The Money Masters: Behind the Global Debt Crisis (1)
In the US, there are untold millions suffering from the impact of mass foreclosures and unemployment; in Greece, Spain, Portugal, Ireland, and Italy, stringent austerity measures are imposed upon the whole population; all coupled with major banking collapses in Iceland, the UK and the US, and indecent bail-outs of “too-big-to-fail” bankers (Newspeak for “too powerful to fail”).
No doubt, the bulk of the responsibility for these debacles falls squarely on the shoulders of caretaker governments in these countries that are subordinated to money power interests and objectives. In country after country, that comes together with embedded corruption, particularly evident today in the UK, Italy and the US.
As we assess some of the key components of today’s global financial, currency and banking model in this article, readers will hopefully get a better understanding as to why we are all in such a crisis, and that it will tend to get much worse in the months and years to come.
Foundations of a Failed and False Model
Hiding behind the mask of false “laws” allegedly governing “globalized markets and economies”, this financial model has allowed a small group of people to amass and wield huge and overwhelming power over markets, corporations, industries, governments and the global media. The irresponsible and criminal consequences of their actions are now clear for all to see.
The model we will briefly describe falls within the framework of a much vaster global power system that is grossly unjust and was conceived and designed from the lofty heights of private geopolitical and geo-economic planning centers that function to promote the global power elite’s agenda as they prepare their “New World Order” – again, Newspeak for a “Coming World Government”.
Specifically, we are talking about key think tanks like the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, and other similar entities such as the Cato Institute (Monetary Issues), American Enterprise Institute and the Project for a New American Century that conform an intricate, solid, tight and very powerful network, engineering and managing New World Order interests, goals and objectives.
As an example, Argentina, one may say, has some “advantages” over the citizens of industrialized countries as the US, UK, European Union, Japan or Australia, in that over the last few decades it had direct experience of successive catastrophic national crises emanating from inflation, hyper-inflation, systemic banking collapse, currency revamps, sovereign debt bond mega-swaps, military coups and lost wars…
Finance vs the Economy
The financial system (i.e., a basically unreal virtual, symbolic and parasitic world), increasingly functions in a direction that is contrary to the interest of the real economy (i.e., the real and concrete world of work, production, manufacturing, creativity, toil, effort and sacrifice done by real people).
Over the past decades, finance and the economy have gone their totally separate and antagonistic ways, and no longer function in a healthy and balanced relationship that prioritizes the common good of the people.
This huge conflict between the two can be seen, amongst other places, in today’s financial and economic system, whose main support lies in the debt paradigm, i.e., that nothing can be done unless you first have credit, financing and loans to do it. Thus, the real economy becomes dependent on and distorted by the objectives, interests and fluctuations of virtual finance.
The real economy should be financed with genuine funds; however with time, the global banking elite succeeded in getting one sovereign nation-state after another to give up its inalienable function of supplying the correct quantity of national currency as the primary financial instrument to finance the real economy.
That requires decided action through policies centered on promoting the common good of the people in each country, and securing the national interest against the perils posed by internal and external adversaries.
Thus, we can better understand why the financial “law” that requires central banks to always be totally “independent” of Government and the State has become a veritable dogma. This is just another way of ensuring that central banking should always be fully subordinated to the interests of the private banking over-world – both locally in each country, as well as globally.
We find this to prevail in all countries: Argentina, Brazil, Japan, Mexico, the European Union and in just about every other country that adopts so-called “Western” financial practice.
Perhaps the best (or rather, the worst) example of this is the United States where the Federal Reserve is a privately controlled institution outright, with around 97% of its shares being owned by the member banks themselves (admittedly, it does have a very special stock scheme), even though the bankers running “Fed” do everything they can to make it appear as if it is a “public” entity operated by Government, something that it is definitely not.
One of the global banking over-world’s permanent goals is – and has been – to maintain full control over all central banks in just about every country, in order to be able to control their public currencies.
This, in turn, allows them to impose a fundamental (for them) condition whereby there is never the right quantity of public currency to satisfy the true demand and needs of the real economy. That is when those very same private banks that control central banking come on scene to “satisfy the demand for money” of the real economy by artificially generating private bank money out of nothing.
They call it “credits and loans” and offer to supply it to the real economy, but with an “added value” (for them): (a) they will charge interest for them (often at usury levels) and, (b) they will create most of that private bank money out of thin air through the fractional lending system.
At a geo-economic level, this has also served to generate huge and unnecessary public sovereign debts in country after country all over the world. Argentina is a good example, whose caretaker governments are systematically ignorant and unwilling to use one of the sovereign state’s key powers: the issuance of high power non-interest generating public money.
Instead, Argentina has allowed IMF (International Monetary Fund) so-called “recipes” that reflect the global banking cartel’s own interests to be imposed upon it in fundamental matters like what are the proper functions of its central bank, sovereign debt, fiscal policy, and other monetary, banking and financial mechanisms, that are thus systematically used against the common good of the Argentine people and against the national interest of the country.
This system and its dreadful results, now and in the past, are so similar in so many other countries – Brazil, Mexico, Greece, Ireland, Iceland, UK, Portugal, Spain, Italy, Indonesia, Hungary, Russia, Ukraine… that it can only reflect a well thought-out and engineered plan, emanating from the highest planning echelons of the global power elite.
Fractional Bank Lending
This banking concept is in use throughout the world’s financial markets, and allows private banks to generate virtual money out of thin air (i.e., scriptural annotations and electronic entries into current and savings accounts, and a vast array of lines of credit), in a ratio that is 8, 10, 30, 50 times or more larger than the actual amount of cash (i.e., public money) held by the bank in its vaults.
In exchange for lending this private “money” created out of nothing, bankers collect interest, demand collateral with intrinsic value and if the debtor defaults they can then foreclose on their property or other assets.
The ratio that exists between the amount of Dollars or Pesos in its vaults and the amount of credit private banks generate is determined by the central banking authority which fixes the fractional lending leverage level (which is why controlling the central bank is so vital strategically for private banker cartels).
This leverage level is a statistical reserve based on actuarial calculations of the portion of account holders who in normal time go to their banks or ATM machines to withdraw their money in cash (i.e., in public money notes).
The key factor here is that this works fine in “normal” times, however “normal” is basically a collective psychology concept intimately linked to what those account holders, and the population at large, perceive regarding the financial system in general and each bank in particular.
So, when for whatever reason, “abnormal” times hit – i.e., every time there are (subtly predictable) periodic crises, bank runs, collapses and panics, which seem to suddenly explode as happened in Argentina in 2001 and as is now happening in the US, UK, Ireland, Greece, Iceland, Portugal, Spain, Italy and a growing number of countries – we see all bank account holders running to their banks to try to get their money out in cash.
That’s when they discover that there is not enough cash in their banks to pay, save for a small fraction of account holders (usually insiders “in the know” or “friends of the bankers”).
For the rest of us mortals “there is no more money left” which means that they must resort to whatever public insurance scheme may or may not be in place (e.g., in the US, the state-owned Federal Deposit Insurance Corporation that “insures” up to $250,000 per account holder with taxpayer money).
In countries like Argentina, however, there is no other option but to go out on the streets banging pots and pans against those ominous, solid and firmly closed bronze bank gates and doors. All thanks to the fraudulent fractional bank lending system.
In the US, so called “commercial banks” are those that have large portfolios of checking, savings and fixed deposit accounts for people and companies (e.g., such main street names as CitiBank, Bank of America, JPMorganChase, etc.; in Argentina, there are Standard Bank, BBVA, Galicia, HSBC and others).
Commercial banks operate with fractional lending leverage levels that allow them to lend out virtual Dollars or Pesos for amounts equal to 6, 8 or 10 times the cash actually held in their vaults; these banks are usually more closely supervised by the local monetary authorities of the country.
A different story, however, is in the US (and elsewhere) with so-called global “investment banks” (those that make the mega-loans to corporations, major clients and sovereign states), over which there is much less control, so that their leveraging fractional lending ratios are far, far higher.
This greater flexibility is what allowed investment banks in the US to “make loans” by, for example, creating out of thin air 26 virtual Dollars for every real Dollar in cash they held in their vaults (i.e., Goldman Sachs), or 30 virtual Dollars (Morgan Stanley), or more than 60 virtual Dollars (Merrill Lynch until just before it folded on Sept 15, 2008), or more than 100 virtual Dollars in the cases of collapsed banks Bear Stearns and Lehman Brothers.
Private Money vs Public Money
At this point in our review, it is essential to very clearly distinguish between two types of money or currency:
Private money – This is virtual money created out of thin air by the private banking system. It generates interests on loans, which increases the amount of private money in (electronic) circulation, and spreads and expands throughout the entire economy. We then perceive this as inflation.
In actual fact, the main cause of inflation in the economy is structural to the interest-bearing fractional lending banking system, even among industrialized countries.
The cause of inflation nowadays is not so much the excessive issuance of public money by government as all so-called banking experts would have us believe but, rather, the combined effect of fractional lending and interest on private banking money.
Public money – This is the only real money there is. It is the actual notes issued by the national currency entity holding a monopoly (i.e., the central bank or some such government agency) and, as public money, it does not generate interest, and should not be created by anyone other than the State.
Anybody else doing this is a counterfeiter and should end up in jail because counterfeiting public money is equivalent to robbing the real economy (i.e., “we, the working people”) of their work, toil and production capabilities without contributing anything in return in terms of socially productive work.
The same should apply to private bankers under the present fractional lending system: counterfeiting money (i.e., creating it out of thin air as a ledger entry or electronic blip on a computer screen) is equivalent to robbing the real economy of its work and production capacity without contributing any counter-value in terms of work.
Read the next part of the article
September 26, 2018