supply overtakes economic value.

Therefore, the excess money eventually dilutes the market value of all money issued.
This is called inflation. In 1971 the US Federal Reserve System private bank finally switched to total fiat money
indefinitely. At this point in time many of the economically developed countries' currencies were fixed to the US dollar
(see Bretton Woods Conference), and so this single step meant that much of the western world's currencies became fiat
money based. [Following the first Gulf War the president of Iraq, Saddam Hussein, repealed the existing Iraqi fiat
currency and replaced it with a new currency. However, the old currency continued to be used in the politically isolated
Kurdish regions of Iraq. Despite having no backing by a commodity and with no central authority mandating its use or
defending its value, it continued to circulate within this Kurdish region. It became known as the Swiss Dinar. This currency
remained relatively strong and stable for over a decade. It was formally replaced following the second Gulf War.]

Credit money (created in bank accounts by commercial banks and the Federal Reserve Banks who are owned
by the major commercial banks) often exists in parallel with other money such as commodity money, and
from the user's point of view is indistinguishable from it. Most of the world's money is credit money derived from
national fiat money currencies and represents a collective debt liability. Strictly speaking, a debt is not money,
primarily because debt can not act as a unit of account. All debts are denominated in units of something external to the
debt. Hence credit money is not strictly money at all. However, credit money certainly acts as a money substitute when it
comes to the other functions of money (medium of exchange and store of value). As such, the existence of credit money
may dampen demand for the real money and in so doing alter the dynamics of money's market value. Paper money is an
IOU and a convenient medium of exchange. Under a rigid gold-standard with convertibility, paper currency is a fixed debt
instrument. However, when paper money floats, it becomes known as fiat money and its value is not defined by reference
to an external unit of account. It is no longer a debt instrument but rather it becomes purely monetary and its value is a
product of the dynamics of supply and demand. Typically, banks force supply and other sectors force demand.

Credit money tends to arise as a byproduct of lending and borrowing. The following example illustrates this. Imagine you
have deposited some gold coins in a bank vault. The bank might lend the coins to a second person based on a promise to
pay equivalent coins back with a few extra at a time in the future. The second person can in the meantime use the coins
normally as money. But you still own the coins, and you also could still use them - you could transfer their ownership to
another person to pay for something you have bought by telling the bank to transfer them from your account to the other
person's account. You might do this by writing a check. So, in this simple example there are two people using the same
coins as money at the same time. It's as if new money has been created by the act of lending. Taking it another step, if
the second person spends the coins at a shop, and they end up being deposited back into the bank by the shopkeeper,
the bank can lend them again. Now you and the shopkeeper can use the coins in the same way, by writing checks or the
equivalent in this example, and whoever borrows the coins a second time can use the coins directly as money. So there
are three people with financial use of the coins. This can go on with many people ending up simultaneously using the
same coins financially, but for each extra user there is a promise to pay equivalent coins back. These arrangements where
many people use the same money simultaneously are in many respects the same as if there was extra money. The extra
money that there appears to be is known as credit money. It is in regulating the amount of money that a bank can lend
that the controlling authority can set the money supply and change monetary policy.

The credible promises to repay in a reasonable time give the extra money its value. In today’s economy, all money is
created when someone such as a person, a corporation, a government, etc. issue a promise to pay and the banks
monetize this promise to pay into dollars or national currency, i.e. the banksters create currency from nothing and
collectivize the debt liability against all citizens of the country. Banks allegedly evaluate the risk involved in each
loan, however, they actually transfer all liability to the tax payers. During the Crusades in Europe, precious goods would
be entrusted to the Catholic Church's Masonic Knight Templars who effectively created a system of modern credit
accounts. Over time this system grew into the credit money that we know today, where banks create money by approving
loans - although the risk and reserve policies of each national central bank sets a limit on this, requiring banks to keep
reserves of fiat money to back their deposits. Sometimes, as in the U.S. during the Great Depression or the Savings and
Loan crisis, trust in bank policies drops very low and government must intervene to keep the industry of credit in
operation by bailing the private bankers with taxpayers’ earnings.

In many countries, the issue of private paper currencies has been severely restricted by law. In the United States, the
Free Banking Era lasted between 1837 and 1866, during which almost anyone could issue their own paper money. States,
municipalities, private banks, railroad and construction companies, stores, restaurants, churches and individuals printed
an estimated 8,000 different monies by 1860. If the issuer went bankrupt, closed, left town, or otherwise went out of
business, the paper money note would be worthless. Such organizations earned the nickname of "wildcat banks" for a
reputation of unreliability and that they were often situated in far-off places (e.g a private $1 note, issued by the
"Delaware Bridge unpopulated locales that were said to be more apt to wildcats than Company" of New Jersey 1836-
1841). On the other hand, according to Lawrence H. White's article in FEE (http://www.fee.org/vnews.php?nid=2794 ) "it
turns out that “wildcat” banking is largely a myth. Although stories about crooked banking practices are entertaining—and
for that reason have been repeated endlessly by textbooks—modern economic historians have found that there were in
fact very few banks that fit any reasonable definition of wildcat bank." The National Bank Act of 1863 ended the "wildcat
bank" period. In Australia, the Notes Act of 1910 basically shut down the circulation of private currencies by imposing a
prohibitive tax on the practice. Many other nations have similar such policies that eliminate private sector competition. In
Scotland and Northern Ireland private sector banks are licensed to print their own paper money by the government.
Today there are several privately issued digital currencies in circulation that function as money. Transactions in these
currencies represent an annual turnover value in billions of US dollars. Many of these private currencies are backed by
older forms of money such as gold (digital gold currencies).
The Hidden History Of Money & New World Order Usury Secrets Revealed at last! Page 26