The Federal Reserve creates money out of nothing. It’s a four step process: First, the Federal Open Market Committee approves the purchase of United States Bonds; next, the bonds are purchased by the Federal Reserve; the Federal Reserve pays for these bonds with electronic credits to the seller’s bank (these credits are based on nothing); and finally, the banks use these deposits as “reserves”. So, they can loan out over ten times the amount of their reserves to new borrowers, all at interest. “Let’s look at an example of how this works with a Federal Reserve purchase of $1,000,000 of bonds. This then gets turned into over $10,000,000 in bank accounts. The Federal Reserve in effect creates 10 percent of this totally new $10,000,000 and the banks create the other 90 percent. To reduce the amount of money in circulation this process is simply reversed. The Federal Reserve sells these bonds to the public and the money flows out of the purchaser’s local bank. Loans must be reduced by ten times the amount of the sale, so a Federal Reserve sale of $1,000,000 in bonds, results in $10,000,000 less money in the economy.” –www.iamthewitness.com DarylBradford Smith Bankers.htm * These bonds are simply promises to pay or government IOU’s. People purchase them in order to get a secure rate of interest. At the end of the term of the bond, the government repays the bond, plus interest and the bond is then destroyed. When a legal system is dependent upon debt-money in order to carry on the business of the legislature, the executive and the judiciary, that business and indeed the departments themselves become what is called “colored” because (1) no actual payments in “lawful money” have taken place for any property, products or services, and (2) all title (evidenced by statements of ownership stock certificates, etc.) has been actually transferred to the DTC per its rules of participation, leaving only the pretext or semblance of title, now commonly known as “entitlement” or “beneficial interest”. Black’s 4th defines “color” as “[a]n appearance, semblance, or simulacrum, as distinguished from that which is real. A prima facie or apparent right. Hence, a deceptive appearance; a plausible, assumed exterior, concealing a lack of reality, a disguise or pretext.” This means that the statute only appears to be a statute “as distinguished from that which is (a) real [statute].” And a court of justice is only the “pretext” of one, and the “rights” enforced, only the “prima facie or apparent right”. The reality lurking underneath the disguise is that everything involving the instruments being passed as money is colored into a commercial-natured thing. Indeed, even crime is not exempt from being colored: Title 12 Section 72.11 of the Code of Federal Regulations openly declares ALL crime to be commercial in nature, going as far as to list some of the more common crimes but without limiting the scope of the declaration. And the greater part of the U.S. Code consists of private law for the regulation of commerce. The type of legal system capable of sustaining a debt-money economy is a pure Civil Law (statute) system, where the statutes (or “apparent” statutes) are the obligations of record (ie, bonds). According to Black’s 4th, “statute also sometimes means a kind of bond or obligation of record, being an abbreviation for ‘statute merchant’ or ‘statute staple.” Now, the previous definition can seem confusing at first glance until you look at the definitions later given of the statute merchant and statute staple to which it refers: “Statute staple. The statute of the staple … authorized a security for money, commonly called statute staple, to be taken by traders for the benefit of commerce; the mayor of the place is entitled to take a recognizance of a debt (ie, bond] in proper form, which had the effect to convey the lands of the debtor to the creditor (International Monetary Fund) till out of the rents and profits of them he should be satisfied. … [It 15) Security for a debt acknowledged to be due, so called from its being entered into before the mayor of the staple, that is to say, the grand mart for the principal commodities or manufacturers of the kingdom, formerly held by act of parliament in certain trading towns. In other respects it resembled the statute-merchant, (q.v..) but like that has now fallen into disuse.” Implemented during the reign of King Edward III (27 Edw. III. stat. 2), the statute, often referred to as “the Law Merchant” in English, is the body of commercial law used by merchants throughout Europe during the medieval period. It evolved similar to English common law as a system of custom and best practice, which was enforced through a system of merchant courts along the main trade routes. It functioned as the international law of commerce. Therefore, the Statute-Merchant system (or some other version of it) is likely to be in use, more than ever before, as it is the natural and only legal device capable of sustaining such an economy. Perhaps a closer look at its definition will shed more light on this subject: “Statute-merchant. In English law. A security for a debt acknowledged to be due, entered into before the chief magistrate of some trading town, pursuant to the statute 13 Edw. I. De Mercatoribus, by which not only the body of the debtor might be imprisoned, and his goods seized in satisfaction of the debt, but also his lands might be delivered to the creditor till out of the rents and profits of the sale or disposition of] them the debt be satisfied.” But this still does little to explain the role it could play in a legal system where the debt-money base of the economy is secured by direct taxation of the citizens — or does it? When you consider that all Civil Law systems originate from and are closely connected to the Admiralty Law (Roman Civil Law) in terms of how they operate, and that under such systems fines and penalties are legally considered to be forms of direct taxation as is inflation, then you don’t need to be told that a Civil Law system is ideal for debt-based economies, nor do you need to be told why the statute-merchant arose under it — it will perpetuate its own dependency upon this debt-money as a matter of life or death. So, with the lifeblood of the system being commercial paper and electronic credits representative of those “immobilized” paper assets, the system is completely privatized within the private Federal Reserve monopoly. Like everything outside of any private system, non-members/non-participants are not subject to it. In fact, there are so many loopholes created by such an arrangement that it almost seems as though it was set up for the blatant exploitation of those with the intellectual prowess and knowledge, of operation of law. Understanding this, it is easy to see how all “paper,” if it contains the necessary elements, is potential commercial paper — including, especially, court papers such as judgments (civil and especially criminal). A criminal judgment based on a crime that is calculable in debt-money is a bond subject to the private law of the private system. The courts are therefore instrumentalities of the private system, and so are both the legislatures and executive departments who create and enforce the statutes (not to mention the salaries of the officers are payable in debt-money). It permeates everthing. All persons subject to this system are therefore voluntarily subjected to it through the contract they entered into by placing their paper in its custody and using its services or accepting its benefits. Indeed, by merely using Federal Reserve notes, one has passed, himself off as a merchant at law, holding himself out as knowledgeable in the negotiable instruments used, thereby subjecting himself to its jurisdiction in the same way that a citizen does.