The Greatest Heist Never Told
If banks can create money from nothing and dodge regulators with offshore sleight of hand, who’s really in charge of the system..and what else aren’t they telling us?
If a system is designed to fail in broad daylight, and still nobody gets arrested, maybe it’s doing exactly what it was built to do?
Forget everything you thought you knew about the monetary system.
This isn’t about reserve ratios, Basel requirements, or the omnipotent Fed behind the curtain.
This is about the real power…banks that create money from thin air and central banks that orbit them like sycophantic moons.
It’s a rigged game.
Always has been.
And the players? Well, they’ve turned regulatory capture into a performance art.
Let’s rip the mask off and show you how the greatest financial heist in human history is still happening in real time…with regulators, academics, and even ChatGPT as unwitting (or maybe complicit?) extras in the show.
The Lie of Scarcity
The biggest con in banking isn’t just how money is created…it’s the myth that it’s scarce.
You, me, and every small business owner in Kansas City has to scrape and hustle.
Time, energy, goods…everything we value is limited.
Except for banks.
For them, money isn’t just easy to make…it’s infinite. The only things standing in their way are regulations with more holes than Swiss cheese.
From 1980 to 2007, M2 money supply in the U.S. soared from $1.5 trillion to $7.5 trillion.
Meanwhile, bank reserves barely moved…flatlining around $40 billion.
Quick math check: if reserve requirements were actually enforced at 10%, we should’ve seen $750 billion in reserves. But nope.
Banks invented “sweep accounts,” a kind of financial sleight of hand that moved customer deposits to entities with zero reserve requirements overnight.
It’s like magically vanishing your liabilities just in time for the auditors.
It wasn’t just a loophole…it was the plan.
Regulatory Theater: The Wizard of Oz Act
The mainstream loves a good fairy tale: Basel III, SLR, capital ratios…layer upon layer of “protection.”
But what we’re really watching is regulatory theater, complete with curtains, spotlights, and a whole lot of pretending.
ChatGPT gave it a valiant try, insisting that global regulators assess banks “on a consolidated basis.”
In theory, that means JPMorgan can’t set up a shop in the Cayman Islands without scrutiny.
In practice? That’s adorable.
These entities aren’t named “JPMorgan Offshore Laundromat LLC.”
They’re cloaked in legal and financial separation so complete, it makes your cousin’s drop-shipping side hustle look like a Fortune 500 audit.
As long as the parent company doesn’t guarantee the debts and the entity is capitalized “independently,” it’s as free from regulation as an unregistered lemonade stand on the moon.
Why are there more banks in the Cayman Islands than people? Because the rules are written for regulators, not for banksters.
Shadow Banking: The Invisible Heist
The real fun starts in the shadows.
This is where banks don’t just bend the rules…they disappear them entirely.
They offload risk into hedge funds, SPVs, and synthetic instruments so complex they’d make a quantum physicist sweat.
Post-2008, when regulators started sniffing around traditional tricks like sweep accounts, banks adapted.
Now they use:
Prime money market funds for unregulated funding.
SPVs to ditch risk-weighted assets.
Synthetic total return swaps for off-book exposure.
Captive hedge funds to isolate risks.
Structured notes to harvest yield without a capital charge.
It’s a smorgasbord of financial engineering that costs a lot to set up…$100 million or so…but returns billions. And for the JP Morgans of the world? That’s pocket lint.
But this isn’t where the rabbit hole ends.
What if the real engine behind infinite banking profits isn't just balance sheet manipulation… but something far more structural, embedded deep within the plumbing of the financial system itself?
Let’s pull back the curtain just a bit further…
Treasuries: The Unlimited Buffet
Ever heard that banks can’t absorb unlimited Treasuries because of balance sheet constraints?
Cute.
Here’s how it works: when a bank buys a Treasury, it credits the seller’s account with a deposit. That deposit is a liability to the bank, and the Treasury is the asset.
Boom!…money created, just like that.
In the Caymans, banks pay 2.6%–3% for five-year time deposits, buy five-year Treasuries at 4.33%, and pocket the 130 basis point spread…with zero money down.
Free money.
It’s Universal Basic Income for banksters.
If the Treasury floods the market with $2 trillion more in notes? The banks will cheerfully eat it up.
If yields go higher? Even better.
The only thing that slows the party is a shift in risk-adjusted return.
Not Fed policy.
Not capital requirements.
This isn’t a market with constraints…it’s a buffet. The only question is what’s on the menu next.
The Fed: An Expensive Distraction
Let’s address the elephant in the room.
The Federal Reserve. The big, scary boogeyman everyone thinks runs the show.
It doesn’t.
Banks don’t need the Fed’s reserves to make loans. They never did.
Between 2010 and 2020, the Fed’s balance sheet exploded, but M2 growth didn’t follow. Why?
Because QE doesn’t print money for the real economy…it fattens reserves that banks don’t lend.
Real money creation? That happens when banks lend or buy Treasuries.
In 2020–2022, M2 surged by 25%, or $6.4 trillion.
QE played a role, sure, but so did fiscal stimulus and forbearance. Businesses drew down credit lines. People stopped paying loans. More credit went out than came back in.
Even ChatGPT had to concede: banks would've bought Treasuries anyway during COVID. Why?
Because the spread was juicy, inflation was low, and it was a no-brainer.
The Game Plan: Understand the Plumbing
This stuff isn’t theoretical…it’s the code that runs the financial matrix.
If you don’t understand it, you’re walking blind in a dark room full of pickpockets.
The Fed doesn’t control credit. Banks do.
If demand for credit falls, money disappears. If it spikes, money explodes.
The system self-regulates…until it doesn’t.
Debt doesn’t matter the way people think. Reserves are irrelevant.
The real drivers are bank credit, government spending, and investor appetite for risk. That’s what moves markets, inflates bubbles, and triggers crashes.
This isn’t about being a contrarian for fun. It’s about survival.
Who Guards the Guards?
So what do we do?
Well, if you’re a Rebel Capitalist like me, you learn the rules so you can play your own game. You stop believing in financial fairy tales. You realize the system is rigged…not in secret, but in plain sight.
We’re not in a monetary system anymore.
We’re in a credit system.
A bank-led, regulator-tolerated, Fed-irrelevant, shadow-drenched ecosystem of arbitrage, leverage, and offshore magic tricks.
But knowledge is power.
And in a rigged game, the only winning move is to understand why it’s rigged…and use that to your advantage.
Stay free, stay sovereign, and never stop questioning.