ibox/material/edit: from pg. 35 In Australia, the Commonwealth Bank was set up in 1912 with assets totalling $20,000. By 1984, its assets had reached $30,496,000,000. The Australian Institute for Economic Democracy commented;
In monetising the real wealth of Australia (i.e. creating its monetary equivalent) the banks have issued the money as debt and so aquired assets equal to about one third of the entire wealth of Australia... Does it not strike you as preposterous that an institute that produces nothing more than figures in books, can aquired the ownership of assets more vast than our greatest industries which employ thousands of people in all states, and upon whose physical production the entire economy of Australia depends?
However, the most powerful and forthright warning ever made concerning banking is that offered by Lord Josiah Stamp, former director of the Bank of England.
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 with the power to create credit, and with the stroke of a pen they will create enough money to buy it back again... If you want to be slaves to the bankers, and pay the cost of your own slavery, then let the banks create money. ________________________________
pg. 256 All that the past 300 years have achieved is to institutionalise and slightly stabilise the debt creation of money, introducing practices and institutions which iron out the worst fluctuations in the inevitable cycles resulting from debt. But despite numerous such changes, the principle of the system is unaltered, and the power, which has always rested with bankers and governments, has not been reduced but considerably increased, whilst the independence of the people has declined.
The fact is, our current civilisation has grown out of virtual slavery and mass exploitation, and has not changed a bit, except some of its slaves are better cared for. And if our modern age shows signs of decadence, cruelty and ignorance, we need only remember the victimisation and neglect of the past when, abiding by the rule of money, men were thrown into detor's gaol because of an unstable financial system, families were left to starve whilst food rotted, children were locked into workhouses or taken for slaves and men were hanged for poaching a rabbit. And if anyone believes modern times do not deserve such a parallel, the conduct of commercial interests in the third world should serve to correct such illusions. ____________________________________
Jan 2000 info: It is time to ask searching questions about the near total reliance of modern economies upon banking. Getting the right answers can sometimes be difficult. But not asking the right questions in the first place can be a disaster. The industrialised economies are trying desperately to break the cycle of boom and bust and the Asian Tigers are counting what is left after the crash. But no-one is pointing out that modern economies are rendered inherently unstable by a financial system based almost entirely upon lending.
The exposure of industrialised nations to the banking system is no less great than that of the poorer nations, and the risk of collapse just as possible. The debts registered against the wealthy nations and their citizens speak for themselves. In the UK outstanding mortgage debts total £420 billion, commercial debts £380 billion and the National Debt stands at £400 billion. In the USA, mortgages currently in excess of $4.2 trillion and a national debt of $5 trillion make one wonder why the wealthier a nation becomes, the more its financial accounts deteriorate.
The answer to this conundrum is easy. Under the current financial system, debt is used to create money. Bank of England statistics show that a staggering 97% of the entire UK money stock consists of bank money created by the action of lending to borrowers. Government created currency the notes and coins (MO) at 3% of the money stock, is now so trivial that the entire economy functions on money created by bank lending. Globally, over 90% of all money is created by the banking system.
The ability of lending institutions to create a vast circulating money stock of bank credit is well understood by economists. In most peoples' minds, money is still the stuff you jingle in your pocket. However, most money today consists simply of numbers relayed between bank accounts via computer systems, and created out of thin air every time a loan is made.
The problem with a bank-based money supply is this: When a bank makes a loan, a debt is created as well as a credit. So with the £680 billion of bank credit now lubricating the UK economy goes £680 billion of debt in the form of mortgages, overdrafts, commercial loans and other debts.
.... In the end, this has to be part of the answer. And as Bryan Gould points out, the questions addressed are fundamental political issues, not just a matter of economics. Why should a nation's people and its commerce drift ever deeper into debt simply to create their medium of exchange? Why should a government the one institution with the constitutional authority to create money delegate this responsibility and power entirely to banks, and thereby oblige the nation to run on debt? These are the questions we should ask as we watch the crisis in Asia deepen and spread, perhaps along with a query as to the sanity of the bulk of our economists, who see no connection between the spiralling debt problems of the world and the way money is currently created. link to the rest of this article: http://www.prosperityuk.com/prosperity/articles/bankchaos.html
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