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We live in a causal world where everything happens for a reason and nowhere is this truer than in the world of politics. In America the guiding principles behind what our government does should be the ideals associated with a Constitutional Republic. Unfortunately, this kind of government which was established for us by our Founding Fathers, no longer exists because it was overthrown from within in 1913 upon creation of the Federal Reserve Bank; a private corporation wrongfully given authority over our money supply and economy. As a result of this unconstitutional action by Congress, our government was transformed into an oligarchy of a small group of rich and powerful men. From that infamous day forward, everything this Nation did happened not by the consent of the governed through our Congress, but by the will and designs of these behind the scenes power brokers.

"Permit me to issue and control the money of a Nation and
I care not who makes its laws." - Mayer Anselm Rothschild

"None are more enslaved than those who falsely believe they
are free." - Goethe

In Part I of these two articles on economics we learned or at least we should have learned that:

• Our monetary system is based upon debt instead of value and as a result, interest bearing debt is the driving force behind the creation of money.

• Borrowing by our government, corporations, and individuals creates money, but does not create the money needed to pay the interest associated with this debt.

• The interest paid for a loan, in many cases, is as much as the principle and many borrowers pay back twice the amount borrowed in real money even though the bank created the principle out of thin air through a book keeping entry.

• Because of the above we are locked into a perpetually increasing debt that wouldn’t exist if our government provided this service as required by our Constitution. As a result, we are no longer a free and independent people but instead, economic slaves to a group of international bankers and power brokers who hold this Nation firmly in their grip.

As bad as this sound, our situation is far worse than just described because of the inherent flaws in a fractional reserve monetary system. This descriptive label means that the reserves backing the money in the system are only a fraction of the value of the money in circulation. Today, this label is a misnomer because our currency is fiat money which is not backed by anything other than the power of the Federal Government. In any case, the inherent flaws in our monetary system are real, unavoidable, and whether we realize it or not, the system is doomed to fail because its viability requires an infinite world with a never ending supply of resources. We live in a finite world with finite resources and most important, one with a limited ability to sustain and support human populations. Therefore, our monetary system is out of touch with reality and very serious consequences are associated with this state of affairs. Presently, America and the rest of the world are just beginning to feel these consequences and they are the harbingers of a world catastrophe of immense proportions.

To understand what is happening, we need to consider how money works in an idealized society. Assume for a moment a nation with a money supply fixed at $100 dollars. Under these circumstances, it should be obvious that the value of all the goods in that nation is $100 dollars; the operating principle being that the value of everything combined necessarily equals the amount of money available to buy things. Therefore, the people within our ideal society trade goods and services using the available money as a medium of exchange. The system is stable, society is stable, and these fortunate people could go on forever trading the same money over and over again for all that life has to offer.

Now suppose within our idealized economy we have a lazy and greedy smart person who gets the idea that instead of working like everyone else, he would make his money work for him by loaning it out at interest to his fellow citizens. If he does this, what will happen? Upon satisfaction of the first loan this individual makes, Mr. Smarty Pants ends up with the amount he loaned plus the interest on this loan both of which he promptly re-loans. Upon satisfaction of this second loan, our enterprising individual ends up with his original principle, the interest from his first loan, and a greater amount of interest from his second loan. This process keeps repeating itself with Mr. Smarty Pants earning more and more interest with each new loan because he has more money to lend for each subsequent loan. It should now be clear “What happens?” In an idealized society, if one person loans money at interest, like a cancerous growth which consumes everything around it, he will end up with all the money and every one else will be flat broke.

"The government should create, issue, and circulate all the
money and credit needed to satisfy the spending power of
government and the buying power of consumers. By
adoption of these principles, the taxpayers will be saved
immense sums of interest." - Abraham Lincoln

However, this is not the end of it because as our greedy smart person gets more and more money through his loans, he uses some of this money to buy things. By so doing, he increases the amount of time it will take for him to get 100% of the money in existence but no matter, eventually he still will get it all and what’s more, he will also end up owning all things available for purchase. Therefore, in an idealized economy with a fixed amount of money available to buy a finite amount of goods, if someone is allowed to loan money at interest, they will end up with everything and everyone else will become the economic slave to this greedy and enterprising individual. Mr. Smarty Pants will become the master and everyone else will be his permanent indentured servants.

"The modern banking system manufactures money out of
nothing. The process is perhaps the most astounding piece
of slight of hand that was ever invented. Banking was
conceived in iniquity and born in sin. Bankers own the earth.
Take it away from them but leave them the power to create
money and it with the flick of a pen they will create enough
money to buy it back again. Take this power away from them
and all great fortunes would disappear including mine. And
they ought to disappear. But then this world would be a better
and happier place to live in. But if you want continue to be
slaves to the bankers and pay the cost of your own slavery,
let the banks continue to create and control credit." - Sir Josiah
Stamp, The Bank of England, 1928-1941

In days long gone they had a name for the crime of loaning money at interest and it was called usury. Usury was a crime because honest men believed that money, being a medium of exchange, should be earned by contributing to society and not by loaning money to other people. Our forebears clearly understood that by loaning money a money lender gets others to do work to his benefit and this allows the lender to reap these benefits while doing nothing to earn them. For this reason, usury was a crime condemned by all the world’s religions and in some societies it was actually punishable by death. Slavery is wrong and this is just as true for economic slavery. No man should own the work of another through the simple act of loaning money.

Let’s now go back in time to when the western world had embarked upon its age of exploration and expansion. Indeed, early on we didn’t even know if the world was round or flat, but it certainly seemed to be infinite. People looked at the horizon and it appeared to go on forever. And what better way was there to get rich than to go out into the unknown and grab a piece of the action. However, this takes money and if one doesn’t have any it has to be borrowed. The problem we have is why would anyone loan you their money if they will not profit from the loan? Perhaps usury isn’t such a bad idea after all. To be sure, who cares if I have to give some of the wealth I obtain from the money I borrow if I end up with so much more for myself? Certainly, in the real world, if I am going to get mine and this takes borrowing, what’s wrong with sharing a portion of my new found wealth with those who provided me with the means of finding it? This certainly makes sense and this is especially true when we live in world where the there is no apparent end to the resources available.

Understanding all of the above, let’s return to our idealized economy and modify it to reflect the situation we just described. First of all, if we remove limits on the goods and resources available, it necessarily follows that an unlimited source of money is required to exploit these things. This reality makes money lending at interest necessary and this being the case, first thing we should do is change our way thinking; usury must be a good thing because the bankers and the loans they make are a key to riches and prosperity. True, by borrowing from them they will become rich also, but who cares? There are no limits on what is available and we always will be able to get more than our share of the bounty. Why shouldn’t the bankers be able to make loans and charge interest when this ultimately results in more things for us to share and enjoy? And this is exactly what happened! Because of the need to explore and conquer new horizons, banking and money lending became respectable professions and bankers were allowed to create money at will whenever the need arose.

Fueled by money lending at interest, the Western World expanded and eventually discovered the New World. When it did, our flat-infinite world changed into a round-finite one. Despite this, the world was still relatively empty and from anyone’s point of view, its resources were unlimited. In time, the ingenuity and resourcefulness of western man produced the industrial revolution. As a species, we would no longer expand territorially, but God’s bountiful earth was there for us to exploit and the money lenders were also there and more than willing to help. In the United States, we exploited our environment with a vengeance and in time our Nation became an industrial giant. Our success and prosperity made us the envy of the world and it was easy credit and the money lenders who help us achieve this.

At this point, we have gotten ahead of ourselves, so let’s go back to our simple model and discuss some basic economics. If we allow a bank to loan money it doesn’t have at interest when the supply of goods is fixed, the inevitable result is inflation. This is a matter of simple mathematics! If the supply of goods and services remains fixed while the supply of money increases, then as a matter of course, it will take more money to buy each item of everything that is for sale. Therefore, and this cannot be stressed enough, if we allow bankers or money lenders to create money in response to the needs of society, the only way for the resulting economy to remain stable is for the amount of goods and services to continually grow and expand.

This is an unavoidable consequence of a monetary system where the money supply is dependent upon and results from the creation of debt. Unfortunately, this is the type of monetary system which we adopted in 1913 when the money lenders took control of our government by engineering passage of the unconstitutional Federal Reserve Act. So what? At this point, I am sure this is what most readers are thinking. So what? We are the greatest and richest nation in all of history because of our Federal Reserve System and the bankers deserve some of the credit for this! So what’s the problem? Unfortunately for us, the problem is threefold:

• Usury is an immoral and flawed monetary system

• The wrong people are doing the lending

• Usury is incompatible with physical reality

When I was growing up, usury was considered to be the charging of “excessive” interest. Surely, single digit interest rates are not usury. Unfortunately, this is a gross and grave misconception we still harbor to the benefit of those who own our banking system. Usury is the charging of interest for a loan and this means any amount of interest. It should be a crime in any society and this is especially true when lenders loan money they do not have. While usury allowed the Western World to expand and dominate the globe, this same result would have been achieved if governments did the lending instead of bankers. This would have saved us from huge sums of interest debt which we will never be able to pay off and it also would have stopped these bankers from becoming so rich and powerful that they could buy and sell governments.

"Until the control of the issuance of currency and credit is
returned to the government and recognized as its most
conspicuous and sacred responsibility, all talk of sovereignty
and parliamentary democracy is idle and futile. Once a nation
parts with control of its credit, it matters not who makes the
nation’s laws. Usury once in control will wreck any nation." -
William Lyon MacKenzie King, Former Prime Minister of Canada

To better understand what we just read, let’s examine an example of a typical mortgage loan. If a person borrows $100,000 over thirty years at a fixed interest rate of 5.1%, they will pay back $200,000 to the bankers; $100,000 in principle and $100,000 in interest. In other words, for just the minimal costs associated with processing the paper work of this loan which amounts to no more than a few thousand dollars over its course, the banker reaps almost $200,000 in profit. Let’s put this another way, if it costs the banker $5,000 to process the loan just described, the return on his investment is not 5.1% percent each year as most people wrongfully believe. Instead it is an unimaginable 3,900% over the course of the loans 30 year period or a return of 130% yearly.

That’s right! What you just read is not a typographical error. The banker’s return on his investment will not be the 5.1% in interest you pay him, but an average of 130% each year for the entire 30 year loan period. This is not just windfall profits, instead, it is legally sanctioned and government sponsored highway robbery. Understanding this, is it any wonder that these filthy-rich behind the scenes power brokers have the wealth and power to make or break politicians, buy our political parties, orchestrate the course of elections, corrupt the institutions of our society, and chart the course our Nation will take. And if they have this wealth and power, which they do, do you really think they will sit back and not use it? If you think they won’t, then you must also believe in Santa Claus, the Tooth Fairy, and the Great Pumpkin.

To be sure, behind the scenes power brokers have controlled the course of our Nation over the past century and while so doing have positioned themselves to do the same thing to the entire world. Of late, these behind the scene power brokers have become confident enough to come out of the closet by announcing their creation of a New World Order. Make no mistake about it. This New World Order is a dictatorship and its creation means that the spark of democracy and representative government has been forever erased from the face of this planet. The United States of America no longer a government of the people, by the people and for the people because the government of the world is now a more sophisticated form of the same ignoble and despicable dictatorships which we fought and vanquished in World War II.

"The supra-national sovereignty of an intellectual elite and
world bankers is surely preferable to the national auto-
determination practiced in past centuries." - David Rockefeller,
To The Trilateral Commission, 1991

Getting back to the point; the charging of interest in a fractional reserve monetary system; the system we have had in this Nation since the passage of the Federal Reserve Act in 1913, is nothing short of criminal and is usury in every sense of the word in its most vile form. We fought a revolutionary war against Great Britain, but what most Americans no longer realize is that one of the reasons for our revolution was to free ourselves from the international bankers and money lenders that held England and the rest of Europe in their grip. We won the revolutionary war and thought this was the end of the story. Through this war we had established ourselves as an independent nation and were free to march west across the continent to pursue our manifest destiny. What we didn’t realize was that the forces of evil in the world were relentless and in time we would grow fat, dumb, happy and the most fatal of all, unvigilant.

"The inability of the colonists to get power to issue their own
money permanently out of the hands of King George III and
the international bankers was the prime reason for the
Revolutionary War." - Benjamin Franklin

In 1913, our naivety paid off for the international bankers and while no one was watching, their back stabbing minions in Congress induced the rest of Congress to pass the unconstitutional Federal Reserve Act. From this day forward, Americans were no longer a free and independent people and their future and economic well being would be in the hands of few greedy men who would charge us dearly for the service they provided; a service that according to our Constitution should be provided for us by our government for free. The bitter irony of our situation today is that these robber baron bankers are using our own money to keep us enslaved and worse, using our wealth and accomplishments to enslave the rest of the world in our name.

"I have never yet had anyone who could through the use of
logic and reason justify the Federal government borrowing
the use of its own money. I believe a time will come when
the people will demand that this be changed. I believe a time
will come in this country when they will blame you, me, and
everyone connected with Congress for sitting by and allowing
this idiotic system to continue." - Wright Patman, Texas
Congressional Representative 1928-1976, Chairman, Banking
& Commerce 1963-1975

But if this was all there was to be concerned about in regard to our situation, it wouldn’t be too bad in comparison to what is eventually in store for us. Sure, usury is crime and our hi-jacked Congress made this crime the basis of our monetary system contrary to the will of our Founding Fathers, but the real tragedy of this is just around the corner because the health and viability of our economic system is wholly dependent upon expansion of our economy. Indeed, we are told by our money lenders that our economy must expand by about 3% yearly to remain healthy. At first glance, this seems reasonable, but nothing could be further from the truth. The tragedy behind this seemingly innocent number is that an annual growth rate of 3% is not a straight line on a graph as we think because each year the 3% is applied to the previous year’s total. Therefore, a yearly growth rate of 3% means that economic output and activity must increase, not linearly over time, but along an increasingly steeper quadratic curve.

For example, assume at any point in time that our economic output is 100 widgets and our target growth rate is 3% yearly. If this is the case, our economic output will double approximately every 23 years. If it was 100 widgets at the start, it will be 200 widgets in 23 years, 400 widgets in 46 years, 800 widgets in 69 years, 1600 widgets in 92 years, etc., etc., etc. After 10 such cycles the total amount of widgets produce would have to be 102,400 or a whopping 1,000% increase over our base year. By now you should have the big picture. If a nation embraces a fractional reserve banking system where private banks control the money supply by issuing debt, the inescapable consequences of such a course of action is that the nation so cursed must expand its economy at an ever increasing rate just to maintain its supply of money and if it does not, recession or depression is the inevitable result. The problem being that a continually accelerating rate of growth is physically impossible in a finite world with a finite amount of resources.

We started our discussion by creating a hypothetical economy and used it to learn a lesson about the nature of interest bearing loans. Then we modified our model to reflect the “real” world and we learned how a fractional reserve banking system allowed us to create the wealth we have today even though this was a regrettable way of accomplishing this. However, what we never realized was that there are more sinister downsides to the system we were forced to adopt. Not only would we lose control of our government, but we would also eventually lose everything the system allowed us to create because the debt being created due to the imposition of interest ensured that, collectively, we would always owe more than we owned. But far worse than this, because an economic system whose health and viability is wholly dependent upon ever accelerating growth, we not only are depleting the resources of our planet, but are destroying its ability to support life as we know it. And we are doing this at the behest and to the sole benefit of a small group of greedy and morally bankrupt men.

At the beginning of this article, we pointed out that nothing in life happens unless there is a reason and this is especially true for politics. Our economy is driven by a fractional reserve monetary system which, among other things, necessitates that we use and exploit our resources at an ever increasing rate to maintain its health and viability. Therefore, everything our government does today is done with an eye toward increasing economic activity and this means accelerating exploitation of the limited resources of our planet. The mantra of our government, today, is buy, spend, borrow, use, consume, construct, build, expand, grow and do this faster and faster and faster, etc. Such things as conservation, responsible use, limited government, balanced budgets, democracy, sovereignty, republicanism, secure borders, sustainable development, sustainable population levels, and sanity, are incompatible with our monetary system and therefore, repugnant to our government and the power brokers who control it. Thus, we are cursed to live under a government which only pays lip service to things that are not only worthwhile and beneficial, but absolutely necessary for our survival on this poor over-stressed planet.

To be sure, in considerations of the realities we face in today’s world and the finite resources of our planet, how our government functions and what it does is absurd, self-destructive, and insane. But no matter, the egotistical robber barons of the New World Order and their minions are getting richer every day and this allows them to sit back in their self-imposed fog of ignorance believing that they can fool us forever and that we will continue to be happy with the crumbs that tumble down to us from above.

My fellow citizens, I say to you with great conviction that we are led by greedy men who corrupt and destroy everything they touch. They have stolen our government, our prosperity, our heritage, and now because of their greed and ignorance, they are driving us over the edge into a world which will soon become a living hell. We allowed them to do this to us because most of us are easily fooled which is the thing feared most by our Founding Fathers and because the rest of us are too lazy or busy to ensure that our government follows the plan the Founders laid out. Our government, the one we used to have, was conceived in tyranny and born in freedom. Beyond all doubt, it was the greatest government ever devised by man and as Americans it was our profound and sacred duty to bequeath this precious jewel to our children.

What else is there to say other than that in this we have failed miserably. But there is more to say. Our shame and dishonor sinks far lower than we presently can imagine because we have also failed to pass on to our children a planet where their survivability is assured. Not only are we a species that has fouled its own nest, we have fouled it to such a degree that our children will not be able to live here in peace and contentment. And we did this because making money by the bankers and New World Order moguls who rule us was more important than the kind of world they passed on to their own children. In this they truly reveal what worthless and demented human beings they are. But we are not much better than them because the truth we will take with us to our graves is that the promise of life, liberty, and the pursuit of happiness is now nothing more than an empty dream to our children because of us.

To read "The Economics of Disaster - Part I" go to www.constitutionforum.us and find it in the Main Menu.
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Life is a function of mind over matter, if you have no mind it doesn't matter.