by Madhava Setty
from Collective-Evolution Website
Economics is the science of the production, distribution and consumption of goods and services.
The application of economics, if honed to a specific, razor sharp intention becomes the most powerful weapon on Earth.
This weapon is called the Central Banking system.
This number is called the "budget deficit." Operating with a budget deficit is nothing new in our government's history. This has been going on for decades, independent of which party has controlled the White House or Congress.
If you were to add
together all the deficits over the years you would arrive at a sum
of approximately 22 trillion dollars. This number is called the
Most people are aware of these staggering numbers, yet few of us seem to consider basic questions about the system, like,
The answers to these
questions are astounding and can lead to an understanding of our
nation's history and monetary system that is absolutely necessary to
put nearly every aspect of geopolitics into perspective.
Through his thorough
examination of military conflicts, the rise and fall of governments
and repeated taxpayer funded bailouts, Mr. Griffin makes it
abundantly clear that human history has been driven more by the
inner workings of centralized banking and not the will of
individuals or even the apparent vision of their appointed leaders.
The result of this system, as evidenced by repeated examples, has not been to stabilize economies but to destabilize them.
In his diligent and
erudite analysis, Mr. Griffin goes further in asserting that this
has been the intention of the founders of the modern banking system
However, we can still arrive at a basic understanding of the system and its repercussions here.
However, according to The Federal Reserve there is only about 1.7 trillion dollars of currency in circulation.
Clearly, it exists only as numbers attached to accounts existing in computer memory...
Monetary transactions are no longer dominated by the exchange of currency backed by a commodity (like gold or silver), they are instead represented by the increase of a receiver's account balance that corresponds to the equivalent decrement in the account of the payer.
This, of course, seems like a reasonable system that is equitable to both parties.
However, if you examine it more closely, certain fundamental questions arise, primarily,
The total amount of money in circulation in 1950 was approximately 27 billion dollars.
The answer is that it was created by our banks and the Federal Reserve, an institution uniquely endowed by our government to "print" money at its own discretion.
This should strike you as unnerving for two reasons.
Clearly, the amount of goods and services generated by the country has grown with our population and its concomitant increase in our labor force.
Also, innovation in manufacturing and the development of technologies have given rise to less expensive ways to make stuff. We have also engineered methods for extracting our natural resources, making the required raw materials more abundantly available for industry.
These changes continually influence the supply and demand for goods and services that ultimately will dictate what things cost.
These are the "market" forces that capitalism relies upon to self-regulate and ostensibly create an environment for innovation. If the amount of money in circulation is left untouched, prices will continually readjust to represent the total value of the total amount of goods and services generated by an economy.
There should never be a need to put more money into circulation.
To illustrate this, let us consider a simplistic model of how a bank works.
First, a bank serves as a secure place to store depositor's money. The bank issues the depositor a receipt of deposit. Long ago these receipts were recognized as being more convenient than actually using coins to facilitate transactions.
The "money" was in a vault, but the receipts of deposit, when they began to be accepted as payment by a third party, began functioning as money itself. Griffin explains that this form of money is termed "receipt money."
The modern representation
of this convenience has taken the form of checking accounts.
The ability of private
citizens and industry to have access to money to purchase homes or
invest in their businesses or education allows for economic growth
and a higher standard of living and is generally considered a good
thing and something we all depend upon.
We will pay for it over time. In fact, we will pay more for it through a loan than if we purchased it outright. The higher the rate of interest and the longer the term of the loan, the more we end up paying.
In the case of a home
mortgage paid over thirty years the borrower ends up paying several
times the amount they borrowed. This is all spelled out to the
borrower when they sign the promissory note and agree to the terms.
The depositors are free to continue to withdraw from their accounts, meanwhile the borrowers also have access to the very same pool of money. When your bank loans a sum of money to another party the amount in your account there does not get reduced.
So, where does the money come from?
The bank is essentially creating money out of debt and subsequently collecting interest on it. This money is added to circulation and when this happens, the value of every single dollar in the system gets depleted.
As amazing as it may seem, banks are only required to keep available a fraction (10% or less) of the amount of money they lend on hand to meet the needs of their depositors.
Clearly there may come a time when a large number of depositors demand their money to be returned at the same time.
This is the dreaded "run on the bank" which should send the bank into insolvency.
However, this rarely happens these days for two reasons.
Because the profitability of the bank is directly related to the amount of money they loan out, banks are motivated to maximize the amount they lend.
By uniting banks under common lending practices it becomes clear that no individual bank will be allowed to go bankrupt.
However, there now exists the possibility that many or all banks may fail simultaneously with a deep and widespread dive in consumer confidence and/or an accumulation of a great amount of bad debt.
Note that the latter will
automatically give rise to the former as in the case of the great
recession of 2008 when it became recognized that a massive number of
irresponsible home loans were made over the course of a decade.
Government steps in by infusing the banking system with large sums of money.
But who would be willing to accept government IOUs in such a crisis? Nobody...
Nobody, except the Federal Reserve. Through the purchase of government debt the Federal Reserve floods the system with essentially a limitless amount of "money."
This money did not come from the sale of goods and services or gold bars from the treasury. This money is ink on paper called Federal Reserve Checks which are used to fund government debt and ultimately result in greater balances in commercial bank accounts when the government spends it.
The crisis gets averted.
Or does it..?
When that happens, the value of every single piece of currency, including the money in your wallet, drops.
In fact, the reasons are simple.
Let us briefly review.
It should be clear then that this maneuver is designed to keep lending institutions in perpetual business aggrandizing their wealth.
Recall that banks are only required to hold no more than ten percent of their deposits (assets) on hand and are free to loan out the rest. However, there is a greater harm they can exact through our banking system's definition of an "asset."
The bank provides no real service, creates no tangible product, does no labor and assumes little risk yet is able to collect a continuous stream of money from assets that never existed until the moment someone agreed to borrow from them.
This is called "fractional reserve banking" and as shocking as it seems, it exists wherever an economy has abandoned a commodity (gold or silver) backed currency. In other words, everywhere...
The Federal Reserve (and any central bank) has the sole authority to create money when the need for debt arises.
If we were to examine the situation from a central banker's perspective we would regard global events in the context of debt.
War requires a nation to redirect their youth away from the creation of goods and services and into military service. There is the cost of munitions, fuel, care for the wounded and ultimately reparations.
The bigger and the longer the war the better... if you were a central banker...!
This may be obvious to some, but to many this approaches absurdity.
A government for and by the people seems too powerful to be influenced by financiers and monetary policy makers. If banking insiders had any influence over our elected officials, the media would bring immediate public attention to it, right?
In order for this kind of treachery to take place it would require the hidden collaboration of a very small group of extremely influential persons in government, central banking and the media.
This would be a conspiracy, which many believe would be impossible today. There is no question that it has happened in the past...
As detailed in "The Creature from Jekyll Island," the United States entered WWI after The Lusitania, a massive British liner with 195 American civilians on board, was sunk by a German U-boat attack.
Prior to setting sail from New York, The Lusitania was loaded with tons of weaponry including six million rounds of ammunition purchased with funds raised for England through JP Morgan's investment house. This was done in broad daylight with the ship's manifest a matter of public record.
The German government protested that using such a ship to transport weapons was in direct violation of international neutrality treaties. The American government denied this was taking place.
The German embassy then appealed to the American people directly, placing ads in newspapers urging them not to book passage on The Lusitania as it represented a strategic target that would fall under German attack.
The U.S. State Department
prevented these warnings from being run.
When it became clear that Germany was nearing victory through their control of shipping lanes in the Atlantic with their U-boats, Morgan's income stream was threatened.
England, France and the American investing house knew their causes would only be saved if the United States entered the war against Germany.
At the time this seemed a practical impossibility as Woodrow Wilson, approaching reelection, was riding a broad anti-war sentiment sweeping the country. This all changed when the The Lusitania sank.
Morgan had, in the meantime, purchased control over major segments of the media and flooded the public with pro-war editorial. The media, the banks and our government worked together to see that America entered WWI on April 6, 1917.
War expenditures, as
always, were fueled by monetary expansion engineered by The FED.
Between 1915 and 1920 the monetary supply doubled and the value of
our currency dropped by nearly 50%.
If this version of history still seems too incredible to believe, consider this:
The real threat is hidden
in plain sight and is far more diabolical, as it is not confined by
borders or allegiance to governments that inevitably rise and