Money as a Debt (2006)

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MONEY AS A DEBT, by Paul Grignon

Paul Grignon's 47-minute animated presentation of "Money as Debt" tells in very simple and effective graphic terms what money is and how it is being created. It is an entertaining way to get the message out. The Cowichan Citizens Coalition and its "Duncan Initiative" received high praise from those who previewed it. I recommend it as a painless but hard-hitting educational tool and encourage the widest distribution and use by all groups concerned with the present unsustainable monetary system in Canada and the United States.


(DVD CHAPTER 1: Intro & Goldsmith’s Tale)


"We are absolutely without a permanent money system...

It is the most important subject intelligent persons can investigate and reflect upon.

It is so important that our present civilization may collapse unless it becomes widely understood and

the defects remedied very soon."

~ Robert H. Hemphill, Credit Manager

Federal Reserve Bank of Atlanta, Georgia (1935)

Moonfire Studio Logo Tag

Title 2

"Each and every time a bank makes a loan… new bank credit is created — new deposits — brand

new money."

~ Graham F. Towers, Governor, Bank of Canada, 1934-54

Title 3

"The process by which banks create money is so simple the mind is repelled."

~ John Kenneth Galbraith, Economist

Title 4

"Permit me to issue and control the money of a nation, and I care not who makes its laws."

~ Mayer Anselm Rothschild, Banker

Title 5 Money as Debt

1. Two great mysteries dominate our lives: love and money.



2. “What is love?” is a question that has been endlessly explored in stories, songs, books, movies,

and television.


3. But the same can NOT be said about the question “What is money?”

GRAPHIC TEXT 4 What is Money?

4. It’s not surprising that monetary theory hasn’t inspired any blockbuster movies. But it was not even

mentioned at the schools most of us attended. HE’LL DEMAND YOUR INTEREST

GRAPHIC TEXT 5 Coming Soon! Bank The Term Depositor MONETARY THEORY WILL


5. For most of us, the question “Where does money come from?” brings to mind a picture of the mint

printing bills and stamping coins. Money, most of us believe, is created by the government.

GRAPHIC TEXT 6 Where does money come from?

6. It ‘s true (pause) but only to a point. Those metal and paper symbols of value we usually think of as

money are, indeed, produced by an agency of the federal government called the Mint.

7. But the vast majority of money is not created by the Mint. It is created in huge amounts every day

by private corporations known as banks. (long pause)

GRAPHIC TEXT 7 loans mortgages

8. Most of us believe that banks lend out money that has been entrusted to them by depositors. Easy

to picture. But not the truth.

9. In fact, banks create the money they loan, not from the bank’s own earnings, not from money

deposited, but directly from the borrower’s promise to repay.


In return for the Lender’s agreeing to lend the Principal Amount to the Borrower, the Borrower grants

and mortgages the Land to the Lender as security for payment of the Mortgage Money and the

fulfillment of all the Borrower’s other promises and agreements as set out in this Mortgage until the

Borrower has performed all the Borrower’s obligations under This Mortgage.

Peter Pumpkineater

10. The borrower’s signature on the loan papers is an obligation to pay the bank the amount of the

loan plus interest, or, lose the house, the car, whatever asset was pledged as collateral. That’s a big

commitment from the borrower.

11. What does that same signature require of the bank? The bank gets to conjure into existence the

amount of the loan and just write it into the borrower’s account.

GRAPHIC TEXT 9 “By the Privilege of our Bank Charter The borrower’s pledge of debt

becomes the Bank’s money to lend” $ Mortgage

12. Sound far-fetched?

13. Surely that can’t be true. But it is.

14. To demonstrate how this miracle of modern banking came about consider this simple story:


a brief and broadly allegorical history of banking

Title 6 The Goldsmith’s Tale

1. Once upon various times, pretty much anything was used as money.


2. It just had to be portable and enough people had to have faith that it could later be exchanged for

things of real value like food, clothing and shelter. Shells, cocoa beans, pretty stones, even feathers

have been used as money.

3. Gold and silver were attractive, soft and easy to work with, so some cultures became expert with

these metals. Goldsmiths made trade much easier by casting coins, standardized units of these

metals whose weight and purity was certified.

4. To protect his gold the goldsmith needed a vault.

5. Soon his fellow townsmen were knocking on his door wanting to rent space to safeguard their own

coins and valuables.


6. Before long, the goldsmith was renting every shelf in his vault and earning a small income from his

vault rental business.

7. Years went by and the goldsmith made an astute observation. Depositors rarely came in to

remove their actual, physical gold, and they never all came in at once.


8. That was because the claim checks the goldsmith had written as receipts for the gold deposited,

were being traded in the marketplace as if they were the gold itself.

GRAPHIC TEXT 14 I promise to pay the bearer of this claim check 1 Ducat of gold


9. This paper money was far more convenient than heavy coins, and amounts could simply be

written, instead of laboriously counted one by one for each transaction.

GRAPHIC TEXT 15 “No more-a HEAVY bags of coins!

Get your PAPER money wallet-a!”

10. Meanwhile, the goldsmith had developed another business. He lent out his gold charging interest.

GRAPHIC TEXT 16 Ye Olde Goldsmith LOANS-R-US

11. Well, as convenient claim check money came into acceptance, borrowers began asking for their

loans in the form of these claim checks instead of the actual metal. As industry expanded more and

more people asked the goldsmith for loans.

GRAPHIC TEXT 17 $ “I’ll take it in paper please!” The Town Crier Trade & Industry Expanding

Capital Investment needed immediately! Ye Olde Goldsmith LOANS-R-US

12. This gave the goldsmith an even better idea.

13. He knew that very few of his depositors ever removed their actual gold. So, the goldsmith figured

he could easily get away with lending out claim checks against his depositors’ gold, in addition to his


GRAPHIC TEXT 18 Clerk GOLD WITHDRAWAL I promise to pay the bearer of this claim check 1

Ducat of gold Ye Olde Goldsmith REPAID

What they don’t know won’t hurt them % of my own gold % of my depositors’ gold Hmmmmm

14. As long as the loans were repaid, his depositors would be none the wiser, and no worse off. And

the goldsmith, now more banker than artisan, would make a far greater profit than he could by lending

only his own gold.

15. For years the goldsmith secretly enjoyed a good income from the interest earned on everybody

else’s deposits.

16. Now a prominent lender, he grew steadily richer than his fellow townsmen and he flaunted it.

Suspicions grew that he was spending his depositors’ money. His depositors got together and

threatened withdrawal of their gold if the goldsmith didn’t come clean about his newfound wealth.

GRAPHIC TEXT 19 Ye Olde Goldsmith LOANS-R-US

17. Contrary to what one might expect, this did not turn out to be a disaster for the goldsmith. Despite

the duplicity inherent in his scheme, his idea did work. The depositors had not lost anything. Their

gold was all safe in the goldsmith’s vault.

GRAPHIC TEXT 20 ponti martini medici

18. Rather than taking back their gold, the depositors demanded that the goldsmith, now their banker,

cut them in by paying them a share of the interest.

19. And that was the beginning of banking. The banker paid a low interest rate on deposits of other

people’s money that he then loaned out at a higher interest.

GRAPHIC TEXT 21 Ye Olde Goldsmith Bank Today’s rates: deposits 3% loans 7%


20. The difference covered the bank’s cost of operation and its profit. The logic of this system was

simple. And it seemed like a reasonable way to satisfy the demand for credit.

21. However this is NOT the way banking works today.

22. Our goldsmith/banker was not content with the income remaining after sharing the interest

earnings with his depositors.

GRAPHIC TEXT 22 Europeans Spread Across World Demand for credit growing fast.

Before after $ 20 ponti martini medici NO PEEKING

I promise to pay the bearer of this claim check 1 Ducat of gold Ye Olde Goldsmith LOANS

Loans-R-Us “oh yeah!”

23. And the demand for credit was growing fast, as Europeans spread out across the world. But his

loans were limited by the amount of gold his depositors had in his vault.

24. That’s when he got an even bolder idea. Since no one but himself knew what was actually in his

vaults he could lend out claim checks on gold that wasn’t even there!

25. As long as all the claim check holders didn’t come to the vault at the same time and demand real

gold, how would anyone find out?

26. This new scheme worked very well, and the banker became enormously wealthy on the interest

paid on gold that did not exist!

GRAPHIC TEXT 23 Goldsmith Banker “I’m-a SO-O-O-O Rich!”

27. The idea that the banker would just create money out of nothing was too outrageous to believe,

so, for a long time, the thought did not occur to people.

28. But, the power to just invent money went to the banker’s head as you can well imagine. In time,

the magnitude of the banker’s loans and his ostentatious wealth did trigger suspicions once again.

GRAPHIC TEXT 24 “No claim-a check thank you. Fill her up… the old-fashioned way”

$ I promise to pay the bearer of this claim check 1 Ducat of gold Ye Olde Goldsmith

29. Some borrowers started to demand real gold instead of paper representations. This set off


30. Suddenly, several wealthy depositors showed up to remove their gold. The game was up!

GRAPHIC TEXT 25 Goldsmith Banker CLOSED

31. A sea of claim check holders flooded the street outside the closed doors of the bank. Alas, the

banker did not have enough gold & silver to redeem all the paper he had put into their hands.

GRAPHIC TEXT 26 loan documents paper cash gold

32. This is called a “run on the bank” and is what every banker dreads.

33. This phenomenon of a “run on the bank” ruined individual banks and, not surprisingly, damaged

public confidence in all bankers.

GRAPHIC TEXT 27 Law courts Banker Jokes They are so bad!

34. It would have been straightforward to outlaw the practice of creating money from nothing.

GRAPHIC TEXT 28 “Don’t do it!”

35. But the large volumes of credit the bankers were offering had become essential to the success of

European commercial expansion.

36. So, instead, the practice was legalized and regulated.

GRAPHIC TEXT 29 LOANS Gold the Fractional Reserve System 9 to 1

37. Bankers agreed to abide by limits on the amount of fictional loan money that could be lent out.

The limit would still be a number much larger than the actual value of gold & silver in the vault. Quite

often the ratio was 9 fictional dollars to 1 actual dollar in gold.

38. These regulations were enforced by surprise inspections.

39. It was also arranged that, in the event of a run, central banks would support local banks with

emergency infusions of gold.

GRAPHIC TEXT 30 Central Bank

40. Only if there were runs on a lot of banks simultaneously would the bankers’ credit bubble burst

and the system come crashing down.


(DVD CHAPTER 2 The Money System Today)

Title 7 The Money System Today

GRAPHIC TEXT 31 1700 1800 1900 2000 $ Central Bank Gold

1. Over the years, the fractional reserve system and its integrated network of banks backed by a

central bank has become the dominant money system of the world. At the same time, the fraction of

gold backing the debt money has steadily shrunk to nothing.

GRAPHIC TEXT 32 Money used to represent VALUE Money now represents DEBT

2. The basic nature of money has changed.


central bank credit =

3. In the past, a paper dollar was actually a receipt that could be redeemed for a fixed weight of gold

or silver. In the present, a paper or digital dollar can only be redeemed for another paper or digital


GRAPHIC TEXT 34 “Take a check?” “Not a chance sonny.” Jewelry SALE

4.In the past, privately created bank credit existed only in the form of private banknotes, which

people had the choice to refuse just as we have the choice to refuse someone’s private check today.

GRAPHIC TEXT 35 “By the Privilege of our Bank Charter The borrower’s pledge of debt

becomes the Bank’s money to lend” $

5. In the present, privately created bank credit is legally convertible to government issued “fiat”

currency, the dollars, loonies and pounds we habitually think of as money. Fiat currency is money

created by government fiat, or decree, and legal tender laws declare that citizens must accept this

fiat money as payment for debt or else the courts will not enforce the obligation.


“If legal tender was offered, the court considers the debt discharged. Next.”

6. So, now the question is… if governments and banks can both just create money, then how much

money exists?



7.In the past, the total amount of money in existence was limited to the actual physical quantities of

whatever commodity was in use as money. For example, in order for new gold or silver money to be

created, more gold or silver had to be found and dug out of the ground.

GRAPHIC TEXT 38 Mortgage

In return for the Lender’s agreeing to lend the Principal Amount to the Borrower, the Borrower grants

and mortgages the Land to the Lender as security for payment of the Mortgage Money and the

fulfillment of all the Borrower’s other promises and agreements as set out in this Mortgage until the

Borrower has performed all the Borrower’s obligations under This Mortgage.

Peter Pumpkineater

8. In the present, money is literally created as debt. New money is created whenever anyone takes a

loan from a bank. As a result, the total amount of money that can be created has only one real limit -

the total level of debt.

GRAPHIC TEXT 39 CASH BACK Easy credit No money DOWN

TOTAL American Debt $5 Trillion 1957 OVER $53 Trillion 2008 Much Higher in 2009

9. Governments place an additional statutory limit on the creation of new money, by enforcing rules

known as fractional reserve requirements.

GRAPHIC TEXT 40 bank inspector LOANS “That’s your LIMIT”

Fractional Reserve Requirements Announcing: New Federal Banking Regulations

“NEW rules better than the old rules” LOANS Gold debt money: gold 9 to 1

new money: existing money

10. Essentially arbitrary, fractional reserve requirements vary from country to country and from time to

time. In the past, it was common to require banks to have at least one dollar’s worth of real gold in

the vault to back 10 dollars worth of debt money created.

11. Today, reserve requirement ratios no longer apply to the ratio of new money to gold on deposit,

but merely to the ratio of new debt money to existing debt money on deposit in the bank.

GRAPHIC TEXT 41 RESERVES Cash $ Central Bank Deposits Only

Our deposits are actually loans to the bank.

12. Today, a bank’s reserves consists of three things: the amount of government-issued cash that

the bank has in its vault, the amount of credit it has with the central bank, and the amount of already

existing debt money the bank has on deposit.

GRAPHIC TEXT 42 Grand Opening New Bank Cash $ Money 5%

Promises to pay Money 95% Central Bank

13. To illustrate this in a simple way… let’s imagine that a new bank has just started up and has no

depositors yet. Investors have paid for the bank’s infrastructure and have supplied it with sufficient

cash to meet the demand for cash withdrawals. Typically, cash in the vault will amount to no more

than one dollar for every 20 or 30 dollars that could be demanded from the bank. The bank has joined

the central bank system, which permits the new bank to borrow cash from the central bank if it’s


GRAPHIC TEXT 43 International Banking Accords require banks to have equity ownership and

saleable assets equal to 8% of credit created. Step 1 $10,000 4 SALE

New Credit Account $10,0000

14. The doors open and the new bank welcomes its first loan customer. The customer needs $10,000

to buy a car. On approval, the bank creates an account for the borrower and types in that the bank

owes the borrower $10,000. This $10,000 is not taken from anywhere. It is created on the spot. The

borrower does not take this money out in cash. Instead he writes a check on his account to buy the


GRAPHIC TEXT 44 Step 2 9:1 Commercial Bank Deposit $10,0000 $9,000 : $1,000

new loan : reserve Loan “ I will pay you back darling”

15. The seller then deposits this newly created $10,000 check at her bank.

16. At a ratio of 9:1, this new $10,000 deposit allows the seller’s bank to create a new loan of $9,000.

GRAPHIC TEXT 45 Step 3 Commercial Bank Deposit $9,000 $8100 : $900

new loan : reserve

17. And if that $9000 is then deposited by a third party, it becomes the legal basis for a third issue of

bank credit, this time for the amount of $8100.

18. Like one of those Russian dolls, each layer of which contains a smaller doll inside, each new

deposit contains the potential for a slightly smaller loan in a decreasing series.

GRAPHIC TEXT 46 New Loan of Total Money Created (number series) $

19. Now, at any stage, if the money created is taken in cash and not deposited at a bank, the process

stops. That’s the unpredictable part of the money creation mechanism.

GRAPHIC TEXT 47 $0 $10,000 $ amount of each loan Number of times money is

deposited and re-loaned TOTAL approaches $100,000 New Loan of Total Money Created

(number series) $

20. But more likely, at every step, the new bank credit money will be deposited at a bank, and the

reserve ratio process can repeat itself over and over until almost $100,000 of brand new bank credit

money has been created within the banking system.

GRAPHIC TEXT 48 New Credit Account $10,0000 $ BANKING SYSTEM

Deposits $100M Loans $90M

21. All of this new money has been created entirely from debt. And all transactions have been

carried out with bank credit. None of the banks involved have needed to use any of the cash in their



“We’ve been misled?” BANK

22. What’s more, under this ingenious system, the books of each bank in the chain must show that

the bank has 10% more on deposit than it has out on loan. This gives banks a very real incentive to

seek deposits in order to be able to make loans, supporting the general but misleading impression

that loans come out of deposits.

GRAPHIC TEXT 50 New Bank $10,000 $100,000 $ BIG BANK #1 #2 #3

23. Now, it can’t said that any one bank got to multiply the initial $10,000 of bank credit into $100,000

of bank credit. However, the banking system is a closed loop. Bank credit created at one bank

becomes a deposit in another, and so on and so on.

GRAPHIC TEXT 51 BANK 1 2 3 4 Promise net transaction = 0

New Credit Account $10,0000 THE BANKS GET TO COLLECT INTEREST ON ALMOST $100,000


24. In a theoretical world of perfectly equal exchanges, the banks would owe each other nothing at

the end of the day, and the $10,000 created out of thin air as a loan by the first bank could indeed

become almost $100,000 of new loan money in the banking system.

25. If that sounds ridiculous, try this. Actual reserve ratios can be much higher than 9:1. For some

types of accounts, twenty to one and thirty-three to one ratios are common.

GRAPHIC TEXT 52 9:1 20:1 33:1 Fractional Reserve Requirements “Sum it all up for us

willya?” BANK

26. There are also many exceptions where NO reserve requirements apply at all!

27. So…while the rules are complex the common sense reality is actually quite simple. Banks can

create as much money as we can borrow.

Title 8

"Everybody sub-consciously knows

banks do not lend money.

When you draw on your savings account,

the bank doesn’t tell you you can’t do this because it has lent the money

to somebody else."

~ Mark Mansfield, economist and author

GRAPHIC TEXT 53 Bank Credit 95% Government-created Money 5% Loan $9,000

The amount of the loan (the Principal) is created from the borrower’s promise to pay.

Principal payments “un-create” the loan, ceasing to exist as money. P


Title 9

“I am afraid that the ordinary citizen will not like to be told that banks can and do create money

...And they who control the credit of the nation direct the policy of Governments and hold in the hollow

of their hands the destiny of the people”

~ Reginald McKenna, past Chairman of the Board, Midlands Bank of England

28. Despite the endlessly presented mint footage, government-created money typically accounts for

less than 5% of the money in circulation. More than 95% of all money in existence today was created

by someone signing a pledge of indebtedness to a bank. What’s more, this bank credit money is

being created and destroyed in huge amounts every day, as new loans are made and old ones




Announcing: New Federal Banking Regulations


29. Banks can only practice this money system with the active cooperation of government.

30. First, governments pass legal tender laws to make us use the national fiat currency.

31. Secondly, governments allow private bank credit to be paid out in this government currency.

32. Thirdly, government courts enforce debts.

33. And lastly, governments pass regulations to protect the money system’s functionality and

credibility with the public while doing nothing to inform the public about where money really comes



Title 10 The Simple Truth

GRAPHIC TEXT 55 Mortgage

In return for the Lender’s agreeing to lend the Principal Amount to the Borrower, the Borrower grants

and mortgages the Land to the Lender as security for payment of the Mortgage Money and the

fulfillment of all the Borrower’s other promises and agreements as set out in this Mortgage until the

Borrower has performed all the Borrower’s obligations under This Mortgage.

Peter Pumpkineater loan agreements cash

1. The simple truth is that, when we sign on the dotted line for a so-called loan or mortgage, our

signed pledge of payment, backed by the assets we pledge to forfeit should we fail to pay, is the only

thing of real value involved in the transaction.

GRAPHIC TEXT 56 Loans & Mortgages For Sale Mortgage $

portable, exchangeable and saleable

the borrower’s promise to pay is a form of money

2. To anyone who believes we will honour our pledge, that loan agreement or mortgage is now a

portable, exchangeable, and saleable piece of paper. It’s an IOU. It represents value and is therefore

a form of money. This money the borrower exchanges for the bank’s so-called loan.

GRAPHIC TEXT 57 Real World “Can I borrow a hammer?” IOU

“That only works at the bank Dad” Money World

3. Now a loan in the real world means that the lender must have something to lend. If you need a

hammer, my loaning you a promise to provide a hammer I don’t have won’t be of much help.

4. But in the artificial world of money, a bank’s promise to pay money it doesn’t have is allowed to be

passed off as money and we accept it as such.

Title 11

“Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend,

not money, but promises to supply money they do not possess.” —Irving Fisher, economist and



New Credit Account $10,000


5. Once the borrower signs the pledge of debt, the bank then balances the transaction by creating,

with a few keystrokes on a computer, a matching debt of the bank to the borrower. From the

borrower’s point of view this becomes “loan money” in his or her account, and because the

government allows this debt of the bank to the borrower to be converted to government fiat

currency, everyone has to accept it as money.

GRAPHIC TEXT 59 Basic Truth Loan Agreement Joe Borrower

6. Again the basic truth is very simple. Without the document the borrower signed, the banker would

have nothing to lend!

GRAPHIC TEXT 60 governments corporations small businesses families Debt ?

Where does it all come from? “I ponder no longer!” loan agreements cash

8. Have you ever wondered how everyone... governments, corporations, small businesses, families

can all be in debt at the same time and for such astronomical amounts? Have you ever questioned

how there can be that much money out there to lend? Now you know. There isn’t.

Banks do not lend money. They simply create it from debt. And, as debt is potentially unlimited, so

is the supply of money.

GRAPHIC TEXT 61 Debt Money

9. And, as it turns out…the opposite situation is also true.


Title 12

No Debt, No Money


1. Isn’t it astounding, that despite the incredible wealth of resources, innovation and productivity that

surrounds us, almost all of us, from governments to companies to individuals, are heavily in debt to


2. If only people would stop and think - How can that be? How can it be that the people who actually

produce all the real wealth in the world are in debt to those who merely lend out the money that

represents the wealth?!!!


New Credit Account money = debt NO debt NO money

3. Even more amazing is that once we realize that money really is DEBT, we realize that if there

was no debt there would be no money!!!

Title 13

“That is what our money system is. If there were no debts in our money system, there wouldn’t be any

money.” ~Marriner S. Eccles, Chairman and Governor of the Federal Reserve Board


30-year mortgage “Last payment Honey!” “Yay! No more cat food” Debt



4. If this is news to you, you are not alone.

5. Most people imagine that if all debts were paid off, the state of the economy would improve. It’s

certainly true on an individual level. Just as we have more money to spend when our loan payments

are finished, we think that if everyone were out of debt, there would be more money to spend in

general. But the truth is the exact opposite. There would be no money at all!


MONEY SUPPLY 32% reduction 1929-33

6. There it is. We are totally dependent on continually renewed bank credit for there to be any money

in existence. No loans, no money - which is what happened during the Great Depression, the money

supply shrank drastically as the supply of loans dried up.

Title 14

“This is a staggering thought. We are completely dependent on the Commercial Banks. Someone has

to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic

money, we are prosperous; if not, we starve. We are, absolutely, without a permanent money system.

When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost

incredible, but there it is.”

~ Robert H. Hemphill, Credit Manager of Federal Reserve Bank, Atlanta, Georgia


Title 15 Perpetual Debt

GRAPHIC TEXT 66 “your loan” Principal Interest $ ? Overall Money Supply

1. And that’s not all. Banks create only the amount of the Principal. They don’t create the money to

pay the Interest. Where is that supposed to come from?

2. The only place borrowers can go to obtain the money to pay Interest is the general economy’s

overall money supply. But almost all that overall money supply has been created exactly the same

way –as bank credit that has to be paid back with more than was created!

GRAPHIC TEXT 67 Principal + Interest Treadmill of Perpetual Unpayable Debt Foreclosed

3. So everywhere, there are other borrowers in the same situation, frantically trying to obtain the

money they need to pay back both Principal and Interest from a total money pool which contains only


GRAPHIC TEXT 68 Principal + Interest Principal created 100% of Interest must be spent

Principal Extinguished $ interest to depositors operating expenses dividends

Profit Seeking

4. It’s clearly impossible for everyone to pay back the Principal plus the Interest unless every penny

of interest the lenders take in is recycled back to those who need this money to make their payments.

This means interest earnings must be 100% spent so that borrowers can earn these dollars

repeatedly. While much IS spent as interest to depositors, operating expenses and dividends, some

of the interest income becomes new loans at interest, or investments, creating additional demand for

money and an ultimate shortage of debt-free money available for borrowers to earn.

GRAPHIC TEXT 69 $ Principal Interest Foreclosed Soup Kitchen Kill the Banks!

Who took the money? crowd control Resumé will invent for food

5. The big problem here is that for long term loans such as mortgages and government debt, the total

Interest far exceeds the Principal, so unless a lot of extra money is created to pay the Interest, it

means a very high proportion of foreclosures, and a non-functioning economy.

GRAPHIC TEXT 70 DEBT household state & local federal corporate financial


6. To maintain a functional society the rate of foreclosure needs to be low. And so, to accomplish

this, more and more new debt money has to be created to satisfy today’s demands for money to

service the previous debt. But, of course, this just makes the total debt bigger. And that means more

interest must ultimately be paid, resulting in an ever-escalating and inescapable spiral of mounting


7. It is only the time lag between money’s creation as new loans and its repayment that keeps the

overall shortage of money from catching up and bankrupting the entire system. However, as the

banks’ insatiable credit monster gets bigger and bigger, the need to create more and more debt

money to feed it becomes increasingly urgent.

GRAPHIC TEXT 71 NEWS CAN Interest Rates GO Lower? Low, low interest rates

NO Money Down! Preferred You are invited to Apply Record Deficits!!!

Federal Debt Ballooning RED INK DEBT

8. Why are interest rates so low? Why do we get unsolicited credit cards in the mail? Why is the US

government spending faster than ever? Could it be to stave off collapse of the entire monetary


9. The rational person has to ask: Can this really go on forever? Isn’t a collapse inevitable?

Title 16

“One thing to realize about our fractional reserve banking system is that, like a child’s game of

musical chairs, as long as the music is playing, there are no losers.”

~ Andrew Gause, monetary historian The Secret World of Money, 1996


Daily Wrapup Huge Influx of Spanish Gold causes massive INFLATION

money supply volume of trade

10. Money facilitates production and trade. As the money supply increases, money just becomes

increasingly unless the volume of production and trade in the real world grows by the same amount.




11. Add to this the realization that when we hear that the economy is growing at 3% per year, it

sounds like a constant rate. But it’s not. This year’s 3% represents more real goods and services than

last year’s 3% because it’s 3% of the new total. Instead of a straight line as is naturally visualized

from the words, it is really an exponential curve getting steeper and steeper.

Title 17

“The greatest shortcoming of the human race is our inability to understand the exponential function.”

~ Albert A. Bartlett, physicist

GRAPHIC TEXT 74 money supply volume of trade resource & energy use

12. The problem, of course, is that perpetual growth of the real economy requires perpetually

escalating use of real world resources and energy. More and more stuff has to go from natural

resource to garbage every year ...forever, just to keep this system from collapsing!

Title 18

“Anyone who believes exponential growth can go on forever in a finite world is either a madman or

an economist.” —Kenneth Boulding, economist

13. What can we do about this downright scary situation?


There can be shortages of resources and skills - but why should there ever be a shortage of money?

???? 4 Simple Questions

14. For one thing, we need a very different concept of money.

15. It’s time more people asked themselves and their governments four simple questions.


Create money backed only by debt

16. Around the world, governments borrow money at interest from private banks. Government debt is

a major component of total debt and servicing that debt takes a big chunk of our taxes.

17. Now, we know that banks simply create the money they lend…

and that governments have given them permission to do this.

GRAPHIC TEXT 77 Question 1 Why do governments CHOOSE to borrow money from private

banks at interest when gov’t could create all the interest-free money it needs itself?

18. So the first question is… why do governments choose to borrow money from private banks at

interest when government could create all the interest free money it needs itself?

GRAPHIC TEXT 78 Question 2 Why create money as DEBT?

Why not create money that circulates permanently?

19. And the second big question is: why create money as debt at all? Why not create money that

circulates permanently and doesn’t have to be perpetually re-borrowed at interest in order to exist?

GRAPHIC TEXT 79 How can a money system dependent on perpetually accelerating growth…

be used to build a sustainable economy?

20. The third question: How can a money system that can only function with perpetually accelerating

growth be used to build a sustainable economy? Isn’t it logical that perpetually accelerating growth

and sustainability are incompatible?

GRAPHIC TEXT 80 What specifically needs to be changed?

21. And finally: What is it about our current system that makes it totally dependent on perpetual

growth? What needs to be changed to allow the creation of a sustainable economy?


Title 19 Usury

GRAPHIC TEXT 81 We’ll not tolerate Usurers in this Kingdom Just say NO to Usury

Holy Bible Old Testament Quran Sutras “To profit from money alone is like unto thievery”

Daily Wrapup Pope says NOPE to Charging Interest Usurers “should get a job”

Canal Street Journal

1. At one time, charging any interest on a loan was called usury and was subject to severe penalties,

including death. Every major religion forbade usury.

2. Most of the arguments made against the practice were moral. It was held that money’s only

legitimate purpose was to facilitate the exchange of real goods and services. Any form of making

money from simply having money was regarded as the act of a parasite or of a thief.

GRAPHIC TEXT 82 Ye Olde Goldsmith LOANS-R-US Interest Rates from just 8%

3. However, as the credit needs of commerce increased, the moral arguments eventually gave way to

the argument that lending involves risk and loss of opportunity to the lender and therefore attempting

to make a profit from lending is justified.

GRAPHIC TEXT 83 1700 1800 1900 2000

• Loans • Mortgages • Bonds • Stock Market trading • Currency speculation

Real Estate flipping the list goes on… $

Wall Street Journal “And… I did it all without producing one actual useful thing”

4. Today, these notions seem quaint. Today, the idea of making money from money is held as the

ideal to strive for. Why work when you can get your money to work for you?

5. However, in trying to envision a sustainable future, it is very clear that the charging of interest is

both a moral and a practical problem.

GRAPHIC TEXT 84 sustainable World Oil Supply 1950 2000 2050 Boom Bust

Solar Input • solar • wind • tidal • hydro • biomass • geothermal

Full recovery of non-renewable resources Stable Population

6. Imagine a society and economy that can endure for centuries because, instead of plundering its

capital stores of energy, it restricts itself to present day income. No more wood is harvested than

grows in the same period. All energy is renewable: solar, gravitational, geothermal, magnetic and

whatever else we discover. This society lives within the limits of its non-renewable resources by

reusing and recycling everything. And the population just replaces itself.

GRAPHIC TEXT 85 money supply real world economy $$$

ALL the money in existence No creating money as debt

7. Such a society could never function using a money system utterly dependent on perpetually

accelerating growth. A stable economy would need a money supply at least capable of remaining

stable without collapsing.

GRAPHIC TEXT 86 lending at interest $$$$ ?


Mortgage In return for the Lender’s agreeing to lend the Principal Amount to the Borrower, the

Borrower grants and mortgages the Land to the Lender as security for payment of the Mortgage

Money and the fulfillment of all the Borrower’s other promises and agreements as set out in this

Mortgage until the Borrower has performed all the Borrower’s obligations under This Mortgage.

Peter Pumpkineater FORECLOSED Taxes “Oh what’s the point?”

8. Let’s say the total volume of this stable money supply is represented by this big circle. Let’s also

imagine that moneylenders must actually have existing money to lend. If some people within this

money supply begin systematically lending money at interest, their share of the money supply will

grow. If they continually re-loan at interest all the money that gets paid back, what’s the inevitable


9. Whether it’s gold, fiat or debt money doesn’t matter. The moneylenders will end up with ALL the

money! And after the foreclosures and bankruptcies are all filed, they’ll get all the real property too!

10. Only if the proceeds of lending at interest were evenly distributed among the population would this

central problem be solved. Heavy taxation of bank profits might accomplish this goal. But then why

would banks want to be in business?

GRAPHIC TEXT 87 Principal + Interest $$$$$$ FORECLOSED

Treadmill of Perpetual Unpayable Debt

“So simple !” Gov’t announces interest-free loans for municipalities

11. If we were ever able to free ourselves of the current situation, we could imagine banking run as a

non-profit service to society, disbursing its interest earnings as a universal citizen dividend, or lending

without charging interest at all.

Title 20

“I have never yet had anyone who could, through the use of logic and reason, justify the Federal

Government borrowing the use of its own money... I believe the time will come when people will

demand that this be changed. I believe the time will come in this country when they will actually

blame you and me and everyone else connected with the Congress for sitting idly by and permitting

such an idiotic system to continue.”

~ Wright Patman, Congressman (1928-1975) Chair of House Banking Committee (1963-1975)


Title 21 Changing the System

GRAPHIC TEXT 88 The Credit Machine $

Strangely, no matter how I adjust it, it always does the same thing!

1. If it is the fundamental nature of the system that causes the problems, tinkering with the system

cannot ever solve those problems. The system itself must be replaced.


2. Many monetary critics call for a return to gold-based money, claiming that gold has a long history of

reliability. They ignore the many scams that can be played with gold: shaving coins, debasing the

metal, cornering the market, all of which were abundantly practiced in ancient Rome, and contributed

to its fall.

3. Some advocate silver, it being more abundant than gold and therefore more difficult to corner.

GRAPHIC TEXT 90 Commodity Money • distorts the value of the commodity • is easily stolen

• supply cannot be controlled beneficially paper digital plastic

JANE DOE 666 Lucifer St. New World Order Compound #33 licensed to spend

credit history on infostrip “Have a nice day”

“They still fall for it “ “Air today… gone tomorrow”

4. Many question the need to bring back precious metals at all. No one wants to go back to carrying

heavy sacks of coins to go shopping. It’s a certainty that paper, digital, plastic or more likely biometric

ID money would be the real medium of trade with the same potential for creating unlimited debt

money we have now. Beyond that, if gold again became the sole legal basis of money, those who

have no gold would suddenly have no money!

GRAPHIC TEXT 91 Gov’t & Corporate Dishonesty Stretching Imagination $


5. Other monetary reform advocates have concluded that greed and dishonesty are the main

problems, and that there may be better ways to create an honest and equitable money system than

returning to silver or gold.

GRAPHIC TEXT 92 Local Exchange Trading System LETS INTEREST


The LETSystem Design Manual LetsEurope.Info DEBT

6. Inventive minds have proposed a variety of alternate ways to create money. Many private barter

systems create money as debt much as banks do, but it is done openly and without charging

interest. An example is a barter system in which debt is expressed as pledges of hours of work, all

work being valued equally at a dollar figure that then allows hours to be equated with the dollar price

of goods.

GRAPHIC TEXT 93 Electoral Reform Monetary Reform

$ Interest Principal Banks

7. This kind of money system can be set up by anyone who can devise a way to do the accounting

and find willing and trustworthy participants. Setting up a local barter money system, even if it were

little used now, would be prudent emergency planning for any community.

8. Monetary reform, like electoral reform, is a big topic, and one that requires a willingness to change

and to think outside the box. Monetary reform, again, like electoral reform will not come easily

because the enormously powerful interests that benefit from the existing system will do their utmost to

maintain their advantage.

GRAPHIC TEXT 94 Money is an IDEA • symbolic • commodity • receipt for commodity

• bogus receipt • fiat (gov’t cash) • debt (bank credit) • debt (pledge)

Tally Stick System Colonial Scrip “We must put a stop to this!”

“This interest-free currency must be destroyed” “If people catch on…”

“We will be OUT OF BUSINESS!”

9. Now that we have seen that money is just an idea and that, in reality, money can be whatever we

make it; here is one very simple alternative monetary concept to consider. This model is based on

systems that have worked in the past, in England, and America, systems that were undermined and

destroyed by the goldsmith-bankers and their fractional reserve system.

GRAPHIC TEXT 95 Permanent Interest-Free Money Museum

Banker’s Magic Hat (now extinct) Public Market Opening Soon Public Market NOW OPEN

10. To create an economy based on permanent, interest free money, money could simply be created

and spent into the economy by the government, preferably on long-lasting infrastructure that

facilitates the economy, such as roads, railroads, bridges, harbours, and public markets.


11. This money would not be created as debt. It would be created as value, that value being in

the form of whatever it was spent on. If this new money facilitated a proportional increase in trade

requiring its use, it would cause no inflation whatsoever.

GRAPHIC TEXT 97 Buying Power $ Reduction of

INFLATION = TAX Shrinks Minus 20% Right now we have both inflation AND taxes!!

Tooo much!

12. If government spending did cause inflation, there would be two courses of action available.

13. Inflation is equivalent in effect to a flat tax on money. Whether the money goes down in value

20% or the government takes 20% of our money away from us, the effect on our buying power is the

same. Viewed this way, inflation in place of taxation might be politically acceptable if well spent and

kept within limits.

GRAPHIC TEXT 98 NEWS Gov’t Budget predicted to cause 8% INFLATION


…raises Sales Tax to 12% Wages & Prices show signs of decline

Nicely timed before ELECTION “Oh man… how hard is that?”

14. Or, government could choose to counter inflation by collecting tax monies that it then takes out of

use, thus reducing the money supply and restoring its value.

15. To control deflation, which is the phenomenon of falling wages and prices, the government would

simply spend more money into existence.

GRAPHIC TEXT 99 Banker’s Magic Hat (now extinct) Museum $$$

+ Money added through gov’t spending - Money removed through taxation

“This government is to blame!” “We caused half the inflation your party did”

“But we got BETTER VALUE for it!”

16. With no competing private debt money creation, governments would have more effective control

of their nation’s money supply. The public would know whom to blame if things went wrong.

Governments would rise and fall on their ability to preserve the value of money.

GRAPHIC TEXT 100 Wheels of Gov’t FUEL Tax Revenue Interest

Medical Facilities Road Renewal Bridges Sewage Treatment Rec Centers

Emergency Shelters Subsidized Housing Daycare

No more interest payments Gov’t Debt (now extinct) Museum

17. Government would operate primarily on taxes as it does now, but tax money would go much,

much further as none of it would be required to pay interest to private bankers. There could be no

national debt if the federal government simply created the money it needed. Our perpetual collective

servitude to the banks through interest payments on government debt would be impossible.

Title 22

“Money is a new form of slavery, and distinguishable from the old simply by the fact that it is

impersonal—that there is no human relation between master and slave.” ~ Leo Tolstoy


Title 23 The Invisible Power

Title 24

“None are more enslaved than those who falsely believe they are free.” ~ Goethe


NO LOANS NO MONEY INDUSTRY A B $$$$ direction of Society

1. What we have been taught to believe is democracy and freedom has become,

in reality, an ingenious and invisible form of economic dictatorship. As long as our entire society

remains utterly dependent on bank credit for its supply of money, bankers will be in the position to

make the decisions on who gets the money they need and who doesn’t.

Title 25

“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 with the flick of the pen they will create enough

money to buy it back again...

Take this great power away from them and all great fortunes like mine will disappear, and they ought

to disappear, for then this would be a better and happier world to live in. But if you want to continue to

be slaves of the banks and pay the cost of your own slavery, then let bankers continue to create

money and control credit’.”

~ Sir Josiah Stamp Director, Bank of England 1928-1941

(reputed to be the 2nd richest man in Britain at the time)

GRAPHIC TEXT 102 What was the question again? Central Bank

depressions inflations bank panics war infiltration media control mass deception

assassination “education” Anonymity is essential

2. Few people are aware today that the history of the United States since the Revolution in 1776 has

been, in large part, the story of an epic struggle to get free and stay free of control by the European

international banks. This struggle was finally lost in 1913, when President Woodrow Wilson signed

into effect the Federal Reserve Act, putting the international banking cartel in charge of creating

America’s money.

Title 26

"Throughout the ages,the devices of cunning men have turned money to their nefarious purposes.

Money, beginning with private enterprise as a means of escaping the limitation of barter, soon

developed the cheat to exploit the honest trader who, in an effort to protect himself, turned to

government for protection, only to find that now he had two thieves, the private money changer

and the political plunderer working hand in glove against him. By this combination the money changer

gained the prestige of political sanction through legislative license and the state secured a deceptive

device for laying taxes upon the citizenry (by means of the hidden tax called inflation). It was and

remains a vicious alliance." ~ E.C. Reigel (1879-1953) monetary theorist & consumer advocate

GRAPHIC TEXT 102 Debt government corporate household


NEWS “and not ONE word about it on TV… EVER!”

3. The power of this system is deeply ingrained. So is the educational and media silence on the



“Yer steppin’ on the carrots”

4. Years ago, a Canadian Deputy Prime Minister informally surveyed scores of non-economists, both

highly educated professionals and common sense people on the street and found that not one of

them had an accurate understanding of how money is created. In fact it’s probably safe to say that

most people, including the front line employees of banks, have never given the matter a moment’s


5. Have you?

Title 27

“All of the perplexities, confusion, and distress in America arises, not from the defects of the

Constitution or Confederation, not from want of honor or virtue, so much as from downright ignorance

of the nature of coin, credit, and circulation.”

~ John Adams, Founding Father of the American Constitution

GRAPHIC TEXT 104 Bank of England 1694 2:1 LOANS Debt money owed money created

? “that’s the way it happened” “just grew like Topsy” “lucky for us”

SECRET ORDER OF THE VERY SPECIAL Making things “happen” since 1776


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