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 the following presentation is based on content from my new book The Great gold and silver Rush of the 21st century to read the free online chapters or order the book please go to ggsr21.com thanks welcome to part three of chapter 4 of the great gold and silver Rush of the 21st century that 200 billion dollar gift you never intended to give reserves not required the banks used to have to have reserves this was something that from the very beginning of banking there was some reserves that you had to

keep even though you were basically committing a fraud and the currency that was being deposited wasn't actually there it becomes the bank's property it's a liability of the bank because they owe it back to you someday but it's it's not there as your property so um anyway formerly the banks were required to hold a minimum level of reserves against their liabilities and anything above that was referred to as excess reserves but in March of 2021 they reduced their reserve requirements

to zero you can see that here where the this little purple area goes to zero uh they they eliminated reserve requirements there's no more required reserves therefore they are all now excess reserves basically because they aren't required to have any and this includes Vault cash and you know so the currency if you want to go and get dollars the banks are no longer required uh to have some currency on hand some paper currency uh so uh the if if you look real close on this chart you'll see

a little tiny blip right there and that's Alan Greenspan's response to 911. these are all the Bank Reserves that get stuck in their Reserve accounts because of the process of QE uh it and so all of this is there it's an accident that this is there uh getting back to the um quote from the bank of England the additional reserves are a byproduct of QE so all of these reserves sitting here they're stuck there it's not something they in intended on they got accidentally or unintentionally stuck there a reserve

inflation correlation beyond the imagination during the four years preceding the global financial crisis of 2008 total excess reserves of commercial Banks typically averaged 1.7 billion dollars and that's billion with a B in September and December of 2021 Bank Reserves topped 4.27 trillion with a t it was an inflation of excess reserve ious of roughly 2 500 times in the chart that I showed you earlier of all of the excess reserves that have piled up before 2008 you know other than that uh the big mountain of excess

reserves that are stuck there and the little blip from Alan Greenspan's response to 911 other than those you can barely see the excess reserves Banks didn't want excess reserves for the first 94 years of its operation the Federal Reserve didn't pay the bank's interest on the excess reserves they were just basically a liability sitting there but in October of 2008 Ben Bernanke started paying the commercial bank's interest on their base currency ious all of the reserves that are stuck

there and all of these Banks started earning interest on that enormous pile of Reserves uh so whether it's the fed or the bank of England the goal of QE is to pump newly imagined ious into the financial sector artificially inflating asset prices the enormous piles of Bank Reserves are simply a side effect of QE a byproduct something that Banks never previously wanted but Ben Bernanke changed all that the trillions of dollars of reserves now pay interest and the banks look upon them as a gift a

gift that keeps on giving and I'll give you one guess as to who is footing the bill it's you here's the same graph but now I've included uh the I've overlaid the interest rate on top of it and the problem is I can't keep up with it fast enough since we made this uh since we made this graph and this graph we keep on updating it and trying to get the book out and then they change the interest rate so this is already outdated but it just keeps on going north uh here's the chart of the

cumulative amount of payments that we have made to the banks of over 200 billion dollars and now it's shooting for the moon because whenever we try to raise rates and tighten up things and slow down uh the inflation and so on uh uh the interest rate is going up so when they're doing all of this tightening and talking tough it's literally raining free ious on the banks and right now this is just absolutely shooting for the moon so you can see that it's over 200 billion is the cumulative amount but now uh we're

already growing at a pace where we're paying them more than 100 billion per year uh and it's only accelerating uh when I saw this though I had to ask myself where does the FED get the currency to pay the interest because they can't just print currency that's against the rules they have a balance sheet the balance the balance sheet must always balance assets minus liabilities and capital must always net out to zero and since uh every IOU is a liability it means they must always re acquire an

offsetting asset whenever they create create an IOU therefore central banks can only create currency by acquiring assets so where did they get the currency to pay the interest and the answer is that it comes from their profits and where do they get profits all of the assets they buy pay interest that's where the profits come from uh what are those assets they're mostly U.S treasuries and mortgage-backed securities who pays the principal and interest on those U.S treasuries and mortgage-backed securities you

I'm sorry I'm laughing because this is a really sad situation uh when the U.S treasury issues a bond it's borrowing currency from the buyer of the bond and promising to pay the buyer back plus interest and the funds to pay the buyer back come from your taxes uh mortgage-backed Securities are just a bunch of mortgages bundled up and secured at us so they can be sold to an investor what gives a mortgage-backed Securities its value is your mortgage payment and when I wrote this about 70 of the

fed's assets were U.S treasuries and 30 percent of their assets were mortgage-backed Securities therefore about 70 percent of the interest that the Federal Reserve pays to the banks comes from your taxes and about 30 percent of this interest paid to the banks comes from your mortgage payments now these aren't exact because these yields vary but basically that's the idea the FED is basically taking currency from you through uh your future taxes and your mortgage payments and giving it to the banks on these excess

reserves that were an accident they're not really supposed to be there it's just part of the way the system is set up at the end of 2022 the interest on reserve balances was 4.4 percent and reserves were averaging three trillion dollars and I don't care who you are uh 4.4 interest on three trillion dollars is some serious cash this gift of free currency to the banks is now 132 billion dollars per year which is 11 billion dollars per month and it's all coming out of your pocket uh who knows

how much it'll be by the time you watch this video or read this chapter but I do know one thing it is all coming out of your pocket and it's even worse than that because you're going to be paying for it twice and so are your children according to the federal reserve's Charter it is First supposed to deduct its business expenses and then pay dividends to its stockholders and its stockholders are the members of the member banks of the Federal Reserve System uh and it pays them a six percent

dividend on their uh investment the capital that they have to put up and then they're supposed to turn over all profits to the U.S treasury to reduce our national debt to reduce the annual deficit reduce the national debt now every week the FED used to pay the treasury a couple of billion dollars but since the interest rate on reserve balances exceeded three percent in September of 20 2022 the Federal Reserve started experiencing some significant losses and they just keep on booking them to this account that is remittances

due to the U.S treasury and it's gone Negative they used to have an amount of profit and pay it out have it and pay it out and so that's the reason this line is flat but since they can no longer pay it out it's accumulating as a loss that they just booked there and so this means that the FED is basically insolvent but it's okay because they you know they'll they'll just book it in this account and and Rob it from other places uh the treasury will get by uh but because this

was a gift to the banks and not turned over to the treasury it means our national debt is higher than it should be by the exact amount amount that was paid to the banks uh so not only did we give all of those billions to the banks through taxes due on the bonds that currently exist but the treasury had to replace the Lost Revenue by issuing the same amount of offsetting bonds that you and your children will be paying taxes on for many many years to come so again as I said before if you are not angry

you're not paying attention I want to thank you for watching this part we'll see you in the next part thanks for watching but this is by no means the whole story if you want the full story including my free online only chapters and companion videos there's a wealth of information at ggsr21.com thanks foreign [Music]