What is at the end of the discount interest rate chain?

Smaller banks make profits by soliciting loans at a higher rate of interest than they know they can then refinance with bigger banks, but where do the biggest banks get the currency they lend? and what impact does this have upon wider society?

The discount interest rate chain of the Anglo-Saxon private banking network model, that presently dominates the international money system, does not trace back to existing pools of liquid assets or savings.
As those currently administering that part of the international money system would have people believe.
Given the degree of international disclosures of this matter, for anyone to continue do so is misleading.

New Zealand Prime Minister and former international investment banker John Key said -17 November 2012;
“Our (Govt) debt to GDP levels by then will top at just under 30 percent - in other words - um -we'll be relatively lowly indebted compared to countries like America and Europe - but I put it to you we are a small open economy - we have high levels of private sector debt - we -Mum and Dad - have borrowed that debt effectively from foreigners because their local bank has sourced that from foreigners.”

Mr. Alan R Holmes - worked for 33 years at the Federal Reserve Bank of New York - where from 1965 to 1979 he was manager of the Federal Reserve System Open Market Account. In that position, he was responsible for the creation of money in the United States - said June 1969;
“The idea of a regular injection of reserves-in some approaches at least-also suffers from a naive assumption that the banking system only expands loans after the System (or market factors) have put reserves in the banking system. In the real world, banks extend credit, creating deposits in the process, and look for the reserves later.”

Professor David Miles, Monetary Policy Committee, Bank of England;
"The way monetary economics and banking is taught in many – maybe most – universities is very misleading"

Lord Adair Turner – in 2008 became Chairman of the Financial Stability Authority (FSA) of England - in a keynote speech at The Institute for New Economic Thinking (INET) conference in Hong Kong (April 7-4-2013) entitled - Private Debt and Fiat Money: Lessons from the crisis and from some old economic texts – he said;
"It is often said in general text books or discussion's 'what do banks do?' and you will often hear this description 'well they take deposits and they intermediate it to investment' This is a lousy description of what banks do. The idea that banks intermediate a pre-existing set of liquid asset savings is wrong!. Banks simultaneously create new private credit and new money."

Dr Alan Bollard Governor of the Reserve Bank of New Zealand 2002 - 2012. Published a book 1 Sept 2010 - Crisis: One Central Bank Governor and the Global Financial Collapse
Pg 96
The Bank of International Settlements is an important institution, acting as a sort of central bank for central banks. Set up in 1930, originally to facilitate German World War 1 reparations, it has a checkered history but today offers modern banking services and provides a forum for central bankers.
Pg 20
Banking practices differ around the world, but we ensure ours meet international standards. These are set by a somewhat shadowy group called the Basel Committee on Banking Supervision. Comprised of representatives of large countries( not including New Zealand ), the group meets in Switzerland at the Bank of International Settlements (BIS).
Pg 183
In self-interest, banks may encourage New Zealanders to take on more debt than is good for them individually or deliver more external liability than is good for the country.
Pg 157
Another governance worry related to the power and competence, or lack thereof, on the part of banks chief risk officers and risk committees. These officers assess the possible outcomes from any deal and decide whether the risks are acceptable under the banks mandated policies. We were now hearing about cases where risks had been miscalculated, procedures bypassed and officers overruled, all in the race for higher earnings.

The simple fact is the Anglo-Saxon money system currently traces back down the discount rate of interest lending chain to a small bunch of private institutions known as 'primary bond dealers' or 'currency wholesalers' owned by the family trusts of a small number of the worlds wealthiest inter-generational dynasties - who could meet the collateral backing thresholds set in the 16th century to obtain an 'international banking license' – to become 'primary bond dealers' – in an Anglo-Saxon class system that was already far more high finance dominated than any longer Monarchist ruled. 

At a time the European financial elites could no longer stave off a revolutionist push by European common peasants, for a say in their nations national assemblies and increased equal economic opportunity, including the abolishment of slavery as legitimate business practice. 

The financial elites decreed that if there were to be public institutions they were to be private debt deficit funded and if slavery abolished the slave owners be compensated for loss of their private property.
So the peasants only be freed from an exploitation system that was obvious, to one that was less obvius.

You need to understand just what the term 'credit' means in a 'money system' - to understand the extraordinary privileges these 'primary bond dealers' have and how they have subverted and perverted the social intent of money as invented many thousands of years ago.

Money systems as invented and intended were a circulatory arterial system made up of heart/lungs/arteries to keep stable the vitals of an economic body - think of the old saying - money was made round to go around. Money systems were invented to improve upon barter or raid as a means of trade - 'currency' is  'tokens of exchange' within a money system - the blood - that represents contracts of credit that have been authorised by the 'accountants' that administer a money system - the heart - for trade of goods or services that immediate - line of sight - trading was not possible and - that enables what is needed for the contract of credit to be completed.

For any contract of credit within a money system to be honest and - not a 'counterfeit' imitation of what is honest - the accountants of any money system must ensure that there is sufficient 'natural resource collateral' to enable the contract of credit to be honoured and cleared. Every activity of consumption - by any animal on the planet - is on one side of a balance sheet on the other side of which is natural resource collateral and - no amount of creative accountancy will prevent the catastrophic failure that will occur if this balance sheet is cheated.  

Once a contract of credit is completed - that is - it has created a service providing asset to remain in its place - or allowed consumption of resources - it is deemed cleared and the job of that currency done - if there was no other productive job for that currency needed to allow the completion of - it needs to be retired from circulation to keep the circulatory arterial money system honest & stable at the correct quantity and pressure.

What do you think is going to happen to the health of the economic body if currency there was no longer a productive need for - was allowed to hoard in concentrated amounts without returning to the heart/lungs to be regulated? - heart attacks and aneurysms that put the stability of the entire economic body at risk?

Much of the present instability within the global economic body is all about the private Western banking powers - that currently administer as much of the international money system as they can get their hands on - as entirely interest bearing loans - battling against anybody that suggests a public administered alternative to  putting their nations natural resources up as collateral for loans of the private Western banking powers interest bearing foreign currency to circulate in their domestic money system.

Because the entirely interest bearing - entirely private loan based - money system has been irrefutably proven to be a predatory lending pyramid scam - mathematically impossible to ever repay - due to the systemic shortage of what is given to what is demanded in return - that induces ever increasing compounding interest penalties when the inevitable non-repayment occurs.

Currently Russia – India – Brazil – Japan – Argentina - Iran all practice what is referred to as Fully Functioning Public Banking - backed by the full credit of the nations resources. Which means rather than them putting up their own resources as collateral to import foreign private interest bearing debt to circulate in their money system - they instead spend their own sovereign currency directly into circulation to circulate in their money system in the process of converting their own resources into usables.

China is currently a hybrid of both and I seriously hope they are taking the Western banking powers for a ride in getting externally what they want and then returning to internally balancing their economy with public credit for the greater common good of all its people.

Most Anglo-Saxon nations - including New Zealand - have at times practiced Fully Functioning Public Banking - at which times they have experienced no greater wider prosperity for as many as possible - but sadly due to the Western Banking powers spin doctors they have completely regained control of current economic policy almost without challenge.  

Several other nations and blocks of nations have recently attempted to break free of the chains of the Western banking powers entirely interest bearing private loan based money system pyramid scam and have suffered severe political interference – but although there is lots to fear – there is nothing to lose and everything to gain – because to do nothing is will result in losing everything anyway.

The Anglo-Saxon nations must again openly rejoin the struggle against the private bankers that has been kicked down the ages or risk forever remaining only a colony of them and further funding the expansion of their predatory pyramid scam over others. 

Citizens will be better off - up front - if their government issued the primary currency base - without charging interest - to fund our primary economic base - instead of continuing to allow private banks to do it - as is presently the case - with interest charges attached - then waiting for the promised 'trickle down' from the so-called 'private financial service sector' - that quite clearly has failed to be delivered - because of the now widely admitted – at the very highest international levels - pyramid aspects of that system.

Land users of nations can be better off managing properties on behalf of their fellow citizens - via their government - by conducting a 'normal course of business' approach that improves the 'lot' of both their fellow citizens and their nation - instead of managing property on behalf of private bankers under terms and conditions that drive an interest bearing - credit fueled - capital gain approach - that is inflating land prices beyond the 'normal course of business' and - thus inflating the price of produce from that land beyond their fellow citizens available wage - kept low - because all sectors of the 'real' economy are facing the same currently entirely interest bearing - entirely private loan based pyramid scam.

The pyramid aspects of this private financed - entirely interest bearing - credit fueled - capital gain approach - drives the selling off of a nations very primary productive base - of its citizens necessities of life - to the very same individuals who use the proceeds of their pyramid crime - to buy assets - at fire sale prices - under conditions of receivership - that is mathematically inevitable - under their pyramid scam. Very, very different in nature to the social service - circulatory arterial system - money was invented and intended to be many thousands of years ago.

We have been conned into thinking dog fight economics is normal - we have to counter the spin of those a-top the current private banking pyramid scam - the mantra they have used their current near monopoly ownership of mainstream media to bombard us with - that governments have no place in picking winning monopolies or providing jobs - that - this is best left up to the private - profit seeking entrepreneur - funded by private finance – private ownership of absolutely everything is natural law - when in-fact it is the private - profit seeking entrepreneur – funded by private finance – that law should not allow anywhere near what nature picks as a 'winning monopolies' by way of it being a necessity of life of humans or every living thing in our biosphere.

The primary productive economic base of 'necessities of life' should be provided by public finance at cost only – to then be provided as a public service at the cheapest possible cost – to then be a launch pad and fall back for private – profit seeking entrepreneurs – to then deal in the 'wants' of society – with finance brokered within the boundaries of an already existing honest currency supply – as opposed to the private banker interest bearing – transferable contracts of credit – that currently circulate as our entire currency supply and – that they repeatedly – in the pursuit of personal short-term gain – issue more of than there is the natural resource collateral in existence to ever clear the debt.

A nations own public agency – answerable to its own people - should be creating and controlling the money system for the people - it should not be renting the currency in their system off private bankers – foreign or domestic – or that nation clearly does not enjoy economic sovereignty – nor administer equal economic opportunity of all within its borders.

The trade of a nations surplus production outside of its borders should only be a secondary consideration - after the non-surplus production has been distributed in a manner that delivers as dignified access to the necessities of life – within the sustainable boundaries and balances of natural resources and population as possible – to as many as physically possible within its borders. When the fundamentals of money are fully understood - the export trade of non-surplus production – or the foreign ownership of any of the primary production base – due to the debt of private financial middlemen being held to a nations head like a gun - to the extent that poverty among plenty for many within its borders is the result – is an outright fraud.

Any international public institution formed to oversee the trade of available international surplus domestic production - that does not take into consideration the above - is also an outright fraud!

Repelling the spin of the Private Banking Pyramid Scam - that has reached the proportions of an Imperialist Empire - might just be in the 21st century - as important to humanity as the struggle to end slavery by chains in the 18th century.