Topic: This is the way a "bank loan" REALLY works. (Read 354 times)

But this is the exact thing that is happening to America. The banks are creating more money to give to Ukraine to destroy Russia with. And as that money filters back into the US, we have massive inflation. Other countries don't like this, so they are gradually going where it is a bit more stable... BRICS.

So, it is the US banking system destroying itself by US greed... to steal Russian and Siberia from the current owners.

Many countries, not just banks, despise bitcoin.
Can you imagine, for example, how bad it would be for America if many countries abruptly ceased to accept the USD or declared that it was worth 70% less than it had been a month earlier? We are aware that the outcome would be a complete and total collapse of the American economy.
And without any other options available to America, this could result in a significant increase in prices everywhere.

But why would Biden want to defund the American Dollar? Because of what this thread is all about. The banks have been stealing money from common people since the formation of the Federal Reserve Bank. And the government has backed them in this process.

Even if this were not true, there are bank publications that explain it this way, along with websites that do the same. The people are finding out, and the banks need to change to slip out from under their liability or potential liability to the people. The Reset is a way to confuse the whole thing so that it will be more difficult than ever for the people to get their money back from the banks.


BREAKING: Global Banks Support Biden's Move to "Defund the Dollar"

I know, I know. Just because you stick your head in a hole in the sand, doesn't mean that you haven't poked it out of a different hole.

Coming from franky1, it's about as wrong as it can get.


True. And BADecker never said that it was.


Absolutely. Signing anything is not making a loan payment. Where do you get that idea from? Bank loan payments are not made until someone makes a payment AND the bank accepts the payment. If the bank doesn't accept the payment, it isn't a payment.


But all that stuff is or may be internal banking policy. It doesn't have anything to do with a borrower and his loan except that he is living in general society.


But that isn't what the bank shows in its ledger.

When the bank accepts funds, it makes a notation of where the funds came from. Then, the funds are included in all banking funds for the bank in question. These funds are co-mingled with all the other funds that the bank receives.

It's the same in reverse when the bank removes funds - say, like for a loan. The funds are removed from the general funds in the bank, and a notation is made in the ledger what the funds are for.

The point is, when a borrower gets his loan, and then pays it off over the years, when is the bank ever going to return value to him for funding the loan in the first place, with his promissory note?

The whole bank process is like a bait and switch.


Except, in reality, since the bank ledger shows that the bank received funds in the amount of the loan from the borrower's promissory note, before the loan was ever made, there isn't any interest, because the loan was prepaid.


This is bank dealings, that they have been allowed to do by law and policy. It doesn't have anything to do with the borrower and his prepaid loan.



Your major mistake in this is that the bank ledger shows that the borrower essentially funded his own loan with the promissory note.

The point is that the whole banking system is one of deceit, and is screwing the people out of a whole bunch of their labor... when they repay the loan over the years, rather than recognizing that they prepaid the loan in a creation of new money.

Ok. So you made it up.


I'll take that as a "no".

badecker has it all wrong

firstly:
previous bank depositers are not having their value given to a borrower.

secondly:
signing a loan agreement is not you making a payment. badecker is stuck in some lame "freeman" mantra where he does not understand real life

so here goes

when people deposit into banks their (total) $500b. that paper money is burned and depositors are given a digital bank balance.

however without deleting customers deposit account balances. the bank is allowed to "create" inflation rate new bank deposits. but only to be used for mortgage/credit agreement pay outs to borrowers

so lets say its 5% inflation meaning a bank has a "pot"/allowance to create 25billion when a borrower signs the paper work

yes a borrower creates the money they sign.. even though its property of the bank where the bank is giving it to the borrower

the borrower didnt pre-pay into the bank his own loan
meanwhile
if there was say a loan for $200k at a 3% interest rate for 20 years

that amount handed to the borrower is spent(enters circulation)
where real estate developers, agents or home seller get that cash and put it into their bank accounts.

meaning the bank has total deposits of now $500,000,200,000 for that one agreement plus previous bank deposits.
but now only has an allowance of $23,999,800,000 to offer to borrowers

---

now behind the scenes of the bank/insurance market

the bank sees that as a future combined ROI of $266k
meaning a 1in3 risk of default they still break even

the bank does not want to wait for 20 years of small amount to re accumulate its allotment to then offer more loans

so it sells the agreement behind the scenes to insurance companies

insurance companies buy these for 2 reasons
1. they can hedge/bet on the % chance of the borrower making payment in full or defaulting.
2. with most mortgages there are stipulations that the borrower also takes out property insurance to protect the home from loss due to damage.

so the insurance company is also getting a side payment from the borrower direct, which hedges the loss if there was a problem

these agreements then become more a tradable asset of their own.

---

now back to the borrower
he is now paying the bank $1.1k a month to meet the terms of the agreement
which till by year 20 mean he has paid $266k in mortgage agreement payments into the bank

meaning the bank after 20 years has now combined bank account deposits of $200k and a return of 266k to the 'pot of allowance

in short.
if a bank can do $25bill of loans on a inflation rate of deposits of $500b deposits
at the end that deposits would be $525b of customers funds
which converts 26.26 loanable allowance to create next round(if no loans default)
and
8.33bill of interest profit(if no loans default)
and ontop of this a smaller amount from the back door deals of the agreement trades

Ask him. You can search his contact info out.


But that's the whole object. To make the promissory note to be worthless by paying it off. So, when you use the promissory note to pay off the loan before you even get the loan, the promissory note becomes worthless. And that's why the bank makes such a hassle for you if your don't make payments over the years. Because they sell your note like it has value. That's illegal.

I don't believe you're too dumb to understand this so what's your point here? When you prepay the loan, you don't get free money. You get paid-off money. An even trade... except if there is a prepayment penalty. You can't do this with your neighbor next door, except if he loves the heck out of you. But you can do it with the bank because it is written up in banking laws. The banks even say it in their explanation pamphlets, but very carefully so you don't really understand what they said.



Well, now you are only playing dumb. But that's okay. At least you are being honest-like.

Specifically "bank CPA". Was he ever employed at a bank? As a CPA? You keep repeating it as a fact so you must know the source, please share.


Except you make the promissory note worthless if you don't intend to make the payments, so you'd be scamming the bank.

I don't believe you're too dumb to understand this so what's your point here? Can you get free money from the bank by taking a loan and not repaying it, or not? Legally. Without lawsuits/repossessions/collections. Yes or no?


PLUS? 27-2=25 any third-grader should be able to tell you that.

But if that's how you do math then I guess you could genuinely believe the "Schauf" BS.

You're kinda funny. Just because one site doesn't say anything about him being a CPA, doesn't mean that a whole lot of other sites that you looked at don't say it. But...

I'll prove that the loan paperwork has value like money. It's real simple. You can prove it to yourself by getting a bank loan. And remember, this is for the US and Euro... but it is probably similar for many other countries and currencies. Here's the proof...

The setting: You are at the bank, ready to sign the last piece of paper to get you your loan, the promissory note. If you don't sign the paperwork, will the banker give you the loan? NO! Because there isn't any value in the paperwork without your signature on it. It's a valueless piece of paperwork.

If you sign the paperwork, then it has value. How much value? Value in the amount of the loan. Value that you are going to pay back the loan. It's written on the paperwork. What kinds of value does it have? Two value kinds in one:

1. It has value to the banker. We know it because he gives you your loan money... which he wouldn't do before it had value that you gave it by signing it.

2. Value in your promise to pay, because if you don't pay, he can get it out of you by taking you to court.


So, it's an even trade. Value for value. Your valuable promissory note, for his valuable cash or bank check. You did the terms on the promissory note by paying it off even before you got the loan. You didn't default on your loan... which you paid off even before you received the loan money.


Nobody needs Tom Schauf to understand this... except you. In your case, I probably messed with your thinking by throwing his name in there. Slow down a little, so that you can understand it. Take it one little step at a time, since you are having trouble understanding something so simple.

----------

The trick that is messing with your mind is like this little riddle story, which I have written before.

Back when hotel rooms were cheap, three strangers happened to meet at a hotel to get a room for the night.

The clerk said, "Sorry. We only have one room left. You three guys will have to decide amongst yourselves who will get the room. Or, if you want, you can all share the same room."

The guys talked it over, and decided to share the last room with each other.
The clerk charged them $10 each for the room, a total of $30.
The bellboy ran a couple of extra beds into the room.
The guys went up to their room.

Later, the clerk thought to himself, "$30 for that room was rather a lot." So he called the bellboy over, and gave him $5 to take up to the guys as a refund.

On his way up to the room in the elevator, the bellboy couldn't figure out how to divide $5 evenly among three guys. So, he decided to keep $2 as a tip.

When he got to the room, he gave each of the guys a dollar back. So, that means that the guys each paid $9. Three times $9 is $27... plus the $2 that the bellboy kept makes it $29. What happened to the thirtieth dollar?

----------

This whole riddle is based on a lie, as is the way the banking system loans money.

I think you got it backwards. I can borrow and I know reasonably well how that works. You don't and you refuse to even try while claiming it's free money. Something's not right here, it's almost like you're full of shit.


It doesn't say anything about him being a "bank CPA", so that's probably false too.

You apparently haven't done your homework. After all, you are making a claim about my claim, and I have shown you where you can find the info.

Take a look at the OP. The OP is a tiny part of what there is to read about this whole thing. Rather than checking it out through searches, you seem to want me to post hundreds (thousands?) of pages here in Bitcointalk.

However, if you sincerely want to see that it is true and why, I will help you a little by offering you a search link that really works - https://duckduckgo.com/?q=Tom+Shauf%2C+bank+freedom&ia=web.

Since you don't seem to want to accept what I say, why should I say more for you? You simply don't want to believe it. So, when (if) you get sincere about it, do your searches and learn the info. Most of Tom's info is online already.

Or is it that you are upset because you don't have good enough credit to borrow money from a bank? And you are simply jealous of those who do?



EDIT: Try http://quartzmoon.com/bankdebt/bankloan.html.

You're the one making the claim, you should at least try to substantiate it. As far as I can tell this "Schauf" dude never worked in a bank and either has no clue how banks function, or is a crook making a few bucks off some "how to get free money" e-book. You might be complicit in his fraud by promoting him here.

'If' is a funny word. In the US, if the loan paperwork/contract is signed, that isn't what makes it mean something. The signed paperwork can sit there all century on the loan officer's desk, and it doesn't mean anything... except that the borrower HASN'T gotten his loan (yet). But that isn't why the loan officer wrote up the contract. He wrote it up because he wanted to give the borrower his loan.

If the paperwork/contract is accepted by the bank, what will they do, since the borrower prepaid his loan off with it? If he gets his loan money, that means they accepted his prepayment.

To keep from being illegal, many bank loans have a prepayment clause that states a penalty for paying the loan off early. So, simply pay the penalty and the borrower is free and clear... since he prepaid his loan with the loan paperwork.

The bank isn't going to take him to court for prepayment. And in the US, the loan falls into a private deal. So, government doesn't have anything to do with it until there is a complaint that the law was broken.


Tom Schauf, a former bank CPA, shows that the bank treats the contract as a payment. Like I said, it can sit on the loan officer's desk all century, and it doesn't mean anything. It's when he deposits it that it becomes money. He can't do it alone - like if the borrower doesn't sign the contract - and the borrower can't do it alone, without the bank. But together, the bank and the borrower create new money.

HOWEVER, anybody can make new money if there are other people who accept it as money. Think of grocery store coupons. They are semi-private money. Any time something is traded among people, it approaches being money. If it is done the right way, it IS money, at least for them.


It's tempting. But there are two points why I probably won't:

1. Every time money is added to the system, it makes all the rest of the money to be worth less. In other words, borrowers are stealing from everybody. And those who are poorest and can't get a loan, are the ones who are hurt the most.

2. I like to be straight forward with what I do. So, if I told the loan officer that I was prepaying the loan with the promissory note, wouldn't the bank suddenly find some reason to not trade money with me?




You can search for his information just like I can. Get his address and phone and contact him. Search on "Tom Schauf, bank freedom." His name is Thomsas D. Schauf. I don't know for sure how old he is, but I don't think that he is 70 yet.

If you signed a contract that doesn't allow early repayment then it's your fault. If that's against the law in your jurisdiction then the contract is void but this doesn't mean you get free money... your side of the contract is void too, so you have to return the loan that you got.


Your contract is not money on its own. It has value only because of the promise to pay. It's an asset (not a "deposit" in an account) on the books of the bank and the value goes down as you repay the loan, eventually reaching zero and the end of the contract.


Then go get a loan and prove what you're saying. According to you it's free money so why wouldn't you do it?


He was a "certified public accountant" in a bank? Which bank?

Suppose you get a $300,000 loan from a bank, and you are ready to start making payments. Your first payment is due, next month, same day you made the loan.

Then, a week after you took out the loan, you win a cool $million in a lottery. You get your $winnings, and head over to the bank and pay off the $300,000 loan.

Can you do this? Yes. But there might be early payment $penalties. They might be written right in the contract. But you can do it. According to the Uniform Commercial Code, the bank has to accept your payoff. If they don't, you are free from the loan, by law, because if the bank won't accept your payment, how can you pay them?

----------

The thing that you did in reality is to pre-pay-off your loan with the contract. How do we know? The bank ledger shows that they deposited your contract into an account, just like it was a check or money order. As far as the bank is concerned, it is money in (your contract), and money out (cash or bank check to you). It's a creation of new money. The FED even has pamphlets that say this in clever wording so that people don't easily figure it out. The bank doesn't lose anything in the deal.

----------

I am not present in any bank loan operations. But Tom Schauf was a bank CPA. This is what he found out. To see how he says it, search on "Tom Schauf, bank freedom." The one thing that I can tell you is that he is right.

I have told this to money people, and most of the time they don't want to talk about it, because they know it is true. They just spout the old banking lie, that we borrow depositors money, and they turn away. But you don't need to be a lie detector to see that they know that's a lie.

False. You owe them because you signed the contract. There is no magic "get out of a loan without paying it" bullshit here. The contract ends when the loan is paid off so there is no "double repayment". The fact that the bank can sell your contract to some other bank doesn't change anything and doesn't double the loan. All it means that another bank now takes your payments and assumes the risks etc, and you no longer owe anything to the original bank.

How about this: post your mortgage agreement here and tell us which specific part allows you to not make the payments.


They don't "keep the house". They'll sell it off and take what they're owed from the proceeds, if anything remains you get it back. You can also sell it before defaulting on the mortgage and avoid the issue altogether.

I don't like banks at all but the lack of basic financial literacy on a forum dedicated to the supposedly improved financial system is just incredible.

Yes, in part. But mostly banks hate Bitcoin because it is showing the people that bank loans are not really loans. Rather, so-called loans are creations of new money by the bank.

The big point is that if people realized that this is what the so-called loans really were - creations of new money - people would realize that they had no reason to repay something that wasn't a loan.

The people would stop paying on their loans, and after a while, this whole scenario would halt personal income taxes along with almost stopping inflation.

One of the biggest reasons for the increase in the price of goods at the store is, the banks and government figured out a way to make loads of new money so that they could support a war in Ukraine. More money in the environment means that the same amount of products are represented by more cash. More cash per product is an increase in price.

Government is essentially taxing the people through government bank loans (new money creations) being used to support the Ukraine war... and who knows what else?

And that is why banks hate bitcoin.

Because if everyone transacts with it, nobody will take fiat loans from the bank, so the bank will have no more "deposits" to lend, no interest to collect and their revenue would go to zero.

One of the most important things to do with this thread, is to find the info in the links and searches. Then learn the info, and share it widely so you can discuss it with many others.

Why would you want to do this? Because when people start to realize that their loans they got from the banks, were really done by bank fraud, they will stop borrowing. The banks will go broke. They won't have any money to give government. And the war in Ukraine will fail for lack of funds.

I mean, you don't like the idea of having to pay off a $300,000 mortgage on your house over 30 years. Since the loan doesn't really exist, why are you doing it?

I guess the real point of this thread is that standard bank loans, the way they work in the US, are fraud against the so-called borrowers. Here's why.

Many different things can be called money. Do a search.

A signed promissory note is money. When you are getting a so-called loan, if you sign a promissory note and give it to the banker, what you really did is make a loan to the banker. The promissory note became money when the banker accepted it from you.

Then the banker gets some cash out of the vault, and repays the loan that you made to him. The loaning is completely done. It was a trade, promissory note money for cash money. You thought that the banker loaned you some money. But he repaid the promissory note loan you made to him. The whole loan and repayment happened inside of 10 minutes.

If you make payments for the following 5 to 30 years, you are simply giving the bank a gift of your labor, in the form of money. You aren't paying back a loan, because you can't pay back a loan that never existed. The loan that you did at the bank, and its repayment, were completely finished in every way at the bank.

Search on "Tom Schauf, bank freedom" - https://duckduckgo.com/?q=Tom+Shauf%2C+bank+freedom&t=ha&va=j&ia=web. Take your time reading the literature, there, because we have been brainwashed that the bank is making a loan, that we don't realize what is really happening.

In our culture - bank loans are not encouraged - because there is interest attached with it.
But even than banks are menting money and peeling off the skins and blood of the borrowers for their own interest - bank doesn't care for anyone. It cares for itself.

Actually, the exit from a bank loan is what the OP is all about about, and what this thread is about. This is for the USA. Other countries will do it other ways.

When did you exit your bank loan? When you prepaid it off, by signing the promissory note before you got the money. The whole loan, and its repayment, was essentially finished at this time. You gave the bank some money (your signed promissory note) and they gave you some money in return (cash or a bank check).

If you make a payment next month, you are telling the bank that you owe them... which you don't. But since you said you do, you do. After all, what can they do? They have to - and want to - believe you when you say that you owe them some money and interest.

I mean, if your next-door neighbor buddy comes over to you in your back yard and says, "I owe you $100,000," and he doesn't really owe it to you, what are you going to do? You will, as his friend, tell him he doesn't owe you the money. But if he insists, all you can do is accept the payments he makes, right? Of course, keep this free money available to return to him for a time when he recognizes his mistake.

Since the banks have told you all this through their money pamphlets, "Modern Money Mechanics" and "Two Faces of Debt," what else can they do when you start to give them free money for nothing? They simply accept it.

Again, search on "Tom Schauf, bank freedom," in various search engines, and figure out how to get yourself free from your mistake of thinking you owe the bank anything following your promissory note payment.

And IDK about other stuff - I know bank loans are horrible and you are hostage to them once you are into it.
There is no exit to it but to die a slow death.
I was advised by my father not to get loan from bank since I am too poor managing my finances - I had a very horrible time

The whole point of this thread is that the bank is NOT loaning other people's money to you or anybody. They have the ability to do this, but they don't do it.

What do they do when they loan money? They create new money together with the borrower. They essentially get this money free. Then they sell the promissory or other note (private money), at a discounted rate, to people and companies who don't understand that the bank is simply getting rid of the private money for public money.

This^^ is what the bank ledger shows. But the banks never show their ledgers to anybody, except that there is a court order to do so. Of course, the bank CPA sees the ledger. But most CPAs simply follow the program. If they happen to put 2 and 2 together to see the money creation process, they don't say anything, because this is the way it's done, and they are making good money from the bank through this process... even though they know that the banks are being enriched for nothing.

In the bank loan process, nobody uses fake money. By logic and law, anything that has value and is traded is money... especially if it is done on a regular basis. Signed promissory notes are money. When the borrower signs the note, he creates the money. Then he trades it to the bank for public money.

Bitcoin is private money. The signature process is right in the client... did you ever notice that it says "signed" when bitcoins are transferred? Why is it private money? Because it isn't Constitutionally set up to be the kind of money that government can make into public money. The government gets to treat it as public money with the people, because they are in the process of training the people to accept it as public money.

The Federal Reserve bank is private. The only reason Federal Reserve Notes are accepted as public money is, the government did a trick when they transferred responsibility for money to the Fed, and made it look like it was public money in the eyes of the people.

So, what are the laws that we are under for using Fed Notes? We are under a bunch of convoluted Contract Laws (Note that we have the right to contract as provided in the Constitution under the Contract Clause.). And this is what banking laws are. And it is why the promissory note becomes private money when signed.

Search on "Tom Schauf, bank freedom" to read Tom's stuff. Tom was a bank CPA, and he is doing us a favor by pointing all this banking stuff out to us. Use different search engines for this to see different points.

IDK about all that other stuff, but the scam to me is that the bank is loaning me other people's money. If we go 80/20 in a house for instance, the bank is only putting up part of that 80 because of leverage. So it's using fake money, and you put down real money. But, if you default, they keep the house. Such a strange system, but these days houses are so expensive you don't really have a choice.

Sorry you are having such a bad day, but you would have to get into the failure of each bank that failed to see why. However, thanks for agreeing with me in the area of 'central bank policies', sort of.

A lot of the failures come about because the bankers are too greedy, and make dangerous deals. Or they become a bit upset when they finally realize how corrupt the banking system is, and they simply let their bank fail as a way out.

But I am a bit curious. Why are you picking on this topic of mine? Are you afraid that the 'system' might fail because this info is coming out into the open? If that's the case, all you are doing is helping with the advertising.

Or is it the fact that I proved that God exists in some other topic, and you just don't like God very much?

Or what?

https://bitcointalksearch.org/topic/m.16887246


The nonsense has a simpler mathematical explanation. Since the 2007 crisis many banks failed, the smaller and weaker ones. That does not mean that it is impossible for any of them to fail, but it is much more difficult. In addition, central bank policies help them.

General statements about lies are simply blab. You are just like millions of Americans who don't see what's really going on. Or you are a banker who has been brainwashed. No problem. Having faith is a good thing. Believe what you want to believe.

Tom Schauf, the UCC, and the banker's manuals show what is really going on. "Two Faces of Debt" stumbles through the things we disagree on. It seems to say that both things are happening. Tom simply puts it into chronological perspective, which the pamphlet doesn't... very well.

"Modern Money Mechanics" is harder to read. You have to sit down and think it through. But both of these Federal Reserve Bank money manuals state what I have been saying, right out in the open.



Banking has finally figured out a way to keep banks from failing. Between themselves, the government, and international entities, they simply have "loaned" enough new money into existence, that, since they are all tied under the Fed, there is no way a bank has to fail, except that it is part of a cover-up... to make it look good in the eyes of the local people. That isn't a failure, btw. That's simply damage control.

In other words, supporting things like Ukraine armament in the war, only exists as long as people believe that fiat has value. So, continue to believe the lies. But also look at the truth.

I do understand it, and that's why I don't believe what you say. We are in a forum that was born in good measure against the banking system. Just as this that I just said is true, what you say mixes truth and falsehood and some statements are outright lies.


You have no fucking clue.

https://www.bankrate.com/banking/list-of-failed-banks/

P2PECS, a perfect example of somebody who doesn't what to know how it works.

And that is the problem with millions of Americans. They simply can't believe that government and the banks would do something like this to them. So, they go on and give their labor away to the banks, and we have wars and trouble from it all around the world, because they made the banks and government rich enough that they can do just about anything... even give $billions away to Ukraine.

However, like people are reading the ingredients more and more, on the labels on grocery products they buy at the store, even so these same people are starting to read more about all aspects of life. Will there come a time when they stop enriching the banks for nothing?

Actually, it's happening right now. Lots of people default on so-called loans. It doesn't hurt the bank at all. The bank already made their money, by selling discounted promissory notes on the various markets. Ah, but, we could go on forever. Simply search on "Tom Schauf, bank freedom" to get the info. Get Tom's books at Amazon and get yourself free... https://www.amazon.com/tom-schauf-Books/s?k=tom+schauf&rh=n%3A283155.

https://archive.org/stream/TopSecretBankersManualByThomasSchauf/Top-Secret-Bankers-Manual-by-Thomas-Schauf-Copyright-2002_djvu.txt

https://educationcenter2000.com/Secret_Banker's_Manual.pdf

I don't know which is more pathetic, the OP's nonsense or the other guy asking for a one liner.

The nonsense mixes correct ideas with incorrect ideas, as it usually happens with this kind of arguments, because if they were clamorously incorrect nobody would believe them.


Ehhh no. So what follows is incorrect as well.


For those of us who understand it, it's clear that it's too long on purpose.

One line? No. But short-ish.

For the US and Europe and some other nations.

Getting a loan from a legal bank or other lending institution.

Let's say you are applying for a loan. All the preliminaries have been taken care of... you have good credit, and the bank thinks that you will be able to pay the loan back over the term. They are ready to give you the loan.

You are sitting at the desk, across from the loan officer, ready to sign the final piece of paper (promissory note... promise-to-repay paperwork) that will get you the loan.
----- If you DON'T sign the paperwork, will you get the loan? No.
----- If you SIGN the paperwork, will you get the loan? Yes.
What does this mean?

It means that the paperwork has value if it is signed, but not if it isn't. It has enough value to get you the, say, $50,000 loan. After you made the paper have value (by signing it), you hand it to the loan officer, and he hands you the $50,000.

In other words, you gave the loan officer value, and he gave you value back. It was an even trade. But because of the wording on the paperwork, what you really did was to prepay your loan, just like you can pay your car off early.

Since you paid off your loan already, why do you spend the next 10 years paying it off again... and interest? They tricked you. You paid off your loan before you received the loan value. You are making the bank rich by repaying the loan again.

What really is the promissory note that you signed, when the bank receives it from you? It's a creation of new money. You and the bank created new money together. Once the trade is completed, neither of you owes the other anything.

This is the way it has always been. It's found in the Uniform Commercial Code (indirectly). And it is found in past money manuals from the Federal Reserve Bank... like "Modern Money Mechanics" and "Two Faces of Debt."

Since this forum isn't really the place to go into it in detail, search on "Tom Schauf, bank freedom" - https://www.startpage.com/do/dsearch?query=Tom+Schauf%2C+bank+freedom&cat=web&pl=ext-ff&language=english&extVersion=1.3.0. Tom was a bank CPA who even taught other CPAs.

An additional note is from an article about the bond market collapse in Australia... "Australia’s central bank has equity wiped out by billions in bond losses" - https://www.cnbc.com/2022/09/21/australias-central-bank-has-equity-wiped-out-by-billions-in-bond-losses.html. Note what the bank indicated, "Australia’s central bank on Wednesday said its equity had been wiped out by losses suffered on pandemic-era bond buying, but its ability to create money meant it was not insolvent and would continue as normal."

Note that the bank creates money. This post is about the way it is done.

Sorry about not being brief. For people who don't understand any of this, it can't be brief.

Can you gave a one liner summary of what this post is about.
I want to know that. But seriously it is to long to understand what is means.

Note that this isn't mine. To find it or other like it, search on "Tom Schauf, bank freedom."

--------------------

This is the way a "bank loan" really works.

For those of you who have mortgages or other bank loans.... did you know you financed that loan by giving them the whole amount up front? Bet you didn't... but this is how it works, and if you don't believe it, do your research.

According to Supreme Court Ruling 1148 of 1978 (Ruling by Chief Justice Bora Laskin):
"The promise to pay IS the money"...... when you promise, you pay!  And that is CANADIAN LAW... what is below is US law... and it is exactly the same!

Here's how the Banksters use their puppets, the Politicians.

THE government is to invest £500bn of your money in British banks so they can lend it back to you with interest.

The historic move is being hailed as a lifeline for the financial system as long as nobody asks too many questions.

Julian Cook, chief economist at Corbett and Barker, said: "The government will give your money to the banks so the banks can start lending you that money, probably at around 7% APR."

He added: "In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot.

Interviews with bankers about a foreclosure.

The  banker was placed on the witness stand and sworn in. The plaintiff's (borrower's) attorney asked the banker the routine questions concerning the banker's education and background.

The attorney asked the banker, "What is court exhibit A?"

The banker responded by saying, "This is a promissory note."

The attorney then asked, "Is there an agreement between Mr. Smith (borrower) and the defendant?"

The banker said, "Yes."

The attorney asked, "Do you believe the agreement includes a lender and a borrower?"

The banker responded by saying, "Yes, I am the lender and Mr. Smith is the borrower."

The attorney asked, "What do you believe the agreement is?"

The banker quickly responded, saying, " We have the borrower sign the note and we give the borrower a check."

The attorney asked, "Does this agreement show the words borrower, lender, loan, interest, credit, or money within the agreement?"

The banker responded by saying, "Sure it does."

The attorney asked, `"According to your knowledge, who was to loan what to whom according to the written agreement?"

The banker responded by saying, "The lender loaned the borrower a $50,000 check. The borrower got the money and the house and has not repaid the money."

The attorney noted that the banker never said that the bank received the promissory note as a loan from the borrower to the bank. He asked, "Do you believe an ordinary person can use ordinary terms and understand this written agreement?"

The banker said, "Yes."

The attorney asked, "Do you believe you or your company legally own the promissory note and have the right to enforce payment from the borrower?"

The banker said, "Absolutely we own it and legally have the right to collect the money."

The attorney asked, "Does the $50,000 note have actual cash value of $50,000? Actual cash value means the promissory note can be sold for $50,000 cash in the ordinary course of business."

The banker said, "Yes."

The attorney asked, "According to your understanding of the alleged agreement, how much actual cash value must the bank loan to the borrower in order for the bank to legally fulfill the agreement and legally own the promissory note?"

The banker said, "$50,000."

The attorney asked, "According to your belief, if the borrower signs the promissory note and the bank refuses to loan the borrower $50,000 actual cash value, would the bank or borrower own the promissory note?"

The banker said, "The borrower would own it if the bank did not loan the money. The bank gave the borrower a check and that is how the borrower financed the purchase of the house."

The attorney asked, "Do you believe that the borrower agreed to provide the bank with $50,000 of actual cash value which was used to fund the $50,000 bank loan check back to the same borrower, and then agreed to pay the bank back $50,000 plus interest?"

The banker said, "No. If the borrower provided the $50,000 to fund the check, there was no money loaned by the bank so the bank could not charge interest on money it never loaned."

The attorney asked, "If this happened, in your opinion would the bank legally own the promissory note and be able to force Mr. Smith to pay the bank interest and principal payments?"

The banker said, "I am not a lawyer so I cannot answer legal questions."

The attorney asked, " Is it bank policy that when a borrower receives a $50,000 bank loan, the bank receives $50,000 actual cash value from the borrower, that this gives value to a $50,000 bank loan check, and this check is returned to the borrower as a bank loan which the borrower must repay?"

The banker said, "I do not know the bookkeeping entries."  

The attorney said, "I am asking you if this is the policy."

The banker responded, "I do not recall."

The attorney again asked, "Do you believe the agreement
between Mr. Smith and the bank is that Mr. Smith provides the bank with actual cash value of $50,000 which is used to fund a $50,000 bank loan check back to himself which he is then required to repay plus interest back to the same bank?"

The banker said, " I am not a lawyer."

The attorney said, "Did you not say earlier that an ordinary person can use ordinary terms and understand this written agreement?"

The banker said, "Yes."

The attorney handed the bank loan agreement marked "Exhibit B" to the banker. He said, "Is there anything in this agreement showing the borrower had knowledge or showing where the borrower gave the bank authorization or permission for the bank to receive $50,000 actual cash value from him and to use this to fund the $50,000 bank loan check which obligates him to give the bank back $50,000 plus interest?"

The banker said, "No."

The lawyer asked, "If the borrower provided the bank with actual cash value of $50,000 which the bank used to fund the $50,000 check and returned the check back to the alleged borrower as a bank loan check, in your opinion, did the bank loan $50,000 to the borrower?"

The banker said, "No."

The attorney asked, "If a bank customer provides actual cash value of $50,000 to the bank and the bank returns $50,000 actual cash value back to the same customer, is this a swap or exchange of $50,000 for $50,000."

The banker replied, "Yes."

The attorney asked, "Did the agreement call for an exchange of $50,000 swapped for $50,000, or did it call for a $50,000 loan?"

The banker said, "A $50,000 loan."

The attorney asked, "Is the bank to follow the Federal Reserve Bank policies and procedures when banks grant loans."

The banker said, "Yes."

The attorney asked, "What are the standard bank bookkeeping entries for granting loans according to the Federal Reserve Bank policies and procedures?"

The attorney handed the banker FED publication Modern Money Mechanics, marked "Exhibit C".

The banker said, "The promissory note is recorded as a bank asset and a new matching deposit (liability) is created. Then we issue a check from the new deposit back to the borrower."

The attorney asked, "Is this not a swap or exchange of $50,000 for $50,000?"

The banker said, "This is the standard way to do it."

The attorney said, "Answer the question. Is it a swap or exchange of $50,000 actual cash value for $50,000 actual cash value? If the note funded the check, must they not both have equal value?"

The banker then pleaded the Fifth Amendment.

The attorney asked, "If the bank's deposits (liabilities) increase, do the bank's assets increase by an asset that has actual cash value?"

The banker said, "Yes."

The attorney asked, "Is there any exception?"

The banker said, "Not that I know of."

The attorney asked, "If the bank records a new deposit and records an asset on the bank's books having actual cash value, would the actual cash value always come from a customer of the bank or an investor or a lender to the bank?"

The banker thought for a moment and said, "Yes."

The attorney asked, "Is it the bank policy to record the promissory note as a bank asset offset by a new liability?"

The banker said, "Yes."

The attorney said, "Does the promissory note have actual cash value equal to the amount of the bank loan check?"

The banker said "Yes."

The attorney asked, "Does this bookkeeping entry prove that the borrower provided actual cash value to fund the bank loan check?"

The banker said, "Yes, the bank president told us to do it this way."

The attorney asked, "How much actual cash value did the bank loan to obtain the promissory note?"

The banker said, "Nothing."

The attorney asked, "How much actual cash value did the bank receive from the borrower?"

The banker said, "$50,000."

The attorney said, "Is it true you received $50,000 actual cash value from the borrower, plus monthly payments and then you foreclosed and never invested one cent of legal tender or other depositors' money to obtain the promissory note in the first place? Is it true that the borrower financed the whole transaction?"

The banker said, "Yes."

The attorney asked, "Are you telling me the borrower agreed to give the bank $50,000 actual cash value for free and that the banker returned the actual cash value back to the same person as a bank loan?"

The banker said, "I was not there when the borrower agreed to the loan."

The attorney asked, "Do the standard FED publications show the bank receives actual cash value from the borrower for free and that the bank returns it back to the borrower as a bank loan?"

The banker said, "Yes."

The attorney said, "Do you believe the bank does this without the borrower's knowledge or written permission or authorization?"  

The banker said, "No."

The attorney asked, "To the best of your knowledge, is there written permission or authorization for the bank to transfer $50,000 of actual cash value from
the borrower to the bank and for the bank to keep it for free?

The banker said, "No."

Does this allow the bank to use this $50,000 actual cash value to fund the $50,000 bank loan check back to the same borrower, forcing the borrower to pay the bank $50,000 plus interest? "

The banker said, "Yes."

The attorney said, "If the bank transferred $50,000 actual cash value from the borrower to the bank, in this part of the transaction, did the bank loan anything of value to the borrower?"

The banker said, "No." He knew that one must first deposit something having actual cash value (cash, check, or promissory note) to fund a check.

The attorney asked, "Is it the bank policy to first transfer the actual cash value from the alleged borrower to the lender for the amount of the alleged loan?"

The banker said, "Yes."

The attorney asked, "Does the bank pay IRS tax on the actual cash value transferred from the alleged borrower to the bank?"

The banker answered, "No, because the actual cash value transferred shows up like a loan from the borrower to the bank, or a deposit which is the same thing, so it is not taxable."

The attorney asked, "If a loan is forgiven, is it taxable?"

The banker agreed by saying, "Yes."

The attorney asked, "Is it the bank policy to not return the actual cash value that they received from the alleged borrower unless it is returned as a loan from the bank to the alleged borrower?"

"Yes", the banker replied.  

The attorney said, "You never pay taxes on the actual cash value you receive from the alleged borrower and keep as the bank's property?"

"No. No tax is paid.", said the crying banker.

The attorney asked, "When the lender receives the actual cash value from the alleged borrower, does the bank claim that it then owns it and that it is the property of the lender, without the bank loaning or risking one cent of legal tender or other depositors' money?"

The banker said, "Yes."

The attorney asked, "Are you telling me the bank policy is that the bank owns the promissory note (actual cash value) without loaning one cent of other depositors' money or legal tender, that the alleged borrower is the one who provided the funds deposited to fund the bank loan check, and that the bank gets funds from the alleged borrower for free? Is the money then returned back to the same person as a loan which the alleged borrower repays when the bank never gave up any money to obtain the promissory note? Am I hearing this right? I give you the equivalent of $50,000, you return the funds back to me, and I have to repay you $50,000 plus interest? Do you think I am stupid?"

In a shaking voice the banker cried, saying, "All the banks are doing this. Congress allows this."

The attorney quickly responded, "Does Congress allow the banks to breach written agreements, use false and misleading advertising, act without written permission, authorization, and without the alleged borrower's knowledge to transfer actual cash value from the alleged borrower to the bank and then return it back as a loan?"

The banker said, "But the borrower got a check and the house."

The attorney said, "Is it true that the actual cash value that was used to fund the bank loan check came directly from the borrower and that the bank received the funds from the alleged borrower for free?"

"It is true", said the banker.

The attorney asked, "Is it the bank's policy to transfer actual cash value from the alleged borrower to the bank and then to keep the funds as the bank's property, which they loan out as bank loans?"

The banker, showing tears of regret that he had been caught, confessed, "Yes."

The attorney asked, "Was it the bank's intent to receive actual cash value from the borrower and return the value of the funds back to the borrower as a loan?"

The banker said, "Yes." He knew he had to say yes because of the bank policy.

The attorney asked, "Do you believe that it was the borrower's intent to fund his own bank loan check?"

The banker answered, "I was not there at the time and I cannot know what went through the borrower's mind."

The attorney asked, "If a lender loaned a borrower $10,000 and the borrower refused to repay the money, do you believe the lender is damaged?"

The banker thought. If he said no, it would imply that the borrower does not have to repay. If he said yes, it would imply that the borrower is damaged for the loan to the bank of which the bank never repaid. The banker answered, "If a loan is not repaid, the lender is damaged."

The attorney asked, "Is it the bank policy to take actual cash value from the borrower, use it to fund the bank loan check, and never return the actual cash value to the borrower?"

The banker said, "The bank returns the funds."

The attorney asked, "Was the actual cash value the bank received from the alleged borrower returned as a return of the money the bank took or was it returned as a bank loan to the borrower?"

The banker said, "As a loan."

The attorney asked, "How did the bank get the borrower's money for free?"

The banker said, "That is how it works."

--------------------