Richard Werner Exposes the Evils of the Fed & the Link Between Banking, War, and the CIA

The Secret Power of Banks and How They Create Money

1. The Main Idea in a Nutshell

   • Regular banks, not the government, create most of the money in our economy out of thin air every time they give someone a loan, and this simple fact has been a well-kept secret that explains why our economy is so unstable.

2. The Key Takeaways

   • Banks are Money Printers: When a bank gives you a loan, they don't lend you someone else's savings. They just type the numbers into your account, creating brand-new money that didn't exist before.
   • Economics is Kind of Broken: Most official economic theories completely ignore the fact that banks create money. This is why economists are often so bad at predicting financial crises like the one in 2008.
   • Japan's Crazy Economy: In the 1990s, Japan's economy was doing weird things nobody could explain. The speaker, Richard Werner, figured out it was because banks were creating massive amounts of money for real estate, leading to a giant bubble.

   • A Hidden Truth: The idea that banks create money isn't new, but it has been treated like a taboo or a conspiracy theory. Famous economists have even helped hide this reality over the years.

   • Fun Facts & Key Numbers:

     • Fact: In the 1980s, the land under the Emperor's palace garden in Tokyo was worth the same as all the real estate in the entire state of California.
     • Fact: A survey found that 84% of people wrongly believe the government or the central bank creates most of our money.
     • Fact: During the Great Depression, the US central bank let over 10,000 smaller American banks go out of business, wiping out the savings of countless families.

3. Important Quotes, Explained

• Quote: "> When you take out a loan, the money that you're given as the borrower, didn't previously exist. It is net new purchasing power has been created and added to the money supply."

  • What it Means: Imagine you get a $5,000 loan for a car. The bank doesn't take that money from a vault or from another customer's account. They simply invent $5,000 and put it in your name. Just like that, there's $5,000 more in the world.
  • Why it Matters: This is the core secret. It means private banks, not the government, control how much money is in the economy. They decide who gets money and for what, giving them immense power.

• Quote: "> We have no banks in our models. So, of course, I can't talk about banks."

  • What it Means: The speaker is explaining what an honest economist should have said during the 2008 banking crisis. Their complex theories and computer models used to predict the economy literally don't include banks. It’s like trying to explain how a car works without mentioning the engine.
  • Why it Matters: This shows how out of touch mainstream economics is from the real world. If the experts' own theories ignore the most powerful players (the banks), it's no surprise they can't protect us from financial disasters.

4. The Main Arguments (The 'Why')

   1. First, the author argues that the whole field of economics is built on a faulty foundation. It teaches that banks are just boring middlemen who pass money around, when in reality they are the main creators of money.
   2. Next, he uses his own experience in Japan as proof. The only way he could explain why land prices were insane and money was flooding out of the country was by realizing banks were creating it from nothing and lending it out.
   3. Finally, he points out that he actually tested the different theories of banking with real-world data. His experiment proved that the theory where banks "create money out of nothing" was the only one that was true, while the theories in the textbooks were wrong.

5. Questions to Make You Think

   • Q: If regular banks create money, why does everyone think only the government can do that?

   • A: The text says this is a common-sense idea that happens to be wrong. For over 100 years, the most popular economic theories have been designed to hide or downplay the power of banks. Because this is what's taught in schools and repeated in the news, most people (84% according to one survey!) believe it.

   • Q: The speaker says interest rates aren't what really drives the economy. So what does?

   • A: The text says the real driver is the amount of new money ("credit") that banks create and what they let people use it for. If banks create a lot of new money for building factories and starting businesses, the economy grows in a healthy way. If they create it for gambling on stocks or real estate, it just creates bubbles that eventually pop and cause a crisis.

   • Q: What are CBDCs and why is the speaker so worried about them?

   • A: CBDC stands for Central Bank Digital Currency. It would be like a digital dollar that you hold in an account directly with the government's central bank, not a normal bank like Chase or Bank of America. The speaker warns that this would give the government total control over your money, allowing them to program it, track every purchase, and even turn it off if you do something they don't like.

6. Why This Matters & What's Next

   • Why You Should Care: Understanding who really creates money helps you see why things like the 2008 housing crash happen. It shows that a small number of private companies have huge, unchecked power over everyone's life. This knowledge helps you cut through the noise from politicians and experts and see what’s really going on with the economy.
   • Learn More: Check out the speaker's book, Princes of the Yen. It tells the full detective story of how he uncovered this secret while working in Japan. You can also find many interviews with him, Richard Werner, on YouTube where he explains these ideas clearly.