Badlands Media - Badlands Book Club: The Creature From Jekyll Island - Chapter 10: The Mandrake Mechanism

Episode Date: July 30, 2026

CannCon and Ashe in America crack open Chapter 10 of The Creature from Jekyll Island by G. Edward Griffin, and this time the Fed is fully in the crosshairs. This week is all about the Mandrake Mechanism, named after a comic strip magician who could conjure things out of thin air, which turns out to be an uncomfortably accurate description of how the Federal Reserve actually creates money. The hosts break down how modern currency is no longer backed by gold or silver at all, how debt itself is the spark that brings money into existence, and how paying off that debt makes it vanish just as fast. Expect a deep look at reserve ratios, checkbook money, and the sleight of hand that keeps the whole system running, paired with the hosts' usual banter, tangents, and disbelief that this is somehow how it all works.

The Badlands, one of the Badlands, explain those Badlands. That's a hell of a name. All right, good afternoon, ladies and gentlemen, and welcome to the Badlands Book Club. Better known or more affectionately known as... The Bad Mood Hour. Why? Because we're reading the Bad Mood Book. Yes, we are.

We are reading the Bad Mood Book. Cute little creature, though. It's much better than the book that shall not be named. Well, it's a certain. more accurate. That is for sure. Ostensibly not written by feds. That is absolutely for sure.

Is that going for it? And yeah, so, yeah, we're going to get into it, man. We're going to get into it. And I don't know if you saw the Fed just came out and said they are not going to lower rates again. And Trump's pretty ticked about it. And I would be, if I was him, I'd be pretty ticked about it. Yeah, he had something on that. that it was uh i had something from daily this morning and i did not get to it so i mean we could

yeah something about the i don't know economic rebound despite not cutting rates or something some story i read i thought i said it to burning bright but i guess i didn't yeah i mean it's it's crazy like like you look at this story here and uh fed holds rates steady what it means for credit card savings account mortgages and auto loans and i'll talk about this tomorrow on daily but uh fix mortgage mortgage mortgage which aren't directly affected by the Fed, but by the Treasury long-term notes, are the highest they've been in a year at 6.76%.

Car loans, new car loans are at 7%. That is affected by the Fed. 7%, 10.5% for new cars. Credit cards are at 24%. Yeah, that's insane. 24%. That's criminal. That is absolutely...

It's loan shark ship. that that's like when when I was in the Marine Corps and we get to you know our duty station as private first class and and Lance Corporals and privates and all that they're like make sure you don't go out in town and and go get into some stupid auto loan where you're paying 24% interest 25 is what they say 25% interest and now it's like yeah that's a standard credit card rate if you have a 750 credit score that's that's criminal these people are criminals and uh what a show to be talking about the criminals that set the financial parameters of society and people's

access to financial assets, then this show, where you learn that it's all a scam and the name of the game is bailout. Yeah, freaking pisses me off so much, man. And the entire thing, like, the Fed is nothing but a construct. It is literally an unaccountable body that is thwarting the president right now, making the president look bad. If you go back and look at that, you know, that article there, they have like a chart of the historic rates going all the way back to like 2000. And, you know, they're, they're attributing all of this to the Iran conflict. But you go back and look at the beginning after 9-11. You look at the beginning of Iraq, Afghanistan all the way up until about 2004. And the rates were dirt low, less than 1% after Iraq and Afghanistan had already

begun. And that was a much larger war than what we're facing right now. Right. This is, I mean, this isn't even This is chicken scratch compared to that. That was an actual ground invasion, allocation of troops and resources and everything else. This is just some ships off the coast throwing Patriot missiles. So far, Brian. So far. But it's absolutely crazy, man. And hopeful theorists isn't 750 pretty good.

Actually, it's only considered good now. My score, I think, is like a 748. Isn't 800 the best? No, 850, I think, is the best. Yeah. And on the highest I've, the highest I've, been is 770. I got up to 770. I mean, that whole thing is a scam too, because if you pay off all your credit cards, then your rate goes down. Yep. And not only that, like I do, so my credit cards, I'm,

I don't max them out, but I put a lot of money on my credit cards every single month and I pay them off completely every single month. But it will hit me because they hate you. No, no, well, that doesn't affect my score. What affects my score is that my credit limit, my credit usage goes so high. in the middle of the month and then I pay it off at the end of the month, but they do the credit analysis or whatever in the middle of the month. So they're like, oh my God, this guy's using 80% of his credit card. Yeah, I'm also not buying anything on debit or cash, well, some cash, but, you know, it's all in that. And then it gets all paid off at the end of the month. And I'm back to zero. And if they would do there, they're like, oh, this guy's not using any credit. He's good.

I do have my, I got a mortgage. I got a home, an auto loan, one auto loan. I got two paid off cars. Paying 24% on that auto loan? No, I'm only paying 4% on Christy's car. Yeah, it was new. She's the only one in my family out of the two of us that's ever had new cars. I'd never get new cars. I'd rather buy like a used car that's like five or six years old. Or they depreciate the moment you drive them off a lot.

And I like sports cars. I like fast, expensive cars and they're way cheaper five or six years later. Like my Cadillac, you know, is I bought that car. It's a 2014 and I bought it in 2018. And it was already, you know, instead of being a $100,000 car new, it was only like $45 or $50 grand. You know, it's half price. And so. Well, we should hit our sponsors and get into the bad mood hour because it's only being in a bad mood for an hour, Brian.

Yeah, I know. Can you run those while I go groundwater? I don't have which one. It's a river in my shroom vibe. I got you. Yes. All right. Well, you know what would make this book better if we were all tripping on shrooms?

Hey there, Earthlings. I'm here on the streets of New York to tell you about something that's literally out of this world. You know, traveling between dimensions really takes it out of you, but I've found the perfect solution. My shroom vibe can now be your shroom vibe. Elevate your frequency. Get microdose capsules, gummies, and chocolate bars at my shroomvive.com. Use code badlands for 10% off your order. Trust me. Galaxy hopping demands balance, and ours comes from my. Mother Nature. Organic, not synthetic. It's the real deal. Si Lee, if you know what I mean, check it out. Your frequency will thank you. Visit my shroom vibe.com. Organic goodness, not synthetic. Use code badlands. That wasn't really a fair statement because the book itself is actually really good, right? It gives us information that we need. It gives us the history that's been buried about what has been done to us, us being the people. of the world because this is definitely a global scam. So it wouldn't be better.

It wouldn't make the book better. But it certainly would make the bad mood hour more enjoyable if we all ate shrooms before we read the book. But more seriously is what you should do with your money in light of what you're learning in this book. Your bank kept $1,600 from you in 2025. You probably didn't notice. Now multiply that by millions of Americans.

That's over $433 billion in interest the banks kept. Your money goes in. Banks put it to work. They make record profits. You get almost nothing in return. And when they blow up, guess who has to bail them out? So what are you supposed to do? Ask politely, wait, accept that this is just how banking works? Or you could put your money where it works for you.

works for you. On River, your cash earns 3.3% paid in Bitcoin. Burning Bitcoin gives your money even more room to grow. And it's just as easy as how you bank today. You can get paid, pay your bills, and access your money anytime. Start banking with Bitcoin on River. That lendsmead.tv slash river. You will not regret it. You will not regret it. my stack sets every week. I still need to do the Bitcoin interest on cash thing that you're doing. I need to add that to my list of things to do. I think, I mean, obviously, I do it because I like to put it into Bitcoin when there's dips and everything.

But yeah, it's nice getting 3.5% on money that you can actually like use. You can get, you know, are we on chapter 10? we are yes that's what I thought that's what I thought okay so we need to hype up before we start reading

in the bad mood hour this is the vibe waiting yeah that's how we make the bad mood hour good Brian that's actually me playing guitar behind my head although the the strings are backwards

the strings should be facing away from me not towards my head so maybe you're just on how to do it the right way Either that or the AI just kind of got me wrong. I don't know. I think the AI nailed you perfectly. Okay.

It is like one of the best, one of the best AI. You and Zach in that, in the July 4th video, my favorite part of that is when you're doing the Boston Tea Party. It's like, an Indian. And Zach's like all bored hitting the vape by the Dolorian. I love it so much. It's so, that, that video is so badass. It's also a very accurate representation of what I look like with my shirt off still. I'm sure that's true.

All right. After 10, you take it away. The Mandrake mechanism. Oh, hold on. Do I have? Okay. Do I have the rumble up? We are not very well prepared today.

I'm super well prepared. I don't know what you're talking about. No, you're not. If you were here on time. I have rumble up. If we have, we have, we have, if you were here on time, then I could have. I was here on time. I see her two minutes early.

I could have accurately talk shit and about the things that we talked about before the show. I could have accurately done that and still been able to. To what you're saying is you're very unprepared for the show today. I was perfectly prepared. In part. In part. In part. Chapter 10.

The Mandrake Mechanism. The method by which the Federal Reserve creates money out of nothing. The concept of use. as the payment of interest on pretended loans, the true cause of the hidden tax called inflation, the way in which the Fed creates boom-bust cycles. In the 1940s, there was a comic strip character called Mandrake the Magician. His specialty was creating things out of nothing

and, when appropriate, to make them disappear back into that same void. It is fitting, therefore, that the process to be described in this section should be named in his honor. In the previous chapters, we examined the technique developed by the political and monetary scientists to create money out of nothing for the purpose of lending. This is not an entirely accurate description because it implies that money is created first and then waits for someone to borrow it. On the other hand, textbooks on banking often state that money is created out of debt. This is also misleading because it implies that the debt exists first and then is converted into money.

In truth, money is not created until the instant it is borrowed. It is the act of borrowing, which causes it to spring into existence. And incidentally, it is the act of paying off the debt that causes it to vanish. There's a footnote on that that says, printed Federal Reserve notes that sit in the Treasury's vault do not become money until they are released into circulation in exchange for checkbook money that was created by a bank loan. As long as the bills are in the vault with no debt-based money to report, place them, they technically are just paper, not money.

They pass through the magic walls of the Federal Reserve. Well, it's the mechanism of exchange that causes it to become money. I was trying to make a joke. Sorry. Sorry. I'm already in the bad mood portion of the bad mood hour. I'm trying to lighten it. There is no short phrase that perfectly describes this process.

So until one is evented along the way, we shall continue to use using. the phrase, create money out of nothing, and occasionally add, for the purpose of lending, where necessary to further clarify the meaning. So let us now leave the historical figures of the past and jump into their future, in other words, into our present, and see how far this money-slash-debt creation process has been carried and how it works. The first fact that needs to be considered is that our money today has no gold or silver behind it whatsoever. The fraction is not 54, percent or 15 percent. It is zero percent. It has traveled the path of all previous fractional money in history and is already degenerated into pure fiat money. The fact that most of it is in the

form of checkbook balances rather than paper currency is a mere technicality. And the fact that bankers speak about reserve ratios is eyewash. The so-called reserves to which they are, in fact, treasury bonds and other certificates of debt. Our money is pure fiat, through and through. The second fact that needs to be clearly understood is that in spite of the technical jargon seemingly complicated procedures and seemingly complicated procedures, the actual mechanism by which the Federal Reserve creates money is quite simple. They do it the exact same way. The goldsmiths of old did, except, of course, the goldsmiths were limited by the need to hold some precious metals in reserve, whereas the Fed has not. no such restriction. The Federal Reserve is candid. The Federal Reserve itself is amazingly frank about

this process. A booklet published by the Federal Reserve Bank of New York tells us that, quote, currency cannot be redeemed or exchange for Treasury gold or any other asset used as backing. The question of just what assets back the Federal Reserve notes has little but bookkeeping significance, end quote. Elsewhere in the same publication, we are told, quote, banks are creating more are creating money based on borrowers promises to pay the iowu banks create money by quote unquote monetizing the private debts of businesses and individuals in a booklet entitled modern money mechanics the federal reserve bank of chicago says quote in the united states neither paper currency nor deposits have value as commodities intrinsically a dollar bill is just a

piece of paper deposits are merely book entries coins do have some intrinsic value as metal but generally far less than their face amount. What then makes these instruments checks, paper, money, coins, acceptable at face value and a payment of all debts and for other monetary use? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and real goods and services whenever they choose to do so. This partly is a matter of law. Currency has been designated legal tender by the government. That is, it must be accepted. Yeah, except when you go to like football stadiums and every place else now that's like, oh, we don't take cash.

Like the bullshit's against the law for you not to take cash. Yeah, they don't. In the fine print of a footnote and a bulletin of the Federal Reserve Bank of St. Louis, we find this surprisingly candid explanation. Quote, modern monetary systems have a fiat base, literally money by decree, with depository institutions acting as fiduciaries, creating obligatory. against themselves with the Fiat base acting in part as reserves. The decree appears on the currency notes, quote, this is not a legal tender for all debts public and private. This note is legal tender for all debts public and private.

And quote, while no individual could refuse to accept such money for debt repayment, exchange contracts could easily be composed to thwart its use in everyday commerce. However, a forceful explanation as to why money is accepted is that the federal government, requires it as a payment for tax liabilities. Anticipation of the need to clear this debt creates a demand for the pure fiat dollar. Money would vanish without debt. Oh, wait. My creatures fall in here.

It is difficult for Americans to come to grips with the fact that their total money supply is backed by nothing but debt. And it is even more mind-boggling to visualize that if everyone paid back all the money that was borrowed, there would be no money left in existence. That's right. There would be not one penny in circulation. All coins and all paper currency would be returned to the bank vaults, and there would be not one dollar in anyone's checking account. In short, all money would disappear. Mariner Eccles was the governor of the Federal Reserve System in 1941. On September 30th of that year, Ecclice was asked to give testimony before the House Committee on Banking and Currency. The purpose of

the hearing was to obtain information regarding the role of the Federal Reserve in creating conditions that led to the Depression of the 1930s. Congressman Wright Patman, who was chairman of that committee, asked how the Fed got the money to purchase $2 billion worth of government bonds in 1933. Acleese, this is the exchange that followed. Acleese, we created it. Patman, out of what? Eccles. Out of the right to issue credit money. Patman.

And there is nothing behind it, is there, except our government's credit? Ecclice. That is what our money system is. If there were no debts in our money system, there wouldn't be any money. It must be realized that, while money may represent an asset to selected individuals, when it is considered as an aggregate of the total money supply, it is not an asset at all. A man who borrows $1,000 may think that he has increased his financial position by that amount, but he is not.

His 1,000 cash offset is offset by his 1,000 loan liability and his net position is zero. Bank accounts are exactly the same on a larger scale. Add up all the bank accounts in the nation, and it would be easy to assume that all that money represents a gigantic pool of assets which support the economy. Yet every bit of this money is owed by someone. Some will owe nothing. Others will owe many times what they possess. All added together, the national balance is zero. What we think is money is but a grand illusion. The reality is debt. Robert Hemphill was the credit manager of the Federal Reserve Bank in Atlanta. In the forward to a book by Irving Fisher entitled 100% Money, Hemphill said this. Quote, If all the bank loans were paid, no one could have a bank deposit. and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent upon the commercial banks.

Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money, we are prosperous. If not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless situation is almost incredible. But there it is. With the knowledge that money in America is based on debt,

it should not come as a surprise to learn that the Federal Reserve System is not the least interested in seeing a reduction in debt in this country, regardless of public utterances to the contrary. Here is the bottom line from the System's own publications. The Federal Reserve Bank of Philadelphia says, quote, a large and growing number of analysts, on the other hand, now regard the national debt as something useful, if not an actual blessing. They believe the national debt need not be reduced at all.

The Federal Reserve Bank of Chicago adds, quote, debt public and private is here to stay. It plays an essential role in economic process. What is required is not the abolition of debt, but it's prudent use and intelligent management. I mean, that's something like really hard to wrap your head around because immediately you want to go to, you know, the $40 trillion debt that the U.S. government has. but you know what is there like a hundred and twenty six trillion they say in circulation no something something high like that and so you got to you know look at all the debt that we have so the debt i have on my house the mortgage is you know x amount of dollars that somebody else has in their possession that's that's crazy to think of that like every dollar you have is somebody else's

burden like liability that's crazy but multiple people's right because it's of the fractional, they're, they're loaning out each dollar, you know, multiple times. So. Right. And you, well, that's a good point too, is that each dollar has your house is owned by a bunch of people. Yeah. So my one dollar is a dollar that's loaned out to 12 different people. Now, I only have the dollar in accounting for one person. The bank, however, has a dollar that's accounting for each of those 12 people. And their money is imaginary. Their money is just a number on a piece of paper. It's not even physically in their possession. That's the crazy part. Well, all money is imaginary. What makes it money and real is the mechanism of exchange.

Correct. But at least we have a dollar bill that's perceived as legal tender in our possession. The bank doesn't have that. They have $12 and only, you know, two of them are in their possession. Yeah. And liabilities of those $12 times 12 or 20 or however many times. Yeah. Yeah. And me, Meanwhile, the Federal Reserve rates that we're watching be adjusted here and there is all manipulation to compensate for that missing money for the banks. Yeah. Like when they get in trouble because somebody comes and tries to cash it in, they're like, oh, the Fed's here to save you. We'll either print more money or we'll just, wow. So if you're new to the show, this is why we call it the bad mood hour.

Not all books on Book Club result in the bad mood hour. Just the last two. Just the left one. Yeah. I mean, the fourth turning had its moments. Yeah. Right. But and hopefully like so there are people in the chat earlier saying like what what book are you guys doing next?

First of all. Rainbows. It's going to be a while because this book is going to take us probably a year to finish. We are a third of the way through. We are a third of the way through. But also I so I've been pushing for the starfish and the fight in the spider for a while. Somebody mentioned it in a chat that you and I are in the other day. And I revived my call for us to read The Starfish and the Spider.

I think you'll really like it. It's about decentralization as a mechanism of warfare. And it's a business book. But it has like the principles of the Apaches and other stuff in it that I think you will enjoy. But I think it was Claire that brought up Animal Farm. What was that Tuesday? For a while, we do soft war too. I can't we can't do another financial book after this

absolutely not I veto you would argue it's not a financial book yeah well he can eat a dick we're not doing we can do software after that we can do software the book after the next book but I don't know I'm kind of on animal farm and I think it's a perfect time with all the discussion about communism for that book and we've never done a nonfiction a fiction book before we've got the remainder of Trump's presidency

to talk about it and think about it I know what's wrong with a little debt? There is a kind of fascinating appeal to this theory. It gives those who expound it an aura of intellectualism the appearance of being able to grasp a complex economic principle that is beyond the comprehension of mere mortals. And for the less academically minded, like myself, it offers the comfort of at least sounding moderate. After all, what's wrong with a little debt prudently used and intelligently managed? The answer is nothing, provided the debt is based on an honest transaction.

There is plenty wrong with it if it is based upon fraud. An honest transaction is one in which a borrower pays and agreed upon some in return for temporary use of a lender's asset. That asset could be anything of tangible value. If it were an automobile, for example, then the borrower would pay quote unquote rent. If it is money, then the rent is called interest. Either way, the concept is the same. When we go to a lender, either a bank or a private party and receive a loan of money, we are willing to pay interest on the loan in recognition of the fact that the money we are borrowing is an asset which we want to use.

It seems only fair to pay a rental fee for that asset to the person who owns it. It is not easy to acquire an automobile and it is not easy to acquire money, real money, that is. If the money we are borrowing was earned by someone's labor and talent, they are fully entitled to receive interest on it. But what are we to think of money that is created by the mere stroke of a pen or the click of a computer key? Why should anyone collect a rental fee on that? When banks place credit into your checking account, they are merely pretending to lend you money. I feel like somebody just said that. In reality, they have nothing to lend.

Even the money that non-indebted depositors have placed with them was originally created out of nothing in response to someone else's loan. So what entitles the banks to collect rent on nothing? It is immaterial that men everywhere are forced by law to accept these nothing, certificates in exchange for real goods and services. We are talking here not about what is legal, but what is moral. As Thomas Jefferson observed at the time of his protracted battle against central banking in the U.S., quote, no one has a natural right to the trade of money of money lender, but he who has money to lend. That's exactly what we just said, but a little more articulate.

Third reason to abolish the system. Centuries ago, usury was defined as any interest charged for a loan. Modern usage has been redefined it as excessive interest. Certainly, any amount of interest charged for a pretended loan is excessive. The dictionary, therefore, needs a new definition. Usury, the charging of any interest on a loan of fiat money. Let us, therefore, look at debt and interest in this light. Excuse me. Thomas Edison summed up the immorality of the system when he said, quote,

people who will not turn a shovel full of dirt on the project nor contribute a pound of materials will collect more money than the people who will supply all the materials and do all the work. And there's a footnote on that. As quoted by Brian L. Beck's The Hidden Hand. Someone just brought up that book the other day. The Hidden Hand. Unfortunately, Edison did not understand the whole problem. He was correctly. opposed to paying interest to banks for their fiat money, but he was not opposed to government fiat money. It was only the interest to which he objected. He did not see the larger picture of how fiat money, even when issued solely by the government and without interest, has always been destructive of the economy through the creation of inflation, booms, and busts. Is that an exaggeration?

Let us consider the purchase of a $100,000 home in which $30,000 represents the cost of the land, architect's fee, sales commissions, building permits, and that sort of thing, and 70,000 is the cost of the labor and building materials. If the home buyer puts up 30,000 as a down payment, then 70,000 must be borrowed. If the loan is issued at 11% over a 30-year period, the amount of interest paid will be $167,806. That means the amount paid to those who lend the money is about two and a half times greater than paid to those who provide all the labor and all of the materials. It is true that this figure represents the time value of that money over 30 years and easily could be justified on the basis that a lender deserves to be compensated for surrendering

the use of his capital for half a lifetime. But that assumes the lender actually had something to surrender, that he had earned the capital, saved it, and then lent it for construction of someone else's house. What are we to think, however, about a lender who did nothing to earn the money, had not saved it, and in fact simply created it out of thin air? What is the time value of nothing? That's insane. That pisses me off. I know.

It's such a scam. Oh. You know what it keeps making me think of is it's a wonderful life and the kind of the standoff between George Bailey and the savings and loan and Potter and the bank? Mm-hmm. As we have already shown, every dollar that exists today, either in the form of currency, checkbook money, or even credit card money, in other words, our entire money supply exists only because it was borrowed by someone. Perhaps not you, but someone. That means all the American dollars in the entire world are earning daily and compounded interest for the banks which created them.

A portion of every business venture, every investment, every profit, every transaction, which involves money, and that even includes losses and the payment of taxes, a portion of all of that is earmarked as a payment to a bank. And what did the banks do to earn this perpetually flowing river of wealth? Scam, everyone. Did they lend out their own capital obtained through investment of stockholders? Did they lend out hard-earned savings of their depositors? No, neither of these was their major source of income. They simply waived the magic one called fiat money. The flow of such unearned wealth under the guise of interest can only be viewed as usury of the highest magnitude. Even if there were no other reasons to abolish the Fed, the fact that it is the supreme

instrument of usury would be more than sufficient by itself. Who creates the money to pay the interest? One of the most perplexing questions associated with this process is, where does the money come from to pay the interest? If you borrow $10,000 from a bank at 9% interest, you owe $1,900, but the bank only manufactures $10,000 for the loan. It would seem, therefore, that there is no way that you, and all others with similar loans, can possibly pay off your indebtedness. The amount of money put into circulation just isn't enough to cover the total debt, including interest. This has led to sum to the conclusion that is necessary for you to borrow the 900 for the interest, and that, in turn, leads to still more interest. The assumption is that the more we borrow,

the more we have to borrow. And that debt based on Fiat, excuse me, and that debt based on Fiat money, Fiat money is never ending spiral leading inexorably to more and more debt. This is a partial truth. It is true that there is not enough money to include, excuse me, not enough money created to include the interest,

but it is a fallacy that the only way to pay it back is to borrow still more. The assumption fails to take into account the exchange value of labor. Let us assume that you pay back your $10,000 loan at the rate of approximately $900 per month, and that about $80 of that represents interest. You realize you are hard pressed to make your payments, so you decide to take on a part-time job. The bank, on the other hand, is now making $80 profit each month on your loan. Since this amount is classified as interest, it is not extinguished as in the larger portion, which is a return on the loan itself.

So this remains as spendable money in the account of the bank. The decision then is made to have the bank's floors waxed once a week. You respond to the ad in the paper and are hired at $80 per month to do the job. The result is that you earn the money you pay the interest on your loan. And this is the point. The money you receive is the same money which you previously had paid. As long as you perform labor for the bank each month, the same dollars go into the bank as interest.

then out the revolving door as your wages and then back into the bank as loan repayment. It is not necessary that you work directly for the bank. No matter where you earn the money, its origin was a bank and its ultimate destination is a bank. The loop through which it travels can be large or small, but the fact remains all interest is paid eventually by human effort. And the significance of that fact is even more startling than the assumption that not enough money is created to pay back the interest. It is that the total of this human effort ultimately is for the benefit of those who create fiat money. It is a form of modern serfdom in which the great mass of society works as indentured servants to ruling classes of financial nobility.

Bitcoin. Ash, are you frozen again? Ash is definitely frozen again. Understanding the illusion. That's really all one needs to know about the operation of the banking cartel under the protection of the Federal Reserve. but it would be a shame to stop here without taking a look at the actual cogs, mirrors, and pulleys that make the magical mechanism work. It is a truly fascinating engine of mystery and deception. Let us therefore turn our attention to the actual process by which the magicians create the illusion of modern money.

First, we shall stand back for a general view to see the overall action. Then we shall move in closer and examine each component in detail. All right, we'll stop there at the Mandrae Mechanism in Review, and let's go ahead and talk about some soft disclosure. No, Chee-G, we can't stop your snack, and we have to deliver all of these soft disclosure gift cards. He goes by Zach Pave. The motion detective. SNL skit, I wish it was Christmas today. No.

So you had like Tracy Morgan and Chris Catan and Jimmy Fallon. I wish it was Christmas today. And the thing was Chris Catan's whole role was just doing this the whole time. And that's kind of turned into my muffin hit it dance behind the scene, except for when it peaks it hydrate your elbows. I think we're all like. So we all do the, we all do the hydrate your elbows. And then it goes into the boom, boom.

And I'm doing the fist bumps after that. So it's hydrate your elbows. Moistriarch. We really are. we really are rocking out to this song every time it plays behind the scenes one day i'll record it and you guys can see because we can see each other down below we're off screen so we can see each other fucking rocking out yeah softdisclosure dot com promo code muffin hit it get you some beard oil get you some tallow bars get you some lip balm which has tallow in it it does you were correct

i was i was incorrect in that well you were only partially correct although i was yeah doesn't doesn't have tallows. Yeah, no, I watched her make the lip balm when I was up there one time. And I don't, I don't remember the tallow part. But it might have been already, you know, included in what I was watching in terms of steps. Cash definitely ate the tallow. So all right. And they'll lick it too. Like the, my, my dogs, if we put like the, you know, put any of the tallow products on your, anywhere the dogs can reach your skin, they're going to town because. Yeah. All right, the mandrake mechanism, an overview, you go ahead and pick up there.

Debt. Wait, hang on. Creature. I'll call it creature. Okay. Debt. The entire function of this machine is to convert debt into money. It's just that simple. First, the Fed takes all the government bonds, which the public does not buy, and writes a check to Congress in exchange for them. It acquires other debt obligations as well, but government bonds comprise most of its inventory. There is no money to back up this check. These Viat dollars are created on the, the spot for that purpose. By calling those bonds reserves, the Fed then uses them as the base to create nine additional dollars for every dollar created for the bonds themselves. The money created for the bonds is spent by the government, whereas the money created on top of those bonds

is the source of all the bank loans made to the nation's businesses and individuals. The result of this process is the same as creating money on a printing press, but the illusion is based on an accounting trick rather than a printing trick. The bottom line, is that Congress and the banking cartel have entered into a partnership in which the cartel has the privilege of collecting interest on money, which it creates out of nothing, a perpetual override on every American dollar that exists in the world. Congress, on the other hand, has access to limited, unlimited funding without having to tell the voters their taxes are being raised through the process of inflation. If you understand this paragraph, you understand the Federal Reserve System. know we've talked about this before, but when he was quoting the exchange between the congressman and the federal reserve chair and he's like, well, what what makes it what makes it real?

And he's like, well, the confidence of the people. Like this is where g money is sort of correct, right? If you defect change your thinking and move into other instruments that are not dependent upon the system, you're in better shape, probably. Money now for a more detailed view. There are three general ways in which a federal reserve creates fiat money out of debt. One is by making loans to the member banks through what is called the discount window. The second is by purchasing treasury bonds and other certificates of debt through what is called the Open Market Committee.

The third is by changing the so-called reserve ratio that member banks are required to hold. Each method is merely a different path to the same objective, taking in IOUs and converting them into spendable money. The discount window. The discount window is merely bankers language for the loan window. When the bank runs short on money, the Federal Reserve stands ready as the bankers bank to lend it. There are many reasons for them to need loans. Since they hold reserves of only about 1 or 2% of their deposits in vault cash and 8% or 9% in securities, their operating margin is extremely thin.

It is common for them to experience temporary negative balances caused by unusual customer demand for cash or unusually large clusters of checks all clearing through other banks at the same time. Sometimes they make bad loans, and when these former assets are removed from their books, their reserves are also decreased and may, in fact, become negative. And all those words are in scare quotes, assets, reserves, etc. Finally, there is a profit motive. When banks borrow from the Federal Reserve at one interest rate and lend it out at a higher rate, there's an obvious advantage. But that is merely the beginning. When a bank borrows a dollar from the Fed, it becomes a $1 reserve.

Since the banks are required to keep reserves of only about 10%, they can actually lend up to $9 for each dollar borrowed. There's my point. Let's take a look at the math. And actually, there's a footnote on, they can actually lend up to $9 for each dollar borrowed. The footnote is, this 10% figure, 10 to 1 ratio, is based on averages. The Federal Reserve requires a minimum reserve of 10% on deposits and over $47.6 million, but only 3% on deposits from $7 million up to that amount and no reserves whatsoever below that amount.

Reserves consistent of vault cash and deposits at the Federal Reserve. See Federal Reserve press release. Nice. Classy. Classy Federal Reserve. Let's take a look at the math. Assume the bank receives $1 million from the Fed at a lot. a rate of 8%. The total annual cost, therefore, is $80,000, 0.08 times 1 million. The bank treats the loan as a cash deposit, which means it becomes the basis for manufacturing an additional $9 million to be lent to its customers.

If we assume that it lends out that money at 11% interest, its gross return would be $990,000.1.9 million. Subtract from this, the bank's cost of $80,000 plus an appropriate share of its overhead and we have a net return of about $900,000. In other words, the bank borrows a million and can almost double it in one year. That's leverage. But don't forget the source of that leverage, the manufacturer of another $9 million, which is added to the nation's money supply. So when they double their money in one year, they're also significantly devaluing our money. Yeah, they're making each dollar worth less.

And there is doubling it in one year. There's a footnote on that as well. It says the banks must cover these loans with bonds or other interest-bearing assets, which it possesses, but that does not diminish the money multiplier effect of the new deposit. The open market operation, the most important method used by the federal. reserve for the creation of Fiat money as the purchase and sales securities on the open market. But before jumping into this, a word of warning, don't expect what follows to make any sense. Just be prepared to know that this is how they do it.

Love it. The trick lies in the use of words and phrases, which have technical meanings quite different from what they implied to the average citizen. So keep your eye on the words. They are not meant to explain, but to deceive. In spite of first appearances, the process is not. complicated it is just absurd yeah I don't think we're going to get through this chapter in one go but we can probably get through this detailed view of the mandrake mechanism if we yeah government debt start with start with government debt the federal

government adds ink to a piece of paper creates impressive designs around the edges and calls it a bond or treasury note it is merely a promise to pay a specified sum at a specified interest on a specified date. And we shall see in the following steps. This debt eventually becomes the foundation for almost the entire nation's money supply. Footnote says debt obligations from the private sector and from other governments are also used in the same way, but government bonds are the primary instruments. In reality, the government has created cash, but it doesn't yet look like cash. To convert these IOUs into paper bills and checkbook money is the function of the federal reserve system. To bring about that transferment,

the bond is given to the Fed where it is then classified as a as you as continued on next page and then as a security asset yeah that's you're the next pair an instrument of government debt is considered an asset because it is assumed the government will keep its promise to pay this is based upon its ability to obtain whatever money it needs through taxation thus the strength of this asset is the power to take back that which it gives So the Federal Reserve now has a quote unquote asset, which can be used to offset a liability. It then creates this liability by adding ink to yet another piece of paper and exchanging that with the government in return for the asset. That second piece of paper is a federal reserve check. There is no money in any account to cover this check. Anyone else doing that would be sent to prison. It is legal for the Fed, however, because Congress wants the money, and this is the easiest way to get it. raised taxes would be political suicide. To depend on the public to buy all the bonds would not be

realistic, especially if interest rates are set artificially low, and to print very large quantities of currency would be obvious and controversial. This way, the process is mysteriously wrapped up in the banking system. The end result, however, is the same as turning on the government printing presses and simply manufacturing fiat money, money created by the order of government with nothing of tangible value backing it to pay government expenses. Yet, in accounting terms, the books are said to be balanced because the liability of the money is offset by the asset of the IOU. The Federal Reserve check received by the government is then endorsed and sent back to one of

the Federal Reserve banks, where it now becomes a government deposit. Once the Federal Reserve check has been deposited into the government's account, it is used to pay government expense. and thus is transformed into many government checks. These checks become the means by which the first wave of Fiat money floods into the economy. Recipients now deposit them in their own bank accounts where they become. Commercial bank deposits. Commercial bank deposits immediately take on a split personality.

On the one hand, they are liabilities to the bank because they are owed back to the depositors. But as long as they remain in the bank, they are also considered as assets because they're on hand. Once again, the books are balanced. The asset offsets the liabilities, but the process does not stop there. Through the magic of fractional reserve banking, the deposits are made to serve an additional and more lucrative purpose. To accomplish this, though on-hand deposits now become reclassified in the books and called... Bank reserves. Reserves for what? Are these for paying off depositors should they want to close their accounts?

No. That's the lowly function they served when they were classified as mere assets. Now they have been given the name of reserves. They become the magic wand to materialize even larger amounts of fiat money. This is where the real action is. At the level of the commercial banks, here is how it works. The banks are permitted by the Fed to hold as little as 10% of their reserves, deposits, and reserve. That means if they receive deposits of $1 million from the first wave of fiat money created by the Fed,

they have 900,000 more they are required to keep on hand, one million less 10% reserve. In banker's language, that $900,000 is called. Excess reserves. The word excess is a tip-off that these so-called reserves have a special destiny. Now that they have been transmuted into an excess, they are considered as available for lending. And so in due course, these excess reserves are converted into,

bank loans. But wait a minute, how can this money be lent out when it is owned by the original depositors who are still free to write checks and spend it any time they wish? Isn't that a double claim against the same money? The answer is that when the new loans are made, they are not made with the same money at all. They are made with brand new money created out of thin air for that purpose. The nation's money supply increases by 90% of the bank's deposits. Furthermore, this new money is far more interesting to the banks than the old. The old money, which they receive from depositors, requires them to pay out interest or perform services

for the privilege of using it. But with the new money, the banks collect interest instead, which is not too bad considering it costs them nothing to make, nor is that the end of the process. When this second wave of Fiat money moves into the economy, it comes right back into the banking system, just as the first wave did in the form of more commercial bank deposits. The process now repeats, but with slightly smaller numbers each time around.

What was a loan on Friday comes back into the bank as a deposit on Monday. The deposit is then reclassified as a reserve, and 90% of that becomes an excess reserve, which once again is available for a new loan. Thus, the $1 million of the first wave of Fiat money gives birth to $900,000 in the same. second wave and that gives birth to 810,000 in the third wave, 900 less 10% reserve. It takes about 28 times through the revolving door of deposits, becoming loans, becoming deposits, becoming more loans until the process plays itself out to the maximum effect, which is bank fiat money equals up to nine times the national debt. The amount of feet-

Mine says nine times government. Oh, mine says nine times national debt. Okay, that makes more sense. The amount of Fiat money created by the banking cartel is approximately nine times the amount of the original debt, which made the entire process possible. There's a footnote that says that that is a theoretical maxim. In actual practice, the banks can seldom lend out all of the money they are allowed to create and the numbers fall short of the maximum. When the original debt itself is added to that figure, we finally have total hat money equals up to 10 times national debt.

Total what money? What did you say total what money? It says hat money. Oh, it's Fiat. Oh, okay. That makes more sense. What? That's a lot of hats.

We're buying. I was about to say, I thought they just really want to buy. I mean, I have a bunch of hats because I love hats, but that's a lot of hats. That's what I was going to say. When we have excess money, that's what we call it, hat money. So we can buy hats. Yeah. The total amounts of Fiat money created by the Federal Reserve and the Commercial

Bank's, Together is approximately 10 times the amount of the underlying government debt to the degree that this newly created money floods into the economy in excess of goods and services, it causes the purchasing power of all money, both old and new, to decline. Prices go up because the relative value of the money has gone down. The result is the same as that purchasing power has had been taken from us in taxes. The reality of this process, therefore, is that it is a hidden tax, equaling. up to 10 times the national debt. Without realizing it, Americans have paid over the years, in addition to their federal income taxes and excise taxes, a completely hidden tax equal to many times the national debt, and that still is not the end of the process. Since our money supply is

purely an arbitrary entity with nothing behind it except debt, its quantity can go down as well as up. When people are going deeper into debt, the nation's money supply expands and prices go up. But when they pay off their debts and refuse to renew, the money supply contracts and prices tumble, that is exactly what happens in times of economic or political uncertainty. This alternation between periods of expansion and contraction of the money supply is the underlying cause of. Booms, busts, and depressions. Who benefits from all this? certainly not the average citizen. The only beneficiaries are the political scientists in Congress

who enjoyed the effect of unlimited revenue to perpetuate their power and the monetary scientists within the banking cartel called the Federal Reserve System who have been able to harness the American people without their knowing it to the yoke of modern feudalism. Should we stop there? Yeah, I think so. How much more?

Well, so in mine, there's like five more pages of the text and then there's a bunch of pictures. There's a bunch of pictures and descriptions. I don't know if you have the pictures and descriptions. Yeah, which I think we should read. I think they're important. So that'll be next week. Yeah, that'll be next week.

Wow. I need to read that section over again and like really absorb it because that is that is the crux. It's all scam. It's all fake. It really is. Like this mofo. It's fake because of this mofo. Yeah. Hat tip to a hat tip excess money tip to a tattoo teacher for making those for us.

Yeah. Yeah, Brian's has a beard. Mine does have a beard. Yep. He's right here since I don't have the book. I have to do it the old way. We got our little creatures. They help us read the, read the books.

And thank you. Seriously, thank you to tattoo teacher. We love our, we love our bookmarks. We do. Also, guys, Badlands Media is returning back to Las Vegas, Nevada for the 13th stop. Lucky 13 and Viva Las Vegas of the Guard Tour, the Great American Restoration Tour. Join us from Thursday, September 17th through Saturday, September 19th, and be there. Vegas is a lot of fun.

In-person and virtual tickets are now available at badlandsmedia.tv slash events. And Vegas is a good one, man. Vegas is my favorite city in the whole country. Yeah, and the hotel is fantastic, the Ahern, where we were really cool, really cool venue. I like the fact that it doesn't have a casino inside of it because it's kind of a respite from the rest of Vegas. And I usually try to find those hotels when I go to Vegas to be in a non, you know, casino hotel that's trying to grab you and hook you and make you lose all of your money. It's like a city of many federal reserves. But yeah, really, really good.

The food was great. And it's just always a good time. After hours. A little dive bar they have there is fantastic. Yeah. Oh, yeah. And with the karaoke bar. Yeah.

Yeah. And the last time that we were in Vegas for Gart, Caleb was not yet 21. Oh, boy. And now he's 22. And so we can do all the fun stuff without having to like say, oh, well, I guess we can't do that because it goes stupid. with minor with us.

Also, Ash went out partying with G one night and, uh, no, I didn't. It wasn't with G. Oh, that was ghost with G. You, who did you go out partying with G? Who did you go out with that, that we were like, we couldn't find you? In Vegas. Yeah, that was Vegas. Yeah.

I was on my best behavior in Vegas. My parents were there. No. Yeah. Yeah. No, it was Sunday. No, it was Sunday where you weren't there on the last day. Oh.

No. That was, that was me and Cheryl, who is, you know, has become one of my closest friends. She's, Cheryl is a badlander, uh, marketing badlander. And, um, we, we were talking. That was the first time we'd met. And we had such a great time and we were talking until four in the morning. And then I overslept for my panel. And that's true.

But it was not because I was out partying. It's because it was being very deep and very serious and very important conversation. And I overslept. That was actually the night. That was the night that the moment. ghost picture was taken. Yeah. That was the night we were on the roof of, well, the parking, the roof of the parking garage.

And I remember, I checked out at like, at like two. I was like, we're on the first panel. I got to go to bed. I'm going to bed. I'm going to bed. And I was just like, okay, we'll see you later. And then it was supposed to be part two. Throwing me out of the bus right now.

I am. I am. I'm totally doing it. You know why? It was supposed to be part two of Ash versus G. G. Money. And Ash, no show. But so G wins by default.

Yeah, he like got up and yelled at everybody. But yeah, no, it was fine. It was awesome. I got there before the panel ended and I got on the question, Mike and asked some questions. And then I, you know, was shamed by everybody for the remainder of the time that we had together. But thankfully, it was Sunday. So it wasn't that long. The remainder of your life, we will.

Oh, clearly. Clearly, I never get to live that down. I've never been late to a panel. again. No, you haven't. It is what it is. Everything happens. I mean, shit happens, right? It's Las Vegas. Come on. Come on. Yeah. But that's the thing. I wasn't even like, it's not like I was out doing Vegasy things. Like it was, it was, that part of it was sad. We will not be repeating that this Vegas, though. That is a testament to accessibility because, you know, that memetic photo of ghost is on a bad lander. He's, he's sleeping on. Snuggled up with Max Love and Glory. there you go with max love and glory and Christy was like oh my god I got to get a picture this so Christy took a picture and it's lived in infamy ever since

but Badlandsmedia.tv slash events get your guard Vegas tickets. You will not regret it. Ash, I think that's it. I don't think we have any rants. I didn't see any. There was a couple. Oh. I had to reboot but there was

one from a lady with a bookstore. There were two rants from her But I, because my computer crashed, I don't have that anymore. Do you have it? I do. Chatty Kitty became a new member over on YouTube. Thank you to our YouTube audience. Villis 34. Hi, my sister has a novelty bookstore and currently a signed copy of this book. Walden House Books on eBay. Please give her a visit. And there's the link for the eBay store. And I will copy and put this in the in the messages. And there you go. That is very cool. Thank you.

much for the rants and we'll check it out. Thank you, Villis 34. And thank you to everybody tuning in. Please hit that thumbs up. It helps us out a lot, guys. It really does. Helps us out tremendously. And we'll see you guys next. And make sure, make sure that you're signed up for soft disclosure email notifications. Soft Disclosure Insiders Club, soft disclosure.com. If you are not, you are missing out. Good, better discounts, exclusive deals, product giveaways, more product information, all kinds of stuff. So make sure that you are signed up over at softdisclosure.com. All right.

And, you know, it just hit me that you can throw the missing the Q&A panel in my face because me and your son were playing golf. Yeah. Yeah. Fair. To James, I don't gamble. Vegas doesn't really seem appealing. I don't gamble either.

To me, it seems like throwing money away. I did, one time I was in Vegas, I did a poker tournament. And that felt like, you know, you pay for the experience, right? The buy-in for that you're paying for the hours that you don't win. If you win, then you, you know, but I didn't win. But there's so much to do in Las Vegas that has nothing to do with gambling. And it is definitely worth it. And there's a roller coaster, which we did not get to go on last time.

And this time we're going on the roller coaster. It's very expensive. I will tell you, me and Christy have been to Vegas half a dozen times at least. And I love the place. And I do like to gamble, full disclosure, but the shows, the food, the atmosphere, like, there's so much to do in Vegas now. It's not just about gambling. Fantastic shows every night. The restaurants are top-notch.

Some of them are a little pricey, but you can find good ones that are, you know, fairly priced. I love Vegas, man. And you go just a little bit outside of there, and there's all sorts of things to do. Agreed. And the steakhouse at the A.m. Heron is so good. Yeah, but it's booked. No, no, no, not the, not the golden steer, the one at the, the, the restaurant. It's booked.

The one in inside the rest, the one inside the hotel is fully booked as I understand it. And I know that because G and. No, you're thinking of golden steer right next to the hotel. That one's booked out through like November. I already tried to book that one. I never even heard of that then. I was thinking of the one that's in the hotel, which I thought they said was No, no. No, the one in the hotel, it's nothing, it's nothing like crazy fancy.

But I remember last time, like, Fridays was like half off stakes. And so we all went up there and had half off stakes and they were fantastic. Absolutely delicious. No, you're thinking of the Golden Steer. I tried to make a reservation at Golden Steer. And it was booked all the way through November. And that was like two months ago. So it's like insane. So if anybody's got connections to Golden Steer, just tell them, you know, you got a bunch of social media. folks that are going to be there. You're social media folk. Is that how you define yourself? I mean, what do you have to have to be considered an influencer?

How many? I would never want myself to be considered an influencer. We're all influencers, period. Nope. I mean, if you're on social media. I'm a journalist. And I have my press credentials to prove it. And influencers are people.

I'm going to throw a follower count on the table and be like, let's go. I don't even have 100,000. So I feel like we should clip Brian wanting to be an influencer. Ryan's like basically Scott Pressler now. I'm going to go through all of Ash's posts where she's trying to influence opinions and be like, Influencer! No, I'm not trying to influence anyone. I'm just giving you my opinion and telling you what's actually true because I'm right.

To influence other people. No, more to be right. Well, all right. We're out of here. Bye, guys.