by Kieron McFaddenProsperity, February 2002

As we survey the world scene of worsening poverty and the growing enslavement of entire peoples to corporate power, several common denominators emerge from this heaving sea of human misery.

The most marked of these is the prevalence of debt. Debt has become a mire from which the people of this planet are increasingly unable to extricate themselves. Despite fantastic efforts, involving tremendous sacrifice and hardship, they are sucked ever deeper.

By "people" we mean all people. Most people, as individuals, are personally in debt. Most businesses are in debt, many so much that they no longer operate on profit margins but on the size of their outstanding loans and overdrafts. Most, possibly all, major corporations, the giants of the world economic stage, are likewise so insolvent they can only appear solvent on paper by voraciously plundering assets, which they can offset against their mounting debts. Virtually all governments the world over are so overwhelmed by national or Third World debts, they see no hope of ever becoming solvent.

The bigger and more prosperous the nation, the more heavily mortgaged it seems to be. The United States is the most indebted nation on Earth: its combined national, private and commercial debt to the banking institutions is around $22 trillion — many times all the dollars in its economy. Virtually every nation is in a similar condition and the total world-wide debt to the lending institutions is many times greater than all the money in existence. The debts can never be paid off!

Any nation that resolved to settle its debts would have to transfer all the money in circulation in its economy into the accounts of the lending institutions. It would thereby plunge its people into poverty and bring its economy to a catastrophic standstill as money is removed from general circulation — and it would still wind up with a massive, unrepayable outstanding debt.

If we look at nations such as Argentina, Peru, Brazil, Mexico or Guatemala, we see that this is precisely what has happened. Money — spending power — leaves the home economy and winds up in the possession of international banking cartels. Massive internal shortages of money result, causing a steady decline of living standards, infrastructure, solvency and economic activity.

In a world economy dominated so thoroughly by debt at every level, the world’s creditors — and those organisations they favour with easy access to credit — become the dominant powers. Thus we witness, with a sense of helplessness in the face of forces beyond our comprehension or control, the steady take-over by corporate and banking interests of the entire economic life of nations.We witness, in every nation — Third World or not — a growing subservience of national governments to corporate and banking powers that are so interwoven and co-ordinated as to be a coalition.

As in any relationship between borrower and lender, the lender is senior to the borrower. The former retains a factual claim of ownership upon the borrowed money and the latter uses it temporarily, subject to the lender’s permission. The borrower must also pay a charge or toll for its use, which we refer to as interest. The lender can control the borrower’s policy simply by setting conditions for further lending. The borrower is not free whilst an obligation to repay is outstanding; someone else has a claim over his endeavour and the fruits of his labour. In the current world scene, the people who dominate the financial system, own and control the world’s money supply. When those debts cannot ever be discharged, except by further borrowing — which amasses further debt — then the power held by the lender is permanent, pervasive and almost absolute.

The banks world-wide hold the whip hand over hopelessly indebted governments, inherently insolvent industry and desperately mortgaged media empires.

Where a hidden unaccountable power can make government dance on its debt-strings there can be no true democracy, only a mimicry of it that must forever hide the true nature of the money power from the people.
Whilst the world’s media is over its head in debt and depends utterly on the continued extension of loans by the banks to stay in business at all, there can be no true freedom of the press; only a pretence of impartiality or freedom at best, whilst the media barons dare not displease their money masters.

So long as the world’s banks and the small elite of financiers that owns them can control the destinies of nations simply by turning the tap of money supply on and off, then there can be neither freedom nor national self-determination.

This is the factual situation in which we find ourselves today. It is rather hard to see through the smokescreen of carefully managed chaos, complexity and misinformation that hides it from view. Hard to see or not, the fact of the matter is that an unaccountable financial elite has quietly seized power. It is a near totalitarian power exercised through the leverage provided by the control, through creating and lending, of the world’s money supply.

That this power is not benign and works against the interests of the vast bulk of humanity is evinced by the misery, confusion and decay we see at every hand, even in the heartlands of the world’s most powerful nations.

All of this begs one very important question: if the entire planet is over its head in debt to a small clique of money lenders and if that debt is greater than all the money in existence, where on earth did our creditors find the money to lend us? And how can they have loaned us more money than exists?

The answer is startling. It is nevertheless true, as anyone is free to verify. It brings something ugly into the spotlight; the biggest global fraud ever inflicted upon mankind, a fraud which has killed, impoverished and ruined more than any other enterprise devised by the criminal mind.

From where do these financiers get all the money they lend? They do not get it from anywhere. In essence, they lend money that does not exist!

It works like this: when any borrower, be it an individual, business or government, borrows, for example, £1 million from a bank, the loaned money is simply penned into the borrower’s account as credit. What occurs is simply a ledger entry, a changing of numbers in columns. No other account anywhere is debited or touched. No existing money is moved but new money is created out of thin air as soon as it’s loaned.

Banks lend money they do not have by penning it into existence out of nothing. Whoever borrows that newly conjured money has to pay it back, plus (say) 10% interest.

At the same time as that £1 million is created and loaned a debt of £1.1 million is simultaneously created out of nothing.

Governments, contrary to popular belief, create virtually no money themselves. It is perfectly feasible, indeed vital, for them to create money to supply the economy, and spend it into existence, but they do not.

Instead, governments the world over have surrendered to the international banking system a mandate to create their money for them and supply it to the economy by lending it at interest. In the United Kingdom, for example, around 3% of the nation’s money supply is created and spent into circulation debt-free by its government. The remaining 97% is created by bank lending.

As debt must exist in order for money to exist, someone must carry that debt burden. In other words, we as a people must carry ever-increasing debt in order to supply our own economies with that token of exchange we refer to as money.

It is not hard to see that this is an unsustainable system of money supply. It enables the world’s banking cartels, with their monopoly on money creation, to control the world’s money supply, amassing vast wealth and power from an operation that is no more than legalised counterfeiting.

Producing nothing of value themselves, these bankers are thereby able to steadily gain what is virtually a slave-master’s power over the businesses, farmers and workers who do produce real wealth. Here we see the hidden underlying economic flaw that has plunged our civilisation into misery and chaos.

Why should any of us tolerate this crime a moment longer? We are lucky in that it is easily rectifiable. We simply have to restore to our respective governments the right and duty of creating and spending, not lending, into existence the money our economies require in order to function smoothly. Any government, with the will or demand of the people behind it, could revoke the bankers’ unearned and destructive privilege quite easily if they had the will so to do.

Governments at this time have no will to "buck the system", essentially because no demand comes from their populations and the grass roots organisations representing those populations.

The hard-pressed, confused, hungry, desperate and frightened people of the Earth’s nations do not demand this simple reform because they are unaware of the truth. They are unaware of the truth because it has been kept from them, omitted from their education, omitted from a controlled media and publishing industry, omitted from debate and obscured behind a fog of false information, bewilderment and chaos. Instead they blame the wrong targets for their troubles and even blame and fight one another in the carefully created confusion the money powers find so easy to manufacture. As a result, our troubles grow steadily worse because the true, underlying cause is missed; wrong causes are blamed and wrong solutions engaged.

Another common denominator is that, globally, tens of thousands of betterment groups are active in a fight against one aspect of oppression or another. Every betterment group seems to be fighting a losing battle as gargantuan oppressive powers grow stronger and the world scene of poverty, injustice, loss of freedom and environmental decay deteriorates unchecked.

If tens of thousands of groups, comprising millions of people are fighting for freedom, justice, humanity and decency or indeed any prospect of this planet sustaining life into the future, and yet are losing ground, this tells us something else: someone or something is exerting an almighty push in the opposite direction. That someone or something is hidden from view.

Once we understand how the existing debt-money system empowers and massively enriches a small banking elite, whilst rendering national governments and their agencies, the press and corporate power subservient to them, we begin to see from whence comes the shove and from whence it draws its strength. From this in turn we can clearly see something else:

Each betterment group fights its individual battle against a particular aspect of oppression alone. Each stands alone against the co-ordinated, interlocking and unified might of global oppressive power.

Now that we understand the source and nature of that oppression, we see that it can be broken by cutting off its power at source. That source is its privilege of creating money and lending it into circulation. If that privilege were taken away, it would have nothing.
Not only that, if the manifold devastating effects upon our economies and our freedoms of such a system were removed, we would be contemplating the very real possibility of an era of unparalleled freedom and prosperity, justice and true democracy for all people.

Moreover, once the effects of the debt-money system are understood, we can see that virtually every economic and social ill being fought so heroically by betterment groups the world over, trace down to this single underlying flaw.

This datum is the one vital ingredient missing from most analyses of the world’s social and economic difficulties. The banking elite and their fraud escape attention and therefore justice. They remain free to inflict injustice, suffering and war on all.

This point of address becomes the logical rallying point for all betterment groups the world over. It is the common denominator of the evils they fight.

If each betterment group were to join around this point of agreement and in a unified way incorporate a loud denunciation of the fraudulent money system into its campaigns — without any loss of its own identity and autonomy or any compromise with its own cherished goals, plans and projects — then each would find itself armed with a weapon that oppression cannot withstand.

We find ourselves in possession of the power, potentially, to sweep oppression aside and restore sanity, stability, prosperity and justice to the people of Earth.

Here is our common enemy and our common cause.

Kieron McFadden writes from the British Association of Money Reform.BAMR booklets publishes booklets which cost £3.00 each inc. P&P. Anyone wishing to disseminate can buy multiples of ten for £1.00 each plus £2.50 P&P, payable to BAMR (South East), 27 Imberhorne Lane, Felbridge, West Sussex, RH19 1QX. Tel: 01342 410 962; Fax: 01342 302 149;

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Essential Further Reading:
PROSPERITY: Freedom from Debt Slavery
is a 4-page quarterly Journal which campaigns for publicly-created debt-free money.PROSPERITY is edited and published by Alistair McConnachie and a 4-issue subscription is available for £10 payable to PROSPERITY at 268 Bath Street, Glasgow, Scotland, UK, G2 4JR. Tel: 0141 332 2214; Fax: 0141 353 6900, Email: contactus AT ProsperityUK DOT com All back-issues are still available. The 40-page Report,Clarifying our Money Reform Proposals, launched at the 2006 Bromsgrove Conference, is available for £10 payable to PROSPERITY and is essential reading for beginners.

The Grip of Death: A study of modern money, debt slavery and destructive economics by Michael Rowbotham, [Jon Carpenter Publishing, 1998] and Goodbye America! Globalisation, debt and the dollar empire by Michael Rowbotham, [Jon Carpenter Publishing, 2000] and Creating New Money: A monetary reform for the information age by Joseph Huber and James Robertson [New Economics Foundation, 2000] are all available fromPROSPERITY.