"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight 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 control credit, and with the flick of a pen, they will create enough money to buy it back again. Take this great power away from the bankers and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a better and happier world to live in. But if you want to continue the slaves of bankers and pay the cost of your own slavery, let them continue to create money and to control credit."
- Sir Josiah Stamp, Director and President of the Bank of England during the 1920's
The following are notes from a talk given by David Ealing in 2005.
(Diagram of model not yet included.)
For the next few minutes I would ask you to suspend everything you think is true about our economy and our money. I’m sure most of you think that our economy and the money circulating within it, along with the world’s resources are tools used to create wealth. You are about to see that under our present monetary system the world’s resources play no part in “wealth creation”. Our economy and the dollars that seem to fire its growth are really a sophisticated debt creation mechanism. This mechanism is known as the Private Debt Money System. What that simply means is that all the money that circulates within our society has been borrowed by some entity from a private Bank.
There are no dollars circulating within our society that were not borrowed. A person, corporation, organization or government borrowed every dollar you have ever had or still have in your possession, and they borrowed it from a private bank. And every one of these dollars had or has an interest charge placed against it. It is the effect of the interest on our economy that we’ve not understood. We must come to understand that as long as any interest in placed on money, debt will be the result.
What you are about to see will graphically illustrated that result in its simplest form. You’ll see what the private banks don’t want you to see. You’ll see that as long as all the money in circulation is borrowed from private banks and interest is placed on that money it will be forever mathematically impossible to repay all the loans. Debt must be and is the result. And it’s the debt that the private banks want to grow because our indebtedness to them is what gives them control over our lives.
Private banks are debt farmers. They cultivate, fertilize, nurture and then reap the benefit of our indebtedness to them. They are the most successful farmers this world has ever seen.
Using our model (show model) we will demonstrate the truth of the above statements. For the sake of argument, let’s say that you borrowed one hundred twenty thousand dollars ($120,000) from a private bank for one year, and that the interest charged on these borrowed funds is ten percent (10%). That would mean that the monthly payment toward the principal would be ten thousand dollars ($10,000) and the interest due on these borrowed funds would be one thousand dollars ($1,000) per month. The total payment due each month would equal eleven thousand dollars.
Our model represents the original loan or the money available to you at any one time. It has been divided into twelve parts to represent the twelve monthly payments. Keep in mind that this larger section represents all the money that was borrowed and because of that simple and overlooked fact, it contains just enough money to repay all the principal of the loan, no more, and no less. (Unless of course if some money gets lost, burned or otherwise destroyed. When that happens the banks win yet again.) The smaller red section above the first represents the interest charges due each month.
To make the first payment you will have to take the first of the twelve payments of ten thousand dollars ($10,000) and return it to the bank. The green area that now appears will represent the portion of the loan that you have successfully repaid.
Along with the principal payment you need to also submit one thousand dollars ($1,000) to cover the interest payment. Let’s take that amount from the bottom section. The red area that now appears represents the interest paid and incidentally, it also represents the amount of your future debt to the bank. (By the end of this demonstration you will understand why the global debt equals the interest charged on all the global loans.) The banks cultivated debt has germinated with your first payment.
Our model shows that even as the first payment is made, the total amount of money you need to pay off the original loan is no longer available. Just one month into the repayment plan and already you are in trouble. You have paid one thousand dollars ($1,000) in interest charges, you are one thousand dollars short in fulfilling your obligation to the bank and you are one thousand dollars ($1,000) in debt.
This also holds true of our world economy today. By using some of the borrowed money (the only money there is) to pay the interest on the existing loans, there is never enough money left in circulation to pay the principal on all the loans. Under the Private Debt Money System we are forced to constantly borrow more money and increase our indebtedness to the private banks.
As you continue this process month by month we will see that after ten months you will be left with only ten thousand dollars ($10,000). One hundred thousand dollars ($100,000) has been used toward repaying the original loan and ten thousand dollars ($10,000) has been given toward the interest charges. You now need twenty two thousand dollars ($22,000) to complete your obligation to the private bank. You are twelve thousand dollars ($12,000) short.
On the eleventh month the private bank will demand that the interest charges be paid first. Study this long enough and you will start to see why the private banks say, “If you can’t make a full payment just pay the interest. As you are now seeing, it’s paying the interest that grows the debt for them. It grows the debt by reducing the money available to repay the principal. It forces us to borrow more, thereby increasing the debt. Insidious!
Now to continue, on the eleventh month after making the interest payment of one thousand dollars ($1,000) you can repay only nine thousand dollars ($9,000) of the principal. That adds one thousand dollars ($1,000) to the overall debt. The debt has now reached twelve thousand dollars ($12,000)!
The last month is in a class by itself. With no money left to repay the loan or to pay the interest due your total debt to the private bank now rises to twenty three thousand dollars ($23,000)!
You may say that this model represents just one loan and that in our society we can “earn” a profit from our commerce that will enable us to not only pay the interest but also to create a profit. On the surface it does appear that way but as we have been told many times, “Appearances can be deceiving.”
In order that you see through these appearances you must keep in mind that every dollar in our society was borrowed. And, as part of a loan from a private bank is subject to the process our model outlined. Every loan ends in debt! It does not matter how many loans there are or how they overlap each other or even the amount; every loan ends in debt! The very basic math we learned in elementary school taught us that two negatives always equal a negative. As every one of the billions of loans taken out from private banks end in a negative, how can anything but a negative debt be the result.
I want to say, “Take a deep breath, sit up straight and pay attention, because these next few statements contain everything that will lead you to the truth of the Private Debt Money System. Attempt to answer the following questions and you will see that the only “reward” offered to us by the private banks is debt, while their reward is total control over our lives. Simply put, it’s not a fair trade.
How can a world without poverty become a reality if debt results from every loan? It does not matter how many loans there are or how big or small they are, they all result in debt or a negative. How can we ever end with a positive when all the figures we add are negative? How can wealth and the abundance it seems to create be everybody’s, when to have wealth we must pass debt (read poverty) onto others?
In the world today it’s almost impossible to determine that this is really what’s happening. This is because the number of loans and the amount of money they represent are in constant flux. But the model you have just seen can be used with them all, no matter the number, no matter the amount, as long as interest is charged, each loan guarantees that the global debt grows.
On the surface our economy appears to create wealth because there are many wealthy people that the private banks tout as proof that their Private Debt Money System works. But the wealth these people hold comes at a steep price. A price that they would probably be repelled at if they were to ever see it. Pay attention Bill Gates, Donald Trump, Bob Geldof, Bono, Oprah, Mr. Bush, Mr. Martin, Jim Pattison and others. And yes, even you too Mr. Michael Moore. The Private Debt Money System demands that others experience poverty so that you can have your wealth. Many must lose for you to win.
The above is not meant to point to the very wealthy as the cause of poverty in the world. The insidiousness nature of the Private Debt Money System makes us all responsible. Even as we live pay check to pay check we are responsible. The amount of “equity” we have built up during our lives just determines the amount of our contribution to poverty. The very wealthy have just contributed a little more that’s all.
All loans lead to debt. All money has been borrowed therefore all money leads to debt. Someone borrowed the abundance the wealthy have been able to amass. While they hold this “wealth” these loans cannot be repaid. The private banks love that the rich have amassed this “wealth”. For as long as they have it in their possession it cannot be repaid. Plus, the private banks demand the interest on it each month. The rich never have to pay that interest because they never borrowed it. But someone does have to pay it. And in this world of abundance twenty thousand children a day are paying for it with their lives.
Think of this. Every time you take a breath, whether you’re awake or asleep, somewhere in this world, one child stops breathing – forever. Think of this as you concentrate on your breath for one minute.
Please try to understand that under the Private Debt Money System it is the interest that creates all the debt. That’s why the banks say, “It’s not the principal that’s important, it’s the interest.”
THE INSIDIOUS COIN will help you understand that the money the banks lend is never an asset. It is not an asset when you get it and once you pay it back you are left with more debt. All bank notes represent a debt and as such they are better known as debt notes. Each bank note should have a big IOU stamped on it. That way we would at least know it for what it is – a debt.
THE INSIDIOUS COIN will also inform you of the Public Credit Money System. The first American Colonies used it, Abraham Lincoln used it, and John F. Kennedy used it.
If it is a struggle for you to understand these money systems, please struggle until you understand. It is the only struggle that this world offers that is worth the maximum effort. The lives of over twenty thousand children a day are depending on your understanding. And once you understand these systems the children and all who are experiencing poverty need your action in demanding our Canadian Government put some starch in their spines and rescind the Bank Act, and then, with the strongest resolve, implement a form of the Public Credit Money System. In whatever country you reside this is the most important change you can ask your government to implement.
Let me leave you with a metaphor.
A gardener has planted a wonderful and varied garden. But into this garden a weed has taken root. This weed takes on the appearance of a beneficial agent while sucking all the nutrients out of every other plant in the garden. At first, the gardener puts effort into cultivating this new plant because he believes that it is a benefit. But, as he begins to see that this new plant is an insidious weed that destroys everything he has worked so hard to produce, his efforts change to removing every tiny fragment of it from his garden. He realises that it is only by doing this that his wonderful garden will begin to produce the abundance of which it is capable.
Each and every one of us is that gardener. In our lives we have expended great effort to grow an abundant garden that will nurture our families. Many have dreamed of their own little business only to see it vanish under a load of debt. Many of us just wanted a good job that would assure us a regular income that would allow us to live in simple dignity. And many of us have seen that job gone with the wind of cutbacks and downsizing that was driven by debt. And we all see the same debt increase our taxes each and every year, leaving us with less and less. The weed that has drained the goodness from all our lives is called “interest”. We must all be resolved to ridding this world – our garden – of this insidious weed.
Please join with us as we join with many others who have already recognised this weed.
Thank you.
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Comments to the author are welcomed.
david.ealing@gmail.com
" Funny Money" Paul Hellyer