Let's use a standard house loan as an example. You walk into a bank and ask to be hypothecated. Hypothecation is a fancy word that means to be put into debt to then create new bank money. You are presenting yourself and your signature authority to create new money. The banker rubs his hands in glee. Step 1: A debt instrument, in this case a mortgage, is typed up. Step 2: You sign the mortgage - and become hypothecated at that instant. Step 3: The mortgage debt instrument is attached to the bankers double entry ledger as an asset. We talked about paper assets earlier. Step 4: The banker creates new ledger entries to equal the amount specified in debt instrument. These new ledger entries show up in the banker double entry ledger as a liability. Step 5: You ask, where is my money. Step 6: The banker then tells you it may be found in your checking account.
The new banker credit that was created, is not a deposit by the bank, it is new money created from nothing (ex-nihlo) and is bank bookeeping record of their liability to you.
Step 7: You spend this bank money into the supply, and other people use it.
Step 8: You recall this bank money in the form of wages, and then throw it the banker to pay your debt instrument.
Step 9: IMPORTANT. The bank receives your payment, and then apportions it into reducing ledger numbers. If it vectors into principle, then that money disappears. If it is interest payment - it is PURCHASING POWER for the banker.
We need to stop here for a moment of reflection. In the first payback cycles of your debt money (bank credit) almost all of it goes to paying interest. Say it isn't so. It is so. So, if you have a 30 year mortgage, your cost of mortgage may be 3X the original principle. This upfront payment of interest is USURY. It is the taking of something for nothing. The scheme is to take your labor value and vector it to paying idle rent seekers in the finance sector.
Step 10: The banker spends your interest money on buildings, land, bad debts, and bribing government officials.
Let's stop here for more reflection. You are paying for your own dispossession. This is another form of usury, the taking of your life energy to then dispossess you of life.
There is also seigniorage involved The first cycles of interest payments are using money that has not been inflated, therefore it has more purchasing power.
Step 11: At the back end cycles of the loan period (toward the end), you start paying down the principle. This then drains the money supply, so others do not have a transaction medium, and hence cannot buy and sell. I
Step 12: If too many people are paying down, and not taking out loans, then the transaction money supply is in debt deflation (like today), and that then forces people out of work.
These sort of schemes have been created over very long stretches of time, and are sophisticated constructs.
The house builder has a different kind of debt instrument, where he pays little to no interest up front on the builder loan, but it must be all paid at the end. In this way, the house builder and banker are in collusion. Housing and land are now teamed up together in FIRE (finance, insurance, real estate) to then control the world with their bank credit.
This scheme also pushes housing prices, making the access to living high cost.
Hitler created a housing boom during the NAZI years, to then lower the access price of living. Hitler used direct injection of money into household formation in the form of loans that reduced to zero for every kid you had. In other words, the loans were forgiven and were not Jewish bank loans.
