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Why the Global Banking System Is a Scam


Global Banking System Collapse [We have argued here before that it is lies, systematic fraud and blatant duplicity by the central banks that have kept the global economy afloat in recent years.  In the essay below, a regular in the Rick’s Picks forum who goes by the handle ‘Buster’ provides as succinct and elegant an explanation of this as we have seen. His thoughts were originally published in the forum, but we are reprinting them below because they deserves a wider audience. RA]

America is a great country. As with any business, its success is based on the balance of its assets against its liabilities. Its assets are a plentiful supply of natural resources; land & minerals, plus 300 million specimens of the most creative creature on planet Earth.

These assets are hindered by one main liability, a ruling class who imported a monetary system of theirs from Europe a while ago. It is a non-free market system which is enough of a hindrance to negate all the positives of any country in time. A simple enough system to understand, yet very seldom understood, even by the most intelligent among us, it would seem. It operates on the simple rule that currency is borrowed into existence with interest bearing on it at a given rate. The critical point to recognise is that the interest owing is not issued by the lender, only the principal, thereby meaning that the interest either has to be paid out of the sum of principal borrowed, or by confiscation of real physical assets, i.e. “real wealth”. The only thing keeping this eventuality from occurring is if a new borrower adds more money, borrowed as yet more debt, into the economy.


This is why such a monetary system requires ever more investing manias to perpetuate itself. After exhausting the supply of manias of things of no real consequence such as tulips, the wizards of this system centered mostly around a company known as Goldman Sachs, moved on to turning very critical wealth into the biggest mania in history, i.e. the buildings we all live in. Once this mania had run its course to the extreme by changing the rules or committing outright financial fraud as we now know, and no new borrowers could be dragged in off the street, the “flaw” in the system became manifest, as the interest payments were not being covered by new money borrowed into the economies of the world.

Boiling of the Frog

Now things got interesting. Since not enough currency is in existence to cover all the debt owed to the lender, then the assets, real things or “real wealth,” are now owed to the lenders. The problem with this is that if the lenders acted upon this fact the populations of the developed world would quickly realise that they are all in fact broke, as all property would get consumed by the Banksters as repayment, leading no doubt to a world-wide revolt against the secret overlords of this system. So, instead of this, things have been manoeuvred to allow a more gradual slow “boiling of the frog,” or austerity programs coupled with placing ex-Goldman Sachs employees into key government positions across the western world.

On an accounting level, huge bail-outs will continue to be necessary to keep the system’s head above water, or rather to keep those within “the club” in the lifestyles they have become accustomed to, perpetually unless or until a new bigger mania is devised that could add enough borrowed debt currency into the system to cover the current interest payments, but bringing more burden in so doing. The carbon credit system is possibly such a new mania?

Greenspan Detected a ‘Flaw’

Alan Greenspan famously said that they found a flaw in their financial model. Yeah, right! The flaw was the very foundation of the model deliberately designed so centuries ago. Understanding of this “flaw” is the last thing the powers that be wish for the masses to acquire. Simply put, due to the fact that only the principal is borrowed into existence, not the interest, the result is never-ending debt allowing that the real wealth of miners, farmers, builders, engineers, fisherman and any other positive endeavour to be taken for free by those in “the club” via theft or fraud.

Some, educated to think just as the Wizards have designed, will argue that this is a simplistic way of seeing things, citing their training in financial models and graphs, yet all deliberately designed to confuse and hide the simplicity of it all. As Ricks Hidden Pivot Method [of technical analysis] no doubt demonstrates, the intelligent see just the complexity, but the wise find the simplicity.

America, as every country exists in a world of unimaginable abundance and we humans are blessed with the minds to realise it. We’re just presently snookered by a self-seeking “liability” that thwarts it.

May we all one day realise that abundance.


Please do not ask trading questions!

  • Jon Loren April 21, 2012, 4:26 am

    “History records that the money changers have used every form of abuse, intrigue, deceit, and violent means

    possible to maintain their control over governments by controlling money and it’s issuance.”

    -James Madison

    – On Reclaiming Our Central Bank And Monetary Policy –
    “Whoever controls the volume of money in any country is
    the master of all its legislation and commerce.”
    President James A. Garfield
    The “Federal Reserve” is not a government institution but a private central bank owned by a handful of major banks and bond dealers. As such, it is a cartel owned, controlled, and essentially for-profit driven, not by the people of the United States but, instead, by the banking industry’s ruling elite. This oligarchic setup generates the most costly, debt-based, money system and greatest conflicts of interest in the history of the world. It is a system clearly at odds with the intent of the founders of the United States of America.

    Public Central Bank – Fire The Fed

    “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

    Thomas Jefferson

    The current banking and Wall Street crisis is a direct result of a private central bank system. We are cursed with the deliberately mis-named “Federal” Reserve which is no more than a privatized and exclusive debt-money creation system devoid of public ownership. In this so-called “independent” institution there is no public interest or power within its privately-owned, profit-seeking, system.

    When the power to create our money and credit is in private hands, and based on an exclusive franchise for debt-money creation and sale of bonds at interest – as opposed to direct Treasury financing – then the entire economic and social system is set up for private profit, and debt ruin, at public expense. As history has proven, this structure is virtually guaranteed to result in endless predation, corruption, and eventual collapse at immense public expense.

    The founders of this country well understood this very problem and so, in their wisdom, put the “purse powers” in the hands of the most democratic body – i.e., Congress – exactly so the people would have the right and power to vote on their monetary policy every two years, course correct their own society and economy, and escape the predictable ruin of a private debt-money system under which we have no alternative or escape.

    Today, however, under a private central bank system we have no such public privilege or power. We are powerless at the hands of the real owners of the “Federal’ Reserve – i.e., the major investment banks and historic banking families both here and abroad. These are the very people and institutions who have profited, geared the structure to their endless, debt-money, advantage and proceeded to rape the system until it collapses and the public is forced to rescue and bailout the very predators and criminals at the helm. In any case, this is a society-controlling power no private entity should ever attain.

    Despite the overwhelming and recurrent failures of this privatized system bailout plans are being devised by these very same bankers in order to give the “Fed” even more global powers – all to foster a pretense of regulation and eliminate any vestiges of public money powers around the world. In the midst of this crisis, our pathetic Congress – fed by corporate money and cowed by a corporate press – may well succumb to giving these expanded powers to the same group of international bankers responsible for this and every other monetary crisis.

    Clearly, however, the time is ripe to fire the Fed. We must take its stock under public ownership, if for no other reason then for their ruination of the dollar, aggravating boom and bust cycles, bailout thievery, and to prevent exactly these occurrences again in the future – all of which stem from a lightly or completely unregulated, private, banking system acting to privatize profits and socialize losses. Moral hazard is endless and systemic under this oligarchic structure.

    “The bank was saved but the money was ruined.”

    William Gouge (1796-1863)

    “You gotta start executin’ a few of those white fuckin’ bankers”

    George Carlin

    The immense costs of banker bailouts today mean more bonds have to be sold, more deficit financing incurred, more commissions earned by the big bank Fed owners, more currency value ruin, and more interest payable to foreigners on our “public” debt. Interest on interest, and debt on top of debt until collapse occurs is exactly where a private central bank system always takes us – particularly within a political system driven by corporate power and money.

    Nevertheless, the fact we have a private central bank called the Federal Reserve that is still taken by many economists (and those attached to their ruling-elite sponsored positions) as a virtual given is clearly perplexing at best, and devious at worst. Despite the fact the founders of this nation had seen the predations worked upon England and other countries by private central bankers today’s crop of ruling-elite sycophants continue to ignore the issue and our own Constitution’s clear mandate for public “purse powers.”

    “The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”

    Abraham Lincoln

    Clearly, a public central bank is a subject many go to great lengths to avoid today. In fear for their status and position they quickly poo-poo the idea – and this, as if the founders were idiots!

    Yet, in this crisis, for the first time in my memory we have more people now realizing the real nature of the problem – and so considering the very idea of a public central bank and returning to a Constitutional setup. Despite the massive debt and interest set upon the public the very malady-causing institution remains private and without audits of either institution or its mega-rich and powerful owners. To complete the coup, members of its own fed-owning institutions (Goldman-Sachs, et.al.) serve as “our” Treasury Secretaries in what is a massive conflict of interest and ongoing effort to forestall any public interest or power in their system.

    As with any real reform, it takes outsiders to first broach the issue and then courageous legislators, journalists and media types to discuss the possibility and reach the people. But have you ever seen a debate or read a thorough discussion of a public central bank in your newspaper or in the major media?

    Today the time is ripe and this seminal issue is emerging. Like Holocaust deniers, however, there are those who pretend a public central bank is somehow not possible or advisable, and so they run from the topic and even seek to punish those who pursue the issue. Yet their arguments fly in the face of those who wrote our Constitution and purposely gave the money creation powers to Congress, the people’s body – so we, the people, would not be buried in interest-bearing debt, bailout costs, and enslaved to bankers for the nation’s livelihood and advancement.

    Centuries of planned “panics,” depressions, and recessions – all of which have caused immense enrichment for the few and immense loss to the nation and costs to future generations – have resulted in mind-boggling levels of interest bearing debt, inflation, and currency value destruction now bringing the nation to a financial armageddon.

    It is time we extricate ourselves from this costly, self-defeating, and utterly oligarchic system. Demand that your representative act, not to give greater powers to the banking elite, but to audit the owners and seek to return the “Federal” Reserve stock and powers to We, The People.

    – Zero Per Cent Home Loans –

    “Capital must protect itself in every possible way, both by combination and legislation. Debts must be collected, mortgages foreclosed as rapidly as possible. When, through the process of law, the common people lose their homes, they will become more docile and more easily governed through the strong arm of government applied by a central power of wealth under leading financiers. These truths are well known among our principal men who are now engaged in forming an imperialism to govern the world. By dividing the voter through the political party system, we can get them to expend their energies in fighting for questions of no importance. It is thus by discreet action we can secure for ourselves that which has been so well planned and so successfully accomplished.”

    American’s Banker Association, 1924

    Ask yourself why the people of the United States would agree to charge interest on one another’s home loans – the very building blocks of society? The answer is we did not, have not, and likely would not. Most importantly, we cannot implement any such salutary “barnraising” monetary policy because we no longer have ownership or control over our money creation process and this most vital of state institutions. In short, we have lost control over money creation and purse powers as bequeathed to us by the founding fathers in the Constitution of the United States.

    Instead, with a private central bank, we are required to pay for our homes, as well as all our infrastructure and defense, three or four times over due to the interest costs imposed by private central bankers and their affiliated bond dealers. Interest costs alone represent the greatest of taxes paid, and the greatest of burdens passed to future generations.

    Imagine, in an economy nearly seventy per-cent driven by consumers, what this tax cut, in home interest savings alone, could do to stimulate the “ownership” economy – not to mention freeing the vast majority from nearly endless house debt? In addition, to avoid early foreclosures, family breakups, and financial devastation due to job loss and “free trade” job export new, more democratically-oriented, policies might allow for longer emergency mortgage relief periods to avoid exactly such no-fault crisis and debilitating chaos.

    At the same time, penalties for loan and appraisal fraud could be greatly strengthened. Otherwise home loan programs could very well continue thru existing mortgage, banking, and escrow institutions with the only difference being direct treasury funding as opposed to debt-based bonds serving the interests of the few.

    For the great majority of people there is no greater tax cut possible than eliminating interest on our home loans. If we truly controlled our own government and economy such a change, and related offsetting tax code changes regarding interest deductions, would be simple and easy. First, however, to accomplish this salutary objective, and other necessary monetary system reforms, we have to end, or radically re-control, an oligarchic and undemocratic banking institution misleadingly known as the “Fed.”

    – Hurricanes, Disasters & Infrastructure –

    Aside from the loss of life, the sickest thing about the recent Katrina-Rita-Wilma hurricane events – as well as virtually every other natural disaster, war or infrastructure need – is that we are forced to borrow from a private central bank to pay for all the destruction, reconstruction and related interest costs. A private central bank profiting from Mother Nature’s wrath (due to global warming induced climate change) and the wipe out of entire cities and families is surely the mother of all scandals, the crime of the ages, and the epitomy of financial sociopathy.

    The private cabal “Fed” central bank setup we labor under means the cartel profits from every natural disaster via our borrowing requirements. Clearly, nothing could be more brutal, immoral or just plain wrong. As a result we can be driven into bankruptcy by Mother Nature and the Fed alone, as government insurance program premiums cover only a fraction of the costs, and any and all deficits require debt-money borrowing.

    In short, we must regain control of our monetary powers or we will be bankrupted by Mother Nature alone, courtesy of the “Federal” Reserve.

    – The “Independent” Scam-

    “If government becomes ‘independent of politics’ it can only mean that that sphere of government becomes an absolute self-perpetuating oligarchy.”

    Murray Rothbard, The Case Against The Fed

    Oligarchy and neo-fascism are what we, the people, are fighting today. A top-down, undemocratic, globalization process is effectively removing all local controls and cultural freedoms… and in the process installing private central banks everywhere. Corporate power and rule by the few (via control of our central bank, media, trade policy, and a corrupted Congress) has now reduced much of mankind to neo-slavery upon a global plantation – all within a “free market” from which, for most, there is neither escape nor dissent.

    The primary instrument of this modern neo-slavery and rule by the few is interest-bearing debt, and control of our money creation process by a ruling elite. As a result of this regime, Nations, states, and families around the world are virtual prisoners of a monopoly private central bank system, and its debt money instruments and policies.

    The original Constitution of the United States stated that Congress, the most representative body, was to have the sole power to mint our money and set the value of currency in the United States. However, in 1913, the Federal Reserve Act was passed, in a secretive and deceptive legislative process similar to the coup d’etat accomplished with the corporate-controlled GATT-NAFTA regime. This constitution-crushing “Fed” act passed the authority to create money from the people, via Congress, over to a private consortium of big banks now collectively known as the Federal Reserve Bank – in an historic theft of societal right and power.

    In short, before the passage of the Federal Reserve Act in 1913 congress could print it’s own treasury notes and use the money to pay for the cost of government. After the passage of this act Congress was forced to borrow money from a privately owned Federal Reserve Bank at interest – obviously, an immense sea-change in the nature of government finance and the structure of society.

    Clearly, the “independent” central bank scam is one of history’s great ruses and a device used to pry the most vital of society’s institutions from the hands of the people and their elected representatives – over whom we have some control. As Murray Rothbard, the Libertarian economist, noted in his last book the Fed is simply an oligarchic institution which does not belong in any Democracy or Republic ostensibly shaped and ruled by a majority of its people.

    In order to both accomplish and maintain such a ruling-elite feat, first, you inform the people and their elected representatives they are not capable of handling their own affairs – despite the provision in our Constitution placing the “purse power” squarely in the hands of the Congress. Yet the very reason for the people’s purse power clause is simply that, by 1776, the founders were well aware of what private central banks, and the “Bank of England” had done to the people of the European continent.

    Second, you must denigrate “democracy” in every way possible, and attempt to make a convincing case that a slave society, like the Roman Empire, could possibly give us some lessons in the running of a democracy. In this “mobocracy” strategy no attention is ever paid to the on-going idiocy and historic criminality of Monarchy, Oligarchy and Fascism thru the years. Clearly, the ruling elite’s basic plan of “independent” institutions is to place them out of the control of the very people who must bear, as in the case of our central bank, the extremely taxing and unnecessary debt and interest burdens which last for generations.

    Given their distorted educations and fears for their own job security, the public (maybe not private) opinion of many economists and bankers today remains that the “independence” of a central bank is a kind of given, an institution necessary to achieve stability and progress. Obviously, the question here is independent of whom? The simple answer is independent of you and I, the vast wage-laboring majority, our elected representatives, and the Constitution itself. For decades, exactly this anti-democratic, anti-labor, mindset has been a given for any who value their continued employment in banking and consulting industries, and for media moguls whose pro-business, anti-labor, propaganda must continue on a daily basis.

    Regardless, the very opposite of monetary stability and unburdened progress is the historic case given private central banks and fractional-reserve, debt-money, systems. Therein, the very incentive for stockholders of private central banks is to generate as much money, debt, and borrowing as possible. This secures the greatest interest and bond market profits and commissions, controls access to money and credit, escapes restrictions on the “masters of the universe” powers, and keeps the vast majority from having any influence over their own central banks and monetary policies.

    “A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army…We must not let our rulers load us with perpetual debt.”

    Thomas Jefferson

    “Central banks were supposedly the guardians of money. Yet, they have created the biggest liquidity bubble in history.”

    The Economist

    “Regarding the Great Depression, you’re right, we did it.”

    Ben Bernanke, Federal Reserve Chairman

    In practice, a private, profit-seeking, ownership of the “Fed” means the real owners are interested in creating as much private and government debt, with interest due, as possible. If this were not the case then why seek ownership of the central bank stock, if not to exploit its incredible potential for profit and power over governments and leaders the world over?

    Further, it is all debt money created, with interest attached, and for which money is not simultaneously created to pay the interest over time. Instead, money to pay interest comes out of created capital and savings. In effect, this means that, over time, all assets head toward ownership by big bankers – an elite group with the incredible power to create busts and booms at will, and who grow ever richer amidst the impoverishment of the people.

    The process therein involves The Federal Reserve Bank ordering the U.S. Treasury to print a certain amount of Federal Reserve Notes and then have the U.S. Mint deliver them for the mere cost of printing – i.e., money for nothing! These Federal Reserve Notes are then lent into circulation by lending them either to congress or to the Federal Reserve Member banks. As some economists have noted, money lent into existence would be impossible to totally repay because only the principal was lent into circulation but the principal plus interest has to be paid back.

    Essentially, this privatized money creation system is what is meant by debt slavery, and is the very reason why endless wars, and both cultural and religious strife, have been manufactured over the centuries due to this debt-money creation process and its inevitable implosions and ruin. Time and again, it has proved to be the bane of our existence.

    As for prudence and responsibility, at one time, it was believed that bank reserve requirements would put a lid on lending, debt creation, and inflation. However, with the advent of “securitization” – i.e., the packaging and reselling of debt to pension funds, etc – the money-debt-interest creation process has effectively become limitless. Today’s dangerous mountain of personal and governmental debt, and both actual and incipient inflation, is testimony to that fact. As ex-fed chairman, Paul Volker, once admitted: “it is a sobering fact the prominence of central banks in this century has coincided with a general tendency toward more inflation, not less.” Is it any wonder why?

    – The Creature From Jekyll Island –

    “When the Federal Reserve Act was passed, the people of these United States did not perceive that a world banking system was being set up here. A super state controlled by international bankers and international industrialists acting together to enslave the world for their own pleasure. Every effort has been made to conceal its power but the truth is the Fed has usurped the government.”

    Rep. Louis Mcfadden

    “To cover the fact that a central bank is merely a cartel which has been legalized, its proponents had to lay down a thick smoke screen of technical jargon focusing always on how it would supposedly benefit commerce, the public, and the nation… there was not the slightest glimmer that underneath it all, was a master plan which was designed from top to bottom to serve private interests at the expense of the public… the system is merely a cartel with a government facade.”

    G. Edward Griffin

    In practice, a private central bank cartel means the self-interest of the few pitted against the vast majority. The “independent ” ruse is simply one of the oldest imperialist tricks and one necessary to disarm and distract the populace. If this oligarchic setup is so benign an arrangement, however, why then have an elected Congress? Why any democracy? More to the point, if there is no advantage or profit why then do not the owners of the “Fed” simply relinquish their central bank stock to the people?

    Indeed, as Thomas Jefferson noted centuries ago, a private central bank is akin to a standing foreign army on your soil. In practice, any such central bank “insulated” from the people means a largely private ability to expand money supplies without any ties to production levels – as suggested by economist Milton Freidman. Thus, this for-profit money-creation process generates inflation as well as privatizing loan choice and distribution, while eliminating any significant public imput on lending policies, and promoting central bank largesse in the form of bail-outs for member banks at taxpayer expense – often after they have wreaked currency havoc and reaped usurious interest rates.

    Yesterday and today, “purse” powers in private hands means that money-center banks (owners of central banks) prefer guaranteed lending to governments in large amounts – i.e., to the very governments and people prevented from any non-interest-bearing money creation and municipal credit due to the loss of their rightful central banking ownership and money and credit powers.

    At the same time, central bank stockholders may be speculating against these same borrowers in currency markets – undermining their own client governments, generating instability, currency chaos, and need for evermore interest-bearing debt, not to mention financing both sides in costly wars and arms races. Exactly this grossest of conflicts of interest, maximizing of debt-indenture, and insider exploitation of money and credit powers arises due to the usurpation of the people’s powers. In the case of the U.S., it was a result of the successful coup represented by the “Federal Reserve” act of 1913.

    Inflation, corruption, and IMF-generated ruin emerge where the banking powers rest in the hands of the unelected few, and public oversight is either missing, perfunctory, or reduced to a “Humphrey-Hawkins” dog and pony show. In the American case, this private money creation system scourge comes complete with taxpayer guarantees and liabilities for all Fed insider, member-bank, mischief benefiting the few while taxing the many.

    In short, instability, usury, and insider loan thievery occur because the people are no longer in control of their central banks and are now prisoners of banking oligarchies both domestic and foreign.

    “The power of financial capitalism had another far-reaching aim, nothing less that to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conference.”

    Carroll Quigley, 1966

    “Government debt paves the way for government control. Consider: Debt leads to taxation to pay interest. Taxation leads to more economic control over the people by the same government that ran up the debt in the first place. It’s hardly extreme to conclude that escalating debt is part of a plan, such as a plan to establish a new world order.”

    John F. McManus

    “Ruling elites are deadly serious about seeing that any renovation of the international system is in their interest. They use a variety of carrot and stick tactics to maintain political and economic control – domestically and internationally. Control techniques will be more vicious or less, depending on a combination of factors involving the state of the economy and, more importantly, the state of popular opposition. The more threatening and persistent the moves to counter their plans and build alternative models, the more violent will be their tactics of repression.”

    Holly Sklar, Trilateralism

    It is the mega-merchant banks and their “bond market” cartel which owns our central banks and gains private powers to rule mere governments via control of money and credit. As both history and contemporary affairs reveal, the greatest threat to the peace and stability of the world is a banking system, and central banks, removed from the people’s ownership, control, and vigilant oversight. Inflation and currency ruin are the ultimate prices paid and, today, these twin taxes are gathering steam.

    A long history of predation, panics, planned booms and busts – all precipitated by bankers gorging on the people’s money and credit powers – is exactly why the founders vested “purse” powers in the people and their elected representatives. Indeed, they were well aware of what had transpired on the European continent and how American colonies had been at the mercy of an “independent” Bank of England.

    – The Owners Of The “Fed” –

    “Here are the card-carrying shareholders in the `Federal’ Reserve Corporation: Rothschild Banks of London and Berlin, Lazard Brothers Bank of Paris, Isreal, Moses Sieff Banks Of Italy, Warburg Bank of Hamburg and Amsterdam, Lehman Brothers Bank of new York, Kuhn Loeb Bank Of New York, Chase Manhattan Bank Of New York, Goldman Sachs Bank Of New York.”

    Miles Franklin Newsletter

    “It must not be felt that these heads of the world’s chief central banks were substantive powers in world finance. They were not. Rather, they were technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down.”

    Carroll Quigley, Tragedy And Hope

    “The world is governed by very different personages from what is imagined by those who are not behind the scenes.”


    “There is no reason why the banks should be in control of the Federal Reserve system.”

    Sen. Robert Owen, 1913

    If the people do not own their central bank either federally or via stock held by the several states, the so-called “Federal” Reserve system is simply a sham. Indeed, the real nature of this beast is revealed in the Federal Reserve Act – i.e., a law dictated by a robber-baron “community of interest” stipulating the privately-held stock of the Federal Reserve cannot be bought or sold on any stock exchange, or ever purchased by the public.

    As Eustace Mullins revealed, the “fed” stock is passed by inheritance amongst a few, mega-wealthy, banking families via powerful banking firms which, in 1913, made a private “Federal” system the law of the land. Today, without good cause or reason, an exemption from the Freedom of Information Act prevents Americans from knowing who the real personages are behind their central bank and corporate fronts.

    For his opening up an arcane and purposely obscured world to greater public understanding, and shedding new light upon the Bank of England and Federal Reserve, Eustace Mullin’s Secrets of The Federal Reserve remains a classic. Aside from revealing the forces behind central banks, the saga of Mullin’s attempt to publish his book validates his thesis of a corrupt “money power” system. In 1952, Mullins was told by eighteen major publishers his material was too hot to handle and that no one in New York (where banking interests reign) would dare put it to print. They candidly told him it would never be printed anywhere. Later, Mullins was abruptly fired from his Library of Congress post after he self-published his expose of the Fed’s history and ownership in 1952 – and became the only person ever discharged from the Library of Congress for political reasons.

    As if this were not enough, in 1954, the entire German edition of his book was seized and burned by government agents. As Mullins relates, “the burning of the book was upheld April 21, 1961 by judge Israel Katz of the Bavarian Supreme Court. The U.S. Government refused to intervene, because U.S. High Commissioner to Germany James B. Conant (president of Harvard) had approved the initial book burning order. This is the only book which has been burned in Germany since World War II.”

    Alarming as any book-burning may be, it is surely not the only case of the suppression of the truth about the secretive oligarchies ruling our lives. A pattern of interference with literary freedom appears whenever the subject of ownership of the “Fed” emerges. For example, congressman Charles Lindbergh Sr.’s “Why is your country at war,” was published in 1917 and dealt with the money power and origins of war. According to Mullins, “Woodrow Wilson ordered government agents to seize and destroy the printing plates and copies of this book in the spring of 1918.” Also, William Carr’s study of the Rothschild dynasty had to be privately printed and, in 1915, Baron Nathan Mayer De Rothschild went to court to keep Ignatius Balla’s “The Romance of the Rothschild’s” from being printed on the grounds portions were untrue and libelous. The court, however, ruled in favor of Balla’s truths.

    Historically, a series of similar incidents reveals the nature of the problem. The closer one gets to revealing the essence of enclosure, factor-imbalance, and identities of a ruling class, the more obscurity and worse is brought upon offending writers or reformers. In a society where capital owns the media, major publishing houses, and controls appointments in government, major universities, and foundations then unemployment, defamation, and worse is easily brought upon dissidents and any set of facts some wish buried. The experience of writers like Ezra Pound, and circumstances surrounding the assassinations of President’s Lincoln, Garfield, and Kennedy (all of whom were no friends of banking powers) are enough to give anyone pause… nevertheless, information must be free and truthful.

    Invariably, the critics of oligarchy, globalization, GATT-NAFTA, and a banking elite’s “independent” interests are characterized as “irrational”, “deranged”, “nationalistic”, “racist”, “anti-semitic” and bent on seeing conspiracy. This occurs in spite of both Adam Smith’s and Karl Marx’s trenchant and timeless observations, the sordid history of the “Federal” Reserve, and the complete lack of effective democracy in our monetary policy.

    Obviously, ruling oligarchies have no reason for being nor any argument for suppressing democracy. To survive they must rely on propaganda, repression, defamation, state terrorism, and assassination in hopes of avoiding their fate.

    To better understand this on-going tyranny of capital we also need to know how, from near-absolute power over the people’s finances, the House of Rothschild and others moved on to control, and enclose, our media and information supply. As Kent Cooper, a former head of Associated Press, noted “international bankers under the House of Rothschild acquired an interest in the three leading European [news] agencies.” The Rothschild group purchased Reuters in London, Havas in France, and Wolf in Germany to monopolize the news creation nexus and information-dissemination business in Europe and around the world. Today’s global corporate media empire is simply an extension of this trend to control information and assure capital’s propaganda remains both dominant and ubiquitous.

    Thus, in addition to land enclosures, factor imbalance, private central banks, and corruption of political systems the power of capital was immensely amplified with its ownership and control of media, and news and information sources. A privatized media realm includes the power to control the public mind, distract and direct debate, demonize dissidents, bring a halt to reform, and disappear the entire question of a public central bank.

    – Private Central Banks, Kondratieff Waves
    & Anti-Semitism –

    “The bankers’ Satanic Conspiracy is the source of anti Semitism. The sooner Jews rise up to oppose it; the sooner anti-Semitism will end.. Obviously, many Christians are involved. When I criticize Rockefeller, no one says anything about ‘anti-Christianism.'”

    Henry Makow

    “Due to the hard times… the ugly side of human nature becomes apparent. Religious fundamentalism and political extremism (both right and left) resurge in a clamber for radical solutions. Racism increases as scapegoats are sought to vent frustrations (Previous waves: anti Semitism in Europe during the 1870’s/80’s & 1930’s/40’s. Current wave: Ethnic cleansing of the 1990’s) There is less tolerance of unconventional sexuality (Previous waves: Victorian morality of the 1870’s/90’s and Hitler sent homosexuals to the gas chambers in the 1930’s/40’s). The current down wave has seen the rise of the religious right in US politics, with moves against abortion and less tolerance towards racial minorities and homosexuals. Lastly, socialism becomes more popular with the masses as there is a reaction against free market economics, which is widely blamed for the adverse conditions.”

    David McMinn

    It is this writer’s contention that Kondratieff’s business-cycle wave theory may well be little more than a private central bank, debt-interest, bubble phenomena – in other words, a long cycle wave of debt build-up and interest accrued which eventually collapses business and society, and brings in its wake either new ruling-elite fascisms of one variety or another, or a re-capture of monetary powers by the public.

    Thus, while this revolution of Kondratieff cycles may well represent simple and normal business cycle waves, in fact, they may also be generated and driven by private central bank debt bubbles and the eventual repudiations which follow. Such traumatic cycles might well not exist nor be as wrenching were it not for the private central bank institutions feeding member bank mischief. We are not then speaking of ordinary and more benign, supply-demand, commodity price inflations and deflations.

    Again, with securitization making reserve requirement’s relation to loans nearly meaningless today, fiat money creation has become effectively limitless, and this amidst no gold or commodity backing for the “Fed” currency. In this for-profit debt creation business the sky is the limit. Adding insult to injury, the taxpayers (via the income tax) are also the hapless guarantors of the bankster’s, ruling-class, machinations…. at interest, of course.

    As things stand, few mega-banks have any public interest seats or participation on their boards, and so no non-profit or public-interest oriented impacts emerge on who gets loans and on what terms. In short, “our” money is created in their interests… and until such time as the interest bubble leads to implosion, new debt replaces old, and devastation results for families and nations alike. Despite this dismal dynamic, nations that attempt to buck the oligarchic system will likely face reprisals from powerful “free market” forces at odds with the interests of the vast majority. So much for democracy… that is until ruin or revolution emerge.

    After usury, predation, and ruin arise from oligarchic, undemocratic, economies controlled by ruling-elite bankers, when the inevitable crisis or depression hits then some group or other must be blamed. Enter the Jews, Chinese, or Indians – depending on the country and continent. Regardless of locale, due precisely to a lack of public ownership of central banks, and due to all the dismal effects flowing from oligarchic banking and economy, it is these ethnic groups which historically, emerge as targets… and eventually pay the price of undemocratic banking structures.

    In other words, short of reform, what has happened in the past will most certainly happen in the future given that anti-semitism and worse is born and bred by “independent” central banks and their captive institutions – i.e., the International Monetary Fund, World Bank, and any government controlled by the few in order to make possible the exploitation of the many.

    For example, few remain aware today that after World War I, the infamous Dawes Plan for war reparations was drawn and dictated by international bankers – i.e., the owners of central banks. Aside from funding both sides of the conflict, it was their post-war, counterproductive, “shock therapy” which produced a Hitler and a virulent anti-semitism on the European continent… with devastating consequences.

    “Terrorism, War & Bankruptcy are caused by the privatization of money, issued as a debt and compounded by interest” [he cancelled debt and interest in France – hence the Battle of Waterloo.]

    Napoleon Bonaparte

    “Congress… gave the power to regulate money to a handful of unelected private bankers. America has been paying the price ever since… As the Federal Reserve is a private banking institution, every time Congress requisitions money it creates a debt obligation… a transfer of cash [created out of thin air] from the Fed in exchange for U.S. bonds, resulting in taxpayers paying untold billions of dollars in interest every year with no hope of ever being able to reduce the principal. By controlling our money, private Federal Reserve bankers have indebted us all, forever… By eliminating the middleman we would be able to create a debt free, productive, government at all levels.”

    Edward F. Mrkvicka, Jr.

    “Government bonds are taxpayer’s promises to pay, secured by a first lien on all physical property within the nation and a first lien on national income, because Congress has the power to tax. These fully-secured, interest-bearing, taxpayers’ promises-to-pay are created by the government and exchanged for privately owned bank’s promises-to-pay of private individuals which are unsecured. These unsecured promises-to-pay of private individuals are borrowed by the United States Government. These private individuals’ promises to pay are called money. Imagine a banking system which permits taxpayers promises-to-pay to be exchanged for private individuals’ promises-to-pay.”

    Gertrude Coogan, Money Creators

    Given the oligarchic structure, it is not that any one particular elite or ethnic group happens to own or control a central bank, or predominate in the banking field. Instead, it is the institution of private central banks per se which proves a scourge upon mankind with its invitation to misfeasance, inflation, and powers of the few to dissemble democracy, social justice, and progressive economy in general. In short, it is the structure, stupid.

    Despite capital’s media propaganda, many more people around the world today are awakening to the nature of banking tyranny, to a reality of oligarchy everywhere, and the pervasive lack of effective democratic structure in “free market” institutions and “free trade” regimes which control our lives. We do not elect our trade representatives, our Federal Reserve board members, our United Nations representative, and we have no National Initiative with which to defeat the many corruptions of the ruling class.

    In this sick milieu, as surely as night follows day, oligarchy and the predation which follows from imperialism breed backlash and movements of the people to regain their rightful powers and interests.

    Today, many more “money trust” victims from around the world seek to overthrow both local and international oligarchies in order to come out from under the tyranny of latter-day Dawes plans and undemocratic, GATT-NAFTA, trade schemes. The latter being an uncompensated, effectively forced, trade regime fast-tracked by capital past wage-laboring majorities. Unsuited for a still disparate and largely undemocratic world, this sorry regime not only rewards the greater-slave and induces global oligopoly but, due to a lack of compensating and incentivizing tariffs, induces a race to the bottom in standards, and generates costly environmental ruin by greatly increasing the fossil-fuel transport of “goods” around the globe.

    With the ruling elite’s program of “interdependency and “harmonization” not approved by the people via National Initiatives, they lack any real democratic impetus or approval of their terms. Yet these schemes abide due to our increasing impotence and the capture of “our” representatives by capital’s money machine and global media empire.

    Despite the people’s rights, wants, and needs reform still remains problematic today due to the fact that oligarchy, enclosure, and capital’s political corruption have proceeded to the point where government itself has been disarmed by money-dependent politicians who have become captives of capital. As a result of this sick setup, legislatures filled with capital-dependent, re-electable, politicians, and capital’s “free press” all fail to represent the vast, wage-earning, majority.

    Wherever society is so corrupt it can only fail as vital, balancing, reform and economic democracy cannot emerge… without getting to the endgame point of maximum ruin and exploitation. Thus, as in the past, ruling elite predation and oligarchy will likely proceed to the point where debt bubbles and currency ruin mean that new pogroms of Jews, Chinese, or Indians become inevitable – all due to gross factor imbalance in society and ruling oligarchies fed and bred by private central banks.

    Having seen this sorry dynamic emerge many times throughout history, one would think the very people in the forefront of movements to re-establish constitutional purse powers and democratic banking would be those of Jewish, Chinese, and Indian extraction. Count one such figure in Murray Rothbard, the libertarian economist, who noted that “if government becomes `independent of politics’ it can only mean that that sphere of government becomes an absolute self-perpetuating oligarchy.”

    Indeed, exactly this is what the “Federal” Reserve, Euro-Land, and all capital-controlled institutions have become – self-perpetuating oligarchies. Wherever such “factor” imbalance prevails, real reform must emerge or turmoil, terror, and revolution are assured.

    “5. Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.”

    Communist Manifesto #5,
    Karl Marx & Fred. Engels

    “Lenin is said to have declared that the best way to destroy the Capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens… while the process impoverishes many, it actually enriches some… who are (then) the object of hatred.”

    John Maynard Keynes

    “[There must be] some dilution of sovereignty, to the immediate disadvantage of those nations which now possess the preponderance of power… the establishment of a common money, might be invested in a body created by and responsible to the principal trading and investing peoples. This would deprive our government of exclusive control over a national money…”

    John Foster Dulles,
    CFR Founder

    “The Fed is exactly what Karl Marx called for in the fifth plank of his Communist Manifesto… The founders of the United States certainly had no intention of allowing the federal or state governments to issue paper money. Never in their wildest dreams did they envisage creating a privately run central bank with vast powers to inflate and manipulate our nation’s currency and credit… Inflation sets the stage for the rise of a tyrant…

    Older Americans have seen our nation’s currency deteriorate from the most honest fiduciary money the world has ever known to fiat money redeemable in nothing… its value is being continually eroded by the monetary policies set by the privately run Federal Reserve… It is not by chance that our nation’s money degenerated from the most honest paper money in history to completely irredeemable paper money. Nor was it by chance that the Federal Reserve replaced the U.S. Treasury as the issuer of our money.

    Determined individuals planned and accomplished this change as a major step in their conspiratorial plan to steer our nation into totalitarian control and world government… The Fed is an unconstitutionally established entity that is independent of government. But its leaders do not operate independently of the conspiratorial force that brought it into existence. That force, working over several generations to bring about the tyrannical `new world order’ can be found in the membership of the Council On Foreign Relations, the Trilateral Commission, the Rhodes Scholar program, the Bilderberg movement, and numerous other organs of the `Establishment.’ It is a force that dominates government as well as the Fed.”

    John F. McManus,
    Financial Terrorism Review


    “The BIS (Bank for International Settlements) is the central bank’s central bank… its members are the central banks of the industrial world… It is certainly the most powerful financial institution in the world.”

    Dennis Birch

    “The powers of financial capital had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.”

    Carroll Quigley, Tragedy And Hope

    “The World Trade Organization, The World Bank, The International Monetary Fund and other financial institutions virtually write economic policy and parliamentary legislation. With a deadly combination of arrogance and ruthlessness, they take their sledgehammers to fragile, interdependent, historically complex societies and devastate them, all under the fluttering banner of ‘reform’.”

    Arundhati Roy

    “The counterfeit option is available only if a country happens to be in the unique position of having its currency accepted as the medium of international trade, as has been the case for the United States. In that event it is possible to create money out of nothing, and other nations have no choice but to accept it… The result is that America has continued to finance its trade deficit with fiat money – counterfeit, if you will – a feat which no other nation in the world could hope to accomplish.”

    G. Edward Griffin

    “The infamous `conditionalities’ policy for procuring emergency IMF loans… remains in force to this day… The prospective recipient of money must convince inspectors it is implementing a “realistic rate of exchange… as defined by the IMF. The focus on the exchange rate allows the IMF to control a country’s fiscal policy, government expenditure, tax policy, and public enterprise policy – in short, every aspect of national economic life… The formula is invariably the same. The debtor country is forced to slash imports, severely devalue its domestic currency (ensuring that relative dollar-denominated debt increases by multiples), and impose draconian cuts in government subsidies for food and other necessaries, while opening vital areas of the national economy to foreign takeovers on the cheap, justified as `free market reforms’ by the IMF.”

    Executive Intelligence Review

    In 1930, the Bank For International Settlements – BIS – was created by a coterie of international bankers for the purpose of handling collection of German war debt. Today, it functions as a central bank for central bankers.

    The BIS remains a nearly invisible affair despite wielding immense powers without being subject to any democratic office, imput, or influence. In short, not only is the BIS self-created and without political legitimacy but it wields great, behind-the-scenes, powers.

    This institution emerged as a way to implement war reparation policies devised by international bankers – i.e the infamous Dawes Plan. As mentioned, these “shock therapy” burdens devastated Germany after the First World War and led directly to the rise of Adolph Hitler. Today, these same policies are plunging the rest of the world into crisis by increasing indebtedness and servitude to international bankers.

    In Europe, the objective of the BIS is to remove whatever control any national central banks retain and move toward a private, European, central bank with the BIS as supranational power above and beyond any control by the people.

    As for the World Bank and International Monetary fund, after the chaos of World War II, the WB and IMF were formed in 1945 at the Bretton Woods conference. Capitalized with currency and gold from developed nations they provided credit for post-war reconstruction. Early borrowers were the devastated nations of Europe as reconstruction took priority over new development, until the late 1950’s when lending to lesser-developed countries proceeded in the wake of de-colonization.

    This conference gave birth to The World Bank, The International Monetary Fund and the General Agreement on Trade and Tariffs (GATT). In effect, the Bretton Woods did for the world what the Federal Reserve Act of 1913 did for the United States. It provided a framework for the International Bankers to place the World into economic bondage through debt and set up the IMF to force austerity measures – in order to service debt and restructure economies, societies, and cultures according to the Banker’s specification. The hardships generated as a result have been legion.

    Another primary reason for Bretton Woods was to stabilize currency values and prevent competitive devaluations from ruining economies and rewarding speculators – something now under way big time due to our lack of tariff freedom and absence of compensating tariffs – which would obviate having to ruin the value of one’s own currency “in order to compete.”

    Originally, the IMF was to be a currency stabilization fund, enabling governments to intervene to maintain currency values by protecting them from speculators and “market forces.” After wreckage and war emerged from the Dawes Plan and Great Depression, Bretton Woods was then ostensibly intended to limit the influence which private, unelected, bankers exerted in international finance.

    Several decades later, President Nixon removed the dollar from a gold peg in 1971, and Bretton Woods, in effect, ended. As a result, currencies could then fluctuate freely and be driven by the whims of speculators, allowing destruction of stable economies by speculators in a “casino” environment.

    Given their structure, the IMF and World Bank function as instruments of a global financial oligarchy – i.e., one demanding private central banks and power to implement shock therapies serving bank interests by destroying the wealth, freedom, economic diversity and independence of people everywhere.

    In practice, the World Bank, IMF, and BIS impose conditions determined by private capital – i.e., the unelected. While giving lip service to “public” objectives, a capital-controlled World Bank-IMF continues to prop up despotic regimes while undermining democracy and domestic freedom and economy. As a result, democratic trade processes are denied and “free market” enclosures, privatizations, foreign-debt, and import-export regimes enriching multinationals are imposed. Working together, WB-IMF-BIS policies and GATT remove decision-making powers from the people and give capital a veto power in international, unelected, tribunals and private central banks removed from the people’s influence.

    With World Bank loans come debt burdens and explicit conditions on capital use – which translate into implicit ones on allowable forms of politics, culture, and economy. This means western-style cultural domination. Former Treasury Secretary Lawrence H. Summers revealed the intent when he stated “countries that do the right things will be rewarded with rapid capital inflows. Those that do things wrong are punished.” Given the IMF’s makeup, any democratic freedom and wage-labor power is seen as “wrong.” Another former Treasury Secretary, Robert Rubin, stated the real goal: “ending the Link between human rights and trade is a very good objective to shoot for.” Very Good?

    Capital’s agenda here means we must sever economy from morality and from any assessment of human rights, democratic prerogative, and environmental condition. Given this amoral “engagement” ethic, with the people’s own money and loan guarantees banking elites proceed to reward the “efficient” and punish more democratic, wage-labor oriented, systems as well as ecologically conservative and communal styles of life and economy.

    A “World Bank” controlled by capital enriches mega-contractors, multinationals, and dictators as long as they do the “right” thing. What “doing the right thing” means is capitalist code for destroying labor unions, persecuting dissenters, defeating native land rights, perfecting enclosure, and crushing institutions threatening to capital’s hegemony. Not only is the “right” thing determined by the few but those working to preserve natural liberty, sovereignty, cooperative organization, and seeking labor and land reforms are often abused, imprisoned, or exterminated for their resistance to capital’s forced interdependency.

    Once nations have significant foreign debt burdens (often undertaken by desperate rulers without the approval of the people) they find they have little alternative or freedom of dissent without incurring the wrath of institutions able to dictate the terms of “their” culture, economy, and trade. This neo-slavery emerges as a result of our lack of public ownership of central banks and a media now dominated by capital – see http://www.editorfreedom.com.

    Aide from the debilitating and disastrous mountain of public and private, interest-bearing, debt since the advent of the Fed our currency has shrunk in value by over 4% per year. As a result of imprudent, profit-seeking, management of “our” currency by bankers and “deficits don’t matter” politicians alike, the value of the dollar has fallen over 95% in value since the inception of the Fed, and some 30% in the past year or so against other major currencies – the latter decline due largely to the lack of compensating tariff arrangements appropriate for a still very disparate and undemocratic world, and a deliberate, beggar-thy-neighbor, policy of currency ruin.

    With the removal of tariff freedom and rational trade policies due to GATT-NAFTA (another ruling class coup similar to the Fed scheme) monetary officials are now purposely driving down the value of our dollar today to try to eliminate horrendous trade imbalances. By attempting to substitute monetary policy for trade policy, the value of all our assets and savings, national and personal, are driven downward. In effect, currency ruin is the greatest of tariffs, and everything we must now import to live (because “free trade” has nearly wiped out domestic producers) costs more… and then more again due to deliberate currency decline. So much for the benefits of forced free trade, for “universal gain” trade ideology and monetary stability.


    “Once the government reclaims the power to create money from the banks, it will no longer need to sell its bonds to investors. It will not even need to levy income taxes… government-issued money would actually be less inflationary than the system we have now; and it is precisely because power and money corrupt that money creation needs to be done by a public body, exercised in full view and with full accountability… what has allowed government to be corrupted today is that it is actually run by the money cartel. Big business holds all the cards, because its affiliated banks have monopolized the business of issuing and lending the national money supply, a function the Constitution delegated solely to Congress.”

    Ellen Brown, Web Of Debt

    All the books presented here are essential reading to understand our monetary history, our corrupt banking system, and our debt-money prison. Ellen Brown’s Web Of Debt is one I especially recommend to everyone to better understand the current condition of “our” economic and banking system and the effective remedies so eloquently outlined in this book.

    As she states, “Our money system is not what we have been led to believe. The creation of money has been “privatized,” or taken over by a private money cartel. Except for coins, all of our money is now created as loans advanced by private banking institutions — including the private Federal Reserve. Banks create the principal but not the interest to service their loans. To find the interest, new loans must continually be taken out, expanding the money supply, inflating prices – and robbing you of the value of your money.

    Not only is virtually the entire money supply created privately by banks, but a mere handful of very big banks is responsible for a massive investment scheme known as “derivatives,” which now tallies in at hundreds of trillions of dollars. The banking system has been contrived so that these big banks always get bailed out by the taxpayers from their risky ventures, but the scheme has reached its mathematical limits.

    There isn’t enough money in the entire global economy to bail out the banks from a massive derivatives default today. When the investors realize that the “insurance” against catastrophe that they have purchased in the form of derivatives is worthless, they are liable to jump ship and bring the whole shaky edifice crashing down… Just the interest on the U.S. government’s burgeoning $9 trillion debt will soon be more than the taxpayers can afford to pay. When that happens, the economy will collapse unless the monetary system is radically overhauled.”


    “Money creation is the greatest economic power known to man. That power ought always to be exercised in the interest of all the people, never for the sake of the private gain of a privileged few- The banks – commercial banks and the Federal Reserve – create all the money of this nation, and the nation and its people at interest on every dollar of that newly created money. This means that private banks exercise un-Constitutionally, immorally, and ridiculously the power to tax the people. For every newly created dollar dilutes to some extent the value of every other dollar already in circulation… A Federal Reserve system brought under control by the elected officials of the United States could be run in the public interest instead of in that of the money-lending community as is now the case.”

    “Much has been made of the fact that these so-called “Lincoln Greenbacks” depreciated in the course of time, relative to gold. But these notes bore upon their face this legend: “this note is a legal tender at its face value for all debts, public and private, except duties on imports and interest on the public debt.” Thus the government itself had to go to bankers to buy from them gold with which to pay the interest on the national debt. And importers had to go to the same bankers to secure money – other than greenbacks – with which to pay their import duties. The bankers interest in bringing about the depreciation of this government money will be obvious to any fair-minded person. In any case, due to the exception clause appearing on these “greenbacks” all the bankers had to do was to demand from the government and from the importers more than a dollar in greenbacks before they gave a gold dollar in exchange.”

    “We are sometimes ready to congratulate ourselves that our age has outgrown all superstitions. But the historian of the future will, I fancy, reckon… the strange superstition that, whenever money is invented, a percentage must be paid forever afterward as a propitiation to a banker. It is on that superstition that the whole empire of Mammon is built.”

    “When government bonds are “sold” to a bank what really happens is that the government gives the private bank an interest-bearing obligation of all the people of the Nation. The bank, it is true, credits the government with a brand new demand deposit, which it writes up on its books for the sole purpose of buying the bond. But this bankers’ promise to pay (which is what a demand deposit is today) has nothing in the world behind it except the bonds themselves. And the bonds in turn, everyone knows, derive their value entirely from the fact that the credit of the Government and the industry of the people are security and its repayment is guaranteed by the taxing power of the government. The sovereign government has, in such a case, “borrowed” from a private profit-making agency nothing in the world except the credit of the nation itself which the government had in the first place… Yet this and future generations must pay the banks interest on the bonds they have “bought” by this strange procedure…. Now why on earth would our government do such a thing?… It should be the nation itself that creates this money or credit and derives the economic advantage from so doing.”

    Rep. Jerry Voorhis, Out Of Debt, Out Of Danger


    “Sovereign nations do not have to borrow their money into existence., yet the United States has been deceived into doing this since 1913. The compounding interest on this debt is now growing exponentially, and cannot be sustained. Unfortunately, we cannot just pay down the national debt. All our money – except for coins – is created out of debt. Under this debt money system, to reduce the debt is to reduce the national money. The only solution is to restructure our monetary system to forbid government borrowing. Fortunately, this is nothing new. The U.S. and other nations have done it before.”

    “The problem with the economy of every nation on earth has the same root – national debt – debt that is totally unnecessary… All nations can get out of debt and not incur any more debt. Any nation that did this would immediately stabilize their economic situation – that is, incur neither significant inflation, nor deflation – by design. Human societies run best on stability – a stable economic platform – one that can be predicted in the long term. Once the money power is taken away from the b

    • Buster April 23, 2012, 12:32 pm

      Thanks Jon.
      This makes a great reference point for anyone wishing to understand what’s gone wrong in the world. The founding fathers would have had this taught in all our schools, no doubt….if the Banksters hadn’t had them shot!

  • mava April 19, 2012, 3:24 am

    I don’t understand why am I posting in the middle of the thread. Guess I am doing something wrong…

  • mava April 19, 2012, 3:22 am

    Oops, meant for this post to be at the end. Not really replying to anyone in particular.

    Anyway, I was going to say that all we need is a rule of non-aggression. Then Roger can have his fiat money, and may-be he is right about it, but he should never allowed to make it “legal tender”, and force those like me to participate.

    Everything is totally possible on non violent basis. Communists can organize and tax themselves out of existence, and as long as we do not allow them to aggress against me, I would not even care about them.

    Buster, will probably never borrow any capital from me on interest. And you know what? That is fine with me. If I am not allowed to charge the interest, then why in the right mind would I ever loan any capital to anyone? To enjoy the risks? But that is just me. Somebody definitely will, just do not force anyone one way or another.

    All the incongruities in our desired ways, do exist only due to the fact that no matter the way, we always want to force feed that to everyone.

    So, my point is that the bad system will dies by itself, out of lack of demand. All we need to do is just let them all try to compete against each other without any aggression. Strictly on voluntary basis.

  • mava April 19, 2012, 3:18 am

    Rick, I hate your post submission thing. I typed the whole detailed and nice reply and puff, all gone, instead of just letting me fill out the email address which is fake anyway.

    (Not to say that I hate your site or your method. Nor to say that I am not free to not post here. But, had to vent).


    Anyway, I was going to say that all we need is a rule of non-aggression. Then Roger can have his fiat money, and may-be he is right about it, but he should never allowed to make it “legal tender”, and force those like me to participate.

    Everything is totally possible on non violent basis. Communists can organize and tax themselves out of existence, and as long as we do not allow them to aggress against me, I would not even care about them.

    Buster, will probably never borrow any capital from me on interest. And you know what? That is fine with me. If I am not allowed to charge the interest, then why in the right mind would I ever loan any capital to anyone? To enjoy the risks? But that is just me. Somebody definitely will, just do not force anyone one way or another.

    All the incongruities in our desired ways, do exist only due to the fact that no matter the way, we always want to force feed that to everyone.

    So, my point is that the bad system will dies by itself, out of lack of demand. All we need to do is just let them all try to compete against each other without any aggression. Strictly on voluntary basis.

  • Buster April 19, 2012, 12:19 am

    Obviously things are more complex than as presented in the essay, as we are all well aware. It was simply a summary of a major part of the problem. There are many fine commentators here very well qualified to shed light on the finer points of our predicament; the financial, legal, historical, political & the psychological elements.
    I won’t spend too much time arguing over what will likely amount to little more than semantics at the end of the day, as I’m more inclined to look at the bigger picture as we get closer to the train wreck.
    Re. the questions raised:
    I believe that getting further down to the basics, points to a reliable judicial system as being the ultimate solution.
    History shows that both fiat & metal currencies have been compromised by the sociopaths who seem so determined to dominate our societies.
    We are likely witnessing the downfall of Corporate Fascism, not that of Free-Market Capitalism, as some are under the illusion that we have in the Western world.
    From a Biblical perspective, the issue of money is well covered, with the key points being to have a fair system of weights & measures & protection of both parties in any exchange, thereby allowing trade of goods or services that benefits everyone. Our present system of money would be viewed as fraud, having bankruptcy built in by design, with no debt jubilee. I believe violations of debt laws was even the reason God was said to have punished the Israelites & allowed their downfall.
    Evidence of the fraud in the design of the monetary system is shown up in bankruptcies & the continual growth of debt. Non debt based money has been ruthlessly suppressed. Both government & private interests have played their part in this fraud.

  • Rich April 18, 2012, 9:22 pm
  • Rich April 18, 2012, 9:17 pm

    Brilliant Buster:

    Usury finance funded by taxes always leads to collapse and confiscation as debt compounds faster than economic growth in the end times.

    Silver is the antidote to vampires.

    We are off on our One Month Silver Senator Whistle Stop Tour and will see know how well $9.4 B government subsidy Amtrak wifi works.

    Be well thee All.

    Click on Rich to follow…

  • Steve April 18, 2012, 5:32 pm

    I want to say it again. Great article Buster.

  • ken horn April 18, 2012, 3:41 pm

    It’s hard to imagine how much hot water we are actually in. The worldwide gov’t bloat & incompetence is almost incomprehensible. Think about just the USA & just a sliver of what has been unearthed recently. Jim Yong Kim (see google), new head of the World Bank. Steven Chu (see google), head of Dept. Of Energy, Solyndra, large donor access to White House, Fast & Furious, GSA scandal, Secret Service scandal, Keystone Pipeline, no budget for 3 yrs, more than $T deficit (3 yrs. running), $16T debt, 8.2& unemployment. I could go on & on. Gov’t is a corrupt, self-serving, pandering bunch of idiots. Now, extrapolate all this to the “progressive” globocrats of Europe & Scandanavia, the black marketeers of Russia & China, the “bad boys” of Venezuela, Cuba, Iran & N. Korea. Do you really see a way out before the House of Cards falls? Be cautious!!!

  • John Jay April 18, 2012, 3:30 pm

    Every nation on the earth has been swilling the financial Kool Aid of fiat and debt. Now everyone at the party is starting to slur their words, some are staggering, a few have already toppled over. You and I can’t stop it, all you can do is stay out of the way and watch the show.
    The only question is, who will be the last man standing at the suicide party?

  • roger erickson April 18, 2012, 1:51 pm

    “America is a great country. As with any business, its success is based on the balance of its assets against its liabilities.”

    Why isn’t the ability to organize interdependencies counted as an asset? In fact, the value of that asset absolutely dwarfs all other assets.
    USMC on Campaigning
    “we generate tempo by decentralizing decisionmaking”

    That’s why the following sentence is exactly backwards. “The only well-managed system there ever will be is one without any fiat.”
    That can seem true for small systems – where component value can compete with value of interdependencies. For large systems, value of interdependencies dwarfs value of actual components. [The piston is paramount in a 1-cylinder engine. The pistons in a 12-cylinder engine are useless without the tuning processes.]
    Fiat, as the direct representation of public initiative, is required for scalable cultures & economies. Populations can mobilize overnight, to do amazing things (e.g. WWII). When that happens, the impossibly slow charade of digging up gold reveals the flaw of yoking public initiative valuations to arbitrary commodity stores vs dynamic organizational ability.

    Read Ben Franklin’s very old essay on this topic. He nailed the essential items very well, in 1727. The right to have our own, fiat currency is exactly what triggered our Revolutionary War.

    “The Nature and Necessity of a Paper-Currency”

    • roger erickson April 18, 2012, 1:59 pm

      The real war, started as soon as the Revolution succeeded, was by banksters trying to keep us on a gold-std, where banking plutocrats could monopolize access to & price of methods for denominating our own transactions (i.e., fiat currency).

      Fiat currency is not the problem, it’s necessary for dynamic, scalable economies. Distributed vs central control of currency creation is the central limitation.

      Every necessary tool comes with benefits risks. They have to be used appropriately. Reverting to pre tool-use is not a viable option, unless – like chimps – you opt for life in a zoo, where life is “simple”.

      • Benjamin April 18, 2012, 2:49 pm

        Ugh… I must be in the wrong forum today. This is the forum for Rick’s Picks, right? Sure don’t look much like it. But I guess one can’t do anything but be in the Twilight Zone when they’re in it!

        Alright, Roger… We’ve got fiat coming out of our exosphere. We’ve not been on anything remotely close to a gold standard in over 30 years. So. Answer me this. Please. When can we expect everything to become the kind of fine you’re talkin’ about?

      • roger erickson April 18, 2012, 7:42 pm

        I answered this already, but Rick seems to have banned my first reply. Here’s a repeat:

        We’ll make progress when we control fraud. Read up on Bill Black (“Best Way to Rob a Bank is to Own One.”) Massive fraud existed on the gold std when we had a small population & economy. Massive fraud still exists now that fiat currency has allowed our tripled population to scale up a (what, 40x larger) economy? [Choose your metric to compare net output 1933-1012.]

        They’re separate issues.

        I repeat. Trying to repeal fiat currency is like trying to remove all tuning systems from a 12 cylinder engine. Try it.

        We have plenty of things to agree upon. Let’s not argue over something as lame as constrained vs agile public initiative.


        Other than posts flagged by Word Press’s spam-catcher and filters, it is only very rarely that I expunge a post — maybe two or three times a year. The process is automated, but if you post a message with several hyperlinks it is more likely to get trapped by the filter.

        I occasionally perform minor edits, as some of you will have noticed — mainly of misspellings and the incorrect use of the word it’s. It’s ‘its’ that should be used possessively, just as ‘theirs’ is correct, not their’s. RA

      • roger erickson April 18, 2012, 7:48 pm

        oops, meant 1933-2012 🙂

      • Steve April 18, 2012, 9:06 pm

        Roger, the response is way too narrow. With gold and silver Coin one could never be made a debtor in possession / tenant in fee by discharge of one’s hands work. Payment in Full, Extinguishment of Debt creating Liberty of Life and Property. Take your 1T, 1,000,000,000.00 in fiat notes and discharge it for land – the debtor is in possession as long as he pay the FEE.

      • Steve April 18, 2012, 9:06 pm

        Roger, the response is way too narrow. With gold and silver Coin one could never be made a debtor in possession / tenant in fee by discharge of one’s hands work. Payment in Full, Extinguishment of Debt creating Liberty of Life and Property. Take your 1T, 1,000,000,000.00 in fiat notes and discharge it for land – the debtor is in possession as long as he pay the FEE.

      • Mark Uzick April 18, 2012, 5:16 pm

        The “zoo” is the centralized control where you (Roger) wish to be imprisoned in preference to the complexity and uncertainty of having to make your own choices in the real world; but this “zoo” you crave to live in is not really a zoo that’s run by a kindly and compassionate zookeeper, but a herd pen where you’ll be fed and otherwise tended for until it’s your time for slaughter.

        Fiat money also exists outside of the control of the state where its nature and purpose are clearly understood to be counterfeit money, the purpose of which is to be a tool to defraud. When employed by the state, its purpose an nature are no different.

      • F. Beard April 18, 2012, 9:09 pm

        Fiat money also exists outside of the control of the state where its nature and purpose are clearly understood to be counterfeit money, the purpose of which is to be a tool to defraud. MarMark Uzickk Uzick

        Movie tickets are fiat; they are declared to be good for a performance and so they are.

        Government fiat is similiar; it is declared to be acceptable for taxes and so it is.

        What gold standard advocates desire is “fiat gold” which is hypocrisy. With a gold standard, it is not gold backing the value of fiat; it is the power of government backing the power of gold.

        Inexpensive fiat is the ONLY ethical money form for government debts (taxes and fees). The problem is that fiat is also de jure and de facto legal tender for private debts too.

      • Steve April 19, 2012, 12:20 am

        F.Beard, in private contract bull shist is money if both agree. Using the terms ‘by Right’ de Jure, and ‘in Fact’ de Facto does not make the Const., or the Case Law on High Treason for debasment, and fiat change. It only shows the bull shist in real terms.

        Government fiat is deemed to be a tally for territorial corporate enfranchisees to pay the fee. No Man is subject to an excise tax, only a corporate enfranchisee.
        The problem is always the garbage that happens in the jury pool and the abuse of Nash’s Non Co-operative Game Theory by idiots that are debtors in possession tenant in fee.

        Government fiat on a several State is High Treason.

        Are movie tickets declared money by the Constitution, or private contract and agreement between two parties?

        Always the horse shist.

      • F. Beard April 19, 2012, 12:57 am

        Congress has the right to coin money and regulate the value thereof. End of story.

        As for gold and silver, it is absurd on its face that they even be mentioned in so fundamental a document as the US Constitution.

      • Mark Uzick April 19, 2012, 4:39 am

        F. Beard, movie tickets are not money – they’re rarely even objects of barter – and even if they were, by market forces to assume the role of currency, they would be legitimate money – not money by fiat; there’s no state decreeing one to use them or accept them for payments.

        Government fiat is similar; it is declared to be acceptable for taxes and so it is.

        To define fiat by its acceptability for paying taxes is both wrong and misleading – its the requirement to use it without regard to one’s chosen preference by the arbitrary decree (fiat) of the state. Even gold backed money can be fiat money.

        As to taxes giving un-backed fiat money a kind of pseudo backing: it’s not comparable to the movie ticket that represents something people may value, fiat money and tax payments represent coercion by threat of punishment.

        What gold standard advocates desire is “fiat gold” which is hypocrisy. With a gold standard, it is not gold backing the value of fiat; it is the power of government backing the power of gold.

        In this case it actually is the gold that backs the value of fiat money; but you’re almost right that it is the power of the state that backs – not gold – the gold backed fiat as a required medium of exchange.

        Inexpensive fiat is the ONLY ethical money form for government debts (taxes and fees). The problem is that fiat is also de jure and de facto legal tender for private debts too.

        There is nothing at all ethical about fiat anything – be it fiat money, fiat law or fiat government (The state.)

        Just as the only ethical form of money is money by the consent of the traders, so the only ethical form of government is government by consent of the governed.

      • F. Beard April 19, 2012, 2:20 pm

        As to taxes giving un-backed fiat money a kind of pseudo backing: Mark Uzick

        It’s a very real backing; pay your taxes with fiat or be punished.

        it’s not comparable to the movie ticket that represents something people may value Mark Uzick

        Staying out of prison is worth a lot to most people.

        fiat money and tax payments represent coercion by threat of punishment. Mark Uzick

        Correct. So fiat obviously needs no other backing. The question then is why do some people seek an additional “backing?” Cui bono?

        Just as the only ethical form of money is money by the consent of the traders, so the only ethical form of government is government by consent of the governed. Mark Uzick

        Government is force. That force should not be exercised for special interests such gold owners and usurers. The real purpose of a gold standard is to deprive the government of its soverign right to create government money. Look at the Eurozone countries to see how well that is working out.

        The gold standard folks would replace government counterfeiting of private money with private counterfeiting of government money. That’s no solution. It’s just a different form of injustice.

        The proper solution is co-existing government and private money supplies per Matthew 22:16-22 (“Render to Caesar …”).

      • Steve April 18, 2012, 5:25 pm

        Actually Roger, it was Hamilton in the administration of President Washington that attempted to bring in British styled banking to put the People into debt so those people could be controlled by taxation and interest payments. The value of money is an exclusive legislative power in the hands of the People. The executive branch involvment in money is High Treason by standing case law. Debt is about control because the debtor is enslaved to the lender.

        The problem is corporate enfranchisees who have found out how to be task masters to enslave their own kind via fiat debt. Mobocracy runs on fiat, not Liberty.

      • roger erickson April 18, 2012, 7:47 pm

        And Hamilton succeeded, perverting Franklin’s fiat currency to a plutocrat-controlled system.

        Plus, you’ve got it completely wrong. The “value” of money is definitely NOT an exclusive, legislative power. The “supply of currency” is an exclusive, legislative power. Currency only denominates the real transactions that citizens execute, through private or public initiatives. Value of real goods/services always floats, regardless of a gold or fiat std.

      • Steve April 18, 2012, 9:00 pm

        Ignorance Roger, “Congress has the Power . . . To coin Money, regulate the Value thereof, and of foreign Coin and fix the Standard of Weights and Measures.”, Article I, sec. 8, cls. 5, Const. That right of the People extends back to case law that found the executive guilty of High Treason with a chopping of heads of the Chief Exec. The Right of the People extends back to the individual right to say what amount of grain he will trade for 1 ounce of silver.

        Note what coin and Coin, and Weight and Value mean as proper nouns in capital letter in the orginal text.

        What is left in agument is treasonous designs to overthrow the contract constitution, which is what the practicers of fiat do.

    • Steve April 18, 2012, 5:27 pm

      misplaced below:

      Actually Roger, it was Hamilton in the administration of President Washington that attempted to bring in British styled banking to put the People into debt so those people could be controlled by taxation and interest payments. The value of money is an exclusive legislative power in the hands of the People. The executive branch involvment in money is High Treason by standing case law. Debt is about control because the debtor is enslaved to the lender.

      The problem is corporate enfranchisees who have found out how to be task masters to enslave their own kind via fiat debt. Mobocracy runs on fiat, not Liberty.

    • Robert April 18, 2012, 6:00 pm

      “Populations can mobilize overnight, to do amazing things (e.g. WWII). ”

      You have made similar statements in the past, and each time I have asked:

      WHAT was so amazing about WWII…?

      The fact that we killed “them” and destroyed “their” capital, before they killed “us” and destroyed “ours”…?

      Good grief man. WWI and WWII were the most flambouyantly unnecessary acts of human hubris since the formation of the slave trade.

      War solves no problem. War merely makes the original predicament moot as it disipates beneath the weight of even larger predicament.

      2+2 does not equal five, and if you choose to fight me to the death defending that it does, and you manage (via luck or skill) to kill me, then that does mean that you get to “own” the truth….

      2+2 will still not equal 5, even after I’m dead.

      Mobilize and coordinate all you want- moral inferiority does not “earn” the respect of moral superiority via willful destruction.

    • roger erickson April 18, 2012, 7:32 pm

      “Mobocracy runs on fiat, not Liberty.”

      Correction. Mobocracey runs before, during & after both fiat & liberty. Fiat is simply a scalable tool of growing systems. Controlling fraud is a completely separable issue. Parallel tools exist to control systemic fraud.

    • roger erickson April 18, 2012, 7:35 pm

      “WHAT was so amazing about WWII…?”

      Again, a completely separable issue. What’s so amazing about any rapid innovation? There are always two, separable components. The ability to accelerate generation of innovations, and the ability to SELECT which to leverage, and how.
      You can’t accelerate selection without first accelerating something to select from. Wars just happen to be the most common trigger for rapid human innovation. Pick anything from the Pyramids to NASA if you prefer – instead of simply trying to change the subject.

    • Steve April 18, 2012, 8:47 pm

      Correction – mobocracy does not exist in the light of good.

    • Steve April 18, 2012, 8:51 pm

      Roger, Immutable Law – and the great minds like Chief Justice Marshal who said – if one does not believe in the Immutable Law the opposition will change the rules and change the rules until all shall be lost. I think Marshal paraphrased the Roger mobocracy theory.

    • Robert April 19, 2012, 2:21 am

      “What’s so amazing about any rapid innovation?”

      Again… You tell me.

      Is your life so much better than that of the WWII hero? Or do you subscribe to the fallacy that standard of living has anything to do with quality of life?

      Exactly what “benefit” is derived from innovation? it seems to me that the fallacy of infinite growth has merely turned humans into consumptive locusts.

  • mava April 18, 2012, 8:04 am

    Buster, nice article. Nicely written that is.

    But. I hate to rain on your parade. But, here is the thing. It’s a myth. This is what is more commonly known as the problem of unpayable interest.

    It is no less a myth than that the FED is owned by a bunch of wealthy individuals, banks, and not by the Federal Government.

    And not unlike the latter, the former was designed and placed into a public discourse with a purpose to get the public busy discussing mythical, rather than real.

    The interest you speak of, is paid by service, labor and product. Once rendered, it is turned into money and paid in leu of interest. There is no horror nor impropriety there.

    The horror and impropriety exists instead in the fact that the principal is created out of thin air. To loan properly, one must surrender it’s use of previously saved capital. Similarly, with the FED, the horror is not that it’s privately owned (even if it was so, but it isn’t), but instead in the fact that it serves to divert attention from the government counterfeiting our money into existence.

    • Mark Uzick April 18, 2012, 8:48 am

      Well said Mava: Buster’s premise amounts to an attack on Capitalism and trade with roots going back to biblical times and its prohibitions on interest and a morality that proclaims business, profit and self interest in general as evil:

      “I tell you the truth, it is hard for a rich man to enter the kingdom of heaven. Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.”

    • F. Beard April 18, 2012, 11:14 am

      and its prohibitions on interest and a morality that proclaims business, profit and self interest in general as evil: Mark Uzick

      1) The Bible permits the taking of interest from foreigners.
      2) Profits are good in the Bible; profit taking isn’t.
      3) The Parable of the Talents (Matthew 25:14-30) praises business activity and condemns hoarding.
      4) Matthew 22:16-22 hints at the solution to the money problem – coexisting government and private money supplies.
      5) The Bible does not condemn self-interest; the Bible advocates wise self-interest.

    • Mark Uzick April 18, 2012, 12:19 pm

      F. Beard, you can find support for just about anything toward which you are predisposed to believe in the Bible – from free-market capitalism to communism – all believers are certain that God is on their side.

      I’m not advocating any particular version as the the authentic one; I’m only pointing out the roots of the anti market sentiment that culminated in socialism, not whether these roots are the true faith or whether they represent your particular theology.

      BTW: Your interpretation is far from the most free-market supporting that I’ve heard; from my perspective I’d call it middle of the road.

    • F. Beard April 18, 2012, 6:22 pm

      you can find support for just about anything toward which you are predisposed to believe in the Bible – from free-market capitalism to communism – all believers are certain that God is on their side. Mark Uzick

      The more I read the Bible, the more I find it to be consistent.

      I already find it to be very consistent including wrt economics.

    • Robert April 20, 2012, 3:43 pm

      “The Bible permits the taking of interest from foreigners.”

      -What is a “foreigner” exactly?

      A person, right? and when the entire world unites under the common God, will there not be any “foreigners” left?

      Who will pay the interest?

      Buster is right, yet again.

    • Buster April 21, 2012, 11:51 am

      A very valid point, Mava. It’s obviously not as simple as the essay abbreviates to, I know.
      I surmise that in our current system, all money is borrowed into existence from the Federal Reserve corporate entity, which could be owned by either private or Federal hands without changing the issues necessarily. This imaginary money accrues interest which is paid to the Federal Reserve. If this interest is hoarded, rather than spent back into the economy by the Fed then we have the scenario as described in the essay, which would inevitably require ever more debt increase or face the consequence of the money supply drying up entirely as it would all be paid out of the economy as interest, yet still leaving the debt owing, AKA bankruptcy. The Fed therefore has absolute power over the economy in that it has the monopoly on the money supply at source & also because it decides whether to hoard the accrued interest it receives for the money it creates out of thin air, or not. I’m unsure if it’s possible to find out whether the Fed has hoarded it’s interest, as it refuses to be audited despite calls by wiser representatives such as Ron Paul, which is rather odd if the Fed is owned by the government isn’t it?? & due to the complexity of fractional reserve banking it would be difficult or even impossible to calculate. Some, I think wrongly assume that we must include the monetary value of all assets in the calculations, but as I understand it, this must be worked out on a purely ‘monetary’ level, to quantify the money that’s come out the doors of the Fed compared with that which has gone back in the doors to the Fed, so to speak. Lesser Banks hoarding money is bad enough but does not have the same critical importance as the Fed doing so, as it alone is the gatekeeper to the ratio of the total money in & out of the economy.

      I’m hoping that someone (Shadowstats maybe?) more knowledgeable in these matters may be able to shed some light on the subject, but I suspect that if Ron Paul can’t get the answer then it’s well hidden for good reason. However, all I can see are debts as far as the eye can see with the accompanying slave status it carries, as Steve has well described, so I suspect hoarding is the very deliberate practice. Even lesser banks could afford to hoard indefinitely if given zero interest loans from the central banks. This is all very important to fully understand the predatory nature of our system.
      As for the government itself being the real culprit, America had a short time with a debt free money system issued by the government which, history shows, as being a time of unbridled prosperity. According to the historical records the international Banksters were very worried that America would become so powerful that it would eventually threaten their monopoly on European power through their debt based system of money creation granted them by contract with the rulers of those lands. That is why they set about installing a debt based monetary system in America at any cost. These issues appear to be so well supported by historical & current evidence that I can only conclude as I have done on these matters. I suspect the disagreements over the facts are superficial when we all look at them soberly. I suspect that government issued debt free money could work well enough in principle provided government was incorruptible, but where on Earth could we hope to find such a government?? Who would be incorruptible enough to lead such a government & have the power to defend it from failing ideologies like Communist Fascism or Corporate Fascism, even disguised as Free Market Capitalism.
      Now we start to see why we don’t have a free market economy that realises abundance for all.

      BTW. Getting paid a return on investment is not the problem Biblically. Creating a monopoly of the money supply & deliberately causing the bankruptcy of the productive elements of society in order to steal everything certainly is! If any wish to support this sort of system they are free to do so for yet a while longer. Just please step to the left side & take a seat.

  • Mark Uzick April 18, 2012, 6:22 am

    I believe that Buster is wrongly placing the blame for a fiat money scam and the other abuses by the state and of the state by its insiders/cronies on the idea of credit creation: a perfectly legitimate activity that has been perverted and abused by the state.

    As long as borrowed principle is put to productive use the supply of money could grow while its purchasing power remained stable or even increased. This is what can happen in a well managed fractional reserve gold standard*, but it will only be prudently managed when the borrowers, lenders and depositors/investors act privately upon their own behalf and bear the responsibility/risk of their miscalculations.

    You may ask, “So where does the gold to pay back this phantom/credit based principle come from, as only the principle is loaned into existence?”

    It comes from peoples earnings and savings, leaving less gold in the hands of the consumers and a surplus in the hands of the investors and creators/producers, while driving down the cost of living as gold goes into shorter supply and products become more abundant/improved. This is how deflation creates a higher standard of living and channels capital into the hands of the most productive among us.

    Those who are risk adverse can simply store their gold in a vault or pay a fee to a bank to keep it in a checking account from which the bank cannot make loans; even they will become wealthier from others’ risk taking as their gold’s purchasing power increases.

    * There, of course, may be other forms of money competing with and complementing gold.

    • Benjamin April 18, 2012, 9:19 am


      There is no need for this “well-managed” system you elude to. Starting in the simplest possible way…

      Some entity gives me some paper as a loan, so that I can begin a new venture. I’ll have to use this paper, of course, to buy the things which I need to begin. So my suppliers take the paper. Come time to divvy up the profits, they’ll surely get less gold than the entity whose only job was issuing the paper. And for the sake of argument, let’s say that there’s no government whatsoever to tax me.

      So the exact opposite of what you described would occur. Producers wouldn’t wind up with all the gold. The thieving issuer of paper would. And just as I’ve been saying for some time, the central banks are very rich with real money. You can easily find a picture of the NYC Fed vault, for example. They’ve been busy stealing it while governments were busy accepting and enforcing greater powers (through fraudulent funding), and while the people have been busy being divided and conquered.

      The only well-managed system there ever will be is one without any fiat.

    • Mark Uzick April 18, 2012, 10:35 am

      Benjamin: So my suppliers take the paper. Come time to divy up the profits, they’ll surely get less gold than the entity whose only job was issuing the paper.

      How can you make a blanket statement like that? What do you know about the profit margin the suppliers work on? and what do you know about the interest differential that the issuer of fractional reserve notes of credit works on and the bad loans that they have to make good on out of their working capital and all their other overhead? These things are not your responsibility to oversee – they will be worked out in a dynamic, competitive marketplace.

      The only well-managed system there ever will be is one without any fiat.

      That’s what I said; this and everything you said leading up to it indicates that you haven’t done more than skim what I wrote. Please read it over and when you understand it (I hope.) then be kind enough to let me know if it’s my fault; whether my writing is as indecipherable as I sometimes fear.

    • Benjamin April 18, 2012, 12:24 pm

      “That’s what I said”

      You, know about had up to HERE with your games of “I didn’t say that, I said this”. Every single we time cross paths, you retract what you plainly say and pretend you said something you didn’t.

      “I believe that Buster is wrongly placing the blame for a fiat money scam and the other abuses by the state and of the state by its insiders/cronies on the idea of credit creation.”

      “As long as borrowed principle is put to productive use the supply of money could grow while its purchasing power remained stable or even increased.”

      So everything would be just fine if we do the impossible, which is to seperate the siamese evils of abusive government and central bank.

      As for the rest of your defensive and puerile response… you ain’t got a clue why I was saying what I did, nor of the indisputable history which proves it. The sun failed to set on the British empire for the simple reason that they used brute force to rake in real wealth to support their bogus Mark system. GD it, Mark, that’s what the Revolution was fought for! And let’s not forget all the other rebellion that eventually allowed the sun to finally set on British empire… and “shine” on the U.S.

      Those were the central points of the article, in other words. But no. You strip those away and try to make a side-show THE feature. So not only do you too frequently “not say that!” you like to ignore what others say and try and place your own words in their mouth.

      You’re an insufferable @ss.

      Anyway, sorry about that explosive response, folks, and especially to the guest commentator.

    • Mark Uzick April 18, 2012, 4:22 pm

      Benjamin: So everything would be just fine if we do the impossible, which is to seperate the siamese evils of abusive government and central bank.

      And where pray tell us have I said that a well managed fractional reserve gold standard could involve a central bank?

      If it is too difficult for you to comprehend that a fractional reserve bank can be anything other than a central bank the very next words are:

      …, but it will only be prudently managed when the borrowers, lenders and depositors/investors act privately upon their own behalf and bear the responsibility/risk of their miscalculations.

      Didn’t I already warn you that you skim were you should read? or did you miss that too?

    • Steve April 18, 2012, 5:13 pm

      Mark, the state did not do anything in regard to money. The original several States are not involved at all.

      It is the people who have chosen the easy way of having the federal government be their father/god under territorial powers as I stated above.

      Once Men choose to give up responsibility for the security of territorial power/creation the masters of manipulation use theory like Nash’s Non Co-operative game theory to make it very hard to be honest and moral, and very easy to play the “game” with the immoral who choose to make everyone just like their immorality. It is called democratic practice/principles where the will of the masses overcomes the Rights of the Individual via infringement.

      Fractional reserve banking is infringement just like the jeweler shaving coins is historical infringement (called criminal intent). The history of money went from the owner holding his Coin to a jeweler putting the money into a safe to give the owner security. Jewelers became bankers, and the first legislative acts were to put ridges on the edges of the Coin to stop shaving. Then the jeweler/banker figured out he could lend move than he had in ownership by contract with the Coin depositor, or bailor of depositum. The banker owns the Coin under a contract to return the Coin to the depositor. Bankers being what they are figured they could lend more notes than they had Coin in house/safe thereby making interest on Coin that did not exist. The scam continues and I do not believe I need to explain more in regard to valueless notes printed into existence to make it easy to convert a Man into a debtor in possession based upon use of debt, instead of ‘saved value’.

    • Robert April 18, 2012, 5:45 pm

      “it will only be prudently managed when the borrowers, lenders and depositors/investors act privately upon their own behalf and bear the responsibility/risk of their miscalculations.”


      Divinely inspired wisdom- completely impossible in a practical sense.

      The negative consequences of bad decisions are SUPPOSED to be socialized, because a million people paying higher taxes is somehow morally superior to 999,999 stable people, and one bankrupt person.

      This is the reality you exist within. It is foundationally flawed, and some might say absolutley stupid and possibly even evil; but it is what it is. We live on Prison Planet. You are either an inmate, or you are a jailer- the choice is yours (As your simple and elegent statement above demonstrates).

      I agree that it is unfortunate that the VAST majority of people don’t understand that they have the choice to shed their shackles, but education bears no cost but the burden of time.

      The words you speak above are truthful in premise, but ugly in practice (since they yield poverty for the less “enlightened”); and history teaches us that given the choice of embracing a beautifully formed fallacy versus an ugly truth, the social contract always favors the lie, and on this particular subject, the lie is so appealing to the sentimental aspect of our being that it is nearly un-conquerable.

      Everyone can be equally happy; so long as everyone also suffers equally…. The basis of Utopia.

      People fail to recognize that any amount of suffering is antithetical to any degree of happiness.

      What you know to be the truth must be the foundation for how you conduct your affairs. To attempt to extend this simple logic onto a social scale, however, yields an unfortunate ugliness that will not be ignored by the empathetic psychology of the social brain.

      I share your philosophy, and I also share your desire (and Buster’s desire) to share what we see as a simple truth, but I am not so passionate about attempting to re-introduce the world to the common law.

      Better we should focus on the lesson, lead by example, and let the bane of evility self destruct (as it must); While we maintain the discipline to walk through a field of social zombies understanding fully what it means to be truly alive…

      Now if you’ll excuse me, I have to go polish the bars in my cell… 🙂

    • Mark Uzick April 18, 2012, 6:06 pm

      Steve, fractional reserve banking isn’t a fraud unless it’s represented to be UN-leveraged safekeeping of client’s money.

      If savers want interest income they must be willing to take some risk, in which case they are not really savers, but investors. Their deposits, known as CD’s, would be something akin to bonds where the bank held capital reserves to cover losses which would bear an interest rate in proportion to the risk of the borrowers and the reserve leverage employed by the lender. Gold certificates issued by banks making risky loans or using too much leverage may be rejected by vendors or valued on a discounted basis.

      I don’t know whether fractional reserve banking would be popular; only the market and the creativity of the vendors of money in a competitive market-place can determine that outcome.

    • Mark Uzick April 18, 2012, 6:35 pm

      I’m not sure if my terminology’s correct but sometimes I’ve referred to “fractional reserve banking” as when banks loan out time deposits while keeping a reserve against losses and other times I’m referring to the issuance of gold certificates only fractionally backed.
      Can someone tell me if this is the correct phrase for both of these distinct activities?

    • Steve April 18, 2012, 8:24 pm

      First Mark, the Law prohibits charging any interest to your brother, and there must be the 7 year (bankruptcy law) and 50 year Jubliees. Foreigners, like u.s. corporate enfranchisees can be bilked by interest and fractional reserve territorially.

      My understanding of fractional reserve banking originated with the Jewelers who found that they could gain more interest by loaning out notes for more numbers of Coin than they actually held in the safe. The jeweler calculated the risk of criminality by making a guess in regard to how big a run on the actual assets he could survive. The end line is that the Jeweler made interest on Coin he did not hold (in fact did not exist) by lending FRAUD NOTES. Jeweler can now make 3% on the actual Coin that is only legitimately able to earn 1% by fractionally saying he may produce a 3 Dollar note on assets of 1 Dollar held in his safe. The Jeweler bet that the run on actual Coin would never exceed 2.99. Jewelers got hung sometimes years ago. Now, a private bank is the jeweler and congress is paid its graft to enlist task masters to enslave their brothers with debt and turn Liberty into tenant in fee, debtor in possession while taxing corporate excise 1040 @ 30%. Nice scam.

      At least the Jeweler had 1 ounce of Gold in the safe. The fiat system of the federal reserve has nothing of its own in actuallity upon which to base a fractional loan. The only assets held by the fed are held by fraud in discharge for a debtor in possession based in notes it issued itself to steal Liberty just like Hamilton envisioned.

      Selling interest on something that the Jeweler never held is as clear a fraud as exists. Nothing new here with the federal reserve and a banker/jeweler who borrows 10 from the private bank to lend upon the 1 depositum of a corporate subject. The 10 are lent on interest to another subject establishing a “Loan Asset” with the bank of 10 which allows the bank to borrow 100 which can be lent at 100 x interest all based upon 1 depositum – sounds like fraud to me.

      Let us clear the point. A deposit into a bank is a bailment under contract. The jeweler/banker now owns the Coin under a contract to return the bailment at the contract terms to the depositor. Depositor only owns a contract with the bank. Bank owns the bailment of money.

      Fiat money by its very nature is fraud because it is based upon nothing of value. Continentials were given on full faith and credit to the farmers. The famers needed money to operate, so sold their notes to the Bankers, ie; Hamilton, at a loss because of the need for immediate cash to keep from loosing the farm. The bankers knew the notes would eventually obtain full value and thus “speculated” by misrepresetation to take advantage of the disadvantaged common man. Is there anything new?

      If broken down to its simple form isn’t the government simply using debt to enslave the People, again as the British styled banker Hamilton envisioned? Doesn’t the government use every known abuse like Nash’s Non Co-operative Game Theory to compel one to a loss of Liberty voluntarily because one cannot get ahead without debt fraud?

  • Jill April 18, 2012, 5:07 am

    A psychological view of what leads these folks described in the essay to do what they do:


    • Buster April 19, 2012, 10:11 am

      An excellent link indeed, Jill.
      Very insightful.

  • Benjamin April 18, 2012, 4:24 am

    [Standing applause]

    Great article, Buster! But I have a question and a point to make regarding the following quote…

    “Simply put, due to the fact that only the principal is borrowed into existence, not the interest, the result is never-ending debt allowing that the real wealth […] to be taken for free by those in “the club” via theft or fraud.”

    I don’t really know if they don’t borrow the interest into existence. Does it really matter, though? I mean, that borrowed interest-money would surely come with it’s own price tag.

    • Steve April 18, 2012, 4:56 pm

      Ben; 1 federal reserve note borrowed. Interest owed @ say .05. Need to borrow another federal reserve note to pay .o5 leaving 1.95 which now owes .0998 at the end of the next year which requires the borrowing of another note. This all leaves 3 principle notes owing and less than 3 in hand because of interest paid.

  • SJB April 18, 2012, 3:59 am

    Don’t miss Rick Ackerman’s interivew with Kerry Lutz, over at Financial Survival Network..


  • Jill April 18, 2012, 3:48 am

    Thanks, Buster, for your essay. That was elegantly simple and simply elegant.

  • John Jay April 18, 2012, 3:43 am

    Very nice piece of work.
    The only thing I would add is that we are now in uncharted financial territory. In the other paper money induced inflation incidents since the American Revolution, there has always been a precious metal backed currency to measure the fraud against. The American Continental, French Assignat, Union Greenback and Confederate dollar all were able to be compared to the British Pound Sterling. When Britain and especially Germany committed financial suicide in WWI, the US Dollar was there to showcase the Weimar hyperinflation. Ditto for all the South American inflation States. Now the entire world is on a fiat printing/debt binge. The Swiss Franc was a potential port in the storm, but they wanted no part of that! Bad money drove good money out of circulation for sure.
    Gold and Silver are a good way to track the insanity, but no country uses it to back their currency, the world financial system can’t take the strain. I doubt if even the guys pulling the strings at all the central banks really know what the hell they are doing. This time, there is no Pound Sterling, and trade deficits have not been settled by shipping gold bullion country to country for a long time. Very hard to predict the solution to this simultaneous equation.

    • Steve April 18, 2012, 4:51 pm

      JJ, Call the Mint and ask about the Dollar, in silver specie money. It should be very clear that the value established by Congress in the word Dollar is still very much in place. With this legislative value I can judge that a federal reserve note is valueless even though the perception is that said note is 3200% less than just 50 years ago. The big number is much more real than the accountants saying that there is less than 2% inflation. Infringement – a word chosen carefully by the Framers of the Constitution.

      Then take Article I, sec. 1o, cls. 1 of the Federal Constitution to establish that no several State on Equal Footing can use federal reserve notes, nor can the Citizen on one of those several States make a use of fiat fraud.

      It should be easy then to see the voluntary choice to enter federal territory where ‘the congress’ [created in 1867] is allowed to practice territorial powers exterior of what Congress set for the several States in union. The congress is allowed to slave and do anything they wish in the district of Columbia, and territories pursuant to Article I, sec. 8, cls 17, and/or Article IV, sec. 3, cls. 2 Const. The end game was creating by legislative act creating an inferior federal subject citizenship, and then using federal territorial powers to make using fiat as a territorial subject the easy way.

      Easy is never good when it comes to money. Easy means that slowly the enfranchisees have given away their inheritance to land in exchange for a fee for security of a new corporate world called democracy where the will of the masses overcome the Rights of the Individual.

    • rickj April 18, 2012, 8:12 pm

      Steve; thanks, your article is more accurate.

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