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This spooky graphic adorns the cover of Ellen Brown’s 2007 book “The Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free” (Third Millennium Press), a very well-written and informative book about money, the money supply, and banking. Even those that already understand what money is and how it is created can learn much from this book.
In her 3/3/09 Review of “The Web of Debt” for ChrisMartenson.com, Ann Tulintseff writes:
If there is one book, one newspaper, one blog, one article, that one should read to understand the current economic crisis, to understand the root of the problem, and to understand its solution, it is The Web of Debt: The Shocking Truth About Our Monetary System and How We Can Break Free, by Ellen Hodgson Brown. Brown began writing Web of Debt, six years ago, and, while some are surprised at the current national and world economic crisis, others, including Brown, had seen it coming.
In Web of Debt, Brown explains our current debt-based private banking monetary system and its history, and the ominous role the private bankers have played in shaping national and world events for their own benefit, amassing great wealth and power, and the myth of the free market and the current events on Wall Street, all with fascinating, highly referenced, and understandable detail. She explains that much of history has been a struggle between the public interest and private banks, connecting the dots with a tale of intrigue that leaves the reader enlightened with how the world really works.
Brown explains that the current financial crisis is an end of a 300-year Ponzi scheme known as Fractional Reserve Banking run by the private banks, including the Federal Reserve. She further states that this is an opportune time to change the system now that it is collapsing — to a system where the people, i.e., Congress, take back the constitutional authority to create money (currently residing unconstitutionally in the hands of private bankers) for the good of the people, with the possibility of funding the government with fees and reasonable profits from public banking in lieu of the income tax.
Many of us don’t typically think of money as debt, even though that’s all any medium of exchange really is – a system of IOU’s. Regardless, many or most of us have generally assumed that banks make loans out of their own deposits, so it is stunning to learn the extent to which banks are permitted create money out of thin air and then accumulate wealth charging interest on it. It’s an open secret, but people in modern times have rarely learned or talked about the implications of our private banking system.
Brown discusses in considerable detail the pitfalls in this privately owned monetary system, including the problem of interest. As Tulintseff puts it:
Since bank lending is essentially the only source of new money in the system, someone somewhere must continually be taking out new loans just to create enough money (or credit) to service the old loans composing the money supply. Thus, the private bankers system of debt-based money requires a continuous inflationary cycle of loans to increase the money supply to pay the interest.
Simply put, our economy (and the world economy) depends on a continuous generation of new debt. Brown argues, as well, that this debt dependency is behind the growth of federal debt since 1979. I have questions about that theory: The U.S. economy flourished with a money supply generated by private debt after WW II up to the 1970s, while WWII debt was being paid off. Even so, paying down the federal debt today, with the huge income and wealth inequality that exists, will be precarious, and maybe impossible, without reviving the middle class whose demise lies behind the accumulation of $14 trillion of new federal debt over the last 30 years.
That’s merely an offering of food for thought, for there is much to think about on this topic. My purpose in this post is to post this 45-minute video:
This extremely well-produced and succinctly-narrated documentary explains the modern banking system in clear, understandable terms. Ellen Brown’s more detailed discussion is fabulous, but I recommend that everyone watch this video. It’s really not going to be possible to fully understand the inequality problem and the current recession/depression without thinking about banking and the money supply. We need to be concerned about much more than reining in investment banking’s speculative excesses: We must also come to grips with the looming problem of the exponential growth of debt interest.
Put on your thinking caps: As Ed Schultz would say, “Let’s get to work!”
JMH – 2/7/12
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