Chapter 3 — Banking

Yet another topic that everyone can relate to is that of the banking system. We are all sick to death of ridiculous bank fees, crazy interest rates on credit cards, and mortgages that seem to go on forever.  But, believe it or not, it is actually worse than even all of that!

Okay, so let’s start with the basics. Have you ever asked yourself the following:

Why are we working longer hours than ever before?  Pretty much every person we speak to tells us that they are now working more hours than in the past.

Why don’t we feel like we’re getting ahead?  Again, despite working longer hours than ever before, most people tell us that they feel like they are just treading water and barely keeping afloat financially.

Why is the cost of things constantly increasing? The value of things doesn’t change.  For example, a loaf of bread still provides breakfast for almost a week for a family, so the value hasn’t changed, yet the cost has increased exponentially.

Why did a property that used to cost 3-4 times the annual wage, now costs 9-10 times?  Be sure to ask your parents or grandparents, if they are still around, how much a house used to cost compared to their wage 30, 40, 50 years ago.  Once again, a house still only has a roof, four walls and some bedrooms, so the value hasn’t changed, just the cost.

The fact is that, as we explained in our Introduction to this e-book, we are all slaves to the banks.  Hopefully, you watched the Jones Plantation video we referred to in the Introduction section, and saw some clear comparisons with modern day life.  As we mentioned, the slaves back then knew they were slaves and could fight back to change that fact, but most people nowadays are completely oblivious to the situation.  So, in this chapter, our goal is to detail the fraud that is committed by the banks every day, and how that enslaves each and every one of us through debts that have been fraudulently created.

To understand the fraud, you first need to understand what ‘money’ is. Money, as we know it, comes in the form of coloured polymer notes. The RBA (Reserve Bank of Australia) – which, by the way, is privately owned by the International Banking Cartel – tells us that it is legal tender. Unfortunately, however, it is completely worthless, and the only thing that gives it ‘value’ is that people are prepared to accept it for its face ‘value’.

Now, these polymer notes were originally paper notes and those, in turn, used to be certificates for gold. In the old days, when we used to have a gold backed currency, you could always exchange your ‘notes’ for the equivalent amount of gold detailed on them. This is an important point that you will need to get your head around if you want to fully understand the ultimate banking fraud that is explained in this chapter.

The media tells us that Australia owes billions of dollars, and that the USA owes billions of dollars, and that Europe owes billions of dollars.  So, who exactly is it that all these billions of dollars are owed to?  That would be the International Banking Cartel, who fund entire countries and even continents.  Our Government, like all countries bar North Korea, borrows its money from the International Banking Cartel at interest.  The obvious problem with this scenario is that the money the Governments borrow doesn’t cover the additional interest that the bankers demand. Therefore, the citizens of every country in the world are chasing their tails trying to pay off a debt that can never be repaid. This answers the four questions posed at the start of this chapter.

The reality is that Governments have the right to print money, though, rather than borrow it, and here in Australia, that right comes from Sections 51 and 81 of our Commonwealth Constitution – please see our Constitution chapter for further details.  So, why do they borrow money instead of printing it?

Because, the last person that tried to free his country from the Central Banking System was John F. Kennedy, and we all know what happened to him!  Keep in mind that they didn’t take him out in some back alley and get rid of him quietly: they publicly executed him on international television, so that anyone who had similar thoughts in the future would immediately reconsider.

Having said that, Iceland recently took back the power to create money from the International Banks, and handed it back to their Parliament.  We recommend that you read this article, which details exactly what the Iceland government did, and then this article, which explains why what they did was the right thing to do.

Within this international banking fraud there is another, more localised, fraud committed by lending institutions right here in Australia.  This fraud occurs whenever someone borrows money to purchase a property.

Many people are still confused about where the money comes from when a bank grants them a so-called ‘loan’.

Some people still believe that the money comes from depositors’ funds – but, obviously, that’s not the case, because nobody just finds money missing out of their day-to-day or term deposit accounts. The banks would have us believe that they borrow it from “overseas” but, as we detailed above, if all the “overseas” countries are similarly in debt, then that is also clearly not the case.

So, the question to ask is:  “Do banks borrow the money that they loan you, or do they “create” it?”  Let’s have a look at some statistics which reveal some interesting facts.

The RBA reports various figures regarding the financial “state of the nation” each and every month.  You can find a copy of those reports via these links - D3 Money Aggregates and D2 Lending and Credit Aggregates. Those tables are deliberately confusing and difficult to read, however, so we will detail some key figures below.  We have picked an arbitrary date of April 2014, but you will see similar discrepancies between the figures on any particular date that you choose to look at.

In April 2014, the RBA reported the following as existing in Australia at that date:

• Currency – $57.5 billion
• Current deposits with banks – $236.6 billion
• Broad money (all possible forms of money) – $1,646.8 billion
• Loans and advances - $1,925.6 billion
• Total credit - $2,246.6 billion

So, would someone like to explain how, if there existed only $1.6 trillion in all possible forms of money, the banks could ‘loan’ or ‘advance’ $1.9 trillion and, furthermore, how they could extend credit of $2.2 trillion?  Only God can create something from nothing, so how do the banks get away with it?

The simple fact is that banks ‘create’ loans through fraudulent accounting practices – they create a deposit on one side, and offset that with a loan on the other side.  For proof of this fact, we recommend that you read through the “Credit River decision” (First National Bank of Montgomery v Jerome Daly) In this case the defendant, who was facing foreclosure on his house, subpoenaed the CEO of the bank, who admitted, under oath, that his loan was created by bookkeeping entry.

So, what is the specific process that the banks use to commit this fraud?

When you buy a house, you run around looking for properties until you find just the right one. You then negotiate with the real estate agent or vendor and settle on a price - you do all that work, not the bank. You then approach the bank and ask to borrow x amount of dollars. For simplicity, in this example, we'll say it's a million dollars.

Now, the bank obviously doesn’t just hand over a million dollars and say: "Here you go, go buy your house, just pay it back when you can" - in fact, far from it. Instead, what they do is they defraud you with 3 important documents - the loan agreement, the mortgage document, and the Certificate of Title.

The loan agreement is the value to the bank: it is your promise to pay them a particular amount of money over a specific time frame. Now, in our 1 million dollar example, they don't actually lend you a million dollars, they only usually advance you around 80%.  So, in this example, that would equate to $800,000 because they expect you to put 20% of your own money in as ‘hurt money’. And, of course, you don't just pay them back that original $800,000 either: in fact, over the course of a 25 year loan, it would be closer to $2 million+.

Remember, the loan agreement is a promise to pay back that $2 million+ over, say, 25 years - it is a promissory note. Many of you would be familiar with the old practice of writing out a cheque and then someone signing that cheque over to a third party. It's not done that much anymore, but if we wrote you out a cheque for $100 and you wanted money straight away, you could ask a friend, for example, to give you, say $80, and you would write the cheque over to him or her.

The bank can on-sell your promissory note by way of securitisation, which is what happens the majority of the time. That starts to get a bit complicated, so we won't get into that, but if you want to find out more about how securitisation works, we recommend watching this short video. The point to take from this is that the loan agreement is the value to the bank.

The mortgage document is the guarantee to the bank that it can take some kind of action if you break your promise to pay. In this case, they have a mortgage over your house and they have a right to sell it to cover any shortfall. It is very important to note that you own the house at all times, which is why the bank requires a mortgage over it.

It is not a case that the bank owns the home until you pay it off, as many people believe - you can paint your house, renovate it and even sell it if you want to - the bank will expect that their balance is paid off before the property changes hands though, and no buyer would purchase a house that still had a mortgage in place, but they certainly could, by law, if they wanted to. This is a very important point - it's your house, not the banks!

Now we get to the key component - the Certificate of Title. What is it?

It is the title to your house. Remember we said previously that bank notes used to be Certificates of Title to an amount of gold? Well, in this case, the house is the gold because it has value, so the Certificate of Title is the “money”.  Section 39 of the Banking Act 1959 (Cth) specifically defines a Certificate of Title (instrument of title) as “Australian currency”.

As we said above, at all times, the Certificate of Title has your name on it: it's yours. So, what happens to it at settlement? The bank steals it from you and keeps it - why? Why do they keep your Certificate of Title when they already have the value from you – being your loan agreement - and they already have the mortgage document, which is their security?

As you will see in a moment, they steal or swindle it from you because they need it to create the purported ‘loan’. We challenge you to look through your Terms and Conditions documentation to see if the Certificate of Title is listed or referenced anywhere. The banks don't mention it in any of their paperwork and, because they take it without mentioning it or telling you about it, then they have defrauded you. There has been no meeting of the minds - a necessary part of any lawful contract to exist - because you have not been given full disclosure before you entered into the contract.

For a meeting of the minds to occur, there must be full disclosure and, the fact that the bank does not even mention, let alone “disclose” what they are doing with your Certificate of Title, it is not possible for there to be a true ‘meeting of the minds’ with respect to almost every home loan contract! The bank is required to disclose every aspect of the contract, including how they handle your Certificate of Title.

So, what do they do with it?  As we understand it, the banks deposit that Certificate of Title on their books as an asset, and that is where the ‘money’ comes from that they then supposedly ‘loan’ you. So, in essence, they have stolen the money from you that they then turn around and ‘lend’ back to you, at interest!

The banks then bundle up your loan agreement with many others and securitise - or sell those off - so they have already been paid once for that particular loan. However, they still collect monthly payments from you for the life of the loan, so you have actually paid 2 - 3 times the amount of the supposed ‘loan’ but, if you miss even a few payments, they can then sell your house and get paid a third time. If that's not fraud, then we don't know what is!

Now that you understand this - even if you only have a basic grasp of what we have just explained, the fraud should still be clear - what can you do about it?

First and foremost, anyone who has a current mortgage can write a simple letter to their bank asking the bank important questions about the Certificate of Title.  There is a copy of a sample letter that you can use on our References CD, or you can download it here. We recommend that you fill in the parts in red, change all the red text to black, and then print off the letter, sign it and send it off to your bank manager and see what sort of response you get.

It is important to note that we are not suggesting that anyone stops making their home loan payments, because the banks are fully supported and backed by the corrupt courts, and you will almost certainly lose your house. Instead, sending off a letter such as the one referred to above, achieves a number of positive outcomes. Firstly, you become aware of the fraud that the banks are committing and, secondly, the banks become aware that we are on to their scam.

Depending on the response that you get from your bank you may receive information that gives you sufficient grounds to successfully challenge the validity of your loan and/or mortgage.  We just want to be clear that challenging unsecured loans and/or credit cards is quite simple, but challenging any loans where the lender has security over a physical asset - house, car plant and equipment etc. -  will almost certainly lead to that asset be repossessed, barring any exceptional circumstances.

Sadly, that’s not the end of the fraud that the banks commit.  Anyone who has been forced into taking out mortgage insurance will also have been the subject of an additional fraud.

Many people fail to understand that the mortgage insurance policy, which the bank forced you to pay for, actually only covers the bank, and not you.  The issue is that this is never explained to the purchaser prior to them paying for the mortgage insurance policy, and that constitutes insurance fraud.  Any time someone tries to gain a financial advantage where no loss has occurred, that constitutes insurance fraud. If you make a false claim on your home and contents insurance, for example, and claim something was stolen when it wasn’t, then that would constitute insurance fraud. If a bank was to claim a ‘loss’, when clearly no actual ‘loss’ has occurred – because they ‘created’ the loan and loaned funds of no value - that too constitutes insurance fraud.

But, there’s yet another issue with mortgage insurance policies – you are never actually given a copy of them!

Anyone who has ever heard or seen the ads for car insurance or home and contents insurance will be aware of the disclaimer that is recited at the end of each ad, along the lines of: “This is general advice only.  Please get a copy of our PDS (Product Disclosure Statement) to decide if this product is right for you.”

We are yet to come across anyone who has ever received a PDS for their mortgage insurance policy.  Once again, this constitutes insurance fraud, and you have a right to demand a refund of your mortgage insurance policy fee.  To assist you in obtaining that refund, we have a template letter that you might like to use.  Once again, you will find a copy of that letter on our References CD, or you can download a copy here .

We recommend that, if you are interested in finding out more about the fraud perpetrated by the banks, and/or challenging any unsecured loans/credit cards, you go to the Bank Secrets Revealed website .

Go back to Chapter 2 or move onto Chapter 4.