6139008-History-of-Money

the real economy to be maintained decade after decade and century after century at its full employment potential withoutrecurring inflation and recession. By this standard, a financial system that creates money only through the creation ofdebt is inherently unsustainable. When a bank makes a loan, the principal amount of the loan is added to the borrower'sbank balance. The borrower, however, has promised to repay the loan plus interest even though the loan has created onlythe amount of money required to repay the principal-but not the amount of the interest. Therefore unless indebtednesscontinually grows it is impossible for all loans to be repaid as they come due. Furthermore, during the life of a loan someof the money will be saved and re-lent by individual bond purchasers, by savings banks, insurance companies etc. Theseloans do not create new money, but they do create debt. While we use only one mechanism-bank loans-to create money,we use several mechanisms to create debt, thus making it inevitable that debt will grow faster than the money with whichto pay it. Recurring cycles of inflation, recession, and depression are a nearly inevitable consequence. If, in the attempt toarrest the price inflation resulting from an excessive rate of debt formation, the monetary authorities raise the rate ofinterest, the result is likely to be a financial panic. This in turn may result in a sharp cutback in borrowing. Monetaryauthorities respond to bail out the system by increasing bank reserves. Governments may also respond by increasing thepublic debt-risking both inflation and growing government deficits. Let's keep something in mind while reading this folks,increasing the money supply is not in and of itself a bad thing. However, the way the Fed does it is ridiculous. First of allevery dollar introduced into the economy is based on debt! New money cannot be created unless new debt is created.Second of all, the Fed year after year increases the money supply greater than the output of the economy. Let's say theeconomy grows by 3% in one year. The money supply should then grow by 3% in order to not have deflation. Does thegovernment increase the money supply by 3%? Nope, it increases the money supply by 4-6%. That extra 1-3% is moneythat comes right out of your monetary assets’ purchasing power, a hidden tax. This is why there has been a total of1500% inflation since the Federal Reserve was established in 1913. Keep in mind this is LONG TERM inflation I amtalking about. Not short term inflation, which can be caused by market forces. I think short term inflation is asmokescreen for the cause of long term inflation as they can easily be confused by the common man.Laurence Ball, assistant professor of economics at Princeton University and a visiting scholar in the ResearchDepartment of the Philadelphia Fed: “While economists disagree about many issues, there is near unanimity aboutthis one: continuing inflation occurs when the rate of growth of the money supply consistently exceeds the rate of growthof output (of the economy)”. From: What causes inflation? (http://www.econ.ohio-state.edu/hineline/econ520/ball.pdf).Money loses its value when it is created and put into circulation (spent) faster than the growth in productivity in the localeconomy (versus just being created and held as a reserve).Churchill to Lord Robert Boothby: "Germany's unforgivable crime before the second World war," Churchill said," washer attempt to extricate her economic power from the World's trading system and to create her own exchange mechanismwhich would deny World finance its opportunity to profit.", quoted in the Foreword, 2nd Ed. Sydney Rogerson, Propagandain the Next War 2001, orig. 1938. [A bit like what Iran will be doing soon with its bourse]A few pence lent out at usury some twenty centuries ago would amount now, at compound interest, to more wealth thanthere is in the whole World, which is a sufficient proof that usury is unjust and, as a permanent trade method, impossible.The large proportion of usurious payments which are now being made on account of the impersonal and indirect characterof nearly all transactions, is beginning to lay such a burden upon the World as a whole that there is danger of abreakdown as the loans were made for unproductive purposes (such as wars) and created no new wealth. If you keep ontaking wealth as though from an increase, when really there is no increase out of which that wealth can come, the processmust sooner or later, come to an end. It is as though you were to claim a hundred bushels of apples every year from anorchard after the orchard had ceased to bear, or as though you were to claim a daily supply of water from a spring whichhad dried up. The man who would have to pay the apples would have to get them as best he could, but by the time theclaim was being made on all the orchards of the World, by the time that usury was asking a million bushels of apples ayear, though only half a million were being produced, there would be a jam. The interest would not be forthcoming, andthe machinery for collecting it would stop working. Long before it actually stopped of course, people would find increasingdifficulty in getting their interest and increasing trouble would appear in all the commercial World.Now that is exactly what is beginning to happen after about two centuries of usury and one century of unrestricted usury.So far we have got out of it by all manner of makeshifts. Those who have borrowed the money and have promised to pay,say, 5 per cent., are allowed to change and to pay only 2.5 per cent. Or, by the process of debasing currency, which Idescribed earlier in this book, the value of the money is changed, so that a man who has been set down to pay, say, ahundred sheep a year, is really only paying 30 or 50 sheep a year. A more drastic method is the method of writing offloans altogether simply saying: "I simply cannot get my interest, so I must stop asking for it." That is what happens whena Government goes bankrupt, as the Government of Germany had done. If you look at the usury created by the GreatWar (1914), you will see this kind of thing going on all sides. The Governments that were fighting borrowed money fromindividuals and promised to pay interest upon it. Most of that money was not used productively: It was used for buyingwheat and metal, and machinery and the rest, but the wheat was not used to feed workmen who were producing morewealth. It was used to feed soldiers who were producing no wealth, and so were the ships and the metal and themachinery, etc. Therefore when the individuals who had lent the money began collecting from the Government interestupon what they had lent they were asking every year for wealth which simply was not there, and the Governments havegot out of their promise to pay a usurious interest in all sorts of ways - some by repudiating, that is, saying that theywould not pay (the Russians have done that), others by debasing currency in various degrees. The English Governmenthas cut down what it promised to pay to about half, and by taxing this it has further reduced it to rather less than a third.The French Government, by inflation and by taxation have reduced it much more - to less than a fourth, or perhaps moreThe Hidden History Of Money & New World Order Usury Secrets Revealed at last! Page 96