Banker borrows from himself by accounting for a billbond, or other loan agreement as an asset. This asset creates new dollars on accounting ledgers but does not increase the inventory of gold, which creates fractional reserve banking. This asset is the thing that Central Bankers loan and borrowers borrow. Which means borrowers borrow something that is not there.

 The land baron promised to pay back the grain at the next harvest. For the Central Banker, his harvest is when the borrower has to repay the loan he has taken. The Central Banker uses the borrower’s payment to pay back his debt. The Central Banker using the borrower’s payment as the Central Banker’s harvest proves that the borrower has borrowed something that does not exist. Essentially, the borrower borrowed from himself and then paid himself back. This is quite a clever trick, indeed.

Banker’s Debt Complication

Things get complicated here: a billbond, or loan agreement represents two loans. The first loan is from the Central Banker to himself, and the second is from the Central Banker to the borrower. A billbond, or other loan agreement is evidence of both loans.

When the borrower repaid the loan to the Central Banker in gold, the Central Banker used the borrower’s gold to repay the billbond, or other loan agreement that served as Evidence of the Central Banker’s Debt. The borrower’s gold paid back the borrower’s and Central Banker’s debt. Then the process is repeated, with the Central Banker making a profit in gold on each repetition. This concept was mentioned by Alexander Hamilton, the first Secretary of the Treasury, in his 1790 National Bank Letter to Congress. [See Chapter 9: Alexander Hamilton – Central Banker’s Buddy, and Appendix D 1790 Alexander Hamilton Report on the National Bank]

Example – Bank of England Corporation

Initially, when the country of England issued a bond, it served two functions. The first function of the bond is taught in universities and is well-understood as a loan that a government asks for, which increases its national debt. For instance, when England had a budget deficit, it would issue a $1,000 bond. This bond had two purposes: It borrowed $960 and guaranteed to pay back $1,000 in gold. [Within the meaning of this text, the term gold refers to all precious metal coins.] However, the trick is the type of money that England borrows versus the gold it ultimately pays back.

The second function of the bond concerns the type of money the Bank of England (BoE) corporation loaned to the country of England. The BoE’s corporate charter authorized borrowing on the corporate seal by bond. This specification authorizes the BoE Corporation to borrow the bond amount as an asset debit [increase]. The bond is evidence of the BoE corporation’s debt in this function. That asset increase was loaned to England as a liability credit, increasing England’s account balance at the BoE Corporation. This credit increases England’s national debt.

The Bank of England Corporation (BoE Corporation) did not transfer the gold they had in inventory to England. Instead, the BoE Corporation accounted for the bond as a $960 asset debit [increase] and loaned England $960 as a liability credit, increasing England’s bank account balance. 

Then England paid back their bond with $1,000 in gold. The BoE Corporation accounted for the payment with a $1,000 liability debit [decrease] to pay off England’s bond functioning as their national debt.

The BoE Corporation accounted for England’s $1,000 gold payment with a $960 asset credit [decrease] to pay off its bond function as Evidence of Banker’s Debt.

That leaves the BoE Corporation with $40 in gold as profit. The BoE Corporation loaned a paper entry but received gold as payback. That is the trick Financially Great named the Paper Money for Gold Franchise. [See Chapter 7: Bank of England 1694 – Independence, Paper Money for Gold Franchise]

Legitament loans

For those who understand accounting, the legitimate method is for the Central Banker to originate an advance with a liability debit [withdraw] from owner’s equity and then liability credit [deposit] the borrower’s account. Assets, as in the inventory of money, stay the same.

Update Trick: Clearinghouse Certificates as Lawful Money

The debt economy, a.k.a fractional reserve banking, a.k.a. Evidence of Banker’s Debt, a.k.a. Paper Money for Gold Franchise, was the main Central Banker trick from 1694 to 1864. The National Currency Act updated the trick in 1864 with the addition of clearinghouse certificates printed on paper. This administrative trick was about something other than the value of gold. It was about who ends up with gold. The trick The Author is trying to explain is that from 1864 to 1913, New York clearinghouse corporations would collect gold from all over the U.S. as reserves. However, when required to transfer that gold to a commercial bank, they would substitute paper notes called clearinghouse certificates. The accounting books would show payment, but the gold stayed in the clearinghouse corporation. Those who owned a New York clearinghouse corporation got richer than rich.

The sneaky part of that trick is that paper clearinghouse certificates were authorized as lawful money in the U.S. The significance is that it is the first time U.S. constitutional dollars were authorized to be printed by a privately owned, for-profit corporation as a clearinghouse. Prior to this, paper currency only served as an IOU for gold-as-money. 

Update Again: Lawful Money Fed Funds

What is a debt economy, and why is our economy, not a debt economy? The debt economy is based on gold as money. The Central Banker was in debt for gold. The US is not a debt economy because a balance in the demand deposit, timed, and savings account (Legal Tender Checking)along with Fed fund reserves is money. These accounts don’t promise to be redeemable for money because they are money.

The 1913 Federal Reserve Act updated the lawful money clearinghouse certificate printed on paper to elastic currency, a.k.a accounting-as-money, a.k.a electronic money input into a computer. The updated form became the Fed Funds Lawful Money Reserve Checking Account System (Reserve Checking). The fact is that Reserve Checking is authorized lawful money. The trick is that the Five Reserve Banks that filed a Comptroller of Currency Certificate of Organization can make all the Reserve Checking balances they want. The significance is that, as lawful money, Reserve Checking bought every Treasury bond. The result is inflation of the dollar inventory. The consequence is intentional price inflation. The scam is that the $35 trillion national debt was created as liability credits [deposits] in Congress’ Reserve Checking account. In other words, U.S. citizens work to repay accounting entries as our national debt. The effect is that citizens borrow computer entry but pay it back with human labor. The result is that the Federal Reserve cohorts get the fruits of human labor for free.

Printing Reserves

The time of increasing the inventory of dollars by coining metal and printing on paper is passing. The cashless society is upon us, and it uses accounting-as-money. Entries into an accounting program create new dollars in a cashless society. Coining a gold dollar is the same as printing or entering a dollar as an accounting entry. Each method increases the inventory of dollars. 

The method designed into the 1913 Federal Reserve Act to increase the inventory of dollars is to use an accounting entry in the Reserve Checking System. Then the reserve is spent into the Legal Tender Checking System. The person in charge of new accounting-as-money dollars is the Chairman Governor of the Federal Reserve System. It is these new accounting dollars that cause the majority of price inflation.

Printing Summary

This website proclaims that the tagline “The government prints too much money” is incorrect.
The word “print” mislead citizens into thinking that a printing press prints all our dollars. The fact is that most of the inventory of dollars is in bank accounts as account balances. Most of the dollars in account balances originated in the Reserve Checking System. These Reserves are created with a Single Entry in Double Entry Accounting. Therefore, it is justified to replace the word “print” with “Single Entry.”

This website uses the facts from the 1913 Federal Reserve Act to teach that the tagline “The Government Prints too much Money” is misleading. The Chairman Governor has replaced the term “government,” while “Reserves” has taken the place of “money.” These changes resulted in an accurate new saying: “The Chairman Governor Single Enters too many Reserves.”

The lesson is that if citizens want to stop so much new money from inflating our economy, we must outsmart the Chairman Governor before he coins “too much” reserves on the computer to buy Treasury Bonds.

Too Much

Without regurgitating an economics class, there are three basic types of price inflation.

  1. Prices increase when an earth element is in short supply but is in demand.
  2. Prices increase due to man-made or mother nature reasons such as shipping disruptions, Covid-related issues, rising gas prices, corporate greedflation, war, or the Chairman Governor raising interest rates.
  3. Prices inflate due to too many dollars added into the system.

Financially Great hypothesizes that prices inflate when the inventory of dollars increases without a proportional increase in products and services that requires the facilitation of more transactions simultaneously. [See Chapter 4: Coin Dynamics – Money Supply – Public Utility]

Think about accounting-as-money as scorekeeping and dollars as points. Citizens go to work to create a product or service. Each citizen receives some points generated from that product or service as payment for their human effort. Price inflation occurs when scorekeeping provides more points than products and services produced by citizens.

As an analogy, ten baseball players score ten runs each for a total of 100 points, but the scoreboard shows a total of 110 points. That is inflation of points. The scorekeeper added ten more points than needed.

The citizen’s scorekeeper is the Chairman Governor. He is also the referee. He causes inflation by creating more money than is needed in our economic game. So the tagline “The Government prints “too much” money” is changed to “The Government prints “more money than is needed.”

The updated tagline is now: “The Chairman Governor Singel Enters more Reserves than is needed.” 

Financially Great aims to explain the laws that make this tagline true. Please buy the book: Make America Financially Great to pinpoint the specifications and interpretation of their use today.  

Free Fed Notes

Section 4.4 of the Federal Reserve Act states that in depositing a Treasury Bond into the U.S. Treasury, the owner of the Treasury Bond gets the face amount of the Treasury Bond in Fed notes for free. [See Chapter 27: Federal Reserve: Note – Free Fed Notes.] When the Chairman Governor speaks about the Electronic Fed note, he is referring to free-fed notes he got with Treasury bonds. Instead of printing Fed notes, he deposits them to his Legal Tender Checking Account. An account balance increase directly increases the inventory of dollars’ relationship to goods and services available to trade for the dollar, which further adds to price inflation.  

Why Fight Inflation With More Inflation

The Chairman Governor has two direct methods to increase the price of goods and services, thereby creating inflation. The first method to inflate prices is to increase the inventory of dollars. The main procedure is to buy Treasury bonds with a Single Entry in the Reserve Checking System. The new Reserve Checking dollars are spent into the Legal Tender Checking System thereby increasing the inventory of dollars as Legal Tender Checking balances. In addition, the Five Federal Reserve Bank corporations that buy Treasury bonds receive an equal amount of Fed notes. Both of these methods increase the inventory of dollars without increasing the goods and services available to trade for the new dollars. The description of this type of inflation is “too many dollars chasing too few goods and services.” The obvious solution is to decrease the inventory of dollars in relation to the number of goods and services, which is within the power of the Chairman Governor. Or the other option is to increase the amount of goods and services in relation to the inventory of dollars, also within the power of the Chairman Governor.

The second method employed by the Chairman Governor to inflate prices is raising interest rates. The increase in interest rates translates to a higher cost of borrowing money, which can lead to an increase in the prices of goods and services. A perfect example is when the Chairman Governor increased the interest rates, leading to a significant increase in the cost of home mortgages. High monthly payments pushed many home buyers out of the market. The Chairman Governor did not decrease inflation as much as he stopped businesses from showing inflation of prices.

The Chairman Governor intends to slow the economy with interest rate hikes to fight inflation. The problem is that increasing interest rates doesn’t improve the “Too many dollars chasing too few goods and services” inflation situation. So, what is his purpose? One viable answer is to reduce taxable income. Reduced tax income increases the budget deficit. An increased budget deficit increases the number of dollars that needs borrowing as the national debt. Increasing the national debt requires increasing the number of Treasury bonds issued. The increased number of Treasury bonds gives the Five Certificates more chances to buy them with a Single Entry in Reserve Checking. A Single Entry increases the inventory of dollars. The increase in dollars combined with the slow economy increases the inflation of prices. And then, the cycle continues with more budget deficits, resulting in more Treasury bonds being bought with a single entry, resulting in inflation every year. 

One other observation. The Chairman Governor’s fiscal responsibilities include collecting taxes. Over the years, the Chairman Governors have not fixed the problem of large corporations not paying their fair share of taxes. The hypothesis is they don’t want to increase the amount of tax collected because that would decrease the budget deficit, thereby reducing the amount of Treasury bills the Five Certificates can buy. Reduced number of Treasury bonds mean the Chairman Governor’s cohorts have less Treasury bonds to laudar into legal Tender Checking balance increases.

Free Fed notes

Section 4.4 of the Federal Reserve Act states that depositing a Treasury Bond into the U.S. Treasury, the owner of the Treasury Bond gets the face amount of the Treasury Bond in Fed notes for free. [See Chapter 27: Federal Reserve: Note – Free Fed Notes.] When the Chairman Governor speaks about the Electronic Fed note, he is referring to free-fed notes he got with Treasury bonds. Instead of printing Fed notes, he takes them as a deposit to his Legal Tender Checking Account. No money laundering required. An Legal Tender Checking account balance increase directly increases the inventory of dollars’ relationship to goods and services available to trade for the dollar, which further adds to price inflation.  

Unappreciated Federal Reserve System Specification

Why rediscount? [Specifically, who discounts and who rediscounts, and what benefit do the discounters get? ] Member bank originates a business loan with a bank account credit that increases the business’s balance. Then the Member bank sells (discounts) the loan to district Federal Reserve Bank Corporations in exchange for a credit to its reserve account. The district Federal Reserve Bank then resells (rediscounts) the loan to one of the Five Certificate Reserve Banks who filed a Comptroller of Currency Certificate of Organization in exchange for a reserve account credit. Five Certificate Reserve Bank Corporations then collected gold from the business as payment. This is named the Paper Money for gold Franchise. Originally the benefit for the Five Certificate Reserve Banks is they loaned an accounting entry in the Reserve Checking System but was repaid with gold, but today they are repaid in the Legal Tender Checking System which means they can buy anything for sale in the US. [See Chapter 25 Federal Reserve Act: Discount ]

Why commercial paper? [Hint that is Net 90-day accounts receivable! What benefit does the U.S. central bank gain from a small short-term loan based on a commercial invoice?] The original objective was to quickly laundar a liability-side credit to a business’s bank account into a payment of gold from the business. Today the business pays with a transfer from its Legal Tender Checking System. [See Chapter 24: Federal Reserve Act – Commercial Paper]

Why discount and then rediscount commercial paper, which is 90-day accounts receivable, and why is it so significant that it is in the title of the Federal Reserve Act? Discount-Rediscount is the newest version of the Paper Money For Gold Franchise mischief set up by the Central Bankers in the 1694 Charter of the Bank of England Corporation. It is a method funnel loans on commercial paper collected from all across the US by transfer (discount) to one of the 12 district reserve banks and then retransferred (rediscount) to one of the Five Certificate Reserve Bank Corporations who then collects the loan payment on the commercial paper. The main point of central banking is to loan credit on accounting books but collect real money as payment. Ninety days is a quick way to launder an accounting entry into gold or Legal Tender Checking account balance increase. 

How is the “effective supervision of banking in the United States” used to purposely inflate the inventory of dollars? Supervision converts every neighborhood commercial bank into a Federal Reserve Bank Corporation customer. Originally, supervision included selling reserves to commercial banks. Commercial banks (member banks) traded (discounted) 90-day Commercial Paper and other loans in exchange for reserves required by the Reserve Bank Corporations as Supervisors. Supervision uses member banks to collect loans from citizens and transfer (discount) the ownership of those loans up through Federal Reserve Bank Corporations because they want to collect gold or legal tender directly from the citizens. The Federal Reserve Bank corporations pay with a liability side credit to the member bank’s reserve account, which creates new money with Single-Entry in Double-Entry Accounting.  

What is the significance of only 5 Federal Reserve Banks filing a Comptroller of Currency Certificate of Organization that nobody sees as a problem? The significance is direct access to the U.S. Treasury to buy Treasury bonds with free Fed funds and then use those Treasury bonds to get free Fed notes.

How does the Comptroller of Currency Certificate of Organization affect the inventory of Fed notes? As per Section 4.4 of the 1913 Federal Reserve Act, the Treasury accepts deposits of the Treasury bonds bought with free Fed funds, and then the Five Certificates receive an equal amount of Fed notes for free. Each Treasury bond increases the inventory of Fed notes [See Chapter 27: Federal Reserve – Notes – Free Fed notes, page 431]

How does increasing the inventory of Fed notes also increase the national debt? The fact that a Treasury bond is needed to get Fed notes increases the national debt. A new Treasury bond grows the national debt.

How does increasing the national debt also increase the inventory of dollars in bank accounts, which causes inflation? The national debt increases with each Treasury bond sold. The problem is that Five Certificate Reserve Bank Corporations buy all Treasury bonds with a Single-Entry in the Reserve Checking System, increasing Congress’s Reserve Checking account balance. This Single-Entry coins new dollars as an account balance. The national debt isn’t borrowing dollars already in the system. The national debt is funded with new, never-been-used dollars in the Reserve Checking System, which is spent into the Legal Tender Checking System (demand deposits) which leads to inflation.

The Core Reason America is Financially Weak

The Federal Reserve System was created when gold was money but we don’t use gold as money anymore. That’s because the Federal Resrve Act converted the US dollar from gold-as-money to accounting-as-money, which is elastic currency.

When gold was money, the US Treasury needed to attract investors to buy Treasury bonds with gold. The function of attracting investors is called Open Market Operations. The main tool was interest rates. Interest rates were raised to increase the income of gold with Treasury bonds. Interest rates were lowered to decrease the income of gold into the US Treasury.

Here is a hypothesis, if the government doesn’t need to attract gold then the government doesn’t need to manipulate interest rates.

Do you disagree that Open Market Operations are now obsolete because we don’t need to attract gold from investors anymore?

Do you disagree that borrowing the National Debt is obsolete because we use Worthless-Money-Made-Out-Of-Nothing, which is simply a bank account balance increase created with an accounting trick called Single Entry in Double Entry Accounting? [See Chapter 26: Single Entry]

This book explains that a Single Entry in Double Entry Accounting can be performed on the books of the US Treasury as easily as it is now performed on the books of a Federal Reserve Bank corporation. The significance is that it is $1 billion per week cheaper to Single Enter “Free Money-for-Nothing” on the US Treasury’s books than on the books of a Federal Reserve Bank corporation. [See Chapter 30 Recommendations.]

The objective of this book is to reinforce the constitutional specification that only Congress increases the money supply. [See Chapters 8 Constitutional Representation].

Congress will then coin new “Lawful Money” on the US Treasury’s books. The Treasury then becomes the “Lender of Last Resort” and lends “Lawful Money” to the Federal Reserve when needed.

Learn how the original reserve bank corporations, aka clearing-houses, got authorization to print “Lawful Money” as a paper bill which later evolved into Fed fund reserves as checking account balances in the 1913 Federal Reserve Act. [See Chapter 18: 1864 National Currency Act: Clearinghouse certificates]

Financially Great points Congressmen to the specific text in the Federal Reserve Act that are obsolete today and explains why. It also points to the laws that can be used to modernize our system without destroying our bank account payment system. The Federal Reserve Act is so flexible that no laws need to be changed. All Congress has to do is change a couple of administrative procedures to Make America Financially Great!

Which would you rather have?

  1. All the gold in the world?
  2. All the money in the world?
  3. The power to clear checks, debt card and credit card sales?

The point is that the amount of gold and money in the world is finite. They can be spent to the point of running out. It’s like smoking cigarettes or drinking beer, wine or eating potato chips. No matter how much you have it always runs out.

In contrast, the power to clear checks doesn’t have a limit. One more check can always be cleared to buy dinner, a car, a house or a politician. A check transfers the balance from the buyer’s bank account to the seller’s bank account. The power to clear checks gives a Central Banker the power to pay the seller but without withdrawing from the buyer’s account. The buyer can keep buying and buying without bouncing a check.

This check-clearing power created a new class of people. The new term that refers to these established individuals is the “infinitely rich”. 

Greatest Banker-Robbery in the Universe

For those who are not professors, have you ever heard of a book called The Creature from Jekyll Island? It is a fascinating read that exposes a financial conspiracy at a resort hotel called Jekyll Island, and resulted in the establishment of the Federal Reserve central bank system. While the book is excellent at shedding light on this conspiracy, it falls short in describing the specific tricks built into the 1913 Federal Reserve Act, which gave a select few Central Bankers free money. [See Chapter 21 Federal Reserve: Monopoly.] Free money is where the book Make America Financially Great comes in – it aims to fill the gap in our financial education and provide insight into the built-in tricks that created this issue.

Interestingly, once classified as a conspiracy theory has since been confirmed as a true story by the Federal Reserve Board of Governors. In fact, in 2010, these Governors even went to Jekyll Island to celebrate the 100th anniversary of the meeting where the wealthiest bankers in 1910 conspired to evolve the banking laws of the time into a new, more profitable system for themselves. [See Chapter 18: 1864 National Currency Act] They established Worthless-Money-Made-Out-of-Nothing as bank account balances with two classes of fiat money – one authorized as Legal Tender Checking and the other as Reserve Checking. [See Chapter 22: Federal Reserve: Elastic Currency.] Additionally, they set up administrative specifications that gave them access to free money that citizens did not want them to have. Today, this gives a few Central Bankers trillions of free U.S. dollars printed as bank account-balance-increases and free Federal Reserve notes, which directly link to the money-inventory inflation problems citizens face today. [See Chapter 27: Federal Reserve: Free Fed Notes]

The insinuation is that university professors were not taught the Jekyll Island tricks that are built into the 1913 Federal Reserve Act when they were students.

The author of Financially Great understands that professors believe that they are teaching their students the correct information about the way the Federal Reserve Act created Worthless-Money-Made-Out-of-Nothing and free Money-for-nothing. The fact is that professors were not taught the Jekyll Island tricks when they were students. The author wrote this book as completely and accurately as possible to bring professors up to speed quickly. He researched previous congressional acts to define terms. Then used, those definitions to identify significant sections of the Federal Reserve Act. The intention is to accept the congressional documents as fact. Then the author described how these facts built the administrative procedures strangling citizens with money supply inflation today.

Another thing The Author did to save the reader time was to include a copy of the 12 documents he quoted in the appendix so the reader can save time on confirming the facts. The sections quoted in Financially Great are in bold font. [See Appendixes A-M]

  • Appendix A: 1913 Federal Reserve Act
  • Appendix B: 1776 Declaration of Independence
  • Appendix C: 1789 US Constitution Article 1
  • Appendix D: 1790 Alexander Hamilton Report on National Bank
  • Appendix E: 1791 Alexander Hamilton for the Bank
  • Appendix F: 1819 Supreme Court: McCulloch v. Maryland
  • Appendix G: 1824 Supreme Court: Bank of US v Planter’s Bank of Georgia
  • Appendix H: 1864 National Currency Act
  • Appendix I: 1694 Charter of the Corporation of the Bank of England
  • Appendix J: 1791 [First] Bank Corporation of the US
  • Appendix K: 1816 [Second] Bank Corporation of the US
  • Appendix L: 1900 Gold Standard Act
  • Appendix M: 2005 Federal Reserve System: Purposes & Functions

Declare Congressional Documents as Facts

In order to move forward, we must come to an academic agreement based on factual information regarding Worthless-Money-Made-out-of-Nothing. The congressional document called the “Federal Reserve Act created the current form of Worthless-Money. The long title is “An Act to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.” Let us agree to use this document as the foundation for discussions and university teachings on this topic.

Citizens, professors, professionals, Congressmen-women, YouTube producers, and conspiracy theorists must acknowledge that the Federal Reserve Act has established systemic facts. However, they are welcome to challenge the author’s interpretation of the utilization of those facts. To fully comprehend the new concepts presented in Financially Great, the recommendation is for readers to give the material a second read. They are then welcome to question the author’s interpretation of the facts in the constitutional document as it applies to today’s system. The author is counting on professors succeeding in their efforts to Make America Financially Great. For those who are up for a challenge, study the documents from Appendix A to M at least ten times each to reveal hidden loopholes. This study is the same approach the author took.

Who Ruled the Federal Reserve is Constitutional and Why is he Wrong?

[See Financially Great: Chapter 8 Constitutional Representation and Chapter 16: Supreme Court Error 1 and Chapter 17: Supreme Court Errors 2 and 3]