Part 2: A Secret Global Monetary Reset Has Started (Watch Before This Video Is Banned)
Part 2: A Secret Global Monetary Reset Has Started (Watch Before This Video Is Banned)
George Gammon: 10-17-2026
Chapter 4: Bank creation of money
I'm going to show you how these banks create the dollars, create the money supply, and how that in and of itself creates a tremendous amount of demand for dollars and treasuries.
What we have is a debt based monetary system. I'm sure you guys have heard that term before. And essentially what that means, whether we like it or not, is money or currency, whichever term you want to use, is really debt.
In other words, for every $1 that exists, there has to be at least $1 of debt. And usually, it's a multiple of that.
Now, for the sake of this example, we're going to go ahead and set aside currency in circulation and some technical parts of the Fed's balance sheet because 95% of the dollars, especially outside of the United States, came into existence this way.
Let me show you what I'm referring to. So, let's go ahead and use a scenario that everyone can easily understand. We've got the average Joe here and he's going to take out a mortgage from the bank to buy a home from the average Jane, So, the average Joe goes to the bank. and he says, "Hey, I need a loan for we'll just call it $100,000 because I need to buy this house from the average Jane."
Now, the key here is the bank, this is the balance sheet for the bank, assets on the left, liabilities on the right, has no money to begin with in this example. They don't need it. So what a lot of people think of is a bank is just an intermediary where they take dollars from over here that already exist because I don't know the government created it or something like that and then they take those dollars and they give it to someone else.
That is not how the banking system works. Just if you have that idea in your head, just forget about it right now. It's not how the system works. the system could function with no dollars, with no bank reserves to begin with. Here's how.
You've got that bank, assets on the left, liabilities on the right. They go ahead and create those dollars out of thin air. And they deposit them into the average Joe's bank account. Let's say that average Joe has an account with this bank.
And how do they do that? Well, it's just an electronic number. They just go over to the computer and type in $100,000 in his account and then he has $100,000.
Now, there has to be an offsetting asset because that's a liability on the bank's balance sheet, which there is. It's the loan they just created. Now, what does this loan represent? This is another key you've got to get your head around. It represents future demand for those dollars that were just created.
Let me show you what I'm referring to. So Joe wants to purchase that house from the average Jane. He wants that to go onto his balance sheet, but he has to give Jane the dollars. So let's say she banks with another bank. So those dollars will go over here. And editor, you can help me out with that one. Let's go ahead and delete the dollars there and let's make them appear on the asset side of her balance sheet. We almost put them on the liability side. Okay.
But now Joe's balance sheet has the house as an asset, but the liability again is that loan, the money, the $100,000 plus interest that he owes the bank. And now let's go ahead and take it a step further.
Assume that Jane takes that money asset side of the balance sheet and spends it into the real economy because she wants to buy whatever $100,000 car or something like that. So now we have those dollars that were created by the bank by lending them into existence. Those dollars are circulating.
They're circulating in the economy. But every single month, Joe has got to come up with, let's say, $2,000.Let's say that's his mortgage payment. So Joe represents demand for dollars because every single month he's got to go out to the economy. He's got to do something to get those dollars to go ahead and pay back the bank. So hopefully you guys can see now how thisb debt based monetary system actually creates future demand for the dollars that are created by the debt to begin with.
And unfortunately, this is just the start. It gets a lot worse, if you want to look at that way.
Chapter 5: The role of derivatives
it's not just the debt, it's also the derivatives.So, let's think about this in terms of an FX swap. It's actually sounds complicated, but it's not.
Let's say we've got corporation ABC and XYZ, and ABC needs yen and XYZ needs dollars. Sothey go agree to go ahead and take let's say a billion dollars and a billion dollars worth of yen and go ahead and swap them for let's just say three months at a predetermined exchange rate.
So you see what happens here. If XYZ gets those dollars, they're likely going to use them to spend out into the global economy, but in three months they're going to need to somehow get those billion dollars. Is that the number we said? We'll go with it. a billion dollars from somewhere by selling cars or selling widgets or whatever it is. So that in and of itself creates another $1 billion of future demand for dollars.
Now those of you who are really paying attention might be saying, "Yeah, George, okay, but that also creates future demand for yen." And it absolutely does. But let's just look at these FX swaps as far as the overall derivatives picture. And I'd like to remind you that 90% plus of the FX swaps globally, which is basically a hundred trillion market in and of itself, 90% of those transactions have the USD on one side.
So just in this super oversimplified example, we have demand coming from the banks lending the dollars into existence, we have even more demand on top of that from the shadow banks lending them to other entities. And then on top of that, we could have those dollars that were created by this bank that went to ABC and let's just say a loan. Those are going to XYZ.
They go ahead and spend those out to the real economy which creates even further future demand for those original dollars that were lent into existence in this debt based monetary system.
So now let's go back to the visual capitalist because of course the next question is okay George how much globaldebt is there which could represent demand for these dollars? Well, I'm glad you asked.
We showed you the visual representation of how big it was compared to the broad money supply or the Fed's balance sheet, but I didn't give you a specific number. So, remember this goes back to 2020 when the size of the global debt would be much smaller than it is today. And even back then there was $253 trillion which at the time represented $322% of global GDP.
But now let's get to the elephant in the room which is [laughter] obviously derivatives. We showed you the size of everything else. So let's just look at the derivatives in those exact same terms. Now for this one editor, help me out. We're going to have to start scrolling. But we're going to have
But we still have to keep scrolling and scrolling and scrolling and scrolling and scrolling. Why? Because the high-end estimate for the amount of derivatives that are out there, because no one really knows, notional value would be over one quadrillion dollars.
One quadrillion dollars. Now, it is true, this is notional, and it is true that not all of this would be denominated in dollars, but the vast majority of it would. So we have one quadrillion dollar where a significant portion of that represents future demand for dollars. And on top of that we have a measly 253 trillion of debt or the vast majority of that represents future demand for dollars.
So then the question becomes taking it back to the petro dollar and the sideeshow.
How big is that market? How big is the oil market? In other words, well, I'm glad you asked. We go over to another page from the visual capitalist and we can see the crude oil market is a whopping 2.1 trillion.
So let's assume for a moment that we lose the entire petro dollar system that because Saudi Arabia is mad at us or because of what's going on in the Middle East, they no longer sell their oil for dollars. They start selling them for euros or yuan or gold or whatever it is.
Okay? So we lose $2.1 trillion of demand, but we have one quadrillion.
But assuming the one quadrillion in derivatives and 253 trillion in actual debt represents, I don't know, we'll just throw it out there and say $500 trillion of future demand for dollars.
You see what I'm saying? We've got $500 trillion of demand over here.
We got 2.1 right here in terms of the oil market or possibly the petro dollar. But we're not done. Editor, let's go back to the previous page and look at that visual representation of the 253 trillion in global debt.
Because I know a lot of you right about now are saying, "Whoa, whoa, whoa, whoa, George. Okay, this explains the demand for dollars. What about the demand for treasuries?" Well, let's think about this. This $253 trillion of debt came from banks and other entities, shadow banks, let's say.
But a lot of this debt needed something called collateral, right? Going back to the example that we just gave, the collateral there for the bank was the average Jane's, which became the average Joe's house. That was the collateral. That's why they did the loan to begin with.
So a significant percentage of this $253 trillion in debt is backed up by a collateral called US treasuries. So you can see very clearly why even if there is demand for dollars and treasuries that is created by pricing oil and dollars, it is absolutely insignificant compared to how the monetary system itself has evolved because that is the reset that nobody is talking about.
Chapter 6: The banking trick
So a significant percentage of this trillion in debt is backed up by a collateral called US treasuries. So you can see very clearly why even if there is demand for dollars and treasuries that is created by pricing oil and dollars, it is absolutely insignificant compared to how the monetary system itself has evolved because that is the reset that nobody is talking about because nobody really knows that it happened because it happened in secret.It happened in the shadows.
And this paradigm shift was started by the banks long before 1971 and long before the petro dollar was established in 1974.
So when you think about the monetary system, the way it really works, not what you hear on CNBC, definitely not what you hear about on YouTube, where the banks are at the center of it all.
It reminds me of that quote from The Usual Suspects. I'll go ahead and read it to you. The greatest trick the devil ever pulled was convincing the world he didn't exist.
And I think the greatest trick the banks ever pulled is convincing you that the Federal Reserve, the Treasury, or the petro dollar actually control the dollar itself.