The scam called a bank loan part deux

In part deux of the bank loan scam we investigate if banks loan out deposits.

Lets take a look at federal reserve bank publication Modern Money Mechanics...

Of
course, they do not really pay out loans from the money
they receive as deposits. If they did this, no additional
money would be created.

Also in the same publication under "expansion stage 1"


Loans are made by
crediting the borrower's deposit account, i.e.,
by creating additional deposit money.

https://archive.org/stream/ModernMoneyMechanics/MMM_djvu.txt


I highlighted CREDITING because it again reinforces the point, this was a currency swap, they are crediting you, not "loaning" you. And again they are creating this money they are giving to you, which is really just bank credit.


Lets take a look at another federal reserve bank publication, "i bet you thought" was put out by the NY fed to help dispel myths about money....

http://files.eric.ed.gov/fulltext/ED175743.pdf

Banks create money by "monetizing" the private debts of businesses, individuals and governments. That is, they create amounts of money against the value of those lOUs.



And there you have the key, they MONETIZE the private debt(promissory note).

What does 'Monetize' mean

To monetize is to convert an asset or any object into money or legal tender.

Read more: Monetize Definition | Investopedia http://www.investopedia.com/terms/m/monetize.asp#ixzz4HMzDpFha
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So how do they monetize your debt?

Well a promissory note is a negotiable instrument per UCC (check your state statutes)

https://www.law.cornell.edu/ucc/3/3-104

We are the "Issuer/Maker of the instrument

3-105. ISSUE OF INSTRUMENT.

(a) "Issue" means the first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of giving rights on the instrument to any person.

 

 

 

Lets go check some definitions....

 

https://www.law.cornell.edu/ucc/3/3-103

 

Drawer" means a person who signs or is identified in a draft as a person ordering payment.

 

"Maker" means a person who signs or is identified in a note as a person undertaking to pay.

 

 

To go on, we need to understand the definitions of "payment order" and "funds transfer".

https://www.law.cornell.edu/ucc/4A/4A-103

https://www.law.cornell.edu/ucc/4A/4A-104

 

 

So now we understand that we are the originator of the first funds transfer.

More on the funds transfer aspect in part 3.