The FED tells us in no uncertain terms in the next sentence. "What they do when they make loans is to accept promissory notes in exchange for credits to the borrower's transaction accounts."

So an exchange occurred!!! Why does the credit card agreement and statement present it as a loan, and charge interest? Does the agreement ever mention that an "exchange" was happening?

The FED adds fuel to the argument in their publication, Two Faces of Debt. In this publication on page 19 the FED tells us that a "depositor's balance? rises when the depository institution extends credit-either by granting a loan to or by buying securities from the depositor.

In exchange for the note or security, the lending or investing institution credits the depositors account or gives a check that can be deposited at yet another depository institution. In this case no one else looses a deposit? the money supply is increased. New money has been brought into existence."

So, here again we see the word "exchange" being associated with the so called loan. Notice that the quote says clearly that a "depositor's (YOU) balance? rises" when a depository institution extends credit by granting a loan or by buying securities from a depositor (evidence the agreement, promise to pay, or promissory note is deposited). How does that happen according to the circular? "In exchange for the note" the lending institution credits your account etc.

Then we are told something that proves the bank or financial institution really did not lend you their money as they implied or agreed. We are told that as a result of this transaction "no one loses a deposit" (thus no other person who had money deposited at the institution lost any deposit) that "the money supply increased", and that "new money has been brought into existence".

By now you should be feeling hope that there really is a way to get out of credit card debt, legally, lawfully, and ethically.

Out of Credit Card Debt - Non Consideration

How was the "new money" brought into existence? By the deposit of your agreement/promissory note. Now this is a crucial point because as any attorney knows, for an agreement or a contract to be valid both parties must provide what's called "valuable consideration". In other words each party must provide something of value in return for the thing of value that they receive.

Now we would ask the simple question: What did the bank lend that I should repay? If according to the FED, whose regulations they must follow:

1) the bank did not use others depositor's money,
2) banks do not really pay out loans from this money,
3) they accept my agreement/promissory note in "exchange" for credits in a transaction (checking) account,
4) and they issue a check or wire transfer from this account.

What did they lend? The wire transfer, credit or check is issued from the deposit of the promissory note. Remember what GAAP says. Anything accepted by the bank as a deposit is considered as cash. This concept one must never forget: the promissory note is an asset. An asset is something that has value. It can be bought and sold.

This explains why the FED says "new money" is brought into existence with the deposit of your promissory note. It is "money" that was not in the bank or financial institution prior to the deposit of the promissory note.

Thus we are told in "Two Faces of Debt" page 19, "Such newly created funds are in addition to funds that all financial institutions provide their operation as intermediaries between savers and users of savings."

These funds are in "addition" to their other funds. What does addition mean? It means to add. The agreement/promissory note is an increase of the financial institution's funds! Thus from an economic standpoint you were far from getting a loan, you were making a deposit. And, what does the FED say about that? Again we read from page 19, "Two Faces of Debt" "A DEPOSIT CREATED THROUGH LENDING IS A DEBT THAT HAS TO BE PAID ON DEMAND OF THE DEPOSITOR, just the same as the debt rising from a customer's deposit of checks or currency in a bank."

This is very powerful, clear, and concise statement. What can we learn from it?

1) When a bank or financial institution makes a "loan" they incur debt.
2) This debt must be paid on demand of the depositor (of the promissory note).
3) It is the same as the debt the lending institution owes a person who deposits checks or currency or checks in a bank.

So when we deposit our paycheck or cash into the bank, or other financial institution, the institution has to record it as a debt owed to us on their

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