[New post] Forget about Full Reserve Banking

[DANIEL KRYNICKI]

Going beyond all the palliative solutions almost all monetary reformers offer, Anthony Migchels

here uses the elementary concept of interest elimination in moneylending to solve the malaise 

plagueing modern civilization.  Of course, most business degree holders and a few other disciplines 

all know too well what bank credit is.  This Dutch economist below explains carefully why the 

elimination of interest in lending solves the problems generated systemically by the present form of 

capitalism.

The sad thing in the US is that we have within our Constitution the wherewithal to effect this change 

without the violence normally associated with revolution, and without radical changes to the 

institutional structure of various government bureaucracies.  But it would take educating a critical 

majority of the people.  A former email correspondent named Christopher Hansen explains that it 

requires a voting block with more that 30% of registered voters to overcome the two major parties.

So in this spirit, I forward the following economic essay to concerned Americans who fear what 

the future holds for the West because the money power is as CR Dickey put it in 1949, "Thus 

Hamilton's system of perpetual debt, interest-bearing bonds, and a strong centralized government  

- for the benefit of a small but powerful financial clique - fastened itself like a gigantic leech to 

the young Republic".  And we all know what eventually happens to a host which has been bled 

of its life giving fluids over a long period of time. 

Daniel S. Krynicki

St. Clair Shores, Michigan  

---Forwarded Message---

From: On May 8, 2013, at 1:06 PM, Real Currencies <commen...@wordpress.com> wrote:

New post on Real Currencies

Forget about Full Reserve Banking by Anthony Migchels A large number of monetary reform proposals include Full Reserve Banking. However, the Money Power will continue to control the money supply in this scheme. The problem is not credit creation, but who's in control and what is he doing with that control. Getting rid of Usury is the main issue. The Greenback, Social Credit, Positive Money, Austrian Economics, the Chicago Plan and undoubtedly many more propose full reserve banking. There is a general dislike of Fractional Reserve Banking. The idea is, that money through bookkeeping is unfair. We have always believed that we borrow from savers. Because of this programming, we instinctively want to 'repair' the situation by making it what we always thought it was. And this is a grave misunderstanding: the problem is not credit creation, it's interest. When we calculate that a mortgage at 5% over thirty years costs 150% of the principal in interest, we can easily see that this has nothing to do with 'costs' for the bank. Managing such a risk free loan over thirty years should never cost more than 10% of the principal. Interest on mortgages which are created by bookkeeping are wholesale plunder. The bank doesn't risk anything anyway, since there is the house as collateral. To say housing is under water today is not a valid argument: the banks create the boom-bust cycle themselves. Rational monetary management would not know sudden changes in prices, save for massive disaster. Only a few hundred years ago, when Usury prohibition was already on the wane, a combination of collateral and interest was unheard of. It was either the one, or the other. But to say then, that we will solve it by ending double entry bookkeeping? Shouldn't we just end the usury on the bookkeeping and let the credit facility take a small one off percentage as a handling fee to cover its costs? Double entry bookkeeping knows credit and debit by nature. The key issue to understand is that it is not the bank's credit, it's ours. We give each other credit. The credit is mutual. We allow each other to buy now and pay later. The bank only does the bookkeeping. In the current paradigm the bank has usurped this credit and is extorting us through interest on it. Consider it for yourself: would you prefer to continue to pay $300k interest over a $200k mortgage to savers and a bank, or would you prefer to pay 0% interest to a credit facility? Case closed. The Money Power is comfortable with Full Reserve Banking Of course the right to create credit must be taken away from the Money Power and its banks. We cannot allow them continued control, even without Usury. They'd continue to boom/bust the hell out of us. That's another problem with Full Reserve Banking: it's still, well, banking. We need to get rid of banking altogether. This in itself is an important point. No real monetary reform is thinkable while leaving the Banks alive: a vampire will not lose its tricks. It was bred to suck blood. It will always look to reassert domination. This problem shows also with Full Reserve Banking: the banks would regain full control over the entire money supply in a short while. Should we replace our current money by spending into circulation a batch of debt free money, the Money Power would quickly get a hold of a sizable chunk of that batch. Both through its own wealth and income of its Transnationals. It would then start lending this money out at interest in her banks that have switched to Full Reserve Banking. It would then continue to not spend, but lend their profit through interest back into circulation. Thus, through compound interest, the entire money supply would end up again with the Plutocracy within a few years. The Money Power cares not whether it gets its interest through Fractional Reserve Banking or Full Reserve Banking. It cares not whether it is paid in paper or in coin. The Money Power cares about the Trillions in interest it rakes in yearly. Conclusion The IMF is discussing it openly and positively. Gold based full reserve banking is the classical Austrian approach. Why? Because it is does not touch Usury. That's why the talking heads of the Mainstream are always talking about debt, debt, debt. They even talk about burning creditors. But never about stopping interest payments. While even Greece could pay off its entire national debt in 20 years just with what it loses to debt-service now. Usury is the heart of the matter. Full Reserve Banking does not end it. Interest-Free Credit by bookkeeping does. Related: Full Reserve Banking Revisited (discussing the IMF's paper on the Chicago plan) The Problem is not Debt, it’s Interest (with Video) Gary North’s Bluff: the Lie he’s been sitting on for 50 years Debt free money alone does not solve compound interest Anthony Migchels | May 8, 2013 at 6:05 pm | Categories: Austrian Economics, Economic Commentary, Gold, Interest, Monetary Theory, Money Power, Truth about Money, Usury | URL:http://wp.me/pHHUn-S3 Comment    See all comments    Like

[Jim Schroeder]

Social Credit does not propose full reserve banking, nor do Social Crediters believe in the abolition of interest based upon the fallacious debt virus theorem.

 

"When we calculate that a mortgage at 5% over thirty years costs 150% of the principal in interest, we can easily see that this has nothing to do with 'costs' for the bank." (Anthony)

 

What Anthony fails to realize in his sloppy economic analysis is that the cost of inflation through the depreciation in value of currency over those same 30 years is 114%.

 

http://www.bankofcanada.ca/rates/related/inflation-calculator/

 

 

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[John G Rawson]

Anthony's computation is wrong anyway.
$1.05 compounded for 30 years as per the debt virus theory would amount to $432 and 19.4c
Were the theory true, we would be in a much worse state than we are.
Reserves apply to deposits, not lending.
What those who really want from "100% reserves" is to take away the ability of cvommercial banks to create money and to centralise this in a government agency, usually its central bank. The extreme ones want to charge banks interest on their money, thus raising the cost of finance and with that the prices of goods etc.
J R

---

Date: Fri, 10 May 2013 10:03:08 -0600
Subject: Re: [socialcredit] [New post] Forget about Full Reserve Banking
From: jimsch...@gmail.com
To: social...@googlegroups.com

[Wallace Klinck]

Thanks for this clarification, Jim.  There is a video about where Anthony is interviewed by Cathal Spelman of Ireland and I found it to be less than inspiring.

Social Credit provides that all new production must be financed by new credits.  Actually this has historically been common practice in financing of business.  Douglas stated that the "cash credits" in the hands of the consumer should be equivalent to the prices of consumer goods coming off the production line.  Because allocated costs are added to the distributed costs (i.e., wages, salaries and dividends) of production in respect of capital charges, costs are always exceeding available consumer income.  This chasm between prices and incomes expands as the the economy becomes more modernized through the use of non-labour factors of production and capital costs increase relative to labour costs.  This phenomenon underlies basic economic processes and has nothing whatever to do with interest.  

Would-be "monetary reformers" such as Anthony and Daniel who identify interest as the primary source of economic evil pass glibly over the above accounting defect as though it does not exist.   This is as, having observed wilting or blackened leaves on a tree, they would hack away at the blighted leaves and branches instead of identifying and inactivating the destructive organism which is entering the roots of the tree.   In following this simplistic and superficial approach one simply ends up with no tree.  Anthony and Daniel appear to neglect also the fact that inflation with increasing financial incomes makes the payment of loans more easy.  The term "compound interest" is also often used loosely inasmuch as loans which are serviced do not compound unless in default or arrears.  This is not to mount an unqualified defence of either interest or inflation but merely to observe objective facts.  Compounding unliquidated capital costs incur increasing interest charges but this is a result rather than a primary cause of such charges.

We have to differentiate between two factors relating to distribution:  One factor is equity or fairness of distribution and the second and primary issue--from a Social Credit point of view-- is the question of whether there exists a sufficiency or deficiency of national income.  The Social Credit analysis resoundingly demonstrates the latter and that it intensifies with the use of technology or real capital in industry.  People who want to place the creation of credit solely in the hands of the State do not, I think, truly realize what they are asking which is the centralized control of the national real credit or productive power.  Only the State can afford to create the credit needs of the nation without charge to borrowers and if we remove all incentive to other entities to provide this service the creation of credit will be forced into the hands of the State.  We should all well know what this would mean and how this centralization of power has failed in the past in the form of fascism or communism, i.e., totalitarianism.

Entrepreneurs require access to the resources of the community to enable them to produce goods and services.  The only way to gain this access is through what we call financial credit and the bookkeeping costs of administering the issue and recall of this credit are surely a cost of doing business.  Most business people are not prepared to provide this sort of service and would rather get on with their area of specialization in production.  

The financing of consumption is a different matter altogether because when a consumer good is completed it real costs of production have been fully met by provision of the physical inputs required for its production.  Consumers therefore should have in their hands cash credits equivalent to the prices of all final goods offered at the retail level.  They increasingly do not have adequate cash credits to purchase final output of industry and it is this problem that Social Credit addresses.

On a national or overall basis there should be no need for consumer debt whatsoever.  However, we continue to be presented dramatic charts showing the exorbitant and oppressive costs of holding a mortgage and statements condemning the large percentage of interest charges comprising mortgage repayments to the banks.  One can readily agree with the condemnation but it is irrelevant because in a Social Credit dispensation consumers would always have at hand sufficient money to purchase all ultimate consumer goods as they come off the production line.  Where there is no debt there can be no interest charges.  But arguments such as these are nothing more to "reformers" like Daniel and Anthony, etc. than water falling off a duck's back and appear in their view to carry no weight whatsoever.

However, some people who may have been raised on the legalism and abstractionism of the Old Testament seem to place more emphasis on rigidly defined abstract "justice" rather than upon real equity.  Douglas said that to seek "justice" over-zealously is sometimes likely to miss it.  It will certainly be missed if an obsessive and misperceived emphasis on "interest", per se, results in the sacrifice of an inheritance in the communal capital.  Mere abolition of interest would be giving up ones heritage for a mess of pottage.  But such arguments fall on deaf ears with those who are more concerned to agonize over the "morals" of their neighbours and the perceived adverse corrupting affects of "receiving something for nothing."

Sincerely

Wally

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[John G Rawson]

Wallace, I agree with nearly all of that, of course.
But I see you are again quoting that all new production must be financed by new credits.
Please explain how a new entrepeneur, with an idea that seems too unusual to be financed by a bank manager, could gain risk capital to get started. 
There seem to be only three possibilities:
1. A law forcing banks to finance such, which would lead to all sorts of abuses and is not in accord with S C philosophy anyway.
2. Setting up a government organisation to consider such ideas and fund those that some public servant deems likely to succeed.
3. Setting up a govt. organisation that is bound to finance all such ideas, again with all sorts of cranky ideas coming into the picture.
We have gone into this before, and I think we came to the conclusion that there must be spme exceptioon allowing investment of savings for such purposes.
But now you have gone back to the ironclad  (and obviously impractical) "all" rule.
Regards
.J R

---

[DANIEL KRYNICKI]

Hello Ronni,

I understand you consider your writings proprietary information.  But with a subject that affects the well being of the entire population and which is necessary for designing our laws in a way that will 'promote the general welfare', it behooves us to share what we have learned in our search for the truth. 

Both Franklin and Hamilton were more closely akin to being antinomians, possibly deists, as opposed to the Bible believing Puritans of and before their times in New England.  As a result, Franklin and Hamilton believed that reasonable interest rates were natural as the Colonies emitted 'bills of credit'.  These 'bills of credit' consisted of paper money, the lions share of which were lent to colonists at interest.  They discovered 'money creation' .  But they learned this trick from medieval Italians.  I searched Franklin's letters and read his 1729 essay A Modest Enquiry into the Nature and Necessity of a Paper-Currency.  Nothing in them suggests he realized the charging of interest when money-lending is detrimental to national well-being.  We must remember that this money they lent as 'bills of credit' was created by the several Colonial Governments out of nothing.  It was money created by government edict to be emitted into the currency stream and thus resulted in it being used as one of their mediums of exchange.  As a medium of exchange in the general currency stream, the price inflation it caused affected everyone, including the poor.  Other currencies also existed and circulated as the result of international trade, pieces of eight being one of them.  These 'bills of credit' failed the Colonials as a medium of exchange primarily because of the interest associated with them (my expert opinion, of course).  This is always the primary cause of price inflation (ditto).  The more we look into every example of credit found in historical data, the more we can see why each and every system failed.  Any interest charges for loans of newly created money invariable always find their way into the prices of goods and services.  I cannot stress this any more than I already have.

As for early Americans like Hamilton, I refer to Dickey's statement as more truthful than any other I've ever seen.  The only founders who even approached the correct path were Thomas Jefferson and the earliest Puritan Colonials.  Jefferson's banking quote is dead on.  It explains why and how the early Puritan complete proscribing of usury would be the only system that would work in any paper money and/or cyberspace credit accounting monetary systems.  Perhaps Jefferson himself was a voratious reader who actually studied the early Puritans' logic on usury.

 Thomas Jefferson said in 1802:

"I believe that banking institutions are more dangerous to our liberties than standing armies.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered." 

Michael Hoffman covers the early colonial Puritans in very great detail, complete with references and bibliography in his Usury in Christendom < www.revisionisthistory.org >.  One quote from his book - page 245 - explains a struggle the earliest Christian settlers of New England met with as they attempted to institute a government based upon Biblical principles: "The old Puritan Biblical mores were being replaced by the imperatives of the new commerce.  The legacy of this betrayal is found in the fact that almost none of the 'Christian patriots' in the often Protestant Church-based, Right wing populist movements today, who advocate a return to the 'good old days of America's Biblical values,' associate those values with the early Puritan struggle for a usury-free commonwealth.  These modern 'patriots' come to America's colonial history in ignorance, because they commence their study half-way through its history and mark as their inspirational starting line a point eighty or more years after the actual one."    This all too little understood period is the reason most people do not even know there was a great war of ideals that took place between the money powers and the Bible believing Christians of that time period.  The money powers have largely been able to win this battle with help from defectors within the Christian Protestant clergy as well as their propaganda, false educational system and teaching that the Puritans were a religious fanatical sect.   I have more respect for this work Hoffman has produced than any other I have read before.  Two others stand out as a close second.  They are: Judah's Sceptre and Joseph's Birthright ©1917, Destiny Publishers and A History of the Church to A.D. 461, Oxford at the Clarendon Press - 1922.

As for FDR, precisely how did he regulate banks with his Glass-Steagall Act?  More than this: will a complete restoration of Glass-Steagall actually bring about any meaningful change?  Or will we continue to not just witness but be the victims of the boom/bust cycles we experienced for decades before Glass-Steagall was dismembered?  Moreover, will we continue to witness the asymptotic rise graph of our national debt under Glass-Steagall if it is restored?  It looks to me as if a restoration of Glass-Steagall will not produce any better results than we had experienced from its inception in 1932/1933 until when it was dismembered in 1999.  FDR did absolutely nothing but offer more and more palliatives than ever before thus covering up the symptoms rather than curing the disease. The real problem was and still is that banks are allowed to create money out of nothing and charge interest on the loans of their money creations.

I understand that you are in LaRouche's camp.  But none of the writings either you or any of the excellent articles you had sent to me previously ever directly address this money creation at interest issue.  Therefore, no support by me could as yet be given to one such as LaRouche.  Right now the only ones alive I would lend favorable reviews to are Michael Hoffman and Anthony Migchels.  A close second is Dean Malone.  But he is wavering under duress from the SC Forum and the Public Banking Institute.  No one else has even come close to these three in their depth of comprehension of this economics topic.

Now that we mentioned it, the Public Banking Institute is another one of those do-gooder groups telling us they will enhance government revenues by charging interest on loans with money that the Public Banks would then create out of nothing.  If the government of, for and by the people can charter a Public Bank and create money out of nothing - it can pay for its expenses out of these creations without paying any interest at all to bankers - and it can also lend interest free to the very people for whom the government was created to serve.  This same government that can create money out of nothing Constitutionally also has the ability Constitutionally to nullify the power banking institutions have to issue bank credit at interest and also change our scrip from Federal Reserve Notes issued by the privately owned Fed into interest free US Treasury Notes issued by the US Treasury.  We have within our Constitution the wherewithal to effect this change without the violence normally associated with revolution, and without radical changes to the institutional structure of various government bureaucracies.   Will this thieving trickery ever end?  I said it before: US Treasury interest free credit (money creations) used to pay for the cost of government operations reduces income taxes and can eliminate property taxes.  We can have a flat rate income tax.  This is all that would be needed to regulate the levels of money in the currency stream for robust commerce.

Look at Lew Rockwell and Gary North.  Gold, gold and more gold, they want gold to back the currency they themselves will create at interest.  All the while they create new money and charge interest for its use, their gold is locked up in a vault, never at risk.  Barring defeat in war from a foreign power, their gold is only accessible to themselves.  They risk nothing.  But the collateral - borrowers put up for use of this currency - is at risk from default of principal plus interest payment.  Meanwhile the currency they circulate indeed drives up prices because producers will get the interest they have to pay to the money creators from consumers in order to finance production.  Under their system, the von Mises gold owners and the producers are the only winners.  Prices go up; and the poor are left behind in the dust.  All this because the moneylenders love money more than their fellow human beings.  Even from this humanistic standpoint, the moneylenders who demand their usury are egregious violators of a moral law that transcends an educational code imprinted on most college degrees: Intelligence, Leadership and Integrity.  They create the money anew by a double accounting entry gimmick; and then extract usury for the use of something they did not have to begin with.  Where is the integrity if they willfully are the direct cause sending the prices of goods and services into an upward spiral?  Those who do not have the ability to compete become victims in a system promoted by sophists and casuists.  By virtue of their adeptness at rhetoric and subterfuge they twist the majority's minds into believing this system is good.  Laissez-faire capitalism is what it is; and God is against it.

Of course, government officials get in on the action and cannot be bought back by the people because the people no longer have enough money to pay them off.  The system now belongs to the 'money creators'; only Almighty God has the ability to take it away from them.   

And what of the the most strident defenders of CH Douglas in the Google Social Credit Forum?  They always claim that they have the Christian New Testament on their side.  But it has been my experience of late that they pick out only a couple verses that show how in agreement the New Testament is with their objectives.  At the same time they ignore ten times as many that would serve as an indictment of this false science they promote.  What I wrote once before will always hold true whether a Douglas Dividend ever gets inaugurated or not: "the money creators will never relinquish their power to both create money (as bank credit) and set the interest rates".  Only the people of this nation in conjunction with our nationally elected officials have the ability to amend the Constitution to the extant necessary for taking back this power.  Otherwise, everything else we try will only treat the symptoms, but never the disease.  When interest rates go up, the cost of goods and services will also go up.  When interest rates go up, the ultimate payment on a mortgage for property ownership goes up and up and up.  The Douglas Dividend is an illusion, a myth.  The money creators will continue their parasitic ways by hook or by crook. 

    

One thing great about the Biblical standards established in the New and Old Testaments, is that they remain consistent for all time.  No political or economic analysis can gainsay this consistency.  If an historical account in the Bible was a story of one who acted in a political manner, the Biblical account always presented it truthfully.  Look at Aaron and the golden calf: what a perfect metaphor for Gary North today.  He swallows the gold but defends his usury.  Politicians every one.

And so we get to Linden LaRouche.  Is he another politician also?  He was on a radio show recently.  I didn't listen.  But Dick Eastman did; and Eastman wasn't impressed at all.  Unless all these would-be political hopefuls get back to basics, begin the slow process of educating the general public on these core issues about money creation and usury, our decline will continue into oblivion.  World War III is at the door; and only an extra-terrestrial intervention will save mankind from destruction.       

Daniel S. Krynicki

St. Clair Shores, MI

May 12, 2013   

On May 9, 2013, at 8:43 PM, Ronni Blair <> wrote:

Hello, Daniel,

I have heard this complaint about Hamilton many times, but never hear the evidence. I would like to spend more time on studying Hamilton, but right now have other priorities, including getting my garden in, and organizing other aspects of my research in health. (By the way, I just ordered three excellent books that reveal the various physical causes of "mental" health conditions, which I learned about from a great new site: www.alternativementalhealth.com )

  The same is true of FDR, who did regulate the banks, and gave the people a chance to survive with some useful government programs.  Many people are quite ideologically reactive, which in itself is a sign of our times--often caught in the dialectic without a lot of clarity to give credence to the fears of "big government" and corrupted monetary and Wall Street systems.  For me, it all comes down to the character and mentality of the individual players who participate in the various groups, or people of "like mind," even when they are using their minds... In my research on human consciousness, groups of people arrive at what appears to be a consensus, but which is quite often manipulated through unseen forces, beyond government or money power.  

FDR also used the Hamiltonian American System of Economics to develop after we had been derailed for many decades by a disorganized banking system out of control of the congress (since Jackson in 1835) and later with the advent of the Fed.  Whose responsible is rarely considered, nor are realistic policies designed to control undue influence and corruption discussed.  Usually, as in your quote from Dickey, it comes across as pure prejudice, borne no doubt from years of suffering from having to live in a corrupted or broken system.  It always amazes me that so many complain of government control, but then expect government to do something about it.  Or, complaining about welfare state conditions, can't see that this is a way to control the masses, by the kleptocrats, by keeping many people poor.  J.P. Morgan Chase holds the food stamp concession for America, as an example.  How did that happen? It is by and large the most corrupt bank in America, but it is the CEO and the individuals who do the dirty work, with complicity in congress by those they control.

We were and are subject to a number of psychological wars and hot wars that accompany the plans of various secret societies. 

  Many confuse credit with debt in Hamiltonian's approach. A woman I spoke with recently assumed they were the same.  I said that it depended on who benefits and how the system itself works, not to mention who controls the policies. 

 I think when the government issues credit for development, that creates jobs to build infrastructure and benefit commerce, it's one thing: it develops revenue and commerce under the General Welfare principle--everyone benefits.  When private banks issue credit at interest (bonds aside, another category of finance), we simply have a ponzi scheme and private parties manipulating policies to benefit their profit margins, with no other considerations, which is even justified by law. Corporations are obliged to the stock holders, at least until recently when complete fraud and corruption became more visible and out of control.

  

When making the argument that Hamilton belonged to a powerful financial clique, I would like to know what clique that is.  The fight for a strong federal government, argued in the Federalist Papers, was in the context for defending the American Republic against the British Empire, not to amass power among aristocrats, at least not in itself.  While it is true that many of our founders were Free Masons, I do not believe they were Illuminati and driven by the goals of the Zionist / Judaic cult that Hoffman and others are aware of.

Right now, I'm cross referencing these various assumptions and tendencies about organized force and the thinking about political power in the context of the actual history of the World Revolutionary plan, which is in part being revealed in a book I'm now reading, Freemasonry and Judaism, Secret Powers Behind Revolution.  The author is Vicomte Leon De Poncins.  

What CR Dickey was probably talking about without knowing it what this melding of Free Masonry and Judaism, which has the actual intention of destroying humanity to insure their own pathological dominance of the entire planet.  Strange, but there is a lot of evidence for this in this book and many many other sources, one of the major threads I've followed for a long time.  Obviously, politics, "religion" and economics are always closely entwined and one cannot understand the power wielded by one group over another and how they compete without a fairly large and pertinent knowledge base to qualify the various assumptions.  Usually, the words of the criminal class of perpetrators of the various murderous influence come out and say it in their own words, or it comes out in trials when they get caught, as happened several times in the history of Europe and the U.S. 

Without the knowledge and evidence of these secret societies and their ability to deeply control the beliefs, values (or lack of values), and therefore behavior of specific groups of people, one can't make a statement about anything else in proper context of this all pervasive influence.   This is not a long book, but is mostly quotes from the Constitutions of the various national Free masonic constitutions, and includes many reports from some who had begun with good intentions, only to later learn of the real intent of the higher levels that used the lower levels as a front for their networks of control.  This is a connection that must be made, and which should focus on specific individuals, not classes of people, other than bankers, oligarchs, and those with the most political influence.  They control through the media, which they own and so spin our very sense of reality at every turn.  

I agree fully with Migchels, who knows how manipulation works.  Most people unable to be fully informed assume that someone else they like is right, e.g. the gold standard and gold backing of currency, without considering how we ourselves, our perceptions are manipulated.  It's a fascinating dynamic of the power of one individual vs. the organized force of corporations, governments, institutions, clubs, anything.  We do have free association in our laws, and a good thing, but the purpose of regulating or limiting government powers is to restrain the tendency to abuse those powers.  Now we have completely DEregulated government entities, including unelected bureaucrats and various "movement identity" people (environmentalists), actually mashing every sane regulatory boundary of the banks, usually not realizing what the consequences are for the policies they promote.  The reason is that they have no sense of principle or meaning in life beyond their personal wants and petty desires, usually driven by fear and the desire for pleasure. 

I have had to set aside the Rockefeller and the gold reserve issue for now, but Bill Still is brilliant on this, as is Ellen Brown and the others who report simple facts in The Secret of Oz.  I'm still waiting for Still's new movie, which prepaid to get asap.  They sent an e-mail saying they were almost finished... it's about J.P. Morgan and others... but promises to be a good meld of the fraud of the "yellow brick road" to hell and the history of the players in the Fed and current issues.  

I think there is a serious unfounded fear of what everyone calls fiat money.  As you know, and Migchels knows, its who controls it and the purpose of the exchange... which has issues all along the line from individual to governments, corporations, wall street, etc.  It's money! Nothing more, or less, UNLESS the political power and power of public perception management are attached to it.  Whose controlling those perceptions is key.  

By the way, I also received Bev Eakman's book, The Cloning of the American Mind.  I'm so impressed with her work!  She's a technical genius and has managed to completely expose the methods and intent of the public school takeover, a very serious issue.  Yes, the same usually anonymous "powers that be," are behind these manipulations.  We can call it the Synagog of Satan, or Judaism, the Khazars, or whatever, this group is expert at mind control and social engineering and we know them by their fruits.  

Thanks for the great post. I am now distracted from what I was doing!  Back to work and later I will return to the excellent thinking and scholarship of Migchels and share it with my friends.  As we continue to explore all of these issues, we are helping others to understand how our own minds work and how to protect ourselves from that deception, which is everywhere these days... and on the wane!

Best Regards,

Ronni

P.S. In Freemasonry and Judaism, it is revealed that the goal of this secret society is to destroy Christianity, by destroying the Catholic Church (over the last 300 years or more) and the European monarchs as well, in deference to the secular atheistic society, which is far more easily manipulated, and controlled, for obvious reasons.  When you think of the assassination of Duke Ferdinand and his wife, the Russian Czars, etc. you see the intent here.  Their preferred form of government to control were republics, ostensibly because their primary methods gave them the freedoms to control through money and influence from the inside, and place their agents in key positions of influence. We have the so-called People's Republic of China as an example--but we hear that they have 1000s of riots there yearly, which of course we don't hear about on the controlled media.  

 We see this everywhere today in different forms.  We are fighting an info war as Alex Jones knows... btw, his show today had some interesting guests, specifically Lord Monckton and Godfrey Bloom, an EU parliamentarian and member of the UKIP (UK Independent Party) that opposes the fascist austerity, globalization and the destruction of the West.  Both make points about unelected bureaucrats and the elite being in denial and incompetent about the unpayable debt, saying that it must default.. Let's hope they continue to gain steam and make their point, as so many others are doing the same.  Btw, Monckton also concluded that we must have an international freedom party.  It will be interesting to see how that develops... 

P.S.S. Sorry for the large print, it helps me to see what I'm writing better.

On May 9, 2013, at 12:57 PM, DANIEL KRYNICKI wrote:

So in this spirit, I forward the following economic essay to concerned Americans who fear what 

the future holds for the West because the money power is as CR Dickey put it in 1949, "Thus 

Hamilton's system of perpetual debt, interest-bearing bonds, and a strong centralized government  

- for the benefit of a small but powerful financial clique - fastened itself like a gigantic leech to 

the young Republic".  And we all know what eventually happens to a host which has been bled 

of its life giving fluids over a long period of time. 

I'll get back to this chart later and call it the Banking Oppression Chart.  I should additionally include more columns to show mortgage points.  These are up front percentages that are always added on top of the principal balance so that an actual $100,000 estate purchase winds up with a mortgage principal balance of anywhere from $3,000 to $7,000 more than $100,000. 

[Jim Schroeder]

Hi Daniel:

 

You wrote that the Douglas dividend is an illusion and a myth.

 

Can you elaborate upon this?  How is it an "illusion" and what makes it a "myth"?

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[DANIEL KRYNICKI]

If CH Douglasites do not take the ability of banks to create money and also set interest rates away from them, what exactly do you think will happen when the people receive a Douglas Dividend free and clear?  The banks will raise the interest rates to levels not known among the present generation.  It should have been easy to notice this from the mortgage chart.   The bankers will always demand their pound of flesh.  When interest rates go higher, the prices of goods and services will also rise along with them.  What will happen to the dividend then?  Will the poor be able to buy a loaf of bread with even $1,000 in their pockets?  Will the Weimar Republic Inflation of the early 1920s repeat, this time on a worldwide scale?  The bankers are expert at stealth and subterfuge.  They have a gimmick in their trick bag for everything the Douglasites will do.  Hoffman spelled it out for us in his book: LEGERDEMAIN.  

Take away from them their power to create money and set interest rates completely.  

Even better, abolish usury altogether.  From the context of my original email, any economist or accountant should see that whoever has the power to create money (in any form, including what is now commonly known as bank credit) should not be allowed to charge interest anyway.  Currency in circulation is backed by the assets and labor of the people.  It belongs to the people.  Therefore, the people institute a government to act in their behalf and create a money supply.  Here in the US we have some august documents from its founding that elaborately and specifically require our government to do all this and more.  In fact, the Unanimous Declaration of Independence carefully and exhaustively enumerates a long list of abuses and usurpations perpetrated against colonial citizens by the British government.  With the banking coup that occured in 1913 here, just about every single one of those abuses has repeated, and then some on top of them.

So the people get this dividend.  So what.  The wizard behind the curtain pulls levers to make it vanish.  Instead of pulling a coin out of from behind someone's ear, they make our money vanish into their own pockets dividend or no dividend.  

The more things change, the more they remain the same, especially when we don't go at the root of their power - the ability to create money. 

Daniel

[Jim Schroeder]

Daniel, what prevents banks from raising their interest rates now?  Do you think that the entire amount charged for interest on loans is profit to the banks?

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[Wallace Klinck]

If there is no shortage of money what would give banks carte blanche power and license to raise interest rates?  Please explain Daniel.  If consumers always had sufficient  genuine cost-liquidating purchasing-power to buy all consumer goods emerging from the production line what need would there be for consumer loans at all at any rates of interest?  Please enlarge, Daniel.  If via the Social Credit Compensated Price the new money created without debt to finance lower prices would be issued only on condition that prices are lowered how then could there be anything but a fall in prices?  Please elucidate, Daniel.  If the new consumer credits were issued only to liquidate former costs and generate no new costs then how, Dennis,  would there exist any pressure to elevate prices?  You seem to be thinking in the conventional mode regarding demand inflation and disregard entirely the Social Credit analysis of physical cost and its progressive reduction by technology.  You seem completely oblivious to the fact that money can be created not only to create financial costs but also to cancel them--and to Douglas's definition of money as accountancy.  Do your understand anything whatsoever regarding National Accountancy in a Social Credit dispensation?   Social Credit asserts that the true cost of production is consumption and that true cost is falling all the time because production in total outstrips consumption.  Are you prepared to deny the truth of this proposition?  If so what is your rationale?  You allege  that Social Credit is a "false science."  What concrete and empirical evidence do you have to verify this allegation?  How will the banks maintain their power through their ability to create credit when that power of creation is increasingly broken by the issue of "debt-free" money from a source external to the banking system?  Is the essential problem the right of the banks or any other similarly qualified entity to create credit or is it their claim to the ownership of it?  Do you not understand that the Social Credit National Dividend and Compensated Price effectively remove that claim from the banks and confer it upon the general public?  When a bank creates credit does it not do so by request of the borrower so that the latter as a producer can exercise a claim to utilize the real productive credit of society?  When a bank issues money as a loan does it not create deposits which are an obligation on the debit side of the banks ledger? When you talk about "the people" are you talking about the people  as individuals or as an amorphous and abstract collectivity?  You constantly harp on property mortgages and the burden of interest attached to them.  Why do you insist repeatedly on resurrecting this argument?  Do you think that there would in a Social Credit dispensation exist any overall need for residential mortgages?  When a house is completed and ready for occupancy all the physical costs of building the house have fully been met.  Why should there exist an extended period of many years to pay for the house financially?  Time was when mortgages were not contracted to build houses.  You seem concerned about the interest charges on a mortgage--but does it not concern you that there is a debt requiring a mortgage in the first instance?  If the people as individuals and groups of individuals constitute the real credit of society then why should only a "government" have the power to create financial credit for the mobilization of the general creativity of the individuals comprising society?  If only the State is to have the power to create financial credit  and such power is such an evil thing then how is this centralization the power of credit creation going to be the solution to our problems?  Or, as you have said it will permit the mobilization of society so as to keep everyone, especially the "slackers"  busy.  What instrument of flagellation would you prefer to maintain such externally disciplined activity--a "Cat-O-Nine"?  Or more subtle and sophisticated means of compulsion?  What would you do with the arm of workers in the present financial industry if you proscribed interest? let them starve, euthanize them or expel them to another planet as potential useless consumers and "slackers"?  As Jim asks, do you think that banks operate without cost?  Or that they distribute none of their income?  That their shares  as are not attractive as a dividend revenue stream to retirement funds, etc.?  Do you not agree that money should be cancelled at the rate of consumption and that the building of business reserves is a necessary requirement?  I you think that the system can be "fixed" by the elimination of interest then there would be no need for the Social Credit ameliorative measures, would there be?  That which is fixed is fixed, is it not?  Are you opposed to business dividends also, Daniel--and therefore to profits, as well? In what ideological "camp" do you regard yourself?

Here is the concluding passage from Arthur Brenton's book "The Veil of Finance."  Brenton (Editor of the "New Age") reveals the futility of all the various proposals for "financial  reform" at its time of writing.  Nothing has changed in a fundamental sense--except that the fundamental flaw in the price-system has enlarged enormously because of the burgeoning capital component in prices.  

"In conclusion:  Remark particularly that at the time we write (September, 1925) not a single one of the many credit reformist programmes which are being popularised touches the fundamental defect in the system. Some of them advocate larger issues of loan credit by the banks. (The proposal to abolish the Gold Standard is not an end in itself, but a means to make more loan credit available.) Others advocate lower interest—some of them suggest even no interest at all. Of the limitation of profits, the elimination of the middle man, and other subordinate issues, we will not speak.  But the shortest reflection should show the reader that, even if credit were to be lent free of interest, and in a much expanded volume, and if producers limited profits to a generally-approved margin—these reforms would not of themselves solve the problem of the disparity between Price and general Purchasing Power. Throughout our analyses we have shown this disparity to arise irrespective of interest, and irrespective of the quantity of credit in circulation. There remains a plausible case for limiting profits, but their limitation under prevailing conditions would only mean that wage and salary earners would become the investing class instead of the “profiteers,” for remember that the current concept is that the development of industry depends upon investments out of personal incomes, and to the extent you forbid your “capitalist” to accumulate investment funds by “profiteering” you must of necessity look to wage and salary earners to provide the money instead. We have shown at length that the application of personal earnings (however derived) to financing new production is wrong in principle, is unnecessary, and leads to a financial vacuum in which the productive process soon becomes exhausted. 

"Current attempts to patch up the system go to support the diagnosis that we have put forward. They can be comprehensively described as the Dole system. Firstly, workmen are supplied with money while waiting for opportunities to work; and more recently, the coal industry is being supplied with the same while waiting for opportunities to execute orders. In a short time we shall hear Agriculture crying out for the subsidy. Now all the excitement and fears expressed in reference to this tendency depend upon the false assumption that this money now going out is a loan, and must be repaid later on in taxation and cancelled. All the preparations being made for the expected Capital-Labour struggle arise from the same belief, and are so many manœuvres  by rival interests to escape the burden of repayment. But the true line to take is to say, not “Who shall repay the subsidy?” but “Need the subsidy be repaid?” We press the view that the dole or subsidy need never be repaid, but that both should be regarded as a belated payment to the public on account of the stupendous hidden debt of credit owed to them by their financial agent, the banking system. There is only one objection to the present “subsidies”—we are not every one of us sharing in them. The distribution is partial, when it ought to be general. And when it becomes general, we have only to discard its obsolete and false name of “subsidy” and “dole,” and to clothe it with its scientific name and economic vestment—The National Dividend. 

"The Veil of Finance will have been lifted."

Sincerely

Wally

[DANIEL KRYNICKI]

Because they can. Avarice will always drive the greedy to get more than they are able to gather from honest labor.  And you are somewhat foolish to think that if you leave this power of theirs intact, they will somehow do the right thing and keep rates low.  I am old enough to have seen mortgage interest rates go as high as 9%.  When I was young, a 5 1/4% mortgage interest rate was not obtainable.  The rates were higher when I needed to buy a home, and they went even higher afterward.  Along came the dufus inventor of the ARM.  Voila, we were led into the sub-prime crisis of 2007.  

"When a bank creates credit does it not do so by request of the borrower".  I'm hereby requesting that my government abolish the practice of charging usury on money creations.  In addition, I also request that my government issue all the currency needed, interest free, to both pay for all of its expenditures and to make available to the general population interest free loans.  Why?  Because the government has the power to do all this as authorized by the clauses "consent of the governed" from the Unanimous Declaration of Independence as well as the Constitutional mandates enumerated in the Preamble, in Article 1 Section 8 Line 5 and in the Bill of Rights.  Until this happens, the people have no other place to go to obtain this phony money that enables them to purchase a home to raise their families.  The bankers are the only group presently authorized to create money.  "By request of the borrower": My goodness,  you indeed also speak exactly like a sophist.  Is there presently anywhere else to go?  You seem to be desirous of keeping the people in total ignorance of the heritage they have inherited from the founders of a nation whose time has finally arrived.  

In our history, we have the sure example that both Colonial governments and the Continental Congress emmitted 'Bills of Credit' to satisfy the requirement of a suitable currency for commercial activity.  The only thing they did wrong in this enterprise is that they emmitted most of it as loans to be paid back at interest.  Usury never did work in money creation.  It never will.

Daniel Krynicki

[DANIEL KRYNICKI]

Your first line is at best debatable.  At worst it's sophistry.  I have come to realize that money, as we use it, is backed by collateral put up by the people, not by banks.  This applies to bank credit and also to currency in circulation.  The people therefore have the right to send the entire banking system into exile and to create a national credit office that will issue a national currency instead of bonds, both as loans to the people usury free as well as pay for the costs of its own and all government operations.  What need is there for banks?  Tell bank employees to find a job at the new national credit office.

Intermingling saving with investment opens the door for that profiteering you speak of.  This affects even those who are least able to cope in a dog eat dog civilization the usury fosters.   Being paid interest on savings' accounts goes out the exile door along with the bankers.  In investment there is always risk involved.  In savings, there should be no risk.  A properly ordered national credit office will guarantee savings that sit parked in a fee oriented holding institution.  Let's call it a bank where people park their deposited money and use it to write checks or make electronic fund transfers.

As for SC eventually halting inflation, I hear many theories painting a broad stroke for what they propagandize.  The truth of the matter is that these are untested theories along with their incipient propaganda have no test results to demonstrate anything they aver. 

  

On May 14, 2013, at 11:24 PM, johnw...@gmail.com wrote:

It seems that you are making a complaint against profiteering, not usury.  Banks charge interest as the price of money creation, because they have to account for all the costs of 1.  inflation and 2.  loan defaults, along with any operating expenses and interest payments on their savings accounts.  As defaults go up banks charge more for interest, and as inflation goes up so too goes the interest rate.

Now it is true that the closer the participants in an industry get to monopoly the more the participants are able to get away with profiteering.  Banks have become so monopolied because of the fact that business cycles, caused by the inadequacy of income over time to rise fast enough with the level of prices, put banks out of business by turning in a whole bunch of defaulted loans.  Banks will typically load their bad assets, the defaulted loans, into one company, and then merge the remaining goods assets with other companies.  Over time this causes there to be fewer and fewer banks that are larger and larger until, of course, we have such a centralization of power that allows there to be a "global banking elite."

It seems to me that what would be required is a sort of "trust-busting" scheme that sets up a large number of local banks for the purposes of local production, with a credit source administered by the government (this credit source working perhaps in much the same way as central banking already does - except, perhaps, the central bank being an automatic branch of the government, not simply a pseudo-private corporation).  This would re-enable competition to actually play as a factor and reduce the tendency to profiteering, and I believe (but I am not knowledgeably certain) that implementation of Social Credit policies would get rid of the business cycle to a great, if not complete, extent, and not force the conglomeration and centralization of power in corporations (including, of course, banking corporations). 

Again, I am not knowledgeably certain (but I am working on that!), but it seems like Social Credit policies as have been elaborated would reduce and eventually halt inflation, and cause there to be much less defaulting by companies on their loans, reducing the interest rate even further.  The only loans that would be defaulted on would be the ones to businesses that the public truly didn't desire (i.e. did not buy products from) or that are incompetent - which is just and fair, and banks that did well would be ones that took good measures to make sure the businesses they loaned to would be neither incompetent nor undesired by the public.

As for savings account interest- It seems like that paying interest on savings accounts would be fair only if the money being invested were to be invested in risky loans, such as businesses branching into a new and undeveloped field.  Banks that invest in solid, secure loans would pay less on savings (and charge less on interest), and if the bank were merely a holding bank, i.e., it made no loans, but only facilitated checking and electronic transfer payments, it would be fair for the bank to charge a fee for the service and not pay interest on the accounts.

The point is that we want to have the power of money creation as decentralized as possible.  It seems that the argument that is being presented by Jim, Wally, et al. (correct me if I am wrong!) is that for the purposes of financing production, fractional reserve can work (with some modification?) and is best when the creators of it are as decentralized and as close to the community as possible, and that for the purposes of financing consumption, the government can administer (but not control) the adjustment of prices and incomes through the compensated price and the dividend, so that the power of the use of the money is in the hands of the individual.

[Dennis Helbig]

Walking through foreclosure right now.

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