Credit Cards and the Fed - It's worse than I ever knew

[Mesogen]

I just came across a banner ad for this company.

http://www.fdrs.org/

This page:

http://www.fdrs.org/debt_termination.html

explained to me for the first time what happens when you apply for a credit card.

I couldn't believe it. To me, it's the worst kind of fraud and racketeering ever, on the grandest scale ever. No wonder our money is going down the toilet.

Check it out.


False Advertising

Banks bombard consumers with over 6 billion mail solicitations each year. Notwithstanding newspaper, radio, television, magazine, sporting event advertising and numerous other forms of marketing, the average working class, credit worthy, American is exposed to over 75 loan solicitations per year.

These banking ads represent, in one way or another, that the bank will lend you money in exchange for repayment, plus interest. This absurd idea is completely contrary to what, in reality, transpires and what is actually intended. In actual fact, banks do not lend you any of their own, or their depositors money.

False advertising is an act of deliberately misleading a potential client about a product, service or a company by misrepresenting information or data in advertising or other promotional materials. False advertising is a type of fraud and is often, a crime.

To substantiate this premise, we will begin by examining the funding process of credit cards and loans. When you sign and remit a loan or credit card application, (say you are approved for $10,000.00) the commercial bank stamps the back of the application, as if it were a check, with the words: "Pay $10,000.00 to the order of..." which alters your application, transforming it into a promissory note.

The bank takes your line of credit and turns it into a phantom loan for the full value of the credit limit.


Fraud, Forgery & Intent to Deceive

Altering a signed document, after the fact with the intention of changing the document's value, constitutes forgery and fraud. Forgery is the process of making or adapting objects or documents with the intent to deceive. Fraud is any crime or civil wrong perpetuated for personal gain that utilizes the practice of deception as its principal method.

In criminal law, fraud is the crime or offense of deliberately deceiving another, to damage them - usually, to obtain property or services without compensation. This practice may also be referred to as "theft by deception," "larceny by trick," "larceny by fraud and deception" or something similar.
By turning your credit application into a promissory note, the bank has committed fraud and forgery.


Deliberate Theft By Deception

Having altered the original document, the (now) promissory note is deposited at the local Federal Reserve Bank as new money. "Generally Accepted Accounting Principals" (the publication governing corporate accounting practices) states: "Anything accepted by the bank as a deposit is considered as cash." This new money is now a three to ten percent fraction of what the commercial bank may now create and do with as they please.

So, $100,000.00 to $330,000.00.00, minus the original $10,000.00 is now added to the commercial bank's coffers. With this scheme they are taking your asset, depositing it, multiplying it and exchanging it for an alleged loan back to you. This may constitute deliberate theft by deception. In reality, of course, no loan exists.Holy F*&@ing Sh#%!!!:eek:


Fraudulent Conveyance

At this point in the process, they have now transferred and deposited your note (asset) to the Federal Reserve Bank. This note will permanently reside and be concealed there. Since they've pilfered your promissory note, they owe it back to you. It is you, therefore, who is actually the creditor. This deceptive acquisition and concealment of such a potentially valuable asset amounts to fraudulent conveyance.

In legal jargon, the term "fraudulent conveyance" refers to the illegal transfer of property to another party in order to defer, hinder or defraud creditors. In order to be found guilty of fraudulent conveyance, it must be proven that the intention of transferring the property was to put it out of reach of a known creditor - in this case, you.


It just gets worse from there.

Who knew? Not me. No wonder they want college kids to have a dozen credit cards with $5k limits each.

I'll never look at credit cards the same way again.

[MadEmperor]

Never heard of any of this.
Which companies are they implying does this kind of thing?

[freelance]

wow...this is basic economics put in fear mongering rhetoric form. Go check out an Economics textbook, specifically Macroeconomics, and read the chapter about monetary policy. This is how we control inflation and unemployment in a free market system. Relax, its not as bad as that article makes it sound.

Uh, this is exactly why Ron Paul wants to change the monetary policy--so that we can have a FREE market instead of today's managed market.

[sickmint79]

it's the banking system so... all of them !

http://video.google.com/videoplay?docid=-9050474362583451279

[Chris_in_Florida]

wow...this is basic economics put in fear mongering rhetoric form. Go check out an Economics textbook, specifically Macroeconomics, and read the chapter about monetary policy. This is how we control inflation and unemployment in a free market system. Relax, its not as bad as that article makes it sound.

[Mesogen]

wow...this is basic economics put in fear mongering rhetoric form. Go check out an Economics textbook, specifically Macroeconomics, and read the chapter about monetary policy. This is how we control inflation and unemployment in a free market system. Relax, its not as bad as that article makes it sound.

So yer saying that inflating the money supply controls inflation? Increasing debt controls unemployment? Please explain.

[Chester Copperpot]

So yer saying that inflating the money supply controls inflation? Increasing debt controls unemployment? Please explain.

all the inflation is caused by increasing the money supply.. or more accurately the curency supply.

[Syren123]

Looks like ya'll need to read The Creature from Jekyll Island. Everything the OP described is delineated in the chapters called "Nearer to the Heart's Desire" and "Home Sweet Loan." The extent to which we American workers and taxpayers have been fleeced will not only boggle your mind, it will give you renewed commitment to end this criminal regime posing as a govt.

The theft, crime, and complicity of govt and the banking cartel is so astounding it's got to be fiction, but when you read the book, you know it's the truth. The book was written 13 years ago, and everything the author states about the 'final play' of the New World Order is happening right now. Get the book tomorrow and start reading immediately.

[jaybone]

all the inflation is caused by increasing the money supply.. or more accurately the curency supply.

Actually, inflation is the increase in the money supply.
Price increases, or more accurately dollar depreciation is a symptom of inflation and not technically inflation itself.

[Mesogen]

There are different types of inflation. Monetary inflation (increasing the money supply) and price inflation.

This blog item explains it nicely.
http://my.opera.com/weirdling/blog/show.dml/32853


What banks and the credit card companies create, though, is too much money too quickly by offering credit so easily and cheaply. And consumers are all too eager to take advantage of the easy credit without realizing that they are making everyone, including themselves, poorer in the long run.

The reason I said that it's worse than I thought is because, I thought that only mortgages and other types of bank loans were inflating the money supply, but I didn't realize that credit cards basically inflate it even faster, are far more ubiquitous, and create massive amounts of debt. It's just plain insane.

I have a few credit cards for 'emergencies.' I think the total credit limit on them is like $40,000. Mind you, my total balance is maybe $1000 (yes, I need to pay it off, I'm lame) but I had no idea that by being issued these credit cards, I was effectively being issued unsecured loans for the total amount of the credit limit. Like a dumbass, I increased the money supply by at least $40,000 with absolutely nothing of value to represent that $40,000. There are millions of people out there all doing the same thing.

It's a completely F-ed up system.

[Chris_in_Florida]

So yer saying that inflating the money supply controls inflation? Increasing debt controls unemployment? Please explain.

#1 Im only quoting the Macroeconomics class I just had to endure this summer, Im not saying its a good or bad thing. Im always open to a different view point.

#2 What I was saying is exactly the opposite of what you just implied. The fed controls inflation and unemployment through what is called contractionary and expansionary monetary policy. When price levels begin to rise too quickly the fed will start selling off government bonds, which in turn raises the interest rate by depleting commercial banks excess reserves. These excess reserves are what banks make loans from. When the fed wants to encourage spending, say to fight a recession or unemployment, they buy bonds from commercial banks which increases excess reserves. This is called open market operations. The fed can also affect changes in the economy by changing the discount ineterst rate (which is the rate that commercial banks get when they borrow money from one of the regional Federal Reserve Banks) or by changing the required reserve percentage.

Banks create money by giving out loans. Lets say the required reserves for a bank are 10%, and they have $100,000 in checkable deposits. They only have to keep 10% or $10,000 to back that $100,000. Anything above that is excess reserves and open to being loaned out. When a bank lends out $20,000 to you to buy a car and you pay back interest, it just created money in the form of interest. Also, in the simplest form, the Fed, by allowing that bank to give the loan, created the jobs of everyone involved in selling you or building you that car.

[Chris_in_Florida]

There are different types of inflation. Monetary inflation (increasing the money supply) and price inflation.

What banks and the credit card companies create, though, is too much money too quickly by offering credit so easily and cheaply. And consumers are all too eager to take advantage of the easy credit without realizing that they are making everyone, including themselves, poorer in the long run.

The reason I said that it's worse than I thought is because, I thought that only mortgages and other types of bank loans were inflating the money supply, but I didn't realize that credit cards basically inflate it even faster, are far more ubiquitous, and create massive amounts of debt. It's just plain insane.

I have a few credit cards for 'emergencies.' I think the total credit limit on them is like $40,000. Mind you, my total balance is maybe $1000 (yes, I need to pay it off, I'm lame) but I had no idea that by being issued these credit cards, I was effectively being issued unsecured loans for the total amount of the credit limit. Like a dumbass, I increased the money supply by at least $40,000 with absolutely nothing of value to represent that $40,000. There are millions of people out there all doing the same thing.

It's a completely F-ed up system.

The question is, in a completely free market system, would it be better or worse? Banks give credit cards because there is a market for credit cards, the same with other loans. So does the Fed actually help to control something that would be completely running wild if it were not there to regulate the industry in a way?

[Syren123]

banks create money by giving out loans. Lets say the required reserves for a bank are 10%, and they have $100,000 in checkable deposits. They only have to keep 10% or $10,000 to back that $100,000. Anything above that is excess reserves and open to being loaned out. When a bank lends out $20,000 to you to buy a car and you pay back interest, it just created money in the form of interest. Also, in the simplest form, the Fed, by allowing that bank to give the loan, created the jobs of everyone involved in selling you or building you that car.

That is the theory. The reality is not even close. There is nowhere near the required reserves on loans either by banks or the FDIC; 'asset' figures stated by banks include fake assets such as 'monetized' debts, and banks don't make their real money on loans to you and me. That's basically to give us all something to do with our days. The real money comes in lending to large corps and 3rd world govts. Even mortgages are created to be sold back to Wall Street as packages to create 'collateralized' investments like hedge funds.

The fact that banks can get bailed out by taxpayer funded insurance schemes like the FDIC is appalling. The only thing protected are banks, not depositors. Govt regulation is nearly always BAD in that it doesn't punish bad management as the free market would do. Banks who make bad loans SHOULD eat it and go under and be held accountable, not bailed out and allowed to go on. Same with mortgages - they should eat the loss, people who lost their houses should learn their financial lessons like the rest of us, and the taxpayer should not be the savior.

[Syren123]

The question is, in a completely free market system, would it be better or worse? Banks give credit cards because there is a market for credit cards, the same with other loans. So does the Fed actually help to control something that would be completely running wild if it were not there to regulate the industry in a way?

In a free market system, it would be BETTER. There would not be the ability to run wild because there would be a LIMIT to the amount that could be lent by any institution, not an unlimited amount like their is now. There is very easy credit available that was NOT available back in the day. Back in the day, say the 60s and 70s, people were NOT over their heads in credit card debt because it was not readily available.

[Mesogen]

Banks create money by giving out loans. Lets say the required reserves for a bank are 10%, and they have $100,000 in checkable deposits. They only have to keep 10% or $10,000 to back that $100,000. Anything above that is excess reserves and open to being loaned out. When a bank lends out $20,000 to you to buy a car and you pay back interest, it just created money in the form of interest. Also, in the simplest form, the Fed, by allowing that bank to give the loan, created the jobs of everyone involved in selling you or building you that car.

The interest didn't create the money. Money was "created" when they loan out money from their reserves, then someone else deposits that same loaned money back into the system, then that money is again lent out. This keeps going until many people are in debt to the interconnected banking system based on the original reserves, which is nowhere near the amount of debt everyone owes the banks.