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Created Out Of Thin Air – That Is Where The Federal Reserve Got The 1.3 Trillion Dollars That It Bought All Of Those Mortgage Backed Securities With

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When the mainstream media told the American people that the Federal Reserve was going to “help” the housing industry by buying up hundreds of billions of dollars worth of toxic mortgage backed securities, very few people probably even stopped to wonder where all of that money was going to come from.  Well, the truth is that it did not come from anywhere.  It was made up out of thin air.  In fact, a total of 1.3 trillion dollars was just “printed into existence” so that the Fed could soak up these problematic securities (and help their buddies down on Wall Street in the process who were desperate to dump them).  During a recent Joint Economic Committee hearing on Capital Hill, U.S. Representative Ron Paul directly confronted Federal Reserve Chairman Ben Bernanke about this 1.3 trillion dollars.  As Ron Paul described how this 1.3 trillion was just created out of thin air, all Bernanke could do was nod his head.  Why?  Because it was the truth.

Of course we all know that the Federal Reserve creates money out of thin air all the time, so that is not new, but what is new is the recklessness and openness with which they are going about doing it.

Need to help your buddies down on Wall Street by buying up a tsunami of bad mortgage securities?

Just zap another trillion dollars into existence!

Need to bail out the mortgage giants Fannie Mae and Freddie Mac?

Just get the magic money printing machine ready!

Wouldn’t it be nice if the rest of us could create money out of thin air?  It would make life so much easier.

A video clip of the exchange between Ron Paul and Bernanke at this hearing is posted below.

The key moment comes when Ron Paul makes this statement….

“Well, where did you get the money? You created this money. So you did monetize debt, and that went into the banking system.”

As you watch this video, you will notice that at that moment Bernanke nods his head up and down repeatedly….

So who does all of this money printing benefit?

Well, it benefits the Federal Reserve and the big financial institutions on Wall Street that have financial ties to the Federal Reserve.

It certainly does not benefit the rest of us.

No, in fact Bernanke says that the rest of us need to get ready to pay higher taxes and have a lower standard of living in order to pay for the big financial mess that our politicians and the Fed have gotten us into.

So while there are lots of smiles going around in Washington D.C. and on Wall Street these days, the same cannot be said for the rest of the good ole U.S.A. as the following video illustrates….

The reality is that the United States is a nation that does not even have control over its own currency.  If the United States government wants more money, it has to go ask the Federal Reserve to create it.  Unfortunately, the Federal Reserve does not also create the interest that will ultimately be paid on that new money that is being created.  So where will the money come from to pay the interest?  Well, by creating even more money (debt) in the future.  It sounds like insanity, but that is the U.S. financial system.  It is a perpetual debt machine that was created to have an ever expanding national debt that is mathematically impossible to pay off.

Just because the folks down on Wall Street do not dress up in gang colors or try to sell drugs to our children does not mean that they are not corrupt or that they are not criminals.  In fact, the truth is that the corruption in our financial system is hitting unprecedented levels.

But most Americans have no idea what in the world is going on in the financial system.  All most of them know is that things are getting bad and they want somebody to “fix” the problems.

Unfortunately, the folks that the American people are expecting to “fix” things are the very same ones who got us into this mess in the first place.

“Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States.”
-Senator Barry Goldwater

“A great industrial nation is controlled by it’s system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world–no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men.”
-President Woodrow Wilson

“The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson.”
-Franklin Delano Roosevelt

“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”
-Abraham Lincoln

“Give me control of a nation’s money and I care not who makes it’s laws”
-Mayer Amschel Bauer Rothschild


  • why so many bad things are happening

    Could it be that we have forgotten to Thank God for our prosperity? Could it be that we are hedonistic idiots, instead of God fearing people?

  • nader paul kucinich gravel mckinney

    Does the Government & Propaganda Media lie to you?
    the truth about the gulf oil catastrophe
    future of a nation with no trust
    the official 9/11 pack of lies
    banker bodyguards
    lying to the public
    government liars
    corporate liars
    financial theft
    media liars
    pure greed

  • Lunatic Fringe

    Well done.

  • Give me control of a nation’s money supply, and I care not who writes it’s laws. – Mayer Amschel Rothschild

    Such a corrupt man. But these corrupt people have always dominated the masses. Always been smarter than the rest.

    I pray that one day, the Federal Reserve is shut down.

  • The end of the euro is a matter of days…

  • Matt

    The corrupt always are watching their backs. Is that living?

  • xander cross

    sorry but you have no evidence that god exists and also, religion is also a big part of the problem as well. It’s funny how when something happens, it’s “god’s will” but yet, you all take part in the sin of usuary.

  • Mortgage Backed Securities: Simplified.
    Ok, so here it is: The banking cartel (European central bankers who own the Federal Reserve) have the control of Americas money supply. To control America there are a few things that need to be done (you can count them on one hand). One of these is to own property assets (all kinds, including residential). To own them, they restrict the money supply and cause a financial crash. This was done through predator lending schemes knowing unqualified lenders would get loans. First step in the scheme is to increase the money supply “just enough” and make laws to “give” marginal buyers a way to buy property. This would move the property from those that had the ability to make payments into the hands of those that do not have the ability to pay, for profit from the sale. Then, pull back on the money supply “just enough” to cause a crunch. This crunch rolls into mortgage defaults. Now, just add a few ledger entries (simply add numbers into a central banks computer) creating money out of thin air, and use these dollars to buy the toxic mortgages from the smaller banks and mortgage companies at a “cut rate.” That is called “Mortgage Backed Securities.” Now the true wealth is being transitioned to European Central Bankers.

    In America we call that STEALING! Nevada has laws against this! (see NV Constitution Art1, Sec14) When I am Governor of Nevada, immediately this game comes to an end. Find out more:

  • People are starting to wake up.

    The Fed Reserve and Government have conspired to lie and to steal us blind. It is an elite system of greed where the victors continue to kick the losers to the curb.

    Freedom’s just another word for “nothing left to lose.” The music will stop soon. Maybe the elite will find themselves with no place to sit down.

  • Andy waters

    Xander Cross, How can there be sin if there is no God? If we are just smart monkeys, how can there be right and wrong? Open your mind and your heart. andy

  • BillyCrandall

    The reason America is in so much trouble is because people are “praying” for things to get better instead of going out there and making the changes that need to be made. There is no god helping america.

  • jenchen

    I have been predicting this for a long time-it is simple-the end of a cycle-when jupiter and saturn are conjoined in the same sign at the same degree-the market peaks-when about 20 years later they are opposed-in opposite signs at the same degree it crashes-check back through history. May 22 2010-there will be a crash worse than ever before-the tables will turn-if what you have done in the sowing period is hoarding wealth while others starve-if inequity is your goal-then now you will starve while others hoard. The same is true of your oppressed-those you oppress-even those in prison who are insane criminals will eventually get the upper hand-and oppress you all in the same way you oppressed them previously-oh yeah that is precisely why the Government/banks are being run by a small group of criminal sociopaths. You can tell a lot about a society by the way it treats its criminals and the insane-because that way will eventually be what that society will someday be forced to suffer by those they formerly ruled over(oppressed) who now rule over them-Get the picture? You reap what you sow-in cycles so you can be aware of your own truth and correct it-unless you are completely stupid – oh yeah-that would be the result of lying-make others believe lies and you will never know the truth-then just like americans who think they are free-you will never know you never were anything but slaves of the banks. Had you believed in complete christian sharing-complete equality in every way-all working for the good of each other unselfishly-with no need for any barter/money-you would be reaping the heavenly world you made for others a heavenly world-rather than the Hell that is coming.

  • This one is easy to answer. An is actualy totaly legal by law. An also is even faster then printing money out of then air. Since there is no printing press involved. The answer is in the reserve banks fractinoal reserve banking practice. A clue i give here is 10/1. All the usa gov has to do is open a bank acount deposit say 1 trillion $ an then the bank can loan 10 trillion out. Its how the banks work.

  • Arturo

    Just discovered your site. Congratulations! The topics covered are what concern the current generations and people have to learn more so that they can comprehend the disaster which has not already struck.

    What Dang is saying is absolutely true. It’s called fractional reserve banking. Deposit one trillion and lend 900 billion. Deposit 900 billion and lend 810 billion and so deducting 10% each time for banking requirements. The only problem is that this simply creates more debt, more liquidity amd more inflation – which is the problem facing the US and Europe right now.

    Since the creation of the Federal reserve in December 1913 ( it is a conglomeration of private banks, mainly from the UK and Europe and has nothing to do with the US government except that it lends money at interest to the Treasury) the greenback has lost 97% of its purchasing power.

    The answer will be a revolution and since the state knows this they have hundreds of FEMA camps ready for you guys who step out of line. Google it.

  • duggy dugg

    soft as a fresly laid turd ; you don’t come close to telling the story ; you make the “financial system” and the “fed” seem complicated …that only the intellectuals can understand ….IT IS DIRT SIMPLE

    1. the greatest scam in history : the “fed”
    2. the biggest problem there is : government borrowing from the ngo nga non-federal “fed” , no more federal than federal express ! the fake central bank is a cartel ! owned by other bank gangsters ;

    the fed bribed into existence in 1913 is a collusion of big banks ; not a central bank at all ; central bank implies that the government owns the “central” bank ;

    the fed is a private bank masquerading as a central bank with the deceitful name federal ; it is not federal and has no reserves of gold or anyhthing else to back up the fake dollars [ federal reserve bank notes ] it fraudulently issues !

    the fed conjures dollars [ trillions ] from nothing and loansharks the trillions to congress plus vig ! ! ! that is the real story ;

    government meekly sells bonds [borrowing $ ] the bonds carry vig [interest] and have to be paid back ! the fed is the government’s co-conspirator ; GOVERNMENT BORROWS ; THE FED LOANS ; WE ARE IN THE FED’S DEBT AS A RESULT


    demand the end of gov’t borrowing
    demand the end of the fed creating america’s $

    • Jason

      Sounds like you watched a little zeitgeist

  • Russ

    We ‘The People’ have no one to blame but ourselves.

    We keep voting for politicians whose only concern is to get re-elected, and those politicians keep giving us goodies and freebies and ‘entitlement’ programs in return.

    When the people finally wake up, realize there is NO free lunch, and vote for true Constitutional purists who shut down all of the Federal overspending, THAT’s when this country will get back on track.

    I just wonder if ‘The People’ will have the collective stomach for the sacrifices that must be made……it’s gonna be PAINFUL.

  • Jason

    Most americans refuse to listen for the simple fact that most americans are uneducated when it comes to the regulations and the regulators who manipulate us to gain control over us all. Our governement im sure is fully aware that the majority of us have no idea how our economy works. The majority of us just take what is given. We dont care how much money is printed from thin air or how much debt is accompanied with it because for 1. We dont understand and for 2. We dont have enough time in the day between work, family, finding sleep, and keeping up with Kardashians to even give thought to the subject. The goal is to keep us all content which will help keep our mouths shut, because without discontent within society, there is no opposition, no change. So i say bring on the collapse of our currency, our economy and our way of living because until then and only then will we be able to pull our heads out of our holes and open our eyes to see things for what they really are and as a society make the necessary changes to do whats best.

Finca Bayano

Panama Relocation Tours



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