In the beginning of the Latin translation of the Bible we read these words:
"Fiat lux"
"Let there be light."
Today our government says "Let there be money." The government thinks it is God, and can create money ex nihilo, "out of nothing."
The government creates money out of thin air through a process called "fractional reserve banking." Normally, when savers deposit their savings with a bank, the bank can loan out those deposits at a higher rate of interest than the bank pays the depositors. But what if nobody is saving any money? America's personal savings rate has gone from around 10% down to near-zero. How can there be more loans when there's less savings?
Answer: the government creates "fiat money" -- money out of thin air. It prints it up. It add digits to electronic bank accounts. It says to borrowers: if you want money, we'll create it for you.
"Are you saying borrowers create money?" Yes. Let's look at a statement or two from a book published by the Federal Reserve Bank of Chicago (a branch of the U.S. Central Bank), entitled, Modern Money Mechanics: A Workbook on Deposits, Currency and Bank Reserves.
The actual process of money creation takes place in commercial banks. [D]emand liabilities of commercial banks are money. These liabilities are customers' accounts. They increase when the proceeds of loans made by the banks are credited to borrowers' accounts.
Banks can build up deposits by increasing loans and investments.
Expansion [inflation] takes place only if the banks . . . increase their loans or investments. Loans are made by crediting the borrower's deposit account, i.e., by creating additional deposit money.
Expansion continues as the banks . . . increase their loans . . . crediting borrowers' deposits - creating still more money - in the process.
These statements do not constitute a shocking disclosure. We read about it every day in the papers, and hear about it on the Evening News: When inflation gets out of hand, what does the government do? It raises interest rates. This makes it more costly for covetous consumers to go to the banks and create more money to spend into the economy and raise prices.
There is nothing "conspiratorial" here. The Feds (the Federal Reserve System) have nothing to hide. The System was created precisely to manipulate the money supply and allow the government to buy the things it wants - including the votes of the middle and upper classes - by giving them the power to buy the things they want - "at low, low, interest."
And the most important fact to remember: every act of "credit expansion" which is undertaken by borrowing, is an act of currency debasement -- an act of creating false weights. It is an abomination to God.