Economic Dictatorship

“The inability of the Colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the prime reason for the revolutionary war.”
–Benjamin Franklin

The video below, by Paul Grignon, is a superb animated history of money, explaining how our current system of Debt as Money came about, and how it affects and traps us (and our government) today. It makes a strong case against the banking system, and suggests that our own ignorance of how money actually works leaves us in a hidden slavery we don’t even realize.

Some interesting points from the video:

Banks do not lend money. They create money from debt. When you pay off a loan, you are erasing money from the system.

The government makes about 5% of the money out there. The rest is invented by banks, and backed by nothing but our promises to pay on loans they give out using their invented money. Because the law lets them deal in dollars (fed notes), and people have to accept dollars offered for debts (“legal tender for all debts, public and private”, as it says on your dollar bill), we end up spending the imaginary money that the banks created.

And the whole time, they get interest on loans of this money that they never actually had in the first place.

If we had no debt, we’d have no money. This happened in the Great Depression. That’s why interest rates are so low right now — the system needs borrowing in order to have a functioning economy, because the banks need to invent that borrowed money which doesn’t exist otherwise. This is how our economy became dependent on banks, which is why we end up spending our taxes on a huge bailout to keep things stable when banks start having problems.

But since this system requires debt for there to be money, we constantly have to take out more and more debt and invent more and more money. In the long run, to keep up with this exponential growth (to keep interest — for which money doesn’t exist — from eating away at the system and collapsing stability), we require more and more resources to be harvested and consumed.

So if the current system is inherently unstable, economically and from an ecosystems perspective, what would be better?

Permanent, interest-free money, suggests Grignon. Basically, instead of banks inventing money and then collecting interest from us and the government (i.e. us again), the government would create money but not collect interest, freeing us from the problem of the runaway debt system. There would thus be no national debt either — we wouldn’t be in slavery to banks.

It’s a really interesting argument, full of historical perspective now completely lost to the average person. Seeing the quotes of past presidents decrying the evils of the banking system is kind of startling, because you realize this was a very real and recognized problem for a long time, and over time it just fades away in public consciousness behind layers of obfuscation in the ever more complicated monetary system we live under.

“All of the perplexities, confusion, and distress in America arises, not from the defects of the Constitution or Confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.”
–John Adams

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3 Responses to Economic Dictatorship

  1. Thanks for posting the article, was certainly a great read!

  2. An interesting, related article here talks about similar problems with the current system:

    “There is no need for money to be created as interest-bearing notes. However, it’s still being issued this way worldwide by private banks against the security of people’s own personal wealth or the wealth of other nations. The ‘money’ you borrow from them is created ‘out of thin air.’ It’s a piece of paper that indicates you have pledged your possessions in exchange for your promise to repay the lenders of this money – with interest!

    The crucial point to understand is that the way money is created and issued determines the workings of the marketplace. Money issued at interest by private banks, such as the United States Federal Reserve Bank, brings with it an overwhelming debt which has devastating effects on its own people and around the world. In contrast, money issued by a government without interest would benefit everyone. Instead of creating artificial shortages and causing horrendous suffering, interest-free money would simply be a medium of exchange and could release the abundance of human production.”

  3. Amber says:

    Where’s this video?

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