Debt Based Money: The Scheme that Transfers Wealth to the Banks and Systematically Devalues the Currency Held By the People

29 Nov

This piece does a fairly good, cloean job of explaining the root of the problem with debt based montary systems… Unpayable, unsustainable and never ending debt for the people, wealth for the private bankers…

Guest Post: Musing Of A Bank Run

from zero hedge | on a long enough timeline, the survival rate for … by Tyler Durden

Submitted by Joe Wäges

Musing of a Bank Run

If ever there were a sign of the times, one can clearly see the desperation of the establishment upon reading Andrew Clark’s “Eric Cantona’s bank protest isn’t very wise“. After reading the article and comments it becomes painfully clear that most people, the author included have no idea how the monetary system works.

How does Mr. Clark propose with that “There’s nothing evil about the concept of banks – they exist to look after our savings and to provide investment for businesses”, given that banks create money out of thin air based on deposits as a multiplier. One cannot say (with a straight face) they are looking after our savings as the very purchasing value of those savings is being diluted through legalized counterfeiting known as leverage and or the money multiplier. I do not think Mr. Cantona is arguing against the concept of banking, but rather organizing the end of the current predatory casino model paraded around as capitalism. Calling this model capitalism is an insult to capital, as it is after all savings. True capitalism cannot exist in a system where money is based on debt, not value; a printing press and not from savings. On the point that the concept of banking is not evil, one concedes that an idea cannot posses any characteristics of a living entity as it is an idea. That said debt based monetary systems utilizing a fiat currency, are historically used by oppressive régimes as the system itself is a giant wealth transfer and consolidation mechanism.

Ask yourselves how can it be that I, my friends and family, businesses and corporations, states, nations and indeed every entity created by man be in debt all at the same time? It is because of the banking and monetary system itself. The assets of the people are transferred to banks by creating ever more “reserves”. There is no hope for savings in a fiat currency as the nominal value can be maintained, but the actual purchasing value is devalued at an exponential rate. Most importantly in this type of system you can never be out of debt as the system is based on debt. Banks create principal and not interest, which is why there is a minimum payment on credit cards. This is the interest payment. Banks do not care if you ever liquidate debt and it is in their best interest that you don’t. If you round up every last dollar both physical and digital, and apply it to all of the debts, there still will not be enough money as it has yet to be created. In short is a scam and once trapped inside, it is very difficult to escape. Mr. Cantona is only showing us one possible exit.

The crisis we are facing is that exponential growth of debt, also known as the money supply, is an unsustainable function and the banks knew this. They only had to refer to the “small” history of banking spanning the last 500 years. Every person, corporation, state and government is well beyond prudent debt saturation levels, and has been so for some time. In short we cannot take on more debt, and this breaks the entire system forcing all to liquidate assets at a fraction of their value as no new value is being created by the banks in the form of debt as the exponential monster requires. This is how banks transfer wealth, for pennies on the dollar, from the aggregate to the few with little to no personal cost to them, as their money is a created based on a multiplier of our money.

The solution is to strike first and cripple the banks by removing our money and using it to buy physical assets. A demonetization of the system if you will. Precious metals and essential commodities are naturally the best investments. The banks will cry wolf, but this time there will be no bailout. The people must insist on their sovereign nation issuing its own debt free currency, as it is the only real purpose for a national government to begin with. We don’t need private currencies anymore and fractional reserve banking is the largest hammer in the toolbox of tyranny. Banking and indeed money should be based on value not debt. Lets make this the end of debt slavery and the beginning of a renaissance of liberty by withdrawing all of our money and restoring the power and prerogative of the nation-state by reinstituting the practice of issuing debt free money and full reserve banking based on fees and not interest. All debts must be repudiated as illegal instruments without exception.


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  1. Debt Based Money: The Scheme that Transfers Wealth to the Banks and Systematically Devalues the Currency Held By the People | Debt in to Wealth

    December 2, 2010 at 2:47 am

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