The £1.3 Trillion Black Hole

This post was first published in February 2009.

Here in the UK our kept politicians have well and truly lost control. The latest lunacy in trying to cope with the economic crisis is to pump yet more money into the rotten banking system, whilst what is left of our productive industry suffers from cash starvation.

£250 billion is to be handed over to each of Royal Bank of Scotland and Lloyds Banking Group. The latter, having survived comparatively unscathed from the crisis until as late as September 2008, were then daft enough to buy some of the more toxic "assets" of another banking casualty, HBOS.

The funny thing is that they did that after coming under pressure from our (then) Prime Minister, Gordon Brown, to do it, and it's he who now puts himself forward as being just the man to sort out the mess. Trouble is, he himself had a large part to play over the last 8 or 9 years in creating the credit bubble, the bursting of which has precipitated the present crisis.

The handover is expected today or tomorrow, ahead of the announcement of catastrophic losses by both banks, so as to cushion the effects on the foreign exchange markets.

Debt Slavery

This half a trillion pounds of additional government debt makes the total amount poured by the UK government into the banking system around £1.3 trillion - about the same in value as the UK's total annual output. So we in the UK would have to work for a full year and sell all our produce overseas in order to pay off all the money borrowed just to salvage the financial system.

Back in the real world, the retail sector is fighting to survive by offering deals of half-price or less on nearly all their stock. That effort has nearly run its course and the massive redundancies that are inevitable have now started in earnest. Local authorities, many of which have lost massive amounts in Icelandic banks, are grimly holding on until April and the start of the next financial year, when revenues traditionally start coming in again.

Where will it all end? Some group of people know, and it's a group of people who aren't concerned about your future or mine. In fact they are only concerned about themselves and their own hold on world power. A clue was given us in a news report this morning in which the Australian media magnate Rupert Murdoch, undoubtedly one of the 6,000 or so people who really run the world, was quoted as saying, "We are in the midst of a phase of history in which nations will be redefined and their futures fundamentally altered."

That sounds ominous indeed. It gives proof, if it were still needed, of the existence of the "Superclass" of David Rothkopf's book of the same name, and the truth of the conspiracy attested by Aaron Russo in a posting on YouTube.

What can we do to expose this evil? Read that book, watch the video, download "Promise To Pay" from this blog's Home Page, and . . .

Spread the word.

Philip Gegan




Just Who Is It Lending All This “Money”?

This post was originally published on 20 February 2009.

The notion of having our economies based on debt has been around for hundreds of years, perhaps longer. Here in the UK we had it foisted on us in 1694, when the Bank of England was established to lend the government of the day £1.2 million to help finance the perennial wars against France.

The chief architect of this system at that time was someone called William Patterson, whose motto was "Thus you labour, but not for yourselves". In other words, "You do all the labour, and I'll receive the rewards". Such arrogance is breathtaking.

Soon the government found that it actually owed not £1.2 million, but £20 million, and then £30 million, and a few years further on it topped £100 million. This became known as the National Debt which, like the poor, is always with us. Because successive politicians who aspired to government learned that this was the way to raise money needed by the government.

"Every Loan Creates A Deposit"

Sure, they sold government bonds to the public as well. But the vast bulk of government debt, or "gilt-edged securities", were bought up by private bankers and the Bank of England. And how did they get the money to lend to the government? Well, since "every loan creates a deposit" under the topsy-turvy laws of banking, the very fact that the government owed them more money provided the "capital" for the money lenders to be able to lend out even more (and collect the interest and stipulate terms).

So the power and influence of finance, and, later, international finance, over the affairs of nations grew like a cancer. And now, in the UK, it has just been announced by our Office of National Statistics that the National Debt, having been just over half a trillion pounds only a few months ago, has now topped £2 trillion.

That's two thousand billion pounds, or £2,000,000,000,000. It's a figure that few of us can even imagine. And to pay it back we would have to hand over all our Gross Domestic Product for several years. Even if that were possible in terms of all of us foregoing all food, clothing, shelter, and other essentials, not to mention luxuries, we would run out of money long before the debt was repaid.

Even Worse In The US

In the United States the situation is if anything even worse. The National Debt of the United States is now around $65.5 trillion. That's about the value of its Gross Domestic Product for four years, or more than the whole of the wealth produced by the whole world in a year.

We all know instinctively that this just isn't right. Why should national governments, rightly answerable to the people every few years when elections come round, have to borrow the money they need (over and above what they raise by taxation)? Most people think that governments either issue their own money or control and own the Central Bank that merely does this as a task on behalf of the government.

But that's not the case at all. Although much has been made in the controlled media of the Federal Reserve, in the US, and the Bank of England, in the UK, "printing" money, that is really not the point. Of course some institution has to "print" money - it's a man-made invention. Tokens for the exchange of wealth, articles of value, and so on, to facilitate trade, are an essential commodity in any modern civilization.

All New Money Is Debt

Where the divergence takes place, between what most people think happens and what really happens, is how the newly created money is treated. And how it is treated is as a debt, owed to the shadowy figures who control the money system. They are the people to whom, under this racket, all this money is owed.

Of course only a tiny fraction of all this debt will ever be repaid (which makes the whole system all the more ridiculous). But, again, that is not really the point. The shadowy figures, the money power, or whatever you want to call them, are more concerned with power than with getting this "money" back. They only created the money out of thin air anyway (it's laughable to think they pretended to have a few hundred billion at a time lying about to lend out to governments in a financial crisis).

But it's the interest payments, running at an astronomical figure each year, and the power over governments, that international finance, and their lackeys among the global elite, thrive on.

This unelected, unaccountable elite create the credit by which we all are their debtors. If not on a personal level then as taxpayers, where our tax money is largely used simply to service these fictitious loans. Let's do all we can to expose this evil system and the shadowy figures who exercise such terrifying power for their own sinister ends, such as shown in this video of the famous film maker, Aaron Russo.

So . . . Spread the word!

Philip Gegan


The Bursting of the Bubble

This post was originally posted in February 2009.

It's unfortunate that it's taken the current recession, with all its bankruptcies, bailouts, tax increases, lay-offs and other tragedies, to more easily explain to people what a racket the economy really is.

People like me have been telling anyone who'll listen for the last 40 years or so that the economy (in my case of the UK, as that's my country) is fatally flawed, and that there's going to be an almighty crash eventually.

The response is usually quite sceptical. After all, when times are good and the economy is booming, everyone seems to have a job and all the shops are open, it's difficult to believe that it's all based on a bubble that will soon burst.

The Demise Of Manufacturing

But that's what has happened. I discussed in my last post how we in the west don't manufacture much ourselves any more - it's all imported, mostly from China and other Asian countries. The economy shifted over the years from being a manufacturing based one to, well, it's difficult to say what it has been based on for the last 40 years or so.

With the demise of manufacturing, the economies of most Western countries have come to be based around big, lucrative, projects, usually involving defence contracts or building contracts, and similar devices. With such a lot of money being shovelled around in these projects, it's not surprising you soon had the usual band of freeloaders and parasites creaming off the profits.

It became a paradise for the accountants, tax advisers, lawyers, brokers and all the other in-betweens that are attracted to easy money. This itself helped create a boom in the City and all the financial institutions. Money flowed around, in and out of the country, and while our factories and mines shut down the suits in civvy street prospered and paid themselves million pound bonuses.

Corruption blossomed. And as often as not it involved the very people who are supposed to be looking after our national interests - our ministers, MPs and Councillors. Examples of all this have been in the national newspapers nearly every other day for many years now. While the wheels came off the wagon the party inside carried on as if there were no tomorrow.

Reality Pops Up

Now the wagon has crashed with little hope of repair, many of the party goers have suddenly come face to face with reality - you can't carry on for ever pretending to be wealthy when you no longer produce any wealth to speak of. The bubble has burst. The only surprise is that it took so long.

And the real tragedy is that, until enough of us can organise resistance, the global elite / money power will continue to pursue their aims of global domination while ordinary folk suffer the consequences.

So for that reason, make sure you've downloaded "Promise To Pay" and are distributing it far and wide, and that you're doing all you can to . . .

Spread the word!

Philip Gegan