A real, honest credit crunch definition is long overdue, so here it is.

Credit crunch: a panic-driven massive withdrawal of credit from all sections of society desperately in need of it by banks that have previously been engaged in an orgy of unsustainable, irresponsible lending of fictitious money in huge amounts largely to people who any fool could see had no means of repaying it.

That’s quite an indictment of banks and the banking system, so let’s take a closer look at what triggered the credit crunch, now grown into a full-blown recession around the globe and ruining countless peoples’ lives.

Money is created by the banking system out of nothing. This is wrong, but it’s the way it is, unfortunately. It is then lent at interest to all sections of the community – big businesses, small and medium sized businesses, governments, international institutions, nationalised industries, banks themselves (big and small) and, of course, private citizens.

This makes it unrepayable debt. Anyone or any institution of whatever nature that manages to repay its borrowings plus interest does so at the cost of other borrowers not being able to do so. Traditionally governments, even with their power of taxation, have not been able to repay the money they have borrowed. The core lending is shoved into a pile and called the “national debt” or “treasury bonds”, or something like that.

Because this debt is unrepayable the whole system is unworkable in the long run. Sure, it can appear to be working for long periods, while lending is increasing and the amount of money in circulation is therefore keeping fairly constant in spite of large amounts being withdrawn through loan repayments. But after a number of years the system always threatens to collapse, because there is a limit to the amount of phoney money the banks can lend before their stockpile of real money – gold in former times, now more likely treasury bills and other securities – threatens to dry up and destroy the solvency of the banks themselves.

Indeed, a large number of banks have collapsed in spite of calling a halt to further lending and in spite of billions having been pumped into the banking system by leading governments such as the United States and Great Britain. As this is being written (late July 2009) there are still banks in the USA folding, and this is in spite of the recent stock market rally.

The only people benefiting from all of this are the really huge banking houses such as the Rothschilds and J.P.Morgan. Even Goldman Sachs, currently back in profit and paying its fund managers obscene bonuses with taxpayers’ money, is in very dangerous waters.

It’s obvious from even a brief survey of the situation that the system of having private bankers control the currency, an absolutely vital control lever of any economy, is sheer lunacy. Private bankers use the incredible power vested in them for their own enrichment and power, and the evil “hidden agenda” they pursue in their quest for global domination.

In Great Britain they have had this power unopposed since 1694, when the UK central bank, the Bank of England, was founded. It kept its name even after the United Kingdom was formed from the union with Scotland and Ireland some years later.

In the United States there were several criminal attempts to foist a central bank on the new republic early in the nineteenth century but each time those attempts were eventually rejected. But in 1913, on Christmas Eve, while most people were going home to their families for the Christmas holiday, a small group of criminal plotters let by Nelson Aldrich, a corrupt senator whose daughter married a Rothschild, managed to get the Federal Reserve Bill passed before only a handful of senators, and economically enslave the United States.

Since then, of course, the USA has suffered the Great Depression of the 1930s, numerous financial panics (which the Federal Reserve Act of 1913 was supposed to put an end to), and an escalating level of public and private debt. The mighty economic engine of the United States has gradually been withered away and is now in serious danger of complete collapse.

Thus is the story, or a small part of it, so far. The worst of the current recession is shortly to come.

Philip Gegan