an object that has no intrinsic value and is still used as a medium of exchange. The term “fiat” derives from the Latin “fieri” meaning ‘it shall be’. Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value. It was introduced as an alternative to commodity money and representative money. Commodity money is created from a good, often a precious metal such as gold or silver, which has uses other than as a medium of exchange (such a good is called a commodity). Representative money is similar to fiat money, but it represents a claim on a commodity. Fiat money first began to be used in China in the 11th century and has since been used by various countries. It gradually poisons any economy it invades. The corruption of money always begins the complete corruption of a nation.
Beginning on pages 50–51 of Tragedy and Hope, author Carroll Quigley speaks of a group that employs “financial capitalism” to monopolize business and control government. As experts in “financial manipulation,” these men “aspired to establish dynasties of international bankers” and, according to Quigley, they succeeded at a level that rivaled the political dynasties of past centuries. Centered in London, with offshoots in New York and Paris, the power of this group is described as “overwhelming” in significance and “occult” in nature. By 1850[2] they could access the immense monetary power of “the Stock Exchange, the Bank of England, and the London money market.” But this was just the beginning.
In time, they brought into their financial network…commercial banks and savings banks, as well as insurance companies, to form all of these into a single financial system on an international scale which manipulated the quantity and flow of money.
Just to clarify: these men did not own the money that citizens placed in commercial and savings banks. They did not own the money that citizens paid into retirement funds, insurance funds, or trust funds. However, as already mentioned, they didn’t need to own the money. All they needed was the power to control it, and that they had. As long as an institution within their “financial network” held the funds, they could direct those funds toward increasing their power. They, alone, determined how and where that enormous, international pool of money would be invested.
Bankers, especially…international investment bankers, were able to dominate both business and government. They could dominate business…because investment bankers had the ability to supply, or refuse to supply, capital…they took seats on the boards of directors of industrial firms, as they had already done on commercial banks, saving banks, insurance firms and finance companies….they funneled capital to enterprises which yielded control, and away from those who resisted.[3]
Side Note: Quigley points out that bankers have far less power over those who can finance their own operations.[4] As such, any group seeking to create a ruling “dynasty of international bankers” would be wise to create a system that is built on debt and undermines independent financing. Anything that devours or wipes out the wealth of outsiders will create endless opportunities for members of the dynasty who have an inexhaustible[5] supply of money to loan (always with strings attached):
The power of investment bankers over governments rests on a number of factors, of which the most significant, perhaps, is the need of governments to borrow money. Just as businessmen go to commercial banks for current capital advances…so a government has to go to merchant bankers (or institutions controlled by them) to tide over the shallow places caused by irregular tax receipts. As experts in government bonds, the international bankers not only handled the necessary advances but provided advice to government officials and, on many occasions, placed their own members in official posts…
In addition to their power over government based on government financing and personal influence, bankers could steer governments in ways they wished them to go by other pressures. Since most government officials felt ignorant of finance, they sought advice from bankers whom they considered to be experts in the field. The history of the last century shows…that the advice given to governments by bankers, like the advice they gave to industrialists, was consistently good for bankers, but was often disastrous for governments, businessmen, and the people generally. Such advice could be enforced if necessary by manipulation of exchanges, gold flows, discount rates, and even levels of business activity.[6]
To summarize: using enormous amounts of other people’s money, international bankers essentially purchased their way into powerful business and government positions. With each new position, they gained control of more money. With control of more money, they gained access to more positions (so on and so forth). Through this process they secured enough monetary power to enforce their “advice” on both businesses and governments alike, expanding the reach of their hidden “dynasties” each step of the way.
This now brings us to the Network’s two crowning achievements of 1913: the federal income tax and the Federal Reserve System.
Using government as its instrument, the Network granted itself the legal authority to both create and directly confiscate the money it needs to finance its global objectives. The enormity of this topic, especially regarding the legal right to create money, requires hundreds of pages to cover properly. This chapter will provide only a short introduction. To fully understand the power derived from creating money, I highly recommend further research into the Federal Reserve System.[7] For now, let’s start with the easier of the two funding mechanisms: not money creation, but money confiscation.
2: Confiscate Money
On page 938 of Tragedy and Hope, Quigley draws a flawed conclusion. He assumes that J. P. Morgan, Rockefeller, Carnegie, etc., must have lacked control over the government in 1913. If they had more power, he suggests, they would have stopped the federal income tax from becoming law. Like so many others who’ve accepted the alleged purpose of the income tax, Quigley fails to put two and two together: an income tax that is paid into a system that the Network controls only serves to strengthen the Network’s position. It creates another massive flow of other people’s money to tap into.
Even if high-ranking members like J. P. Morgan, Rockefeller, Carnegie, etc., had paid the income tax like everyone else, they’d still gain control over far more money than they paid in. (The amount of money collected from the rest of the population each year ran into the billions by 1917, then the tens of billions by the mid-1940s, then the hundreds of billions by the mid-1970s, and it runs into the trillions today.)[8] Remember, they don’t have to own that money to determine how it’s spent.
Of course, these men did not pay income taxes like everyone else. Instead, they used the government to establish “tax-exempt” foundations before the income tax became law. This not only enabled them to shield their own fortunes, but it also enabled them to gain further control over Ivy League education and the federal government itself. Remarkably, Quigley acknowledges the ultimate effect of the income tax and the tax-exempt foundations, but he doesn’t seem to think about it much further:
These tax laws drove the great private fortunes…into tax-exempt foundations which became a major link in the Establishment network between Wall Street, the Ivy League, and the Federal government.[9]
For insight into how the Network really felt about the income tax, we can simply turn our attention back to E. M. House. In his book Philip Dru: Administrator (written anonymously before the income-tax amendment was passed), House openly attacked the “grotesque” American Constitution because it prevented “the government” from collecting an income tax from its citizens.[10] Shortly after House’s choice for president (Woodrow Wilson) was placed in office, the “grotesque” constitutional barrier was removed, and the money began to flow.
Sadly, few Americans realize that the United States did not have a permanent personal income tax prior to 1913.[11] Think about that for a minute…America went from being a sparsely settled nation of wilderness in 1776 to the most prosperous and arguably most powerful nation on the planet without an income tax. Contrary to the popular canard, a lack of income tax does not mean your country is doomed (socially, politically, militarily, and economically) to the global status of Somalia.
Another little-known fact about the income tax: if we abolished the personal income tax today, the federal government would still collect about $3 billion per day ($125 million per hour) in revenue. Compare that to its revenue in 1913 of less than $1 billion per year,[12] and the obscenity of what the Network has achieved becomes pretty clear. Even after adjusting for inflation, the numbers are still alarming. (One billion dollars per year in 1913 would equal about $25 billion per year today.[13] At the current rate of federal spending, that inflation-adjusted $25 billion would be gone in a little over two days!)[14]
All of this federal spending requires an ever-expanding river of money. Follow that river, and you’ll find that it inevitably empties into an ocean of Network-connected industries and “interests.” Even humanitarian “government” services like food stamps are handled by JP Morgan and generate millions of dollars for the firm. Start looking into the military-industrial complex, which serves the ultimate Network interest (its sovereignty-destruction project), and the costs, financial and otherwise, boggle the mind. But as bad as all of this is, we’ve still only scratched the surface.
Yes, the income tax essentially handed the Network a license to steal. Without its instrument (government), there would be no way to directly confiscate trillions of dollars annually from the labor of US citizens. The power of this funding mechanism, which did not exist for nearly 140 years of our nation’s history, has strengthened the Network’s global influence beyond measure. However, even on its best day, the so-called income tax runs a distant second to the greatest monetary power of all: the power to create money out of thin air.
3: Create Money—Create Credit—Create Inescapable DEBT
In the next chapter, we’ll briefly cover the basic mechanics of creating money, credit, and inescapable debt. For now, let’s cover something that’s arguably more important and definitely easier to understand: the implications of possessing such incredible monetary power and the story of how the Network seized it. First, the implications. We’ll start small and work our way up.
Can you imagine if the government gave you 100 million dollars? Think about that for a minute. Tomorrow, at noon, the government has agreed to transfer $100 million into your bank account, no strings attached…Got it? OK, let’s go a little further.
Can you imagine if the government gave you 500 million dollars? How about $1 billion? Better yet, what if it simply decided to give you $1 trillion? It’s difficult to get your mind around such large numbers, but really try to imagine what it would be like. For instance, if the government gave you $1 trillion and if you invested it, earning only a 7 percent annual return, you’d wind up with over $5.5 billion per month in additional income (roughly $192 million per day.)[15]Imagine having the ability to spend $192 million per day without ever depleting a penny of the $1 trillion you were given. How much power would you have? And with so much money to spend, how many individuals and institutions would want to be your friend?
Now, let’s take it one step further…What if the government gave you all of the dollars? What if you were given the exclusive right to create every single dollar that exists? Try to get your head around that concept. (If a dollar exists anywhere in the world, it only exists because you were given the right to create it.) Now how much power do you have? The following quote provides a pretty good idea:
“I am afraid the ordinary citizen will not like to be told that the banks can, and do, create money…And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hands the destiny of the people.”—Reginald McKenna, British Chancellor of the Exchequer, as quoted in Tragedy and Hope[16]
That statement is about as straightforward as it gets, and it comes from a man who had intimate knowledge of the topic. He worked at the highest levels within the system and is stating, unequivocally, exactly how it is. Those who create money and control the credit of the nation “direct the policy of governments and hold in the hollow of their hands the destiny of the people.” So why is it, if creating money and controlling credit confer so much power, that so few people understand either of these topics? Shouldn’t we all be taught the dangers of such power? Is it any surprise that we aren’t?
Again, Quigley provides some insight. He explains that, for the Network to achieve its objectives, “it was necessary to conceal, or even to mislead, both governments and people about the nature of money and its methods of operation.”[17] This practice of deceiving governments and people about money continues to this day because it’s the only way for the Network to maintain its current level of power. Rest assured, if the vast majority of people do not understand what central banks are or how they operate, it’s because they were not meant to. Our global monetary system was created by men who “conceal” and “mislead” as a matter of course. It’s not only how they conduct their business, it’s how they intend to secure their “far-reaching aim,” reiterated below.
The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control…able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled…by the central banks of the world acting in secret agreements…Each central bank, in the hands of men like Montagu Norman of the Bank of England (and) Benjamin Strong of the New York Federal Reserve…sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world. In each country the power of the central bank rested largely on its control of credit and money supply.[18]
It was, for this purpose, that the Network created the Federal Reserve System.
The Federal Reserve System
In chapter 3, we covered President Taft’s undoing: he refused to support the Network’s plan to create a central bank in the United States. And since the Network couldn’t fully “dominate the political system” of the United States without control of its “credit and money supply,” Taft was toppled and Wilson was installed. Shortly after taking office, Wilson signed the Federal Reserve Act into law, and the central bank was born.
However, this isn’t the full story of how the Federal Reserve System came to be. Just as citizens were misled into believing that they chose Wilson in the 1912 election, they were also misled into believing the Federal Reserve Act was written to protect them from predatory international bankers. The sad truth is, predatory international bankers secretly wrote the legislation themselves and used government to turn their wishes into law.
This is a piece of the puzzle that Quigley seems to have missed. He acknowledges that Network titans like Rockefeller and Morgan had enough power to cause a financial panic whenever they chose. He admits that they used their power to their own advantage, wrecking “individual corporations, at the expense of the holders of common stocks.” He even admits that J. P. Morgan precipitated the “panic of 1907.”[19] But the fact that their power could have been used to both take out competition and incite public demands for “monetary reform” (reform that would be directed by the Network itself) is not covered. It’s a glaring omission.
In short, the Network needed a central bank to “dominate the political system” of the United States, but it needed another crisis[20] to finally sell the scheme. With that perspective in mind, the panic of 1907 looks very different. First, J. P. Morgan causes the panic (which, to this day, is rarely mentioned), then he and Rockefeller halt the panic (for which, to this day, they’re still portrayed as saviors), and out of the suffering and chaos, “public demands” for legislative intervention finally reach critical mass. “The government” then forms a monetary commission to investigate and solve the problem (headed by none other than Network insider and US senator, Nelson Aldrich), and the commission decides that a central bank is needed to solve the nation’s woes. From there, it was simply a matter of writing the legislation and handing it off to the “right” politicians.
Of course, the Network had to conceal the fact that it would be writing the legislation itself, and this presented some problems. The lengths it went to in order to hide its role reads like a scene out of a James Bond novel.
If you were alive in 1910, you wouldn’t have been invited to the meeting…In fact, you would have never known that a meeting took place. Despite the enormous impact on your country’s future, the scheme to create a new “monetary system” was none of your business.
This is where the story of the Federal Reserve System begins. The banking empires of Rockefeller, Rothschild, Morgan and Warburg…sent [six] representatives on their behalf to the privately owned Jekyll Island off the coast of Georgia. To prevent the men from being recognized, the island’s permanent employees were sent on vacation and carefully screened temps took their place. Each man was sworn to secrecy and instructed to only use their first name to further conceal their identity. (Nearly two decades passed before any of the conspirators publicly admitted they’d participated in the meeting.) In that meeting, the financial elite created for themselves the monetary system that we live under today.[21]
Had this meeting been covered in the press, the headline might have read: “POWERFUL BANKERS CONSPIRE ON PRIVATE ISLAND TO SEIZE MONETARY CONTROL.” But then again, had it been covered in the press, the Federal Reserve Act would have never passed. Citizens wanted Congress to weaken the destructive powers of international banking interests, not expand them.
Unfortunately, the Jekyll Island story didn’t leak until 1916[22], years after the damage had already been done. And even after it was exposed, “educators, commentators, and historians” continued to deny that the meeting ever took place.[23] Anyone who pointed out the nefarious origins and authors of the Federal Reserve Act was smeared and dismissed as a conspiracy theorist. Fortunately, the truth finally did come out, and the conspiracy theorists were vindicated. Perhaps the most definitive admission came from Frank A. Vanderlip, president of the most powerful New York bank at the time (National City Bank of New York, now Citibank):[24]
There was an occasion near the close of 1910, when I was as secretive—indeed as furtive—as any conspirator…I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System…Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage by Congress…although the Aldrich Federal Reserve plan was defeated when it bore the name of Aldrich, nevertheless its essential points were all contained in the plan that finally was adopted.—Frank A. Vanderlip in the 1935 Saturday Evening Post article, “From Farm Boy to Financier”[25]
Despite this admission over seventy-five years ago, despite other participants and their biographers who’ve admitted the same, despite the fact that Federal Reserve Chairman (Ben Bernanke) returned to Jekyll Island in 2010 to commemorate the FED’s founding one hundred years earlier[26]; still the vast majority of people have never heard of the trip to Jekyll Island and have no idea that “international bankers” created the system that was supposed to protect them from international bankers.
But again, should we be surprised? The education system and mainstream media are the two most powerful instruments for distributing information and creating mass awareness. Regarding the media, just a handful of global “news” corporations can, in one day, make billions of people around the world simultaneously aware of something that was completely unknown the day before. With this kind of power, the Network can choose to spread any lie, or withhold any truth, that it chooses. Then there is education: millions of students can be taught the real story behind the Federal Reserve System, or they can be taught the smokescreen of “government intervention to protect the public.” They can be taught the dangers of centralized banking power, or they can be taught nothing at all. At the end of the day, if people aren’t looking beyond the Network’s instruments for their information, they cannot expect to know what the Network doesn’t want them to know.
Continued on next page…
Even Quigley, apparently, was unaware of the trip to Jekyll Island. He makes no mention of the meeting in either Tragedy and Hope or The Anglo-American Establishment. Since he obviously had no aversion to exposing comparable duplicity, it’s reasonable to assume he didn’t know that particular part of the Fed’s history. Or, perhaps he consulted some of the respected “educators and historians,” who convinced him there was no evidence that it ever happened. Whatever the reason, it’s an unfortunate oversight. Nothing demonstrates the Network’s power more convincingly than its ability to secretly write legislation that governs, or outright creates, its own instruments. And on that note…
With its legislation successfully written, Taft ousted, and Wilson in the White House, it would seem that the Network could rest easy. However, there was one more swindle needed to guarantee passage of the Federal Reserve Act. To help garner public support, the very same people who helped author the legislation on Jekyll Island began speaking out publicly against it.
As the Federal Reserve Act moved closer to its birth…both Aldrich and Vanderlip threw themselves into a great public display of opposition. No opportunity was overlooked to make a statement to the press—or anyone else of public prominence—expressing their eternal animosity to this monstrous legislation…Since Aldrich was recognized as associated with the Morgan interests and Vanderlip was President of Rockefeller’s National City Bank, the public was skillfully led to believe that the [big bankers were] mortally afraid of the proposed Federal Reserve Act. The Nation was the only prominent publication to point out that every one of the horrors described by Aldrich and Vanderlip could have been equally ascribed to the Aldrich Bill as well. But this lone voice was easily drowned by the great cacophony of deception and propaganda.[27]
The newly packaged Glass-Owen Federal Reserve Act, which mirrored Aldrich’s version in “all essential provisions,”[28] was put forward by Democrats as being radically different; a bill written by selfless public servants to protect the citizenry from selfish, out-of-control banking interests. And as Vanderlip, Aldrich, and other “big-business Republicans” continued to attack the “new” legislation, more and more well-meaning Americans fell for the ruse.
The voice of the people expresses the mind of the people, and that mind is made up for it by…those persons who understand the manipulation of public opinion…It is they who pull the wires which control the public mind and contrive new ways to guide the world.[29]
Meanwhile, as the citizens were being guided to the desired opinion publicly, Edward Mandell House ensured that Wilson and Congress were being properly guided privately. The Intimate Papers of Col House leave little doubt that he acted as the direct liaison between the Network and relevant politicians during the creation of the central bank. (House directed the politicians while Paul Warburg, the primary author of the Jekyll Island legislation, directed House.) Ed Griffin summarizes House’s role this way:
As far as the banking issue was concerned, Colonel House was the President of the United States, and all interested parties knew it. Wilson made no pretense at knowledge of banking theory. He said: “The greatest embarrassment of my political career has been that active duties seem to deprive me of time for careful investigation. I seem almost obligated to form conclusions from impressions instead of from study…I wish that I had more knowledge, more thorough acquaintance, with the matters involved.” To which Charles Seymour adds: “Colonel House was indefatigable in providing for the President the knowledge that he sought…The Colonel was the unseen guardian angel of the bill.”[30]
Here is a perfect example of Quigley’s observation: ignorance of banking led politicians to trust the advice of bankers and that this was “consistently good for bankers, but was often disastrous for governments…and the people generally.” The great irony is that Quigley himself does not seem to fully understand the nature of the banking system. There are a few things in Tragedy and Hope that support this conclusion; I’ll cover them briefly.
First, on page 58, Quigley presents what he calls a “paradox” of banking practice: bankers prefer monetary deflation (a reduction in the money supply) because it increases both the value of the money that they control and the interest rates that they can charge borrowers. However, he states that they inevitably abandon the “deflationary idea” in favor of inflating the money supply (which they accomplish by issuing bank loans) because of their “eagerness to lend money at interest.”
To Quigley’s credit, he acknowledges that bankers can gain an extra form of profit from this supposed “conflict”: by increasing the money supply with loans, they increase the indebtedness of others and drive prices up. Then, by decreasing the money supply, they can force many debtors into foreclosure and confiscate whatever collateral was pledged to secure their loans. He also acknowledges that this manipulation of the money supply was a “prominent aspect” of the so-called “business cycle” and that it was “destructive to business and industry.”[31]
My question is: Where is the paradox?
If you’re a member of the Network, this is a fundamental feature of the banking system that you’ve created. What better way to crush or control competitors in “business and industry”? You not only enjoy the normal benefits of controlling loans (loaning only to those who yield control and withholding it from those who resist), but you also have a mechanism for trapping debtors and then seizing their assets. If you do decide to confiscate their collateral—rather than bury the borrower in additional debt with additional strings attached—you’ve effectively gained ownership of a real asset with money that you created out of thin air. (Remember, that’s how our current banking system operates. When the Network wants to issue a loan, it pulls a check from its magic checkbook, writes in the loan amount, and poof—the money for the loan is created on the spot.)
Quigley states that too much deflation could sometimes be “disastrous” for the bankers because it forced “the value of the collateral below the amount of the loans it secured.” Sorry, but even this claim needs addressed. An unpaid principal loan balance of say $100,000, secured by an asset that sells for only $80,000 (or less), does not necessarily equal a loss for the bank.[32] And if the goal is to drive a competitor into bankruptcy, then the math involving so-called “losses” gets even more interesting. What appears to be a loss on paper (due to a gap between the amount of principal owed on a loan and what is ultimately obtained during liquidation) can actually be viewed as a great investment. Sure, a portion of the dollars (created out of thin air) are not fully repaid, but that “cost” is minor compared to what it would have cost to purchase the competitor outright. Add in the dividends of market consolidation, and the return on investment is simply fantastic.
Next, there is the issue of the gold standard. Here again, it seems that Quigley has fallen for a false narrative: in this case, that the gold standard was the most sophisticated mechanism of monetary control that the elite could devise. That gold (rather than the control of money and debt, which gold only facilitated) was the root of their monetary power. If these myths are accepted as true, then his assertion that bankers sincerely tried to “save the gold standard” makes perfect sense. However, a closer look at their actions (and the ways in which they benefited from those actions), leads to a more logical conclusion: it was far more profitable to destroy the gold standard than it was to preserve it. To create ever-increasing piles of money and debt out of thin air, the limitations of gold had to be removed.
On pages 256 and 257 of Tragedy and Hope, Quigley nearly stumbles into the truth. While discussing the beginning of World War I, he tells the story of military men and financial experts who believed the war would be over within six months. This prediction was based on the fact that gold reserves (used to pay for the expenses of war) would be depleted within that amount of time. However, by suspending the gold standard, the duration of the war (along with the enormous debts and banker profits associated with it), grew far beyond anything that a gold standard would have supported.
All the Great Powers were on the gold standard under which…paper money could be converted into gold on demand. However, each country suspended the gold standard at the outbreak of war. This removed the automatic limitation on the supply of paper money…each country proceeded to pay for the war by borrowing from the banks. The banks created the money which they lent by merely giving the government a deposit of any size against which the government could draw checks. The banks were no longer limited in the amount of credit they could create because they no longer had to pay out gold for checks on demand…the problem of public debt became steadily worse because governments were financing such a large part of their activities by bank credit.[33]
From this perspective, the advantages of permanently “suspending” the gold standard are self-evident. When a bank creates “paper money” loans that are backed by gold, it runs the risk of losing its gold reserves. When a bank creates paper money loans that are backed by nothing, then its gold reserves are perfectly safe. Additionally, without gold backing, there are no longer any firm limits on how many loans the banking system can create. (Limits, if any, are determined by the wishes of those who control the system and the limitless borrowing needs of government, business, and individuals.)
Last but not least, Quigley asserts multiple times that the reins of power passed from “financial capitalism” to “monopoly capitalism” with the destruction of the gold standard.[34] (Once again, implying a loss of gold backing equaled a loss for those who wielded banking power.)
It would be easy enough to dismiss this supposed shift in power as a distinction without a difference because, at most, it amounted to a shift in methods of control rather than a shift in management. (The same Network that controlled financial capitalism paved the way for monopoly capitalism, and the primary leader of the Network, Lord Milner himself, had written of his desire to abandon the gold standard as early as 1923.)[35] But there is a larger point to be made here.
If “monopoly capitalism” is all powerful because it can self-finance, manipulate the price of goods within its market, and use its inflated monopolistic profits to wield monetary influence, then there are no words to sufficiently describe the power of “financial capitalism.”
- Not only can financial capitalism “self-finance,” it can do so by simply creating money out of thin air and loaning it to others at interest. (What could possibly be more powerful than that?)
- Not only can financial capitalism manipulate the price of goods in a particular market, it can manipulate the price of goods in any market. (Real estate, food, energy, stocks, bonds, education…anything that has a price will be affected by those who manipulate the quantity and flow of money.)
- Not only does financial capitalism enjoy the influence of monopolistic profits, it enjoys the influence of having monopolized the creation of money itself. Stated another way: when a “monopoly capitalist” accumulates his first billion dollars, it’s only because others have borrowed that billion dollars into existence from the Network’s banking system.[36]
If Quigley truly understood the Network’s banking system, he would have never fallen for the lie, undoubtedly perpetuated by the Network itself, that banking power peaked in the 1930s. The exact opposite is true. It wasn’t until the 1930s that international bankers began chipping away at the limitations of gold and inching the world ever closer to a purely debt-based standard.
As powerful as the Network’s position was under the gold standard, it has increased immeasurably under their 100-percent debt-based standard. They can now create, destroy, and direct as much money as they see fit. They currently earn interest on every single dollar in existence, because every single dollar in existence has been created and loaned into the economy by them.
Accordingly, their debt-based system guarantees that nations will remain forever trapped in debt. (As a nation and its citizens attempt to reduce their debt to bankers, they simultaneously reduce their nation’s money supply. Paying off all debt would reduce the money supply to zero…not only would this be impossible, but financial chaos and “emergency government borrowing” would be triggered long before any significant reduction in debt was achieved.) This is not a system that was designed with our best interests in mind.
So far we’ve covered how the Network uses money to control governments, businesses, and trusted institutions. We’ve touched on how it developed ingenious ways to control other people’s financial resources—their savings accounts, their insurance payments, and even their income. We’ve also gone over its greatest swindle of all: granting itself the legal authority to create money out of thin air.
With all of these monetary tools at its disposal, the Network has secretly and systematically consolidated its power over global policies that affect the lives of billions of human beings. Unelected, its members operate beyond the reach of voters. Unaccountable, they violate national and international laws with impunity. Obviously, if we intend to unseat them, we cannot continue playing by the rules of the system that they have created. We must be prepared to think and act in unapproved ways, and that begins with striking the root of their power…money.
In short, our adversary is using our own purchasing power against us. The money that we place in its institutions, the money we allow it to confiscate, and the money we allow it to create—these revenue streams provide the Network trillions of dollars each year to direct as it likes. Until we cut this funding, we are only wasting our time. On the other side of the equation, these trillions of dollars represent the Network’s Achilles’ heel. Without access to this money, it cannot continue to purchase the people and resources necessary to defend its dominant position. (Their system is completely dependent upon the purchasing power that we provide.)
Knowing this, the answer to our dilemma seems very simple: reclaim our purchasing power and destroy their illegitimate system in the process. And truthfully, it really is that simple. But before getting into the obvious ways in which we can take back what is ours, there is one final twist in this story of monetary power. First, we must dig a little deeper into the story of money itself.
Few realize that money comes in many different forms. A basic list would include commodity money, receipt money, fractional money, fiat money, and debt money. (This isn’t as complicated as it sounds; each form will be explained shortly.) Some of these forms of money are far easier to abuse than others, with the last one on the list (debt money) being the worst. Debt money is actually designed to enslave those who use it. No surprise then that debt money is what the Network has chosen to create and spread to all corners of the globe.
Although slavery was abolished…many of the poor were reduced to peonage by contracting debts…binding themselves and their heirs to work for their creditors until the debt was paid. Such debt could never be paid in many cases, because the rate at which it was reduced was left to the creditor and could rarely be questioned by the illiterate debtor.[1]
This quote reveals that there is more than one way to reduce human beings to servitude. Though Quigley is referencing a tactic that was used in mid-nineteenth century India, he perfectly captures the spirit of the financial system we live under today. It is a system that creates debt that “can never be paid,” is “binding” on future generations, and is serviced by a global population of “illiterate” debtors.
Today, the term “illiterate debtor” has nothing to do with an individual’s ability to read, write, or perform basic math. A person can possess all of these skills and still remain completely illiterate when it comes to understanding the Network’s debt-based monetary system. Also, the indignities of “peonage” are no longer reserved exclusively for the poor. A person (or nation) can be poor or they can be rich; it makes little difference. Those who create and control the debt-money supply can manipulate the system and extract wealth from everyone who uses their currency. Not even those who are debt-free are safe. To the extent a person’s income, savings, and assets are debt-money denominated, their purchasing power and accumulated wealth are at risk.
Since most people dislike being ripped off and exploited, it’s reasonable to assume that the only reason the masses tolerate this debt-money system is because they do not understand how it works. That being the case, this chapter will attempt (in just a handful of pages) to end the financial illiteracy that the Network absolutely depends on. Consider this a super-abbreviated crash course on the topic, excerpted mainly from Dishonest Money: Financing the Road to Ruin.
What Is Money?
To accurately define what money is, we can’t simply hold up a US dollar or a Russian ruble or a Mexican peso and say “This is money.” We’re better off to start by defining the overall purpose of money. What does money do?
In the simplest terms, money enables us to purchase products and services from other people. Using this basic description, we might go on to say money can be anything that is widely accepted as payment for products and services. Having defined money in this way, it will be easier to explain the different forms of money and why some are far more honest than others. But first, let’s quickly touch on what existed before money—barter.
Barter
Prior to the creation of money, individuals used barter to trade with one another. This simply means that they would “purchase” what they wanted with products or services rather than paying for it with money. As an example, assume your neighbor grows corn, has one hundred extra pounds of it, and you would like some. If you grow tomatoes, it’s possible that your neighbor will allow you to “buy” some of his corn using your tomatoes instead of money. Or, maybe he’ll allow you to provide a service of some sort in exchange for his corn. (Perhaps you’re good at building storage sheds, and he needs help building one.)
If the two of you are able to come to a barter agreement, then each of you will gain value from the exchange. (Your neighbor turns his surplus corn into something he’d rather have; you turn your surplus tomatoes or a couple days’ work into something you’d rather have.) However, if your neighbor isn’t interested in your tomatoes, and if he doesn’t need a new storage shed, then both of you lose out. Both of you will have to find another trading partner.
Though limited, barter at least provided an opportunity for individuals (and society as a whole), to enjoy the benefits of trade. Rather than just having really good tomatoes and some nice storage sheds, you could also have some really good corn, really good wheat, clothes, furniture, or anything else that others had to offer. But again, you could only obtain these things if others wanted what you had to offer in exchange. This was the big limitation of barter, and it was overcome with the creation of commodity money.
Commodity Money
While trading with each other, people eventually realized that certain commodities were always in high demand. For instance, they discovered corn was so high in demand that it could consistently be traded for nearly anything. From that point forward, corn took on a value that exceeded its consumption value. In other words, even though your neighbor already had all the corn he needed, he would continue to grow (or acquire) more because he knew the corn would be accepted as payment for the products and services of others. The more corn he had, the more purchasing power he had. In this way, many different commodities (corn, wheat, cows, sheep, etc.) eventually evolved into reliable forms of commodity money. But just as barter had its limitations, so too did early forms of commodity money. These problems were eventually overcome when metal was discovered.
Unlike livestock, metal didn’t need to be fed, watered, and cleaned up after. Unlike wheat and corn, you didn’t have to worry about metal going bad, becoming contaminated with bugs, growing mold in storage, and so on. Also, metal was easily divisible. Assuming a milk cow was equal in value to one hundred pounds of iron, and the sale price of an item was twenty-five pounds of iron (or one-fourth of a milk cow), the individual buying with iron had a distinct advantage: he could easily produce the exact amount of money needed. For these reasons, metal eventually became the commodity money of choice, and though many different types of metal were used (iron, copper, and tin to name a few), gold and silver coins became the standard around the world.
Summary of Barter and Commodity Money
Both commodity money and barter share a couple of desirable attributes. The first attribute is transparency. If I want to trade my goat for some of your corn, I’ll have to bring my goat and you’ll have to bring some corn. The odds of either of us walking away with something else in our pocket, like a cricket, are pretty slim. Likewise, if I offer to buy something from you with a Gold Eagle (US gold coin), I must hand over a Gold Eagle. There is little chance that you will be duped into accepting a far less valuable Silver Eagle as payment for your item.
The second desirable attribute is the intrinsic value of the items traded. There are significant natural barriers that limit the production of commodities and, as such, their intrinsic value is transferred to anyone who acquires them. The person who acquires corn does not have to grow and harvest the corn himself; the person who earns a gold coin does not have to dig the gold out of the ground, fashion it into a coin, and convince others of its authenticity. Nobody can simply create gold, corn, or a goat with the flick of a pen. For this reason, these items will always possess the intrinsic value of the labor and the other costs that produced them.
These two attributes (transparency and intrinsic value) made it reasonably difficult to defraud people in trade because it isn’t easy to convince somebody that you’ve paid them with a goat when, in fact, you’ve handed them a cricket. But just as barter led to the invention of commodity money, and commodity money eventually evolved into metal coins made from gold and silver, the inconveniences of gold and silver coins eventually led to the creation of a new form of money. And with it, the ability to easily defraud people (the ability to create money with “the flick of a pen”) was born.
Continued on next page…
Receipt Money
Gold and silver coins were a much improved form of commodity money, but they still had some drawbacks. For instance, if you were even moderately wealthy, finding a place to safely store your coins was difficult. Also, if you wanted to make a large purchase or simply wanted to move a significant amount of money from one place to another, the weight of gold and silver coins made it challenging and nearly impossible to conceal. (Just sixteen hundred dollars in a silver-coin economy would have weighed approximately one hundred pounds!)[2] As before, these two problems were eventually solved. This time, the solution came from goldsmiths.
Goldsmiths already handled large stockpiles of gold and silver in their trade and had built very strong and well-guarded vaults to protect those stockpiles. This made solving the first problem (safe storage of gold and silver coins) a no-brainer. Goldsmiths began renting unused space in their vaults to citizens who wanted to keep their coins safe until they were needed. The goldsmith was happy to collect a fee from each depositor, and the depositors were happy to know that their money was in good hands. Interestingly enough, the safe-storage solution ended up solving the weight problem of using coins in trade as well.
When a citizen came in to deposit their coins for storage, the goldsmith would hand the depositor a paper receipt as proof of their deposit. So, if a customer deposited $1,000 in gold coins, they were given a receipt (or receipts) valued at $1,000 worth of gold. These receipts were marked “payable on demand,” meaning anyone, at any time, could come in and exchange the receipts for gold. Because the receipts were literally as “good as gold,” citizens began accepting them as payment for products and services. From that point forward, the receipts became a new form of money: receipt money. Though the receipts were only made of paper, each one was 100 percent backed by gold (or sometimes silver) and, therefore, each receipt was a legitimate form of paper money.
However, as time passed it became increasingly rare for individuals to cash in their receipts and withdraw coins from the goldsmith’s vault. Assuming their coins were safe and always available, depositors had no reason to remove them. (They’d just have to find another safe place to store them if they did.) Besides, it was much easier to use the receipt money in commerce. Nearly all citizens preferred to carry a pocket full of the goldsmith’s receipts to a pocket full of heavy coins.
Now, put yourself in the goldsmith’s shoes. The receipts that you create are trusted by all. They’re literally considered as “good as gold” and are accepted as payment for products and services, just the same as if a person paid with a gold or silver coin. Although you do not possess the power to create gold and silver coins “with the flick of a pen,” you do possess the power to create receipts that are every bit as valuable in trade. What do you do?
Fractional Money
It wasn’t long before goldsmiths realized that they could simply print up additional receipts for their own benefit. This, of course, was an act of pure fraud. Each ounce of depositors’ gold held in the goldsmith’s vault had a corresponding receipt that was issued to the gold’s rightful owner. Issuing additional receipts constituted a theft of purchasing power, and worse, it set into motion the inevitable loss of the depositor’s coins.
To illustrate, say a man walks into the goldsmith’s shop, deposits $1,000 worth of gold, and receives $1,000 worth of receipts in exchange. No problem there. An hour later, another man comes into the goldsmith’s shop, but he doesn’t want to make a deposit; he wants to borrow $1,000. The goldsmith agrees to the loan and issues the borrower $1,000 worth of new receipts, which are created on the spot. There is now $2,000 worth of receipts, but only $1,000 worth of gold in the vault.
Now imagine that the borrower takes his newly created $1,000 worth of receipts to a local store and spends them. And say the store owner decides he’d rather have the actual gold coins instead of the paper. So, he takes the receipts to the goldsmith, cashes them in for coins, and goes on his way. Everyone is happy to this point. But what happens if an hour later the man who made the original $1,000 gold-coin deposit shows up to withdraw his coins? Too bad for him. His gold walked out the door an hour earlier when the loaned receipts (created without a corresponding deposit) were cashed in.
This is a highly simplified example, but it illustrates the problem that emerged with the creation of paper-receipt money: it opened the door to fraud. What began as a legitimate form of paper money, backed 100 percent by coins held in reserve, eventually turned into fractional money. And as the goldsmith printed more and more receipts, the fraction of coins backing those receipts became less and less.
Before long, citizens were unknowingly accepting receipts backed by only half of the receipt’s printed value, a quarter of its printed value, a tenth of its printed value. When people finally figured out what was going on, they rushed to exchange their receipts for the coins that rightfully belonged to them. Of course, only the first few in line were able to withdraw their gold and silver. All the rest were left holding worthless paper.
Fiat Money
In the previous example, people accepted paper receipts in exchange for their products and services for one reason: they thought that they could cash in their receipts for gold or silver coins whenever they wanted. None of them knew that they were essentially selling their goods for inadequately backed pieces of paper. If they had known the receipts were fraudulent, they wouldn’t have accepted them; they would have demanded actual coins instead. Clearly, they were ripped off.
Again, in an economy that uses only commodity money (as opposed to paper money), it is very difficult to rip people off because the actual commodity must be surrendered at the time of purchase. The trade is transparent. But in the aforementioned receipt-money economy, only the assumption of transparency exists. Yes, the receipt might actually be legitimate; it might represent an underlying commodity that physically exists and does not belong to anyone else. However, it might also be illegitimate. You might sell an ounce of gold for a more-convenient receipt that’s marked “one ounce of gold,” only to find out later that your receipt can’t be redeemed for anything. If this happens, it’s very clear who won and who lost in the exchange. (What thief wouldn’t want to trade worthless receipts for as many ounces of gold as he could get? Printing paper receipts is very easy…Printing gold is impossible.)
This reminds us of what money is supposed to be: something that enables us to purchase the products and services of others. The only reason we are willing to work for money is because we believe the money we earn will serve this purpose. Nobody interested in earning money would exchange their time and effort for pieces of paper that they knew to be worthless. Therefore if somebody wants to use paper money to steal from others, the most obvious way is to mislead them into believing that the money has value. However, fiat money provides another way to steal: good old-fashioned government force.
Encarta defines fiat money as: “paper money that a government declares to be legal tender although it is not based on or convertible into coins.”
Another way to put that would be: fiat money is paper money, backed by nothing, and the government forces people to accept it via legal tender laws. It’s basically the goldsmith’s counterfeit receipts on steroids. Whereas the goldsmith had to conceal the fact that he was fraudulently printing money to enrich and empower himself, fiat money enables a group like the Network to openly print money and force it down people’s throats. They simply use their law-making ability to legalize the scam.
Whether by fraud or by fiat, the power to print money is the power to steal whatever money can buy. Fiat money is more egregious because, unlike fraud, it is backed by force and can be used to openly confiscate purchasing power on an enormous scale. (There is no doubt that the Network advanced its position significantly when it moved the United States from a gold- and silver-backed money supply to a purely fiat model.) But believe it or not, there is actually something worse than fiat paper money. And this brings us to the final form of money we’ll be discussing in this “crash course,” the form of money we use today—debt money.
Debt Money
Take the inherently fraudulent characteristics of the goldsmith’s fractional money system, add in the greater fraud and force of pure fiat, top it off with a mechanism designed to generate inescapable debt, and presto: you’ve got the most sophisticated monetary-enslavement system ever devised by man. And, wouldn’t you know, you also have all the components that make up our current monetary system.
Unlike a normal fiat money system (where the ruling class simply creates its own worthless paper money, spends it into the economy, and demands that everyone accept it), our ruling class has devised something much more powerful. Rather than spend money into our economy, they loan money into our economy. This enables the Network to steal purchasing power from us twice: once when they create new money, and again as they collect interest on the entire money supply.
Worst of all, by creating money and putting it into circulation only when a loan is made, and then destroying that same money (removing it from circulation) when the loan is repaid, the Network has designed the perfect debt trap. Any meaningful attempt to escape this debt trap, by paying down debt, will trigger an automatic “correction mechanism” that guarantees failure. The chain of events is perfectly predictable: as the nation repays its banking debts (and refuses to take out new loans), the economy’s debt-based money supply will shrink. This will cause disruptions in the economy; initially the disruptions will be minor, but they will inevitably become intolerable if new money isn’t injected via new loans. (Imagine the consequences of a 10 percent reduction in the nation’s money supply…now imagine a 40 percent reduction, a 60 percent reduction, or an 80 percent reduction.)
Theoretically, if new loans are not issued to reverse the automatic “correction mechanism” that the Network has built into the system, and if all available funds continue to be applied toward extinguishing Network-created debt, then the debt-based money supply must eventually fall to zero.
Robert Hemphill was the credit manager of the Federal Reserve Bank in Atlanta. In the foreword to a book by Irving Fisher, entitled 100% Money, Hemphill said this:
If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have…If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless situation is almost incredible—but there it is.[3]
Needless to say, the economic and political power that flows from this system is nothing short of obscene. Therefore, it’s easy to understand why the Network built this system like a prison. Playing by their rules, we cannot escape; we can never repay the debt that is owed. And just like the debt slaves of nineteenth-century India, this inescapable debt is binding on our children, and our children’s children, and so on…forever.
Of all the Network’s monetary powers, this particular power is the most destructive. In nation after nation, politicians who are happy to bury their citizens in debt are supported by the Network and placed into positions of power. Some of the politicians are well intentioned; others are not. In the end it really doesn’t matter. As politically motivated spending programs (from warfare to welfare) spiral out of control, it isn’t long before massive monthly loans are needed just to cover the day-to-day operating costs of government. The noose is then tightened further with a never-ending slate of new spending programs that are added year after year, decade after decade. Out of the crushing debt that ensues, and the subsequent need for an endless supply of new loans to keep the bankrupt system afloat, the Network secures its dominant position over everything and everyone that depends on its money.
In the meantime, the illiterate debtors of the world slave away with no idea that the money they “owe” was created out of thin air; it was never earned by the lender. They have no idea that the system itself was designed to create an ever-expanding black hole of debt, a system of financial servitude that is literally inescapable.
Those conspiring to bring us a “world government” ruled by an “intellectual elite and world bankers” are not playing games. They’ve worked hard to perfect and implement their strategy of economic conquest. They’ve proven their ability to seize control of nations large and small (even far-flung empires). They certainly haven’t come all this way for nothing.[4]
How Many Are Willing to Fight?
There isn’t enough room here to cover how inflation, deflation, booms, busts, and bailouts all provide additional ways for the Network to transfer wealth and power into its own hands. For now, it’s enough to reiterate the opening claim of this chapter: money is the root of the Network’s power. For them to dominate “all the habitable portions of the world,”[5] they absolutely must maintain their ability to confiscate, create, and control the money that we earn. And since they will never surrender these monetary weapons willingly, our only choice is to forcibly disarm them.
“The whole history of the progress of human liberty shows that all concessions yet made…have been born of earnest struggle…This struggle may be a moral one; or it may be a physical one; or it may be both moral and physical; but it must be a struggle. Power concedes nothing without a demand. It never did and it never will. Find out just what a people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them; and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress.”—Frederick Douglass[6]
The Network is literally composed of criminals who hide behind the “legitimacy” of government to force their will on us all. Their power over our debt-money system, their power to tax our incomes and wage war on national sovereignty, their relentless expansion of the government that they control—all of this power has been taken by force and fraud. They’re not going to turn the “government power” they have created against themselves (any more than an armed robber would turn his own gun against himself in defense of his victims). No, to reclaim what is rightfully ours, we are going to have to fight…and this leads to one final problem.
Time and time again, history has shown that the predator class will do whatever is necessary to gain and keep the reins of power. In fact, those who subscribe to the concept of “survival of the fittest” would almost certainly argue in the Network’s defense. Its members have studied rulers of the past, improved upon ancient techniques of propaganda and mass manipulation, and have thus earned their right to rule. Following this logic, the same survival-of-the-fittest crowd would argue that the masses belong exactly where they are: beneath the ruling class. Without the willful ignorance, indifference, and timidity of the subjugated, our rulers simply could not exist. It is a symbiotic relationship, one of parasite and host. Society’s refusal to even acknowledge (let alone remove) the bulging tick that’s stuck to its forehead is akin to consent. This being the case, why shouldn’t the Network continue gorging itself?
Does this position blame the victims? Perhaps…but sometimes the victims deserve a little blame.
The typical voter has chosen to accept a fairly obvious lie: that the government is an instrument of the people, that it is subject to the will of the governed, and nobody (inside or outside of government) is above the law. To these voters, the idea of a highly organized shadow government, operating at the direct expense of the governed, is laughed off without investigation. They might passionately believe that Republicans are corrupt and only the Democrats can save them, or that Democrats are corrupt and only Republicans can save them, but they have yet to recognize the deeper truth: neither Republicans nor Democrats are ever going to save them. Both sides are funded and maintained by the same ruling class to create the illusion of choice.
To really drive this point home, let’s revisit a few earlier quotes. First from Quigley:
It is increasingly clear that, in the twentieth century, the expert will replace…the democratic voter in control of the political system…Hopefully, the elements of choice and freedom may survive for the ordinary individual in that he may be free to make a choice between two opposing political groups (even if these groups have little policy choice within the parameters of policy established by the experts)…in general, his freedom and choice will be controlled within very narrow alternatives.[7]
And again, our “expert” on scientific manipulation, Bertrand Russell, takes the concept of hidden power a step further: the experts will not only target the electorate for manipulation, they will target the elected as well:
The government, being an oligarchy…may invent ingenious ways of concealing its own power, leaving the forms of democracy intact, and allowing the plutocrats or politicians to imagine that they are cleverly controlling these forms…whatever the outward forms may be, all real power will come to be concentrated in the hands of those who understand the art of scientific manipulation.[8]
Finally, from the father of propaganda himself, Edward Bernays:
The conscious manipulation of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.
To summarize the substance of this problem: the majority of the population does not understand how they’re being manipulated, nor do they see a bulging tick stuck to society’s forehead. They see only the image of government that the “true ruling power” wants them to see. And if they continue turning exclusively to the same ruling power for all of their information, their perception will never change. That’s why, if we want as many fighters as possible, we’re going to have to speak up. We’re going to have to counter the “conscious manipulation of the masses.”
Continued on next page…
Solutions—Where to Begin
This short section of the book will be the easiest to write. That’s because there isn’t anything particularly complicated about how to free ourselves from financial and political servitude.[9] In a nutshell, it boils down to this: the Network’s empire is built entirely on stolen financial power and manufactured consent. Our objective is to undermine both of these, one mind and one dollar at a time, until the Network can no longer defend itself in any meaningful way. That’s it.
Now, the question becomes: What are the steps we should take to achieve this objective? Although there are many options, implementation of the following will absolutely devastate the Network’s power.
- Raise Awareness: Expose Their Illegitimacy
This is not only the easiest step; it is arguably the most important. Reach out to new people regularly and share information that exposes what the Network is and how it operates. When you encounter individuals who either refuse to look at the facts, or who minimize the significance of what’s presented, do not take it personally. If they attack you, do not take it personally. In most cases, they are simply defending their world view…It has nothing to do with you. Simply move on and know that every single person that is exposed to this information, even those who initially resist, could become an ally down the road. The same cannot be said of those who are never exposed to the truth.
- Competing Currencies: Stop Using the Network’s Money
“End the Fed!” is the rallying cry of millions who have learned how the Network’s “Federal Reserve System” was created and how it operates. This privately owned and controlled money machine has been rightfully identified as the heart of the enemy’s power. To truly disarm the Network, we first must end its ability to create and control our money supply. This can be done, but it won’t be easy.
The good news is that anti-Fed sentiment is growing every day. The bad news is that the Network is already manipulating this sentiment, steering well-intentioned critics toward nationalizing the Fed. But nationalizing the Fed will not end its ability to create and control our money supply. In fact, this is the same tactic the Network used with the Central Bank of England when demands to end its private ownership reached a fevered pitch. Though nationalization did end outright private ownership of the bank, it did little to affect the Network’s control.[10]
For an idea of how nationalization of the Fed would unfold in the United States, flash back to how the Federal Reserve System was created in the first place (in response to public demands for financial reform, covered in chapter 4). The visible US government will spring into action to “protect the people” from out-of-control bankers, and it will accomplish the exact opposite in the process.[11]
Our best move against the Network’s control of our money supply is to begin developing and using competing currencies—money that literally competes with the Network’s fraudulent debt money that circulates in the economy. This move accomplishes two important functions: (1) it cuts the Network out of the equation when we buy and sell from one another, and (2) it protects us in the event of a Network-initiated run on the dollar.[12]
Gold and silver are the two most obvious forms of money that we could begin using, and some states, aware of the dangers of the current monetary system, have begun pushing legislation that will make gold and silver legal tender again. But gold and silver aren’t the only options. Digital currencies like Bitcoin, Litecoin, and even Dogecoin[13] are gaining traction among millions of citizens around the world, without any sanction from government whatsoever.[14] In addition to these digital currencies, there is also the option of competing private currencies, community currencies, time-based currencies, and so on.
The key point is to remember why the Network created central banks in the first place: to control “the political system of each country and the economy of the world as a whole.”[15] The sooner we develop effective ways to trade outside of their system, the sooner their system will become irrelevant and we can ignore it into oblivion.
- Attack the Income Tax
In chapter 4, we went over how the Network, approximately one hundred years ago, began stealing massive amounts of money for its global-domination project. It called the theft “income tax” and has glorified the annual expropriation as a citizen’s “moral duty” ever since.
It’s beyond the scope of this text to delve into how the Network, acting through its tax–exempt foundations, has used education to build public support for this previously illegal confiscation of wages.[16] Suffice to say, using government as its instrument, the Network can now funnel trillions of dollars each year into furthering its own interests. From multitrillion-dollar banker bailouts, to the approximately one hundred million dollars per hour gushing into the military industrial complex,[17] the Network can legally accomplish things with “government taxation” and “government policy” that it could never accomplish privately.
Of course, private power disguised as government power is hardly a new phenomenon, and those who founded the United States federal government did everything they could to protect us from this problem. They knew that the more powerful the government became, the sooner it would be corrupted for private use. That is why our Constitution was written to limit government power. Our Bill of Rights was written to limit government power. The Founders’ opposition to standing armies, their stance against fiat paper money, their aversion to taxation—all of these served to limit government power and, by extension, the inevitable private abuse of that power. Unfortunately, the Network has relentlessly undermined or outright destroyed all of the aforementioned limits, one by one, since 1913.
This perfectly illustrates why we must sever, or severely disrupt, their so-called “income-tax” funding mechanism. Forget the fact that it was foisted on the nation via fraud and manipulation. Forget the fact that the revenue is being used to destroy (rather than protect) the substance of our Constitution and Bill of Rights. Instead, view the argument against a compulsory income tax purely from the angle of a power relationship. View it the way the Network views it: if the citizenry can force the “government” to obey its wishes (by cutting off access to money), then the citizens have the final say on whether or not a policy decision will survive. However, if men with power can simply confiscate whatever amount of money they want (via taxes or via the printing press), then the citizens have lost their most effective nonviolent method of control. Yes, they can still express massive disapproval, as they did in the case of the most recent banker bailouts, but this means nothing. As long as the complaints are submitted with payment in full, and all of the outrage over the government’s refusal to listen falls on easily replaceable representatives, the Network’s power remains undisturbed.
Ultimately, each individual must decide how to attack the income-tax issue. I myself decided to cut my income drastically, eventually reducing the amount of money I “owed” to zero.[18] This is probably too radical for most people, and there are certainly other options. Some find legal ways to reduce their income taxes; others engage in not-so-legal ways. Some continue “paying with complaint” (which is at least better than paying without complaint), while others flatly refuse to pay at all. Last but not least, competing currencies also provide an option because they enable citizens to conduct trade outside of the Network’s financial system. Whether it’s with gold and silver coins, or semianonymous digital currencies like Bitcoin, Litecoin, or Dogecoin, the inability of the Network to easily track these transactions makes it difficult for its members to calculate what is “owed.” [19] It’s then up to the citizens to decide what duty they have to disclose their private financial affairs to men who are openly trying to enslave them.
It goes without saying that the founding fathers would have considered the income tax an unconstitutional abomination. It goes without saying that the Network used its illegitimate influence to foist this tax on the American people. It should have never existed. It ought to be repealed and replaced with, preferably, nothing. (The Federal government carried out its intended role in our society, without an income tax, for more than a century. It can do so again.)
- Nullification: Refuse to Comply, Refuse to Convict
Practically forgotten, the extremely powerful weapon of nullification has recently been dusted off and is being put to good use. The concept behind nullification is very simple: the people determine what the government has the power to do, not the other way around. When policy makers in Washington grant themselves “legal authority” to do things that violate the legal restrictions on their power, the people have the right and the duty to restrain them.
Two dozen American states nullified the REAL ID Act of 2005. More than a dozen states have successfully defied the federal government over medical marijuana. Nullification initiatives of all kinds, involving the recent health care legislation, cap and trade, and the Second Amendment are popping up everywhere.
The indispensable source for developments connected to nullification [can be found at] TenthAmendmentCenter.com. Its Legislative Tracking page covers a variety of nullification initiatives and tracks their progress in state legislatures across the country.[20]
State nullification, even the threat of state nullification, is a tool that has been used effectively for hundreds of years in this country. From the Alien and Sedition Acts of 1798 to the unconstitutional searches and seizures of 1807–1809, from resistance to conscription in 1812 to the northern states’ obstruction of the fugitive-slave laws, nullification has provided a nonviolent way for citizens to push back against federal overreach.[21] But state nullification isn’t our only option. Another form is jury nullification, and it has the potential to be even more powerful.
Jury nullification occurs when a jury concludes that a defendant is technically guilty, but fails to convict the defendant on the grounds that the law in question is unjust. While jury nullification is legal, judges frequently do not inform juries of this power…[22]
In the United States, jury nullification first appeared in the pre-Civil War era when juries sometimes refused to convict for violations of the Fugitive Slave Act. Later, during Prohibition, juries often nullified alcohol control laws, possibly as often as 60% of the time. This resistance may have contributed to the adoption of the Twenty-first amendment repealing Prohibition…[23]
To demonstrate the enormity of this direct power we were given over our government, imagine the following hypothetical scenario: I am a juror, and you have been dragged into court for refusing to pay your taxes to the Network’s collection instrument (the IRS.) Unrepentant, you stand and state the following: “I will no longer voluntarily fund an institution that violates the law with impunity and engages in morally reprehensible behavior. I will no longer be complicit in crime. I would rather be punished for obeying my conscience than be rewarded for ignoring it.”
It’s very unlikely that your defense attorney would support this approach, but remember that this is just a hypothetical scenario to demonstrate the power we still possess as citizens. If I’m a juror in this case, you better believe that I am going to argue for nullification. If that fails, I am going to ensure a hung jury. There will be no conviction this time around. Now, multiply that same scenario a couple dozen times, then a couple hundred times, and then a couple thousand times…the power over our incomes, stolen by the Network in 1913, will be rightfully returned to the people. (Laws that cannot be successfully prosecuted cannot survive. Nullification is our final nonviolent check on the abuse of government power.)
If just 15 percent of the adult population in the United States (roughly thirty million citizens) learn about and begin employing the aforementioned options, the continued illegitimate control of this nation will be rendered nearly impossible. But this army of informed and actively engaged citizens isn’t going to magically appear on its own. Moreover, those who currently hold power will attack our efforts with every lie and dirty trick that they can muster. But then again, “Power concedes nothing without a demand. It never did, and it never will.”
If we intend to take back what “false and designing men”[24] have stolen, we must be prepared to demand it. If we hope to achieve our ends via nonviolent means, the time to act is now…and if a violent confrontation proves unavoidable, we can rest assured that the nonviolent work we have done will provide the foundation for our success.
To clarify the importance of resistance, I will cover the incredible lawlessness and immorality of those we’re up against in the final chapters. Rather than focus on how they might abuse their power, I’ll focus on how they already have.
Fiat Money in History
REVOLUTIONARY FRANCE
Andrew Dixon White’s wonderful little book, Fiat Money: Inflation in France, recounts the inflation during the French Revolution. The French revolutionary government seized all of the church lands. They needed money, so they decided to sell all of the church land. But someone said that if you sell it all at one time you will flood the market and drive down the price of real estate. So, all the real estate brokers in the National Assembly said, “No, we will issue these notes as a liquid mortgage on that ‘national domain’—all of the lands seized from the church.” To make a long story short, the assignat destroyed the wealth of a nation, and ends with Napoleon. Fiat money inflation’s usually end in a dictatorship. The middle class in France was ruined. They even passed the infamous Law of the Maximums, which decreed the death penalty for anyone who asked for payment in gold or silver.
THE CONTINENTAL CONGRESS
Before the French Revolutionary inflation we had our own inflation in the United States. The Continental Congress had the power to issue its own money, but unfortunately (or fortunately, depending upon your viewpoint), congress did not have the power to tax. Rather, they just kept issuing these bills of Continental Currency. until they finally sank into worthlessness. The people who trusted the promise of this paper money were ruined.
THE WAR OF NORTHERN AGGRESSION
When the War Between the States started, both the north and the South decided to finance with inflation. In the north they passed the Green Back Act in 1862, and in 1863, to ensure a market for government bonds, the National Banking Act. In the South a lot of expedients were tried. Notice the Arkansas treasury warrant because you are liable to see something like this again.
What is a treasury warrant? A promise by the treasury to pay you . . . sometime. The warrant reads, “The state of Arkansas will pay to the bearer $5.00 to be paid in the order of their number.” Inflationary notes often offer interest to help them circulate. It was interesting that in August the Federal Reserve Spokesman Clyde Farnsworth said, “Don’t worry. The Fed is printing up lots more money. There will be plenty of currency.” He also said, “I think that consumers are smart, and they will leave their money in the bank because if they don’t, they will be losing their interest.” You remember, that’s the three dollars a year we talked about elsewhere. That trick is so old it is on the face of this 1862 note. By the way, this note has never been paid. Whoever the first sucker was, they still owe him the money.
POST WORLD WAR I GERMANY
Here is a German note dated 1910. This is a thousand mark note. In 1910, Germany had the soundest, most scientific monetary system in all of Europe. In 1907, when a commission was sent by the United States Congress to study European banking systems and methods, what country’s model do you suppose they adopted? Germany’s. It enjoyed the strongest economy in Europe, without doubt. It was the most advanced. It was the most industrialized.
This note traded against the gold dollar at 4.20 gold marks to one gold dollar (a mark was worth 23 cents in gold dollars.) This was a $420 bill, so to speak, the largest note that German banks issued.
When WWI started the German government decided they would finance by inflation. And there was a terrible inflation during the war, about 800%, but that was nothing to the inflation that came after the war. Then German authorities began to inflate and the faster they issued currency, the faster they had to issue currency because everyone expected the currency to go down (Andrew Dixon White’s Law of Accelerating Issue and Depreciation). Factory workers were paid twice a day and would rush out to the gate and give the money to their wives so the wives could rush out to the market and buy something, anything, before the value of the currency sank to nothing.
I could show you many more notes as the inflation progressed. They started with big notes, they went to little notes to save paper, they started printing them only on one side, the notes got littler, finally they were depreciating so fast they just took old notes and began overprinting. One thousand mark note pictured was overprinted “Eine milliard,” one billion. In November 1923, when the end came, the exchange rate of the Reichsmark to the dollar was pegged at 4.20 trillion marks to the dollar, one trillion time the gold exchange rate.
During the height of the inflation, an Englishman went into a bank in Berlin. He threw a sovereign (0.2354 troy ounce of fine gold) on the counter and said “I want to exchange that for marks.” The clerk reached around for his coat, pulled it off the hook, and yelled “Come on boys, let’s go home. This Englishman just bought the bank.” Although the German stock exchange rose hugely during the inflation, it didn’t keep pace with the mark’s loss of purchasing power. Municipal and federal bonds became worthless.
What happened to the middle class in Germany? Germany had the most developed economy and the most scientific monetary system in Europe. People in Germany invested in mortgages, government bonds, stocks, municipal bonds, and they knew those would be good. They were wiped out. The entire middle class was wiped out. Stock market investors, even though the stock market rose and rose, were practically wiped out. Resentment and bitterness over that loss that paved the way for Adolf Hitler, just as the assignat paved the way for Napoleon, and the Chinese Nationalist inflation paved the way for Mao Tse Tung, etc., etc..
Continued on next page…
THE US GREAT DEPRESSION
Speaking of Napoleon and Hitler, we come to our own Great Depression and New Deal. In this country during the cities and states and counties issued warrants. This one warrants that the treasurer sometime will pay $5.00 for salary. Remember the 1862 warrant from Arkansas? One of my aunts was a teacher in Arkansas during the Depression and she got paid with these. You probably know people who did, too. Counties and states paid with these warrants because they had no money. You had to take them to someone who had money and he would discount them. For a $5.00 warrant he might pay $4.00.
The money in the United States used to be backed by gold and silver. The best way to prove this is to look at this photocopy of five $10.00 bills. They all look alike until you look closely at them. The first one says, “Federal Reserve Note (a note is what you give to someone if you owe them something) Redeemable in Gold on Demand at the United States Treasury or in Gold or Lawful Money at Any Federal Reserve Bank.” It’s dated 1928. The same bill from 1934 has a much smaller legend. It’s harder to read, and says “This Note is Legal Tender for All Debts Public and Private and is Redeemable in Lawful Money at Any Federal Reserve Bank.” No gold. We will not give you gold any more. About 1950 they made this legend smaller still, and in 1963 they changed it to read “This Note is Legal Tender for all Debts Public and Private.” Notice that on the bottom of the bill where it used to say “Will pay to the bearer Ten Dollars”, they took that off. The change is very, very subtle. There is also a silver certificate on here and you will notice that it says, “This certifies that there is on deposit in the Treasury of the United States $1.00 in silver.”
It always works this way. History doesn’t show any exceptions. The more things change, the more they stay the same.
Some Spiritual Casualties of Fiat Inflation
Fiat inflation constantly reduces the purchasing power of money. To some extent, it is possible for people to protect their savings against this trend, but this requires thorough financial knowledge, the time to constantly supervise one’s investments, and a good dose of luck. People who lack one of these ingredients are likely to lose a substantial part of their assets. The savings of a lifetime often vanish into thin air during the last few years spent in retirement. The consequence is despair and the eradication of moral and social standards. But it would be wrong to infer that inflation produces this effect mainly among the elderly. As one writer observed:
These effects are “especially strong among the youth. They learn to live in the present and scorn those who try to teach them ‘old-fashioned’ morality and thrift” [emphasis added]. Inflation thereby encourages a mentality of immediate gratification that is plainly at variance with the discipline and eternal perspective required to exercise principles of biblical stewardship — such as long-term investment for the benefit of future generations.1
Even those citizens who are blessed with the knowledge, time, and luck to protect the substance of their savings cannot evade inflation’s harmful impact, because they have to adopt habits that are at odds with moral and spiritual health. Inflation forces them to spend much more time thinking about their money than they otherwise would. We have noticed already that the old way for ordinary citizens to make savings was the accumulation of cash. Under fiat inflation this strategy is suicidal. They must invest in assets the value of which grows during the inflation; the most practical way to do this is to buy stocks and bonds. But this entails many hours spent on comparing and selecting appropriate issues. And it compels them to be ever watchful and concerned about their money for the rest of their lives. They need to follow the financial news and monitor the price quotations on the financial markets.
Similarly, people will tend to prolong the phase of their life in which they strive to earn money. And they will place relatively greater emphasis on monetary returns than on any other criterion for choosing their profession. For example, some of those who would rather be inclined to gardening will nevertheless seek an industrial employment if the latter offers greater long-run monetary returns. And more people will accept employment far from home, if it allows them to earn a little additional money, than under a natural monetary system.
The spiritual dimension of these inflation-induced habits seems obvious. Money and financial questions come to play an exaggerated role in the life of man. Inflation makes society materialistic. More and more people strive for money income at the expense of other things important for personal happiness. Inflation-induced geographical mobility artificially weakens family bonds and patriotic loyalty. Many of those who tend to be greedy, envious, and niggardly anyway fall prey to sin. Even those who are not so inclined by their natures will be exposed to temptations they would not otherwise have felt. And because the vagaries of the financial markets also provide a ready excuse for an excessively parsimonious use of one’s money, donations for charitable institutions decline.
Then there is the fact that perennial inflation tends to deteriorate product quality. Every seller knows that it is difficult to sell the same physical product at higher prices than in previous years. But increasing money prices are unavoidable when the money supply is subject to relentless growth. So what do sellers do? In many cases the rescue comes through technological innovation, which allows a cheaper production of the product, thus neutralizing or even overcompensating the countervailing influence of inflation. This is for example the case with personal computers and other products made with large inputs of information technology. But in other industries, technological progress plays a much smaller role. Here the sellers confront the above-mentioned problem. They then fabricate an inferior product and sell it under the same name, along with the euphemisms that have become customary in commercial marketing. For example, they might offer their customers “light” coffee and “non-spicy” vegetables — which translates into thin coffee and vegetables that have lost any trace of flavor. Similar product deterioration can be observed in the construction business. Countries plagued by perennial inflation seem to have a greater share of houses and streets that are in constant need of repair than other countries.
In such an environment, people develop a more than sloppy attitude toward their language. If everything is whatever it is called, then it is difficult to explain the difference between truth and lie. Inflation tempts people to lie about their products, and perennial inflation encourages the habit of routine lying. We have already pointed out that routine lying plays a great role in fractional-reserve banking, the basic institution of the fiat money system. Fiat inflation seems to spread this habit like a cancer over the rest of the economy.2
Suffocating the Flame
In most countries, the growth of the welfare state has been financed through the accumulation of public debt on a scale that would have been unthinkable without fiat inflation. A cursory glance at the historical record shows that the exponential growth of the welfare state, which in Europe started in the early 1970s, went hand in hand with the explosion of public debt. It is widely known that this development has been a major factor in the decline of the family. But it is commonly overlooked that the ultimate cause of this decline is fiat inflation. Perennial inflation slowly but assuredly destroys the family, thus suffocating the earthly flame of morals. Indeed, the family is the most important “producer” of a certain type of morals.
Family life is possible only if all members endorse norms such as the legitimacy of authority, and the prohibition of incest. And Christian families are based on additional precepts such as the heterosexual union between man and woman, love of the spouses for one another and for their offspring, the respect of children for their parents, as well as belief in the reality of the Triune God and of the truth of the Christian faith, etc. Parents constantly repeat, emphasize, and live these norms and precepts. Thus all family members come to accept them as the normal state of affairs. In the wider social sphere, then, these persons act as advocates of the same norms in business associations, clubs, and politics.
Friends and foes of the traditional family agree on these facts. It is among other things because they recognize the family’s effectiveness in establishing social norms that Christians seek to protect it. And it is precisely for the same reason that advocates of moral license seek to undermine it. The welfare state has been their preferred tool in the past thirty years. Today, the welfare state provides a great number of services that in former times have been provided by families (and which would, we may assume, still be provided to a large extent by families if the welfare state ceased to exist). Education of the young, care for the elderly and the sick, assistance in times of emergencies — all of these services are today effectively “outsourced” to the state. The families have been degraded into small production units that share utility bills, cars, refrigerators, and of course the tax bill. The tax-financed welfare state then provides them with education and care.3
From an economic point of view, this arrangement is a pure waste of money. The fact is that the welfare state is inefficient; it provides comparatively lousy services at comparatively high costs. We need not dwell on the inability of government welfare agencies to provide the emotional and spiritual assistance that only springs from charity. Compassion cannot be bought. But the welfare state is also inefficient in purely economic terms. It operates through large bureaucracies and is therefore liable to lack incentives and economic criteria that would prevent wasting money. In the words of Pope John Paul II:
By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending. In fact, it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbors to those in need. It should be added that certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need.4
Everyone knows this from first-hand experience, and a great number of scientific studies drive home the same point. It is precisely because the welfare state is an inefficient economic arrangement that it must rely on taxes. If it had to compete with families on equal terms, it could not stay in business for any length of time. It has driven the family and private charities out of the “welfare market” because people are forced to pay for it anyway. They are forced to pay taxes, and they cannot prevent the government from floating ever-new loans, which absorb the capital that otherwise would be used for the production of different goods and services.
The excessive welfare state of our day is an all-out direct attack on the producers of morals. But it weakens these morals also in indirect ways, most notably by subsidizing bad moral examples. The fact is that libertine “lifestyles” carry great economic risks. The welfare state socializes the costs of morally reckless behavior and therefore gives it far greater prominence than it would have in a free society. Rather than carrying an economic penalty, licentiousness might then actually go hand in hand with economic advantages, because it frees the protagonists from the costs of family life (for example, the costs associated with raising children). With the backing of the welfare state, these protagonists may mock conservative morals as some sort of superstition that has no real-life impact. The welfare state systematically exposes people to the temptation of believing that there are no time-tested moral precepts at all.
Let us emphasize that the point of the preceding observations was not to attack welfare services, which are in fact an essential component of society. Neither is it here our intention to attack the notion that welfare services should be provided through government. The point is, rather, that fiat inflation destroys the democratic control over the provision of these services; that this invariably leads to excessive growth of the aggregate welfare system and to excessive forms of welfare; and that this in turn is not without consequences for the moral and spiritual character of the population.
The considerations presented in this chapter are by no means an exhaustive account of the cultural and spiritual legacy of fiat inflation. But they should suffice to substantiate the main point: that fiat inflation is a juggernaut of social, economic, cultural, and spiritual destruction.5 Let us now turn to complement our analysis with a look at the historical evolution of monetary systems.
Footnotes
Sources:
- https://the-moneychanger.com/articles/fiat_money_in_history
- https://mises.org/library/morality-fiat-money
Chronological History of Events Related to Fiat Money
‘SMART CITIES’ Worldwide Being Converted Into ‘Open Concentration Camps,’ Says Ex-Silicon Valley Engineer Turned Whistleblower
Run on the Banks in China – Long Lines in Henan, Shanghai, and Dandong
Essay on Patriotism and Globalism by Chilean-born Sven von Storch – National Sovereignty: Make Latin America Great
Study: Money Only Buys Happiness for a Certain Amount
Bitcoin Milestone: Bitcoin’s Value Exceeds That of Gold
12-year old Victoria Grant explains why Canada, and Most of the World, is in Debt at the Public Banking in America Conference (Philadelphia, PA).
Bitcoin Milesone: Bitcoin Reaches Parity with the US Dollar
New Liberty Standard Publishes First Exchange Rate on Bitcoin of 1,309.03 BTC to one U.S. Dollar (0.0008/BTC)
First Transaction of Bitcoin Currency takes place between Satoshi and Hal Finney, a Developer and Cryptographic Activist.
