Till the advent of fiat money, the finances of man have always followed a certain historical sequence. The people produce the wealth. And the king receives his share, which his barons collect for him for a fee. Then the king and entourage spend, and the gold and silver find their way back to the citizens for goods and services rendered. Occasionally the king might decide to buy foreign goods, or lose his wealth through defeat in war. Then the gold and silver will begin circulating in the next country.
The more industrious and prosperous the citizens were, the more gold and silver were amassed, the greater the common wealth of country and king became. The king would not have much wealth if his subjects were not prosperous. Industrious citizens create wealth, not the king. King and government are only necessary evils needed for defense and administration.
Throughout history there has always existed a certain, proportionate, relationship between the wealth of the citizens and the wealth of the king. The healthiest relationship was, and still is, when the scales are tipped well in favor of the citizens.
Contrary to general belief, under normal circumstances and in a healthy environment, the kingís share hardly ever amounted to more than a minor percentage of the common wealth. The need for coining in itself already, combined with what we know about the volumes of gold and silver coinage estimated to have been circulating between the citizens, should be suficient proof thereof. A wise king understood that his own wealth depended on the prosperity of his subjects.
Whenever the king over-taxed his citizens, wasted too much on arms, luxury and extravaganzas, the gold flow from the citizens toward the king became lopsided. Then the wealth of the people decreased and the productivity of the country declined. And when at times the shift in wealth became unbearable, the citizens either revolted and ousted the king or the country went under.
The might of empires and civilizations, mirrored by its gold and silver in circulation, has always depended on the productive capacity of its citizens and available resources. Human prosperity thrives on grass roots, same as happens in nature. And it thrives best when free growing, broad based, and from the ground up, meaning from the ordinary people up. That is what capitalism should be and was all about in former times. The West flourished on natural capitalism till the advent of fiat money. All of Nature thrives on capitalistic principles. Its multitudes live and prosper in free competition. And when man strayed from Natureí rules he had to pay dearly.
Natural Capitalism works when there is minimal government interference and free competition, when everybody has a chance, when the laws are impartially applied, when there is a level playing field and the markets are free, when money flows freely, possesses intrinsic value and is not somebody else his debt, and when there is a free and open flow of information. None of these requisites for a natural capitalism has survived. Natural Capitalism is dead, stone dead.
Grass roots is not only the most important, the least understood and most maligned precondition for growth and prosperity, it is the indispensable prerequisite for it. Prosperity is "from the ground up", a one-way street and should never ever be directed or dictated from the top.
Till the middle of the seventeenth century gold and silver flowed freely among the citizens and between the citizens and the king. But when the kingís demands and his share of the common wealth became excessive, the people united and the counter force of democracy was born. The Magna Charta was signed. The Bastille was stormed. Kings were ousted or saw their power reduced by parliaments. Over time, however, these young democratic governments, instead of remaining "part of the people" changed in character. Slowly but surely they took over the role once played by the king and turned into usurping powers in their own right.
For about two hundred years the two way, self-correcting, wealth relationship between the citizens on the one hand and the king or now the young democratic governments on the other hand, maintained itself. In a democratic ambiance, adjustments took place more smoothly, thanks to the ballot box. The bulk of the gold and the silver continued circulating among the people and a smaller part between the State and the citizens.
It was the glory time of grass roots entrepreneurship. The time of the industrial revolution, great inventions, cultural creativity and new horizons. Enterprise grew, self financed, out of profits. Taxation was moderate and focused. Growth was natural and efficient. Government was humble. The economies grew unrestricted. The Banker was not needed... but... he forced his way in through the back door and within one hundred years took over the world by stealth.
The sequence from the birth, ascent, to the decay and death of civilizations is mirrored by the steady migration of the bulk of the wealth in the form of gold and silver from the citizen to the reigning power. Power flows with the money. And when we analyze the present state of Western Civilization, we have but to discern who it is, that holds the real money, the gold and the silver, and we will know who holds the reigns of power. It is no longer the elected government, but the obscure Banker.
Detailed discussions of the ascent of the Banker can be found in several of my earlier Gold-Eagle essays and in my booklet "Towards Cyber Money". This present essay will be concentrating on the broader picture of the Bankerís shrewd penetration into the social structure of the West, his veiled rise to power and the dire repercussions for society.
The first Banker was a money changer, intermediary, custodian, transfer and payment agent. Then, when the Banker saw that the Church had much idle wealth lying around, which could be made productive by loaning it out, shrewdly the Banker convinced a greedy Rome of the merits of interest compensation. And sometime during the fourteenth century the Pope annulled the ban on usury, and gave his blessing for interest compensation on loans. From there on the Banker became financier.
Once interest compensation on loans was accepted and became the norm, the Banker pursued his aims further, extracting concession after concession from the State. One of his greatest days, and the citizenís blackest, was when he obtained the legal permission to increase his loan portfolio to a value worth many times his bankís registered capital. Overnight the Bankerís potential working capital multiplied many times over, and in some cases even up to twelve times his capital input, depending on local legislation. It gave the Banker a multiple advantage over all other business enterprises and laid the basis for the Bankerís stellar ascent, and his subsequent grab of control of the prime of industry, commerce and business. Although still restricted to certain limits, the multiple application and usage of his basic capital implied that the Banker now possessed the legal authorization to create money out of nothing. Creating money out of nothing and lending it out against interest became the Bankerís core business. It paved the way for the Banker to go out and buy the world.
Now, there is one thing the Banker hates, and that is competition. And because of this the Banker had to wring further privileges from the government. One was the establishment of a privately controlled bank of banks, the Central or Reserve Bank and the other privilege granted, to the same Central Bank, carried the exclusive license to issue and manage the governmentís paper currency. In one coup, banking had become a closed shop and the State had ceded the control over its currency to the Banker.
Nearly all Central Banks or Reserve Banks in this world are privately owned and controlled and not owned by the State, contrary to what all the governments would like their people to believe.
And private ownership implies that Central Banks will always serve the Bankerís interests first and not the countryís.
As long as the currency circulation was in the form of gold or silver, or had legally to be covered 100 percent by gold or silver, the Banker remained restricted in his lending activities to the sum of deposits his clients held at the bank, of course less a prudent safety margin in the event of unexpected withdrawals. One coin in was one coin out. There just was not any more to lend out. But all that changed with the introduction of paper currency.
In the very beginning, when the first paper currency made its appearance, one paper unit was issued for each precious metal unit held in the treasury. In other words, money in circulation was backed 100% by precious metals, but not for long. Once the State ran out of cash, the Banker had no trouble convincing the State that it was not absolutely necessary to maintain a one hundred percent precious metal backing for the nationís currency. The public seldom bothered to exchange their paper claims for the real metal. And anyhow, nobody would find out that easily, if a little bit more paper had been issued than there was gold in the vaults. From there on the precious metal backing began its disappearance act. In 1896 the gold cover of the total sum of US dollars in circulation had already receded to under 4%. Today, all paper money is one hundred percent fiat money. There is no more backing for any paper currency. The gold reserves of the Central Banks have no relation whatsoever any more to the currency in circulation! The published gold reserves, which form part of the countryís total reserves, are only there for the purpose of covering foreign obligations or for intervention in the markets to stabilize the currency. In how far these published gold reserves still have credibility is another, delicate, matter. GATA and Reg Howe have recently discovered inconsistencies in various Central Bank and IMF statements which imply that a greater part of the published official Central Bank gold holdings might in fact be mere paper claims on gold and do not represent actual gold bullion any longer. The same applies to the IMF itself.
A Banker wants to expand and grow his business. Depending on which currency he controls, the more dollars, euros, or yen the Banker succeeds in bringing into circulation, the wider his loan territory. And the more loans he manages to place, the greater his income and the mightier his power becomes.
Regular interest income is the Bankerís bread and butter. The Banker does not really want loans to be paid back. The Banker likes his loans to "work and squeeze" ad infinitum.
The Bankerís empire is his debt empire. It is this simple fact that makes the world go round ... that is....till the music stops ... maybe sooner than later.
Debt is negative money and negative money makes negative people. Far from being benefial for society, the Banker has become a wealth sucking parasite. And contrary to public believe, to function, society does not need Bankers.
Like an evil cancer banking has spread its tentacles throughout and invaded daily life. First the State was subtly seduced and corrupted to spend more than its income. With the result that, in order to cover the ensuing budget deficits, taxes had to be increased, government bonds emitted, and ever more paper money brought into circulation, all measures which benefited the Banker. The people and business in turn, burdened by increased taxation, were forced to take up more and more loans. Free enterprise was not able any more to finance itself out of profits. To add insult to injury the Banker saw to it that, in case of any default, loans obtained preferential treatment over shares. The people, enterprise and government became bank dependent.
The socialists, being the great spenders, were groomed and supported in elections. Legislators were corrupted. Social programs like social security and medicare and expensive public projects were pushed and supported by the Banker. The arms industry was especially nursed. Wars were instigated to bleed the national treasuries. Napoleon, the Kaiser and later the Nazis and the Communists were always amply financed. Step by step the Loan Piper got everybody dancing to his tune. Slowly but surely the governments and people walked innocently, through his bank palaces, into his debt camps.
"Spend, spend, spend", the Banker will give you all the paper money for anything you wish to spend on. That is patriotic, for the economy and the welfare of the nation, not to forget the Banker.
And the Banker conjured all the paper fiat out of thin air and in exchange the Banker took the Stateís, the economyís and the peopleís real assets. Never before in history has there been such a total transfer of wealth taking place in such a short time without a shot being fired.
The Nations are in debt, the people are, industry is, commerce and business is. Everybody owes. Except the Banker, he owns and controls it all and still does not have enough. And in the same way he enslaved the people at home, the Banker enslaved the rest of the world.
Once there was a quorum of central banks, the global Central Bank of Central Banks was founded, the B.I.S., the Bank for International Settlements, which, at a later stage, together with the post war IMF and the World Bank, brought all the worldís finances under one central control and one set of rules, dictated by the Banker. And woe to him who ever dared to step out of line.
Development aid out of thin air was pushed with a stroke of the credit pen. But never were the developing countries allowed or given a chance to pay the loans back. To that purpose commodity prices were manipulated and controlled, politicians bought, students were granted scholarships to study financial and economic indoctrination courses on US campuses, controlled by the Banker, and groomed to stay loyal to the Bankerís fraternities.
Step by step the Banker wedged his way in-between the State and the citizen.
Step by step the Banker undermined the morality of both State and people, pushing his sugar coated credit. Pushing social legislation, pushing hundreds of different credit cards, even for children!
Stealth and anonymity are the Bankerís cloak. And he saw to it that anonymity of share companies, share holdings and voting became legalized. That dividends were taxed only once, at the source only. And that his trusts and foundations, through which he controls his empire, stayed exempt from taxation. It enabled him to build an invisible chain of interlocking anonymous companies into a mighty spiderweb of holdings, far from the public eye, where not even the hierarchy of CEOs know the connections and relationships, and the Banker alone has the sole control from one central point.
Whereas anonymity and tax exemptions served the Bankerís quest to build an empire, they proved fatal for the world economies and finance. They led to the transfer and dislocation of wealth from the broad spectrum of the population to a pyramiding concentration of capital at the top. They replaced good old fashioned peopleís capitalism with megalomania and whimsical financial despotism.
Take-overs and mergers became easy to construe and to finance with all the money and credit created out of nothing and through the simple exchange of shares. The Bankerís out of thin air credits and money would finance anything, any size, as long as there was profit for him to extract. Totally uneconomic behemoth conglomerates were glued together, only to be sucked dry later. Established economic rules were overturned and the "new economy" heralded!
And the Banker was always careful to act within the financial laws, he himself had instigated and promoted. It is to the detriment of society, that there is little recourse left for the public in legal actions. The Banker has seen to that.
Fiat Money has broken the corrective natural cycle of wealth flowing from the citizens to the king or government and back to the people. Neither is there any real wealth flowing back to the Developing world, in exchange for their commodities. Only worthless paper is!
A huge bubble of fictitious paper wealth has been created out of thin air, obstructing the flow of real wealth back to the productive people.
Interestingly enough, neither are real assets being accumulated any more in the treasuries of the king or the governments. The Banker saw to it that every government today is a debtor, not only in the case of the developing countries. And might we ask where could real wealth then be heading? Where could all the gold leased out by the Central Banks have goneLeased out, to where, to whom? Not all of it to India or the Middle East! ? Where did the IMF gold go, not their paper SDRs and SDR Certificates, but the real gold? For instance, where did the massive 1.950 ts gold exported from the USA in the last quarter of 1999 go? Did Edmundo Safra know anything and was subsequently murdered only a few weeks later? Gold flows to where the power resides. And who is it that has the power today? Did the Banker set up the gold leasing schemes to make easy money on the gold carry trade or might his ulterior purpose be to channel all the worldís gold into his private vaults? Was the Banker not also the one who pushed the governments into privatizing State property, only to end up as the major share holder of the former, now privatized State enterprises?
And not content with having extracted the peopleís long time savings in exchange for worthless paper, the Banker has made sure that even present earnings would be creamed off and that the peopleís savings could only be invested in institutions controlled by him. And so the Banker planned shiny investment vehicles and services for the public, to seduce them to stock markets and casinos controlled and manipulated by him, the Banker. That, with the only purpose to fleece the sheeple. The Dow supreme at the top, followed by Nasdaq, Standard & Poor, commodity markets, funds etc.
For foreign governments the Banker saw to it that there would always be an ample supply of interest bearing treasury papers and government bonds available to invest in, so they would not ask payment back in real wealth. The Banker kept the real wealth himself.
And by pushing loans of upto 125% of underlying real estate value and calculated never to be paid back, the Banker laid claim on the peopleís properties in exchange for still more of his fiat paper.
And the Banker saw to it that the government introduced new tax laws and 401K retirement plans to hoard even more sheeple into his paper money casinos. And the Banker controlled media heralded out to the whole world the marvels of Wall Street. Always positive in outlook and where necessary, pro-forma book keeping was applied or rules and statistics were changed.. And when the public ran out of earnings to invest, the Banker corrupted the politicians to invest the peopleís social security and medicare money and the state pensions into his casinos.
Cleverly he uses his lackeys, his brokers, market makers, hedge funds, credit rating companies, his media empire, the bought politicians etc. Their tools are dis-information, short selling, derivatives and share-, interest-, currency- and commodity price manipulation and creative accounting.
The Dollar Banker is leading the way into the global debt enslavement. But not to worry, the Euro Banker, who was slowed down by the time consuming birth of the European Union and the late arrival of the euro, the common European currency, will catch up! The possibilities for the Banker are too tempting to be missed. With the obligatory exchange of all european national currencies for the euro, the European Union governments will soon have lost control of the now common currency. Itís exploit has now been entrusted to the Euro Banker, smiling all the way to the vault. World wide euro credit pushing will soon equal dollar credit pushing. And all the European Union governments and people will soon be swimming in the same debt morass as their trans-atlantic brethren. And what concerns the rest of the world, tomorrow they will find themselves doubly indebted between the dollar and the euro. But what might happen to the Japanese yen is still an oriental mystery.
Although physical slavery was abolished in the nineteenth century, the 20th century has taken the world back to square one, with millions of people again being subjugated. This time not physically, but by a more sinister, hideous, new kind of slavery, invisible and indirect: debt slavery induced by the Banker.
Following the history of the ascent of the Banker over the last two hundred years it becomes obvious that it were never the governments, but the invisible spider web of global fiat money and debt the Banker has spun, which is responsible for all the financial upheavals, market bubbles and crashes, depressions, defaults of many enterprises and countries, the rape of Africa, Latin America, SE Asia and Russia, and even wars.
Banking, far from having developed naturally in the wake of economic growth and necessity, has been shrewdly, methodically and with stealth been designed and advanced by the Banker lead by ulterior motives. His empire spread like an evil cancer, undermining and uprooting the established order, replacing it with the Bankerís Order. Our world would have been better off without. Banks are not needed and were never needed, as I hope to explain in one of my next essays. Even in our highly sophisticated economies of today, money needs only two functions: one, as a means of exchange, proper functioning of which modern communication and data technology easily can provide, and the other, as a store of value.
Alas, banking has become so interwoven in western economy and finance that by now it has become too much of an essential part and a necessary evil for the Westís survival. Banking has penetrated deeply into daily life. Not only would our western financial and monetary structures collapse without banks, but it would also spell the end of the whole of Western Civilization, which has been built around it.
A return to the gold standard, and the abolition of fiat money would only mean a temporary respite. They are not the solution. The Banker would still own the world and in his subtle way he would soon return in a new disguise. It is the whole system, based on interest, credit and fiat money, financial laws and control of the currency, which is rotten to the core.
I do not think parliaments or congresses do still have the will or the strength to correct the situation, they have been bought anyway. An unexpected dictatorial power might intervene and call for the nationalization of all banks or order their closure. Maybe a revolution might bring the necessary changes and redistribution of wealth. But what then? The cancer has already advanced too far for risk free and effective surgery.
In the end, events might well run their natural course of decay, break up, and finally chaos. One day history will show that the banks and entourage were only a one time manifestation, unique to Western Civilization.
Maybe history is already running its course. Wherever we look the rot has begun showing up: the SE Asia crisis, the developing countriesí debt crisis, Indonesia, Mexico, Argentina, Turkey, the lingering default of Japan, the return of darkness in Africa, sudden rise in global unemployment and defaults, the wavering stock and credit markets, international terrorism, WTO protesters, growing discontent, corruption, moral decay, the Third Worldís sprawling shanty towns, and so on.
But not only is the apple rotting on the outside. The rot has already penetrated deep into the very core of the Bankerís empire proper. There are some vague, first indications from Bankerís Land that the situation is getting out of hand, that the Merchants of Debt cannot control their own disciples any longer, and that internal strive and betrayal are undermining the very Empire of Debt. After all, it is only a paper empire with its armed forces by proxy!
The Empire of debt itself is beginning to look just as corrupted and opaque as all the governments, international organizations and people itself has infiltrated and subverted. Greed, rivalry, intrigue and arrogance among the Empireís own rank and file is becoming more blatant and open by the day. The barons have gone unrestrained on the rampage, raiding and looting the financial markets to their own personal benefit as if there were no tomorrow. They are even at one anotherís throat. Everything goes! It is unbelievable what is presently going on in Bankerís Land. Trillions are being thrown around left and right like dirt. Markets floating on thin air, totally unhinged from reality. World finance is getting out of hand and rapidly approaching crisis level, without a hope left whatsoever that a new equilibrium will be found.
This is not going to be just an isolated financial crisis. It is going to be much more than that. It is a crisis of principles versus absolute power, Bankerís Power. A deep rooted structural crisis, affecting the very foundations of inter-human relationships, which is at stake: the way we live or are being lived.
I do not think the Banker will have his ill-gotten wealth for much longer. The looming financial storm is going to sweap him overboard. Understanding the ways of Nature, wealth will return to the people one way or the other. But that might take a tedious and chaotic while. There is too much what has to be corrected and restored. The inverted wealth pyramid has to be turned back onto a solid and broad base and all wealth redistributed. Only war, revolution and chaos can do the latter. Life is not run from the top. Life is grass roots and to grass roots we will return in the end.
How all this might come to pass and of how the impact of the coming financial chaos might be softened and the change-over into a more stable era might be smoothed out, I hope to discus in one of my next essays, on a more positive note.source: http://www.gold-eagle.com/