copyright©Steve Cook 2019
This essay is a necessarily brief account, distilled down to certain essentials, of an elaborate hoax and how to fix it.
We are living in interesting times, times that history will record as the, albeit sometimes painful, birth of a new civilisation much greater than the old one that is dying. And WE, my friend are building it. Moreover, it will be a global one, designed and run by and for all the people of this planet’s human community.
Much of what we are witnessing in terms of the last paroxysms of war and upheaval, the cesspit corruption of the globalists and their cronies, the fraudulent cruelties of their child-drugging, brain-damaging control cult, psychiatry, and so forth are the death throes of the old.
The new civilisation will need, among other things a much better economic foundation than the flawed one that is contributing to the decrepitude of the old.
By this I mean its freedom from economic inequities, iniquities and constraints will require a reformation of the less-than-sane money system currently in use and it is that reform that I will attempt to explain here.
The Hidden Economic Flaw
There is a fundamental problem with our economy that means it will continue to malfunction unless and until that flaw is corrected.
The flaw is carefully hidden behind a smoke screen of complexity by those who profit from it. We are not meant to know about or understand it lest its unmasking derail their gravy train. Understanding and rectifying it, however, will open the door to a resurgence of our fortunes almost beyond imagining. So perhaps we should open the door and see what’s beyond it, even though someone has tried to nail it shut and hung a “Do Not Enter” sign on it.
The flaw can be summed up thus:
There is virtually no true money, per the proper definition of money, in circulation!
That it is called money does not make it money any more than putting kerosene in the petrol tank and calling it petrol will make it petrol. Call it petrol all you like, believe that it is petrol all you like but the car still won’t run properly.
And that in a nutshell is the fundamental flaw that underpins the economic trouble we are having, our precipitate decline, instability, relentlessly escalating debt, money scarcity and declining standard of living.
It is the reason we ran into severe difficulties that precipitated our joining the EU and it must be corrected if we are to make a success of Brexit.
There is no reason on God’s green Earth we cannot flourish and prosper post-Brexit but if we are to do so, the aforementioned problem must be addressed.
This essay is a brief explanation of the flax and how to fix it, which incidentally applies to virtually any country.
Your Government Does Not Create Money
The basic problem with our economy is that the government does not create money. Most people assume that it does but in fact it long ago handed that privilege – the privilege of creating money – to banking institutions.
Banking institutions create money out of nothing and then enter that new money into circulation by lending it to you and me, business, governments and so forth.
Those loans are made at interest so that every time a sum of money is created and entered into the economy, it does so as a debt and the debt has interest added.
Take a simplified example: when the bank kindly lends Joe £5000, the number £5000 is entered electronically in his current account. Joe thinks the money that has appeared in his account came from somewhere. It didn’t. It is simply an electronic “ledger entry” that says “Joe now had £5000” and Joe goes off and spends the money. Thus £5000 was created out of nothing and, by spending it, Joe gets this newly created money into circulation.
But the loan came at (say) 20% interest. So Joe now owes £5000 PLUS £1000 = £6000. Thus £5000 of new money was created and £6000 of new debt was also created.
IN OTHER WORDS, MORE DEBT THAN MONEY IS CREATED.
In this way, over time, our economy has been rigged to run on debt, not money. Let’s go over that again:
What Is Money?
Money is our means of exchange. It is the system of tokens or symbols we use to pass back and forth among ourselves in lieu of actual goods, but confident that at any time we can exchange money for real goods. Being able to exchange it for real goods is what gives it its value.
Who Creates Money?
Someone has to create money. If nobody created it, it would not exist. But who creates it?
People assume that somehow the government creates it but that is not so. It should be so but it isn’t.
Currently banks create it. They simply “print” it, so to speak.
But having been created, how does it get into circulation so that it can be passed around among people?
How do they Get it into Circulation? And what’s the Catch?
The method of getting newly-created money into circulation is that banks, having “printed” it, then lend it to borrowers. The borrowers then take the money loaned to them and spend it. Thus it enters circulation.
But here’s the catch: each time the bank lends out money it has just created, it charges interest. The interest it charges is its profit on “printing” money – in fact, simply creating numbers in computers – out of thin air and lending it.
Thus, each time newly-created money is gotten into circulation by lending it to someone, interest is added and that someone then owes more money than he borrowed. In other words, more debt has been created than money with which to pay the debt back.
This produces many adverse effects that give us all a hard time, a few of them are:
There is more debt in existence (far more) than money.
When an economy expands – through increased population or more goods produced and coming onto the market – the money supply, the stock of circulating money, must be increased along with it. But in the current system, if we increase the money supply – through the mechanics of lending – we increase the overall debt by an even greater amount. This is why in periods of economic boom, levels of debt soar.
The existence of money depends upon people, businesses and governments carrying debt.
In order for money to exist, someone has to be in debt and they have to carry more debt than they have money.
For one person or group to get out of debt or reduce their debt, someone else must go deeper into debt if the volume of money circulating in the economy is to be maintained.
Money enters the economy through three main channels of borrowing: borrowing by the consumer, borrowing by industry, borrowing by government. If, for example, a credit squeeze restricts borrowing by the consumer and industry, there is an increased pressure on government to borrow so as to prevent the money supply shrinking (recession.) If government seeks to reduce its own borrowing, the pressure increases upon the consumer and industry to borrow.
A “credit squeeze” or “austerity measures,” in that they seek to reduce borrowing, bring about a decline in the stock of circulating money. Money becomes scarcer. When money is made scarce relative to the amount of goods and services people want to buy with it, we have what is known as recession.
There are a great many aspects to this economic folly, far more than I can cover in this brief article, but if you would like a more thorough description of it, its history and various ramifications, then please contact me via my website and I will send you a FREE PDF of my book The Worm in the Apple.
The Whip Hand
Suffice to mention here that where a government has surrendered to private banking cartels the creation and lending into circulation of its money stock, those cartels have the whip hand over it.
By turning on and off the tap of money supply through the mechanics of lending, the banking cartels can control the fortunes of entire industries and nations, engineer booms and depressions, dismantle countries targeted for destruction, foment wars, give advantage to those corporate interests they favour and so on.
Understanding that basic “why” of our trouble enables us to come up with a simple plan for national economic recovery, which will enable us to extricate ourselves from the mire in which we are stuck, turn around our national fortunes and bring about a boom beyond all imagining.
Brexit Without Monetary Reform is Not Enough
It is important to note too that the mere fact of leaving the European Union, if we are ever allowed to do so, will not free us from this system and thus will not make us truly free to determine our own fortunes.
It was this system that enabled our decline to be engineered in the first place by those who wanted us desperate enough to embrace the fake Promised land of European Union. If left in place it will enable our enemies to engineer our “failure” if leaving the EU displeases them. Leaving the EU and reforming our money system are both necessary.
Ability to Produce is not the Problem
Bear in mind that whatever trouble we have, it is rarely an inability to produce in abundance all the food, clothing, furniture, computers, roads, houses, schools and so forth we need. We can potentially, produce any amount of these things and so the potential for material wealth is there.
There is a difference for example between being hungry because the crops won’t grow and being hungry because we don’t have the money to buy crops that either have been grown or can be grown.
What is scarce in a recession is money and thus our ability to express demand for what we want because money is the thing we use to express our demand. And so businesses go bust due to a “decline in demand”. But it is not people’s desire for industry’s products that has suddenly, inexplicably waned. What has happened is a relative scarcity of money and thus the spending power with which to express demand.
If you haven’t got the money you can’t buy the dishwasher and if you can’t buy the dishwasher, the dishwasher manufacturer can’t sell it and so goes out of business, no matter that the dishwasher exists, nor how much you want the dishwasher and how much he wants to sell it to you!
Thus, as I mentioned, the problem we have is not a technological inability to create wealth but a malfunctioning money system, a corrupted means of exchange, that has brought about problems of the distribution of wealth from producer to consumer. It is quite likely that such problems of the distribution of wealth created led to often catastrophic failed attempts to correct it, such as Communism. They failed because they attempted to address symptoms without ever identifying and correcting the underlying cause.
Delivering Power into Criminal Hands
This system delivers into the hands of the institutions that create money the power to control money supply, to turn on or off the tap of money supply or to direct the supply of money to those they favour or deny money to those they do not favour. Thus they have been given a whip hand over governments, national economies and the fortunes of nations.
Imagine if someone gave you the sole right to create money and then get it into circulation by lending it out at interest to whomsoever you pleased according to your own purposes and desires. You would have unlimited wealth and unlimited power to shape the fortunes of the human community wouldn’t you? The fortunes of the rest of humanity would then depend on whether your inclinations towards your fellows were inimical or benign. And God help humanity if your inclinations were not benign.
Okay, so now we know what is causing us all this needless trouble.
That trouble is not going to magically disappear unless the cause of it is removed.
That cause is being held in place and then hidden from view by those who profit from it and their proxies in government.
How do We Fix It?
But what can we do about it?
It is very likely that we are approaching a collapse of this flawed system with Western nations who have been at the hub of it facing very serious difficulties. Yet all of these troubles can be avoided and indeed a Golden Age of prosperity ushered, in by the implementation of simple and sensible measures and policies. It is worth knowing what can and should be done to handle the situation when the current system implodes.
So we citizens could do ourselves a favour by demanding the following:
1.) Immediately remove from private banking institutions the right to create money. Banks will retain the right to lend money but may only lend money they actually have on deposit and may not create money out of thin air in order to lend it.
2.) Immediately restore to government – and to democratically elected, accountable government – the right to create money according to the economy’s need for money so as to ensure and facilitate the smooth exchange between producers and consumers of goods and services.
3.) Immediately set up an autonomous Agency whose sole right and duty is to calculate the economy’s need for money. Charge that Agency with the duty of correctly calculating money supply. The yardstick by which that correctness is measured is: KEEP THE PURCHASING POWER OF THE CURRENCY STABLE. In other words, the Agency should steer a course between inflation (too much money resulting in a decline in the currency’s spending power) and recession (too little money in circulation). Stability of spending power of the currency is in any case vital for confidence and the ability to plan and predict.
4.) The above mentioned Agency will not have the power to create money. Its sole function will be that of calculating how much new money must be created and then instructing government to create it.
5.) The above Agency must be protected by law from any influence or interference by any person or agencies including government, with stringent penalties for violation of such law and removal from office of any official or politician who violates that law.
6.) The deliberations, calculations and conclusions of that Agency will by law be open to scrutiny by any citizen of the nation and all its councils, conferences, deliberations and meetings will be held publicly in the presence of witnesses or on camera.
5.) Government will be obliged and bound by law to create and spend new money as instructed by the above mentioned Agency. The Agency may only instruct government as to how much money it must create and spend. It may not instruct government as to on what it spends the money.
6.) Government must spend into circulation exactly the amount it is instructed to spend. It may spend it on roads, schools, pensions, subsidies and so forth, whatever it decides to spend it on according to the priorities, policies and the mandate upon which it was elected to office.
7.) Government must spend the aforementioned money into its home economy so as to ensure it enters circulation in the economy. It may not use newly-created money to buy imports, For example, if it wishes to spend £10 billion into circulation by building a new bridge, it must hire indigenous labour and buy indigenous materials from indigenous suppliers where possible. Thus, through the purchase of materials and the payment of wages, new money will enter the economy WITHOUT A DEBT BEHIND IT and will then circulate. Further, this will greatly help the employment and prosperity of indigenous people and businesses.
8.) New money created by government according to the calculations of the fully autonomous money calculation Agency and spent into the economy on things such as roads and schools or simply used, if government so wishes, to reduce the tax burden of the citizen, will enable taxation to be reduced as the creation and expenditure of new money as the economy needs it will become a new, additional source of revenue for government with which to finance its various projects in service of the people. Bear in mind that new money is created so as to finance various projects all the time. But it is currently done through the mechanics of bank lending described above and the benefits of that method accrue to private banking institutions. Under the new system, the benefits will accrue to the people through a reduction in their tax burden.
9.) Government will thus have a new source of revenue: the creation and spending into circulation of new money. If it wishes to increase its revenues without increasing taxation, it will be able to do so by helping the people increase the production of goods and services both in quantity and quality (wealth). The more benign it makes the environment for human enterprise, for the producer and the honest citizen, the more it supports and encourages the citizen in his efforts to create wealth, the more revenue it will have.
10.) Immediately abolish all taxation (income tax, VAT, death duty, stamp duty, road tax, tax on fuel and so forth.) I say again, all existing taxes of any kind. Replace the currently unwieldy and expensive-to-administer tax system (whose complexity has the sole purpose of hiding from the people exactly how much tax they are paying) with a SINGLE PURCHASE TAX.
NOTE: Under the current system in which money enters the economy through the mechanics of bank lending, the economy is awash with unprecedented amounts of debt. The interest we are paying on those debts is in essence a toll or rental charge we pay for the privilege of having a means of exchange. In other words, it is as highly oppressive form of disguised TAXATION, the benefits of which accrue to private banking cartels.
11) The levying of a single purchase tax will enable the people to know as they pay it exactly how much they are paying. Whether the level of purchase tax be set at 25% or 10% by government or raised or lowered by government, the people will be able to see it clearly and assess and decide upon the performance of their government in managing the nation’s financial affairs. It will thus be impossible for government to hide taxes or its own incompetence, overspending or economic mis-management. Thus, consumption will be taxed but all production will not be taxed anywhere at any time. All wages and profits will be received free of any tax and the citizen or business will pay his tax as and when he buys goods and services. As tax is paid only when goods are bought, it will be impossible for anyone to evade taxes, either through illegal means or the hiring of creative accountants. The wealthy will naturally pay more tax than those less well off in so far as they buy more goods, more expensive goods and luxury items. Whatever the percentage set for the purchase tax, it will be applied uniformly to all purchases. Moreover, as the system will be simple, requiring only that a percentage be added to purchase prices and only points of sale will be required to present tax accounts, the administrative cost and burden of tax collection will be vastly reduced. The majority of citizens will never need to be involved with tax authorities at all. Those who, being points of sale, are required to deal with tax authorities will find a much greater simplicity than the current system of tax returns.
12.) The spending of new money into the economy to offset the tax burden, coupled with the abolition of all taxation upon income and its replacement with a simple purchase tax will remove from the citizen much of the burden of taxation that has until now so stifled his efforts to prosper.
13.) The abandonment of the system of producing money as debt, with interest on the debt being in effect a toll or tax one pays (to private banks) for the privilege of using the nation’s means of exchange, will also reduce the debt burden and remove further strain from the citizen.
14.) Banks will return to their primary function of safeguarding and investing the money of their savers and the provision of loans for the purchase of large consumer items such as houses. But houses, given the economic measures above, will become relatively cheaper in any case, obviating the need of the citizen to take on a lifetime of debt so as to have a home. Large banking cartels will no longer be able to manipulate the economy and thereby the fortunes of the citizen, through the manipulation of interest rates or strategic lending. The hidden whip hand held by banking cartels over elected governments and entire nations will be removed.
Removing the Debt Burden from Everybody’s Back
It should be noted that while the current system requires escalating levels of borrowing in order to sustain a money supply, the new system will see a vast reduction of the pressure on the citizen.
These measures will remove the debt burden from both citizen and government and enable those who manage their affairs well to be truly solvent. They will also remove the tax burden that penalises production and inhibits enterprise and the hidden influence upon government of the money powers.
There are of course other ills in our society that also need to be corrected and the above measures will not of themselves bring about a Utopia but we can at least remove the distractions of economic constraints and debt slavery from Man’s road and thus make his focus on other essential tasks a little easier.
Hope this helps!
I am indebted to the late Dr Edward Hamlyn for introducing me to the principles of monetary reform, the economist Michael Rowbotham and his masterful and enlightened work Grip of Death, and to Abraham Lincoln for his Monetary Policy.
Steve Cook www.steve-cook.com
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