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Hitler’s Finances, Schacht in his Own Words

Gottfried Feder

Left: Gottfried Feder, the intellectual powerhouse that gave Hitler the anti-usury agenda he needed to get to power. But he was sidelined by Schacht and never got the opportunity to implement his ideas.

Clearly far from all were convinced by the analysis that Hitler’s finances were not at all interest-free. But recently some key quotes from Schacht’s memoires have come to my attention. They completely validate the basic premises of the article.

As a reminder, the article pointed out a number of key issues. Hitler did not really reform the German monetary system. The Reichsmark, created by the Weimar republic, continued to be the national unit. The banks continued their operations, based on usurious fractional reserve banking. Their ownership did not change. Germany did have a national debt under Hitler. In 1938 it stood at 18 billion Reichsmark, quite a sizeable sum.

Gottfried Feder was the one behind Hitler’s very strong anti-usury stance during his rise to power. But already in 1931 Hitler’s industrial backers wanted him to reign in Feder and he was completely sidelined in the aftermath of the night of the long knives.

Hjalmar Schacht, aristocrat, mason, top banker, who studied Hebrew to further his career and who was a close friend of Bank of England Chief Montague, became Reichsbank president, in charge of the economy. He solved the depression, which was caused by capital scarcity due to deflation, through the MEFO bills, that circulated between industry, banks and the Reichsbank. But he did not at all solve, or even address usury. Quite the opposite. He was the one who made sure it was business a usual for the banks.

The quotes from his memoires, ‘the Magic of Money’, posted here below, completely corroborate this analysis. He points at Feder and Strasser and interest was the issue. Feder’s interest-free money was ‘nonsense’ and his fight against private banking ‘destructive’.

It also transpires that the MEFO bills came with a 4% interest rate.

Hjalmar Schacht was the man that controlled the German economy and allowed Hitler what the Money Power wanted him to do: build an army against Russia.

Below are the quotes and as an extra the relevant paragraphs from Zarlenga’s ‘the Lost Science of Money’. Interestingly, Zarlenga links Feder to Georg Knapp, who wrote ‘the State Theory of Money’ in 1905. Knapp’s thinking is known as Chartalism and later morphed into Modern Monetary Theory. I will be coming back to MMT at a later stage, it’s making a come back, but unfortunately it does not really solve usury either.

Knapp was probably the link between American Populism in the Greenback wars of the 19th century and Europe’s anti-usury movement.

This truly was a crucial junction in humanity’s struggle against the Money Power’s Usury.

Many thanks to Mark Smith, who got to the bottom of this.

Hitler’s finances, the Myth of Nazi Anti-Usury Activism
Hitler’s finances, a Response to my Critics

Below the quotes, but first this interesting little detail:

This is an old newspaper snippet, concerning the arrest of Louis de Rothschild in the aftermath of the Anschluss, when Germany and Austria were united, something both countries strongly desired.

This arrest is, understandably, construed by Revisionists as proof that Hitler was working against Rothschild.

But Louis de Rothschild was the owner of the Vienna based Krediet Anstalt, that went bust in 1931. This was a shock that was felt all over the world, quite similar to Lehman’s demise, which left a $700 billion crater in the heart of the financial system.

At the time, like today, bankers were used to getting away with this kind of stuff, and Hitler did well to arrest him.

But it was for a specific reason and cannot really be seen as particularly, let alone comprehensively, anti-Rothschild.

Extracts from Hjalmar Schacht’s 1967 book ‘The Magic of Money’ 
The bank supervisory authority owes its existence to a law which I instigated when I was Minister of Economic Affairs in 1934. National Socialist agitators led by Gottfried Feder had carried on a vicious campaign against private banking and against our entire currency system. Nationalisation of banks, abolition of bondage to interest payments, and introduction of state Giro ‘Feder’ money, these were the high-sounding phrases of a pressure group which aimed at the overthrow of our money and banking system. To keep this nonsense in check the president of the Reichsbank called a bankers’ council which made suggestions for tighter supervision and control over the banks. These suggestions were codified in the law of 1934, which was strengthened in 1957 by increasing the powers of the bank supervisory authority. In the course of several discussions, I succeeded in dissuading Hitler from putting into practice the most foolish and dangerous of the ideas on banking and currency harboured by his party colleagues. – Hjalmar Schacht: The Magic of Money p 49

…by the end of March, 1933, Hitler had explained to the Reichstag ‘In principle, the German government will safeguard the interests of the German people, not by means of a state organised bureaucracy, but by means of the greatest possible furtherance of private enterprise and respect for private property’. Adolf Weber commented that ‘parts of this and some other utterances sometimes recall almost word for word the “fundamentals of German economic policy” which Schacht had promulgated a year previously’. – Hjalmar Schacht: The Magic of Money p 49

It referred in this context to the financial methods which I had used to reinvigorate the German economy when in 1934 I was re-appointed president of the Reichsbank. I shall come back to this method, here I will only say that it consisted in the discounting by the Reichsbank of bills which granted industry credit over a term of five years. The Reich itself guaranteed repayment. – Hjalmar Schacht: The Magic of Money p 50

National Socialist agitation under the leadership of Gottfried Feder was directed in great fury against private banking and against the entire currency system. Nationalisation of the banks, liberation from the bondage of interest, the introduction of a state ‘Feder’ giro money, these were the catch phrases by which an end was to be made to our monetary and banking economy. I had to try to steer Hitler away from these destructive conceptions. – Hjalmar Schacht: The Magic of Money p 154

Adolf Weber was asked to make a report by the plaintiff in my denazification process before the Ludwigsburg court. In this report he showed how I succeeded in bringing Hitler to his senses where questions of banking and currency were concerned. At the end of March, 1933 Hitler declared in the Reichstag ‘In principle, the German government will safeguard the interests of the German people, not by means of a state-organised bureaucracy, but by means of the greatest possible furtherance of private enterprise and respect for private property’. And a little later he said to his party leaders ‘It is wrong to get rid of a good economist provided he is a good economist because he is not yet a National Socialist, at least not if the National Socialist who is to take his place knows nothing about economics’. – Hjalmar Schacht: The Magic of Money p 155

The second method was the building of the autobahns, and already in the summer of 1933 work began with the building of the stretch connecting Frankfurt/Main with Darmstadt. As the number of employment opportunities grew perceptibly, the Reichsbank began to. grant direct loans for both these activities. A milliard was made available for the Reinhard programme, and 600 million for the autobahn. Both amounts were later paid back into the Reichsbank. The third method was the defence programme. The building of barracks and the equipping of troops brought orders to concerns spread over the entire country. As the cost of this part of the programme to secure employment for everyone was so great and the repayment period so long, the method by which credit was granted directly to the Reich could not be used here. There was too great a danger that the Reichsbank, in granting direct credit, would lose control of currency policy. A way had to be found which would ensure that the Reichsbank was able to restrict and limit the amount of money in circulation. It took us in the Reichsbank a year and a half to find a system which was suitable, and would still enable us to pursue a responsible currency policy. The provision of money for defence did not therefore begin until the late summer of 1934.

The system worked in the following way: a company with a paid-up capital of one million Marks was formed. A quarter of the capital was subscribed by each of the four firms Siemens, A. G. Gutehoffunungshiitte, Rheinstahl and Krupps. Suppliers who fulfilled state orders drew up bills of exchange for their goods, and these bills were accepted by the company. This company was given the registered title of Metallforschungsgesellschaft (Metal ResearchCompany, ‘MEFO’ for short), and for this reason the bills drawn on it were called MEFO bills. The Reich guaranteed all obligations entered into by MEFO, and thus also guaranteed the MEFO bills in full. In essence all the Reichsbank’ s formal requirements were met by this scheme. It was a question of financing the delivery of goods; MEFO bills were therefore commodity bills. They rested on a threefold obligation: that of drawer, acceptor and Reich. This provided the Reichsbank with every justification for discounting the bills, and, although it was put to every test by the Reichsbank’ s directorate in collaboration with the country’s best legal brains and economists, they agreed unanimously that it was valid. The Reichsbank declared itself ready to prolong the bills, which true to the form laid down were drawn on three months’ credit, to a maximum of five years if so required, and this point was new and unusual. Each bill could thus be extended by a further three months, nineteen times running. This was necessary, because the planned economic reconstruction could not be accomplished in three months, but would take a number of years. By and large such extensions by themselves were nothing new with the Reichsbank; it was quite common to prolong agricultural bills, but an extension over five years, together with a firm declaration that such extensions would be granted, that was most unusual.

One other aspect was even more unusual. The Reichsbank undertook to accept all MEFO bills at all times, irrespective of their size, number, and due date, and change them into money. The bills were discounted at a uniform rate of four per cent. By these means the MEFO bills were almost given the character of money, and interest-carrying money at that. Banks, savings banks, and firms could hold them in their safes exactly as if they were cash. Over and above this they proved to be the best of all interest-bearing liquid investments, in contrast to long-dated securities. – Hjalmar Schacht: The Magic of Money p 113

Had it not proved possible to arrange things in such a way that a large part of the issued bills would be retained by the market and thus not presented to the Reichsbank, then an excessive use of the bank-note printing presses would have been unavoidable. This danger was avoided by making the bills rediscountable at any time, and by paying four per cent interest on them.

It is foolish to neglect the positive results and achievements which the German people brought forth even under Hitler’s tyranny. This is true above all in the fields of social and economic policies. The placing of the interests of Germany as a whole before those of the provinces or municipalities, the abolition or at least reduction of class distinctions not only in monetary but also in humanitarian matters, full employment, the optimum use of leisure time, the social services, maternal and family welfare, the battle against waste, all these remain worthy of our consideration and deserve further development even if in some cases we are dealing only with a cumbersome attempt to learn by trial and error. The fact that they were instigated under National Socialist auspices does not detract from the noteworthiness. This applies particularly to the economic policies prosecuted in the ‘thirties. Adolf Weber said of them ‘all in all the economic policy of this period was thoroughly constructive. Nay, as an economist who has made a thorough study of the world’s economic problems I find it incumbent upon me to state: in all the long years between the two world wars no one in any other part of the world carried out so constructive an economic policy as we did between 1933 and 1935′. Weber made this observation not in the Hitler era, but in 1948. – Hjalmar Schacht: The Magic of Money p 82-83

“Since the bills carried four per cent interest and could be exchanged for ready money at the Reichsbank at any time, they took the place of ready cash, so to speak, and earned interest into the bargain.” - Hjalmar Schacht: ‘My First Seventy-Six Years’ p 316

Zarlenga, ‘the Lost Science of Money’
In Mein Kampf Hitler wrote:

When I listened to Gottfried Feder’s first lecture on breaking down the thralldom of interest [in June 1919], I knew at once that here we had a theoretic truth which will be of immense importance for the future of the German nation.23

Feder’s captivating ideas were about money. At the base of his monetary views was the idea that the state should create and control its money supply through a nationalized central bank rather than have it created by privately owned banks, to whom interest would have to be paid. From this view was derived the conclusion that finance had enslaved the population, by usurping the nation’s control of money.

Feder’s monetary theories could easily have originated from the work of German monetary theorists such as George Knapp, whose book The State Theory of Money (1905) is still one of the classics in the monetary area. Right on page one, Knapp nails it:

Money is a creature of the law. A theory of money must therefore deal with legal history.

Knapp describes the invention of fiat money in these terms: “the most important achievement of economic civilization.” For Knapp, the determination of whether something was money or not was: “our test, that the money is accepted in payments made to the state [i.e., government] offices.”24

Near the end of that book, Knapp casually mentions how German monetary theorists of his day, and earlier, would study and discuss American monetary theories. Thus the ultimate source of Feder’s viewpoint was probably the American Populist movement of the 1870s and the ideas that movement promoted to establish a permanent greenback system.

When the National Socialists came to power, Schacht was reappointed head of the Reichsbank, partly to reassure German big business and foreign bankers. Schacht ridiculed Feder’s monetary views:

Nationalization of banks, abolition of bondage to interest payments and introduction of state Giro ‘Feder’ money, those were the high-sounding phrases of a pressure group which aimed at the overthrow of our money and banking system. To keep this nonsense in check, [I] called a bankers’ council, which made suggestions for tighter supervision and control over the banks. These suggestions were codified in the law of 1934… In the course of several discussions, I succeeded in dissuading Hitler from putting into practice the most foolish and dangerous of the ideas on banking and currency harbored by his party colleagues.25

Konrad Heiden noted that:

Industry did not want to put economic life at the mercy of such men as Gregor Strasser or Gottfried Feder, who, marching at the head of small property owners incited to revolution, wanted to hurl a bomb at large-scale wealth. Feder announced that the coming Hitler government would create a new form of treasury bill, to be given as credits to innumerable small businessmen, enabling them to re-employ hundreds of thousands and millions of workers. Would this be inflation? Yes, said Walter Funk, one of the many experts who for the past year or two had advised Hitler – an experienced and well-known finance writer, collaborator of Hjalmar Schacht and, in Hitler’s own eyes, a guarantee that big business would treat him as an equal… Hitler decided to put an end to the public squabble by appointing Göring to [oversee the questions].

Feder’s faction was then given the four-year plan, to keep them busy.26

Feder quickly lost the battle with Schacht and the German business establishment. Perhaps he was in over his head monetarily. He wrote of his monetary plan: “Intensive study is required to master the details of this problem… a pamphlet on the subject will shortly appear, which will give our members a full explanation of this most important task…”27 But this was 1934, which means he hadn’t clearly reduced the problem to written form since 1919, over 15 years.

“When the time comes, we shall deal with these things in further detail…” Feder wrote, but indeed his party was in power, and the time had come.

Feder was put out to pasture by the National Socialists, serving as an under secretary in the Ministry of Economic Affairs, later to be transferred to commissioner for land settlement and then completely sidetracked as a lecturer at the Technische Hochschule in Berlin. Hitler and the National Socialists came to power on January 30, 1933. Germany’s foreign exchange and gold reserves had dropped from 2.6 billion marks in late 1929, down to 409 million in late 1933 and to only 83 million in late 1934.28 According to classical economic theory, Germany was broke and would have to borrow. But classical economic theory is not very accurate.

Bitcoin: Paving the Way for a Global Cashless Society


After five years of Bitcoin, the verdict is out: it is a ‘free market’ Globalist dream, paving the way for a global cashless currency.

For and Real Currencies

It’s impact is quite stunning, there is little doubt about that. It started trading in early 2009 at just a few cents. Late 2011 1 Bitcoin was worth $6 and now people pay about $650. A little while back it actually reached $1000, when Chinese buyers started weighing in. It then took a big hit when the Chinese Government clamped down on it, citing ‘lack of consumer protection’. Bitcoin has crashed a couple of times on the way up, but has continued to rebound.

Major retailers all over the world are now starting to accept it.

But while this remarkable appreciation is the key to its perceived success, it is actually symptomatic of its main problem: it was designed to be scarce. Its rising price shows there is greater demand than supply.

When money rises in value, all other assets decline. It is good for those holding money, bad for those offering labor or goods and services, i.e. the real economy. In this way it behaves very much like Gold, which is also infamous for its deflationary nature.

Because it is appreciating so strongly, hardly anybody is paying with it. While the total outstanding value of Bitcoins is now somewhere between five and ten billion dollars, real trade is minimal. Who is going to pay with Bitcoin, when it is going to be worth another hundred times more in two years?

To be effective in servicing real trade, the money supply must grow and shrink with economic activity, allowing stable prices.

As it stands now, Bitcoin is a wholly bogus speculative item, with no real economic significance at all.

And it’s a pure ponzi scheme, of course. Later adapters pay for the gains of those helding Bitcoin from the early stages. As long as there are new buyers, it’s party time, but it’s ultimately unsustainable.

Money Power Control
Money Scarcity is, together with Usury, the hallmark of Money Power control. This week the story broke that Wells Fargo is now considering offering Bitcoin services. Undoudbtedly they’d be interested in offering saving and lending ‘services’.

Bitcoin is spent into circulation debt-free, but then will be lent out at interest by the bank. Compound interest lending will allow the banks to gobble up the whole money supply in just a few years.
This is why an interest-free credit based money supply is better than a ‘debt-free’ one: The debt free money is only debt free at the moment it is spent into circulation.

The CIA’s In-Q-Tel investment arm was involved with Bitcoin from the early stages and while it’s speculation, I’d be willing to bet a fiver the market has been cornered already.

Gold vs. Bitcoin: both are artificially scarce

Gold vs. Bitcoin: both are artificially scarce

Bitcoins are ‘mined’: computers must solve complex algorithms to acquire new Bitcoin. Clearly this is a rather irrational way of creating money, again mimicking Gold. Every new Bitcoin comes with a more complex algorithm, requiring more computing power. At this point only major players (like banks) have the computing power to mine new ones.

Clearly there are better things to do for supercomputers than such an artificial procedure. The more so since we can create abundant, interest-free money through bookkeeping.

A few weeks ago it transpired that JP Morgan filed a patent for a Bitcoin like architecture.

But already in 1998 the NSA wrote an extensive report, ‘predicting’ (or planning) a peer to peer electronic unit, quite similar to Bitcoin.

Bitcoin’s appreciation is of course an excellent marketing gimmick: the Libertarian techies who picked up on it early are now rich and are a good fanbase to build on. There is a vibrant Bitcoin community, keeping the dream alive. This is quite similar to what happened in the Bush years, when the Money Power controlled potential opposition by selling them a few ounces of Gold, creating a large base of faithful pseudo-opposition clamoring for the ‘reform’ they want anyway.

The Mass Media have welcomed Bitcoin. Sure, in the early stages there was some bewilderment and scepticism, but we have seen huge media coverage for Bitcoin from the word go. Had it been a threat, it would have been ignored and if that hadn’t worked, attacked.

Bitcoin is not anonymous, although many believe it is. All transactions are publicly logged. While it’s possible to operate discretely, if the community sees a problem, they tend to find out quickly who’s who. Centralist control of its use is thus possible, notwithstanding its peer to peer character.

And Bitcoin is a global phenomenon, which obviously is very pleasant for our globalist masters.

Bitcoin is driven by greed, it’s in no way a rational solution to our monetary problems. It’s global, scarce, cashless and soon the first banks will provide usurious lending.

The lesson is: as long as we hope to breed money from money, not realizing it’s usually our own labor that breeds money for those holding a lot of it, we will be fooled by units like this.

Money must be cheap (interest-free) and plentiful, but stable. Only then can it be a good medium of exchange, allowing the producers of society the benefits of their labor, instead of the providers of capital.

Bitcoin offers none of these features.

It has the Money Power’s fingerprints all over it.

Is the National Security Agency behind Bitcoin?
Baffling Bitcoin
Bitcoin, Impressive but Flawed
Cause and Effects of Money Scarcity

Let’s forget about Ron Paul. It’s time to move on.

Ron Paul

Left: (Ron Paul promising to destroy the economy with austerity and explaining that taking food stamps from the poor will solve the depression.)

Eighteen months after his legendary betrayal, Ron Paul is still worshipped like a saint.

As it transpired, Ron Paul never wanted to win the elections. He never attacked Romney once, during the debates. His campaign advisor Doug Wead, a close friend of the Bush family, openly explained they were just making sure the kids would vote Republican, in exchange for a good position for Rand.

Paul suppressed all dissent in his own camp regarding utterly blatant Diebold manipulation. He was winning all along, which was obvious from the massive turn out for his campaign speeches.

He’s a masonic Republican, far more worried about splitting the vote on the right than actually doing something about anything.

Even much worse were his policies. He’s a globalist, supporting all sorts of ‘free trade’ agreements, resulting in the outsourcing of the US manufacturing base. Lest we forget: “There’s nothing to fear from globalism, free trade and a single worldwide currency” (Paul in Congress, 2001).

His 1 trillion austerity drive would have destroyed the United States. In the purely ruthless libertarian fashion, he was intending to kill all foodstamps, while hardly denting the Pentagon budget. We would have seen starvation in the US, similar to the Great Depression, when millions died of hunger.

That’s the real Ron Paul. But people don’t want to know. He was for freedom, not? The Constitution! Choice and Liberty man!

He blames Central Banking, claiming JP Morgan, Goldman Sachs etc, who actually own the Federal Reserve Bank, are wonderful free market operations.

The Austrian Economics he promotes has been exposed as a multi billion, decades old mind control operation of the most blatant kind. Meanwhile, Ed Griffin, writer of ‘the Creature of Jekyll Island’, promoting Austrianism, now admits that the bankers own all the Gold. He admits the bankers are in it for the Usury. If even he has now seen the light, can we finally put this meme to rest?

The New World Order is nothing else but a bunch of families that started saving with compound interest a couple of centuries ago. We all know the power of compound interest, not? Just do the math: Rothschild held 50 billion in assets in the middle of the 19th century. These people are now ripping us all to bits with the trillions that they are raking in with this stupid scam.

Through usury they bought up everything they could lay their hands on: they own all banks, 80% of the transnational corporations, most land and its associated resources. Capitalism is one giant global monopoly.

We call it the free market.

A Vacuum
Thankfully Ron Paul won’t run again. He has managed to disable the real opposition in the Truth movement, notwithstanding his ‘Arabs did 9/11′ stance, for long enough now. But unfortunately, the love affair between him and the sheeple, one sided as it always may have been, is far from over.

When a man like Brother Nathanael awakes from his stupor and starts denouncing him for his Austrianism (Austrian Economics = Jewish Economics, Jews were always hated because of their…………..Usury!!), his followers pounce on him and he takes down his vids and forgets about the whole thing.

Meanwhile, he’s one of the very few who has shown the courage to move on new information, while most of the Alternative Media remains in limbo.

Recently the story broke that now 46% of Americans consider themselves neither Republican nor Democrat, but independent. The left-right divide is crumbling Half of Americans no longer buy the official 9/11 conspiracy theory.

The question is: who is there to represent an awakening public? And is the public actually awakening, or is the Alternative Media just a completely innocuous bunch of thrill seekers, enjoying themselves with spooky conspiracies?

Considering the fact that monetary reform is still a complete non-issue, one would think so.

Still, the situation looks dire for the Money Power, because while there is no real Populist candidate, there is nobody to replace Ron Paul for them either.  What kind of election is 2016 going to be when nobody below fifty is going to vote? Perhaps they were hoping Rand Paul would do the job, but I really can’t see it happening. He lacks all credibility, I don’t see any serious people storm the barricades for this guy.

But the simple fact is: they have always been very, very adapt at directing the mob and it is most likely they have a plan. And on our side? Well, there is Ellen Brown, who is running for Treasurer in California, with the aim of opening a Public Bank to refinance usurious State debt interest-free and to allow interest-free investment.

This is great news and I sincerely hope that her candidacy will help raise awareness on the all important monetary issue. While her Public Banking solution does not comprehensively end usury, it does seriously diminish the interest drain to the Plutocracy and would allow interest-free investment in infrastructure, ending the depression. It would decentralize real power to the State level.

The Truth Movement’s impact on global political awareness has been immense. But to come of age, we need an agenda, based first and foremost on the end of Usury.

Nothing could be more simple than opening up a few interest-free credit facilities and allowing people and small and medium businesses to refinance their mortgages and business loans there. This would kill the banks overnight, end the depression and Globalism. Transnationals would fade away, as they would be hammered in the market by small and medium business, no longer restrained by scarce and expensive capital. Wage slavery would end and self-employment would become the norm. A working week of max 20 hours would suffice and the standard of living for normal people would vastly improve.

It is the exact opposite of what Ron Paul was promising.

The Ron and Rand Paul Betrayal
Five more reasons Ron Paul was a phoney all along
The Ron Paul Challenge: 10 reasons why the Alternative Media is failing this test
Rationalizing Usury: the Time Value Hoax
The Few Banks that Own All
Ellen Brown runs for Treasurer in California!
What happened to Brother Nathanael and his U-Turn on Ron Paul and Monetary Reform?
Ed Griffin admits the Bankers own all the Gold and that Usury is the issue
Austrianism is Dying! Truthers Unite!
End the Fed: a Trojan Horse destroying the Truth Movement from within




Ellen Brown runs for Treasurer in California!

Ellen Brown for Treasurer!

Ellen Brown, author of ‘Web of Debt’ and the ‘Public Banking Solution’, is running for Treasurer in California, aiming to create a State Bank.

She’s with the Green Party, which takes no corporate funding.

I’m elated with this news. Just today the story broke that a whopping 46% of American voters consider themselves ‘independent’, instead of either Republican or Democratic. These people are simply waiting for someone who will actually put the axe at the root of our problems.

Ron Paul has left a huge vacuum and there is simply no one out there to fill it. While it will undoubtedly be an uphill struggle to get the job, such a campaign can much help to get the monetary reform debate on the agenda. With Austrianism dying in the Truth Movement, this is a real opportunity.

Ms. Brown will implement legislation to charter a Californian State Bank, based on that of North Dakota, as described in her book ‘the Public Banking Solution’.

While her Public Banking approach will not provide interest-free credit to the commoner (and thus does not comprehensively address usury), there is no doubt that this will enable California to extricate itself from a nasty position, with a major depression ongoing and State finances in shambles.

A State Bank is also a great way of reasserting real State autonomy vis a vis the Federal Government’s ongoing marauding of State rights.

Followed up with a Public Works program that can be financed interest-free, it would end the depression and allow California a return to full employment and a massive boom based on real production. If done well, by financing the production chains for these investments interest-free also, these projects could be implemented at a much lower cost than is now common. Capital intensive industry, and none is more capital intensive than construction and machinery, is, by its capital intensive nature, heavily burdened with cost for capital (usury) and stripping production of this unnecessary burden would be nothing short of revolutionary.

For instance, some serious investment in modern public transportation comes to mind. This is much needed all over the US and in California in particular and it would of course fit well with a Green Party agenda.

Furthermore, State Debt could be refinanced interest-free, ending the completely ludicrous plundering by Wall Street through wholly fraudulent ‘Government debt’.

Ms. Brown is very, very knowledgeable, also on the Usury issue and she actually has a heart, which is a nice change compared to the usual bunch running for office. She knows what we’re up against and that is also a big change with what we expect from politicians.

Finally someone people in California can vote for with a clear conscience!

Let’s wish her well and hope that the Alternative Media will endorse her with the same enthusiasm as the unfortunate Dr. Paul!

Here’s Bill Still interviewing her about her plans:

Ellen Brown's 'The Public Banking Solution'

Ellen Brown’s ‘The Public Banking Solution’


Ellen Brown’s Public Banking
Austrianism is Dying! Truthers Unite!

Margrit Kennedy dies

Margrit Kennedy passed away

Margrit Kennedy, the world leading authority on interest-free economics, has passed away at the age of 74.

The news is already almost two weeks old: she died December 28th, from cancer. She is survived by her husband Declan Kennedy (from Ireland) and her daughter Antja.

Kennedy was an architect, a professor at the University of Hannover and an environmentalist who set out to understand why humanity is destroying its own habitat. Her path led her to the monetary system, usury in particular.

Usury is the great driver behind growing debt, growing money and hence the need for perpetual economic ‘growth’ at whatever cost. It is the need to pay off eternally growing interest charges that forces debtors into ever more atrocious behavior, including rapacious plunder of Mother Nature.

It’s hard to think of anybody who has done more to expose the ravaging implications of Usury. Margrit wrote several books on the issue, the defining one being “Interest and Inflation Free Money: Creating an Exchange Medium That Works for Everybody and Protects the Earth”. Her last one is “Occupy Money“.

Her main source of inspiration was Helmut Creutz, whose work she tirelessly promoted. Creutz is the one who established that the poorest 80% pay more interest than they receive to the richest 10%. He also found out that 40% of prices we pay are cost for capital passed on by producers.

She was one of the key players behind the rise of dozens of Regional Currencies in Germany after the Euro was implemented. She travelled all over the world to spread the word. She was in Iceland to advise the Government during the default.

I remember meeting her a couple of years back in Amsterdam, where we were both speaking at a big rally for monetary reform. During the diner beforehand I was sitting next to her and without further ado she glanced at me and asked: “so, when did you first see it?”. Referring to that defining moment in a life when we suddenly see what Usury is.

I am glad I then had (and took) the opportunity to tell her how important her work was for me.

The global monetary reform movement has lost a leading light. A huge thought leader. But she has influenced many, many people and her thinking will continue to grow through them.

It is only in the years and decades ahead that the true impact of her efforts will be properly appreciated.

Thank you for everything Margrit. Rest in peace.

Bill Still remembers Margrit Kennedy:

Tom Kennedy honouring a pioneer ‘UsuryFree Creative’.

On Interest
H. von Creutz: The Money Syndrome (the original studies that Margrit Kennedy popularized)

Margrit Kennedy

Margrit Kennedy

Another Interview with Robert Stark

Robert Stark Anthony Migchels

A few weeks ago I had another chat with Robert Stark. It’s now posted at Counter Currents:

We talked about the major issues under discussion at Real Currencies the last few months:

  • Banking reform in Ireland
  • Immigration and the premeditated destruction of western civilization
  • The real estate boom in Ireland
  • The Winged Lion Award
  • Hitler’s economic policies
  • Gottfried Feder and National Socialism
  • National Socialism vs. decentralism
  • Capitalism and usury
  • Capitalism and the concentration of wealth and power and the globalist agenda
  • Ending usury as the key to preserving a middle class society with wide distribution of wealth
  • G. Edward Griffin’s admission that most of the world’s gold is owned by banks
  • Brother Nathaniel Kapner’s recent repudiation of libertarianism, Austrian economics, and the gold standard
  • How money creation by banks undermines the “time preference” argument for usury
  • Why money should not be scarce. Why money should be part of the commons.
  • How ending usury makes socialist redistribution schemes unnecessary and superfluous
  • Debt-free money vs. interest-free credit
  • Why interest-free credit is superior to debt-free money
  • Interest strike versus debt repudiation
  • How money scarcity is caused by usury
  • William Jennings Bryan
  • Hungarian monetary policy: goodbye to the International Monetary Fund, no to the Euro
  • How usury creates mass starvation in poor countries
  • Education loans in the United States
  • How usury is a driving force behind environmental devastation
  • How usury is connected to cultural degeneracy and hedonism
  • Usury and warRelated:
    Robert Stark interviews Anthony Migchels

Merry Christmas!

Jesus Christ is the Spirit

Every man must be a priest unto himself and his family and this is my sermon for the season………….

The fact that the Old and the New Testament are in the same book was already a major victory for the adversary. YHVH is not the Father. The Gnosts called him the ‘Demiurg’, a pseudo deity. The stories about genetic engineering in the Garden of Eden by some advanced alien are also more credible than the classical interpretation.

The ‘god’ of the OT is Christ’s enemy.

The story of Jesus’ life in the Gospels are not tenable and a mishmash of older legends and astrotheology.

However, the NT is still the most profound and important book that humanity has when it comes to spiritual truth.

Jesus Christ, the Prophet of the Spirit

Jesus was a prophet. I’ll go even so far as to say the most important of all, as he incarnated the Spirit like no one before did.

This was well known during his time, but the texts were corrupted and only around 340 the Bible was compiled. Many important texts were left out. Even more texts were ruthlessly surpressed by the nascent Vatican, coming back only the last few decades, with the Dead Sea scrolls and the Nag Hammadis.

By then the adversary, temporal power, had subverted the story, claiming Jesus was the Son. But Jesus, to my mind, makes quite clear the Spirit is the Son (God Immanent).The Father is God Transcendent, he’s not in his creation.

This can still be gathered from the NT, but only if you free your mind from the mind control.

For instance, the first verses of John are quite clear. They’re the most important ontological verses in the Bible:
1 In the beginning was the Word, and the Word was with God, and the Word was God.
2 The same was in the beginning with God.
3 All things were made by him; and without him was not any thing made that was made.
4 In him was life; and the life was the light of men.

A little later John goes on to say that the Word incarnated in Jesus.

Paul, also, on one or two occasions says ‘Jesus Christ, who has made everything’, clearly indicating it was not about Jesus the man.

The Spirit pervades creation and is not only the light of men, but of all life and indeed, anorganic matter. In this way pantheism is a subset of Christianity proper.

This whole story about Jesus the man being the Son of God is nonsense. Jesus says: ‘come to me and I will give you peace’. But how can we come to a dead man? But if you realize that ‘I’ is the Spirit, because that was who he truly was, than everything is clear.

Jesus says: he who knows Me has eternal life. But how can we know a dead man? The Spirit is in our heart, though, and knowing it means knowing what is Unchangeable and Eternal.

All the Gospels get a completely new meaning when you read them again, realizing ‘I’ is the Spirit and not the man when Jesus speaks. This is particulalry the case with the fourth Gospel, which is the most important one.

It was only after realizing this that I truly started to admire both Jesus the man and the Spirit and started to identify with Christianity.

Jesus Christ, then, is the name of the Spirit and the Spirit is the real God of the New Testament.

By knowing the Spirit and, very important, doing his will, we can also come to know the Father, when the Spirit considers us ready. This is the mystical experience that holy men and women have reported throughout the ages.

I believe this is the secret ‘esoteric’ Christianity of all ages.

It’s also completely congruent with Buddhism and Taoism and much of Gnosticism too, of which Jesus the man was a crucial exponent.

Gautama and Lao Tse preceded Jesus and culminated in him as the Great Prophets of the Spirit. The three of them often play Whist in heaven, having a good crack about all the silly disbelievers they met in their day on earth.

This, in short, is how I look at these things.

 Oh, I love the Gospels. Nowadays, anyway, I couldn’t stomach them for the longest of time.

They’re very profound, but only if one realizes the above, otherwise it makes no sense at all. But while the NT is nowadays my favorite book, with a special place for Lao Tse in my heart too, I love all the religions. Not their exoteric tyrannical mind control, but their real message, which is still available for the thoughtful observer.

Having said that: I’m not happy with Judaism and, to a lesser extent, Islam, as they focus solely on the Father, and worse: on Law, which is antithetical to Christ. Lao Tse fought Law too, which was represented by Confucian thought in his day. But even Islam recognizes the Spirit (which it calls Fitrah) and says worshiping it is the real faith, adding, interestingly, ‘but the people don’t understand’.

Rumi and Sufis represent the Spirit in Islam.

Happy Birthday Jesus!
You were not born this day 2013 years ago. Christmas actually celebrates the Winter Solstice. But it does not matter, because it is about remembering you and what you represented: the Spirit, who created everything. Who is with us always. Who we can disobey at the cost of karma, and who we can obey to know hapiness and become legends of our own. All for good fun.

Help us crucify self and carry our cross, so we can transcend our carnal nature and become One with our maker!

Thank you for everything Jesus, because without you, we would not have known the Spirit and the Enemy would be winning!

Merry Christmas Everybody! May those of Good Will prevail!

Ed Griffin admits the Bankers own all the Gold and that Usury is the issue

Ed Griffin

In an amazing interview with the restarted Daily Bell, Ed Griffin candidly admits the Banker own all the Gold and that Usury is their main tool.

Some time back the Daily Bell restarted their operation. Openly admitting they were in it to provide good investment advice, which is fair enough. For a while they left us alone, focusing on commentating on current events. But a few days ago they unexpectedly reopened our little feud with an uncannily scathing attack at paper money reformers in general and ‘the anti-usury crowd’ in particular.

To be honest, I would have ignored it, I don’t really know what there is left to say about Austrianism and the Daily Bell’s quaint economic ‘theories’ that has not already been said many times now. But then a few days later they posted a highly intriguing interview with G. Edward Griffin, directly responding to a number of vital issues that I discussed in ‘Who is Ed Griffin?‘. This article described how Ed Griffin’s ‘the Creature from Jekyll Island’ aimed to subvert the legacy of Ezra Pound and Eustace Mullins in the Truth Movement. Mullins, coached by Pound, described how the bankers created the Federal Reserve and how they love Gold, which Griffin tried to make go away with his book. Pound’s great enemy, of course, was Usura, not paper money or, God forbid, ‘inflation’.

Interestingly, in the already mentioned hit piece, the Daily Bell warned its readers for people talking about the Federal Reserve being ‘private’, but this was not an issue interviewing the author making a career of claiming the same thing. As we know, the Daily Bell, Ron Paul, Tom Woods and all the others want us to believe Central Banking is a ‘statist’ operation, fiddling with the wonderful free market operations of the banking cartel.

Ed Griffin responds
Let’s just get to the core of it. The interview is here.
Anthony Wile asks Griffin: “Public banking types – those who want a central bank controlled by “the people” – continue to attack libertarian websites for proposing that gold is money. They believe all gold is owned by central banks and elite families and their colleagues.”

Griffin responds: I think the main question there is the assumption that the gold supply in the world is predominantly held by the richest families and the banking cartel. That’s not a truth. There’s no doubt they own a lot of gold and maybe in terms of any single source they may own more than any other single source unless you consider the earth itself. Most of the gold in the world has never been dug out or pulled out in any form at all – 99.99% of it is still in the earth and the oceans. There is no doubt that bankers have a lot of gold and the reason they have gold is because they’re smart. They know that gold is a storehouse of value and that as all the currencies of the world devalue, those who hold gold will not lose their wealth. So they’re smart.

Now, the issue is what about the rest of the gold? Who owns that? Well, like I said, most of it’s still in the earth. When the price goes up people start to dig it out, extract it from the oceans. One of the reasons they’re trying to suppress the price is so as not to make it attractive. I personally became involved in a very small gold mine in Montana some years ago and as we were activating that gold because the price went up there were new mines opening up all over the place that had been dormant for all these years. Gold is everywhere. It can easily be extracted; it’s just a question of price. If you allow the price to seek its normal, free-market level then the price would balance. So there’s no shortage of gold. When the price goes up, all the gold that’s in people’s drawers in the form of old watches and rings and bracelets and stuff, which is a tremendous amount, will come back into the market.”

So there you have it: the Bankers own the Gold, but we’re lucky: 99,99% of the Gold is still in the Earth and when the price rises, more people will dig up Gold. At this point they’re talking about 170,000 tonnes of Gold as the Globe’s official reserves and mining adds about 1% per year to that. So, should we move on to Gold as money, we can just dig for Gold a few decades and have some Gold of our own. Bankers are just very smart, you see?

This is Ed Griffin’s line.

He then continues:
“So the question is, then, how come the banks are the leading opponents of backing a money system with gold?”

So even in the face of his own admission that they own it all, Griffin still claims the bankers are against Gold as money. Of course Griffin is just pretending he doesn’t understand the Dialectic, where the bankers own both sides of the conflict, in this case Paper vs. Gold.

Before getting into this, here’s the other major issue that Wile brought forward: “What are the top men of central banking interested in? Are they in it for the usury or are they in it for control? This is a major and profound question, in our view.”
Yes, you read that right: The Daily Bell wonders whether the bankers are in it for the Usury! Of course he’s only talking about ‘the top men of central banking’, but perhaps in a next interview he can explore the Trillions of usury commercial banking rakes in yearly? Please remember the Federal Reserve Bank pays back to the Government the usury it makes on Sovereign debt it holds. And that commercial banking creates up to 97% of all money in the economy, not central banks.

Here’s Griffin’s response: “The top bankers are interested in it for the usury but their partners in politics are interested in it for control and it’s hard to say which is which, between the two of them, because it’s a revolving door now. I would say central banks, or the big banks that comprise the central banks, and governments now are welded together into one sold piece. It’s hard to distinguish or pull them apart. So the answer to that question is both usury and control.”

Of course it’s not or/or but both: power, control, this is what the enormous wealth of Usury begets them and indeed they (politicians and bankers) are indistinguishable. The politicians are owned by the bankers though, that should be clear but it’s something Austrianism prefers to downplay for obvious reasons.

So, hardcore Austrians Anthony Wile and Ed Griffin conclude: the bankers own all the Gold and they are in it for the Usury (and the control it brings).

All that is now left is the question: how then, if we move to Gold as currency, will there be no usury? How will there be no control? If they own all of it anyway? Will the Bankers not lend the Gold into circulation at interest?

Why are the bankers against Gold monetary reform, as Griffin continues to maintain, even in the face of these stunning admissions?

We can of course talk about the dialectic, Paper vs. Gold in this case, with the bankers owning both sides and routinely ‘attacking’ one of the protagonists to create the illusion of real ‘conflict’. But why would we. Ed Griffin knows this, as does Anthony Wile.

They’re just out of ammo and they know it and thanks to this interview, we do too.

Who is Ed Griffin?
The Daily Bell: Usurious Commercial Banking is Good, Interest-Free Government Money is Tyranny
How the Money Power created Libertarianism and Austrian Economics
Austrianism is Dying! Truthers Unite!

Rationalizing Usury: the Time Value Hoax

Uncle Scrooge, a famous Usurer

 (Left: a famous Usurer)

So I’ll get down upon my knees and bless the Working Man,
Who offers me a life of ease through all my mortal span;
Whose loins are lean to make me fat, who slaves to keep me free,
Who dies before his prime to get me round the century.
Whose wife and children toil in turn until their strength is spent,
That I may live in idleness upon my ten percent.
And if at times they curse me, why should I feel any blame,
For in my place, I know that they would do the very same.

(John Turmel, Thoughts of a Rich Man on Usury)

The idea that ‘the lender can’t use the money when he lends’ is the classical argument to rationalize Usury. But the bank doesn’t lend anything. It’s all credit by bookkeeping.

The ‘time value of money’ is the notion that holding money today is worth more than tomorrow. Between today and tomorrow there will be inflation and the missed opportunity of investing it.

It is at the core of modern theory of finance. It is the rationale for Usury, it can be heard each and every time when people defend it. It is the defining belief that creates acceptance for interest on loans of money.

Because Usury is supposed to be the compensation for the ‘lost’ ‘time value’ to the lender.

People will also point at risk, but there is no risk, there is collateral. Only bogus credit card debt and consumer loans are without collateral and the interest on these kinds of loans can be quite astonishing. But for serious credit, business loans, mortgages, there is collateral and there is no risk to the lender.

The fact that the time value idea still holds so much sway is quite astonishing, after 12 years of Truth Movement and mass exposure of fractional reserve banking.

Because the fact is: nowadays the creditors are usually banks and banks don’t lend anything. They create credit, by bookkeeping. That is what fractional reserve banking is: double-entry bookkeeping, in which debit and credit are implicit and automatic.

It is one thing with simply uninformed people, including most economists who are remarkable mainly for their ignorance in monetary matters. It is borderline bizarre with the Austrians, who are famous for their analysis of fractional reserve banking. But how can one on the one hand defend the ‘time value’ hoax and on the other hand explain that the banks create money and don’t have reserves for what they purportedly lend? It creates quite a cognitive dissonance.

The banks don’t lend and that’s why the ‘time value’ ‘argument’ is a total hoax. Utterly irrelevant. The bank wins nothing by creating money (other than the opportunity to extort the ‘borrower’, who doesn’t realize he isn’t borrowing anything real) and it gains nothing when the money is repaid: the bank takes it out of circulation and the money just ceases to exist as a concept. There is nothing in the books anymore.

The Austrians, and indeed also many paper money reformers, then go on to claim the problem is that the bank creates money! And that we will all feel much relieved when these are indeed savings when we borrow from the bank. Then our sense of ‘justice’ is satisfied.

This hoax is known as ‘full reserve banking‘ and nowadays there is a growing and unisono choir for ‘reform’ of banking based on this idea. The Financial Times’ Martin Wolf wants it. The Frankfurter Algemeine splashes a front page with this great idea. Dutch television is soon airing a major program defaming fractional reserve banking and hallowing our right to pay interest to ‘savers’ (the rich), instead of bookkeepers. The IMF is writing positively about it.

We don’t realize that this means that we will continue paying the same amount of money. Why aren’t we asking ourselves the question ‘but if the bank creates the money by bookkeeping, why am I paying interest?’

That is of course the rational response to the awareness that money is created at close to zero cost.

But even if money was printed debt-free or if we use Gold to back all the money, usury would still be both wrong and unnecessary. Because why do people save? To use it later! They don’t want to use it now, otherwise they would not save! So they lose absolutely zero by not being able to use it now if they lend it out. Not using it now but later is the essence of saving! And if we are not going to use it now, why not let somebody else use it in the mean time??

And even when we think of inflation we are wrong: most ‘inflation’ in the sense of rising prices since the war was caused by ever higher interest charges passed on through prices. It was not caused by money printing, the extra money was printed to pay off the usury. Interest bearing money cannot exist without eternally rising prices (or eternal deflation when the money supply cannot grow, as is the case with Gold). Interest-free money, on the other hand, will see stable prices if managed correctly.

So there is no ‘time value of money’. The rich are just insanely addicted to money and they want more. So they have spin doctors and useful idiots (‘economists’) think up excuses to explain it’s all so necessary and pay them a few hundred grand per year to have it look good.

Inconvenienced millionaires
Why do people have difficulty to see the iniquity of Usury? Someone recently said it is because people don’t see themselves as poor, but as ‘temporarily inconvenienced millionaires’. We are all raised to work hard and expect ‘success’. And ‘success’ is making a bundle and then retiring, having other inconvenienced millionaires sweat away to service the loans we will be giving them through our mutual funds.

But: working hard has little to do with it. There would be many millionaires if working hard was leading to wealth. It’s true that genius expresses itself through a combination of talent and hard work, but most of us are just beta males and the opulent want us to lick their boots, not to join their ranks.

We are raised to be ‘responsible’ adults and are told frugality and saving are a real part of that. We are learned the magic of compound interest at school. Nobody is telling us some other guys have picked up this trick a few centuries ago and have a bit of a head start, ripping society apart with the trillions that compound interest is now making them yearly. We are not told that paying compound interest to the rich is what is keeping us poor. No, morons like Peter Schiff now say we need to save more and we need incentives for that: higher interest rates. Peter Schiff is not explaining how people, who already lose more than half of their income to usury (partly passed on in prices and taxes), are going to save more when they have to pay even more interest to the rich, while they are already living from pay check to pay check, as most Americans are today. Even a good man like Paul Craig Roberts falls for this. It’s our economic illiteracy, not understanding money and Usury.

Because the simple fact is: by saying ‘I wouldn’t lend without interest’, we relegate ourselves and our brethren to interest slavery. Because we don’t lend, we borrow. By not lending to our brethren, they will not lend to us. We will have to go to the rich and to the banks. Why was the middle class sending their children to the bank for a mortgage when they had the assets to set them up with a good start in life with an interest-free mortgage? Why are people worrying about their savings today, while at the same time their children face foreclosure? Why are these savings not sunk into paying off the banks to save the wider family from the losses to usury?

We talk about ‘corruption’ in finance but we don’t see that finance itself is corrupt.

By saying: I want interest, we say it’s alright that we pay 300k interest over a 200k mortgage over 30 years. We say: it’s grand that I lose up to 40% of my income to usury passed on in prices even if I have zero debts. We say: how splendid the Government is losing up to 450 billion per year on servicing the National Debt. How great that there is income tax to pay off this money to the ueber-wealthy. We say: how magnificent that the ultra poor nations lose up to ten times more to usury on their foreign debts than they receive in development aid. We say: ah, just don’t get into debt, even when there would be no money if there was no debt. We say: yes, let’s destroy all economies with insane austerity, because the interest on this freshly printed money must be paid off.

Because, hey, I wouldn’t lend without interest!

There is no ‘time value’ of money. It is all created by bookkeeping and the bank loses nothing. It creates the money when lending and retires it when repaid. But even when we talk about savings, there is no real ‘time value’.

Meanwhile, when we say ‘I wouldn’t lend without interest’ we are just parroting the line of the rich. We don’t realize that we are the ones paying and that we should be saying: “hey, I’m an interest-slave, how do we bust this ‘time value’ hoax, I need interest-free credit, I don’t want to be a slave.”

But for that we have to rid ourselves of the slaver in our selves. We must abandon the American Dream. That nightmare of striking it rich and putting our own boot on the face of our brother.

Credit can be interest-free if it’s mutual. I give you credit, if you give me some. We don’t even have to give up any real money: we can have a credit facility keep the books at cost price. Credit and Debit are just two sides of the same coin in double-entry bookkeeping.

Yes, it requires a little new thinking, a little shedding of wrong beliefs. But the poorest 80% (us) are paying up to 10 trillion in usury per year globally to the richest 10% and most of this money actually ends up with the 1%. That 1% now owns 43% of all assets in the world and the poorest 80% (us) own only maybe 10% if we’re lucky. Usury is what is causing this. Even if we have zero debts, 40% of our disposable income is lost to usury passed on in prices, so it has nothing to do with ‘personal responsibility’. It is the System that we prop up that is keeping us down.

It is when we start to see this, when we start to see what exactly is making these ghouls in London and Wall Street so incredibly wealthy, that we can begin to mend the destruction that the Money Power has been wreaking for many centuries now.

Babylon = Usury! We want Interest-Free Money!
Ten Atrocities that would not exist without Usury
The Problem is not Debt, it’s Interest (with Video)
Forget about Full Reserve Banking
Full Reserve Banking Revisited
Gary North’s Bluff: the Lie he’s been sitting on for 50 years

More on Inflation, the Value of Money and Money as Part of the Commons


A lively discussion ensued after the article on MPE’s take on inflation. But the basic issue remains: a misunderstanding about what determines the value of money.

I realize it’s all unpleasant.

I want to thank all who participated for the level of discussion on the previous article, both in term of content and tone of voice.

A Recap
The whole discussion focused on price stability in MPE, with the MPE advocates maintaining prices will remain stable.

Whereas I stated that people could spend as many promissory notes as they had assets to back them with, this was nuanced, by the explanation that there is an organization (CMI, Common Monetary Infrastructure) that manages some issues, including checking whether people will have sufficient income to service the promissory note.
So people can spend promissory notes that they can both service and back with assets. Also, no asset can be used more than once to back a new promissory note, this is also useful to add.

What it all comes down to is this: MPE believes that the value of money is dependent on the underlying asset.

But the value of money is simply a matter of supply and demand in the economy. That’s the whole crux.

MPE implicitly assumes that there is always demand for asset backed paper. But the problem is that this paper is not very liquid. For instance: a promissory note spent to buy a new house can be paid off over the life span of the house, which could be a hundred years or even much longer.

What is the cash value of a paper asset nominally worth 100 that will mature over the coming century? 10? 20? 30 maybe?

Meanwhile, a great deal of this paper would flood the market, because in an interest-free economy people would have vastly improved creditability.

The value of money is not the underlying asset. Simple proof of that is basic debt free money. Just paper spent into circulation. There is no underlying asset. Still it has value. Why? Because we agree to use it as money and there is a certain demand for money in the economy. How much demand? It depends on how much is needed, how much is available and its price.

More money in circulation means a lower price for it and higher prices for all other assets. This is what MPE simply denies. This is also why its take on inflation is important. Interestingly, nobody addressed my basic critique that both growing volume and usury cause higher prices, not just usury. But failing to correctly address pure inflation in the economies of the West in the last few millennia, including Zimbabwe, is the basis for too many promissory notes in MPE.

While we create the money as credit, once it’s spent into circulation, it is ruled by the laws of money, not credit.

The Promissory Note versus Money as Part of the Commons
The promissory note is MPE’s answer to how the bank usurps our credit. MPE correctly concludes the bank doesn’t lend anything and that ‘their’ credit by bookkeeping is in fact our credit. The bank in fact creates the credit for us on the basis of our promise to pay. But if our promise to pay is all it takes, why do we need a bank? Let alone indentured servitude (usury) in return for exercising our right to promise to pay??

And since sovereigns and the opulent have forever paid with promises to pay, then perhaps so should we. That’s basically MPE’s take. We don’t need to go to a bank, we don’t need permission, there are just some basic rules, there must be assets and there must be enough income to service the promise.

In this way, MPE also avoids the annoying notion of debt. When using a promissory note, we are not going in debt, we are exercising our right to pay later.

Personally I believe MPE takes it too far here. Money does not exist in a vacuum. Why is money so difficult to reform? Because we need each other to make it work. My promissory note is dependent on your acceptance and vice versa. Money is an interplay of individuals. Of individuals and the ‘community’, whatever that may be.

To end the bank’s obfuscation (usurpation), we cannot just say, it’s not yours, it’s mine. Because it is ours too.

MPE, like so many, including myself, wants to avoid having to go someplace and face some technocrat and be dependent on him having a good day for you to get what you basically have a right to.

But the bottom line is: our promise to pay does imply a debt. To the community at large, who allows us to buy now and pay later. All individuals (‘the community’) allow each other this, this is the essential nature of mutual credit.

So I think it’s difficult to avoid: we will need some sort of credit facilities (not banks) who will have to manage it all. They should have clear charters and the understanding should be that within in certain rules we have a right to the credit and not because the credit facility is so good to us, but because it is our right and the credit facility only represents the community and does nothing but keeping the books for us.

But the credit facility is necessary, to make sure the assets are there, and that there is indeed the income to service the debt and, yes, to make sure the volume is managed properly.

We will have a right to credit, but not to as much credit as we like. Money is a part of the commons and it’s not unlike land and reforming land also does not mean that we just say go out there and take what you want. Simply because there is a limited supply of it.

How to manage volume?
The simple fact is: 2000 years of monetary theory and practice does not provide a clear cut formula in the sense that we can mathematically say ‘this economy needs so much money’.

But there are basic pointers. If both the volume of money and prices are rising, than most likely inflation is the cause and rising prices the effect. Deflation will cause economic contraction. Money scarcity will cause permanent depression. If money is scarce, adding money will not lead to rising prices, but to more activity.

Velocity of money is equally important to volume and the real volume of money is nominal value of the money supply times velocity of circulation. Usury slows down the velocity of money. A demurrage accelerates it.

The Money Power always makes sure money is scarce and Usury always causes money scarcity, there is never enough money to pay off interest + debt.

To manage volume, we must monitor economic activity and price levels. If activity is sluggish, money scarcity might be the problem. Add money until prices rise. If activity is still below par, there are other economic problems.

We must create as much money as stable prices allow and no less to avoid money scarcity. If economic activity grows, more money must be added to finance the extra activity, otherwise money scarcity will return and the economy will grow less than it naturally would.

This can be reasonably managed by a competent currency board. It’s not rocket science. If sufficient people in society realize what is going on, this can be managed transparently.

A Usury Free economy will see great abundance. The living standards of the many will rise several times over. But this abundance does not show by endless credit. It shows through lower prices, shorter working weeks, higher wages, self-employment, co-ownership, high levels of home ownership and low rents.

Mathematically Perfected Economy provides a high level appreciation of many monetary issues. There is great merit in Mike Montagne’s long standing efforts to address the most crucial issue of Usury, not just by analyzing the problem, but also by providing an attempt at an integral solution.

But the outright denial of the importance of ‘circular inflation’ for price levels is simply not substantiated with a real case and does nothing to address the clear and present evidence of the historical record. This shows in its management of volume of promissory notes.

This mistaken analysis of volume is quite prevalent in the wider interest-free credit community and will really have to be solved if the community is going to move on to the next level and make a real difference in the struggle against Usury.

Mutual Credit and Inflation
Interest-Free Credit (including MPE!) and the Management of Volume
How to manage the Volume of Money in Mutual CreditThe Cult of Mathematically Perfected Economy and its Ridiculous Stance on Inflation


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