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All of our money comes from debt to private banks -- banks that try to make it look like governments are at fault for their countries falling so heavily into debt. The truth is that banks take the profits that could have been used to better maintain the society if only the people's money was issued by governments through state-owned banks, as was the case, for a time, in both Australia and the US.
What private banks have set up is actually the world's largest pyramid scheme, in which new people must always be going into debt in order that others obtain the currency they need to function within the economy. Within such a system, total indebtedness must continue to increase in order to provide the money that people need in an ever more productive society.
Solution to this problem
We need a grass-roots money-reform movement to take banking away from private interests and put it back in the hands of government -- initially at the state level and eventually at the federal level too. Indeed, North Dakota has very profitably run a state-owned bank for nearly a century, and not coincidentally is the only state in the union that has survived the recent recession unscathed, with the lowest unemployment rate in the country. And now there are five other states that are in the process of passing legislation that will pave the way for state-owned and state-managed banks. Quite naturally, however, banksters are spending big bucks to try and stop this movement -- they don't want to lose all those billions of dollars of easy profits that would suddenly be transferred over to the citizenry as a whole, were it no longer siphoned off by banksters.
During the Civil War, Abraham Lincoln had his government issue a new currency called Greenbacks, but after he was assassinated the banksters saw to it that this practice, so very costly to them, was stopped.
Sometime later, farmers and
factory workers banded together and formed a movement of monetary reform. Thousands joined it and in 1894 they marched
from Ohio to Washington,
D.C., to popularize their cause and to
petition Congress to go back to Lincoln's
greenback system of federally issued currency, which they thought should
replace the private bank-issued currency to which the country had regrettably
returned after Lincoln's
tragic death.
This struggle, between whether the private banks would continue to issue all money, or whether the government would once again take over this responsibility (thereby greatly increasing the money supply while also capturing all the profits to be made from interest on bank loans), was a major issue of the day and was even represented in a fable originating at that time -- the Wizard of Oz, in which the Tin Man represented the factory workers of the country, and the Scarecrow represented the farmers. And so it was that in the fable the two of them marched off together to the capitol to seek redress for their grievances from a little man -- the wizard -- who operated behind a curtain, twisting knobs on secret machines that almost no one understood or even knew existed -- a metaphor for the mysteries of fractional reserve banking and the various scams and pyramid schemes that bankers have long used to separate the rest of us from huge sums of our hard-earned money. (And then they have the gall to claim that it's the government's fault for being so heavily in debt -- when, if the government were the one to issue our currency, it could never be in debt.
Governments have the sovereign right to issue currency, but the world's bankers have for so long paid for and manipulated the members of government, that few governments ever do issue their own currency. And if they do, they are often not allowed to do so for very long. So why does the citizenry tolerate this? It's because the banksters have done such a superb job of conning them into believing that it would be wildly inflationary for governments to issue the currency society needs.
In reality, the banksters simply don't want to lose the extraordinary profits that follow from their ability to create money themselves, simply by providing loans by writing a certain amount of credit into the account of whatever company or government they are dealing with. Banks never loan out their own cash or even the cash of their depositors; all they do is write a certain amount of credit into the account of anyone taking out a loan. And when that company or government somehow acquires the money with which to pay them back (with interest of course), the bank is that much richer with the new money that has been magically created out of indebtedness.
Note: The actual cash is printed up as required by the Bureau of Engraving and Printing. If a bank's demand for cash rises, they go the Fed and ask for more of these paper notes (cash), and the amount is deducted from the bank's "cash reserves." All banks are required to carry a certain minimum amount of "cash" on their books -- called reserves -- to meet demand from depositors who want to withdraw funds. Those withdrawals can be paid with a check, electronic transfer or with paper currency. And when banks have more paper money than they need, they send it back to the Fed. That amount is then added to the banks' "cash reserves." (In effect, the pieces of paper are replaced with electronic bits in the bank's computer system.) The Fed also controls the size of the nation's money supply.
Hence the web of (bank-generated) debt that binds us all, from which some people (the banksters and those whose political campaigns they fund) say there is no escape.
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Last January, when Obama sided with Paul Volcker's plan re-impose the Glass-Steagall Act, which would have led to a kind of breaking up of the big banks -- they would have had to separate their investment/gambling operations from their traditional banking operations -- the stock market began to fall apart, almost as if it had been prompted to do so by powerful actors operating behind the scenes who wanted to send a message to Obama and the nation: "Don't bring back Glass Steagall, or else!"
Also consider the day of May 6th, earlier this year, when the audit-the-Fed bill got the guts cut out of it. What might have prompted Congress to lose its nerve? Answer: There was a sudden, thousand-point drop in the Dow, which no one could explain, which once again begs this question: Are there persons unknown, operating behind the scenes, who can cause such things to happen when they want to deliver a message regarding pending legislation that might 'rob' the rich of the proceeds from their favorite scams? Then too, also on that day, there was the proposed Brown-Kaufmann Amendment that would have broken up our nation's six largest banks. It was rescinded after the mysterious thousand-point drop. Coincidence? Perhaps not. Perhaps a message was being delivered: "Don't mess with us; this is what we can do to you."
Do we finally have legislation in place that will prevent another economic meltdown?
No, there will be no such prevention until the big banks are no longer "too big to fail." This means they need be broken up one way or another. They either have to be nationalized the way the Swedes nationalized their banks when those banks got into similar trouble, or they have to be taken into receivership, re-staffed with government-appointed executives, reorganized, repaired, with their books cleaned up (i.e. toxic assets sold for whatever price can be gotten), and then, eventually, the banks would be sold back into the private sector.
