"It is this underlying confusion between wealth and debt which has made such a
tragedy of the scientific era. It is fundamentally ingrained in the Western mentality
and, could it be straightened out, a scientific civilisation might, at long last, yet be
put on the right road. " Frederick Soddy - i
Introduction
The people who create your money have teamed up with your political leaders
and the media to mortgage your future. Bankers and politicians know all
they have to do is write checks and someone else will pick up the tab. They
borrow and create out of thin air the money that you have to work for. And
then they use that money to acquire more money and power. When they acquire
the privilege of creating money for the world, other nations are told they
must accept that money or be destroyed as a threat to the established order
- one based upon money and debt, just as under feudalism it was based upon
the control of land. That is 'the system'. It must be understood and
changed if our civilization is to have a future.
It is no mystery why Wall Street, the too-big-to fail-banks and the U.S.
government are such good pals as are other Western governments, their banks
and financial institutions. They all create money as debt and use it to
appropriate society's wealth. Very little of the world's money takes the
form of currency or coins. Almost all of it is created as debt denominated
in the currency of the country in question. When a country's money acquires
reserve currency status - a currency which other nations accumulate and use
as a store of value or to settle accounts - its currency can be used to
appropriate wealth from beyond its borders. Bankers and financiers, the
merchants of debt, help governments extract real wealth from both domestic
and foreign populations in exchange for both government and private debt.
They do this by maintaining markets in which this debt can quickly be
converted into the money of the country in question and by fostering popular
misconceptions about the near-money debt they have been creating with such
abandon recently, principally that it has some creative power or inherent
value.
Government's contribution to the partnership is helping its private sector
partners get the money they create accepted. If debt is created by a
private party, there is an obvious risk it may not be repaid and the claim
to wealth it represents will be lost. If, on the other hand, that debt can
be transferred to a collective entity like government - to be backed by 'the
full faith and credit' of the people - the wealth the debt represents is as
secure as the government which has assumed responsibility for it. However,
by ceding the privilege of creating money - as debt or in any other form -
to private parties, governments expose themselves to the threat those
parties will refuse to create enough of it to fund either government's
legitimate activities, the needs of the real wealth-producing economy or
both.
Perhaps the most valuable service performed by the merchants of debt for
governments is helping conceal the real costs of their corruption, waste and
wars. The Vietnam War ended in large part because the American middle
class refused any longer to pay the cost of policing this country's global
empire with the blood of its children. Had the financial costs of that or
any other of the 20th and 21st century imperial wars come fully out of the
public's pockets, there is reason to believe those wars would not have been
tolerated either. The same is true for the 'pork barrel' spending that has
long characterized American politics and the tax cuts for its wealthy.
With volunteer military service now the norm, the mortal threat to the
children of the middle class in the United States and other Western
democracies may have subsided for the moment. But the threat to its
financial future is reaching crisis proportions. Just as they bought the
wars to "make the world safe for democracy" or from Communism or Terrorism,
they bought their governments' and bankers' pitch that all the debt-based
money both were creating was actually some form of wealth. They have been
led to believe that 'Debts that can't be repaid somehow will be.'
This permits their governments, bankers and financiers to transform the
wealth created by past and current generations into debt-based money, a
weapon which can be used for the further subjugation of populations in their
own and other nations, the further expropriation of their wealth.
This strategy of using government debt as a weapon is one which Dr. Hudson,
a Wall Street analyst and research professor for the University of Missouri,
described in his book "Super Imperialism" first published in 1972, a year after the
collapse of the 1944 Bretton Woods International Monetary System. "Super Imperialism"
was the outgrowth of a study he performed on the consequences of the demise
of that system. Dr. Hudson argued the use of government-backed debt as a
strategy for U.S. world domination it has employed in the years since 1971
was in large part the product of fortuitous historical circumstances and
innovative U.S. responses:
"Intergovernmental debts were first catalyzed in the 1920s by the breakdown
of world payments and trade in the wake of Inter-Ally war debts and
reparations, ..." - ii
Dr. Hudson has continued to develop this theme. See, for example, "Why the
IMF Meetings Failed":
"Finance is the new form of warfare -- without the expense of a military
overhead and an occupation against unwilling hosts." - iii
The knowledge that debt and money can be used aggressively has long preceded
him. In "America's 60 Families", former Wall Street Journal correspondent
Ferdinand Lundberg described the advantage of money compared to other forms
of wealth:
"But the securities of American millionaires can be exchanged in a flash for
any currency in the world, for land, for other stocks and bonds. The wealth
of the Indian princes is immobile, static; the wealth of their American
counterparts is mobile, dynamic. In the money markets of the world the
feudal wealth of the Indian princes is of no consequence." - iv
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