The Finance Curse – Professor confirms Banks do Not loan Money: Exchange of Promises (securities)

Feb 24, 2019


Our thanks to Karl from Norwich who told us about this video and said that it “backs up what you say”.

If you’ve seen the video, then we trust you’ll appreciate what follows, for we have transcribed the important stuff for you.

Contemplate the information. Resonate with it. And above all: use it!

You may wish to refer to the video as being “that” which has caused-you to ask questions. What a fantastic “excuse” to use as your reason for asking the banker to show you that

  1. The expert is wrong, and
  2. The Bank does loan money.

Anyone seen a material monetary loss lately? Me thinks-not. And thus we can only say


The ignorant bankers out-there now have no excuse but to listen, learn, and accept they got it wrong, and that what they thought-about-money, is simply not the reality!

We must confess, we can’t wait to see the faces of those specific bankers with whom we’ve been talking all these years, for when they finalise realise that we, and you, were right all along, well….. let’s just say “humble-pie production could become the next big-investment opportunity”.

So savour the moment(s) to come. We will! ;O)


Ross Ashcroft: Richard, when you think about inequality, inequality in the UK, it’s a hot topic; and you think about, as you’d like, the banking sector being-decentralized, flatter-structure, more-resilient. How do you begin to talk to the public or the political class about achieving those goals?

Prof Richard Werner: Essentially, if we want to produce something, we need funding. So there’s a role for banks in almost everything that’s happening in the economy. But what exactly is that role?

Just quickly, I’d like to reflect on that.

Banks are being thought of as “intermediaries” but this is not really what’s happening.

Ross Ashcroft: What are they then?

Prof Richard Werner: They're creators of the money supply.

Ross Ashcroft: So you are firmly of the view that banks create money out of thin air?

Prof Richard Werner: Yes. I have produced the first empirical studies to prove that in the five-thousand-year history of banking, banks are thought of as deposit-taking institutions that lend money.

The legal reality is banks don’t take deposits, and banks don’t lend money.

So what is a deposit? A “deposit” is not actually a deposit. It’s not a bailment. it’s not held in custody.

At law, the word 'deposit' is meaningless. The law courts and various judgments have made it very clear. If you give your money to a bank, even though it’s called the deposit, this money is simply a loan to the bank.

David Buik: That is true!

Prof Richard Werner: So there is no such thing as a ‘deposit’.

David Buik: So you think it’s poorly and inadequately named then?

Prof Richard Werner: Banks borrow from the public. That much we’ve established.

What about lending? Surely they’re lending money?

No they don’t! Banks don’t lend money.

Banks, again at law, it's very clear, they’re in the business of purchasing securities. That’s it!

So you say “okay don’t confuse me with all that legalese. I want a loan”.

Fine! Here’s the loan contract. Here’s the offer letter and you sign.
At law it’s very clear that you have issued a ‘security’, namely a promissory-note, and the bank is going to purchase that. That’s what’s happening.

Ross Ashcroft: Putting it in layman’s terms, what does that mean?

Prof Richard Werner: It means that what the bank is-doing, is very different from what it presents to the public that it's-doing.

How does this fit together?

So you say “fine; the bank purchases my promissory-note, but how do I get my money? I don’t care about the details, I want the money.”
The bank will say “well you'll find it in your account with us”, they will be technically correct.

If they say, “we’ll transfer it to your account” that's wrong, because no ‘money’ is transferred at all, from anywhere inside the bank, or, outside the bank.


Because what we call a “deposit” is simply the bank's record of its debt-to-the-public. Now it also owes you money, and it’s record of the ‘money’ it-owes-you is what you “think” you're getting as ‘money’. That's all it is.

And that is how the banks create the money-supply. The money-supply consists to 97% of bank-deposits, and these are created out-of-nothing by banks when they lend, because they invent fictitious-customer-deposits.


They simply re-state, slightly incorrectly in accounting-terms, what is an Accounts-Payable-Liability, arising-from the loan-contract, having purchased your promissory-note, as a customer-deposit, but nobody has deposited any money.

I wonder how the FCA deals with this because in the financial sector you are not to mislead your customers?

Simon Says….

Firstly: I love this guy (no big-surprise there)!

Secondly: well done to RT for airing the show, and daring to discuss that which has been kept well-under-wraps by the banking fraternity. Or has it?

Perhaps we/you just never recognised it for what it was? Perhaps bank staff don’t recognise-it/see-it? I know I was ignorant of the truth, and I was a Bank Manager!

For me, the true crime is committed when bank-staff realise they don’t know something, but refuse to seek out the truth, investigate, and learn.

We all make mistakes, but picking-up the paycheck for a job one doesn't do and cannot do is accepting-money-under-false-pretence in my book.

To do-the-job one must know-the-job, and clearly, as I feel many of you have experienced, most staff know diddly-squat about their “job” or the “role”, and or the law as it applies to said “job”, and or the industry within which they work. In fact I’d go further and say that most staff know very little about the concept of service. I digress….

So, how do we use the information?

Well, this is something we’ve already covered in the Get-Out-of-Debt Webinar, and for me this reinforces a strategy I’ve been employing for some years now. The strategy hinges on the [non]existence-of, and or [non]ability-to-redeem (buy-back) the ‘security’.

I won’t repeat the contents of that webinar, because you can access the webinar via the ToolBox.

I will, however, relay some independent-legal-advice we’ve received on the subject. It went like this:

When you pay off a debt, ALWAYS get the security back. Period!


If the bank doesn’t have the security, what should they give you instead?

We’ll leave you to ponder.

Until next time

Big love

Simon and Mark

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