Banks, Debt, Inflation and Theft

Lots of thoughts running through my head on this topic. I’m still learning all about it, so my opinions and understanding which follows might not be accurate. Feel free to comment your thoughts, opinions or amendments on my Facebook page where I’ll be sharing this.

Quite literally inflation is theft. Most people think of inflation as prices rising, of greedy corporations seeking more profit perhaps. But that’s not it at all. Prices rising is a symptom of inflation. Inflation actually occurs when our money system creates new money out of thin air, *inflating* the money supply. When the money supply is inflated, it happens at a much different rate than the availability of goods and services, so when a much larger amount of £ is chasing an unchanged amount of goods and services, the number of £ required to buy those goods and services increases – in effect devaluing the £ you have, from wages or, if you’re lucky, in savings. It now takes more wages, and uses more of your savings, to buy the same things as before. The value lost to your £ is transferred to those holding the newly ‘magicked-out-of-thin-air’ money. You’ve lost value, they’ve gained the value. This whole procedure is facilitated by the banking system, and leads all the way to the central banks who, independently of government, control the creation, flow and value of money through inflation and deflation. The words ‘inflation’ and ‘deflation’ as heard in the news are almost never the true definition. That’s where the real power is.

Because of the great influence of the $USD across the world, the inflationary and deflationary activity of the Federal Reserve (a privately owned bank – don’t let the name fool you) has a disproportionate impact on the global economy. Several US Presidents have sought to reign in US central banks over the years, understanding the power they had to great booms and busts, to enslave the people to its system, and to take ownership of the real wealth of the planet (the land and everything in it, and the labour of the people) in return for running an exchange system based on worthless paper.

Sadly our own governments are not beyond participating in the swindle, and on a much larger scale than any of us private people may do so, by getting into debt while using taxpayers, present and future, as collateral. Even more sad, is that voters to a large degree beg for their governments to do this for short sighted and selfish reasons. This why the level of national debt as a proportion of GDP is so significant, at some point the government will owe to the central bank (with interest – not sure why) more than the nation’s entire productive activity can produce in a year. Thomas Jefferson warned of the danger on more than one occasion.

Writing to John Wayles in 1813, Thomas Jefferson wrote:

“…we are bound to defray [our] expenses within our own time and unauthorised to burden posterity with them… let us hope that our moral principles are not yet in that stage of degeneracy; and that in instituting the system of finance to be hereafter pursued, we shall adopt the only safe, the only lawful & honest one, of borrowing on such short terms of reimbursement of interest & principal, as will fall within the accomplishment of our own lives. …my original disapprobation of bank circulating-paper is not unknown, nor have I since observed any effects either on the morals, or fortunes of our citizens, which are any counterbalance for the public evils produced. and a thoro’ conviction that, if this war continues, that circulation must be suppressed, or the government shaken to it’s foundation by the weight of taxes, & impracticability to raise funds on them, renders duty to that paramount to the love of ease & quiet.”

Three years later, writing to John Taylor in 1816, still deploring the power of the Banks paper, and the tendency for Governments to incur debt to them on behalf of the people, Thomas Jefferson wrote:

“And I sincerely believe with you, that banking establishments are more dangerous than standing armies; & that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”.

President Andrew Jackson (1829–1837) succeeded in reshaping the US economy to run without a central bank. The Bank’s own strategy to provide extensive credit and then quickly withdraw it, caused some to question the Bank’s own role in economic hardship. He believed that their central bank, the Bank of the United States, held too much power and could wield it at any moment to ruin the U.S. economy. Because it was a largely private institution, Jackson thought the Bank put too much power in the hands of too few wealthy American private citizens, and the majority of stockholders were foreign investors with allegiances to other governments. When the Bank petitioned to have its charter renewed, Jackson exercised his Presidential veto, stating:

“It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth cannot be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society–the farmers, mechanics, and laborers–who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles.”

In retaliation the Bank of the United States severely restricted loans in an attempt to raise the public’s anger, but thereby proved President Jackson’s point. Jackson ordered that government funds be withdrawn and deposited in State banks. By the time the central bank’s charter expired in 1836, President Jackson’s assessment that the Bank was created to serve the interests of the wealthy, not to meet the nation’s financial needs, was well-supported. The US lived the next 80 years without a central bank and experienced tremendous economic growth, until the Federal Reserve, another private central bank, was created in 1913. War, and the US involvement in it, and the money the banks made from that, followed shortly afterwards – but I’m sure it was just a coincidence.

It’s interesting to note that President Jackson survived two assassination attempts. We try not to draw any incorrect conclusions though you, like me, may speculate on whether these were connected to his Banking policy.

President John F. Kennedy wasn’t as fortunate, and didn’t survive the assassination attempt on him. During his Presidency, Kennedy had also gone to war with the central bank of his day, the Federal Reserve. In an attempt to fix the economy, and bring control of money under Government rather than a private bank, on June 4, 1963 Kennedy signed Executive Order 11110, which gave the Treasury Department the authority to issue ‘silver certificates’ backed by silver. These would act as an alternative to the traditional paper currency issued by the Federal Reserve System. The aim being to create a sliver-backed currency that would be in competition with the Federal Reserve dollar. However, less than 6 months later, on 22 November 1963, Kennedy was assassinated.

Following his death the affect of Executive Order 11110 was wound down. The following year in 1964, C. Douglas Dillon, the Secretary of the Treasury, stopped exchanging silver certificates for silver dollars, and in the subsequent years Kennedy’s work was completely undone. In 1987, assassination survivor President Reagan, issued Executive Order 12608, effectively revoking the amendment made by Kennedy’s Executive Order 11110. The private Federal Reserve central bank has controlled the $USD ever since.

The UK is in no particularly better situation, being similarly in hoc to a private bank, the Bank of England. We know within our own recent lifetimes – 2008 – the tendency of banks to extend debt, and withdraw it, to be rescued from their own foolishness by taxpayers who hold no shares in them, ensuring central banks never lose, while the banks practically hold shares in everything we do and think we own.

We also know how the private central bank deals with Prime Ministers who get uppity (remember Liz Truss).

Think about that this election.

Jefferson, Jackson and Kennedy had a point.