Reply #14: Because of the Fraction Reserve System

[the other one]

The Federal Reserve licenses member banks to create money. The RESERVE REQUIREMENT is the amount a member bank needs to deposit with the FED in order to lend. If the requirement is 1 to 10, that means that a bank can deposit $1000.00 and lend $10,000.00 simply by writing it into the borrowers account. There is a re-lending amount as well, so that under a 1 to 10 requirement a bank can deposit $1000.00 and effectively lend just under $100,000.00.

So the problem is that the United States Government no longer creates money. The FED has the power to authorize banks to lend money. If the our government wants to do something it can't just create the money it must borrow it from member banks and then pay interest.

In June of 1963 JFK authorized the US to start creating money. Look at your money and you will notice it says Federal Reserve Note. For a short time in 1963 United States Notes were distributed, but six months later JFK was dead and the order was quickly rescinded.

The only bank that should be able to do this should be a National Bank.

This is the only issue I agree with Ron Paul about. OK.