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The Greatest Scam On Earth
Caveat Emptor

Douglas V. Gnazzo
May 31, 2006

Justice is Blind

"To seek power by servility to the people is a disgrace,
but to maintain it by terror, violence, and oppression is not
a disgrace only, but an injustice."
-Plutarch, circa 45-125 A.D


The word mortgage is derived from mort gage: dead pledge; mort; dead, and gage; pledge. It represents a pledge of property as security for payment of a debt.

The most common use is in the buying, selling, and borrowing for a home where the mortgage refers to the debt secured by the mortgage. It can also refer to the legal document used in securing property.

Let's take a close up look as how this process works.

"The creditor has legal rights to the debt secured by the mortgage and often make a loan to the debtor of the purchase money for the property."

"The debtor or debtors must meet the requirements of the mortgage conditions (and often the loan conditions) imposed by the creditor in order to avoid the creditor enacting provisions of the mortgage to recover the debt." [2]

There are two main types of mortgages: mortgage by demise and mortgage by legal charge.

"In a mortgage by demise, the creditor becomes the owner of the mortgaged property until the loan is repaid in full (known as "redemption"). This kind of mortgage takes the form of a conveyance of the property to the creditor, with a condition that the property will be returned on redemption."

"In a mortgage by legal charge, the debtor remains the legal owner of the property, but the creditor gains sufficient rights over it to enable them to enforce their security, such as a right to take possession of the property or sell it.

To protect the lender, a mortgage by legal charge is usually recorded in a public register. Since mortgage debt is often the largest debt owed by the debtor, banks and other mortgage lenders run title searches of the real property to make certain that there are no mortgages already registered on the debtor's property which might have higher priority." [3]

The Tax Man

"Tax liens, in some cases, will come ahead of mortgages. For this reason, if a borrower has delinquent property taxes, the bank will often pay them to prevent the lienholder from foreclosing and wiping out the mortgage." [4]

Notice how in all of these definitions that instead of becoming simpler with each explanation it is instead becoming more complicated with increasing legal terms and ramifications.

"A tax lien is a lien imposed on property by law to secure payment of taxes. Tax liens may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay income taxes or other taxes." [5]

Internal Revenue Code section 6321 provides:

"Sec. 6321. LIEN FOR TAXES.

If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belong to such person." [6]

Are you getting a quesy feeling down in the pit of your stomach yet? If not just wait, there is much more user friendly legalese to come. First we will delve into foreclosure.


"Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or lien." [7]

The further we progress into the issue the more complicated it becomes. This is why a lawyer is needed in the conveyance of property.

"Conveyancing is the act of transferring the ownership of a property from one person to another. The buyer needs to ensure that he or she gets good 'title' to the land; i.e., that the person selling the house actually has the right to sell it." [8]

A Deed

A deed is a legal instrument used for transferring title to real estate from one person to another although it can be used in other proceedings. Now we are getting closer to the bone as it is said.

We are all familiar with the terms deed and title, as such legal instruments are used in the conveyance of all real estate. Anyone that owns property such as their home and land have heard these terms before. Let's take a little closer look, as these legal instruments are very important and carry specific encumbrances and ramifications.

"Fee simple, also known as fee simple absolute, is an estate in land in common law. It is the most common way real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property short of allodial title, which is often reserved for governments.

Fee simple ownership represents absolute ownership of real property but it is limited by the four basic government powers of taxation, eminent domain, police power, and escheat.

How ownership is limited by these government powers often involves the shift from allodial title to fee simple such as when uniting with other property owners acceding to property restrictions or municipal regulation."

Although a bit complicated, it sounds like once you wade through all the legelease and you pay off your mortgage, that you own your property and are in possession of the title for it.

Property Titles

But how many people ever pay their mortgage off in full to begin with? If the mortgage doesn't get paid off, then we do not have the title to the property in our possession. The title remains with the lender. So the lendor actually owns the land until the mortgage is paid off.

"Ownership is the state or fact of exclusive possession or control of property, which may be an object, land/real estate, intellectual property or some other kind of property."

"At common law, an estate is the totality of the legal rights, interests, entitlements and obligations attaching to property. In the context of wills and probate, it refers to the totality of the property which the deceased owned or in which some interest was held. It may also refer to an estate in land." [9]

Well that doesn't sound too bad, if once again the mortgage has been paid off in full. I wonder if there is a difference between possession and exclusive possession in the above definition of ownership.

"At common law, a mortgage was a conveyance of land that on its face was absolute and conveyed a fee simple estate, but which was in fact conditional, and would be of no effect if certain conditions were not met --- usually, but not necessarily, the repayment of a debt to the original landowner." [10]

Hmm, now it's gone from complicated to very conditional, as in the difference between exclusive ownership and ownership.


Now we find that a conveyance of land that on its face was absolute (kind of like exclusive) was in fact conditional and could be of NO EFFECT.


It almost sounds like none of us really owns anything outright, as in allodial title, which is reserved for governments or the Royal Family, which are the same. Complicating matters even more is the law of bankruptcy:

"Under the law of bankruptcy in the United States, the "estate" is defined by the Bankruptcy Code as all assets or property of any kind belonging to the debtor which is available for distribution to creditors. The bankruptcy estate is defined at 11  U.S.C § 541. In some cases, the person with legal responsibility for the estate is the trustee." [11]


The creditors have more rights to the property than the individual who "bought" the property and is paying off the mortgage. In fact, the debtor does not retain the title to the property until the mortgage is paid in full. In the mean time, the creditor owns and has possession of the title.

The poor borrower is at the back of the line regarding ownership of any property; as before him, in the eyes of the court, is the lender; and ahead of the lender is the State. The buyer is last in line. Yes - I know, it is hard to believe. So here is a bit of evidence:

Senate Document No. 43

"The ultimate ownership of all property is in the state; individual so-called ownership' is only by virtue of government, i.e., law, amounting to a mere user; and use must be in accordance with law and subordinate to the necessities of the State." [12]

One could reasonably argue that it makes perfect sense that the creditor or lender owns the title and the property; until such time when the borrower (buyer) pays off his loan from the creditor, especially if the lender can show proof that he paid in full for the property and holds a legal title. Now the fun part begins, as we are going to look a bit closer at this thing called lending.


When one decides they want to buy a house or property, they go to their friendly banker to take out a loan to purchase the real estate. Just for the sake of an example, let us say we are going to buy a $1,000,000.00 house. We have to come up with a deposit and the required proof that we can reasonably be expected to pay off the loan, which runs for a period of 30 years.

The "proof" usually includes having a good job with an income large enough to not only service the debt for the house, but to also supply adequate resources to pay all the other necessary bills to survive in today's modern world. Any other existing debt is of consequence, as well as our history regarding paying off debt.

Credit by Mortgage

If we pass inspection, our friendly banker says that if we put down a 10% deposit of $100,000.00 dollars, then he will loan us the balance of the money needed to purchase the house. The banker offers to extend us credit via a mortgage.

This on the surface sounds straightforward and innocuous. Millions of people have done it, and millions more do it each day. Nevertheless, let us dig beneath the surface a bit to see what we can discover.

The price of the house is $1 million dollars. We are going to put down a 10% deposit of $100,000.00. The difference of $900,000.00 the banker is going to loan to us. Of course, he will charge us interest on the loan, as that is what bankers do - they collect their hard earned vig, as do all good collectivists.

So, we sign the mortgage and take out the loan. We also get a schedule of monthly payments for the next 30 YEARS. These are our mortgage payments, which include not only the $900,000.00 but the monthly charge of interest on it as well.

Debt Servitude

Note: when we sign on the dotted line of a 30 year mortgage, we obligate ourselves to work for the next 30 years, to earn enough income to service our newly acquired debt: the mortgage loan.

To get possession of the title we must pay off the loan; in consequence, we have accepted a large obligation that lasts for most of our adult life. Faust must be smiling.

If a borrower takes the full 30 years to pay off the mortgage loan, by the time all is said and done, they will have paid the banker almost 3 times the original purchase price of $1,000,000.00 - a total of almost $3,000,000.00. Oh yes, we get to pay property taxes as well.

Needless to say, the banker makes out quite well. Come to think of it, he must be very rich to be able to lend so many people so much money. I wonder where the banker got all the money to loan out to everyone.

Where's The Money

The truth of the matter is that the banker does not lend any of "his" money. In fact, the banker does not lend any money, as the money does not really exist. All the banker does is extend credit. He simply marks in his ledger (computer screen) that he is loaning you $900,000.00 dollars.

"Mr. Patman warns us to remember that: "The cash, in truth, does not exist and never has existed. What we call `cash reserves' are simply bookkeeping credits entered upon the ledgers of the Federal Reserve Banks. These credits are created by the Federal Reserve Banks and then passed along through the banking system." [13]

Does the banker or the bank have this money on deposit in reserves at the bank? No, they do not. The money did not exist until the banker created it by the very act of lending it to you, and marking it in his ledger.

The extension of credit, whereby money is created - is nothing more than a bunch of double-entry bookkeeping figures. Tough work if you can get it.

"Modern Money Mechanics publication from Chicago, once again: "Deposits are merely book entries...demand deposits are liabilities of commercial banks. The banks stand ready to convert such deposits into currency or transfer their ownership at the request of depositors." [14]

That is all our monetary system is under the thumb of paper fiat debt-money: empty, hollow promises to pay - promises that can never be kept. How could they be - there is no money. It is all just a scam, a fraud - an illusion of delusion.

Debt Equals Money

How can this possibly be true, the reader must be asking. Our government would not allow this - would they? Yes, they would, and yes, they have.

"And, from further testimony from the Federal Reserve itself: In a publication from the Federal Reserve Bank of Chicago, entitled "Two Faces of Debt," -- "Currency is so widely accepted as a medium of exchange that most people do not think of it as debt." [15]

On June 5, 1933, Congress passed the House Joint Resolution 192 to suspend the gold standard and the redeemability in gold of paper money. Since that time, it has been impossible to lawfully pay off a debt. The resolution stated:

" . . . Whereas the holding or dealing in gold affect the PUBLIC INTEREST, [STATE-Corporate Interest] and are therefore subject to proper regulation and restriction: and whereas the existing emergency has disclosed that provisions of obligations which purport to give the obligee a RIGHT TO REQUIRE PAYMENT in gold or a particular kind of coin or currency . . . ARE INCONSISTENT WITH THE DECLARED POLICY OF CONGRESS IN THE PAYMENT OF DEBTS . . . PAYMENT in gold or a particular kind of coin or currency, or in an amount in money of the united States measured thereby, IS DECLARED TO BE AGAINST PUBLIC POLICY: . . . AND . . . EVERY OBLIGATION, HERETOFORE OR HEREAFTER INCURRED, SHALL BE DISCHARGED upon payment, dollar for dollar, in any coin or currency which, at the time of payment, is legal tender for public and private debts . . ." [16]

This statute accomplishes four unbelievably corrupt acts. The first two are: it dismisses what was left of the hard currency monetary system of the Constitution (gold & silver coin), for being inconsistent with the declared policy of Congress; and it declares the constitutional mandate to accept gold as legal tender to be against public policy.

Constitution & Law

These acts are not in keeping with the Constitution, and can only be changed by a constitutional amendment - which has not occurred. We are hereby reminded, why any law, if not in pursuance of the Constitution, is null and void, as if it never occurred; and consequently, is not part of The Supreme Law of the Land.

It also allows for debts to be discharged WITHOUT the use of the hard money currency of gold and silver coin of the Constitution, thereby allowing for the use of paper fiat debt-money in the discharge of debt - or what the Federal Reserve refers to as: monetizing the debt.

Credit Equals Money Equals Debt

Lastly, by instituting a paper fiat debt-money system, whereby credit and debt and money are one and the same - it is issuing debt obligations that are backed by the credit extended by the acceptance of all mortgages on our homes, and other private property.

"The Federal Reserve Notes, therefore, in form have some of the qualities of government paper money, but, in substance, are almost purely asset currency possessing a government guaranty against which contingency the government has made no provision whatever." [17]

Essentially, it comes down to the fact that we borrow money that does not really exist as it did when gold and silver coin was money. Back then the hard currency existed. Today, most of what is called the money supply, as well as the supply of credit, is nothing more than numbers on the ledger of the lender's books.

Perpetual Interest

In addition, the lender gets to create more money or credit - by simply offering it to us. When we accept the offer, money and debt are created by the act of accepting credit.

Money, debt, and credit are one in the same in a paper fiat land, as opposed to a hard currency monetary system of Honest Weights and Measures, as stated in the Constitution and the Coinage Act of 1792. Then silver and gold coin circulated as the currency.

"Mariner Eccles, former chairman of the Federal Reserve Board, held the following exchange with Congressman Patman before the House Banking and Currency Committee on September 30, 1941:

Congressman Patman: "Mr. Eccles, how did you get the money to buy those two billions of government securities?"

Mr. Eccles: "We created it."

Patman: "Out of what?"

Mr. Eccles: "Out of the right to issue credit money." [18]


A paper fiat monetary system of debt-money also insures that there is a perpetual national debt, which insures a perpetual service of interest payments to the elite collectivist.

"They should not have foisted that kind of currency, namely an asset currency, on the United States Government. They should not have made the government liable on the private debts of individuals and corporations and, least of all on the private debts of foreigners." [19]

It is nothing more than monetary prostitution of our freedom and liberty, as well as our children's and their children's.

Payment or Discharge

This is why Joint Resolution 192 switches from payment of debt to the discharge of debt. With real money of gold and silver coin, one can pay debts - hell that is the purpose for having money. However, when you do away with real money, you no longer have any real way to pay off debts - so now they are simply discharged by, or transferred to, others.

Perhaps this is why Congressman Long stated the following:

"That is the equity of what we are about to do. Yes, you are going to close us down. Yes; you have already closed us down, and have been doing it long before this year. Our President says that for 3 years we have been on the way to bankruptcy. We have been on the way to bankruptcy longer than 3 years. We have been on the way to bankruptcy ever since we began to allow the financial mastery of this country gradually to get into the hands of a little clique that has held it right up until they would send us to the grave." [20]

It appears that Congressman Patman understood it all too well when he said:

"I want to show you where the people are being imposed upon by reason of the delegation of this tremendous power. I invite your attention to the fact that section 16 of the Federal Reserve Act provides that whenever the Government of the United States issues and delivers money, Federal Reserve notes, which are based on the credit of the Nation -- they represent a mortgage upon your home and my home, and upon all the property of all the people of the Nation -- to the Federal Reserve agent, an interest charge shall be collected for the Government." [21]

There is much more to say on this, however, this is a good start. More will follow in due course, especially by what ways and means land was originally obtained, and just what is this thing called Common Law.

If the above is true, which I believe to be the case, we all must take a stand on the issue of Honest Money by using our power to vote. We need to vote the right people into position to make the overhaul of a pernicious system happen.

It cannot be done all at one time - but a journey of 1000 miles begins with one step, and is further advanced, one step at a time. If man can build the Great Pyramid, thousands of years ago - we can at least institute the mandates of the Constitution, including Honest Money.

There is a saying that if all good men do nothing, then evil can endure. If all good men cast their Light as beacons of truth - evil dissipates, as all it is - is the absence of Light.

"Simplicity without a name
Is free from all external aim.
With no desire, at rest and still,
All things go right as of their will." [22]


[2] Wikipedia
[3] Wikipedia
[4] Wikipedia
[5] Wikipedia
[6] Internal Revenue Code Section 6231
[7] Wikipedia
[8] Wikipedia
[9] Wikipedia
[10] Wikipedia
[11] Wikipedia
[12] Senate Document No. 43, "Contracts payable in Gold" written in 1933.
[13] Congressional Record
[14] Modern Money Mechanics
[15] Federal Reserves "Two Faces of Debt"
[16] House Join Resolution 1933
[17] Congressional Record
[18] House Banking & Currency Meeting Records - 1941
[19] Senator Packman
[20] Congressman Long - Congressional Records
[21] Congressional Record, Congressman Patman, March 13, 1933
[22] Tao Teh King by Lao-Tzu

-Douglas V. Gnazzo
email: Douglas V, Gnazzo

Douglas V. Gnazzo is CEO of New England Renovation LLC, a historical restoration contractor that specializes in restoring older buildings that are vintage historic landmarks. He writes for numerous websites and his work appears both here and abroad. Just recently he was honored by being chosen as a Foundation Scholar for the Foundation for the Advancement of Monetary Education (FAME).

In March 2006 Douglas V. Gnazzo started his own Honest Money Gold & Silver Report
website. Read the Open Letter to Congress.

©2006 Douglas V. Gnazzo. All Rights Reserved

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