Federal Reserve Note, Rediscounting

So doing a little research, I've found the remedy to FRNs, while has it's pro's, definitely has cons from behind the curtain...

It has to do with rediscounting. So a few things I've found. Things have changed now, with inter bank lending, but back at it's founding, The federal reserve act created a whole new tool, the federal reserve note, which allowed members and some non member banks to move assets (eligible paper, commercial loans etc.) into currency, federal reserve notes. But, obviously, there was a charge for exchanging your commercial loans into currency, the discount rate.

Example; The bank writes up a note to a commercial enterprise for 8% interest, and a person comes in requiring a huge cash withdrawl. Well you the bank, have that 8% asset, so you go to the federal reserve get your currency, federal reserve notes at 6%, for that loan, and satisfy the customers demand. You still make 2% (8-6) and get all the currency you need. This is why people say FRNs represent debt, they are literally used by the federal reserve to purchase loans or other eligible paper from member banks. The reserve bank, one of 12, that issued the FRNs was required to carry minimum (this is a while back) 40% gold to back those FRNs they issued. On the surface you think, "Hey thats cool, they need to have a huge reserve to back their obligations." But think of this, they bought a commercial loan for...60% off! They printed up the FRNs and gave them to the bank to purchase the commercial paper, dollar for dollar, as collateral and charged a fee for that transaction, an interest rate. All of those profits garnered from the eligible paper was used to, you guessed it, buy more gold to support further FRN lending. This is literally a public policy to slowly accumulate all the gold in the economy. Another way to look at it, the reserve bank can print out $100 worth of FRN for $40 worth of gold. What can they do with that $60, yes, buy gold, to lend more FRNs They get a discount on everything. If you flip the remedy on its head, the bank, after rediscounting it's loan (or trading eligible commercial paper) for FRNs can redeem those FRNs for LAWFUL MONEY and use the LAWFUL MONEY as a reserve. Sure, they have to buy them from the FED, but so what, once that Lawful money is held as a reserve, they can fractionally lend the $hit out of it.

This ACT is so maniacal, it can hardly be grasped. The act allowed for banks commercial paper which by the way were first bought with bank checks, negotiable instruments that really are never redeemed and are complete bull, to be sold or transferred to currency, or FRNs. Again, the reserve bank bought $100 dollars worth of commercial paper, for $40 of gold and charged interest. Since there was a requirement to carry a reserve (Gold) at the reserve bank, all the good real money trickled into the reserve banks. The member banks really didn't have the need for gold. The reserve banks just printed up the FRNs and bought everything at a discount. The banks needed to carry at least a reserve in lawful money, well, that required them to either get lawful money from their depositors, cash, or, rediscount their loans to FRNs at interest and convert them to lawful money. So now we have a public policy to concentrate gold into the bankers vaults.

The FRN is easily convertible to Lawful money, so the banks can use the FRN as a reserve, indirectly because it's convertible. If you can do it, they can too. FRNs though cost money to garner, because they have to be purchased. Also, this, 38 CFR 11.81, I believe is a hint as to what happens when you nakedly endorse a check. The bank uses that check as, you guessed it, commercial paper, which is eligible to be rediscounted! to FRNs. That check is not money, it's a negotiable instrument, so they can accept or decline it. The bank gets a loan from you, uses it to get a loan from the Federal Reserve, and fractionally lends upon it. That check you wrote represents nothing other then a bank demand deposit, which really is just a promise to pay, from another bank. When you redeem lawful money, the bank can't sell your commercial paper for FRNs, that money has to be held in your account as a reserve. It requires the bank to use your negotiable instrument, which is not money, to buy FRNs or lawful money (because they have to convert it) and hold that for you. There is also the tax benefits, but, there are plenty of threads on this forum.

The Fed used to control monetarty policy by raising or lowering the reserve requirements, but, when that went down to practically nothing, they resorted to the discount rate. Basically what it costs the bank to rediscount their paper. The economy is completely in the tank, reserve requirements are basically nothing, and now, the discount rate has been at .25% for years. Somethings gotta give...

page 256 shows the flipside of remedy.
http://books.google.com/books?id=Z0n...lawful&f=false

Lawful money itself cannot be used for reserves. And gold is not used for reserves these days, as the Fed has had to 'lease' its gold (used to be the people's gold, before FDR confiscated it and gave it to the Federal Reserve) to suppress the price of gold, so the sheeple will not snap to the fact that the 'money' they use is actually debt. The banks all use commercial paper, mortgages, other supposedly 'good' evidences of debt for their reserves at the Regional banks, and the Regional banks all use US Treasury bonds as reserves. But as mikecz noted, the idea of 'reserves' is now passe; banks create new 'money' (which is just numbers in a computer) whenever they create a new loan, and the reserve requirements are so trivial that they can be ignored. This is the definition of easy credit, but it still fails if no one will borrow any new money into creation. This is why the corporate government continues to run up new increased spending programs every year, so they can borrow the money directly and place it into circulation via welfare and warfare programs. The Fed wants inflation, as this increases tax revenue while decreasing the buying power of the sheeple, thus indirectly transferring more of the gross national product into the control of the kleptocrats. It's all about money and power.

The real key to lawful money is that it is foreign currency per 12 USC 95 a. Because it discharges debt, it can be used to remove assets from the social security trust ponzi. US citizens have no rights inside the trust except naked use; the states hold the legal title to assets held in the NAME account, and the corporate federal government holds the equitable title. This is the same as a serf living on the local lord's land: he cannot own anything, but he has the use of the land, and the crops he can get it to produce through his labor. But suppose he builds a wheel barrow out of local materials. Legally the barrow belongs to the lord; the serf can only use it. But now suppose the miller comes by from the local town and trades the serf some milling services for the barrow. It leaves the lord's lands, redeemed in foreign currency. Thus by using lawful money, which the corporate government cannot tax, assets can be redeemed from the trust by discharging the debt that is attached to the title by the security agreement which the federal government has executed in favor of the IMF. The only way to get assets out of the usufruct trust is to buy them in your own name. This is the activity which 12 USC 95 a gives the president the power to prohibit, as those assets (bank accounts, houses, cars, which you thought were yours), are claimed by the government and pledged to the bankers as collateral for the debt, which can never be repaid, and can be foreclosed by the bankers whenever they choose... But when held in your own name, the assets are only taxable per the methods allowed by the Constitution: income from labor, not taxable at all, property only by allocation to the states by population.

The tax benefit of lawful money arises from its issuance by the US Treasury, per the Constitution. Thus the Constitution determines how it can be taxed. The federal government corporation can only tax FRN's. The tax is on the privilege of being a card-carrying socialist member of the social security 'trust,' and thus a voluntary debt slave who agrees to submit to taxes on all the things which used to be unalienable rights, such as your labor and property, which you agree to give to the government, in exchange for all the benefits of socialism. Your social security number marks you (mark of the beast) as a US citizen, and everyone is trained through endless propaganda programs to treat you as property as soon as you admit to having a social security number. Refusal to use the NAME and SS# should allow you to operate as an American Citizen, with Constitutional rights, or at least unalienable rights, but the system is now set up to exclude you from operating within society while not agreeing to be a socialist, so there will be a lot of pushback from public agencies, banks, corporations, police, etc when you decide to start being free of the oppressive skein of man-made laws.

Freed

Don't be surprised if the "FED gang" closes up shop, high-tails it and runs for the hills when the "elasticity" of its debased currency finally snaps from obscene stretching during the last 10-12 years.

Great article here...

http://www.silverbearcafe.com/private/02.14/birth.html

Great article here...http://www.silverbearcafe.com/private/02.14/birth.html

The Chinese will take control of the Federal Reserve, and assume responsibility for management of foreign held USDollars, with some assistance by the Intl Monetary Fund. The IMF already has a Chinese dominance. The USDept Treasury late last year took back control of certain USDollar responsibility. Doing so set the stage for launch of the Scheiss Dollar, while the Chinese had been busy with acquisition of the JPMorgan headquarters in South Manhattan. The split oversight has already taken root.

I don’t think it will be the Chinese unless there is another plan.

So, basically when you are redeeming lawful money on a check, that money is being "paid" by the drawee (issuing bank), the bank listed below the pay to the order of line. The redemption causes that bank to physically reduce it's "reserves" and cannot simply pass their "obligation to pay" it's account holder.

I have an account, when I deposit $100 (assume coin is deposited, or lawful money but I nakedly endorse it), the bank takes that real $100 and creates a demand deposit account. They take that money and place it in there reserves, loan it out, whatever. With the creation of that account, they now "owe" me $100. At some point if I want to cash out, they have to pay up, but for now, the money is on loan.

If I write a check for $100 to a friend, and he simply receives it, that check is now floating. He has a 100 dollar negotiable instrument, which I suppose he could discount and sell to someone. Which would be an interesting experiment in discounting, but for now, just keeps it.

So now, my friend simply deposits that check in his bank, no cashing, no redeeming. The check is sent from my friends bank usually to an intermediary bank which inspects the account and routing number on the that $100 check, which informs my bank, drawee, of the transaction. My banks obligation to pay me will simply be "discharged" (Well mikecz, we no longer owe you the money), and transfers a new obligation to pay to my friends bank, who now owes him $100. The check is sent back to my bank, scanned and posted. My friends bank opened a demand deposit account in his name, and with that, created an obligation to pay him $100. They have reserves, but, didn't get any from this transaction, they just received an obligation. This is all fairyland money. We are literally moving obligations to pay and no one is actually paying for anything. My bank still has my "money". Say my friend then writes a check to another friend. $100 obligation from his bank, to a new $100 obligation to his friends bank on and on. The reserves are really just a sort of slush money to cover this huge mess of obligations being passed around.

Really the only way to stop they ridiculous cycle is to redeem the money. If my friend were to take that check and redeem it in cash, and things were done correctly, my bank would have to pay up. They now couldn't just transfer their obligation to pay. They would now actually have to pay lawful money, and reduce their reserves and transfer those reserves either to my friend, or to the bank. My bank couldn't keep my money any longer. In reality, his bank would issue him the "lawful money" and later get a deposit from my bank to fulfill the transaction.

Basically this is money changing and the banks are playing the float, because no one actually redeems their money. Most payments take the form in bank checks, so really, we have a bunch of promises floating around that no one ever cashes or redeems. The banks keep the money and play the float as my bank still has my coin if no one redeems the check. We can't do this, because we aren't all in a giant reserve system standing on top of the banking system. Others aren't willing to accept obligations to pay, but their banks are more then happy to do it. The bank checks are practically counterfeiting money.

This is money changing and I did it. I gave them coin, which they kept, and created an account to now "owe" me $100. I wrote a bull bank check (which is my fault, I created a bank note) and gave it to my friend. He deposited the check, nakedly endorsed it, and the obligation simply changed hands. That obligation has no meaning, it's simply a worthless.