This article was republished with permission from TenSyllables.org: https://www.tensyllables.org/post/money-the-long-con-and-what-you-can-do-about-it
By John G. Root, Jr. of Ten Syllables
Money, the Long Con – and What You Can Do About It
Contrary to what you’ve been told, the issue of money is not complicated. It’s time we all became clear about it because the existing worldwide monetary system is basically a long con. It was and remains orchestrated by grifters, shills, forgers, gropers, outside men, inside men, fixers, floaters, hackers and bagmen. It took a long time to set the con up, but it is immensely profitable. We, the bottom 90% of our nations’ citizens, are the marks.
This is the way the money con has evolved and presently works:
1. The original money was backed by a set measure of something of value, a shekel of wheat or a precious metal. Over time, the issuers of the money secretly reduced the value of the backing. Eventually, in most currencies, they did away with the backing.
2. Before central banks, government leadership hierarchies had to go to their citizens for the money to enrich the various private institutions they belonged to – institutions such as highway contractors, oil companies, and what are euphemistically called defense contractors. The leaders taxed the people, bought stuff with the people’s money, and received “contributions” from the sellers of the goods and services. The taxpayers became increasingly disenchanted with this system. They wanted to hold their leaders accountable. Remember accountable?
3. The ruling class decided this system required too much straight talk and accountability, so they had their private bankers set up what they called central banks. The role of the central banks was to create money out of thin air and put it in the government’s bank accounts. The leaders added the monies raised in this way to the national debt, which, of course, was guaranteed by the unwitting taxpayers. The first central bank, the Bank of England, opened its doors in 1694. America’s central, the Federal Reserve, neither federal nor reserve, opened its doors in 1913.
4. The private bankers who joined together to offer their nations the central banks had their creations charge interest on the money they loaned the governments. Mind you, the central banks were creating the money out of thin air. Plus, the private bankers got laws passed which enabled them to loan out ten times as much as they had in deposits. At interest. So, the situation became one in which the central banks created money out of thin air, put it in the government’s bank accounts around the country, collected interest from the government for their loans of created money, and effectively gave their private bank sponsors ten times as much money to loan out to private individuals and institutions.
5. Understand this example. If a bank has $30,000 in deposits, it can lend you ten times that or $300,000 to buy yourself a home. If you take out a 30-year mortgage and repay that $300,000 loan at 5%, over the 30 years you will pay your bank $450,000. That means the bank will realize a return on investment on the $30,000 in deposits of $150,000, or 500% on its $30,000. Plus, the $30,000 wasn’t even its money! It was money it was holding in safekeeping for someone else! The long con, indeed.
6. Think about it. In this monetary system, there are people who have capital, or the right to create capital out of thin air, and there are the rest of us who need that capital badly enough to borrow it and pay interest. And penalties.
7. Now think about people. Generally speaking, people want to be free to lead rich, fulfilling and loving lives, but they’re not paid enough money to do that. The real money is paid for exploiting others, which is neither rich, fulfilling, nor loving. So, if the people don’t sell out, they have to borrow money against future earnings, and the central bankers cause inflation, and prices go up, and they have to keep on borrowing. If they’re lucky, the people buy real estate, which goes up in value, and eventually they sell it and pay off their loans. But periodically the bankers orchestrate a bubble in real estate values. They create easy credit, i.e. lend money, people borrow and buy, values go up, the bankers tighten credit or stop lending money, the borrowers can’t pay, the bankers foreclose, and the people lose their nest egg. In this way, another cycle of the long con is completed.
8. But it’s worse, still. When currencies were first issued, they were usually backed by some precious metal. The pound “sterling” the British called their currency. You could redeem your paper bills for something of material value. No longer. Today the great majority of currencies are unbacked, what are called fiat currencies. When governments can ask their central banks to buy government bonds in exchange for a fiat currency, the natural outcome is that the governments can’t stay away from the trough. They run up too much debt. Worldwide debt today is something on the order of $240 trillion. That’s $30,000 for every man, woman, and child on Planet Earth. World annual product, out of which the $240 trillion must be paid, is only $80 trillion or, on average, $10,000 a year. Mind you, 90% of those folks make less than $1000 a year, none of which is going for debt service. It is the world’s, perhaps the universe’s, greatest Ponzi scheme. Like all Ponzi schemes, it’s due to collapse.
Can you get your mind around the magnitude of this scam? The purposes for which money is issued and how the money supply is managed creates the conditions in which all humanity lives. And you Americans were told you live in a society with a government of the people, by the people, and for the people? Look around you. Who decides how much money to create, what to spend it on, and how to oversee the expenditures? Ever heard of Federal Accounting Standards Board 56? It allows the federal government to cook its books and keep it secret. The true national security issue has become a faux national security issue.
Look, we all need money to live. What we do to get that money has a profound effect on our day-to-day lives, our experiences, including our sense of ourselves. What money is issued for and how the money supply is managed creates the conditions in which we live.
We all need money to live, but most of us are not primarily money motivated. We have a vision for how we might find personal fulfillment and create meaning out of our lives. Plus, we want to develop our capacities, to become steadily better and more effective at what we do. When we choose an activity which society values, such that our compensation provides us with an acceptable standard of living, money is not an issue. Money only becomes an issue when society doesn’t value our chosen pursuits enough to reward us adequately. Society establishes values by controlling the money supply and deciding where the money goes. It does this in a variety of ways but primarily through its monetary system. Basically, a society’s monetary system creates the conditions in which its citizens live. Social science research has demonstrated that injustice, such as the huge wealth discrepancy between the 1% and the 99% contributes to ill health, political unrest, and societal dysfunction.
In modern society, we’re taught that you have to “earn your living” by doing something that someone who has money is willing to pay you to do. We’re told that our aim in life should be to earn enough money so that we can live, plus save enough so that we can retire and live out our “golden years” in peace. For most people “earning their living” is the most important thing they do. They are wage slaves competing for a shrinking middle class piece of the American apple pie. Around them a few billionaires earn more than half of the nation’s entire income.
The situation in America today is that our money is issued by banks as interest-bearing debt. The result is that a great majority of us have a net outflow of interest, while a few of us receive more interest – or income tied to the interest our employer receives, than we pay. The effect of this is that the monetary system is biased against the net borrowers or interest payors. The system is transferring the wealth which the entire society creates from the majority of us to a small minority of elites. With this wealth, the elites control our acculturation – our family life, religious life, education and work life, to the end of perpetuating the inequity.
In the course of the history of civilization interest-bearing debt has been banned during most of Sumer, Babylon, Egypt and the Greek and Roman Republics (but not their empires), as well as during the Middle Ages. Banks issuing the money supply as interest-bearing debt to themselves was first established when the Goldsmiths became bankers by lending receipts for gold they did not have. The system was formalized for the first time with the establishment of the Bank of England in 1694, but not until 1913 in the United States with the establishment of the Federal Reserve System.
Most of the history of the United States was about whether the money would be based on gold or silver (which is what the bankers wanted) or whether it would be issued debt and interest-free by the Congress. Money based on Gold or Silver is valuable in itself, it is not just a measure of the value of the things that are actually valuable. Banks have always lent money that the people think is valuable in itself, i.e. a receipt for gold or silver, that they pretended to have but did not have. The leading bankers have always worked together to save the deception if there were a run on the bank (everyone wanting their gold) and they have shaped society to protect the banking secret. The legislation that established the Federal Reserve was widely believed to give the Government the issuing authority because the bankers misrepresented it as such.
What to Do About It
Although it may not seem that way, there are many much better ways of issuing money that would give us, the people, a just and sustainable abundance and would transform society.
If you live in a society in which money is issued (as money not as debt) so that you receive an equitable share of the dividend income the economy sustainably produces, and you have a right to the money (capital) you need to be productive, then everything that you do would be voluntary, based on what you feel inspired to do to fulfill your life’s purpose. The economy – which is all the things that we do for each other to satisfy our material needs – would be the result of our cooperating with each other to do what we agree would be good and would benefit everyone. In such a system the American ideal of Life, Liberty and the Pursuit of Happiness would be realized because you would have a right to Life (the money you need to live) which would give you the Liberty to Pursue Happiness. Happiness, not the superficial kind, results from being in a position to discover and accomplish one’s mission in life, the transcendent purpose that you dedicate your life to accomplish.
Our observations about human nature do not take into account the fact that our debt-based monetary system generates the underlying fear that permeates society. It is the underlying fear of being destitute that compels people to do all the things that are necessary to earn money to pay their debts. Politically there is an ongoing conflict set up between the human desire to be free and the human desire to express our love by caring for each other, to make sure that everyone has what they need to thrive. Human nature is presumed to be naturally egoistically motivated, but that is a result of having to earn one’s living, which is a monetary phenomenon, rather than a characteristic of human nature. If you have to earn your living (in order to get the money you need to live) and you are doing that in a way that makes sense to you in the context of what you feel is your calling in life then you are doing it as much for the love of the work as for the money, as long as the money is adequate for your needs.
As soon as the money is not adequate for your needs, you will seek a job that pays enough for you to live as you expect to. This is where the egoistical aspect becomes confusing. If you love your job and the pay is adequate then you are doing it altruistically, similarly to what you would volunteer to do. But most people are in an ongoing conflict over whether they are doing their job because they need the money or because the job needs doing and serves a transcendent purpose. This is a tension that shapes people’s psyche’s during their entire life, and it is a very fragmenting experience. The compromises between what one feels are just and sustainable ways of going about things, and what one needs to do to have the money to live is a direct result of the money being issued as interest-bearing debt by banks. The reason is straightforward, but because the banking elite controls the economy and the social science of economics we have no opportunity to ever see it.
Every transaction facilitated by money happens when it is profitable to both parties, and that is human nature. You get what is more valuable to you, the money if you are selling something or the good or service if you are buying something. It should be obvious that with all the transactions that take place every year that benefit both parties we should all be increasingly better off. So what is happening to the better off? It is going to interest and money making money! The system is automatically transferring the wealth human nature creates from those of us who pay more interest than we receive to those who receive more interest than they pay!
What we need is a monetary system that is based on the angels of our better nature rather than the interest-bearing debt-based monetary system that fragments us and justifies wars and violence and environmental degradation. A monetary system that puts everyone in a position to become genuinely integrated and in a position to do what they see needs doing that satisfies a real need in the world can be designed and implemented by committed groups of individuals who voluntarily work together to create Common Good Communities using the Common Good Payment System.
The Common Good Payment system is a sociocratically governed community-created monetary system that is generating profound love and community. There is a better world that we all know in our hearts is possible, and when we get together to share our ideas about the better world AND WE CAN FUND WHAT WE AGREE WOULD BE GOOD everything changes. We create the better world together and transform civilization.
It really is that simple. Everything we need exists: www.commongood.earth and www.sociocracyforall.org and www.tensyllables.org and www.justabundance.org and www.credittothepeople.org and www.publicbankinginstitute.org and www.monetary.org and www.metacurrency.org and www.positivemoney.org and the list goes on. There are thousands of people working on monetary reform every day, voluntarily, as inspired.
Without monetary reform no other reform is possible.