|
Money As Debt
|
| 00:00:17 |
"Some of the biggest men in the United States, |
| 00:00:23 |
They know that there is a power somewhere so organized, |
| 00:00:30 |
that they better not speak above their breath when they speak in condemnation of it." |
| 00:01:01 |
"Each and every time a bank makes a loan, |
| 00:01:05 |
~Graham F. Towers, Governor, Bank of Canada, 1934-54 |
| 00:01:10 |
"The process by which banks create money is so simple the mind is repelled." |
| 00:01:19 |
"Permit me to issue and control the money of a nation, |
| 00:01:23 |
~Mayer Amschel Rothschild, Banker |
| 00:01:30 |
Money as Debt |
| 00:01:37 |
Debt |
| 00:01:49 |
Two great mysteries dominate our lives: love and money. |
| 00:01:54 |
"What is love?" is a question that has been endlessly explored in stories, |
| 00:02:01 |
But the same can NOT be said about the question "What is money?" |
| 00:02:07 |
It's not surprising that monetary theory hasn't inspired any blockbuster movies. |
| 00:02:12 |
But it was not even mentioned at the schools most of us attended. |
| 00:02:16 |
For most of us, the question "Where does money come from?" |
| 00:02:24 |
Money, most of us believe, is created by the government. |
| 00:02:28 |
It 's true |
| 00:02:30 |
but only to a point. |
| 00:02:32 |
Those metal and paper symbols |
| 00:02:36 |
are, indeed, produced by an agency |
| 00:02:41 |
But the vast majority of money |
| 00:02:44 |
It is created in huge amounts every day |
| 00:02:54 |
Most of us believe that banks lend out money |
| 00:02:59 |
Easy to picture. |
| 00:03:00 |
But not the truth. |
| 00:03:02 |
In fact, banks create the money they loan, |
| 00:03:04 |
not from the bank's own earnings, |
| 00:03:08 |
but directly from the borrower's promise to repay. |
| 00:03:12 |
The borrower's signature on the loan papers |
| 00:03:16 |
the amount of the loan plus interest, |
| 00:03:18 |
or, lose the house, the car, |
| 00:03:23 |
That's a big commitment from the borrower. |
| 00:03:27 |
What does that same signature require of the bank? |
| 00:03:30 |
The bank gets to conjure into existence |
| 00:03:33 |
and just write it into the borrower's account. |
| 00:03:36 |
Sound far-fetched? |
| 00:03:37 |
Surely that can't be true. |
| 00:03:46 |
To demonstrate how this miracle of modern banking |
| 00:03:51 |
The Goldsmith's Tale |
| 00:03:54 |
Once upon various times, |
| 00:03:59 |
It just had to be portable |
| 00:04:02 |
that it could later be exchanged for things of real value |
| 00:04:07 |
Shells, cocoa beans, pretty stones, |
| 00:04:12 |
Gold and silver were attractive, |
| 00:04:16 |
so some cultures became expert with these metals. |
| 00:04:20 |
Goldsmiths made trade much easier by casting coins, |
| 00:04:24 |
standardized units of these metals |
| 00:04:29 |
To protect his gold, the goldsmith needed a vault. |
| 00:04:32 |
And soon his fellow townsmen |
| 00:04:35 |
wanting to rent space to safeguard |
| 00:04:40 |
Before long, the goldsmith was renting every shelf |
| 00:04:48 |
Years went by and the goldsmith made an astute observation: |
| 00:04:52 |
Depositors rarely came in to remove their actual, |
| 00:04:59 |
That was because the claim checks the goldsmith |
| 00:05:03 |
were being traded in the marketplace |
| 00:05:08 |
This paper money was far more convenient than heavy coins, |
| 00:05:13 |
instead of laboriously counted one by one for each transaction. |
| 00:05:18 |
Meanwhile, the goldsmith had another business. |
| 00:05:22 |
He lent out his gold charging interest. |
| 00:05:25 |
Well, as convenient claim check money came into acceptance, |
| 00:05:27 |
borrowers began asking for their loans in the form of |
| 00:05:35 |
As industry expanded more and more |
| 00:05:40 |
This gave the goldsmith an even better idea. |
| 00:05:43 |
He knew that very few of his depositors |
| 00:05:48 |
So, the goldsmith figured he could easily get away |
| 00:05:54 |
in addition to his own. |
| 00:05:56 |
As long as the loans were repaid, |
| 00:06:01 |
And the goldsmith, now more banker than artisan, |
| 00:06:04 |
would make a far greater profit |
| 00:06:10 |
For years the goldsmith secretly enjoyed a good income |
| 00:06:17 |
Now a prominent lender, he grew steadily richer |
| 00:06:23 |
Suspicions grew that he was spending his depositors' money. |
| 00:06:27 |
His depositors got together and threatened withdrawal of their gold |
| 00:06:34 |
Contrary to what one might have expected, |
| 00:06:39 |
Despite the duplicity inherent in his scheme, |
| 00:06:44 |
The depositors had not lost anything. |
| 00:06:50 |
Rather than taking back their gold, |
| 00:06:55 |
cut them in by paying them a share of the interest. |
| 00:07:01 |
And that was the beginning of banking. |
| 00:07:03 |
The banker paid a low interest rate on deposits |
| 00:07:10 |
The difference covered the bank's cost of operation |
| 00:07:14 |
The logic of this system was simple. |
| 00:07:16 |
And it seemed like a reasonable way |
| 00:07:20 |
However this is NOT the way banking works today. |
| 00:07:25 |
Our goldsmith/banker was not content with the income remaining |
| 00:07:32 |
And the demand for credit was growing fast, |
| 00:07:37 |
But his loans were limited |
| 00:07:43 |
That's when he got an even bolder idea. |
| 00:07:46 |
Since no one but himself knew |
| 00:07:49 |
he could lend out claim checks on gold |
| 00:07:53 |
As long as all the claim check holders didn't come to the vault |
| 00:08:00 |
This new scheme worked very well, |
| 00:08:05 |
on the interest paid on gold that did not exist! |
| 00:08:09 |
The idea that the banker would just create money out of nothing |
| 00:08:14 |
so, for a long time, |
| 00:08:17 |
But, the power to just invent money went to the banker's head |
| 00:08:23 |
In time, the magnitude of the banker's loans and his ostentatious wealth |
| 00:08:30 |
Some borrowers started to demand real gold |
| 00:08:37 |
Suddenly, several wealthy depositors showed up to remove their gold. |
| 00:08:42 |
A sea of claim check holders flooded the street |
| 00:08:47 |
Alas, the banker did not have enough gold & silver |
| 00:08:53 |
This is called a "run on the bank" |
| 00:08:59 |
This phenomenon of a "run on the bank" |
| 00:09:04 |
damaged public confidence in all bankers. |
| 00:09:08 |
It would have been straightforward to outlaw |
| 00:09:14 |
But the large volumes of credit the bankers were offering |
| 00:09:21 |
So, instead, the practice was legalized and regulated. |
| 00:09:25 |
Bankers agreed to abide by limits on the amount |
| 00:09:31 |
The limit would still be a number much larger |
| 00:09:36 |
Quite often the ratio was 9 fictional dollars |
| 00:09:41 |
These regulations were enforced by surprise inspections. |
| 00:09:45 |
It was also arranged that, |
| 00:09:48 |
central banks would support local banks |
| 00:09:53 |
Only if there were runs on a lot of banks simultaneously |
| 00:09:56 |
would the bankers' credit bubble burst |
| 00:10:04 |
The Money System Today |
| 00:10:11 |
Over the years, the fractional reserve system |
| 00:10:18 |
has become the dominant money system of the world. |
| 00:10:26 |
has steadily shrunk to nothing. |
| 00:10:29 |
The basic nature of money has changed. |
| 00:10:33 |
In the past, a paper dollar was actually a receipt |
| 00:10:40 |
In the present, a paper or digital dollar can only be redeemed |
| 00:10:51 |
In the past, privately created bank credit existed only |
| 00:11:00 |
just as we have the choice to refuse |
| 00:11:05 |
In the present, privately created bank credit |
| 00:11:12 |
the dollars, loonies and pounds we habitually think of as money. |
| 00:11:16 |
Fiat currency is money created by government fiat, |
| 00:11:25 |
as payment for debt or else the courts will not enforce the obligation. |
| 00:11:31 |
So, now the question is
|
| 00:11:33 |
if governments and banks can both just create money, |
| 00:11:41 |
In the past, the total amount of money in existence |
| 00:11:47 |
of whatever commodity was in use as money. |
| 00:11:54 |
more gold or silver had to be found and dug out of the ground. |
| 00:12:01 |
In the present, money is literally created as debt. |
| 00:12:09 |
As a result, the total amount of money that can be created |
| 00:12:25 |
Governments place an additional statutory limit |
| 00:12:30 |
by enforcing rules known as |
| 00:12:35 |
Essentially arbitrary, fractional reserve requirements |
| 00:12:42 |
In the past, it was common to require banks |
| 00:12:49 |
to back 10 dollars worth of debt money created. |
| 00:12:52 |
Today, reserve requirement ratios no longer apply |
| 00:12:59 |
but merely to the ratio of new debt money |
| 00:13:08 |
Today, a bank's reserves consist of two things: |
| 00:13:12 |
the amount of government-issued cash or equivalent |
| 00:13:18 |
plus the amount of already existing debt money |
| 00:13:25 |
To illustrate this in a simple way
. |
| 00:13:28 |
let us imagine that a new bank has just started up |
| 00:13:33 |
However the bank's investors have made a reserve deposit |
| 00:13:40 |
of existing cash money at the central bank |
| 00:13:47 |
Step 1: The doors open and the new bank |
| 00:13:53 |
He needs $10,000 to buy a good used car. |
| 00:13:57 |
At a 9:1 reserve ratio, the new bank's reserve at the central bank, |
| 00:14:03 |
allows it to legally conjure into existence 9 times that amount, |
| 00:14:12 |
This $10,000 is not taken from anywhere. |
| 00:14:20 |
The borrower then writes a check on that bank credit |
| 00:14:28 |
Step 2: The seller then deposits this newly |
| 00:14:35 |
Unlike the high-powered government money deposited at the central bank, |
| 00:14:43 |
Instead it is divided by the reserve ratio. |
| 00:14:47 |
At a ratio of 9:1, a new loan of $9,000 can be created |
| 00:14:57 |
Step 3: If that $9000 is then deposited by a third party, |
| 00:15:05 |
it becomes the legal basis for a third issue of bank credit, |
| 00:15:12 |
Like one of those Russian dolls, each layer of which contains |
| 00:15:20 |
for a slightly smaller loan in an infinitely decreasing series. |
| 00:15:28 |
Now, if the loan money created is not deposited at a bank, |
| 00:15:34 |
That is the unpredictable part |
| 00:15:40 |
But more likely, at every step, the new money |
| 00:15:47 |
can repeat itself over and over until almost $100,000 |
| 00:15:57 |
All of this new money has been created entirely from debt, |
| 00:16:06 |
of just one thousand one hundred and eleven dollars and twelve cents, |
| 00:16:13 |
What's more, under this ingenious system, |
| 00:16:19 |
that the bank has 10% more on deposit than it has out on loan. |
| 00:16:27 |
in order to be able to make loans, supporting the general |
| 00:16:36 |
Now, unless all the successive loans |
| 00:16:40 |
it cannot be said that any one bank got to multiply |
| 00:16:47 |
by issuing bank credit out of nothing. |
| 00:16:50 |
However, the banking system is a closed loop, bank credit |
| 00:17:00 |
In a theoretical world of perfectly equal exchanges, |
| 00:17:05 |
as if the whole process took place within one bank. |
| 00:17:09 |
That is, the bank's initial central bank reserve |
| 00:17:14 |
allows it to ultimately collect interest on |
| 00:17:27 |
If that sounds ridiculous, try this. |
| 00:17:33 |
the requirements to make a reserve deposit |
| 00:17:40 |
and actual reserve ratios can be much higher than 9:1. |
| 00:17:44 |
For some types of accounts, twenty to one |
| 00:17:50 |
And even more recently, by using loan fees to raise the required reserve |
| 00:17:56 |
banks have now found a way to circumvent |
| 00:18:01 |
So
while the rules are complex |
| 00:18:08 |
Banks can create as much money as we can borrow. |
| 00:18:10 |
"Everyone sub-consciously knows |
| 00:18:13 |
When you draw on your savings account, |
| 00:18:17 |
because it hast lent the money to somebody else." |
| 00:18:22 |
Despite the endlessly presented mint footage, government-created money |
| 00:18:29 |
More than 95% of all money in existence today was created |
| 00:18:35 |
by someone signing a pledge of indebtedness to a bank. |
| 00:18:39 |
What's more, this bank credit money is being created and destroyed |
| 00:18:46 |
as new loans are made and old ones repaid. |
| 00:18:55 |
"I am afraid the the ordinary citizen will not like |
| 00:18:59 |
...And they who control the credit of a nation |
| 00:19:04 |
and hold in the hollow of their hand the destiny of the people." |
| 00:19:18 |
Banks can only practice this money system |
| 00:19:23 |
First, governments pass legal tender laws |
| 00:19:28 |
Secondly, governments allow private bank credit |
| 00:19:34 |
Thrirdly, government courts enforce debts. |
| 00:19:38 |
And lastly, governments pass regulations |
| 00:19:46 |
while doing nothing to inform the public |
| 00:19:53 |
[The Simple Truth] |
| 00:19:55 |
when we sign on the dotted line |
| 00:19:59 |
our signed pledge of payment, |
| 00:20:04 |
is the only thing of real value |
| 00:20:09 |
To anyone who believes we will honour our pledge, |
| 00:20:12 |
that loan agreement or mortgage is now a portable, |
| 00:20:16 |
and saleable piece of paper. |
| 00:20:20 |
It represents value |
| 00:20:24 |
This money the borrower exchanges |
| 00:20:29 |
Now... A loan in the natural world means that the lender |
| 00:20:33 |
If you need a hammer, my loaning you a promise to provide a hammer |
| 00:20:39 |
But in the artificial world of money, |
| 00:20:44 |
is allowed to be passed off as money |
| 00:20:51 |
"Thus, our national circulating medium |
| 00:20:57 |
which lend, not money, but promises to supply money they do not possess." |
| 00:21:06 |
Once the borrower signs the pledge of debt, |
| 00:21:12 |
with a few keystrokes on a computer, |
| 00:21:17 |
From the borrower's point of view this becomes |
| 00:21:22 |
and because the government allows |
| 00:21:24 |
this debt of the bank to the borrower |
| 00:21:28 |
everyone has to accept it as money. |
| 00:21:32 |
Again the basic truth is very simple. |
| 00:21:35 |
Without the document the borrower signed, |
| 00:21:45 |
Have you ever wondered how everyone... |
| 00:21:50 |
can all be in debt at the same time |
| 00:21:55 |
Have you ever questioned how there |
| 00:21:59 |
Now you know. |
| 00:22:02 |
Banks do not lend money. |
| 00:22:04 |
They simply create it from debt. |
| 00:22:07 |
And, as debt is potentially unlimited, |
| 00:22:12 |
And, as it turns out
|
| 00:22:14 |
[NO DEBT NO MONEY] |
| 00:22:18 |
Isn't it astounding, that despite |
| 00:22:22 |
innovation and productivity that surrounds us, |
| 00:22:25 |
almost all of us, |
| 00:22:29 |
are heavily in debt to bankers! |
| 00:22:32 |
If only people would stop and think - How can that be? |
| 00:22:36 |
How can it be that the people who actually produce all |
| 00:22:40 |
are in debt to those who merely lend out |
| 00:22:45 |
Even more amazing is that once we realize |
| 00:22:49 |
we realize that if there were no debt |
| 00:22:59 |
"That is what our money system is. |
| 00:23:01 |
If there were no debts in our money system, |
| 00:23:05 |
~Marriner S. Eccles, Chairman and Governor of the Federal Reserve Board |
| 00:23:08 |
If this is news to you, |
| 00:23:12 |
Most people imagine that if all debts were paid off, |
| 00:23:18 |
It's certainly true on an individual level. |
| 00:23:20 |
Just as we have more money to spend |
| 00:23:25 |
we think that if everyone were out of debt, |
| 00:23:29 |
But the truth is the exact opposite. |
| 00:23:37 |
There it is... We are totally dependent on continually |
| 00:23:44 |
No loans, no money - which is what happened |
| 00:23:49 |
the money supply shrank drastically |
| 00:23:56 |
"This is a staggering thought. |
| 00:24:00 |
Someone has to borrow every dollar |
| 00:24:04 |
If the Banks create ample synthetic money, |
| 00:24:07 |
We are, absolutely, |
| 00:24:11 |
When one gets a complete grasp of the picture, |
| 00:24:14 |
the tragic absurdity of our hopeless position |
| 00:24:18 |
~Robert H. Hemphill, Credit Manager of Federal Reserve Bank, |
| 00:24:30 |
[PERPETUAL DEBT] |
| 00:24:33 |
That's not all. Banks create |
| 00:24:37 |
They no not create the money |
| 00:24:40 |
Where is that supposed to come from? |
| 00:24:44 |
The only place borrowers can go to obtain |
| 00:24:48 |
is the general economy's |
| 00:24:51 |
But almost all of that overall money supply |
| 00:24:55 |
-as bank credit that has to be paid back |
| 00:25:00 |
So everywhere, |
| 00:25:03 |
frantically trying to obtain the money they need |
| 00:25:08 |
from a total money pool |
| 00:25:12 |
. It is clearly impossible for everyone to pay back |
| 00:25:16 |
because the interest money does not exist. |
| 00:25:19 |
This can even be expressed by a simple mathematical formula. |
| 00:25:27 |
The big problem here is that |
| 00:25:32 |
the total Interest far exceeds the Principal. |
| 00:25:36 |
So unless a lot of extra money |
| 00:25:39 |
it means a very high proportion of foreclosures, |
| 00:25:46 |
To maintain a functional society |
| 00:25:51 |
And so, to accomplish this, |
| 00:25:53 |
more and more new debt money |
| 00:25:56 |
to satisfy today's demands for money |
| 00:26:01 |
But, of course, this just makes the total debt |
| 00:26:04 |
And that means more interest |
| 00:26:07 |
resulting in an ever-escalating and |
| 00:26:19 |
It is only the time lag |
| 00:26:22 |
as new loans and its repayment |
| 00:26:25 |
that keeps the overall shortage of money from catching up |
| 00:26:30 |
However, as the bankers' insatiable credit monster |
| 00:26:34 |
the need to create more and more debt money |
| 00:26:40 |
Why are interest rates so low? |
| 00:26:42 |
Why do we get unsolicited credit cards |
| 00:26:45 |
Why is the US government spending |
| 00:26:49 |
Could it be to stave off collapse |
| 00:26:54 |
The rational person has to ask: |
| 00:26:56 |
Can this really go on forever? |
| 00:27:01 |
"One thing to realize about our fractional reserve banking system |
| 00:27:07 |
as long as the music is playing, there are no losers." |
| 00:27:17 |
Money facilitates production and trade. |
| 00:27:20 |
As the money supply increases, |
| 00:27:25 |
unless the volume of production and trade |
| 00:27:30 |
Add to this the realization that when we hear |
| 00:27:35 |
it sounds like a constant rate. |
| 00:27:39 |
This year's 3% represents more real goods and services |
| 00:27:47 |
Instead of a straight line as is naturally |
| 00:27:51 |
it is really an exponential curve |
| 00:27:57 |
["The greatest shortcoming of the human race...] |
| 00:28:01 |
[is our inability to understand the exponential function."] |
| 00:28:04 |
[ -Albert A. Bartlett, physicist] |
| 00:28:07 |
More and more stuff has to go from natural resource |
| 00:28:12 |
...forever, |
| 00:28:15 |
"Anyone who believes exponential growth |
| 00:28:18 |
is either a madman or an economist." |
| 00:28:21 |
What can we do |
| 00:28:26 |
For one thing, |
| 00:28:31 |
It's time more people ask themselves |
| 00:28:37 |
Around the world, governments borrow money |
| 00:28:42 |
Government debt is a major component of total debt |
| 00:28:48 |
Now, we know that banks |
| 00:28:52 |
and that governments |
| 00:28:56 |
So the first question is
|
| 00:28:58 |
why do governments choose to borrow money |
| 00:29:01 |
when government could create |
| 00:29:06 |
And the second big question is: |
| 00:29:08 |
Why create money as debt at all? |
| 00:29:11 |
Why not create money that circulates permanently |
| 00:29:17 |
at interest in order to exist? |
| 00:29:19 |
The third question: |
| 00:29:21 |
How can a money system that can only function |
| 00:29:25 |
be used to build a sustainable economy? |
| 00:29:28 |
Isn't it logical that perpetually accelerating growth |
| 00:29:36 |
And finally: |
| 00:29:38 |
What is it about our current system |
| 00:29:43 |
What needs to be changed |
| 00:29:48 |
[Usury] |
| 00:29:52 |
At one time, charging any interest on a loan |
| 00:29:56 |
and was subject to severe penalties, |
| 00:29:59 |
Every major religion forbade usury. |
| 00:30:04 |
Most of the arguments made against the practice |
| 00:30:08 |
It was held that money's only legitimate purpose |
| 00:30:15 |
Any form of making money from simply having money |
| 00:30:20 |
or of a thief. |
| 00:30:23 |
However, as the credit needs of commerce increased, |
| 00:30:28 |
that lending involves risk |
| 00:30:33 |
and therefore attempting |
| 00:30:37 |
Today, these notions seem quaint. |
| 00:30:39 |
Today, the idea of making money from money |
| 00:30:44 |
Why work when you can get your money |
| 00:30:50 |
However, in trying |
| 00:30:54 |
it is very clear that the charging of interest |
| 00:31:02 |
Imagine a society and economy |
| 00:31:08 |
instead of plundering its capital stores of energy, |
| 00:31:15 |
No more wood is harvested than |
| 00:31:19 |
All energy is renewable: solar, gravitational or geothermal, |
| 00:31:26 |
This society lives within the limits of its non-renewable resources |
| 00:31:34 |
And the population just replaces itself. |
| 00:31:39 |
Such a society could never function using a money system |
| 00:31:46 |
A stable economy would need a money supply |
| 00:31:53 |
Let's say the total volume of this stable money supply |
| 00:32:00 |
Let us also imagine that moneylenders |
| 00:32:06 |
If some people within this money supply |
| 00:32:11 |
their share of the money supply will grow. |
| 00:32:15 |
If they continually re-loan at interest |
| 00:32:22 |
Whether it is gold, fiat |
| 00:32:26 |
The moneylenders will end up with ALL of the money. |
| 00:32:29 |
And after the foreclosures and bankruptcies are all filed, |
| 00:32:36 |
Only if the proceeds of lending at interest |
| 00:32:41 |
would this central problem be solved. |
| 00:32:45 |
Heavy taxation of bank profits |
| 00:32:49 |
But then why would banks |
| 00:32:54 |
If we were ever able to free ourselves |
| 00:32:59 |
we could imagine banking run as a |
| 00:33:03 |
disbursing its interest earnings |
| 00:33:07 |
or lending without charging interest at all. |
| 00:33:11 |
"I have never yet had anyone who could, |
| 00:33:15 |
justify the Federal Government |
| 00:33:19 |
I believe the time will come |
| 00:33:22 |
I believe the time will come in this country |
| 00:33:26 |
and everyone else connected with the Congress |
| 00:33:29 |
for sitting idly by and permitting |
| 00:33:32 |
~ Wright Patman. Democreatic Congressman 1928-1976 |
| 00:33:36 |
[CHANGING THE SYSTEM] |
| 00:33:39 |
If it is the fundamental nature of the system |
| 00:33:44 |
tinkering with the system |
| 00:33:48 |
The system itself must be replaced. |
| 00:33:54 |
Many monetary critics clamour for a return to gold-based money, |
| 00:34:02 |
They ignore the many scams that can be played with gold: |
| 00:34:05 |
shaving coins, debasing the metal, |
| 00:34:09 |
all of which were abundantly practiced |
| 00:34:14 |
Some advocate silver, it being more abundant than gold |
| 00:34:20 |
Many question the need |
| 00:34:24 |
No one wants to go back to carrying |
| 00:34:28 |
It is a certainty that paper, digital, |
| 00:34:34 |
would be the real medium of trade with the same potential |
| 00:34:42 |
Beyond that, if gold again became the sole legal basis of money, |
| 00:34:51 |
Other monetary reform advocates have concluded |
| 00:34:57 |
and that there may be better ways to create |
| 00:35:04 |
Inventive minds have proposed |
| 00:35:09 |
Many private barter systems create money |
| 00:35:14 |
but it is done openly and without charging interest. |
| 00:35:18 |
An example is a barter system |
| 00:35:23 |
all work being valued equally at a dollar figure |
| 00:35:26 |
that then allows hours to be equated |
| 00:35:31 |
This kind of money system can be set up |
| 00:35:33 |
by anyone who can devise a way to do the accounting |
| 00:35:36 |
and find willing and trustworthy participants. |
| 00:35:39 |
Setting up a local barter money system, |
| 00:35:44 |
would be prudent emergency |
| 00:35:50 |
Monetary reform, like electoral reform, |
| 00:35:54 |
and one that requires a willingness to change |
| 00:35:59 |
Monetary reform, again, like electoral reform |
| 00:36:04 |
because the enormously powerful interests |
| 00:36:08 |
will do their utmost |
| 00:36:13 |
Now that we have seen that money |
| 00:36:16 |
money can be whatever we make it; |
| 00:36:18 |
here is one very simple alternative |
| 00:36:23 |
This model is based on systems |
| 00:36:27 |
in England, and America, |
| 00:36:29 |
systems that were undermined |
| 00:36:32 |
and their fractional reserve system. |
| 00:36:39 |
To create an economy based on permanent, |
| 00:36:44 |
money could simply be created |
| 00:36:48 |
preferably on long-lasting infrastructure |
| 00:36:53 |
such as roads, railroads, bridges, |
| 00:36:57 |
This money would not be created as debt. |
| 00:37:00 |
It would be created as value, |
| 00:37:07 |
If this new money facilitated a proportional increase |
| 00:37:12 |
it would cause no inflation whatsoever. |
| 00:37:15 |
If government spending did cause inflation, |
| 00:37:22 |
Inflation is equivalent in effect |
| 00:37:26 |
Whether the money goes down in value 20% |
| 00:37:32 |
the effect on our buying power is the same. |
| 00:37:37 |
Viewed this way inflation in place of taxation |
| 00:37:45 |
Or, government could choose to counter inflation |
| 00:37:51 |
thus reducing the money supply |
| 00:37:55 |
To control deflation, |
| 00:38:00 |
the government would simply |
| 00:38:04 |
With no competing private debt money creation, |
| 00:38:07 |
governments would have more effective control |
| 00:38:12 |
The public would know whom to blame |
| 00:38:16 |
Governments would rise and fall on their ability |
| 00:38:21 |
Government would operate primarily on taxes |
| 00:38:27 |
as none of it would be required |
| 00:38:33 |
There could be no national debt if the federal government |
| 00:38:40 |
Our perpetual collective servitude to the banks through interest payments |
| 00:38:49 |
"Money is a new form of slavery, |
| 00:38:53 |
it is impersonal-that there is no human relation |
| 00:39:02 |
[THE INVISIBLE POWER] |
| 00:39:06 |
"None are more enslaved than those |
| 00:39:12 |
What we have been taught to believe |
| 00:39:16 |
in reality, an ingenious |
| 00:39:22 |
As long as our entire society remains |
| 00:39:27 |
bankers will be in the position to make the decisions |
| 00:39:40 |
"The modern banking system |
| 00:39:44 |
The process is perhaps the most astounding |
| 00:39:49 |
Banking was conceived in iniquity |
| 00:39:52 |
Bankers own the Earth. |
| 00:39:54 |
Take it away from them, |
| 00:39:57 |
and with the flick of the pen |
| 00:40:02 |
Take this great power away from them |
| 00:40:06 |
and they ought to disappear, |
| 00:40:11 |
But if you want to continue to be slaves of the banks |
| 00:40:15 |
then let bankers continue to create money and control credit'." |
| 00:40:19 |
~Sir Josiah Stamp - Director, Bank of England 1928-1941 |
| 00:40:27 |
The inability of the Colonists to get power to issue |
| 00:40:31 |
permantently out of the hands of George III |
| 00:40:34 |
was the PRIME reason for the revolutionary war." |
| 00:40:41 |
Few people are aware today that, |
| 00:40:47 |
has been in a large part, |
| 00:40:51 |
to get free and stay free of control |
| 00:40:57 |
This struggle was finally lost in 1913, |
| 00:41:01 |
when President Woodrow Wilson |
| 00:41:05 |
putting the international banking cartel |
| 00:41:12 |
"I am a most unhappy man. |
| 00:41:16 |
A great industrial nation is controlled |
| 00:41:19 |
Our system of credit is concentrated. |
| 00:41:21 |
The growth of the nation, therefore, |
| 00:41:25 |
We have come to be one of the worst ruled, |
| 00:41:27 |
one of the most completely controlled |
| 00:41:29 |
and dominated Governments in the civilized world. |
| 00:41:32 |
No longer a Government by free opinion, |
| 00:41:34 |
no longer a Government by conviction |
| 00:41:37 |
but a Government by the opinion and duress |
| 00:41:39 |
~ Woodrow Wilson - President of the United States 1913-1921 |
| 00:41:43 |
The power of this system is deeply ingrained. |
| 00:41:50 |
Years ago, a Canadian Deputy Prime Minister informally |
| 00:41:56 |
both highly educated professionals |
| 00:42:01 |
and found that not one of them had an accurate understanding |
| 00:42:06 |
In fact it is probably safe to say that most people, |
| 00:42:12 |
have never given the matter a moment of thought |
| 00:42:17 |
Have you? |
| 00:42:22 |
"All of the perplexities, confusion, |
| 00:42:26 |
not from the defects of the Constitution or Confederation, |
| 00:42:30 |
so much as from downright ignorance of the nature of coin, |
| 00:42:33 |
~ John Adams, Founding Father of the American Constitution |
| 00:42:36 |
The modern money as debt system |
| 00:42:41 |
when the first Bank of England was set up |
| 00:42:43 |
with a royal charter for fractional lending |
| 00:42:50 |
That modest ratio was just the proverbial foot in the door. |
| 00:42:54 |
The system is now worldwide, |
| 00:43:00 |
and has almost everyone on the planet |
| 00:43:12 |
Could it have all just happened by accident? |
| 00:43:15 |
Or is it a conspiracy? |
| 00:43:20 |
Obviously, |
| 00:43:34 |
"Whoever controls the volume of money in our country |
| 00:43:39 |
and when you realize that the entire system is very easily controlled, |
| 00:43:45 |
you will not have to be told how periods of inflation and depression originate." |
| 00:43:53 |
The Government should create, issue, and circulate |
| 00:43:56 |
needed to satisfy the spending power of the Government |
| 00:44:00 |
By the adoption of these principles, |
| 00:44:04 |
The privilege of creating and issuing money |
| 00:44:07 |
but it is the government's greatest creative opportunity." |
| 00:44:16 |
Until the control of the issue of currency and credit |
| 00:44:17 |
is restored to government and recognized |
| 00:44:21 |
all talk of sovereignty of Parliament |
| 00:44:25 |
Once a nation parts with control of its credit, |
| 00:44:29 |
Usury once in control will wreck any nation." |
| 00:44:38 |
"We are grateful to the Washington Post, |
| 00:44:41 |
and other great publications |
| 00:44:43 |
whose directors have attended our meetings |
| 00:44:47 |
It would have been impossible for us |
| 00:44:50 |
if we had been subject to the bright lights |
| 00:44:53 |
But, the world is now more sophisticated |
| 00:44:57 |
The supranational sovereignty of an intellectual elite |
| 00:45:02 |
to the National autodetermination |
| 00:45:05 |
~David Rockefeller in an address |
| 00:45:11 |
Only the small secrets need to be protected. |
| 00:45:14 |
The big ones are kept secret by public incredulity." |
| 00:45:23 |
Money as Debt |
