The Mandrake Mechanism and the Nature of the Imaginary USA Monetary Substance

Egon posted on Fri, Apr 9 2010 7:06 PM

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I have found G. Edward Griffin's book entitled, "The Creature from Jekyll Island:  A Second Look at the Federal Reserve" to be the clearest exposition of the monetary processes of the Federal Reserve which I have laid eyes on; but that is not saying much.  Explanations on the workings of the Fed, whether from Austrians or Fed insiders, all seem to be chock full of ambiguous generalities, incomplete logical trains of thought, and disengenous conclusions.  Please note that this is only true of explanations I have actually read, and that there may be satisfactory treatises out there which I have not discovered.  G.'s chapter on the Mandrake Mechanism is among the most helpful for me.  In this chapter, G. takes the reader through the process by which Union (federal) spending is eventually converted into USA monetary tokens (copper/zinc coins and green paper) and electronic blips apparently representing such tokens (more on this ambiguous point later).   G. Edward Griffin denominates this process, "the Mandrake Mechanism."  I must say that after reading it I am still confused.  Can anyone take me through the process in a more satisfactory manner?

Specifically, the following questions, among others, remain about the nature of "banking," USA currency, and the actions of the Federal Reserve in the USA:

1.  What is a "bank"?

Okay, this one seems really obvious, but clarification on this point would get things rolling in the right direction.  I think I understand what a "vault" is (a place where goods are stored, such as gold, firearms, or USA monetary tokens) and what a "lender" or "lending institution" is (an individual or corporation engaged in the business of lending goods to other entities).  Where does the term "bank" fit into the framework created by these two terms?

2.  What is actually in my "bank account"?

I take home a signed slip of paper every two weeks from the corporation I work for (a check), present it to a bank teller, and consider myself $500 of Usonian Farcia richer (this headache-inducing term is left over from a previous post.  If I knew how to link to it I would).  My conception of what happens behind the counter is that $500 of said substance is extracted from my employer's corporate bank account and placed into mine.  Is this actually what happens?  What is actually in my account?

3.  How do Visa, Mastercard, etc. "check cards" work?

I guess I should be asking a bank's customer services representative these questions, but that would just feel weird.  When the employee at the local fast food joint swipes my Visa debit card, what is happening behind the scenes?  Where does the Visa corporation fit into this process?

The remaining questions which I have, of which there are many, depend on the definitions of the rudimentary terms already placed into question.  I thank anyone who would attempt to alleviate my helpless ignorance.

Sincerely,

Egon