Jere L Hough
What wrong with our economy? Why are we having a financial crisis? What is wrong with our money?
This is the defining, yet widely suppressed, issue of our time. It is one that is rarely discussed, even in progressive circles, much less mainstream print, video and talk media.
Until people, especially the world's leaders at all community and governmental levels, correctly perceive the monetary fraud that has been perpetrated upon us all, the situation will continue to worsen to the point of self-destruction, resulting in incomprehensible waves of catastrophes throughout the world. This is not just a national problem. It is global in its reach and scope. And it is urgent.
The question of what is wrong with the worldwide economy cannot be answered without examining the heart of all economic issues: money it's nature, function and defining characteristics and proper roles in societies and civilizations.
The power of money, money creation, regulation and definition is the ultimate worldly, or temporal, power. Its proper use and definition can result in the most powerful creative force for good on the planet. Likewise its misuse or abuse, along with deliberately false concepts about money can be as equally destructive a force as it can be a creative one.
We are living in the end of an age of the abuse of the power of money and the mal-distribution of land and resources the basis of all wealth. The curtain hiding the mechanisms of control is being slowly opened, and the "Wizard of Oz" (oz. = an ounce of gold) is being exposed for the charlatan and illusionist that he really is. The long-concealed identity of "the man", "the powers that be" and "the establishment" is being revealed, largely via the power and freedom of grassroots Internet communications.
Are we ready to deal with that? Can we handle the truth? I truly hope so. The consequences of failing to identify and correct the problem on the causation level are too unpleasant to consider.
So here is the unpleasant truth:
Our entire worldwide banking and financial system is a fraud, from top to bottom. The higher up one looks the more fraudulent and deceptive the institutions and the individuals that run them. Yes, I am referring to the IMF, the World Bank, the BIS, and all national and continental central banks, including the European Union. They are as corrupt and criminal in their enterprises as Bernie Madoff was in his. In fact, there is little difference between them, except for the scale of the criminal enterprises themselves.
By "criminal enterprises" I am referring specifically to "Ponzi Schemes". They are all illegal, fraudulent, and designed to funnel money up a pyramid to the beneficiaries at the top, not be creating a legitimate product, but be the mechanism of unlimited expansion and growth. This model is, of course, unsustainable, and therefore the fraud is that at some point, like all Ponzi Schemes, it must collapse like the house of cards it really is.
The only way the average person can understand this, if they can ever indeed get their mind around it, is to expunge the myths about money that now permeate our worldwide economic civilization. These myths could not have any power over us if they were not constantly and incessantly drummed into our consciousnesses from every major educational and informational institution. So it should go without saying that nearly all major schools of economic thought and monetary policy are a part of the system of deception, knowingly or not. Our leaders, senators, congresspersons, ministers and financial experts are either ignorant or feigning ignorance about the realities behind money.
This situation is not an accident. Nearly 300 years ago, a letter from the Rothschild Brothers of London observed:
"The few who can understand the system (checks, money and credits) will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class, while on the other hand, the great body of the people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interest."
The writer was speaking of the fractional reserve banking system, and it is the "fractional reserve" part of the system that both "creates" new money out of nothing, and accounts for a good portion of the "Ponzi Scheme" aspect.
But what, exactly, is this "myth" about money of which I speak? Well, actually, there are a whole hierarchy of false concepts and deliberate mystifications about money that are perpetuated to keep the Ponzi Schemes afloat. And by "afloat" I literally do mean "a float" in the sense of a check floating or kiting scheme, where an individual's overdrawn bank account can be falsely made to appear to have a large positive value or worth simply because of the time delay involved in clearing checks or other drafts or deposit instruments.
The first myth, and the most important, is that our money comes from the US Federal Government, via the Federal Reserve System, widely supposed to be a federal agency, or at least a "quasi-governmental" agency that operates under meaningful congressional oversight. None of that is true.
The second myth is that money must be made from, or backed by, some form of tangible commodity or asset, most commonly a precious metal, like gold, silver, platinum or bronze. It is held that money should be "redeemable" in terms of the underlying asset, or its equivalent. Paper money, or "fiat money" (as paper money is often mistakenly called) is the problem, we are told. Again, totally untrue. Rather than be part of the problem, if anything, "fiat money", or money by decree or force of law, is a part of the solution to the problem, in conjunction with other elements. When only gold or silver are money, the only persons with money will be those with gold and silver, and that takes us back to be beginnings of our current economic crisis. Gold and silver are wealth not money, and wealth and money are not the same, although they are generally conceptually confused. Much of this confusion has been deliberately promulgated by those who benefit from the confusion the bankers and financiers.
The third myth is that money and credit creation should properly be in the domain of "private enterprise" and that governments should no be trusted with the awesome responsibility of creating or regulating money. This has been the war song and drumbeat of the money-masters for centuries, and has been sold to an unsuspecting and ill-informed public by by educational and informational media and institutions. The well-concealed truth is that private institutions (banks of issue) have been as bad or worse at managing the money supplies of various societies as governments (generally monarchs or other unelected rulers up to the time of the modern central banks) were. The Federal Reserve System was sold to congress, among other ways, as a way to end the repeated catastrophic cycles of boom and bust, prosperity and depression. It was supposed to end the money and credit contractions that accompany all recession and depressions. That was it main reason for being. It has been a miserable failure at mitigating such cycles, and is rather the probably cause of them, or at least a main cause.
These myths and distortions about money allow the illusion, indeed the entire Federal Reserve "Ponzi Scheme", to continue undetected by all but a rare few. Fortunately for mankind, the rare few are beginning to awaken others, and the small minority of those awakening to the real truths about money are growing.
Once one realizes that all money really is is an accounting system that needs debits and credits in the proper amounts to allow for full employment, near capacity production by farm and factory, and the easy flow of goods and services throughout the economy things begin to come into proper focus. Money, in reality, is little else but an accounting tool to keep the flow of goods and services moving smoothly, and allow labor to be exchanged for those goods and services.
In other words, money is a social construct, or an abstract idea about how to keep track of our debits and credits in a sane and balanced way. Money is a legal instrument, a creation of law or "fiat" (by edict of law or decree). Aristotle was aware of this fact over 2300 years ago when he observed that nomisma, or money "is not to be found in nature, but in law"(1) The Greek word for law was nomos, thus "nomisma", or money, was such because of the law.
A careful historical examination of "Colonial Script" and even the later Civil War Era "Greenbacks" issued by Lincoln reveal the success of these currencies. The war against the US Colonies was more about preserving the Bank of England's money monopoly than anything else. Taxation and tariff issues were subordinate issues that most people could understand, while the money issues were abstract and difficult to comprehend. When Ben Franklin toured England explaining the benefits of Continental Script over the British Pound Sterling, the response among banking circles was alarm and even panic.
Here is one article from a British newspaper at the time:
"If that mischievous financial policy, which had its origin in the North American Republic (U.S.), should become indurated down to a fixture, then that Government WILL furnish its own money without cost. It WILL pay off its debts and be without debt. It WILL have all the money necessary to carry on its commerce. It WILL become prosperous beyond precedent in the history of the civilized governments of the world. The brains and the wealth of all countries WILL go to North America. THAT GOVERNMENT MUST BE DESTROYED OR IT WILL DESTROY EVERY MONARCHY ON THE GLOBE." (2)
Ellen H. Brown, in her plain-spoken book, Web of Debt, gives the best explanation I've yet seen on our money problems, and how to fix them. Although there are many roads to monetary reforms that will vastly improve our individual and collective lives, these are the key government reform actions I consider essential:
Transfer the power to create and regulate money back to the public domain, i.e., to congress, and a government treasury, as our Constitution originally intended. This involves rescinding or annulling the Federal Reserve Act of 1913, and its subsequent amendments and revisions, and Federal Reserve Bank Charters.
Create a federally owned and operated Central Banking System that is fully and immediately accountable to the public electorate, to create replacement money for the current Federal Reserve Notes now in use. On a per capita basis money for needed roads, bridges, schools, public utilities, and other public infrastructure could be created and spent into existence for essentials, or loaned at low interest to optional or non-essential public projects.
Gradually eliminate the fractional reserve system from state and local banks and credit unions by raising the reserve requirements for making private loans.
Demand complete monetary and market transparency and insure an independent banking and market regulation authority exists that is free from bribery, influence or control by private bankers and banking institutions.
We have to awaken to the fraud that "laissez-faire" economics and "free-trade" policies have perpetrated on us, and the catastrophic abyss they have brought us to. Like lemmings we can continue over the fatal cliffs, or like rational thinking human beings, or more properly, human becomings, we must either perish from our mistakes or learn from them. Which will it be?
Government, even big government, is not the enemy, contrary to the massive propaganda barrage of the past few hundred years by the private bankers and the other beneficiaries of privately controlled money and credit. The only real enemy is unchecked monopoly power. Our founding fathers used every fiber of their beings to instill this truth in us, and we have still been persuaded otherwise. At least the majority of us have been persuaded not to look honestly at the truth about money, banking, and credit, and accept self-enriching illusion for the elite few as our reality. It need not, and must not continue.
Think for just a moment of the enormous benefits of money reform to society. Think about the huge proportion of the $ 13 Trillion national debt that is mostly interest owed to US creditors because our government is now borrowing its money into existence rather than by simply creating it interest-free. Carry this down to the the state and municipal levels of government and commerce and imagine the tax reforms that could be possible. Income taxes, for example, could be all but eliminated. In time they could be eliminated or replaced by fairer, more just forms or revenue collection. Any tax on wages and ordinary income derived from ones labor is blatantly unjust.
In summary, our current money and credit system is now owned and operated by and for the benefit of private national and international central bankers and their private member banks and the other large corporations that feed on the high profits from the current scheme. The keyword here is private. All logic and reason agues against this injustice. Money and credit should be considered community social enterprises that facilitate private trade and commerce at all social, economic and government levels and should be redefined as such.
Our current system is unsustainable. That which cannot be sustained must end, and we are witnessing that end unfolding now.
We, as a society, have two options. We can rectify past mistakes and make emergency corrections to a dysfunctional system of money, credit and finance, or we can watch the disintegration and destruction of the current system, which in reality is just another far greater and grander Ponzi Scheme, and rebuild a better system from the ashes of the old one. The latter option is not the more desirable of the two.
We don't have the luxury of procrastination. The current system is rotten to its core, and is disintegrating even as we speak. The issue is how much of our current economic system can and should be saved, and what can be changed while there is still time to do so.
Future generations of humans becoming will ask what we did to bring us to economic ruin, or to an alternative and prosperous reality.
How will you answer them?
1. Aristotle; Nicomachean Ethics, Pp 112)
2. The London Times, quoted in Money Creators - Gertrude Margaret Coogan, pg. 217
Recommended reading and viewing:
MoneyMasters: click here
Money as Debt: click here
Web of Debt: http://www.webofdebt.com
The Lost Science of Money - Mythology of Money & Story of Power: http://www.monetary.org