Note: I think I have this correct now:
Infographic for the Federal Reserve Money Creation Process
Here is an infographic I created to show how the money creation cycle creates a many of the problems plaguing humanity today. We need to break free from this vicious and destructive economic cycle.
Text of the Infographic of the Federal Reserve Money Creation Process
|Federal Government||… issues Treasury Bonds (lets say for an interest rate of 0.25%) to the Federal Reserve to print $100,000||$100,250|
|Federal Reserve||… prints money||$100,000|
|Federal Reserve||… loans money to banks with interest||$100,250|
|Banks||Banks create loans based on the $100,000 accepted from the Federal Reserve using Fractional Reserve Lending which means: for every $100,000 they accept from the Federal Reserve they can create loans whose value is equal to 10 x its value – $1,000,000 at interest – lets say 7%||$1,070,000|
As the example above shows: for every $100,000 printed by Federal Reserve and then loaned out using Fractional Reserve Lending that amount that is owed by the government, businesses, and the people to repay those loans and the printing of money is $1,070,000.
There is never enough money to pay back the money created by the Federal Reserve even from the first interest bearing step which is further magnified by Fractional Reserve Lending, which creates an endless destructive cycle:
- printing money = 10x debt
- loss, recession, depression, unemployment, poverty, bankruptcy, foreclosure, inflation, war
- bankers get rich of the interest
For more information on how we can correct this see my two posts here: