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Bill Still: The case for debt free currency
- 20. Banks get to lend 12 x the money they actually have. -- and charge interest
- 32. ”The rich will strive to establish their dominion and enslave the rest. They always did. They always will.... They will have the same effect here as elsewhere, if we do not, by [the power of] government, keep them in their proper spheres.” The Anti-Federalist Papers and the Constitutional Convention Debates, Ralph Ketcham, ed. (New York, NY, Penguin Group, Signet Classic, 2003), p. 107.
- 34. “The treasury, lacking confidence in the country, delivered itself bound hand and foot to bold and bankrupt … bankers pretending to have money, whom it could have crushed at any moment.” • Thomas Jefferson, October 1815 letter to Gallatin. Letters and Addresses, edit. William Parker, (New York: 1905).
- 35. 3. So if the government does not create the money, who does? Before Quantative Easing started, did the Fed create the money? -- YES -- NO
- 36. “As the doctrine is that a public debt is a public blessing, so they think a perpetual one is a perpetual blessing, and therefore wish to make it so large that we can never pay it off.” The Jeffersonian Cyclopedia. Edited by John p. Foley, (New York & London, Funk & Wagnalls Company, 1900), p. 236; citing “To Nicholas Lewis. iii, 348. Ford ED, v. 505. (Pa., April 1792)
- 37. 4. Before QE WHO did create the money?
- 41. 6. Can the National Debt be paid off? -- YES -- NO
Hinweis der Redaktion
- Thank you for coming today. The economic situation in Greece is not good. The solutions that have been offered are not working. We have assembled a group of world experts on the economy today to offer what we believe is the ONLY solution for Greece. We call this solution
- monetary reform. Monetary reform comes in a few variations, and you will hear about most of these different variations today, however the one thing that links all of us together is that the
- control of the quantity of money in Greece must be returned back into the hands of the Greek people. Right now, how much money there is in Greece is determined by the
- European Union and the biggest banks in the form of loans.
- The voters of Greece have zero say in this -- THE most important power of a nation. In other words, the Greek people are no longer in control of their destiny. They have lost their democracy. So I realized this just yesterday -- how appropriate that we are here in Athens – the birthplace of democracy -- discussing whether or not this cherished notion of human freedom through the democratic process can survive.
- Is self-governance sustainable?Because there are only two choices in this world --
- humanity can choose to struggle to remain free by electing representatives that will act in the public interest, or it MUST return to serfdom and collapse back into the law of the jungle. What is the law of the jungle? Political science has a name for it.
- It’s called PLUTOCRACY. That is where the rich make all the rules for their benefit ONLY
- not in the public interest. This violates THE basic premise of all democracy
- – to do the most good for the most people. It seems to me, as an outsider, that plutocracy is now the case in Greece today -- certainly more so than democracy. So, if Greece fails – which it surely will on its current course – then democracy itself will fail. And if democracy fails, then civilization itself will fail and humanity will
- sink back into the dark ages. What is THE most important characteristic of the march of humanity for the last 2600 years – since the days of Solon? What is this thing called civilization all about? It is all about the notion that we, the little people, can
- escape slavery ONLY by banding together and forming a democracy – a government – of the people, by the people and for the people.
- What does “of the people” really mean? It means that we, the people have some say in how we are governed. That means that government must
- be fair. It must treat everyone equally. It means that everyone should have some say and have a fair chance to succeed. It means that effective government – by definition – must operate in the public interest. So does Greece actually have a government today that operates in the public interest? I believe the answer is no. I believe that we now have:
- plutocracy, not democracy. I maintain that without the money power – without control over its money – Greece has lost the power of self-governance. I have a saying that I have repeated so many times over the last 30 years that others call it Still’s axiom. Here is how it goes:
- “It matters not what backs the money; all that matters is who controls the quantity.” So, who controls the quantity of money in a nation is THE most important power of a nation. So who controls the quantity of money now in Greece?
- Is it your parliament – your 300 elected representatives? No. Your Parliament has zero control over the national money. Control of the nation’s money is THE most important power of a sovereign nation; without it, you are no longer sovereign because you can no longer control your destiny. Greece is now – literally controlled by the European Union, which I call
- “the Beast of Brussels”.Many in Greece fear that if they left the EU that the loans would stop and then the money would stop, and Greece would starve. Well guess what? Greece is already starving and one thing is for sure, if you do not get off this road it will NEVER get better; it will only get worse. Yes, the game is to pump up the Greek economy for the next few months to make it look like things may not get much worse, but that is only to get by the upcoming German elections. If Greece were to fail before those critical German elections in September, then the German people would likely elect a much more anti-EU group to its Bundestag. That would be a death blow to the EU and their entire consolidation of power game would come crashing down.
- Greece is being offered basically two paths: more loans, and more austerity.
- Last week, the IMF approved more loans for Greece. Many here in Athens applauded this measure. But everyone knows that you can’t fix a de bt problem with more debt – no more than you can solve an alcoholic problem with more alcohol. At some point you have to stop living off borrowed money. So then the only question is, when will it stop?
- The second path is called austerity – severe cuts in government spending.
- But will cuts in government spending raise GDP? No.
- Will it encourage national productivity? No.
- Will it encourage Greeks to become more independent, or will it encourage Greeks to become more dependent on imported products?
- Will it encourage Greeks to start manufacturing the products they need? Television sets, automobiles, computers? No.
- Will it encourage Greeks to start manufacturing the products they need? Television sets, automobiles, computers? No. Without internal manufacturing and food production, how will Greeks have goods to trade for petrol? No, neither of these two paths have any chance of working. They are both dead ends. They both feed only an economic death spiral. So why not get out? Try something that breaks you out of this death spiral of debt and dependency. Why not try something that is not some theory – some idealistic dream. Why not try an economic system that has worked EVERY TIME it has been tried in the past. Monetary reform means moving from a debt-based system to a non-debt-based system. It means moving from a system of perpetual dependency, back to Greece being a proud independent nation. So who am I to be talking about the roots of democracy here to you, the fathers and mothers of the entire democratic process? Just who do I think I am, anyway?
- I started out life as a newspaper reporter in a small town in Virginia. So I was having a great time chasing small-time crooked politicians when one day an old guy called me up and said, “Boy, have I got a story for you. There is no gold left in Fort Knox.” So I rolled my eyes and I thought – Ah, another crazy person. When you run a newspaper, you get calls from crazy people all the time and they can suck up all your time. So I had developed a quick way to get off the phone. I would say, “Great, send me something in the mail” and I was off the phone in 30 seconds. Well, the crazy people never had anything to send in the mail and so this was a great time saver. Well, this guy – as it turned out – was not crazy. In a couple of days I got a thick packet of material from him in the mail.
- At the end of WW2, 72% of world gold was stored in Fort Knox – the highest percentage of world gold ever collected in history. And to protect this great treasure, extraordinary measures were put in place to keep it safe. One of those measures was to have a physical audit every year of the gold in Fort Knox. Gold bars would be randomly selected every year and weighed and core bored and the gold from that boring would be assayed for purity. But do you know when the last physical audit occurred? Take a guess. 1955!!! 58 years ago. So as a reporter, I knew that the government was lying about something – something big. But I couldn’t understand how this all fit into the world economic picture, but I got a sense that something big was going on. So I wrote my story as best I could, but always knew that something else was going on, not the least of which was why hadn’t the big newspapers and television news channels in the United States taken this story on? I really couldn’t believe it that it was left to me, a little newspaper reporter to take this story on. Incidentally, “The History Channel” finally called me up last year to ask me about this story and they filmed a 1-hour piece on the missing Fort Knox gold which ran almost exactly one year ago on their H-2 channel. It is now available on the Internet. Well, over the years, I finally figured it out. I wrote my first book on this topic in 1992.
- Then I produced my first documentary on the problem in 1996. It was called the MoneyMasters. “The MoneyMasters” has been wildly successful on the Internet. The best guess we can come up with is that “The MoneyMasters” has been viewed by over 100 million people in the last 17 years. It has consistently been ranked in the top 25 most popular documentaries of all times. So let’s take a brief look at the first 3 minutes of it to see if it holds up today.
- So that holds up pretty well. But what I hadn’t figured out yet was why my colleagues in the media had not picked up on this story. So a couple of years ago, I produced my second documentary on the money problem.
- It was called “The Secret of Oz”. It won Best Documentary of 2010 at one film festival, and many other prizes elsewhere. But I still couldn’t get any major media attention for the film and I just couldn’t understand why. It was a huge story. It affected every nation on this planet. It was the leading cause of most of the world’s hunger, poverty, misery and disease, and yet I couldn’t get the major media interested in the story and I just couldn’t figure out why. Why was I so concerned about this? Well, naturally, it meant money to me. But beyond that, a free and independent press is an ABSOLUTE necessity to the maintenance of the concept of democracy. So why weren’t they interested? So when it was completed I sent “The Secret of Oz” out to two of my oldest friends in the news business in the U.S. They were now the president and the #2 guy at one of the three biggest networks. So a week later, the President of this network called me and said they loved the film. So I said, “Really! Why?” So he explained that all the big networks in the U.S. are all mortgaged to the max – in other words, they have taken out all the loans they can just to survive – because they are all in competition and so if one borrows a bunch of money, they all have to borrow just to compete. In fact, they had borrowed so much money that they couldn’t even pay the interest on the loans. They were absolutely dependent on JP Morgan coming in every year and rolling the loans over. In fact, if they didn’t roll the loans over, the network would be out of business in a week. So in this last roll over cycle, JP Morgan guys had come in and made the network lay off its top 100 executives and that meant my friends had gotten fired. So they were mad. And they told me that this is why I could never get on the networks talking about the evils of the debt-based money system – not because JP Morgan actually owned the network, but because they effectively controlled all the networks by debt. So, it’s the same for governments. When a government borrows, who is it borrowing from? Primarily the biggest banks. So do you really think government is going to solve the debt problem when it is every day borrowing from the lenders – the biggest banks? Impossible! So step number one to fix this problem is to break the cycle of government borrowing. But we’ll get into that later. So that’s why we haven’t heard about this debt problem as a major problem before. However, the Greek media is now interested because they see firsthand that the solutions being implemented are NOT working. So we are here to point out the real roots of the problem. Although it is never mentioned in American history books, Americans have fought this debt monster throughout American history. For example, one of my favorite quotes is from the guy who wrote the biggest chunk of the U.S. Constitution, but his name is not one most of you have ever heard of. His name was Gouvernor Morris.
- In a letter to James Madison written on July 2, 1787 Morris explained the battle this way:The rich will strive to establish their dominion and enslave the rest. They always did. They always will.... They will have the same effect here as elsewhere, if we do not, by [the power of] government, keep them in their proper spheres. So the trick has always been to get a nation to borrow money because politicians quickly become dependent on the extra revenue from loans. Why? Because the politicians can spend that money on their constituents, but they do not have to raise taxes. They just push the repayment problem – the debt problem – on down the road to another generation. So that is what is going on right now – not only in Greece, but in every nation. Politicians are easily convinced to accept loans instead of having to raise taxes. But the bad part is that these loans come with two prices: #1. The interest payments on the debts are now climbing so quickly that they alone will bankrupt nearly every nation on earth. But the second price is far more dangerous; it is the CONTROL those debts bring. This control through debt is the VERY DEFINITION of plutocracy and is the VERY OPPOSITE of democracy. So Greece, if you want your democracy back – if you want your freedom back – you cannot just worry about the debt problem. Yes, think about this; you cannot fix the debt problem until you fix the BORROWING problem. Nations should NEVER be allowed to borrow. Why would a nation borrow when a nation can create – create the money it needs.
- Last year, I ran for the nomination of the third largest political party in the United states – the Libertarian Party -- for the office of President. I am not a politician by nature. I am merely a reporter. But I felt that I was the only one on the political scene who understood these simple facts about the economic challenges every nation is now facing, so I took 6 months out of my life to raise the level of awareness on this issue. I can’t run for office in Greece, but I pledge to help any candidate in Greece who understands this borrowing issue and runs for office with monetary reform as their primary objective. Returning again to U.S. history. It is always the goal of the plutocracy to get the government to start borrowing – primarily from them. Thomas Jefferson explained the absurdity of how bankers took control of the American monetary system in 1815:
- The treasury, lacking confidence in the country, delivered itself bound hand and foot to bold and bankrupt … bankers pretending to have money, whom it could have crushed at any moment.So what was he talking about – “bold and bankrupt bankers pretending to have money….” This refers to the second major problem with every national money supply in today’s world. It’s called Fractional Reserve Lending. When you go down to your bank and take out a loan, what the general public thinks is that the bank has a big vault of money that actually belongs to its depositors, and it takes some of that money out and loans it out to you. That’s the way it should be, but that’s not the way it works in today’s world. As soon as banks get government to start borrowing, the first thing they do is to obtain from that government the right to leverage their reserves. It’s called Fractional Reserve Lending. This means that if a bank has 1,000 Euros in its vaults, it gets to lend out ten thousand euros – or more, depending on the law. Where does it get the extra money? It just makes it up with the click of a few computer keys.
- So let’s look at the example of when the First Bank of the United States was formed in 1791, just two years after the U.S. Constitution became the supreme law of the land to understand what Jefferson was talking about. Like all the privately owned central banks that would follow, the new bank was given a name that would deceive people into thinking it was part of the U.S. government. But it was not! It was called the 1st Bank of the United States (1st BUS). After a contentious debate, Congress granted the new bank a 20-year charter – a private monopoly. The nation’s money would be created out of thin air by the new bank and loaned to the government and to private individuals – all at interest – just as our money supply is created today. So if there was a million dollars worth of money in the economy, there would be a million dollars of national debt – debt the citizens and their children would have to pay interest on by taxation. And so it is today, the national debt is roughly the same as the national money supply. How did this bank get its startup capital? Well, that’s a funny story. The bank needed $10 million dollars to get started. So the U.S. government was given 20% of the stock and immediately put up 2 million dollars in cash to get it going. Then the bankers used fractional reserve lending to lend the money to each other to buy up the remaining 80% of the shares for themselves. In other words, they put up no cash themselves, they just loaned each other money created by the new bank out of thin air to sell each other the stock in the bank – a risk-free investment if there ever was one. The plan was backed by Alexander Hamilton who called the national debt “a national blessing.” But I say, a national blessing to whom? Within the first year of the founding of the 1st Bank of the U.S., inflation surged. Thomas Jefferson, then the nation’s first Secretary of State, said this about the 1st Bank:
- “As the doctrine is that a public debt is a public blessing, so they think a perpetual one is a perpetual blessing, and therefore wish to make it so large that we can never pay it off.”Within 5 years, the federal government owed $6.2 million to the 1st BUS. The entire U.S. budget for that year, 1796, was only $5.9 million! During this period, prices had inflated by 72%. So, when its charter expired in 1811, Congress did not renew it and so it died.
- But just 6 years later, a sufficient number of Congressmen had been bribed so that a new privately owned central bank was voted another 20-year charter – the 2nd Bank of the U.S. The same rules applied. The government put up the money and the bankers loaned each other the money to purchase the remaining 80% of the shares in the bank. Please note that although this was a private corporation – just as the Federal Reserve System is today, it was clearly a private corporation which “sold” the federal government 20% of the stock.
- When Andrew Jackson became President in 1829, he was determined to kill the Second Bank of the U.S. and although it took him until 1836 to do it, he eventually killed it. Then Jackson paid off the national debt – the only U.S. President to do so. So down through the years this battle has raged in the U.S. Control of the American monetary system has changed hands seven times between control by the government, or control by a privately owned central bank disguised as a government bank.I document all of this in my book, “No More National Debt”. [hold up book]. So what should we do at this point?
- Monetary reform rests on two great pillars:No More National DebtNo more Fractional Reserve Lending. Banks should only be able to lend out money they actually have.So what does this mean for Greece? If Greece can no longer borrow money what can it do? Will it fall into the sea? What is to prevent mass starvation and rioting. Simple. Just do as nations thoughout world history have done – including Greece during the time of Solon – create the money you need – and without debt. Don’t borrow it. In other words, start printing the Drachma again. The government can then spend Drachma into existence and pay workers for infrastructure projects, pay for social programs, etc.What about Greek debt? There are several schools of thought here. You can either renounce it – not pay it at all – or you can pay it off in the new Drachma – or you can only pay part of it – known as a haircut. These things would have to be decided on by the Greek people after a careful debate which considered the consequences of each alternative. But you may ask why would another nation or a foreign bank accept payment of its debts in Drachma, especially when the EU Charter specifically forbids repayment in anything but Euros? Well, Greece could tell its creditors, take it or leave it. Accept our repayment schedule in Drachmas or you get nothing. Of course, the bankers would threaten and attack any way they could. The Drachma would become devalued. But what does this mean for the average Greek person on the street? It would mean you could no longer afford to import BMWs from Germany. Would that be too bad? What if that stimulated Greek entrepreneurs to start making their own Greek cars? But then there is the question of petrol. I take it that Greece has to import all or most of its oil, so this is a problem. But as I said at the start, as Greek internal production started ramping up, if Greek imports were near zero, then your balance of trade would be a huge positive number. You would soon start to have cash to buy petrol. Look at it this way, Greece is going to have to suffer horribly one way or the other. If you stick with the EU/IMF/ECB loans, you will suffer more and more every year. It will NEVER get better. At least this way your suffering would only last a year or two, then you would be free, strong and independent once again. Again, the bankers will do EVERYTHING IN THEIR POWER TO STOP YOU. Here is an example of the threats they made to Iceland.
- When the crisis first broke, in 2008, the Icelandic Parliament was given a plan by the IMF. They did not want to approve it. According to a friend of mine, Icelandic Parliamentarian BrigittaJonesdottir, the IMF representatives threatened the island by telling the Parliament: “You only have 3 weeks of food on the island. If you don’t take our deal, we will move to ban food imports from Europe to your country and your nation will starve.” This was a serious threat. Island doesn’t have many food resources – primarily fish. So, the Parliament voted for the initial plan. But then, the Icelandic people got mad. They surrounded the President’s house with 10,000 highway flares. The President decided not to sign the bill into law. He decided to put it to a vote – a referendum. What did the Icelandic people do? They voted down the IMF plan by a 92 to 8 margin. A year later, the IMF came back with a new, less horrible plan. It too was put to vote. The day before the vote, the Wall Street Journal warned that if the people of Iceland did not vote for the new plan they would never be able to borrow again.
- Of course, I would say “GREAT”. So how did it turn out? The people voted the new plan down again 60 to 40. Then what happened just 3 months later? The IMF began banging on the Parliament’s door again begging them to take out new loans. You see, their power is addicting a nation to debt. If a nation escapes, it is very bad for their business – the business of control. So, these guys are all bluff. If you, as the proud Greek nation just do the right thing to restore democracy in you country, the people of the world will unite behind you. Then all nations will follow in your footsteps and break the back of this debt money monster once and for all. Lastly, I just want to encourage you that the plutocrat’s most effective trick is to convince you, the average person, that this money problem is way too complicated for you to possibly understand. I tell you that this is NOT COMPLICATED. You can figure this out. You must figure this out if you are to survive. You must insist that your politicians tackle this problem of borrowing and fractional reserve lending head on. Thank you