As mentioned before, the poster started simple. The Black square, white square, and colored text in the box marked United States were all added afterwards, as well as the title. While each of those make the information more bias, I figured why not. However, I think they provide poor analysis of the more important part of what was being explained. There are also very obvious missing parts due to the necessity of sticking to the scope of the monetary system. Otherwise the chart would have completely lost any flow that it might have had. Even at present I think the black and white boxes are distracting from the important information and the part of the chart that actually had some flow. The text on the side seemed so small and dense compared to the large, clear parts of the graph that after putting in the black box, I felt compelled to completely pack the entire page full of text.
I think splitting up the info in several different ways could improve its impact / flow. For example, take all the text other than the labels and put them on another page. Another idea (and this is a great thing about SVG) is cover the flow of the chart through an ODF presentation.
The greatest problem I was trying to show (but don't point out directly) is the logistical end of this system. Sure, it is implied that these bankers are "evil and bad", but just objectively taking a step back, lets follow the chart.
1. Government / congress authorizes the treasury to issue Treasury Bonds to the Federal Reserve. Government can not issue money directly unless it is backed by gold or silver according to the Constitution. The question of being on the gold standard or not is whether or not the Treasury issues those bills. Not being on the Gold Standard, as we are right now, means Gold and Silver Certificates are not being issued as legal tender. The Federal Reserve Act (questionably) without violating the constitution allows the government to issue bonds. These bonds are used as collateral, and authorize so many dollars to go into circulation.
2. The money is given to the Federal Reserve to be deposited exclusively into accounts of the 12 Regional Banks.
3. The only legal tender for the United States is in these banks available as loans to Government, Private Corporations (including minor banks), and people, at interest.
4. When money is borrowed, money is created in two ways. Ignoring loan initiation fees, which could technically be a portion of the money borrowed in payment of the service of providing the loan, interest begins to accrue on a daily basis. The amount loaned (or "principle") + the Interest charged = more money created from nothing. This isn't more being printed, this is money that exists only as a matter of record, but still owed in paper. This is hypothetically part of the fundamental flaw. Oversimplifying it in terms of mathematical limits, if all the money is returned, how do you pay back the money that doesn't exist. Think of a credit card. If you owe $110, and you only pay back $100, what can happens? What does happen?
5. The last example isn't what seems to happen in reality, so instead lets say there are two borrowers. Two people want to start a business, so they go to the bank and each take out a loan of $100. To keep it simple, lets say that the interest in 1 year comes to $10 each. Each company pays its employees and can either spend their money on Company A, Company B, or save it. Assuming people spend all their money, lets say over the course of the year Company A was more successful than Company B. Company A doesn't want to keep paying interest, so they pay back the $110. This now leaves Company A with only profit that it can use to continue to pay its employees and operate a successful business. There is now $90 in the economy ($200 - $110). If people have no money because they always spend it, Company B has $90 - profit / holdings of Company A. This is why it is said that whatever money you have is someone's debt. With Company A's debt paid, how successful would Company B need to be in order to acquire the money necessary to pay off the $110 debt? With only $90 in the entire system, it is not possible; the company will fail to pay its loan with absolute certainty. Applying this situation to today, lets say Company A likes company B because unemployed people don't have money to spend, and the only people with money already work for Company A. Company A was most profitable getting money from the employees of Company A and Company B. Lets say Company A decides to bail out Company B for the sake of the economy. Company A takes out a loan for $110 and even rather than loaning it (which would be guaranteed income) it just gives it as a gift to stimulate the economy. Company A owes $121 ($110 + $11 interest), but $90 Company A has + $110 Company B has now makes $200 again. We are back where we started... except that in the beginning Company A + Company B owed $220, now Company A + Company B owe $110 (+$11 interest for an additional year) + $121 ($242) to keep the economy in equilibrium of $200. From here the cycle repeats itself.
A) Does it matter how successful the companies are, proportionally, or otherwise?
B) What happens if people save their money and don't spend it in the economy?
The cycle of moves faster. This is why it is said that people need to spend money to stimulate the economy. If companies don't get money, they can't pay employees, and work by those companies doesn't get done.
6. The fractional reserve. This is pretty clearly covered on the chart, but one issue: b can not ever be less than c. This relationship can be seen in the difference between the prime lending rate and the prime lending rate. I hope this argument is obvious.
In the next part, I hope to address what Ron Paul is talking about; how the collapse of the banking system will set people free is a good thing, and the effect of bankruptcy on the system.