look at this it's -25 billion as of the time we published the book and now it's up to over 115 billion wow it's it's insane how much this is [Music] growing hello and welcome to this video I've got Alan hiard with me once again and we are you know there was somebody in the comments a little while ago that uh put down that they only watch the videos until I mentioned the book well we're going to be talking about the book so you can stop watching right now uh What uh we're going to do is update some


charts in the book and see what has happened since so Alan what have you got for me here hey Mike um I've got three charts and I've got an old version and a new version for each one so there's a total of yeah there's a total of six basically the theme Here is the interest that the Federal Reserve is paying Banks just to keep currency sitting around the system so the first chart here actually has three things on it um the first thing to notice is probably the big red area which is excess reserves this is


basically cash that banks have sitting in the system that they technically don't need to have there yeah this is their uh base currency so it's bank it's it's Bank Reserves these are the dollars that never get out into the public you and I don't touch these dollars it's a separate monetary system I sort of look at Banks now as you know if this is the front of the bank and this is the ba back of the bank they've got a brick wall in the middle there's a completely separate monetary system on the back of


the bank that is then connected to all of the checking accounts the bank accounts that all of the banks have at the Federal Reserve and they're moving uh behind that wall their monetary system is a bunch of bonds and base currency and they're constantly trading bonds and uh that's you know they hold those on their balance sheet as assets and they've got this uh base currency and for decades and decades and decades $40 billion was enough for the banks to do all of their endof day settlement to


borrow from each other and lend to each other and pay each other what they owe each other uh when deposits move around and because of that wall this big red area is sort of like the ash that is left over if you if you burn something there's Ash I wrote this in the book If you if it rains the streets are wet you know if the streets are wet it means it rained that brick wall when the Federal Reserve created Bank Reser they they'd buy an asset like a bond from a brokerage house but they can't pay the broker brokerage house


because the brokerage house can't accept Bank Reserves brokerage house is not a bank so they would pay the brokerage House's bank and instruct the bank to then create uh um Bank credit currency and deposit it into the uh account of The Brokerage house and so this red area is a reflection of all of the currency that was created by the Federal Reserve and pumped into the financial markets more than $4 trillion dollar at one point pumped into the financial markets uh this is just what gets stuck


in the system and before that the Federal Reserve called it The Limited they the Federal Reserve made up some new language to to make it sound like all of these excess reserves are on purpose it was the uh limited reserves regime before 2008 and then after we started this all this craziness with that bber anke started uh it was called the imple reserves regime and so they're just making up language to sort of cover their butts uh and not admitting that this is this excess they aren't even excess res they


just call them Reserve balances now uh and they didn't pay interest on these excess reserves until 2008 when there was so much of them so anyway go ahead and I'm sorry I interrupted with that rant but I just thought people should have some background on this yeah it's it's all right Mike you're you're full of uh so much knowledge I think everyone enjoys hearing it um and yeah your point that the banking system basically functioned with only $40 billion in reserves is a good one and we can see


that here uh well we actually can't see it here because it's such a small amount so there there there is a red line uh like a red area hidden behind this blue line but it's so low we can't even see it and and that goes back you know indefinitely uh yeah to the beginning of the Federal Reserve right exactly yeah 1913 so then in 2008 that's when November of 1914 is when they opened their doors for business so the Federal Reserve Act was passed in in 1913 so that's right yeah December of 193 yeah


exactly more information so anyways in the 2008 financial crisis that's when this red area effectively starts and to your point yes that's also when the FED began paying interest on the excess reserves so basically this is just extra currency that the FED pays the banks just to have currency uh right so the the Federal Reserve shoved all this onto their balance sheets and they didn't actually want all of these excess reserves and uh in order to make it so that the banks did want them Ben banki


decided to pay them interest on this free currency that the FED creates and shoves on their balance sheets and it gets stuck there exactly and and we can see the the the overall um process of the FED raising this rate in a stair step fashion essentially paying the banks a higher and higher and higher interest rate uh until about 2019 and again this this just gets completely out of hand it's it's basically paying the banks just to keep bunch of cash in their system so that the banking system doesn't implode and


you got to wonder I mean if you're the average person you got to wonder well where does the FED get this currency to just pay the banks to have currency like are they just printing it out of thin air and that's uh kind of what we want to talk about next okay um so actually first let me let me keep on going with the rates and stuff yeah yeah so so this is the chart that we had in the book and we have since updat it and it looks like this so you go back to the first one again and then back to this one so the audience can see


the interest rate line I'll go back and forth keep your eye on this blue line shooting up to the moon this is the new one and here's where it was in the book only about one and a half percent and then the new one we're we're up over five and a half percent yeah it's 5.33 right now is the effective fed funds right yeah yes exactly right now I want to to let everybody know that um that when they're doing QE and when they take interest rates down to zero the public uh experiences this boom


and things are great and then the FED does tightening and so they raise interest rates and they make it tough on the public but it Reigns free currency on the banks I mean just incredible piles of cash going to the bank so uh continue on with your analysis here yeah so so basically this rate is going higher and higher um and you got to wonder like where where does this currency come from like like you know who who's paying for it essentially and the basic principle here is they keep inventing these new mechanisms that


sound complicated but at the end of the day there's only one place it can come from and it's the people who actually make stuff in the economy it's regular people it's the private sector that's it that's the only place that wealth can ever come from it's working hard creating new things that people actually want to buy everything else is smoke and mirrors it's technical jargon so all of this currency that's being paid to the banks is ultimately coming out of your pocket either in the form of


Taxation or inflation higher prices it's just a matter of time before we all pay for it right yeah so that that leads me into the next chart which was in the book this is the cumulative interest that's been paid to Banks hi I just wanted to take a moment and thank you for subscribing and mention that if you'd like to help our Channel please consider my company goldsilver.com the next time you buy precious metals we're one of the most trusted names in the industry our prices are sharp delivery is fast and we


have an insiders program where you find out exactly what I'm doing with my own Investments thanks for making goldsilver.com your dealer and now back to the video so that that leads me into the next chart which was in the book this is the cumulative interest that's been paid to Banks so looks like about 220 billion at that point when the book was published uh you know just over a year ago yep exactly so for the most part the simplified calculation is basically taking the amount of reserves


that the banks have and multiplying it by the interest rate and that's how that's how you get the amount that they're paid and then you just add it up over time and this gets bigger and bigger and bigger and we're at about 220 billion as of the time the book came out and now it's over 350 billion wow so from from 220 to 350$ 350 billion dollar paid to the banks just to keep the existing Financial system afloat that's coming out of our pockets like indirectly isn't it amazing how uh Ben


Bernan you know he isn't fed chairman anymore but he is still so magn because this is a gift from him to the banks uh and it's all being stolen from the public basically yeah yeah yeah what a nice guy and he won the Nobel Prize for all of these policies that will eventually uh drag down the world economy I mean this is going to eventually these policies that he started are going when when the implosion really happens uh it's he will have broken the world economy one man's decisions one man's


ideas it's very very dangerous anyway go ahead yeah well that's why I think you shouldn't give any one person that much power because they might get it wrong they might screw it up right you know he is so incredibly arrogant and uh I I remember a 60 Minutes inter interview right after uh the global financial crisis of 2008 and the interviewer asked uh how confident are you that you can get the balance normalize the balance sheet get the balance sheet back down of the fed and he goes 100% he was absolutely


positive that he could get out of this trap that he created and he can't the only way that we can get out is by chewing off our own foot yeah not good not good right so anyways just to continue the the sort of train of logic here and like following the money or in this case currency um so basically you know where does the FED get all this uh you know creates it out of thin air like everything else um and so what are the implications The Next Step would be for the federal government so the Federal Reserve when


it turns a profit it owes that profit back to the treasury after it deducts all of its expenses and uh and the 6% uh dividend for all of the shareholders which are all the member banks of the Federal Reserve System yes those first anything left over so all of the assets that it buys are uh things that are guaranteed by the US government and pay interest so these are profit making assets they ca cash flowing assets that it buys by typing a number from it just types a number into existence and buys


that asset which is usually a US Treasury and a small percentage of mortgage back Securities and so for us to have currency uh in circulation uh if we have to pay taxes in the future uh to pay those us treasuries and uh your mortgage payment a portion of it goes to pay for the currency that's in existence plus to give make this gift that Ben beri gave to the banks exactly and so as a result almost every year the federal Reserve makes a profit and then owes whatever's whatever's left after these you know


mandatory dividends and whatever else yeah they owe whatever is left to the treasury they give that to the US government they say okay here's what's left you keep it and so almost every fiscal year there's a small profit that get sent to the treasury but then would reduce the national debt or mean it means that they don't have to issue as many future treasury bills notes and bonds right exactly and so ordinarily that's how things operate but very recently things flipped and the FED


didn't turn a profit it now has a massive loss this massive red area down here look at this it's negative 25 billion as of the time we published the book and now it's up to over 115 billion wow it's it's insane how much this is growing now it's the US government now it's the taxpayer that owes the private banking system like the US government the treasury now owes the FED over 115 billion that's why that's why it's so backwards but since they don't pay them


uh because they're not supposed to it just keeps on stacking up and so in order for that red line to uh start to vanish you know for it to reduce uh they would we either need to change the system or or the FED will change the way they measure the system which they do a lot um or things have to fall apart you know one of the things that you see in all of these graphs is uh that we're in the middle of this slow motion train wreck uh and everything has gone out of control since 2008 and they haven't been


able to get things back under control uh they keep on trying different stuff but uh it's just not working well yeah that's the thing when you have a system that's fundamentally based on promises that are empty and you can just keep stacking promises on top of promises that can go on much longer than people think and right that's just what we're seeing happening it's just promises on top of promises with new madeup language to describe each type of promise but at the end of the day


there's nothing there yeah okay any other comments on these charts uh this scares me it scares me too SC it's unprecedented yeah yeah I was just doing an interview with Chris martinon and he was talking about uh anxiety and and so many people are waking up at 3 and 3:30 in the morning which I do all the time and the anxiety when we were writing this book uh was just stacking up to where it was I it was huge and it's depressing to go over this data all the time anyway so uh I want to thank you


for presenting all of this this update and I want to thank thank all the viewers for watching please smash that like subscribe and the notification Bell we'll see you next time hi I just wanted to tell you about gold Silver's 111 oce silver giveaway where you can win win win 11 one one 1 oz silver bar 1 10 oz silver bar and one 100 oz silver bar so enter today and win