The Anarchist Account Book

A guide on dismantling the entire financial system without firing a single shot.

Money based on credit is valued only by the confidence of those willing to transact with it.

The demise of the current financial system is often desired by the people subject to its violent economic swings and perpetual currency devaluation. The fractional reserve system of banking is designed to create wealth for the purveyors of credit rather than producers of value.

These institutions steal the product of labor from the future to pay for the expenses of the present. This has created an economic environment that punishes savers and generates wealth gaps between the debtors and the creditors. Entities with the ability to spawn wealth into existence without providing any value, defy the very laws of nature, and embellish themselves in the process.

This intricate system of deficits, inflation and poverty can very well last in perpetuity. The purposeful amalgamation of national and central banks under the purview of militarized governments can defend the current system with literally endless resources of capital. Those who control the money, care not who makes the laws and enforces them. Everyone is subservient to those who finance their existence. There will never be true parliamentary representation of the people unless the means of commerce are liberated from the cancerous system of fiat currency.  Noone is free until the money is free.

There are plenty of reasons WHY the existing scheme of financial tyranny must end, however, this is a guide for HOW it could be terminated. This is not intended to be an Anarchist Cookbook per se, used for malicious reasons of creating instability and societal destruction. This is purely educational and designed to show the fragility of the financial system and the true power of the people. Suppose a united populace decided to collectively dismantle the existing system for whatever reason, they could do it like this.

Show Me the Money

The bank run is the means by which citizenry of any given country decide they want their money back from the stewardship of banking institutions. The issue of course, is that the banks don’t actually preserve the money in that customers deposit, leading to a crisis of liquidity. The current reserve rate required of banks by the FDIC is 8% of total deposits. That means if 10% of the banks customers simply asked for their money, the bank would have to sell its liquid assets or require a bailout from other institutions.

The U.S. Federal Reserve’s capital reserve requirement for banks has been 0% since March 2020.

Banks will always lend out more money than they keep because the U.S Federal Reserve guarantees capital reserves on any unpaid debts and the banks are welcome to collect interest on those debts. Banks make money off on the interest of credit that they cannot fully back with their existing deposits. Because they never have to insure debts themselves, banks can use customer deposits to gamble on other investments, purchase corporate/government bonds, or even lend those excess reserves to other banks at the Federal Funds Rate of 5%; dictated and funded by the Federal Reserve. In short, it’s a racket.

Imagine for a moment that each bank customer withdrew their entire account balance. It would cause compete and total failure as every institution attempts to sell off investments and collect debts to pay their liabilities. Banks can never pay out the total value of their deposits because each dollar is accompanied by an exponential amount of debt. Debts are considered assets, but they are not liquid and cannot be exchanged for cash in a short period of time. The customer’s checking account is the bank’s liability, but they don’t have the reserves to cover them. The best portrayal of this is in the film “It’s a Wonderful Life”. As customers of the fictional Bedford Falls Building & Loan desperately run on the bank for their money, the protagonist explains that their deposits are tied up in loans on each other’s houses. Banks are lenders, not responsible keepers of cash.

The inevitable consequence of a nationalized bank run would require a government bailout of epic proportions. This is where the government steps in the fill the financial void created by the fractional reserve system. But what happens if the Treasury is flat broke.

There is Never Enough  

The United States, like most other countries, does not have a national or constitutional currency created and owned by the government. Only central banks have the ability to create more money. Governments of the world must borrow that money with interest. U.S. Dollars have “Federal Reserve Note” written across each bill instead of Treasury Note. Whatever spending the government cannot fund through direct taxation must be made up with Treasury Bonds that pay out a specified yield. These bonds are the most important financial instrument and payments are guaranteed by the government… or the taxpayer for that matter.

A bank run of any size could and would be immediately remediated by the federal government through a calculated bailout with Treasury funds. But how much money can the Treasury pay out at any given time? The current Treasury General Account (TGA) as of September of 2024, contains around $700 billion but most of that gets paid out through its existing liabilities. All the government wages, social security benefits, welfare, interest of existing debt, and all other spending is paid out from this account and is dependent on the revenues collected from taxes. Individual income accounts for about a half of government revenue. It’s no secret that governments spend more than they take in taxes, creating deficits. The projected 2024 federal deficit is just under $2 trillion which all must come from the issuance of Treasury Bonds. This $26 Trillion market is supposedly endless.

Thus, prior to the national bank run, the hypothetical disgruntled citizenry must first bankrupt their own government, and they must do it legally. As previously mentioned, tax withholdings on wages are the majority funder of government spending. Every American in the workforce is entitled to decreasing the withholding on their paycheck to 0% of their biweekly wage. This can be done easily and with full authorization of the law. Each tax bill at the end of the year would be higher, but paychecks would be fat, and the government would be quite destitute and unable to pay its bills. Tax withholdings could also be deferred on pensions, annuities and even unemployment or welfare benefits. It would only require two pay periods (one month) to completely drain the TGA and put total dependance of government revenue generation to the issuance of new debt. Hooray?  

The government can perpetually create new debt to service all existing debts, and it does so without fail. Treasury bonds are as good as cash because they are either paid out with taxpayer funds or with more T-bills which backed by taxes… or more T-bills. When an entity borrows value from the future to spend in the present, there will never be enough productive capacity to sustain the levels of debt owed by that entity. Once the dam is broken, its too late to reduce the need for new debt to pay the interest on old debts which itself accrues more interest and requires… more debt. But, if there are purchasers of U.S. Treasury Bonds, this system can go on unabated forever.  

An important question is who purchases all that debt? Technically the biggest holder of U.S. debt at 37% is the private citizens of the nation. Most people don’t even realize they hold Treasury bonds through mutual funds, pensions, retirement accounts and of course their checking account. The FDIC considers government debt as an acceptable cash equivalent to back checking and savings. To truly bankrupt the wonderful federal government, each citizen would have to transfer all their financial products into cash. This would likely incur penalties and fees for early withdrawal but remember that the subsequent tax strike and bank runs would likely crater those investments anyway. The other holders of U.S debt, foreign investors at 23%, and agencies/trusts at 22%, would eventually be forced to decrease their debt holdings as default becomes probable. Fantastic! Now the banks are scrambling to stay afloat, and the U.S. government is unable to bail them out with tax revenue or newly issued debt. But wait… the true creators of currency, the central banks, have unlimited capital to fund the government with Treasury purchases and also bailout the banks with instant reserves via repurchase agreements.

Hopeless Pedantic  

The United States can never default on its debts while there is an entity with unlimited capital willing to purchase new debt. This is the design of the central bank to be the buyer and lender of last resort. The fail safe is and always will be inflation. Countless times, currency has been sacrificed at the alter to protect the integrity of the financial system. Each dollar printed into thin air by a central bank devalues every existing dollar in circulation as the supply rises in relation to goods and services.

This theoretical revolution is all for nothing if the currency that everyone had to expel labor for, becomes increasingly worthless with every bank run and tax avoidance. They have the populous by the throat as long as they barter with customary notes. Consequently, sitting entirely in cash would slowly make everyone destitute as the Federal Reserve prints new money to cover all the uninsured credit of the government and banking institutions. It’s a hopeless cause with inevitable result of hyperinflation that impoverishes the whole country.

Unless… The people collectively circumvent the dollar with a new currency. A return to the barter system would be effective but it would be pretty annoying to trade chickens for a haircut. New localized currency systems would have to be temporarily put in place by municipalities or small communities to protect the savings and purchasing power of the revolutionaries. Every fiat dime would have to be replaced with real tangible assets that have inherent value. The potential of gold as a store of value could be hindered by the insane reserves of central banks who largely control the price. Therefore, the provisional currency must be a resource that cannot by fabricated, printed or controlled by any one power. Think quantifiable necessities like food, energy, land, or labor.

Side note: They managed to accumulate all this gold (real money) with counterfeit currency that creates inflation in the process. So, they protected their own purchasing power by decreasing everyone else’s.

This subversion of the current system of commerce would require sophisticated organization of communities and their avenues of exchange. Cryptographic currency and electronic payments could be instituted but ledgers would need to open-faced and auditable in real time. That’s a complex subject for later day. Regardless, the circumvention of the current monetary system would leave the banking institutions fighting for solvency with worthless digits on a screen that could not be exchanged for actual goods. They would be holding the proverbial bag that contains all the accumulated debt and fake money while the citizenry exchange true value and assets between themselves. Remember, debt is only an asset if it’s paid back. The richest banking institutions are only wealthy on paper as the tangible assets they hold never equal the amassed credit created from nothing. Without the backing of taxpayer funded insurance or literal money printers, these institutions are permanently “in the red” because they never created real value in first place.

Loyalist Scum

This hypothetical insurrection is reliant on the collective agreement of the majority population. Those dependent on government services, or those who work for these institutions will likely not be on board. The revolt of the societal parasites is inevitable considering their addiction to free money and lifestyles created from zero value creation. Nonetheless, the hopeless inhabitants of the country should not be left behind.

Governmental services must be replaced with charity or more localized administrative programs. State and local representatives will need to be empowered to keep the peace and protect the misfortunate while the transition takes place. While this is an entirely non-violent takeover, the privatization of judicial duties and formation of militias may be necessary to defend against monopolistic corporate takeover, military coup d'état, or even a foreign invasion.

 Ideally the collapse of the U.S. dollar will facilitate similar incursions of foreign central banks as the reserve currency disappears and inflation runs rampant around the globe. It must be a congregated effort by the people of world to excommunicate the usurers from power and liberate their markets from external influence. Richer nations benefit from foreign indebtedness and manipulate exchange rates to devalue natural resources. A true free and fair global economy would facilitate competitive currencies and appropriately reward productivity. Wealth can and should be bestowed upon those who truly create value for others instead of purveyors of debt and poverty.

Fool me once…

As the dust settles on a new world that promotes real value, the victors must remember how they got there and educate others to ensure it never happens again. Bank deposits will be fully backed by cash and cash equivalents with inherent worth; flat or elective taxation will fund governments with an enforced inability to create debt or print money; and central banking will be treated with the same disdain as human slavery, because that’s exactly what it is. The people have always had the power to change the financial system, it’s archaic in its current form and will looked upon as such from a future with free markets and legitimate currency. The inheritors of the new world will wonder why their ancestors subjected themselves to such tyranny, and why they had such colorful toilet paper adorned with faces and numbers.