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https://www.globalresearch.ca/quotes-economics-banking-you-wont-hear-corporate-mass-media/5827350

Bankers Rule The Economic World via Debt

Selected Quotes on Economics and Banking, That You Won’t Hear on Corporate Mass-Media.  

Introduction

My book Demonic Economics and the Tricks of the Bankers lists systemic aspects of the banking, monetary, and economic system that are not taught in the schools and universities of the world, and are rarely discussed on corporate owned news and media networks. Knowledge of these topics is absolutely essential for everyone in the world that wishes to understand how the economic world ‘actually’ works and why worldwide society is in perpetual debt while the vast resources of human productivity and of nature are continually exploited by a small group of people that control these systems.

Over decades the power to create money has resulted in the power to own, control and manipulate the assets of the material world, as well media and politics. Representative democracy under capitalism as currently implemented in much of the world, is an illusion – it is money that controls the economic world. Those that control the money creation process wield the power to control the corporate media and own the material world, regardless of which political party is elected, or which system is utilised (capitalism, socialism, communism, etc).

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford (1863-1947), Founder of Ford Motor Company

“One feature of banking that cries out for reform is “fractional reserve banking”, i.e. the practice whereby private banks…are in effect coining their own money and putting it into circulation… This is basically fraudulent and unjust; the banks are in effect issuing their own counterfeit money.” – John Scales Avery, an Associate Professor in quantum chemistry at the University of Copenhagen

“Banking institutions are more dangerous to our liberties than private armies. If the American people ever allow private banks to control the issue of their currency… the banks… will deprive the people of all their property” – Thomas Jefferson

“Whoever controls the volume of money in any country is absolute master of all industry and commerce… when you realise that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.“ – James Garfield, 20th President of the U.S., assassinated in 1881.

“.. a network of private bankers has taken over control of the international money system… credible evidence is presented of a world power elite intent on gaining absolute control over the planet and its natural resources, including its subservient ‘human resources’… Economic means have long been used to spark wars, as a pretext and prelude for the money power to stock and restock the armaments and infrastructure of both sides.” – Reed Simpson, M.Sc., American Bankers Association Graduate School of Banking London School of Economics

“The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government ever since the days of Andrew Jackson.“ – President Franklin Delano Roosevelt, November 23, 1933, in a letter to Colonel Edward Mandell House

“The modern banking system manufactures money out of nothing. This process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin.. Bankers own the earth. Take it away from them but leave them the power to create money, and, with the flick of a pen they will create enough money to buy it back again… if you want to continue to be the slaves of the bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit.” – Sir Josiah Stamp, Director of the Bank of England and the second richest man in Britain in the 1920s

“The goal is control.  They want all of us enslaved to debt, they want all of our governments enslaved to debt, and they want all of our politicians addicted to the huge financial contributions that they funnel into their campaigns.  Since the elite also own all of the big media companies, the mainstream media never lets us in on the secret that there is something fundamentally wrong with the way that our system works.” – Karen Hudes (worked in the legal department of the World Bank for more than 20 years and was Senior Counsel when she was fired for blowing the whistle on the corruption. See Endnote 1)

“Have you ever wondered why Canada is in debt ? have you ever wondered why the government forces Canadians to pay so many taxes ? have you ever wondered why the bankers from the largest private banks are becoming wealthier and rest of us are not ? have you ever wondered why the gross national debt is over 800 billion dollars or why we are spending over 160 million dollars a day on the interest of the national debt ? that’s 60 billion dollars a year, have you ever wondered who receives the 60 billion dollars ? what I have discovered is that the banks and the government have colluded to financially enslave the people of Canada…” – Victoria Grant explains why her homeland, Canada, and most of the world, is in debt. April 27, 2012 at the Public Banking in America Conference, Philadelphia, PA. (See Endnote 2) 

“When a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposit; it was not previously paid into the bank by anyone. It’s new money, created by the bank…” – Robert B. Anderson, Secretary of the Treasury under Eisenhower, 1959.

“A major portion of the money created by banks today has originated with the monetization of home mortgages. The borrower thinks he is borrowing pre-existing funds, when (however) the bank is just turning his promise to repay into an asset secured by real property. By the time the mortgage is paid off, the borrower has usually paid the bank more in interest than was owed on the original loan; and if he defaults, the bank winds up with the house, although the money advanced to purchase it was created out of thin air.” – E.H. Brown, Author of the book ‘The Web of Debt’

“The Bankers Opt to Rule the World. There is afoot, a brilliant, albeit treacherous, scheme to control ALL the people and ALL the property of ALL the world…. World domination via confiscation of your $$$  is already on tap… Bretton Woods Agreement – 1944 This was the birth of the International Monetary Fund and from there all the foreign agencies – CIA, FBI, IRS, BAR – control everything via the 14th Amendment citizen – those who contract to become US citizens as opposed to remaining Sovereign Americans. The sole creation of these agencies was for the purpose of collecting the debt… All those industrialists, those bankers, whose names you’ve heard a million times, Rockefellers, Rothschild, Morgan, etc.… Congress was the creator of money and somehow congress was ‘talked into’… handing this responsibility over to a private corporation owned and operated by these banksters…  they literally destroyed the United States of America and every country which fell like dominoes thereafter once the corporation called USA was founded.” – Author, Mary Elizabeth Croft (listed with kind permission)

“One feature of banking that cries out for reform is “fractional reserve banking”, i.e. the practice whereby private banks…are in effect coining their own money and putting it into circulation, a prerogative that ought to be reserved for governments. Under the system of fractional reserve banking, profits from any expansion of the money supply go to private banks rather than being used by the government to provide social services. This is basically fraudulent and unjust; the banks are in effect issuing their own counterfeit money. When the economy contracts instead of expanding, the effect of fractional reserve banking is still worse.” – John Scales Avery, an Associate Professor in quantum chemistry at the University of Copenhagen, and a member of the group that received the Nobel Peace Prize in 1995 (See Endnote 3) 

“The … bankers rule the world through debt, which is money they create out of nothing. They need world government to ensure no country defaults or tries to overthrow them. As long as private bankers, instead of governments, create money the human race is doomed. These bankers and their allies have bought everything and everyone.” – Henry Makow, Author 

“Governments everywhere are in debt, who are they in debt to? The answer is that they are in debt to private banks. The ‘cruel hoax’ is that governments are in debt for money created on a computer screen, money they could have created themselves.” – E.H. Brown, Author the book ‘The Web of Debt’ 

“Powerful industrialists and bankers essentially bribed the politicians in almost every country of the world into giving up their Constitutionally-protected right to print notes for the Treasury. They handed that power over to a private corporation which issued notes called Federal Reserve Notes… they are ‘debt notes’… What we think of as ‘money’ does not exist; it is borrowed into existence. It is not a substance, or a commodity, or anything which simply exists, for example, as water exists. It does not exist until someone creates a debt…. There is no money.  There was, once upon a time – for example, Colonial Script, gold and silver, Lincoln’s Greenbacks… Did you notice that both those presidents were assassinated for creating notes which were not based upon debt?  The banksters didn’t like this. They had a monopoly on the currency and weren’t about to let anyone cheat them out of their con game.” – Mary Elizabeth Croft, Author (listed with kind permission)

The Privately Owned Banking System Bleeds the Productive Capacity/Profit of Nations

The worldwide privately owned banking system bleeds a significant portion of the capacity/profit of nations. This occurs via the governments of the world paying vast amounts of interest to international banks on debt-money loans and other mechanisms. For example, Ireland has been paying between €6 to 10 billion per annum in interest payments on the national debt. As a trading entity the country was making a profit of around €40 billion per annum, i.e., up to 25% of the nations’ profits have been going directly to the privately owned international finance institutions as interest on debt-money that was originally created from nothing. The cruel hoax is that governments could create that money themselves.

Some authors and independent researchers (See Endnote 5) have estimated that the Rothschilds banking family alone is worth over $100 trillion, a sum which vastly surpasses the fortunes of the corporate billionaires on the Bloomberg Billionaires Index. It is very difficult to verify such estimates. The banking families are not included on the ‘richest people’ lists you see in magazines since according to Bloomberg “the wealth of many families like the Rothschilds and Rockefellers is too diversified and diffuse to value. Bloomberg said that some dynasties whose fortunes are closely intertwined with government, like the House of Saud, are also too difficult to calculate.”, see Endnote 4.

“Permit me to issue and control the money of a nation, and I care not who makes its laws!” – attributed to Mayer Amschel Rothschild, Banker.

As this debt money system and drive for GDP growth continues unabated the Earth’s natural resources are plundered and taken essentially, ‘for free’, by the huge corporate and governmental entities of this flawed economic system. i.e. contemporary economics does not factor in the cost of resource depletion.

“When a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposit; it was not previously paid into the bank by anyone. It’s new money, created by the bank…” – Robert B. Anderson, Secretary of the Treasury under Eisenhower, 1959.

“The government should create, issue and circulate all the currency and credits needed to satisfy the spending power of the government and the buying power of consumers. By the adoption of these principles the taxpayers will be saved immense sums of interest. Money will cease to be the master and become the servant of humanity.” – President Abraham Lincoln

“The Wall Street dominated New World Order (NWO) Empire is being built by colonizing other countries with foreign loans or investments. When the fish is firmly on the hook, the NWO financial terrorists pull the plug, leaving the unsuspecting victim high and dry. And begging to be rescued. In comes the International Monetary Fund (IMF). Its bailout recipes – privatization, trade, liberalization and other austerity reforms – amount to seizing the target countries’ natural resources, and turning them over to the NWO elites – just as surely as the British Empire did by using cruder methods.” – Bob Djurdjevic, Chronicles Journal, see Endnote 6

The Central Banking System Exerts Vast Control Over the World Economy

The Bank for International Settlements (BIS) in Switzerland is the central bank of central banks and is virtually immune to the laws of all national governments. Even Wikipedia admits that it is not accountable to any single national government, see Endnote 7. There are 58 global central banks belonging to the BIS, and it has far more power over the economies of the world economy than any politician does.  The central bankers of the world gather for meetings at BIS and make decisions that affect every person in the world, and yet none of us have any say in what goes on.  According to Author Michael Snyder:

“The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system…. [T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole… see Endnote 8.”

How the US Fell into the Hands of the International Usurocracy During the Civil War After 1863

In a number of popular pamphlets, first published in 1944, Italian author Ezra Pound, described how the US fell into the hands of the international usurocracy during the civil war after 1863; the suppression of the paper-money issue in Pennsylvania, A.D. 1750; and that these historical events should be considered in relation to World War II. In the pamphlet, America, Roosevelt and the causes of the present war, he states:

“This war is part of the secular war between usurers and peasants, between the usurocracy and whomever does an honest day’s work with his own brain or hands… Schoolbooks do not disclose the inner workings of banks. The mystery of economics has been more jealously guarded than were ever the mysteries of Eleusis… The basic fact of the history of the U.S.A. is the suppression (aforementioned) of the colonial paper-money, fifty-six years after the foundation of the (private) Bank “of England” (so-called)… the usurers’ cunning marked by the foundation of the above-mentioned bank was clearly registered in Paterson’s prospectus : “the bank hath benefit of the interest on all moneys which it creates out of nothing…

Wars are provoked in succession, deliberately, by the great usurers, in order to create debts, to create scarcity, so that they can extort the interest on these debts, so that they can raise the price of money (i.e., the price of the various monetary units controlled by, or in the possession of, the same usurocrats), altering the prices of the various monetary units when it suits them, raising and lowering the prices of the various foodstuffs when it suits them, completely indifferent to the human victim, to the accumulated treasures of civilization, to the cultural heritage…”

Lincoln was assassinated after he made the statement given above…The fact remains that Lincoln had assumed a position in clear opposition to the usurocracy…

The meaning of the phrase “It will not do to allow the greenback … to circulate” is this: private individuals, without any responsibility before the American nation, were able to get control of the nation’s money, forcing the people to pay non-official fines and taxes for the sole benefit of this hidden power, the usurocracy. After Lincoln’s death the real power in the United States passed from the hands of the official government into those of the Rothschilds and others of their evil combine. The democratic system perished. From that time on it has been useless to speak of the United States as an autonomous entity…

The Bankers’ “Power Revolution”: How the Government Got Shackled by Debt

As for the system which allowed the national money of the U.S.A. to be controlled by “finance,” namely the usurocracy which was then established in London, it is summed up in a letter, dated 25 June, 1863, from the Rothschild firm in London to the firm of Ikleheimer, Morton & Van der Gould in New York, containing the following words : “Very few people “will understand this. Those who do will be occupied “getting profits. The general public will probably not “see it’s against their interest.”…

• Wars are made to create debts.
• War is the highest form of sabotage, the most atrocious form of sabotage.
• A nation that will not get itself into debt drives the usurers to fury

The details of the Italian and German opposition to the usurocratic conspiracy (prior to WWII) are available…

It’s so much waste of time to speak of this or that “democracy.” The real government was, and is, to be found behind the scenes. The “democratic” system works as follows. Two or more parties, all under orders from the usurocracy, appear before the public. As a matter of form, and to reassure the simpletons, some honest men and one or two independent idealists are allowed to do a little clean work as long as they don’t touch the various rackets. The biggest rackets are those of finance and monopolization, including the monopolization of money itself, both within the nation and in combination with the various foreign currencies. When there is a danger of abundance of any, or almost all, commodities, then the usurocracy unleashes a war in order to diminish purchasing-power…”

In the pamphlet An Introduction to the Economic Nature of the United States, Ezra Pound states:

“Towards the end of the Eighteenth Century the settlers, driven by the desire for Freedom of Conscience, hardened by privations, favoured and betrayed, reached a certain degree of prosperity, thanks to their own hard work and to a sane system of using paper money as a means of exchange that freed them, temporarily, from the pincers of the Bank of England… The Bank of England was based on the discovery that instead of loaning money, the Bank’s paper could be put out on loan (with interest)…

Usury spoiled the Republic. Usury has been defined as too high an interest on money…  Usury however is a cancer, Finance a disease…The usurers act through fraud, falsification, superstitions, habits and, when these methods do not function, they let loose a war. Everything hinges on monopoly, and the particular monopolies hinge round the great illusionistic monetary monopoly… 1834-5: (President) Jackson eliminates the national debt. The United States was left with no debt whatever.“

The Federal Reserve Act of 1913 – A Private Banking Coup

“The FED is an independent agency, that means basically that there is no other agency of government which can overrule actions that we take – what relations are (between Chairman of FED and President of the USA) don’t frankly matter.” – Alan Greenspan (former FED Chairman)

In 1913 the then U.S. President Woodrow Wilson signed legislation by bankers J.P. Morgan, John D Rockefeller, and Paul Warburg, which handed over the power of printing money from the U.S. government into the hands of these private interests. It was enacted on the 23rd Dec 1913 and became known as the Federal Reserve Act. This was a major coup for the international bankers… The government had been under the false impression that the right of government to issue money was not being surrendered to the banks. The establishment of ‘the FED’ had been sold to government on the basis that government would retain control of the process, but in reality, they did not. The act had been hurriedly signed without proper scrutiny by members of government. According to author, E.H. Brown, it was thought that the right of government to issue money was not being surrendered to the banks, however: 

“The bill was so obscurely worded that no one really understood its provisions… but while the national money supply would be printed by the U.S. Bureau of Engraving and Printing, it would be issued as an obligation or debt of the government, a debt owed back to the private Federal Reserve with interest…President Wilson is reported to have said before he died “I have unwittingly ruined my country”. – (See Endnote 9)

“President Abraham Lincoln returned to the colonial system of government issued money during the Civil War; but he was assassinated; and the bankers reclaimed control of the money machine. The silent coup of the Wall Street faction culminated with the passage of the Federal Reserve act in 1913, something they achieved by misleading .. wary congressman into thinking the Federal Reserve was actually federal…. Today the debate over who should create the money supply is rarely heard.. few people even realise it is an issue… The puppeteers working the money machine were more visible in the 1890s than they are today, largely because they had not yet succeeded in buying up the media and cornering public opinion.” – E.H. Brown, Author the book ‘The Web of Debt’.

“The FED is an independent agency, that means basically that there is no other agency of government which can overrule actions that we take – what relations are (between Chairman of FED and President of the USA) don’t frankly matter.” – Alan Greenspan (former FED Chairman)

“”The powerful grip of these gentlemen is on the throttle that controls the wheels of credit and on their signal those wheels will turn or stop.” The Report (of the Pujo Commission on the Money Trust), goes to show how, through “the vast ramifications of this group” of financiers in the U.S.A. and in foreign countries, the financing of enterprises not approved by the group can be prevented. “Therein, said the Commission, lies the peril of this money power to our progress, far greater than the combined danger of all existing combinations.” This group of International Financiers through their control of the Federal Reserve Board and their worldwide ramifications in industry, can and do exert a tremendous influence upon world affairs.” – Lieut.-Col. A. H. Lane, author of the 1934 book The Alien Menace A Statement of the Case

“Never in the history of the World has so much power been vested in a small body of men as in the Federal Reserve Board. These men have the welfare of the world in their hands and they could upset the rest of us either deliberately or by some unconscious action.” – Sir Josiah Stamp in an interview with the New York Evening Post

“the Federal Reserve Act let powerful bankers usurp the money creation authority in violation of the Constitution’s Article I, Section 8, giving only Congress the power to “coin Money (and) regulate the Value thereof”. Thereafter, powerful bankers used their control over money, credit and debt for private self-enrichment, bankrolling and colluding with Congress and administrations to implement laws favouring them. As a result, decades of deregulation, outsourcing, economic financialization, and casino capitalism followed, producing asset bubbles, record budget and national debt levels, and depression-sized unemployment…” – Stephen Lendman, Author of ‘How Wall St Fleeces America’

“When you or I write a cheque there must be sufficient funds in our account to write the cheque, but when the Federal Reserve writes a cheque there is no bank deposit on which that cheque is drawn. When the Federal Reserve writes a cheque it is creating money.” –  Federal Reserve Bank of Boston 

The Federal Reserve Is an Independent, Privately-owned Corporation

The Federal Reserve central bank (known as simply “The FED”) is owned by private commercial banks, the largest of which are Citibank and JPMorgan Chase company. These two banks are part of the empires built by JPMorgan and John D. Rockefeller, who orchestrated the Federal Reserve Act in 1913. The ‘Federal Reserve’ is actually an independent, privately owned corporation. It consists of twelve regional Federal Reserve banks owned by commercial member banks. Privately-owned banks own the shares of the Federal Reserve. This astounding fact that privately-owned banks own the shares of the Federal Reserve was proven, evidenced and upheld by a US federal circuit court in the case of Lewis v. United States in 1982, see Endnote 10, where the court said:

“Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stock-holding commercial banks elect two thirds of each Bank’s nine-member board of directors.”

Also note the comments of Congressman Charles McFadden, Chairman, House Banking and Currency Committee, June 10, 1932:

“Some people think the Federal Reserve Banks are U.S. governments institutions. They are not… they are private credit monopolies which prey upon the people of the U.S. for the benefit of themselves and their foreign and domestic swindlers, and rich and predatory money lenders… These twelve private credit monopolies were deceitfully foisted upon this Country by the bankers who came here from Europe and repaid us our hospitality by undermining our American Institutions… The sack of the United States by the FED is the greatest crime in history. Every effort has been made by the FED to conceal its powers, but the truth is the FED has usurped the government. It controls everything here and it controls all foreign relations. It makes and breaks governments at will.” – Congressman Charles McFadden.

E.H. Brown, chair of the Public Banking Institute in the U.S. makes the assertion that:

“The FED is owned by a consortium of private banks, the biggest of which are Citibank and JPMorgan Chase company. These two mega-banks are the financial cornerstones of the empires built by JPMorgan and John D. Rockefeller, the ‘Robber Barons’ who orchestrated the Federal Reserve Act in 1913… ” –  E.H. Brown, Author the book ‘The Web of Debt’. 

The Trick of Usury and Inflation Further Explained

“The government should create, issue and circulate all the currency and credits needed to satisfy the spending power of the government and the buying power of consumers. By the adoption of these principles the taxpayers will be saved immense sums of interest. Money will cease to be the master and become the servant of humanity.”  – President Abraham Lincoln (Lincoln issued government money, but was later assassinated).

“The Federal Reserve Act of 1913 gave the bankers complete control of the money-and thereby the control of the economy. They issue and own all the money in the nation. This private banking cartel creates money for the cost of the printing…

When the government borrows one billion dollars, it turns over to the bankers an interest-bearing, tax-free government bond and receives that amount in credit. As our banking laws require only a 20 percent reserve, the bankers can create an additional $4 billion in credit and lend it at interest to states, municipalities, businesses, and individuals. All this created “debt money” is LENT into circulation and draws interest until it is paid back to the money changers who got it in the first place for just the cost of printing. Every dollar in currency that you have is a dollar of DEBT, and you are paying interest on it. One billion dollars at 7% pays the bankers $70 million each year and removes that much from circulation. Multiply this by the billions of debt in this country, and you can see the enormity of the crime that is being committed against the nation every year.

The only way the interest gets back into circulation is by more and more borrowing from the bankers; otherwise there would soon be NO MONEY in circulation. The debt and the interest go higher just to keep the same amount of money in circulation. This is the sole reason why we have the paradox of poverty in the midst of plenty and why poverty becomes more widespread day by day. All usury (interest) is finally paid by the individual consumer in increased prices and taxes. TH IS IS INFLATION. Inflation is part and parcel of the debt-usury money system; the system cannot operate without a constant increase in the debt, usury, and INFLATION. These are the seeds of destruction inherent in the Federal Reserve banking system…

The Divine law does not permit a debt build-up to be inherited by the next generation, for all debts must be liquidated or cancelled every seventh year. (See Deut. 15:1-4.) Consider our present plight, which is a result of disobeying God’s law. How many generations are mortgaged by our national debt?” – Dr. Franklin Snook, Author of America Needs the Divine Law

“Bank profits from this source alone [usury] in the USA, UK, Eurozone and Japan are about $140 billion per year in year (in 2003). It is quite outrageous that the banks should have this power

…. That the governments of Western ‘democracies’ permit the banks to continue to enjoy this massive subsidy, and for this extraordinary privilege to be off the agenda of public debate, is a tribute to the power of the ‘elite consensus’.” ” – Extract from ‘The Global Monetocracy’ by Roy Madron and John Joplin (See Endnote 11)

“What is usury? If your answer is interest, then you are experiencing cognitive-dyslexia. Usury is the pure exploitation of another’s necessity, and its most substantive and significant manifestation in credit and finance is everything that is not the interest…

It is not like racketeering. It is racketeering. The private-international-nominal-banking-system is a massively-efficient harvester of civilization-level-wealth because it is constructed from and comprised of, crossleveraged-double-counting double-whammy devices. It is in fact two different but parallel businesses working in tandem. Nominal banking is credit-reinsurance-in-fact, piggy-backing (or vice versa) on a de facto separate business of charging and then further trafficking in 100%-plus application-fees / tribute-payments for access…” – Usury as Cognitive-Dyslexia by Timothy Paul Madden, forensic-financial-economist, and historian of equity, law, and policy 

The Debt-Money System Has Detrimental Consequences

“In industrial countries, between 18% (Sweden) and 26% (Japan) of each year’s total output is ploughed back into investment projects. If in any year this figure falters, the economy risks entering a downward spiral… Consider what happens if growth slows or stops… the possibility of a downward spiral is a prospect that terrifies governments. That is why – whatever their political colour – governments try to work closely with the business sector. In this way they can ensure that, regardless of any social or environmental damage, the economy continues to grow. The debt-money system thus forces governments to put the imperative for short-term growth above long-term considerations, such as the widening inequalities gap or humanity’s relationship with Gaia.” – Gaian Democracies – Redefining Globalisation and People-power’ by Roy Madron and John Jopling (See Endnote 8)

“It is obvious that on a finite Earth…  economic growth cannot continue indefinitely… Today, as economic growth falters, the defects and injustices of our banking system have come sharply into focus, and light has also been thrown onto the much-too-cosy relationship between banking and government…. “ – John Scales Avery, an Associate Professor in quantum chemistry at the University of Copenhagen 

Virtually Every National Government of the World Owes Vast Amounts of Debt

Virtually every national government of the world owes vast amounts of debt to the privately owned banking system totalling many trillions of dollars. Canada pays around $60 billion Canadian per annum interest on the national debt; and all countries in the world appear to be in debt (See Endnote 18), except perhaps five countries (See Endnote 12).

On June 10, 2020, the national debt in the U.S. exceeded $26 trillion and the interest on the national debt is $378 billion (See Endnote 13). In the U.S. student debt is around 1.2 trillion dollars, about the same as the military budget; personal debt (loans plus credit cards plus mortgages) comes in over 13 trillion. As on 31 December 2019, India’s external debt stock totalled US$563.9 billion (See Endnote 14). The national debt of Brazil in 2020 is $1,686 billion (See Endnote 15).

World Bank statistics (See Endnote 16) show that virtually every national government of the world owes vast amounts of debt and, are, therefore in debt servitude to the international banking system. The amount of interest monies received on worldwide debt over decades is obviously staggeringly vast.  The massive total debt incurred by governments of the world cannot ever be fully repaid as there is always more debt in the system than ability to repay (money in circulation). The total amount of debt is possibly quadrillions (thousands of trillions) according to some if the financial instruments known as derivatives are included.

The system is designed so the total debt can never be repaid. The total debt in the worldwide financial system is always greater than the amount of money in circulation and can never be fully repaid.

“All money is borrowed into existence – it doesn’t exist until someone borrows it. It is debt-based money hence it is not really money since real money is based upon substance – gold, silver etc. If money is borrowed into existence, then that is all that exists…so where is the interest? It doesn’t exist. How can it possibly be paid? It can’t be (fully) paid because it is not part of what is created. It simply does not exist. The currency we use is based upon our future labour which the Feds have promised to the bankers. It also does not exist yet. Future generations are already enslaved to pay a debt which does not exist.” – Mary Elizabeth Croft (See Endnote 96), listed with kind permission. 

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https://www.oftwominds.com/blogjuly23/Rome-lessons7-23.html

Lessons from the Unraveling of the Roman Empire: Simplification, Localization

There is an entire industry devoted to "why the Roman Empire collapsed," but the post-collapse era may be offer us higher value lessons. The post-collapse era, long written off as The Dark Ages, is better understood as a period of adaptation to changing conditions, specifically, the relocalization and simplification of the economy and governance.

As historian Chris Wickham has explained in his books Medieval Europe and The Inheritance of Rome: Illuminating the Dark Ages 400-1000, the medieval era is best understood as a complex process of social, political and economic natural selection: while the Western Roman Empire unraveled, the Eastern Roman Empire (Byzantium) continued on for almost 1,000 years after the fall of the Western Roman Empire, and the social and political structures of the Western Roman Empire influenced Europe for hundreds of years.

In broad-brush, the Roman Empire was a highly centralized, tightly bound system that was remarkably adaptive despite its enormous size and the slow pace of transport and communication. Roman society was both highly hierarchical--the elites claimed superiority and worked hard to master the necessary tools of authority-- slaves were integral to the building and maintenance of Rome's vast infrastructure--and open to meritocracy, as the Roman Army and other classes were open to advancement by anyone in the sprawling empire: every free person became a Roman Citizen once their territory was absorbed into the Empire.

When the Empire fell apart, the model of centralized control/power continued on in the reigns of the so-called Barbarian kingdoms (Goths, Vandals, etc.) and Charlemagne (768-814), over 300 years after the fall of Rome. (When the Ottomans finally conquered Constantinople in 1453, they also adopted many of the bureaucratic structures of the Byzantine Empire.)

Over time, however, the feudal model of localized fiefdoms nominally loyal to a weak central monarchy replaced the centralized model of governance. This adaptation fit the highly fragmented nature of European societies in this era.

But centralized influence never went away. The Christian churches based in Rome and Constantinople continued to exert centralized influence in politically fragmented regions, and monarchies continued to exist, in various states of strength and weakness. The Holy Roman Empire--as Voltaire is reputed to have observed, "neither Holy, Roman or an Empire"--had an enormously complex history in Germany and the rest of Europe. The monarchies in England and France remained in place, and the city-states of northern Italy wielded influence via trade and shifting alliances.

In other words, the Medieval era was ultimately a complex competition between overlapping models of governance and sharing resources, a competition between centralized and localized (what Wickham calls "cellular") nodes of power and the various ways that rulers and those they ruled dealt with each other.

Throughout the era, the legitimacy of rulers ultimately flowed from public assemblies, a tradition inherited from Rome that manifested in aristocratic courts and the church's leadership (bishops, etc.) and eventually, in parliaments. This tension played out in the sharing of costs and resources and the general direction of the state.

As a general rule, when monarchs consolidated too much power, they engaged in catastrophically costly and doomed wars (The Hundred Years War) because they were able to override or ignore the cautious counsel of elite assemblies.

Understood as a selective process of adapting to changing circumstances, this history offers us valuable lessons and templates for our future.

Once the centralized power of Rome fragmented, economic, social and political power simplified and relocalized. Trade volume shrank and trade routes vanished. Once the bureaucratic and military structures dictated by Rome collapsed, regions and localities were on their own.

Elites naturally sought out the best means to consolidate and expand their power, and residents (as a general rule, the peasantry and town-dwellers) sought to improve their own lives by reducing costs and securing access to resources.

The immense geographic, cultural, social and economic diversity of Europe was in effect freed to play out. This diversity is still evident; the European Union may have unified the European financial system, but cultural and social divisions have not dissolved.

Wickham distinguishes between two primary sources of income and wealth accessible to elites and governments: land and taxes. Collecting taxes requires an immense bureaucracy to identify and assess property owners, tenant farmers, merchants, collect duties on trade flows, etc. Taxes are the only reliable way to fund professional armies and the stupendous bureaucracy required to manage a complex centralized empire. The Byzantine Empire survived multiple rivals, invasions, etc. largely due to its competent tax collection bureaucracy, and European monarchies could only fund long, costly wars once they established tax collection bureaucracies.

Wealth from land--surplus skimmed from the labor of peasants--was adequate to fund highly localized nobility (many of which had one or two castles and a small fiefdom), but it wasn't reliable enough or large enough to support professional armies or vast centralized states.

How does this history offer a template for the next 20 years?

I have long held that the dominant global forces binding the global economy are globalization and financialization. Both have greatly increased the income and wealth that nation-states can tax to fund their vast structures: military, social welfare, and bureaucracies of management, regulation and control.

I have also held that globalization and financialization became hyper-structures prone to over-extension and the diminishing returns of the S-Curve. (see chart below) Both have reversed and are now in decline, a decline that I anticipate will accelerate unpredictably and rapidly as each dynamic is centralized and tightly bound, meaning each subsystem is highly interconnected with other subsystems. Should one break, the entire system unravels.

Globalization may appear to be decentralized, but the vast majority of global trade and capital flows through a few centralized nodes, and many aspects of trade depend on a very small number of routes and suppliers. This makes global trade exquisitely sensitive to disruption should any critical supplier or node fail.

Financialization is equally centralized and tightly bound, to the absurd degree that obscure financial structures (reverse repos, etc.) can trigger cascading crises in the real-world economy.

I anticipate a global simplification of trade and finance as fragile hyper-structures collapse as the failure of subsystems cascade through the entire system.

These systems have greatly accelerated extremes of wealth-income inequality by their very nature, and these vast distortions and imbalances are unsustainable. Also unsustainable is the immense expansion of the plundering of the planet's remaining resources via globalization and financialization. These dynamics will collapse under their own weight.

What will be left? Once the income and wealth that supported enormously costly nation-state governments contracts, central governments will no longer be able to fund their gargantuan systems. (States that attempt to fund their activities by printing money will only speed the collapse of their finances and thus their coherence.)

As in the post-Roman era, central authority may well continue, but its actual power and influence will be greatly reduced. Without expanding income and wealth to tax, the central state may attempt to extract most of the nation's surplus, but this stripmining of elites and commoners alike will trigger pushback and revolt.

A more sustainable response would be to offload most of the central government's financial burdens onto states, provinces, counties, etc., in effect pushing the impossible task of maintaining entitlements and promised spending on local entities.

Given the diversity of cultures, social values and economic dynamics in large nations and regions, we can anticipate a flowering of adaptations to these greatly reduced means. Some localities will favor increasing authoritarian controls, others will favor reducing authoritarian controls and ceding authority to the smallest units of public assembly.

Locales (shall we call them fiefdoms?) will divide naturally along geographic boundaries, just as fiefdoms in medieval Europe fell into natural boundaries shaped by rivers, valleys, mountain ranges, etc., and along economic and cultural borders.

This relocalization may manifest in the well-known forecasts of the US breaking into multiple regional states, or it might manifest as I suggest in a much-weakened but still influential central government ceding power to local political structures which may themselves fragment or form alliances with nearby entities with whom they share cultural and economic ties.

In other words, a churn of evolutionary adaptations can be expected. Just as there was no one post-Roman adaptation that worked equally well everywhere, we can expect there to be some adaptations of roughly equal success and many that are unsuccessful.

As individuals and households, we want to be located in successful adaptations that share our values and offer us agency, i.e. a say in public assemblies and the freedom to move and work as we see fit.

As I have outlined many times in the blog and in my books, locales that are highly dependent on long global supply chains and distant capital for their essentials will fare very poorly once those supply chains break and the capital dries up. Regions and locales that generate their own essentials (food, energy, metals, concrete, electronics, etc.), talent and capital are much more likely to generate enough resources to satisfy both local elites and the public.

As I explain in my book Self-Reliance, we who have lived in the past 75 years of expanding production and consumption of Everything have lost touch with both the natural world that sustains us and the social and practical skills needed to endure and prosper in an era in which the engines of centralized power and wealth (globalization and financialization) decay and collapse.

Some locales will choose to foster relocalization and individual agency. Others will cling on to failing models of authoritarian control and globalization / financialization.

Ironically, perhaps, the most successful regions will be prone to indulging in hubris and denial, just as the Roman elites, basking in their centuries of dominance, dismissed the "Barbarians" and clung to their delusions of grandeur even as their world fragmented around them.

Those locales left behind by globalization and financialization may well offer much better opportunities for successful adaptation, relocalization and individual / household agency.

It is human nature to find reasons to dismiss the storm clouds on the horizon. We look around and find solace in the apparent strength of our institutions and economy, while ignoring their sobering dependence on unsustainable hyper-globalization and hyper-financialization.

The fragmentation, simplification and localization of the post-Imperial era offers us lessons we ignore at our peril. It's important to view these lessons not just as an academic abstraction but as a guide to your own decisions about what places are most conducive to your security and well-being. Not every locale will do equally well, and the culture of many places may not be a great match for your own values and goals. If you decide to move, sooner is better than later.