Tired Of Lending Money TO The Banks? Start Your Family Bank With IBC ep: 215

One of the biggest problems is fractional reserve banking

through the federal reserve system.

So if you have the chance, the opportunity

to control some of the banking function in your life,

wouldn't you wanna look into that?

Bottom line is when you put your money at the bank,

you're an unsecured depositor of that institution now.

So if the bank fails, well, your money is,

well, look up what percentage of deposits

are backed up by FDIC funds.

It'll surprise you.

If people, if Americans really knew

what was going on with the banking system,

there'd be a revolution overnight.

You will contribute less to the overall problem

of endless money creation,

which is what makes the money that you already have

less valuable every single year, the dollar,

every single day they are printing, printing money,

the federal reserve is giving it to the government

and that's why you can't keep up.

Yeah, there's direct benefits and indirect benefits

of doing it the way that Nelson described

an infinite banking concept through

with properly designed dividend paying

whole life insurance policies,

guaranteeing the collateral your death benefit,

paying you interest in dividends every year,

uninterrupted growth, providing you access to capital,

giving you privacy.

I mean, is all these things wrapped into one?

Wouldn't you be better to just go and open up your own bank?

Hey, I'm Dave, and I'm Paul.

And this is the Wealth Warehouse podcast.

We have something interesting,

and it was kind of Dave's idea to read an excerpt

from a very special book.

I think it's a very special book

for a lot of people practicing IBC

because it gets to kind of like the main problem.

Like there's a lot of problems.

Like Nelson Nash talked about, right?

There's Parkinson's Law, there's taxes,

there's all these other things.

One of the biggest problems is fractional reserve banking

through the federal reserve system.

So we're going to read you a little excerpt

from a book called The Creature from Jekyll Island

by G. Edward Griffin, written in 90,

early 90s, I guess, mid 90s,

been revised a couple times, but phenomenal book.

Phenomenal book, one of the scariest books

you could probably ever read at the same time.

Strangely enough.

I think you said it, maybe it was a terrible story

or a horrifying story told very well.

I think it's something you said, or maybe I said it.

I don't know, I think you said it, but.

I don't know, we say a lot of brilliant things.

So we'll just take credit for it.

Just, yeah, just pure gold.

I mean, just always that.

Yeah, all right.

So you start, so we're going to play,

we'll play two different parts here.

You'll be the question, Asker,

and I'll be the person answering your questions

who in this case, you ask on the questions

are like a typical consumer and customer of a bank.

I am the banker.

Right, so.

This is from The Creatures from Jack O'Lean.

This is what it looks like.

It's a soft cover book.

I'm going to read the introduction.

Oh, the following exchange was published

in the British Humor magazine Punch on April 3rd, 1957.

It is reprinted here as an appropriate introduction

and as a mental exercise to limber the mind

for the material contained in this book.

Okay, here we go.

Now, keep in mind the numbers.

This is 1957.

Keep that in mind, folks.

Okay.

What are banks for?

To make money.

For the customers?

For the banks.

Why doesn't bank advertising mention this?

It would not be in good taste,

but it is mentioned by implication

in references to reserves of $249 million or theirabouts.

That is the money that they have made.

Out of the customers?

I suppose so.

They also mention assets of 500 million or theirabouts.

Have they made that too?

Not exactly.

That is the money they use to make money.

I see.

And they keep it in a safe somewhere?

Not at all.

They lend it to customers.

Then they haven't got it?

Then how is it assets?

They maintain that it would be if they got it back.

But they must have some money in a safe somewhere.

Yes, usually $500 million or theirabouts.

This is called liabilities.

But if they've got it, how can they be liable for it?

Because it isn't theirs.

Then why do they have it?

It has been lent to them by customers.

You mean customers lend banks money?

In effect, they put money into their account,

so it is really lent to the banks.

And what do the banks do with it?

Lend it to other customers.

But you said that money they lent to other people was assets.

Yes.

Then assets and liabilities must be the same thing?

You can't really say that.

But you've just said it.

If I put $100 into my account, the bank is liable

to have to pay it back, so it's liabilities.

But then they go and lend it to someone else.

And he is liable to have it to pay it back.

So it's assets.

It's the same $100, isn't it?

Yes, then it cancels out.

It means, doesn't it?

That banks haven't really any money at all?

Theoretically.

Never mind theoretically.

And if they haven't any money,

where do they get their reserves of $249 million

or they're about?

I told you, that is the money they have made.

How?

Well, when they lend your $100 to someone

they charge him interest.

How much?

It depends on the bank rate, say five and a half percent.

That's their profit.

Why isn't it my profit, isn't it my money?

It's the theory of banking practice that...

When I lend them my $100, why don't I charge them interest?

You do.

You don't say, how much?

It depends on the bank rate, say half a percent.

Grasping of me, rather?

I'm not sure what that means.

Well, that's only...

But that's only if you're not going to draw the money out again.

But of course, I'm going to draw it out again.

If I hadn't wanted to draw it out again,

I could have buried it in the garden, couldn't I?

They wouldn't like you to draw it out again.

Why not?

If I keep it there, you say it's a liability.

Wouldn't they be glad if I reduced their liabilities by removing it?

No, because if you remove it, they can't lend it to anyone else.

But if I wanted to remove it, they'd let me, they'd have to let me.

Certainly.

But suppose they've already lent it to another customer.

And they'll let you have someone else's money.

But suppose he wants his, and they've lent me, and they've let me have it.

You're being purposely obtuse.

I think I'm being acute.

What if everyone wanted their money all at once?

It's the theory of banking practice that they never would.

So what banks bank on is not having to meet their commitments?

I wouldn't say that.

Naturally.

Well, if there's nothing else you can think to tell me.

Quite so.

Now you can go off and open a banking account.

Just one last question.

Of course.

What night do better to go off and open up a bank?

There you go.

The end.

That's an intro to the creature from Jekyll Island.

And that's a, that's the perfect last question.

So wouldn't you be better to just go and open up your own bank?

I mean, that's really what we talk about on, on this podcast.

That's the basis of this podcast is becoming your own bank, becoming your own banker,

because the banker gets to make the rules.

Well, you know, that's what we, what we want to talk about this today,

because what banks have been doing is infinite banking,

just like we teach and what we do in our own eyes,

what banks have been doing this with your money.

Yeah, and they, and they have a monopoly on it, right?

Ever since 1913 when the Federal Reserve Act was signed in the law,

it has gotten worse.

Right now banks have the ability to, to create money,

as we kind of just told you that story.

That was a story of how banks create money.

They take your money, keep none of it in reserve,

and then they lend it to other people, their customers,

who also have money deposited there.

But if we all went to the bank,

first of all, they don't have it in cash.

They have very little cash relatively speaking at the bank,

compared their overall deposits.

But if we all went to the bank to get our money out,

it's kind of, you know, you will lose to the,

it's a wonderful life story with George Bailey all the time,

that people are potter will pay $50 in the dollar, you know, whatever.

Yep.

Yeah, they all want their money, right?

So yeah, I mean, I remember a couple of years ago,

I was making some cash withdrawals,

and not getting a showed up to you,

you know, one of these, a big branch,

you know, one of that national bank chains in the country,

and I said, I need $10,000 in cash.

And the guy looked at me like I was crazy.

He's like, well, you should probably really call here first

before you come,

turn out they did have $10,000.

I don't know that they had much more than that.

You know, and then I got all the questions,

what's it for?

None of your business.

Oh, but it is our business, we're the bank.

We don't have to give you our money.

So, I mean, if you,

yeah, if you want to prove that that money is actually,

it really belongs to the bank when you deposit there,

and you're just an unsecured creditor,

that's really all you are.

Go to the bank and say you have $50,000 in an account.

Go ask for $50,000 in cash.

See what happens.

It's worth doing just for the fun of it,

just to see how they react.

Yep.

And you tell me how easy it is to get $50,000

to cash out of that bank.

I guarantee that you're going to be talking to,

you know, the regular teller, right,

that you go up there.

Yeah, I've got my account.

Here's my account number.

Here's my IDs.

I want to take out $50,000.

I've got $55,000 in the account.

I want it all in cash.

You're going to be talking to a bank manager.

You're going to be taking to a special,

you know, special office.

Maybe it's all glass, you know, out in the open or whatever.

But you're going there first before you get anything done.

And they're going to ask you a lot of uncomfortable questions.

Yeah, because they want to know what it's for.

Because, you know, really in the eyes of the bank

and honestly in the eyes of the law,

in the actual system that we live in,

you're guilty until proven innocent.

And that's what you have to do every time you go to a bank

is you have to prove that you're innocent.

You can't even deposit $10,000 in cash

without answering a bunch of questions.

They won't take your money without answering questions.

You know, that's right.

And it's all regulatory now,

as we know from taking out,

we have to take anti-money laundering training every year

as part of our curriculum right day

as life insurance agents.

And that is a big part of it,

as you learn about the history of the Bank Secrecy Act.

And all the other,

I mean, there was, you know, the 9-11 stuff,

there's all this stuff, right?

To make you safer though, right?

To make the consumer safer.

Yeah.

But it depends on the bank too,

like only criminals use cash.

Yeah.

That's right.

Right.

Bottom line is when you put your money at the bank,

you're an unsecured depositor of that institution now.

So if the bank fails,

well, your money is,

well, if the IC Paul,

well, look up what percentage of deposits are backed up

by FDIC funds,

it'll surprise you.

It's less than 2%.

Yeah, it's funny.

That number is about the same as the amount,

the percentage of term insurance policies

that actually ever pay out less than 2%.

Right.

Yeah.

What a coincidence.

Yeah.

So I mean, that's where the whole term

fractional reserve banking comes from, right?

They only have to hold a fraction of your deposit

and then they create more out of it.

So in a sense,

like theoretically,

$100 can create $1,000 of new money in the economy.

And if you guys really want to drill into that

and how that works,

read how privatized banking really works

by Carlos Lora, Bob Murphy, Nelson Nash.

Oh, great book.

I recommend that.

I mean, we recommend that to everybody.

That's just a must read.

Yeah.

I've even had clients say

that that should have been the first book they read

because it gave them a better understanding

of the overall problem.

Problem.

And he's the only client I've ever heard say

that that was Phil.

But that's a great book

to get into about fractional reserve banking

because no one ever thinks about it.

They don't know that this is going on.

They don't know that the federal reserve

as in federal has no reserve and isn't a bank.

They don't know any of these things.

Or maybe they do know they just don't care,

but most people have no idea what's facing.

No, listen.

You know, I would think if you're listening to this,

you probably have a better sense

than most people about this stuff.

And maybe you did know that.

But you need to share that with other people.

Who was it?

Maybe it was Thomas Jefferson said,

like if 10% of the population,

or if people,

if Americans really knew

what's going on with the banking system,

there'd be a revolution overnight.

Yeah, it was either Ham or Andrew Jackson.

Andrew Jackson.

Yeah.

Yeah, because he was a big opponent

to a central bank.

That was a jack person.

Two different generations.

But for sure.

Yeah.

So, and a bank is fascinating about it though.

It is.

And they were right about everything.

Like those.

Yes.

Our founding fathers are early presidents

who understood the dangers of central banking.

They were right about everything.

I mean, go back and look at what they had to say,

what they wrote.

You can't prove them wrong.

That's for sure.

But you got to understand the problem.

And it all starts with understanding the problem.

So, fractional reserve banking,

creating money out of thin air.

You're just a unsecured creditor

when you lend money to the banks

by depositing it automatically.

It isn't a funny like automatically.

You used to pick up a check on a Friday.

Now it goes automatically to the bank.

Right?

It goes there.

They make it.

They make it easier and easier

to separate yourself from your money.

Yep.

Even even shares of stocks.

Go to the DTC.

They actually sit with the DTC.

You don't actually get that share certificate anymore

that you hold with your hands.

It's all digital.

And it goes to another entity

and sits there and they're leveraging that.

You know, that old conventional saying

or that maximum possession

is nine tenths of the law.

It really is because when banks fail,

as we know from the last,

you know, the big 08 crash

and everything that was rewritten at that time,

when banks fail in the future,

they are allowed to use the money you have on deposit

to revive the bank.

Keep it alive.

You have to distribute shares in return.

So, you know, this is another country,

where they can access their own money.

Yeah.

So we have a solution though, right?

So that was part of what Nelson was trying to get at

for all Americans as building this 10%

and was privatized banking.

In that book that you mentioned,

how privatized banking really works,

is a great way to one not contribute

As much to inflation, like by not putting, by not warehousing all of your funds in a commercial bank or a credit union by warehousing it in private life insurance contracts, right?

And then using that to fund your lifestyle, your needs, your tuition payments, whatever it is, your mortgage payments eventually, you will contribute less to the overall problem of endless money creation.

Which is what makes the money that you already have less valuable every single year, the dollar every single day they are printing printing money, the Federal Reserve is giving it to the government and that's why you can't keep up.

Yeah, and there's direct benefits and indirect benefits of doing it the way, you know, that Nelson described an infinite banking concept through dividend paying, properly designed dividend paying, whole life insurance policies.

You know, the direct benefits, there's a ton of, we probably have a podcast episode on each individual benefit that there is.

But you capitalize these policies, you build that cash value up, and then you borrow against it, you never spend it, you let it compound uninterrupted, right?

And you get access to the insurance company's bottom money as a line of credit essentially to go, do your spending, you can still pay with cash, but you're not paying with your own cash, you know, what's better than paying cash?

Well, paying with somebody else's cash, that's, that's a lot better. So a lot of direct benefits indirectly, like you mentioned, now you're not participating in the fractional reserve economy.

Yes, life insurance companies have to keep money in banks. When you take that money out, you take that loan from the life insurance company, it gets deposited into a bank. Unfortunately, you can't escape the banking system, right?

So in a gradient to the fabric of our economy, you can't really escape it. You can only escape parts of it, but when that money, when that loan from the life insurance company hits my account, it's immediately gone.

Because I'm not taking loans just for money to go sit in some, some bank account somewhere on taking loans. So as soon as it hits that account, I've got that money working for me somewhere else, right?

And it, where's it go? It's going to end up in another bank. There's nothing I can do about that, but at least indirectly what I've done is I've limited the reserves the bank has because I'm not storing my capital with the banks.

I'm storing it at the life insurance company, you know, purchasing life insurance.

That's right. And Nelson alludes to that and becoming your own banker. The money at all, you know, water flows through, you know, he does this analogy where, you know, there's only one pool of water right in the world, right?

But it, you know, some of it flows through us, some of it's in that lake over there, the oceans, obviously hold most of it.

Money is like this, is like that in the sense that it passes to our hands. It goes from me to you, but it's all going to move and end up back in the banking system. I mean, it has to.

But the point is just like Dave said, if you limit the amount of money you put in the bank and limit their reserve capability, you contribute less to the overall problem of inflation, and thus you help your neighbor, you help yourself, you help futures generations more importantly.

Now, are you going to put a dent in it? Probably not. But it doesn't matter because what we're trying to do here through the infinite banking concept is control the function of banking at the you and me level. And that's, that's all we can control. And that's, and that's okay.

Yeah, that's just it is there's there's a lot in this. In fact, most of life you can't control. But the couple things I can control, man, I want to control them.

So if you have the chance, the opportunity to control some of the banking function in your life, wouldn't you want to look into that? And I'm glad we did. I'm glad I did. You know, one of the other great things is you're actually an owner.

When you put your money into one of these life insurance companies, if you're doing this correctly and working with somebody that knows what they're doing is a mutual life insurance company, which means you're an owner of that company.

Are you an owner of the bank? Maybe if you have shares, if you're a shareholder, you go out on the market and buy some, yeah, I mean, you hold some some value, some equity.

But no, you're you're a customer, you're a customer. And really, I think that's what Nelson was mostly talking about is don't be customers of the bank.

You know, limit the the amount of interactions you have with them as customers, because there is actually ways. And this is far beyond what we want to talk about here. There's a ways to where banks can view you as a partner.

Instead of a customer where the bank actually needs you instead of you needing the bank. And that's a whole different place in life to be, you know, real position of strength when you get to that position, but in reality, you're a customer of the

Yeah, absolutely. I tell you what, you know, we talked and I'm glad you brought this up, but ownership is critically important. And that's your you're not an owner of the bank.

You're a customer of the bank. If you practice IBC, you are an owner of a very old, very stable, mutual life insurance company that is guaranteeing the collateral, your death benefit, paying you interest in dividends every year uninterrupted growth, providing you access to capital.

Giving you privacy. I mean, it's all these things wrapped into one. And when you can walk into a bank and sit with them and show them your balance sheet where you have all this liquidity, all this money working for you, it really does change the conversation.

And you know, had lunch with my mortgage guy like that in the last couple weeks. And it was just like, you know, in a couple of years, I won't and I said this, you know, jokingly, I won't need you anymore.

I want to put you out of business because you're I really like you is a good dude. But I don't I don't need your your your bank anymore. At some point in the near future. And that's that's great. Yeah.

All right. Well, we're going to cut this episode right here because this one went pretty long and we'll pick up with the second half next week.

So go check out in the show notes, the link to our website, the Wealthwarehousepodcast.com. We've got a bunch of great resources on there. You can watch Dave's a little video that's very handy.

And do not schedule a call with us unless you've read Nelson's book, which if you're watching us on YouTube, it's right there. So read becoming your own banker, maybe some other books and IBC schedule call with us would be more than happy to talk with you.

Absolutely. And until next time, control your capital or somebody else will.

Hey, I'm Dave and I'm Paul. And this is the Wealthwarehouse podcast.

Wealthwarehousepodcast.com.