Thursday, November 27, 2008


Thought I'd share a nice letter I ran across today. It's right in line with a letter to the editor that appeared today in my local paper.

Here's a nice letter I ran across today that I thought I'd share with the group:

"Thank you, President Bush.

Thanks for legalizing torture.
Thanks for getting rid of habeas corpus.
Thanks for the "unitary executive" theory.
Thanks for making every man, woman, and child in America give $24,000 to private corporations and banks.
Thanks for the increase in poverty and hunger.
Thanks for the millions of dead and wounded soldiers and civilians.
Thanks for keeping us safe.
Thanks for the no-bid contracts.
Thanks for your response to Katrina.
Thanks the warrantless wiretapping and the telecom immunity.
Thanks for helping us undermine that pesky constitution.
Thanks for overturning posse comitatus.
Thanks for NSPD 51.
Thanks for the record average gas prices.
Thanks for kissing and holding hands with dictators and terrorists.
Thanks for invading countries that had nothing to do with 9/11.

Your friend,

The Military-Industrial Complex"

Wednesday, November 26, 2008


And so the propping up of the fraudulent, predatory system known as the "free market" continues. Everybody's getting billions of handouts except the people who need it--you and me.

The money passed out since the bailout passed just a few weeks ago after Congress was threatened with a depression and martial law (both of which were/are likely to come down the pike sooner or later even with a bailout) now comes to a grand total, according to this article, of basically $5 trillion. Here's the horrific breakdown:
Jim Bianco of Bianco Research crunched the inflation adjusted numbers. The bailout has cost more than all of these big budget government expenditures – combined:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

The bailout, in the 6 to 8 weeks since it was passed, has cost more than our involvement in WWII!

You just gave these criminals $24,000...

...and so did everyone else you know (according to Bloomberg). My household, then, has contributed $72,000 to these private banks and corporations. That's $72,000 grand we ain't got, quite simply. This is going to cause massive inflation--how can $5-7 trillion dollars in free money to banks in less than two months not cause hyperinflation? Bloomberg points out that

"Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis."

People, not banks, create money

So in effect what is happening, as I've pointed out in previous posts, is that we are giving banks money so they can then turn around and lend it back to us. Kashkari told us that helping people directly with the bailout money would keep it from going very far and wouldn't help people to get the credit they need. Well, if my family was given its $72,000 directly, that'd go a long way toward helping us out. We don't need credit. CREDIT CREATES DEBT, WHICH IS WHAT THEY WANT.

Oh, I can't take this...I gotta go to bed. But first, one more short post about Afghanistan...

...but not for the reason they say it is. According to this article, 44% of Ecuador's debt is to private banks. Ecuador has declared this and other foreign debts "illegitimate" because of the following:

"The commission found that usurious interest rates were applied for many bonds and that past Ecuadorian governments illegally took other loans on. Debt restructurings consistently forced Ecuador to take on more foreign debt to pay outstanding debt, and often at much higher interest rates. The commission also charged that the U.S. Federal Reserve's late 1970's interest rate hikes constituted a "unilateral" increase in global rates, compounding Ecuador's indebtedness."

Hey, those are all great reasons for Ecuador to declare its debt illegitimate. But, as we've seen, the overarching reason the debt is illegitimate is that the money loaned to them was fake. That is to say, it didn't and doesn't exist except as entries in computer databases.

So are we going to invade Ecuador?

The article notes that:

"Ecuador's findings could set an important precedent for the poorest of indebted countries, whose debt burden has long been criticized as inhumane."

Holy crap, that's the one thing the corporatists absolutely hate--setting an example for other countries, especially when the example being set is throwing off the chains of fraudulent debt slavery. Presidents are hunted down and killed and/or countries are invaded and/or overthrown via black ops for that kind of stuff.

U.S. declares debts illegitimate, why not Ecuador?

A former Ecuadorian government official points out the following:
"The United States itself has embraced the concept of illegitimate debt in encouraging countries to forgive the debt accrued in Iraq under Saddam Hussein."

Good point. Especially when one takes into account that the U.S. put Saddam in place to begin with.

The article makes a similar point:
"In fact, the U.S. originated the concept of foreign debt after the Spanish-American war. The U.S. refused to pay Cuba's outstanding debt to Spain, arguing that it was created by agents of Spain in Spain's self-interest, a matter in which Cubans had no say."

Tuesday, November 18, 2008


I have been led to believe my whole life that banks/finance companies lend money to people. I assume that most other people have been led to believe the same thing. But as we have seen, nothing could be further from the truth.

The Fed admits as much--in a roundabout way--in the quote I used below. Let's break it down again. Here's the quote:

"Banks actually create money when they lend it. Here's how it works: Most of a bank's loans are made to its own customers and are deposited in their checking accounts. Because the loan becomes a new deposit, just like a paycheck does, the bank once again holds a small percentage of that new amount in reserve and again lends the remainder to someone else, repeating the money-creation process many times."

First of all, despite the Fed's protestation to the contrary, "lending" does not create anything. By its very definition, the act of "lending" assumes that what is being lent already exists--in other words, one cannot lend something one does not have. That is to say, I can't lend someone a bicycle if I don't have a bicycle. I can't create a bicycle by lending someone a bicycle--it's impossible. So right off the bat, we can see that we are being misled because lending doesn't create anything. But this idea that money is created through bank lending is very pervasive. And this misconception is a fundamental part of the system under which we currently labor.

Okay, fine, but... is it that people lend to banks? Well, the Fed comes right out and says it--again, in a backhanded way. They point out that "loans" are made to bank customers and are then deposited in a checking account. The bank then uses that deposit as the engine to lend more money. So without saying it in so many words, the Fed is acknowledging that deposits lent to them by us are what they then use to lend.

In fact, every deposit of any kind into a bank is a loan to that bank from people. Without deposits, which are essentially and fundamentally loans from people to banks, the bank could do nothing, it would have no assets. So banks are helpless without the people. But we are always led to believe that in fact people are helpless without banks. That's the whole premise of the bailout--that if banks fail, people suffer. And that may be true if we insist on clinging irrationally to our current system in which we allow banks to dole out the money that is loaned to them by the people at great expense to the people.

A little more

Even with our current system, in which we all go along with the mass delusion that banks, not people, create money, it's still blatantly obvious that it is people that create money instead of banks. I used the illustration of an auto loan below to make this point but now let's illustrate the point with something more expensive, like a mortgage.

But first let's recap a little bit of what posts below mentioned. We already see, by the Fed's own admission, that "very little" of a bank's deposits is "kept in the bank's vault." In fact, they only keep enough on hand "to meet routine withdrawals." In other words, they don't have the money "on hand" at any given time to actually lend any significant amount of real money, i.e., cash. That's what the Fed is essentially saying.

So let's say Bill goes into the bank to get a mortgage loan on a $500K house. We already know that the bank doesn't have $500K in cash on hand to give to Bill to pay for his house. Their deposits, i.e., loans from people, may total many times more than that amount on paper, but they don't actually physically have that amount of money in cash on the day that Bill comes in for his loan.

So the bank judges Bill to be good for the "loan" and they have him fill out a promissory note stating that he will pay the bank the $500K plus interest. The bank then enters some digits into a computer and print Bill or Bill's attorney or real estate agent a check for the proper amount, which they don't have on hand, remember (by the way, if one doesn't have something "on hand," that necessarily means one doesn't have it, even if it is listed as an asset on a ledger book somewhere).

So the bank essentially writes a bad check to the owner of the house Bill wants. But under our current system, the bank's check--again, written for an amount that they do not currently have on hand--is made good by, guess who? Bill and his promise to pay. So the fact that Bill will be giving money to the bank for the next 30 years is viewed as being the same as cash by all parties involved. But that view does not change the fact that the bank does not have the $500K on hand at the time of the transaction.

Quite literally then, Bill is creating the amount of his loan himself by paying it in installments over the next 30 years. That is to say, he's literally loaning the bank the money to cover the bad check it wrote because they don't have the cash on hand to pay for Bill's house.

When looked at this way, one can understand the predatory and fraudulent nature of interest. Again, Bill does not have $500K on hand to pay for the house he wants, but neither does the bank! So because we have created the illusion that banks have the "divine right" of money creation, the bank now gets to charge Bill interest for lending them the money to pay for his house!

No one would ever agree to this system if they realized how it works, and that's why the Fed tells us that banks, not people, create money. But we have seen that the opposite is true--people, not banks, create money but the people have been suckered into letting banks charge them money for loaning money to banks.

So much for "Truth in Lending"...

Monday, November 17, 2008


OK, thought about it some more and have come to this conclusion: People, not banks, create money. The Fed site I quoted from below has it exactly backward, stating that "banks create money." That's what they want us to believe. However, that is false.

We know it's false because they go on to tell us that money is created through lending. Well, all right, but as I've pointed out, banks don't actually have the money to lend. The money is "created" by our "promise to pay" and our monthly installments, as in the car loan example I wrote about below. When the "loan" is paid in full, we have then created the amount of money we "borrowed," along with interest that wasn't created by any bank.

How to look at it

All money is created through our labor. In fact, labor is money. Banks don't do labor, people do. That's the ultimate reason why the bailout and the system it is trying to prop up are utter fraud. They want us to bail out banks because they tell us that it's banks that create money. That is completely false.

And that's why there is no need for a bailout. That's why there's no need, quite frankly, for banks. And that's why there's no need, ultimately, for money. Because our labor is money.

The questioning of Kashkari on Friday was a start, but it was only that. Kucinich and Issa didn't go far enough--even they appear to assume that the system is good for the most part and needs rescuing.

Fake money

However, as I've shown below, our system is based on fake money that creates only profit for banks and only debt for the public. Indeed, as we've seen, even the Federal Reserve admits that for a profit, banks lend money that they do not have on hand. You and I can't do that. And that's why we stay perpetually behind and they stay perpetually ahead.

But even if one accepts that this actual fake money is real, there was one burning question that none of the Congressmen asked, at least not that I saw. And that burning question is this: Why should taxpayers be forced to give a gift of money to banks that banks will then use to create only profit for themselves and only debt for the people who gave them the money to begin with?

This may seem like a silly question, but only if one accepts that Kashkari's precious system helps the public. However, we have seen quite clearly that the system does no such thing. Kashkari is pleading for the system to be maintained--that banks be given money by the taxpayers to issue credit in order to make a profit off of those taxpayers.

Kashkari makes the faulty assumption that helping needy people and businesses "directly" won't work. But that begs another unasked question that is related to the first unasked burning question mentioned above: Why not just give the taxpayer money to the taxpayers directly instead of giving it to a middleman (i.e., the banks) to dole out to us in order to make a profit for the middleman? In other words, instead of giving banks $750 billion (and really much more than that), why don't we just give it to ourselves?

The only answer to those questions is that the system must be preserved, which appears to be the assumption of all the Congressmen I saw questioning Kashkari. But as we've seen, the best way to really help the people instead of the banks is to dismantle the fraudulent, predatory system.

And dismantling the system would not be hard to do. It would be very, very easy, except for the fact that the public has been brainwashed a million times over into thinking that bankers have the divine right of money creation and that credit is necessary for life and the country to continue. Kashkari's comments indicate that credit is the answer to our problems when in fact credit is the problem.

Credit is the problem, not the solution

I'll say it again--credit is the problem, not the solution. If people had good jobs at good wages, they wouldn't need credit. If inflation wasn't through the roof, people wouldn't need credit. BUT, if no one needed credit, then the bankers would be out of work.

And the bankers don't want to be out of work. That's completely understandable because as we've seen, banks are allowed to create money without producing anything but debt, while the rest of us have to perform labor to have access to money. And in fact, it is only our labor that gives bankers their money. We are quite literally "working for the bank."

So the banks have an excellent scam going--they do and produce nothing while getting rich off of those of us who are performing labor.

Labor vs. capital

So that brings up the age-old fight between labor and capital. As we've seen, labor is the only thing that makes capital possible, yet in our system, labor is subservient to capital. This in inexplicably called "free market capitalism" and is extolled a billion times a day by presidents and pundits alike.

But if we were to put capital in its rightful place, i.e., subservient to labor, that would be and is called "godless communism" and is disparaged a billion times a day by presidents and pundits alike.

So we've been conditioned, brainwashed, taught--pick your term--to think that capital, i.e., the financiers/bankers/middlemen are what allow us to exist when in fact THE COMPLETE OPPOSITE IS TRUE. It was Abraham Lincoln who said

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."

So call it communism, socialism, redistribution of wealth--again, pick your term--but the fact remains that labor is and therefore should be treated as the master of capital, not the other way around as is currently the case.

And that's why the questions posed to Kashkari and Paulson and Bernanke about the bailout and "the system" should proceed from a different assumption than they currently do. The questions should proceed from the assumption that the current system is rapacious, fraudulent, predatory, and contrary to common sense, not from the assumption that the current system should be preserved at all costs.

I just want to make one thing crystal clear: the bailout is about propping up a failed, fraudulent system. We are being asked to preserve what even Kashkari calls "the system" but we are not supposed to question the system itself. All the bailout articles in the mainstream press proceed from the assumption that the system is good and needs saving and only quibble about whether or not the bailout is the best thing for the system or not.

But I'm saying that the very system needs to be questioned. And if you read what follows, you'll understand why...

How "the system" works--against us and for the bankers

This "system" that Kashkari referred to is used to keep us in debt slavery. And I'm using the term "debt slavery" quite literally. We are literally slaves to our debts. It's why we never do the things we really want to do--we have to pay a mortgage, don'tcha know. Meanwhile, the mortgage company is literally robbing us because they didn't have the money to lend us in the first place. The only thing that created the "money" to "lend" us was our "borrowing" of the "money."

That's right, our borrowing is the only way more money can be created. Here's how the Federal Reserve Bank of Dallas explains it:

"Banks actually create money when they lend it. Here's how it works: Most of a bank's loans are made to its own customers and are deposited in their checking accounts. Because the loan becomes a new deposit, just like a paycheck does, the bank once again holds a small percentage of that new amount in reserve and again lends the remainder to someone else, repeating the money-creation process many times."

Just think about that for a minute. Let that sink in--money created by lending. I wish I could create money by lending. If I had that power, I'd never stop lending so I'd always make more money. And just when I was about to run out of money to lend, I'd simply lend some more so I'd have more money...that...makes sense, right?

We understand then, that this is the way our wobbly, fraudulent system works--there are a few people at the top (i.e., bankers) who are given magic powers to produce money out of nothing and the rest of us have to pay them exorbitant fees on pain of asset confiscation and/or financial ruination because...because...because we gave them these magic powers? That doesn't make any sense at all.

Divine Right

In fact, this scheme is terribly familiar and it's one that we thought we'd rid ourselves of for good. This scheme is just like the "divine right of kings," in which rulers in the past claimed to be ordained by the gods to rule over the people. It became evident (and was surely evident at the time) that such claims were poppycock, so eventually people correctly decided that they should rule themselves and the United States is a prime example of an attempt to do just that.

But then we allowed a privately-owned central bank (i.e., the Federal Reserve) to take over the creation of our money. They essentially assert a "divine right of money creation" over us. They openly tell us that they create their money out of our debt.

Think about it--in the Federal Reserve quote above, they openly admit that banks keep only a fraction of their deposits on hand. Indeed, the article puts it this way:

"Very little of this money (from savings and checking accounts) is kept in the bank's vault, however. While the Federal Reserve requires banks to keep a specified percentage of customer deposits on hand to meet routine withdrawals, they lend the excess."

Long story short, banks do not actually have on hand the money they are "lending." And the very act of "lending" creates more money on which they base their reserve requirements to then "loan" more "money," on and on, in a circular fashion of upward-spiraling profit for them and downward-spiraling debt for you and me (unless you're a banker).

In the Fed's own example of money creation, they point out that "a bank's loans are made to its own customers and are deposited in their checking accounts." Fine and dandy, but here's the catch--when one goes into a bank and gets a loan, the bank does not give one the amount of the loan in cash or gold or anything with inherent value. They simply "approve" the loan and get you to sign a promissory note. Bingo! That's the moment the "money" is created that puts you in debt and allows them to say they have that much more in deposits so they can do the same thing all over again. BUT NO ACTUAL CASH OR ANYTHING OF REAL VALUE EVER ENTERED INTO THIS TRANSACTION (except maybe what you put up as collateral).

And that's how "money" is created by banks--we do it for them. They can't "loan" us "money" unless we agree to pay them the money over time, plus interest. So not only are the banks keeping us in debt slavery, we are essentially financing our own indebtedness. We're creating only money/profit for the banks and debt for ourselves.

The conventional wisdom is that it all balances out, but that's not really true. Let's say I agree to an auto "loan" for a $30K car. At the end of 5 years (or whatever the loan period is), my labor has created $30K for the bank that didn't previously exist before the bank "loaned" it to me. And I've paid them interest on top of that.

So conventional wisdom says that well, it's true that the bank now has the money, but you've got the car, which is equal in value to the amount of money "lent" to you. Not true--the car is worth less 5 years later than it was when I first bought it. It's no longer worth the amount of money my labor has put in the bank's coffers. In short, the bank is way ahead (thanks to my labor) and I'm still behind (thanks to their chicanery). Indeed, since only banks can create money and they only loaned me the amount of the principal, how can I pay the interest and not still always be in debt? Remember, they only created the amount I financed, not the amount it takes (i.e., interest) to make good on the debt.

Why don't banks bail themselves out--they "create money when they lend it?"

I say all that to say that it's obvious that the system is fraudulent. That's why it makes no sense to continue to prop it up--unless you're one of the people with magic powers. Then it makes perfect sense. Except that it doesn't. If, as the Fed tells us, that banks create money through lending, why don't they just make more loans and bail themselves out?

Sunday, November 16, 2008


After writing the post below, I thought about what Kashkari said some more. He said that helping people directly wasn't feasible, but that taking taxpayer money to help banks directly was helpful for strengthening the system.

So basically what that comes down to is this bewildering, insulting, ludicrous situation:

We give the banks money to loan to us.

Does that make any sense at all? Why are we being forced to go along with this? That's how we should think of the bailout--we are giving free money to banks so they can loan money to us at interest. They get free money, we get debt.

And as Kashkari helpfully points out, we're being forced to do that to help sustain "the system," with the idea that what is good for the system is good for the people. Nothing could be further from the truth--again, we're GIVING banks money that they are supposed to then LOAN to us.

An Analogy

That's the equivalent of me saying to my friend, "Hey man, I'm hungry." So my friend says "If you'll give me an apple, I'll sell it to you." So I give him an apple which he then sells to me for a dollar. Then he says, "In a month, I'll need you to repay me an apple."

So now my friend has a dollar of my money plus he expects me to give him another apple as repayment for the apple I gave to him to sell to me because I was hungry.

I ask him why he thinks I should go along with his little scam. He says "Well, it's all for the good of the system. And hey, you got some benefit out of it--you got an apple when you were hungry. It's only fair that I should be justly compensated at a fair price for facilitating your receipt of sustenance. You see, the system works for the good of us all."

I protest, "But now I'm out a dollar and two apples while you have a dollar and will have an apple in a month. In fact, I've given you everything you now have. By what rights do you charge me for this?" And he says, "The system, the system must prevail! Questioning our free market system is not going to help you--but giving me free money sure will help one of us, i.e., me."

"The System" Uber Alles

And that's the situation we're in with this bailout--we give banks money to lend to us, and then they expect the amount of the loan plus interest yet we're not supposed to notice that the banks wouldn't even have the money to "lend" us if we hadn't given it to them.

But you see, it's for the good of "the system." And saving "the system" is what's important--saving the fortunes and homes of the people is secondary or tertiary if it ranks at all. Kashkari wants "the system" to be sustained because the system is what keeps him and his kind in silk undies and three homes.

Listening to Kashkari “walk through” the bailout procedure with Rep. Cummings, the main problem with the bailout occurred to me yet again. And that problem is this--the bailout money is being used to prop up a system that has two deficiencies: 1) the current system is unsustainable and 2) the current system is fraudulent.

That this is the main problem with the bailout occurred to me when Kashkari said the following to Cummings:

“If we went out to each of the people and businesses and communities and helped them directly the $700 billion wouldn’t go far enough. So we’re trying to take the $700 billion and stabilize the system as a whole so that credit can then flow out to everybody around the country who needs it. So it’s very hard--we’re trying to think of every day–if we have finite resources, how do we use those resources to the best possible benefit to the system as a whole, because that will help every American (at around 7:35 in the clip posted below).”

There are many problems with this statement, but let me start with the one that aggravates me the most, and that is this–we don’t need more CREDIT, we need LESS INFLATION and GOOD JOBS at LIVING WAGES. Credit is what got everyone into this mess in the first place.

And not only that, “credit” is fake money. Credit of the type Kashkari is referring to is what “creates” “money” for the banks while creating only debt for everyone else.

Why Not Help The People Directly Instead of the Banks?

Indeed, Kashkari specifically rules out helping people directly, BECAUSE THAT’S NOT HOW BANKS MAKE MONEY. Instead, Kashkari would rather help the banks directly instead of the people. That way the banks can create more inflation through fractional reserve banking and “loan” the “money” created in this way to us at interest.

What kind of crap is that? People say “please help us” and Kashkari says, “I won’t help you but I’ll help your bank ‘help’ you.” Since when has a bank helped anyone do anything but go into debt?

The $700 billion Is Not the Sum Total of the Bailout

Kashkari would have us believe that the bailout funds total only $700 billion, when the final bailout bill actually had a price tag of $850 billion and we know that the Federal Reserve gave away $2 trillion in bailout money and then told Congress that Congress isn’t allowed to know where that money went.

The idea that the money supply is finite is insane–the money is issued out of nothing. It’s fake, it doesn’t even exist. It’s unlimited, it’s infinite.

In fact, here's a great summary of how the fake money is created from David Icke (the whole article is great; below is just a taste):

"This is how 'they' control governments, businesses and the general population, by creating enormous debt.

Vital to this has been to allow bankers to lend money they do not have. It works like this. If you or me have a million pounds, we can lend a million pounds. Very simple. But if a bank has a million pounds it can lend ten times that and more, and charge interest on it.

If even a fraction of the people who theoretically have 'money' deposited in the banks went today to remove it, the banks would slam the doors in half an hour because they do not have it. Money in the bank is a myth, another confidence trick.

If you go into a bank and ask for a loan, the bank does not print a single new note nor mint a single new coin. It merely types the amount of the loan into your account. From that moment you are paying interest to the bank on what is no more than figures typed on a screen. However, if you fail to pay back that non-existent loan, "they" using "they're" own made-up laws - which are illegal, according to God - will come along and take your wealth that does exist, your home, land, car, and possessions, to the estimated value of whatever figure was typed onto that screen."

Read that last paragraph again and then think about the homeowners on the Mississippi Gulf Coast who are still making mortgage payments, even on houses that were swept out to sea by Katrina on August 29, 2005. I heard a BBC story just yesterday about this--these homeowners are paying interest on nonexistent money (see above--read it multiple times if it doesn't make sense at first) to "pay back" a "loan" on a house that doesn't exist. And they're trapped in the debt--they can't sell or rent the house; they can only go into more debt rebuilding (because insurance won't pay) or have their wages garnished or their credit ruined through foreclosure or other judgments if they just stop paying the mortgage.