Bank President Admitted that All Credit Is Created Out of Thin Air With the Flick of a Pen Upon the Bank's Books → Washingtons Blog
Bank President Admitted that All Credit Is Created Out of Thin Air With the Flick of a Pen Upon the Bank's Books - Washingtons Blog

Wednesday, September 23, 2009

Bank President Admitted that All Credit Is Created Out of Thin Air With the Flick of a Pen Upon the Bank's Books

In First National Bank v. Daly (often referred to as the "Credit River" case) the court found that the bank created money "out of thin air":

[The president of the First National Bank of Montgomery] admitted that all of the money or credit which was used as a consideration [for the mortgage loan given to the defendant] was created upon their books, that this was standard banking practice exercised by their bank in combination with the Federal Reserve Bank of Minneaopolis, another private bank, further that he knew of no United States statute or law that gave the Plaintiff [bank] the authority to do this.
The court also held:
The money and credit first came into existence when they [the bank] created it.
(Here's the case file).

Justice courts are just local courts, and not as powerful or prestigious as state supreme courts, for example. And it was not a judge, but a justice of the peace who made the decision.

But what is important is that the president of the First National Bank of Montgomery apparently admitted that his bank created money by simply making an entry in its book, which means - as we have previously pointed out - that the story we've all been told that bank deposits and reserves precede loans is false.


  1. What's most interesting are the findings in the Notice of Refusal to Allow Appeal where the court, citing the findings of the original case, refuses to allow the appeal due to the fact that the required $2.00 fee had not been properly paid.

    The document details how the two $1 Federal Reserve Notes offered as payment of the fee, having been issued in effect by the same Bank using the same mechanism for creation as ruled unlawful in the original case, are not considered legal tender, and by accepting them as payment, the Clerk's office, as an agent of the State of Minnesota, would be in direct violation of "Article 1, Section 10 of the Constitution of the United States, which prohibits any State from making anything but gold and silver coin a tender, or impairing the obligation of contracts."

    The implications of this statement are immense and the ruling has never been overturned. Too bad no judge alive has the backbone to uphold it.

  2. The average person is too stupid to comprehend this, just as Rothchild predicted.

  3. These mortgages are UNILATERAL(one-sided)contracts to benefit the will see the banks only sign as "interviewer" or "preparer".... NO consideration and NO risk. This may be tied to the Social Security (charitable) Trust also a VOLUNTARY UNILATERAL contract...see 14th Amendment (when we became primarily citizens of the federal government and not of the state in which we are domiciled) and HJR 192 when we VOLUNTARILY gave up our gold we also gave up the law to the international con't

  4. ...con't.. bankers OUTSIDE the Constitutional constraints..essentially this country is ruled by an unincorporated association under "public policy" Roman Civil/admiralty/maritime/equity law... Only to those "subject to" the 14th Amendment U.S. citizens and must revoke our Gift in Trust to Social Security if we are to be free ... individually...THE LAW FOLLOWS THE MONEY....con't..

  5. > which means - as we have previously pointed out - that the story we've all been told that bank deposits and reserves precede loans is false.

    NO! It is NOT false. It is called *fractional* reserve banking. Therefore a bank cannot create a loan out of thin air (only *almost*!) And that is the "fractional" point here: if that bank would have had no deposits or other assets, it would have no reserves required by the federal reserve! It would just have a loan of 100 US$ minus debt of 100 US$ -- which makes 0 US$ assets.

    Guys, first learn how it works. A bank does not need to get 100 US$ to make loans of 100 US$. But it needs 10 US$ or so.

  6. Answers here:

  7. I beg for someone to connect the dots for me. I follow the story about the creation of money out of thin air but I question how a bank can lend out money by just making a book entry. If someone borrows $100 from a bank and the bank makes the entry on the books how does the borrower get the $100 in cash unless the bank has cash in reserve to give out. The bank may have cash from depositors or it may go to a federal reserve bank to get the physical cash but then it should have an offsetting entry on its books to show the liability to the depositor or the FRB, correct? In the bigger picture, if the cash comes from the depositors and the bank is able to lend out say 15 times the amount held in reserve then what happens when the bank over-lends its reserve? It is out of physical cash correct? Without a loan from the FRB or some other lending facility it should then be unable to lend out any more cash correct? So to be accurate, the banks can only create money out of thin air to the extent they can supply physical cash, i.e. to the extent they can lend from reserves or borrow from the Fed, correct?

  8. "Bank President Admitted that All Credit Is Created Out of Thin Air With the Flick of a Pen Upon the Bank's Books"

    Jct: So what? Someone's got the create and issue the new chips. The problem is that the debt for each new chip born of a bank grows with interest beyond the original number of chips creating a mort-gage death-gamble between borrowers to see who can come up with the extra while the loser gets foreclosed on. The problem is the usury, not that the banks create new chips.

  9. At least now I know where the people who show up at town halls to shout down their Congressmen are blogging

  10. The problem is both the usury AND the creation of money from thin air. It is absurd to blame one and not the other. Currency should be issued by the state and without usury so there is amply money in the supply to actually cover the loans in existence. The currency should also be backed by real wealth that is consistent so it is not inflated away. Lastly, the person who made the comment about this simply being a case of fractional reserve lending, although well intended is being naive. The banking system is a system of prey, whereby the money is created out of thin air. Anyone who even believes the fractional reserve lending myth needs to study the banks in more detail and depth. Have you see what transpires in our market place these days? Do you really think this concept of fractional reserve lending is being enforced? This court case is accurate and it is directly reflected in many public Federal Reserve publications (issued by the bankers)

    What we need is real judges with real backbones and real discretion....

    P.S. The banks can be beat in their own game, ask if you need the help

  11. In answer to "how": the signature of the borrower on the "note" becomes "tender" and is placed on the asset" side of the "ledger", (not the "debit" side). Acting as an asset, this "security note" now becomes a basis for further fractional reserve loans.
    In other words, with assets on hand of "X", the institution can legally lend 10 x "X" at "Y" interest, and then receive an "asset note" of 10XY. Now, with an asset of 10XY, the institution can now lend 10 x 10XY at "Y" interest, call the "securitized note" another asset, and so on, and so on.
    Eventually the community ends up in a circulating currency pinch as all currency get confiscated in interest payments unless further debt is extended.
    Let us say X = 10, and Y = 7%; then with 10 dollars on the books, an institution can lend 100 dollars at 7% for 30 years and receive a "note" for this loan. This "note" shows a "face value of $100 x 7% x 30 years or about $300. This "$300" is not placed as a "liability", but instead as an "asset". Based on this "new asset" this institution can now lend $3,000 at 7% for another 30 years receiving a note "valued" at $9,000 on the "asset" side of the institution's ledger.

  12. The end of the pyramid being cash loans from the FRB is not accurate. Lending institutions sell the promissory notes they receive and then contract to "service" them. As long as an institution has sufficient credit to float short term loans to cover their funding obligations they can continue pyramiding up their debt, converting it to "notes" and selling this debt/note currency as if it has value.
    This must be remembered, there is (currently) no such thing as money. What we call "money" or "cash" is really "promissory notes" issued in the name of the FRB. These are "backed" quite literally by what I like to refer to as, "the promise of known liars". Promissory notes backed by real estate are of greater value than the empty promissory notes of anonymous "Reserve" bank owners.
    When the entire picture is fully comprehended, the FRB is actually loaning the promise to tax a populace, and charging that populace everything it owns for the privilege to pay them back that populace's own stock of value. It is a brilliant tactic for the confiscation of assets. But, like any other "magic act" it requires diversion, which seems to come in the form of "fear" and "war" and "accusations"; which tactics never seem to fail to spell bind the populace of any community of people through out history.


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