What most people,
including socialists and communists, SIMPLY DON’T KNOW...
· Where do commercial banks get the money to lend you, your family,
businesses or national governments? No, not from savings accounts or
other reserves – but, quite literally, from
nothing. They create the money they lend simply by keying figures into a
deposit account. It is this fictitious
electronic money, created from thin air, that they then count as an ‘asset’
on their books – but also demand be paid ‘back’ by the borrower – with
interest. To top it all they have total freedom to make a lot more money by
selling loans they make on the financial markets. So when an individual,
a business - or a government - takes a loan from a commercial bank, they
are giving it free licence to create that money for itself – but then paying that bank the same amount of money to
do so! Banks literally lend money into
existence – principally for themselves. Long ago commercial banks were prohibited by law from printing
their own paper notes. But technology has changed, and with it the means of production of money. The result
is that banks can once again effectively ‘print’ their own money in another way
– by creating it electronically and as digital money. As a result, 97% of all money in circulation does not consist of notes and coins
that are printed or minted by governments but is money created by
commercial banks – as debt. That
means commercial banks have an almost complete monopoly on the money supply of nations. It also means
that all capitalist economies are now debt-based and debt-fuelled. For if all
debt were paid back there would be no money in the economy. Yet national governments, banks and
treasuries have for a long time been banned
by international agreement from creating their own money in the same way that commercial banks do all the time. The issue of paper currencies such as Greenbacks as debt-
and interest-free money that began even before the American Civil War - to be used for investment in public spending and the
real economy - was the real cause of the war of Independence, in which King
George was backed by the bankers. And all governments that have since
sought to overturn the monopoly of banks – in particular the big international
banks – on the supply of money, have been sanctioned, trade-embargoed or
targeted for ‘regime change’.
2. The
BIG LIE swallowed by The Left
Most people – including
Labourites and those on the Left, still swallow the BIG LIE that governments are dependent
on either taxation or borrowing from the big international
banks to fund public spending, and that therefore the only area of choice
governments and political parties have therefore, is between either
implementing or arguing for more or less ‘austerity’ (to bring down the national
debt) or else for greater or lesser tax increases or reductions. The idea of
‘sovereign money’ - independent, national and state money-creation - does not
even occur to them and is never so much as mentioned in the media or
parliament. Those who advocate ‘socialism’ as the solution however, still think
principally in terms of the traditional aim of renationalising key industries, public utilities and services.
What they do not realise – and why they have lost credibility - is that this is
actually quite impossible without renationalising
money and money creation. Then again the traditional Marxist expectation
that capitalism would collapse through a falling rate of profit, unemployment
and wage stagnation is completely
out-dated. For finance capitalism in its new form came up with an answer to
this ages ago – by getting workers to use credit cards and ‘pay-day loans’ to borrow the money they couldn’t earn as
low-paid wage-slaves and become debt-slaves
as well - and by forcing governments to borrow from the banks too.
3. Why the Left – including the socialist and even communist Left
– has lost credibility
Because it has failed to keep
up with the times and the changing nature of capitalism it has made itself an
easy target for the Thatcherist-Reaganite claim that There is No
Alternative - offering as it does no clear counter-argument to
the ‘false-flag’ issue of ‘national debt’ – which is solely a result of the
international finance capitalism and not
‘over-spending on the part of national governments. Marx long ago
recognised the predatory and parasitic
nature of unproductive, credit- and debt-fuelled finance capital - what he
called “usury capital”. As Michael Hudson writes: “Marx expected the
Industrial Revolution’s upsweep to be strong enough to replace this system with
one of productive credit, yet he certainly had no blind spot for financial
parasitism. “Both usury and commerce exploit the various modes of production,”
he wrote. “They do not create it, but attack it from the outside.” “Usury
centralises money wealth,” Marx elaborated. “It does not alter the mode of
production, but attaches itself to it as a parasite and makes it miserable. It
sucks its blood, kills its nerve, and compels reproduction to proceed under
even more disheartening conditions … usurer’s capital does not confront the
labourer as industrial capital,” but “impoverishes this mode of production,
paralyzes the productive forces instead of developing them.” Yet neither Marx,
Engels nor Lenin could possibly have anticipated how what Marx called “fictitious
money” would – through the digital era
and as electronic money – become the
principal form both of money and a means of unprecedented wealth expropriation through debt.
“Engels noted that Marx
would have emphasized how finance remained largely predatory had he lived to
see France’s Second Empire and its “world-redeeming credit-phantasies” explode
in “a swindle of a magnitude never witnessed before.” But more than any other
writer of his century, Marx described how periodic financial crises were caused
by the tendency of debts to grow exponentially, without regard for growth in
productive powers. This self-expanding growth of financial claims, Marx wrote,
consists of “imaginary” and “fictitious” capital inasmuch as it cannot be
realized over time. When fictitious financial gains are obliged to confront the
impossibility of paying off the exponential growth in debt claims – that is,
when scheduled debt service exceeds the ability to pay – breaks in the chain of
payments cause crises. “The greater portion of the banking capital is,
therefore, purely fictitious and consists of certificates of indebtedness … A
point arrives at which bankers and investors recognize that no society’s
productive powers can long support the growth of interest-bearing debt at
compound rates. Seeing that the pretense must end, they call in their loans and
foreclose on the property of debtors, forcing the sale of property under crisis
conditions as the financial system collapses in a convulsion of bankruptcy.”
4. What even ‘hard-line’ communists or supposed ‘Marxists’ fail
to see...
Global finance capitalism and
other form of ‘rentier capitalism’ - in which profit takes the principal form
of income received as interest, rent, bonds and other financial instruments is
fast transforming itself into a new form of neo-feudalism based on debt-slavery.
In this neo-feudal ‘world order’, there quite simply is no longer a national ‘ruling class’ either - just a
parasitic sub-class of non-productive rentiers and bankers – themselves puppets of an international financial or ‘rentier’ elite (that far-less-than 1% who own most of the world’s wealth). In those countries
where a national ruling class of productive industrial capitalists does still
exist to some extent, the ruling international financial elite works constantly
to overpower it – for example through the exercise of international money power
(World Bank and IMF) as well as through political destabilisation or outright
war. The only empire in the world
today is ‘The Empire of Money’ – which has no respect for any ethnic,
cultural or spiritual traditions, though it is happy to pit them against
one another. Imperialist states such as the U.S. are just the
military-political instruments deployed by The
Empire of Money and its masters –
the global financial elite represented by the
Bilderberg Group. Political independence – for example in Greece, Russia or Scotland - is a necessary precondition for monetary
independence (i.e. sovereign money creation) but is meaningless without this monetary independence. The
Republic of Ireland was the proof of the pudding – for without monetary independence its historically
hard-earned national independence proved no political defence against the power
of predatory international finance capitalism. And Scotland, if it wins
political independence, may bask in and even benefit from this for a while –
but without monetary independence
from the international banks, this national ‘independence’ will eventually prove illusory.
5. The Gaping Black Hole in Political and Economic Thinking
Throughout Europe and the
world, people are groaning under the
weight of financially imposed austerity measures and resulting,unemployment,
impoverishment, joblessness and debt – unable to afford even food and medicine,
or to get or do anything with their skills and education. As a result, hundreds of thousands regularly take to
the streets to vent their rage in countries such Italy, Spain and Greece. Yes,
they could and should cancel their debts to international banks. But then what?
The gaping hole that even in these
countries you will not find a single political party or movement -
of either the Left or Right, far-Left or far-Right - with a policy that
recognises that the only solution to national and global poverty
and immiseration is the renationalisation of money and money creation. This was the solution that Lincoln
first came up with – so no surprise he was assassinated!
6. Falling Prey to the old Ploy - Divide and Rule
Greeks blaming Germans,
neo-Nazis blaming immigrants or Islam, UKIP and others blaming the EU – and none of them have a clue! This applies
even to ‘communist’ parties across the globe, who still think industrial
corporations rule the world - when in reality they are just ‘cash cows’ for
predatory finance capitalism – why else would up to 40% of the price of
manufactured goods just go to paying off interest to the banks or keeping
speculative financial shareholders happy? It is these same ‘communists’ who
still think in terms of a parochial
class war between a national ‘working class’ or ‘proletariat’ and a national
‘ruling class’ or ‘bourgeoisie’, i.e. who simply do not see that what is happening is the rise of a national underclass (working or not-working) in all countries and
an international ruling class of bankers and financiers
on the other – with ever less and less classes and strata of society in
between.
7. Lessons from History
A comparable state of affairs
that history offers us was the creation of a vast national underclass in
Germany following the massive financial burden placed on Germany by the
Versailles Treaty. Two boxers came out into the ring to slug it out – the
German Communists in one corner and Hitler and his ‘National Socialists’ in the
other. Both knew a thing or two. The Communists blamed the capitalist system.
Fair enough. But you can’t tangibly see
an economic ‘system’ in the same way you can see an orthodox Jew (or a Pakistani Muslim) on your street - or
know that a family in your block of flats, religious or not, is Jewish or are
immigrants. Nice ‘Right hook’ from Adolf - bringing a first point on his score
card - and that of the racist, anti-immigrant or anti-Islamic far-right
movements of today. The Communists also knew from Lenin that finance capitalism
had a big part to play in the current capitalist came. Too true. But then
another hefty ‘Right hook’ from Adolf – focussing on the international nature of finance capitalism and identifying its
machinations with a global Jewish
conspiracy. The Communists of course, didn’t go along with the anti-Semitic
line (recognising as they did that “anti-Semitism is the socialism of fools”)
but nor did they sufficiently
emphasise the national nature of the
German people’s struggle and the international
nature of their enemy. How could they, given that Hitler could score yet
another point by identifying all Communists and Marxists with the ‘traitors’
who paved the way for Versailles – the latter having seeing this war simply as
an ‘imperialist war’ when in reality it was a war waged by English finance capitalism against the threatening power of German industrial capitalism -
industrial capitalism having been long on the wane in England itself. Once in
power of course, Hitler himself would eventually avail himself of American
banks and bankers and financiers – including those from whose family Messrs.
Bush Senior and Junior hail. But before that Hitler had also used a form of national,
state-issued money to rebuild the economy - with such success that whilst
Britain and America were suffering ‘The Great Depression’, the German economy
was booming (and that despite a complete trade embargo being imposed on Germany
as punishment by the international bankers for such an act of national financial insolence). Nor did
the Communists acknowledge that the
Kaiser himself had granted German workers more rights and benefits than
in England or any other capitalist economy. Thatcher was renowned for seeing
England as a ‘nation of shopkeepers’. Well, that’s exactly how the Kaiser and
many other Germans saw England before WW1 – as a country of purely
self-interested and utilitarian traders, wheelers and dealers – lacking all
depth of soul and richness of culture. So the war was seen as a war ‘for
culture’ and against a particularly soul-less English form of capitalism - of the sort that
Margaret Thatcher would later become the chief ideologist and promoter of.
8. The Gaping Black Hole of Monetary Ignorance – and the Message
that MUST be put out
One can play around – and many
do – with a whole variety of different ideological combinations of ethnic
identitarianism, nationalism and traditional socialism or communism – and do so
till the cows come home. But so long as those foreign looking guys over there
with their long beards are seen as more of a threat than your friendly and
familiar high street banks and their
underpaid staff you’re being conned.
For those banks are like the brush head
of a vast global hoover -
sucking immense wealth from your high street to the City of London and Wall
Street, and ending up in the hands of a ruling elite of criminal banking
financiers like Goldman Sachs, the Rockefellers and Rothschilds, J.P. Morgan
etc. That is why it is above all important that socialists and communists of
all varieties finally recognise what they
simply don’t know – and unlike many non-socialists haven’t bothered to even
research and cotton onto – namely that banking, even on the high-street level
is legalised fraud. That a mortgage
or car loan for example, even in terms of Common Law, is a fraudulent transaction; that, unlike money you put in a piggy bank
or safe deposit box, it is not you but your
bank that actually owns the money you deposit in it; that your bank creates
the money it lends you from nothing - a new form of counterfeiting
- and that it makes so much
money from your loans and deposits that it effectively owes you ten
or a hundred times more than you either borrow from or deposit with it it. It is high time therefore for socialists and communists to wake
up to the central significance for our times of just one single policy that was already
stated in The Communist
Manifesto - “the centralisation of credit in the hands of the state”. Unless the demand for National People’s Banks and National
People’s Money – issued debt- and interest-free - and invested into the real
economy and not the private banking system itself - goes right to the top
of any new political manifesto, the central issue of our times will remain
unaddressed – the monopoly of international and commercial banks on money
creation - and their consequent stranglehold
on national governments of any
colour or ideological persuasion, and that however nobly ‘nationalistic’ or
‘socialistic’ their aims may be.
See also: THE NEW ECONOMICS MOVEMENT
See also: THE NEW ECONOMICS MOVEMENT
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