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


No Bailouts Can Save This Sick System

This blog post was first published here on 7 January 2009.

It appears now that the bailouts of late 2008 may not have been enough to save the banking systems of the US and the UK, not to mention major corporations like Ford and General Motors.

Major manufacturers in the West have been crippled by the free trade policies of the last sixty years whereby cheaper foreign imports have been allowed to flood the home markets, driving down prices and destroying profits, leading to factory closures and job losses.

The banking system has simply shown itself to be unworkable. Governments can pump all the money in the world into this corrupt setup, but it will never work. Although it is euphemistically called “taxpayers’ money” it is in fact merely fictitious money created by the central banks and lent to  governments at interest so it can be “invested” in the banking system again.

It is a ludicrous merry-go-round and the only winners are the private banking families and their agents. Read what they think of the rest of us and what they plan to do next in David Rothkopf’s book, Superclass. And it you haven’t already, download and read this free Guide to this most pernicious economic system we’re all currently trapped in - Promise To Pay, by Dr R. McNair Wilson. And . . .

Spread the word.

Philip Gegan


The “Bailout” Racket

This article was first posted here on 18 December 2008.

Many aspects of the so-called “bailout” of the corrupt banking system of the US and the UK, and probably most other countries as well, have never been properly explained or subjected to close scrutiny.

For example, Goldman Sachs, the US investment bank, went cap in hand to the US government for a life-support share of the bailout fund and received the equivalent of £6.5 billion. Now we hear that this bank is paying bonuses to its London staff totaling some £4.3 billion, almost two thirds of what it has taken from the US taxpayer, supposedly to enable it to simply survive.

What does this tell us? Well, it tells me, for one, that the people who run this bank live on another planet. How can any institution receive a huge amount of public money from the taxpayer on the grounds that otherwise it will fold and carry thousands of other organisations down with it, and then just a few weeks later pay out two thirds of that huge amount to its key employees as a bonus for doing so well?

Apart from being morally repugnant, it just doesn’t add up, does it? Especially when you consider that the US government itself is bankrupt, in debt to the tune of so many trillions of dollars that it is virtually impossible to calculate or comprehend the true amount.

So why does a bankrupt organisation (the US government) give billions of dollars that it doesn’t have to another organisation that then fritters most of the money away on bonuses? And in a time when the rest of us are having to tighten our belts and cut costs wherever possible.

The truth is that the international money power that owns and controls the world’s central banks (Federal Reserve, Bank of England, etc) love weak and bankrupt governments. In the credit boom of the last ten or fifteen years it was becoming a little bit too easy for western governments. Perhaps they weren’t doing everything the way the private banking families wanted them to. They were beginning to get just a little bit out of control.

So what does the money power do? Naturally it pulls the rug from under the credit boom by cutting off further credit to its agents and apparatchiks (the big banks like Goldman Sachs, Lehman Bros, etc) and precipitates the credit crunch. Before long these big banks and major corporations like Ford, Chrysler and General Motors are begging the government for bailout money to survive.

The social and economic cost of allowing these institutions to go under is too high, so the government has to mortgage its future even more by lending or granting billions of dollars to them. This means borrowing even more from the central bank (Federal Reserve). The government is now tied even more securely to international finance.

It has to either restrict public spending, thereby worsening the crisis immediately and risking social and racial unrest. Or it must increase public spending to try and spend its way out of recession, thereby plunging itself into even more unprecedented levels of debt that will take forever to repay and making the situation much worse in the long term. This applies, of course, not just to the US government, but to all western governments.

So the credit crunch means hard times for everyone except the very people who caused it in the first place. The private families, the close-knit group of around 6,000 people who really rule the world (see “Superclass” by David Rothkopf, available from Amazon) have never had it so good.

Read the truth about international finance and the money power by downloading our free guide, the classic “Promise To Pay” by Dr R. McNair Wilson, from our home page.

Spread the word.

Philip Gegan