Crime Against Humanity: “National”, “Federal”, “Central” Banking, 7

Let’s return to Example Island for the basics of how it works and the order of magnitude of its “yield” – that is, of the amount and transfer speed of stolen purchasing power –. And while en route let’s have a quick think of two mechanisms: the infinite debt trap and the ambiguous money. Again, there still live 100 people, and each one on the average owns 100 units of money; in all, 10,000 units of paper money in existence, 1% each on the average. But one of them is the banker and one of them is the king or the politician, and they have established and own the “central bank”; when the system goes full speed, the central bank has spent a trifle to produce all the 10,000 units of paper money in existence, then it has loaned them all to the government, and in exchange the government has given to the bank as collateral promissory notes in whatever form for say 10,000 units, expiring in 10 years, and has bound itself to pay to the central bank an interest of say 1% a year: 100 units a year.

To begin with, there is the initial theft of purchasing power perpetrated by receiving government promissory notes for 10,000 units in exchange for paper money whose production cost nothing. The banker has spent a trifle and has received in exchange the commitment of the government to give him back all the existing money supply plus interest. The government has committed itself to give back to the banker all the money supply plus the interest, and has received in exchange valueless paper it could print itself at the cost of a trifle. As to that paper being backed by gold – that which has the so−called intrinsic value, at first it may seem that the paper is but a placeholder of the gold, and anyone can go to the banker to redeem it. If that was true, the government had exchanged its commitment for the banker’s collateral, made up by that gold; if that was true, it’d be only a matter of why the government should borrow the banker’s gold instead of using its own; if the government were short of gold, it would be a matter of why should the government use a money backed by something scarce with the suppressive result of a scarce money supply. But the more the money moves inside the scope of its ambiguity towards being backed by nothing, the less possible becomes for people to actually redeem it in gold due to laws and rules, whether written or unwritten, and the more directly the question arises of why should the government commit itself to give everything in exchange for nothing.