Usually Doom readers aren’t shy. Take K for instance. The other day he burst open the gates of Castle to announce a new insight about Lennar. He proposes the HB as a sort of anti-DavidLereahWatch. Lennar seems so grounded in reality that they could serve as an antidote to NAR’s Chief Economist. K even proposes we should institute a whole "Lennar" Category to index their forecasts. We’re not quite ready to do that yet, but on K’s say-so we’re certainly going to study their activity and announcements with renewed vigor. K is typical. Doom readers, even the occassionally hostile REIC types who drop in, are usually straight-ahead, even straight for the jugular communicators. Doom usually doesn’t do subtle.

So we were all taken aback when right in the middle of holiday preparations at the Castle there came a gentle tapping at the window by a reader we’d never heard from before. After some hushed back-and-forth, there emerged information that not only lifted our eye-brows, it raised the hairs on the backs of our necks.

Follow us down the rabbit hole if you dare. Doom commenter Old Mike isn’t going to like it but remember, … we’re talking about the single most important economic event in the last hundred years.

We start with something only slightly mind-boggling, the distinction between Law and Equity (from Wikipedia; don’t worry, it gets worse).

The distinction between "legal" and "equitable" relief is an important aspect of common law systems, including the American legal system. The right of jury trial in civil cases is guaranteed by the Seventh Amendment of the Constitution but only in cases that traditionally would have been handled by the law courts at Common Law. [my emphasis]

Now let’s go way back to Pearl Harbor Day 1968. European student riots to rival that les Miserables stuff from 120 years previously were just dying down, and Democracy was threatening to burst out all over America. Meanwhile, real life was going on and the First National Bank of Montgomery was in a Minnesota court foreclosing on a $14,000 mortgage, based on the undeniable fact that the borrower had stopped making payments. In a fit of insanity, the bank’s lawyer had allowed the case to go to a jury. The defendent argued [1] that the loan wasn’t made with real money because US Fed notes are illegal, and both jury and judge agreed. Later, the judge refused the two dollar appeals fee.[2] The grounds were that he and the jury had just established that the money wasn’t real. Internet conspiracy theorists assert that the "Credit River Decision" is to this day the defining US case law on the subject, and that America’s money is illegal. No wonder companies avoid Law like the plague and insist on Equity procedings.

 

Meanwhile, related theories seem to have arisen up around Credit River. The presiding judge is said [3] to have been murdered, perhaps to protect the integrity of a special multi-trillion dollar fund the Illuminati uses to assassinate people it doesn’t like, among other things. There appears to be a consensus among the theorists that all this started during the famous (and, this time, well documented) 1910 Jekyll Island Duck Hunting Expedition.[4] Never fear, no ducks were harmed.

Indeed, it looks like the theorists are dead right. Clearly, Congress has the sole and undelegatable duty to manage US money, but since the Constitution is not a suicide pact, almost everyone just ignores the fact. What’s more worrying is the insight these people bring into how the Fed creates the illusion of money.[5]

"The entire function of this machine is to convert debt into money. It’s just that simple. First, the Fed takes all the government bonds which the public does not buy and writes a check to Congress in exchange for them. (It acquires other debt obligations as well, but government bonds comprise most of its inventory.) There is no money to back up this check. These fiat dollars are created on the spot for that purpose. By calling those bonds ‘reserves,’ the Fed then uses them as the base for creating 9 additional dollars for every dollar created for the bonds themselves. The money created for the bonds is spent by the government, whereas the money created on top of those bonds is the source of all the bank loans made to the nation’s businesses and individuals. The result of this process is the same as creating money on a printing press, but the illusion is based on an accounting trick rather than a printing trick. The bottom line is that Congress and the banking cartel have entered into a partnership in which the cartel has the privilege of collecting interest on money which it creates out of nothing, a perpetual override on every American dollar that exists in the world. Congress, on the other hand, has access to unlimited funding without having to tell the voters their taxes are being raised through the process of inflation. If you understand this paragraph, you understand the Federal Reserve System."

 

So, after all, it’s easy. They just do it with Feynman diagrams. A particle of money is created out of nothing along with an anti-particle of debt. If you consider Fannie’s and Freddie’s accounting as a couple of literal Black Holes, the fountain of cash that flows from the GSEs is just an instance of Hawking radiation. No wonder particle physicists and Ph.D. mathematicians have been going into finance, they are the only ones who really understand what’s going on. It’s not harmful that they get the joke at the expense of FASB, what matters is that so many of them are laughing at the money, all the way to the bank. Just remember guys, greed kills.

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Notes and References

[1]: "RE: First National Bank of Montgomery vs. Jerome Daly", WorldNewsStand blog (represented as a copy of court documentation), undated. Snopes does not comment on this, so it is either genuine or the debunkers have not yet bothered to examine it.

[2]: "Revolt In Minnesota", The Libertarian Forum, Vol I, No. IX, August 1, 1969.

[3]: "Illuminati Cash ‘Slush Fund’ Estimated At 65 Trillion Dollars: Illegal Federal Reserve At Heart Of Problem As Minnesota Judge Allegedly Poisened [sic] In 1969 After Ruling Against Corrupt Banksters", by Greg Szymanski, Axis of Logic, June 22, 2006.

[4]: "The Fed — Jekyll Island Monster", by Stephen Neitzke, Populist Party of America, July 16, 2006.

[5]: "Chapter Ten: THE MANDRAKE MECHANISM – The Method by which the Federal Reserve creates money out of nothing; the concept of usury as the payment of interest on pretended loans; the true cause of the hidden tax called inflation; the way in which the Fed creates boom-bust cycles", by G. Edward Griffin (extract of the book reviewed in [4] above).