The Rule of Law in the Economy and Unsound Money


Juan Castañeda talks to Alasdair Macleod about sound money

Juan Castañeda, Senior Lecturer at UNED and blogger at The Old Lady of Threadneedle St, talks to Alasdair Macleod, of the GoldMoney Foundation, about the economy and the dangers of monetary stimulus. They explain that at the root of our current problems is unsound money. Under sound money system there is some kind of objective rule that serves as a guarantee of what money is, that enforces the Rule of Law in economic matters. Prof. Castañeda believes that the US has the largest problem, given the recent monetary expansion.

They discuss the consequences of stopping monetary stimulus that the economy is addicted to. They talk about interest rates, the price level and how this is affected by monetary policy. Nevertheless they insist that the consequences of continuing to print will, eventually, be even worse.

Billions for the Bankers 5: Debt-Free Money

Part five of a series: Billions for the Bankers, Debts for the People: The Real Story of the Money-Control Over America by Sheldon Emry, this section deals with the fact that money is a social construct, and that we can constitutionally provide the medium of exchange (money) needed by our people, debt-free money, by bypassing the bankers.

INTEREST-FREE MONEY

interest free money

If we would have used the Constitutional way of “creating” the money needed in the nation, the Federal Congress would spend most of its time and study on the issuance and control of an adequate supply of stable money for the people. If an increase in population and production required an increase in the medium of exchange, Congress would authorize the “coining”, (i.e., printing) of the determined amount. Some could be used to pay current legitimate expenses of the Federal Government, with the balance paid directly to the citizens. Records for payment would be similar to social security records, except a citizen would be recorded at birth, instead of when he first goes to work. Each person on the records as of the date of the Congressional authorization would receive an equal amount just as if he were a stockholder holding one share. Just think– a payment of only $20 to each citizen would put $4 billion of debt-free and interest-free money into circulation.

Such a suggestion always scares the bankers. Their propagandists will immediately cry “printing press money” and warn that it would soon be “worthless” and would “cause inflation”.

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The Money Masters – Full

THE MONEY MASTERS is a historical documentary that traces the origins of the political power structure. The modern political power structure has its roots in the hidden manipulation and accumulation of gold and other forms of money. The development of fractional reserve banking practices in the 17th century brought to a cunning sophistication the secret techniques initially used by goldsmiths fraudulently to accumulate wealth. With the formation of the privately-owned Bank of England in 1694, the yoke of economic slavery to a privately-owned “central” bank was first forced upon the backs of an entire nation, not removed but only made heavier with the passing of the three centuries to our day. Nation after nation has fallen prey to this cabal of international central bankers.

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The truth is that their immense usury charges on their “created” credit (our debt) is the sole cause of “inflation”. All price on all industry, trade and labor must be raised periodically to pay the ever increasing usury charges. That is the ONLY cause of higher prices, and the money-changers spend millions in propaganda to keep you from realizing that.

The money-creators (bankers) know that if we ever tried a Constitutional issue of debt-free, interest-free currency, even a limited amount, the benefits would be apparent immediately. That they must prevent. Abraham Lincoln was the last president to issue such a debt-free and interest-free currency (in 1863) and he was assassinated shortly thereafter.

NO BANKERS PLUNDER

Under a Constitutional system no private banks would exist to rob the people. Government banks under the control of the people’s representatives would issue and control all money and credit. They would issue not only actual currency, but could lend limited credit at no interest for the purchase of capital goods, such as homes. A $60,000 loan would only require only $60,000 repayment, not $225,931 as it is now. Everyone who supplied materials and labor for the home would get paid just as they do today, but the bankers would not get $195,931 in usury. AND THAT IS WHY THEY RIDICULE AND DESTROY ANYONE SUGGESTING GOVERNMENT (CITIZENS’) MONEY WITHOUT INTEREST AND WITHOUT DEBT.

History tells us of debt-free and interest-free money issued by governments. The American colonies did it in the 1700’s and their wealth soon rivalled England and brought restrictions from Parliament, which led to the Revolutionary War. Abraham Lincoln did it in 1863 to help finance the Civil War. He was later assassinated by an agent of the Rothschild Bank. No debt-free or interest-free money has been issued in America since then. Several Arab nations issue interest-free loans to their citizens today. The Saracen Empire for bad interest on money for 1,000 years, and its wealth outshone even Saxon Europe. Mandarin China issued its own money, interest-free and debt-free, and historians and collectors of art today consider those centuries to be China’s time of greatest wealth, culture and peace.

Germany issued debt-free and interest-free money from 1935 and on, accounting for its startling rise from the depression to a world power in 5 years. Germany financed its entire government and war operation from 1935 to 1945 without debt, and it took the whole Capitalist and Communist world to destroy the German power over Europe and bring Europe back under the heel of the Bankers. Such history of money does not even appear in the textbooks of public (government) schools today.

Issuing money which doesn’t have to be paid back in interest leaves the money available to use in the exchange of goods and services and its only continuing cost is replacement as the paper wears out. Money is the paper ticket by which such transfers are made and should always be in sufficient quantity to transfer all possible production of the nation to ultimate consumers.

It is as ridiculous for a nation to say to its citizens, “You must consume less because we are short of money,” as it would be for an Airline to say “Our planes are flying, but we can’t take you because we are short of tickets.”

STABLE MONEY

Money, issued in such a way, would derive its value in exchange from the fact that it had to come from the highest legal source in the nation, and would be declared to be legal to pay all public and private debts. Issued by a sovereign nation, not in danger of collapse, it would need no gold or silver or other so-called “precious” metals to back it. As history shows, the stability and responsibility of the government issuing it is the deciding factor in the acceptance of that government’s currency — not gold, silver or iron buried in some hole in the ground. Proof is America’s currency today. Our gold and silver are practically gone, but our currency is accepted. But if the government was about to collapse, our currency would be worthless. Also, money issued through the people’s legitimate government would not be under control of a privately owned corporation whose individual owners benefit by causing the money amount to fluctuate and the people to go into debt.

NO MORE BANKERS’ PLUNDER

Under the present debt-usury system, the extra burden of usury forces workers and businesses to demand more money for the work and goods to pay their ever-increasing debts and taxes. This increase in prices and wages is called “inflation.” Bankers, politicians and “economists” blame it on everything but the real cause, which is the usury levied on money and debt by the Bankers. This “inflation” benefits the money-lenders, since it wipes out savings of one generation so they cannot finance or help the next generation, who must then borrow from the money-lenders, and pay a large part of their life’s labor to the usurer.

With an adequate supply of interest-free money, little borrowing would be required and prices would be established by people and goods, not by debts and usury.

wealth without debt

CITIZEN CONTROL

If the Federal Congress failed to act, or acted wrongly, in the supply of money, the citizens would use the ballot or recall petition to replace those who prevented correct action with others whom the people believe would pursue a better money policy. Since the creation of money and its issuance in sufficient quantity would be one of the few functions of Congress, the voter could decide on a candidate by his stand on money, instead of the hundreds of lesser, and deliberately confusing, subjects which are presented to us today. And since money is, and would remain, a national function, local differences or local factions would not be able to sway the people from the nation’s (citizens’) interest. All other problems, except the nation’s defense, would be taken care of in the State, County, or City governments where they are best handled and most easily corrected.

An adequate national defense would be provided by the same citizen-controlled Congress, and there would be no Bankers behind the scenes, bribing politicians to give $200 billion of American military equipment to other nations, disarming us, while alien nations prepare to attack and invade the United States of America.
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For more on this vital topic, check out these links:
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DebtFree United States Notes Were Once Issued Under JFK And

Most Americans have no idea that the U.S. government once issued debtfree money directly into circulation. America once thrived under a debtfree monetary.

Publish Date: 12/18/2011 20:22

http://theeconomiccollapseblog.com/archives/debt-free-united-states-notes-were-once-issued-under-jfk-and-the-u-s-government-still-has-the-power-to-issue-debt-free-money

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The End of Capitalism As We Know It | Positive Money

You won’t hear this from orthodox economists and commentators for they do not take account of the way that money creation distorts the operation of the “free” economy. And they do not appreciate why The usual reason given for the bank’s refusal is that they are worried they won’t get paid back. The real reason is that they …. In what other circumstance could democratically elected Prime Ministers be superseded by anonymous BANKERS virtually overnight! [Reply]

Publish Date: 12/05/2011 6:01

http://www.positivemoney.org.uk/2011/12/capitalism/

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Europe’s Transition From Social Democracy to Oligarchy « A

The reason for this disparity is that they lack a “public option” in money creation. Having a Federal Reserve Bank or Bank of England that can print the money to pay interest or roll over existing debts is what makes the United

Publish Date: 12/17/2011 22:05

http://anationbeguiled.wordpress.com/2011/12/17/europes-transition-from-social-democracy-to-oligarchy/

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Creating New Money: A Monetary Reform for the Information Age

Creating New Money: A Monetary Reform for the Information Age is a book written by James Robertson and Joseph Huber launched by the New Economics Foundation in 2000. It reflects the values of a democratic civil society and the need for economic and financial stability. However, we must never forget that “you can lead a horse to water, but you cannot make it drink”, so follow-up emails should be sent, to enquire as to whether or not they have read it. [Reply]

Publish Date: 12/15/2011 8:46

http://www.positivemoney.org.uk/2011/12/creating-money-monetary-reform-information-age/

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Could the money system be the basis of a sufficiency economy

In my book The Future of Money* I argue that the money system could be a possible mechanism for achieving a socially just, democratically administered, sufficiency economy – an economy that can meet people’s material needs to the

Publish Date: 12/24/2010 2:00

http://www.vielegelder.de/archives/846

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More on Money and Social Possibilities « heteconomist.com

In his interpretation of money as a promise, he notes that this would make the basis of fiat money the government’s promise to extinguish tax liabilities. He does not, however, …. Nevertheless, I think there will be a hierarchy in terms of how restrictive constraints are under different monetary systems for as long as those systems remain in place, and also a hierarchy in terms of how difficult (or costly) it is to relax or abandon the self-imposed constraints. For example, the

Publish Date: 12/18/2011 5:43

http://heteconomist.com/?p=3210

The President: “What is Constitutional Money?” with Edwin Vieira

Rep. Ron Paul sponsored this Congressional lecture on “What is Constitutional Money?”, part two of a three part series on the basic principles of money for Congressional staff. As a continuing educational tool this lecture was

Publish Date: 11/30/2011 23:06

http://www.thepresident.com/2011/11/what-is-constitutional-money-with-edwin.html

A House for Half the Cost? Here’s How

Article by Kevin Cox, Adjunct Associate Professor at University of Canberra, Australia, in which he propose some accounting changes to save on the price of homes. A good starting point, but falls short of a jubilee as it still preserves the banking system that we have. At one point he states that banks are unnecessary in order to transfer assets from one party to another…

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Reducing the finance costs of housing will also reduce house prices.
Flickr/kennymatic

Welcome to Safe as Houses, a series delving into a topic close to the heart of many Australians – property. This is not a series on where the market might be heading. Instead we aim to explore how we view property and float some alternative ideas.

Along with poorly behaved sporting figures, Kyle Sandilands, and casual police brutality, crushingly large mortgages are basically accepted as an unpleasant fact of life.

But what if we could change the way we repaid our loans to pay less interest and enjoy improved home affordability? Adjunct Associate Professor at the University of Canberra, Kevin Cox explains how.

In The Conversation this week, Keith Jacobs argues that falling house prices would lead to positive outcomes for the Australian economy. Here I propose a way to reduce the cost of housing that will, over time, also reduce house prices.

A reason for unaffordable housing is that the finance costs of purchasing a house with a loan is at least twice as much as it needs to be. Reducing the cost of finance will reduce the total cost of purchasing a house. This will, in turn, reduce the pressure on house prices as it will reduce the financial profitability of traditional housing loans and direct finance to other more productive and profitable uses.

Most loans are used to transfer control of an asset from one person to another. The person receiving the loan agrees to pay rent for the use of the asset while ever they have the use of the asset. When they relinquish control of the asset they no longer pay rent on the asset. Let us assume the asset is a fleet of five cars. A borrower rents five motor cars and so pays rent on five cars. If they return one car they pay rent on the four remaining cars and they do not pay rent on the returned car.

Money loans work differently. Let us assume that the rent on five units of money is one unit of money. If one unit of money is returned then rent is continued to be paid on five units of money – not four. We treat money loans differently from other asset loans because we create money with an interest coupon attached at the time of creation. This gives money a value over time by the way it was created. Money when it is saved should have an interest coupon attached. Money when it is created should not have an interest coupon attached.

Most people think banks take in deposits and lend the deposits. Unfortunately this is not the way the system works. When a bank gives a loan the bank creates new money to lend. This money is deposited in the borrower’s account. There was no deposit lent or money saved – instead the bank created money and deposited it. This newly created money immediately attracts interest. This is the underlying reason why, in the above example, rent continues to be paid on five units not four because banks have to pay interest on newly created money.

Because we create money with an interest coupon and because interest itself attracts interest then the amount of money needed to keep the system operating compounds. In the ancient world the Sumerians, Babylonians, Jews and Romans understood the unsustainable nature of debt and periodically they had a debt jubilee to remove the excess debt. Muslims and Christians tried to solve the problem by banning interest.

There is another solution. We can change the rules on how to repay loans. We continue to pay rent (interest) on money but pay no interest on accumulated interest.

Using existing loan repayment rules, if we have a loan of $100,000 with a yearly interest rate of 20% and we repay $20,000 each year then the loan is never repaid. Each year the $20,000 repayment does not reduce the capital on which interest is paid and it means we pay interest on the money that has been repaid. The new proposed rules of repayment are for repayments to come off the principal and no interest is to be charged on unpaid interest.

At the end of the first year, with these new rules, the borrower still owes $100,000 but the amount of money on which interest is paid in the next year is $80,000. This means that at the end of the second year the amount owed is $96,000. Each year the amount owed will reduce until finally the debt is repaid. With both sets of rules the same amount has been paid so the economic outcomes are the same. The difference is that the new rules extinguish the debt.

Supplied by Kevin Cox
Click to enlarge

This simple change to repayment rules could make a dramatic change in the cost of capital goods financed through loans. For example, the interest charges on a home loan of $500K at 7% over 30 years is about $611,000 while the total interest charges on a loan with revised rules with the same size repayments is $225,000.

If the approach is adopted it will mean that housing in Australia will become affordable without a collapse in house prices.

In systems terms the positive feedback mechanism of interest on interest has been removed. In most systems positive feedback almost always leads to instability. Removing mechanisms that cause positive feedback means the system has a better chance of stabilising. What this means for house prices is that the inflationary pressures will be reduced.

For banks, it means they will find it more profitable to lend existing deposits for housing rather than create new deposits with new money. However, money still needs to be created so banks will have deposits to lend. (I describe one way to do this in a previous article. )

In summary, the issuing of credit through the creation of interest bearing money leads to a compounding of debt, which unnecessarily increases the cost of credit.

By changing loan repayment rules, the cost of credit is reduced which reduces the cost to transfer capital assets to the benefit of both the buyer and seller.

This is the fourth article in the Safe as Houses series. Read the other instalments here:

This article was originally published at The Conversation.
Read the original article.

Billions for the Bankers 4- Gambling Debts War and Corruption

gambling and warPart four of a series: Billions for the Bankers, Debts for the People: The Real Story of the Money-Control Over America by Sheldon Emry, this section deals with gambling, debts and war. This book was written in the 1980s, many years before the great awakening that is occurring now.

FOR THE GAMBLERS AMONG MY READERS

To grasp the truth that periodic withdrawal of money through interest payments will inexorably transfer all wealth in the nation to the receiver of interest, imagine yourself in a poker or dice game where everyone must buy the chips (the medium of exchange) from a “banker” who does not risk chips in the game, but watches the table and every hour reaches in and takes 10% to 15% of all the chips on the table. As the game goes on, the amount of chips in the possession of each player will go up and down with his “luck.” However, the TOTAL number of chips available to play the game (carry on trade and business) will decrease rapidly.

The game will get low on chips, and some will run out. If they want to continue to play, they must buy or borrow them from the “banker.” The “banker” will sell (lend) them ONLY if the player signs a “mortgage” agreeing to give the “banker” some real property (car, home, farm, business, etc.) if he cannot make periodic payments to pay back all of the chips plus some EXTRA ones (interest). The payments must be made on time, whether he wins (makes a profit) or not.

It is easy to see that no matter how skillfully they play, eventually the “banker” will end up with all of his original chips back, and except for the very best players, the rest, if they stay in long enough, will lose to the “banker” their homes, their farms, their businesses, perhaps even their cars, watches, rings, and the shirts off their backs!

Our real-life situation is MUCH WORSE than any poker game. In a poker game none is forced to go into debt, and anyone can quit at any time and keep whatever he still has. But in real life, even if we borrow little ourselves from the Bankers, the local, State, and Federal governments borrow billions in our name, squander it, then confiscate our earnings from us and pay it back to the Bankers with interest. We are forced to play the game, and none can leave except by death. We pay as long as we live, and our children pay after we die. If we cannot pay, the same government sends the police to take our property and give it to the Bankers. The Bankers risk nothing in the game; they just collect their percentage and “win it all.” In Las Vegas and at other gambling centers, all games are “rigged” to pay the owner a percentage, and they rake in millions. The Federal Reserve Bankers’ “game” is also rigged, and it pays off in billions!

In recent years Bankers added real “cards” to their ‘game. “Credit” cards are promoted as a convenience and a great boon to trade. Actually, they are ingenious devices by which Bankers collect 2% to 5% of every retail sale from the seller and 18% interest from buyers. A real “stacked” deck!

YES, IT’S POLITICAL, TOO!

Democrat, Republican, and Independent voters who have wondered why politicians always spend more tax money than they take in should now see the reason. When they begin to study our “debt-money” system, they soon realize that these politicians are not the agents of the people but are the agents of the Bankers, for whom they plan ways to place the people further-in debt. It takes only a little imagination to see that if Congress had been “creating,” and spending or issuing into circulation the necessary increase in the money supply, THERE WOULD BE NO NATIONAL DEBT, and the over $4 Trillion of other debts would be practically non-existent. Since there would be no ORIGINAL cost of money except printing, and no CONTINUING costs such as interest, Federal taxes would be almost nil. Money, once in circulation, would remain their and go on serving its purpose as a medium of exchange for generation after generation and century after century, just as coins do now, with NO payments to the Bankers whatever!
money for war

MOUNTING DEBTS AND WARS

But instead of peace and debt-free prosperity, we have ever-mounting debt and periodic wars. We as a people are now ruled by a system of Banker-owned Mammon that has usurped the mantle of government, disguised itself as our legitimate government, and set about to pauperize and control our people. It is now a centralized, all-powerful political apparatus whose main purposes are promoting war, spending the peoples’ money, and propagandizing to perpetuate itself in power. Our two large political parties have become its servants, the various departments of government its spending agencies, and the Internal Revenue its collection agency.

IMF & World Bank are weapons of war , by John Pilger

this is a 21 minutes montage of an original 52 minutes special report by John Pilger that you can find if you google for WAR BY OTHER MEANS editing and upload done January 3rd 2011 original program dated late 1991

Unknown to the people, it operates in close cooperation with similar apparatuses in other nations. which are also disguised as “governments.” Some, we are told, are friends. Some, we are told, are enemies. “Enemies” are built up through international manipulations and used to frighten the American people into going billions of dollars more into debt to the Bankers for “military preparedness,” “foreign aid to stop communism,” “minority rights,” etc. Citizens, deliberately confused by brainwashing propaganda, watch helplessly while our politicians give our food, goods, and money to Banker-controlled alien governments under the guise of “better relations” and “easing tensions.” Our Banker-controlled government takes our finest and bravest sons and sends them into foreign wars with obsolete equipment and inadequate training, where tens of thousands are murdered, and hundreds of thousands are crippled. Other thousands are morally corrupted, addicted to drugs, and infected with venereal and other diseases, which they bring back to the United States. When the “war” is over, we have gained nothing, but we are scores of billions of dollars more in debt to the Bankers, which was the reason for the “war” in the first place!

BUT WAIT… THERE’S STILL MORE
people corrupted we will keep lending

The profits from these massive debts have been used to erect a complete and almost hidden economic and political colossus over our nation. They keep telling us they are trying to do us “good,” when in truth they work to bring harm and injury to our people. These would-be despots know it is easier to control and rob an ill, poorly-educated and confused people than it is a healthy and intelligent population, so they deliberately prevent real cures for diseases, they degrade our educational systems, and they stir up social and racial unrest. For the same reason they favor drug use, alcohol, sexual promiscuity, abortion, pornography, and crime. Everything which debilitates the minds and bodies of the people is secretly encouraged, as it makes the people less able to oppose them or even to understand what is being done to them. Family, morals, love of Country, the Christian religion, all that is honorable is being swept away, while they try to build their new, subservient man. Our new “rulers” are trying to change our whole racial, social, religious, and political order, but they will not change the debt-money economic system by which they rob and rule. Our people have become tenants and “debt-slaves” to the Bankers and their agents in the land our fathers conquered. It is conquest through the most gigantic fraud and swindle in the history of mankind. And we remind you again: The key to their wealth and power over us is their ability to create “money” out of nothing and lend it to us at interest. If they had not been allowed to do that, they would never have gained secret control of our nation.

|How true Solomon’s word’s are:

“The rich ruleth over the poor, and the borrower is servant to the lender”
(Proverbs 22:7).

God Almighty warned in the Bible that one of the curses which would come upon His People for disobeying His laws was:

The alien who lives among you will rise above you higher and higher, but you will sink lower and lower. He will lend to you, but you will not lend to him. He will be the head, but you will be the tail. Deuteronomy  28:44-45

Most of the owners of the largest banks in America are of Eastern European ancestry and connected with the Rothschild European banks. Has that warning come to fruition in America?
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Why FIAT BANKERS Want DEATH & WAR : KEISER REPORT

This week Max Keiser and co-host, Stacy Herbert, talk about the European penny drops as more banks need more bailouts while the public debt clock ticks up to $40 trillion. In the second half of the show, Max Keiser interviews Michael Betancourt about…

If Central Bankers Start all the Wars, are Veterans Heroes

Henry Makow When the United States and England loaned Mexico money in 1903 using its customs revenue as collateral, Illuminati banker Jacob Schiff cabled his English counterpart, Ernest Cassel:

Publish Date: 11/13/2011 22:50

http://musicians4freedom.com/2011/11/13/if-central-bankers-start-all-the-wars-are-veterans-heroes-mercenaries-and-dupes/

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BANKERS START WARS TO CREATE DEBT !!! HISTORY OF FEDERAL RESERVE EUSTACE MULLINS

Ezra Pound studied the banking system and Federal Reserve for 30 years. He commissioned Eustace Evans to write the first history of the Fed. He told Eustace that bankers create wars to put nations into debt and that’s how they make money. An illuminating interview…

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How Bankers Get Rich From War Profiteering « Zazen Life

Filed under Business Advice, Culture + Politics, Economics, Finance, Investing, Philosophy Tagged with bankers war profiteering, banking laid bare, carnegie, civil war profiting, j.p morgan, mellons, rockefeller, standard oil,

Publish Date: 12/14/2011 0:04

http://zazenlife.com/2011/12/14/how-bankers-get-rich-from-war-profiteering/

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Soldier Speaks Against Illuminati Bankers and Fighting in Iraq

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Billions for the Bankers 3: Money as Debt

Billions for the BankersPart three of a series: Billions for the Bankers, Debts for the People: The Real Story of the Money-Control Over America, by Sheldon Emry, which was printed in the 1980s: this section deals with money creation and the fact that the interest portion needed to pay the debt is never created. Thirty years later many of the debt slaves are waking up to the truth about how money is created. A few economists are now waking up as well. 2012 will be the year of the great awakening. A better world is coming, free from the tyranny of Babylonian banking. Constitutionally correct interest-free money will lead to prosperity unimagined under the debt-money system of looting and enslavement.

Money As Debt-Full Length Documentary

Money As Debt is a fast-paced and highly entertaining animated feature by artist & videographer, Paul Grignon. It explains today’s magically perverse DEBT-MONEY SYSTEM in terms that are easy to understand. Check out his website: www.moneyasdebt.net M…

THE INTEREST AMOUNT IS NEVER CREATED

The only way new money (which is not true money, but is “credit” representing a debt), goes into circulation in America is when it is borrowed from Bankers. When the State and people borrow large sums, we seem to prosper. However, the Bankers “create” only the amount of the principal of each loan, never the extra amount needed to pay the interest. Therefore. the new money never equals the new debt added. The amounts needed to pay the interest on loans is not “created,” and therefore does not exist!

Under this kind of a system, where new debt always exceeds the new money no matter how much or how little is borrowed, the total debt increasingly outstrips the amount of money available to pay the debt. The people can never, ever get out of debt!

An example will show the viciousness of this usury-debt system with its “built-in” shortage of money.

IF $60,000 IS BORROWED, $255,931.20 MUST BE PAID BACK

When a citizen goes to a Banker to borrow $60,000 to purchase a home or a farm, the Bank clerk has the borrower agree to pay back the loan plus interest. At 14% interest for 30 years, the Borrower must agree to pay $710.92 per month for a total of $255,931.20. The clerk then requires the citizen to assign to the Banker the right of ownership of the property if the Borrower does not make the required payments. The Bank clerk then gives the Borrower a $60,000 check or a $60,000 deposit slip crediting the Borrower’s checking account with $60,000.

The Borrower then writes checks to the builder, subcontractors, etc., who in turn write checks. $60,000 of new “checkbook” money is thereby added to “money in circulation.”

However, and this is the fatal flaw in a usury system, the only new money created and put into circulation is the amount of the loan, $60,000. The money to pay the interest is NOT created, and therefore was NOT added to “money in circulation.”

Even so, this Borrower (and those who follow him in ownership of the property) must earn and TAKE OUT OF CIRCULATION $255,931, almost $200,000 MORE than he put IN CIRCULATION when he borrowed the original $60,000! (By the way, it is this interest which cheats all families out of nicer homes. It is not that they can’t afford them; it is because the Banker’s usury forces them to pay for 4 homes to get one!)

Every new loan puts the same process in operation. Each borrower adds a small sum to the total money supply when he borrows, but the payments on the loan (because of interest) then deduct a much LARGER sum from the total money supply.

There is therefore no way all debtors can pay off the money-lenders. As they pay the principal and interest, the money in circulation disappears. All they can do is struggle against each other, borrowing more and more from the money-lenders each generation. The money-lenders (Bankers), who produce nothing of value, slowly, then more rapidly, gain a death grip on the land, buildings, and present and future earnings of the whole working population. Proverbs 22:17 has come to pass in America. The borrowers have become the servants of the lenders. No wonder God Almighty forbids interest on loans.
foreclosures

SMALL LOANS DO THE SAME THING

If you haven’t quite grasped the impact of the above, let us consider a small auto loan for 3 years at 18% interest. Step 1: Citizen borrows $5,000 and pays it into circulation (it goes to the dealer, factory, miner, etc.) and signs a note agreeing to pay the Banker $6,500. Step 2: Citizen pays $180 per month of his earnings to the Banker. In 3 years he will take OUT of circulation $1,500 more than he put IN circulation.

Every loan of Banker “created” money (credit) causes the same thing to happen. Since this has happened millions of times since 1913 (and continues today), you can see why America has gone from a prosperous, debt-free nation to a debt-ridden nation where practically every home, farm and business is paying usury-tribute to some Banker. The usury-tribute to the Bankers on personal, local, State and Federal debt totals more than the combined earnings of 25% of the working people. Soon it will be 50% and continue upward.

THIS IS WHY BANKERS PROSPER IN GOOD TIMES OR BAD

In the millions of transactions made each year like those above, little actual currency changes hands, nor is it necessary that it do so. 95% of all “cash” transactions in the U.S. are by check, so the Banker is perfectly safe in “creating” that so-called “loan” by writing the check or deposit slip, not against actual money, but AGAINST YOUR PROMISE TO PAY IT BACK! The cost to him is paper, ink and a few dollars in salaries and office costs for each transaction. It is “check-kiting” on an enormous scale. The profits increase rapidly, year after year, as shown below.

THE COST TO YOU? EVENTUALLY, EVERYTHING!

In 1910 the U.S. Federal debt was only $1 billion, or $12.40 per citizen. State and local debts were practically non-existent.

By 1920, after only 6 years of Federal Reserve shenanigans, the Federal debt had jumped to $24 billion, or $226 per person.

In 1960 the Federal debt reached $284 billion, or $1,575 per citizen and State and local debts were mushrooming.

By 1981 the Federal debt passed $1 trillion and was growing exponentially as the Banker’s tripled the interest rates. State and local debts are now MORE than the Federal, and with business and personal debts totaled over $6 trillion, 3 times the value of all land and buildings in America.

If we signed over to the money-leaders all of America we would still owe them 2 more Americas (plus their usury, of course!)

[Now in 2011 National Debt is over $15 Trillion dollars]

However, they are too cunning to take title to everything. They will instead leave you with some “illusion of ownership” so you and your children will continue to work and pay the Bankers more of your earnings on ever-increasing debts. The “establishment” has captured our people with their ungodly system of usury and debt as certainly as if they had marched in with a uniformed army.

GW Radio 11-4-11: End Global Central Banks and Jail The Criminals

Subscribe to our FREE Newsletter: www.greenewave.com Help Support Us: www.paypal.com Join ‘The WAVE’: www.GreeneWave.com Sponsor www.greenewave.com *GETyour official Obama ‘MADE in the CIA’ T-shirt here!!! www.districtlines.com Follow us on Facebook!…


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More interesting links on this topic of money as debt:

The Seven Universal Laws For All Humanity: Money Creation Is A

While the creation and growth of money seems somewhat intangible, money is the way we get the things we need and want. Money is actually nothing but worthless paper created and handed out to us to make us believe we

Publish Date: 12/08/2011 8:01

http://creedofnoah.blogspot.com/2011/12/money-creation-is-useful-productive.html

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Make Money Creation Democratically Accountable, Financial Times

Despite the Bank of England having created money and massively bought up government debt with it, the hope that the cash received would somehow translate into new bank lending has not happened. So when is the penny

Publish Date: 12/14/2011 6:36

http://www.positivemoney.org.uk/2011/12/debt-free-money-creation-financial-times/

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Brain Bender: Monetary and Economic Solution for the World

2: Money and Credit need to be created by the US Treasury and administered locally based on projected production of commodities and not what is already warehoused. Critics in the media are a dime-a-dozen, but it’s rare to

Publish Date: 12/15/2011 2:38

http://brainbender.blogspot.com/2011/12/monetary-and-economic-solution-for.html

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Adair Turner solves debt crisis – Hindenburg flies again at Frankfurt

So far so good – he acknowledges that “over confident faith” in economic dogma (again, a motivation with no place in a supposed science) allowed banks to create too much money (“credit creation” means money creation – if

Publish Date: 12/14/2011 17:25

http://freedomthistime.wordpress.com/2011/12/15/adair-turner-solves-debt-crisis-hindenburg-flies-again-at-frankfurt/

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Currency Creation ~ Two | The Money Conspiracy

In other words, for every deposit that ever occurred in the banking system, about nine times that amount can be created out of thin air.

Publish Date: 12/05/2011 16:22

http://themoneyconspiracy.com/prescious-metals-envesting/create-currency-two/

This Lawsuit could end the Banksters Tyranny

CONFIRMED: The Trillion-Dollar Lawsuit That Could End Financial Tyranny

bonds

It could be the biggest, most explosive story in modern history. We are just starting to put the pieces together and understand what is going on in the occult financial geopolitical scene, and how a 117-nation alliance is working to free the Earth from financial tyranny.
……
In classic Orwellian terms — such as “War is Peace, Freedom is Slavery, Ignorance is Strength” — the mainstream media’s “Global Financial Collapse” cry of doom may very well be the best thing that’s ever happened to us.
At least in any known, recorded history.

A VERY MYSTERIOUS, VERY QUIET AND VERY LARGE-SCALE FINANCIAL SCANDAL

You are about to dive into a story that, for quite some time now, has been nothing but a great-sounding idea — a wonderful “what if.” Almost nothing of this story could be found in the mainstream media.

CONFIRMED: The TrillionDollar Lawsuit That Could End Financial

Thousands of trillions of dollars? A lawsuit that could end the Federal Reserve and the Bankster’s Tyranny … Read More

Publish Date: 12/13/2011 1:01

http://divinecosmos.com/start-here/davids-blog/995-lawsuit-end-tyranny

Billions for the Bankers 2: The Federal Reserve

Part two of a series: Billions for the Bankers, Debts for the People: The Real Story of the Money-Control Over America, this section deals with the unconstitutional money system controlling America: the Federal Reserve.

G. Edward Griffin – Creature From Jekyll Island

G. Edward Griffin explains the Federal Reserve. www.freedom-force.org

“Congress shall have the Power to Coin Money and Regulate the Value Thereof.”

Instead of the Constitutional method of creating our money and putting it into circulation, we now have an entirely unconstitutional system. This has resulted in almost disastrous conditions, as we shall see.

Since our money was handled both legally and illegally before 1913, we shall consider only the years following 1913, since from that year on, ALL of our money has been created and issued by an illegal method that will eventually destroy the United States if it is not changed. Prior to 1913, America was a prosperous, powerful, and growing nation, at peace with its neighbors and the envy of the world. But – in December of 1913, Congress, with many members away for the Christmas holidays, passed what has since been known as the FEDERAL RESERVE ACT. (For the full story of how this infamous legislation was forced through our Congress, read The Creature from Jekyll Island, by G. Edward Griffin or Conquest or Consent, by W. B. Vennard). Omitting the burdensome details, it simply authorized the establishment of a Federal Reserve Corporation, with a Board of Directors (The Federal Reserve Board) to run it, and the United States was divided into 12 Federal Reserve “Districts.”

This simple, but terrible, law completely removed from Congress the right to “create” money or to have any control over its “creation,” and gave that function to the Federal Reserve Corporation. This was done with appropriate fanfare and propaganda that this would “remove money from politics” (they didn’t say “and therefore from the people’s control”) and prevent “Boom and Bust” from hurting our citizens. The people were not told then, and most still do not know today, that the Federal Reserve Corporation is a private corporation controlled by bankers and therefore is operated for the financial gain of the bankers over the people rather than for the good of the people. The word “Federal” was used only to deceive the people.

MORE DISASTROUS THAN PEARL HARBOR

Since that “day of infamy,” more disastrous to us than Pearl Harbor, the small group of “privileged” people who lend us “our” money have accrued to themselves all of the profits of printing our money’ – and more! Since 1913 they have “created” tens of billions of dollars in money and credit, which, as their own personal property, they then lend to our government and our people at interest. “The rich get richer and the poor get poorer” had become the secret policy of our National Government. An example of the process of “creation” and its conversion to people’s “debt” will aid our understanding.

THEY PRINT IT – WE BORROW IT AND PAY THEM INTEREST

We shall start with the need for money. The Federal Government, having spent more than it has taken from its citizens in taxes, needs, for the sake of illustration, $1,000,000,000. Since it does not have the money, and Congress has given away its authority to “create” it, the Government must go the “creators” for the $1 billion. But, the Federal Reserve, a private corporation, doesn’t just give its money away! The Bankers are willing to deliver $1,000,000,000 in money or credit to the Federal Government in exchange for the Government’s agreement to pay it back – with interest! So Congress authorizes the Treasury Department to print $1,000,000,000 in U.S. Bonds, which are then delivered to the Federal Reserve Bankers.

sure we will loan you money

The Federal Reserve then pays the cost of printing the $1,000,000,000 (about $1,000) and makes the exchange. The Government then uses the money to pay its obligations. What are the results of this fantastic transaction? Well, $1 billion in Government bills are paid all right, but the Government has now indebted the people to the Bankers for $1 billion on which the people must pay interest! Tens of thousands of such transactions have taken place since 1913 so that by the 1980’s, the U.S. Government is indebted. to the Bankers for over $1,000,000,000,000 (trillion) [now $15 trillion in 2011] on which the people pay over $100 billion a year in interest alone with no hope of ever paying off the principal. Supposedly our children and following generations will pay forever and forever!

AND THERE’S MORE

You say, “This is terrible!” Yes, it is, but we have shown only part of the sordid story. Under this unholy system, those United States Bonds have now become “assets” of the Banks in the Reserve System which they then use as “reserves” to “create” more “credit” to lend. Current “fractional reserve” requirements allow them to use that $1 billion in bonds to “create” as much as $15 billion in new “credit” to lend to States, Municipalities, to individuals and businesses. Added to the original $1 billion, they could have $16 billion of “created credit” out in loans paying them interest with their only cost being $1,000 for printing the original $1 billion! Since the U.S. Congress has not issued Constitutional money since 1863 (over 100 years), in order for the people to have money to carry on trade and commerce they are forced to borrow the “created credit” of the Monopoly Bankers and pay them usury-interest!

AND THERE’S STILL MORE

In addition to the vast wealth drawn to them through this almost unlimited usury, the Bankers who control the money at the top are able to approve or disapprove large loans to large and successful corporations to the extent that refusal of a loan will bring about a reduction in the price that that Corporation’s stock sells for on the market. After depressing the price, the Bankers’ agents buy large blocks of the stock, after which the sometimes multi-million dollar loan is approved, the stock rises, and is then sold for a profit. In this manner billions of dollars are made with which to buy more stock. This practice is so refined today that the Federal Reserve Board need only announce to the newspapers an increase or decrease in their “rediscount rate” to send stocks up and down as they wish. Using this method since 1913, the Bankers and their agents have purchased secret or open control of almost every large corporation in America. Using that control, they then force the corporations to borrow huge sums from their banks so that corporation earnings are siphoned off in the form of interest to the banks. This leaves little as actual “profits” which can be paid as dividends and explains why stock prices are often depressed, while the banks reap billions in interest from corporate loans. In effect, the bankers get almost all of the profits, while individual stockholders are left holding the bag.

The millions of working families of America are now indebted to the few thousand Banking Families for twice the assessed value of the entire United States. And these Banking Families obtained that debt against us for the cost of paper, ink, and bookkeeping!
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Wait! Here is more on the Federal Reserve:

The Origins of the FedRon Paul – Mises Daily

The Federal Reserve cartelizes the banking industry, allowing individual banks to inflate together, earning them and the government enormous profits, while making sure that they are never held accountable for their

Publish Date: 12/02/2011 1:36

http://mises.org/daily/5742/The-Origins-of-the-Fed

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The Federal Reserve Cartel: Part IV: A Financial Parasite :

Garrison wrote inRoosevelt, Wilson and the Federal Reserve, “Paul Warburg was the man who got the Federal Reserve Act together after the Aldrich Plan aroused such nationwide resentment and opposition. The mastermind

Publish Date: 12/14/2011 0:19

http://theintelhub.com/2011/12/13/the-federal-reserve-cartel-part-iv-a-financial-parasite/

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Matt Stoller: How the Federal Reserve Fights « naked capitalism

Two weeks ago, Bloomberg released a significant story on the actions of the Federal Reserve as the lender of last resort during the crisis and the extent of that lending. The article, an homage to the late great reporter Mark

Publish Date: 12/12/2011 3:36

http://www.nakedcapitalism.com/2011/12/matt-stoller-how-the-federal-reserve-fights.html

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Federal Reserve Owns USA! « counter Information

That interest is now more than seven trillion dollars! More than half of America’s debt is owned by the Federal Reserve! We need a revolution in America!! The private bankers who own the Federal Reserve are evil and wicked!

Publish Date: 12/13/2011 10:45

http://counterinformation.wordpress.com/2011/12/13/federal-reserve-owns-usa/

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Why the Federal Reserve is Evil at A Geek With Guns

Why the Federal Reserve is Evil · without comments. It’s impossible to miss all the anti-Federal Reserve propaganda floating around but many honestly do not know why the Fed is such a terrible organization. Thankfully Ron

Publish Date: 10/21/2011 11:30

http://christopherburg.com/2011/10/21/why-the-federal-reserve-is-evil/

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14 Reasons Why We Should Nationalize The Federal Reserve

One of the most important steps that we could take to bring prosperity back to America would be to nationalize the Federal Reserve. Doing so would allow the.

Publish Date: 11/06/2011 17:07

http://theeconomiccollapseblog.com/archives/14-reasons-why-we-should-nationalize-the-federal-reserve

Billions for the Bankers Debts for the People

Billions for the BankersPart one of a series by the late pastor Sheldon Emry. This booklet was published in the 198os at a time when many Americans just went along with the banking system and Wall Street thinking all was well and that sentiments like these were wild-eyed conspiracy theories. Today, this work is seen as ahead of its time… Entitled: Billions for the Bankers, Debts for the People: The Real Story of the Money-Control Over America, this is a classic that has been around for 30 years. Good background reading as the usurious banking system faces a nuclear implosion as a result of the MF global fraud.

Three Types of Conquest

How banks rob

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”
-Thomas Jefferson

THREE TYPES OF CONQUEST

History reveals nations can be conquered by the use of one of three methods.

The most common is conquest by war. In time, though, this method usually fails, because the captives hate the captors and rise up and drive them out if they can. Much force is needed to maintain control, making it expensive for the conquering nation.

A second method is by religion, where men are convinced they must give their captors part of their earnings as “obedience to god”. Such a captivity is vulnerable to philosophical exposure or by overthrow by armed force, since religion by its nature lacks military force to regain control once its captives become “disillusioned”.

The third method can be called economic conquest. It takes place when nations are placed under “tribute” without the use of visible force or coercion, so that the victims do not realize they have been conquered. “Tribute” is collected from them in the form of “legal” debts and taxes, and they believe they are paying for it for their own good, for the good of others, or to protect all from some enemy. Their captors become their “benefactors” and “protectors”.

Although this is the slowest to impose, it is often quite long-lasting, as the captives do not see any military force arrayed against them, their religion is more or less intact, they have freedom to speak and to travel, and they participate in “elections” for their rulers. Without realizing it, they are conquered, and the instruments of their own society are used to transfer their wealth to their captors and make the conquest complete.

In 1900 the average American worker paid few taxes and had little debt. Last year payments on debts and taxes took more than half of what he earned. Is it possible a form of conquest has been imposed on our people? Read the following pages and decide for yourself. And may God have mercy on this once debt-free and great nation.

THE REAL STORY OF THE MONEY-CONTROL OVER AMERICA

we were always in debt

Americans, living in what is called the richest nation on earth, seem always to be short of money. Wives are working in unprecedented numbers, husbands hope for overtime hours to earn more, or take part-time jobs evenings and weekends, children look for odd jobs for spending money, the family debt climbs higher, and psychologists say one of the biggest causes of family quarrels and breakups is “arguments over money.” Much of this trouble can be traced to our present “debt-money” system.

Too few Americans realize why our founding fathers wrote into Article I of the U.S. Constitution:

Congress shall have the Power to Coin Money and Regulate the Value Thereof.

They did this, as we will show, in prayerful hope it would prevent “love of money” from destroying the Republic they had founded. We shall see how subversion of Article I has brought upon us the horrors of which Jefferson had warned.

MONEY IS MAN’S ONLY “CREATION”

Economists use the term “create” when speaking of the process by which money comes into existence. Now, creation means making something that did not exist before. Lumbermen make boards from trees, workers build houses from lumber, and factories manufacture automobiles from metal, glass and other materials. But in all these they did not “create,” they only changed existing materials into a more usable and, therefore, more valuable form. This is not so with money. Here, and here alone, man actually “creates” something out of nothing. A piece of paper of little value is printed so that it is worth a piece of lumber. With different figures it can buy the automobile or even the house. Its value has been “created” in the true meaning of the word.

paper money will buy all this

MONEY “CREATING” PROFITABLE

As is seen by the above, money is very cheap to make, and whoever does the “creating” of money in a nation can make a tremendous profit! Builders work hard to make a profit of 5% above their cost to build a house.

Auto makers sell their cars for 1% to 2% above the cost of manufacture and it is considered good business. But money “manufacturers” have no limit on their profits, since a few cents will print a $1 bill or a $10,000 bill.

That profit is part of our story, but first let us consider another unique characteristic of the thing – money, the love of which is the “root of all evil.”

ADEQUATE MONEY SUPPLY NEEDED

An adequate supply of money is indispensable to civilized society. We could forego many other things, but without money industry would grind to a halt, farms would become only self-sustaining units, surplus food would disappear, jobs requiring the work of more than one man or one family would remain undone, shipping, and large movements of goods would cease, hungry people would plunder and kill to remain alive, and all government except family or tribe would cease to function.

An overstatement, you say? Not at all. Money is the blood of civilized society, the means of all commercial trade except simple barter. It is the measure and the instrument by which one product is sold and another purchased. Remove money or even reduce the supply below that which is necessary to carry on current levels of trade, and the results are catastrophic. For an example, we need only look at America’s Depression of the early 1930’s.

THE BANKERS DEPRESSION OF THE 1930’s

In 1930 America did not lack industrial capacity, fertile-farm land, skilled and willing workers or industrious farm families. It had an extensive and highly efficient transportation system in railroads, road networks, and inland and ocean waterways. Communications between regions and localities were the best in the world, utilizing telephone, teletype, radio, and a well-operated government mail system. No war had ravaged the cities or the countryside, no pestilence weakened the population, nor had famine stalked the land. The United States of America in 1930 lacked only one thing: an adequate supply of money to carry on trade and commerce.

taking money out of circulation

In the early 1930’s, Bankers, the only source of new money and credit, deliberately refused loans to industries, stores and farms. Payments on existing loans were required however, and money rapidly disappeared from circulation. Goods were available to be purchased, jobs waiting to be done, but the lack of money brought the nation to a standstill. By this simple ploy America was put in a “depression” and the greedy Bankers took possession of hundreds of thousands of farms, homes, and business properties. The people were told, “times are hard,” and “money is short.” Not understanding the system, they were cruelly robbed of their earnings, their savings, and their property.

MONEY FOR PEACE? NO! MONEY FOR WAR? YES!

World War II ended the “depression.” The same Bankers who in the early 30’s had no loans for peacetime houses, food and clothing, suddenly had unlimited billions to lend for Army barracks, K-rations and uniforms! A nation that in 1934 couldn’t produce food for sale, suddenly could produce bombs to send free to Germany and Japan! (More on this riddle later.)

money for war not for peace

With the sudden increase in money, people were hired, farms sold their produce, factories went to two shifts, mines re-opened, and “The Great Depression” was over! Some politicians were blamed for it and others took credit for ending it. The truth is the lack of money (caused by the Bankers) brought on the depression, and adequate money ended it. The people were never told that simple truth and in this article we will endeavor to show how these same Bankers who control our money and credit have used their control to plunder America and place us in bondage.

POWER TO COIN AND REGULATE MONEY

When we can see the disastrous results of an artificially created shortage of money, we can better understand why our Founding Fathers insisted on placing the power to “create” money and the power to control it ONLY in the hands of the Federal Congress. They believed that ALL citizens should share in the profits of its “creation” and therefore the national government must be the ONLY creator of money. They further believed that ALL citizens, of whatever State or Territory, or station in life would benefit by an adequate and stable currency and therefore, the national government must also be, by law, the ONLY controller of the value of money.

Since the Federal Congress was the only legislative body subject to all the citizens at the ballot box, it was, to their minds, the only safe depository of so much profit and so much power. They wrote it out in the simple, but all-inclusive:

“Congress shall have the Power to Coin Money and Regulate the Value Thereof.”

The Financial Crisis was Entirely Foreseeable

From  Washingtons Blog: Foreseeable or Not?

I noted in April:

Whenever there is a disaster, those responsible claim it was “unforeseeable” so as to escape blame.

For example:

  • It happened with 9/11

The big boys gamble with our lives and our livelihoods, because they make a killing by taking huge risks and cutting costs. And when things inevitably go South, they aren’t held responsible (other than a slap on the wrist), and may even be bailed out by the government.

But surely the financial crisis was different. After all, Wall Street executives and politicians say that the financial crisis wasn’t foreseeable. And see this.

Actually, it might have been slightly foreseeable for a little while before the financial crisis.

We’ve Known for Thousands of Years

We’ve known for literally thousands of years that debts need to be periodically written down, or the entire economy will collapse. And see this.

We’ve known for 1,900 years that rampant inequality destroys societies.

We’ve known for thousands of years that debasing currencies leads to economic collapse.

We’ve known for hundreds of years that the failure to punish financial fraud destroys economies.

We’ve known for hundreds of years that monopolies and the political influence which accompanies too much power in too few hands is dangerous for free markets.

We’ve known for hundreds of years that trust is vital for a healthy economy.

We’ve known since the 1930s Great Depression that separating depository banking from speculative investment banking is key to economic stability. See this, this, this and this.

We’ve known since 1988 that quantitative easing doesn’t work to rescue an ailing economy.

We’ve known since 1993 that derivatives such as credit default swaps – if not reined in – could take down the economy. And see this.

We’ve known since 1998 that crony capitalism destroys even the strongest economies, and that economies that are capitalist in name only need major reforms to create accountability and competitive markets.

We’ve known since 2007 or earlier that lax oversight of hedge funds could blow up the economy.

And we knew before the 2008 financial crash and subsequent bailouts that:

  • The easy credit policy of the Fed and other central banks, the failure to regulate the shadow banking system, and “the use of gimmicks and palliatives” by central banks hurt the economy
  • Anything other than (1) letting asset prices fall to their true market value, (2) increasing savings rates, and (3) forcing companies to write off bad debts “will only make things worse”
  • Bailouts of big banks harm the economy
  • The Fed and other central banks were simply transferring risk from private banks to governments, which could lead to a sovereign debt crisis

Given the insane levels of debt, rampant inequality,  currency debasement, failure to punish financial fraud, growth of the too big to fails, repeal of Glass-Steagall, refusal to rein in derivatives, crony capitalism and other shenanigans … the financial crisis was entirely foreseeable.

Moral Hazard of Usury

SNAKEWhen Cato was asked by Cicero “What do you think of usury?” He replied, “What do you think of murder?”

Usury is the taking of interest for loans. The biblical term for usury is nashak (naw-shak’), to strike with a sting, as the bite of a serpent.

From “Usury is Destroying America”, written by Richard Freeman in the paper New Solidarity, during the Bush administration:

“Usury is the practice of charging excessively high interest rates for borrowing money, that is, interest rates above the cost to the lender or financial institution of servicing the loan. For most banks, in most situations, administrative service costs do not exceed 1 percent. During the Roosevelt years of 1940s, the average interest rate set by the U.S. Federal Reserve, under FDR’s strong influence, was 1.6 percent. Once excessive, usurious interest rates are established in an economy, they are generalized to all financial instruments- stocks, bonds, and home mortgages, for example. Usury thus loots wealth out of the economy, and puts it in the hands of the usuror bankers.

Usury creates its own bankruptcy, and brings in its train something else: fascism, the self same regime imposed on Germany by Hitler’s finance minister, Hjalmar Schacht. Usury bankrupts itself as the rising claims of the fictitious financial paper exceed the capacity of the real physical economy to pay them. As the financial paper depreciates, the bankruptcy of the financial elites of London, Wall Street, Boston, Geneva and Venice frantically increase their efforts to siphon real wealth out of the productive economy and the flesh and bone of the workforce, to fund and preserve the bankrupt financial system. This is the kernel of fascist economics.

Usury, fascism and the process of depopulation are three phases of the same process. The murderous debt-collection policies that dominated Imperial Rome destroyed the economy of the entire Mediterranean region, and led to a collapse of the population by 40 percent. The attempt to collect the debt imposed on Europe by the Bardi and Peruzzi banks in the fourteenth century led to the impoverishment of the population, the lowering of its standard of living and immunoligical resistance, and the devastation of the Black Death, which reduced the continent’s population by one-third between 1348 and 1373.

In America, this triple process is far advanced. The Bush administration lies that poverty is declining in America. The facts show otherwise. The minimal number of US poor is 45 million; but another 60 million are barely surviving with household incomes for a family of four within $6,000 of the poverty line. Two out of every five Americans barely subsist during what is supposedly the greatest recovery in American history in this century.

It is time to realize the consequences of our national economic policies over the past decades: Defiance of the injunction against usury, and our irrational enslavement to a free enterprise system of “money-making,” have exacted a terrible price from the United States, and if not ended, will destroy our nation.”

The English Usurer

A Usurer is not tolerable in a well established commonwealth

Usury Condemned by Aristotle, Cato, Plutarch and Plato:

Aristotle says, “There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of any modes of getting wealth this is the most unnatural.’

Plutarch says, “Are we not ashamed to pay usury? Not contented within the limits of our own means, we do by giving pledges and entering into contracts, fabricate the yoke of our slavery; flee from the tyrant-usurers; the barbarians’ debts beget before they conceive; they demand the very moment they lend; the usurious borrower heaps debts upon debts, and finally he sinks into complicated difficulties.”

Plato: “no one shall deposit money with another whom he does not trust as a friend, nor shall he lend money upon interest; and the borrower should be under no obligation to repay either capital or interest.”

Usury, or Interest Condemned in the Bible

Exod. xxii. 25. If thou lend money to any of my people, that is poor, and that dwells with thee, thou shalt not be hard upon them, as an extortioner, nor oppress them with usury.

Levit. xxv. 35. If thy brother be weak of hand, and thou receive him as a stranger and sojourner, and he live with thee, take not usury from him, nor more than thou gavest. Thou shalt not give him thy money upon usury, nor exact of him any increase of fruits.

Deut. xxiii. 19. Thou shalt not lend to thy brother money at usury, nor corn, nor any other thing, but to a stranger. To thy brother thou shalt lent that which he wanteth without usury.

Psalm xiv. 5. Lord, who shall dwell in thy tabernacle? Or who shall rest in thy holy hill? He that hath not put out his money to usury, nor hath taken bribes against the innocent.

Psalm liv. Cast down, O Lord, and divide their tongues: for I have seen iniquity and contradiction in the city: day and night shall iniquity surround it upon its walls; and in the midst thereof are labor and injustice; and usury and deceit have not departed from its streets.

Ezech. xviii 8. The man that hath not lent upon usury, nor taken any increase; he is just, he shall surely live, saith the Lord God. And the man that giveth upon usury and that taketh an increase; shall such a one live? he shall not live; whereas he hath done all these detestable things, he shall surely die; his blood shall be upon him.

Ezech. xxii. 12. They have taken gifts in thee to shed blood; thou hast taken usury and increase ; and hast covetously oppressed thy neighbours; and thou hast forgotten me, saith the Lord God. Behold, I have clapped my hands at thy covetousness, which thou hast exercised. Shall thy heart endure, or shall thy hands prevail in the days, which I will bring upon thee? I, the Lord, have spoken, and I will do it; and I will disperse thee in the nations and will scatter thee among the countries. And her prophets have daubed them without tempering the mortar: the people of the land have used oppression and committed robbery; they have afflicted the needy and the poor. And I have poured out my indignation upon them; in the fire of my wrath I consumed them; I have rendered their way upon their own head.

Notice that the Prophet ranks here again usury or taking increase, with the most horrible crimes-murder, idolatry, incest, oppression of the poor, of the widow, and orphan, pollution of the sanctuary and the Sabbath.

Nehemiah v. 1. There was a great cry of the people, and of their wives against their brethren, the Jews; and there were some that said, Let us mortgage our lands, and our vineyards, and our houses, and let us take corn because of the famine; and others said, Let us borrow money for the king’s tribute, and let us give up our fields, and vineyards. Behold, we bring into bondage our sons; and our daughters, and some of our daughters are bond-women already; neither have we wherewith to redeem them; and our fields and our vineyards other men possess. And I was exceeding angry when I heard their cry according to these words; and I rebuked the nobles and magistrates, and said to them, Do you every one exact usury of your brethren? The thing you do is not good; why walk you not in the fear of our God, that we be not exposed to the reproaches of the Gentiles our enemies? Restore ye to them this day their fields, and their vineyards, and their olive-yards, and their houses; and the hundredth part of the money, and of the corn, the wine, and the oil, which you were wont to exact from them, give it rather for them.

Matt. v. 42. Give to him, who asks of thee, and from him that would borrow of thee, turn not away.

Luke vi. 35. If you lend to them from whom you hope to receive, what thanks have you: for sinners also lend to sinners for to receive as much; but love ye your enemies; do good, and lend, hoping for nothing thereby, and your reward will be great, and you will be the sons of the Most High.

The Koran on Debt and Usury

II. 274 Those who in charity spend of their goods by night and by day, in secret and in public, have their reward with the Lord: On them shall be no fear, nor shall they grieve.

II. 275 Those who devour usury will not stand except as stands one whom the Evil One by his touch hath driven to madness. That is because they say: “Trade is like usury,” But God hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for God (to judge); But those who repeat (The offense) are Companions of the Fire: They will abide therein (for ever).

II. 276 God will deprive usury of all blessing, but will give increase for deeds of charity: For He loveth not creatures ungrateful and wicked.

II. 278 O Ye who believe! Fear God, and give up what remains of your demand for usury, if ye are indeed believers.

II. 279 If ye do it not, take notice of war from God and His Apostle: But if ye turn back, ye shall have your capital sums: Deal not unjustly, and ye shall not be dealt with unjustly.

II. 280 If the debtor is in a difficulty, grant him time till it is easy for him to repay. But if ye remit by way of charity, that is best for you if ye only knew.

II. 281 And fear the day when ye shall be brought back to God. Then shall every soul be paid what it earned, and none shall be dealt with unjustly.

Commentary on the text by Abdullah Yusuf Ali:

We recapitulate the beauty of Charity (i.e., unselfish giving of one’s self or one’s goods) before we come to its opposite, i.e., the selfish grasping greed of usury against those in need or distress. Charity instead of impoverishing you will enrich you: you will have more happiness and less fear. Contrast it with what follows,– the degradation of the grasping usurer.

Usury is condemned and prohibited in the strongest possible terms. There can be no question about the prohibition.

The following four verses (278-281) refer to further concessions on behalf of debtors, as creditors are asked to (a) give up even claims arising out of the past on account of usury, and (b) to give time for payment of capital if necessary, or (c) to write off the debt altogether as an act of charity.

 

Concerning the statement “take notice of war from God and his Apostle” (279) : This is not war for opinions, but an ultimatim of war for the liberation of debtors unjustly dealt with and oppressed.

III. 129 To God belongeth all that is in the heavens and on earth. He forgiveth whom He pleaseth and punisheth whom he pleaseth; But God is Oft-Forgiving, Most Merciful.

III. 130 O Ye who believe! Devour not Usury, doubled and multiplied; but fear God; that ye may really prosper.

The last verse spoke of forgiveness, even to enemies. If such mercy is granted by God to erring sinners, how much more is it encumbent on us, poor sinners to refrain from oppressing our fellow-beings in need, in matters of mere material and ephemeral wealth? Usury is the opposite extreme of charity . . . Real prosperity consists not in greed, but in giving,– the giving of ourselves and of our substance in the cause of God and God’s truth and in the service of God’s creatures.

XXX. 38. So give what is due to kindred, the needy, and the wayfarer. That is best for those who seek the Countenance of God, and it is they who will prosper.

XXX. 39 That which ye lay out for increase through the property of (other) people, will have no increase with God: But that which ye lay out for charity, seeking the Countenance of God, (Will increase): It is these who will get a recompense multiplied.

Riba is any increase sought through illegal means, such as usury, bribery, profiteering, fraudulent trading, etc. All unlawful grasping of wealth at other people’s expense is condemned. Economic selfishness and many kinds of sharp practices, individual, national, and international, come under this ban. The principle is that any profit which we should seek should be through our own exertions and at our own expense, however we may wrap up the process in the spacious phraseology of high finance or City jargon.

The Parable of the People of the Garden (LXVIII. 17-33) speaks of the rich owners of an Orchard who resolved to gather the fruits of the garden secretly in the early morning, and thus deprive the poor of their portion of the harvest. They were unaware that the night before ” there came on the garden a visitation from the Lord, which swept away all around, while they were asleep” As the morning broke they hurried to the garden speaking to each other in secret low tones, “Let not a single indigent person break in upon you into the (garden) this day.” But when they arrived at the garden they found it changed beyond all recognition. Instead of a rich harvest, it had become a howling wilderness. They said, “We have surely lost our way: Indeed we are shut out (of the fruits of our labor)!

Here the Koran recognizes the right of the poor to a share of the harvest, similar to the Biblical injunctions. In a later section of the Koran (LXIX 31-37) Hell-fire is promised those who neglect the feeding of the poor: “Seize ye him, and bind ye him, and burn ye him in the blazing fire. . . This was he that would not believe in God Most High, and would not encourage the feeding of the indigent! So no friend hath he here this day. Nor hath he any food . . . “

The Koran further instructs that those bound by debt should be helped to economic freedom:

IX 60 Alms are for the poor and the needy, and those employed to administer the (funds); For those whose hearts have been (recently) reconciled (to truth); for those in bondage and in debt . . .

Read more:

History of Usury Prohibition

Historical Views on Usury