Friday, February 9, 2007

Chapter Four

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and born in sin. Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with the flick of a pen, they will create enough money to buy it back again. Take this great power away from the bankers and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a better and happier world to live in. But if you want to continue the slaves of bankers and pay the cost of your own slavery, let them continue to create money and to control credit."
- Sir Josiah Stamp, Director and President of the Bank of England during the 1920's




Question: [Answer this question for the children born today, not for yourself.] Would it be better to live life as a slave to debt that can never be paid, or as a free human being in a country that truly offers a completely debt free future to all its citizens?

For most of us, apathy in the field of economics is an act in which the brain shuts down in the face of overwhelming contrary information. While discussing the subject of this book with a good friend the other day she made the comment, “That’s the stuff that makes my brain hurt.” Even those who believe they understand economics are unable to see all the cotton amongst the wool. At least it’s better to believe that then to think they choose to ignore the cotton at the expense of others. We are led to believe that by using the present economic system now operating in Canada that it is possible for everyone to have all the wealth necessary to have an abundant life. A quick look through the shelves of any major library at the vast number of books expounding the great opportunities offered by this system will show this. But then we look around our society and see all the evidence of poverty, lack and need. There is a contradiction. Hopefully, if you have read this far, you have a little willingness to see that it is the system that is at fault and not the people.

Only when we see that it is The Private Debt Money System that is the cause of so many of our country’s problems will we become willing to change our thinking and look for a better way of doing business. That way is The Public Credit Money System. With The Private Debt Money System only the banks win. Everyone else loses. With The Public Credit Money System everyone including the banks will win. The banks will lose only the control they now rule the world with. But that is the one thing they do not want to lose and that is why they will fight with everything they have to maintain the system they have put in place. This control must revert to the people.

In chapter one an example of a form of The Public Credit Money System used on the Islands of Guernsey and Jersey is cited. The following example is freely “borrowed” from a web site you’ll find under

You will notice that much of this work has been borrowed from others. This work is not so much about me writing new things that are educational but to cite educational information that has already been created by those who know more than I on these subjects. My task, as I see it, is to connect The Private Debt Money System to many problems existing in the world today, the worst of which is the starvation, in this world of abundance, of 18,000 children a day. It is also to place this information in front of people in a very public way and then, to plead for a sane money system to be adopted in its place.

For the full article, diagram and other related articals see:

Public Credit Money System

“…under The Private Debt Money System, there is a constant shortage of money which causes re-occurring inflation-depression cycles. The Public Credit Money System is designed so that this shortage of money never occurs.

Under the PCMS, a publicly owned national treasury (Bank of Canada) under the direction and control of the federal parliament, would have the sovereign and exclusive authority over all money creation in Canada, not the private banks! This is

[Diagram not yet included] absolutely crucial to putting the brakes on escalating public and private debt and putting wealth back in the hands of the real creators…. the people. …The Bank of Canada would create all the nation’s money for their legislatively approved expenditures, interest free. So, instead of paying for a project two or three times over (principal and interest under the present system), the taxpayers would only have to pay for it once. As an example, a one hundred million-dollar expenditure for upgrading the national highway system would only cost one hundred million dollars, not two or three hundred million. The federal parliament would authorize the bank of Canada to “create” one hundred million dollars and spend it into circulation in the economy for the highway improvements. Once the project is finished, the repayment of the “loan” would be accomplished through some form of taxation or user fee. Once to “loan” is paid off, the tax or fee is abolished, leaving the asset, the new road, free of any debt.

Of course, we still do need banks from which to operate from in carrying out our daily financial activities. This includes consumer loans to the general public and small and large business. Under the PCMS system, the private banks can borrow funds from the Bank of Canada at a set interest for the purpose of re-lending the money to individuals and businesses. The bank’s interest rate is then set above the BoC rate in order for the bank to make a profit.

For example, the BoC exercises its authority and creates let’s say, $1,000 and lends it to the banking system at a rate of 6%. The banks in turn use the money to make loans to businesses and individuals. The banks’ interest rate is set at, say, 10%. The BoC opens the faucet and $1,000 flows into the economy (sink). At the same time, the government is approving its annual budget for public expenditures and decides that it requires $200 for its duly authorized public projects. Exercising its authority, the BoC creates the $200 to pay for the approved expenses. The BoC’s other faucet opens and this $200 of debt-free money pours into the economy. After a year, the private sector’s $1,000 debt is due for repayment. The principal drain opens up as the people pay the banks and the banks repay the BoC. The money disappears – is extinguished – as soon as it reaches the treasury.

The interest drain opens. The banks pay their interest to the treasury. They borrowed the $1,000 from the BoC at 6% and loaned it at 10%. Therefore, the borrowers pay $100 of interest to the banks (10% of $1,000) and the banks pay the BoC $60 in interest (6% of $1,000). The $60 flows out of the interest drain and disappears – is extinguished.

Because $200 of debt-free money came into the economy, it was not necessary to borrow to pay the interest due on the $1,000. Both this principal ($1,000) and the money needed to pay the treasury interest on it ($60) flowed into the economy and then it flowed out again. There was an adequate supply of money in the system to pay the interest. The third drain in the system is there in case government expenditures are greater than the amount of money that is extinguished through the interest drain within a given time. In this example, the BoC extinguished $60 of debt-free money when it received its interest payments from the banks. The banks retain $40 as profit and to cover their overhead. This totals $100.

The government created and spent $200 into circulation, so, subtracting the interest the banks owe the BoC ($60) and the profit retained by the banks ($40), from the $200 of debt-free money issued, there is an excess of $100 in purchasing power in the economy.

In order to keep the system in balance, this $100 will have to be removed from the money supply. The simplest way to do this is to tax it out. (i.e. a gas tax). The $100 is gradually collected by the treasury (BoC) and when it is all collected, the tax is abolished. Thus, permanent taxes may not be necessary.

Using this system, every family can afford to own a home and pay it off in a much shorter time than under the private debt money system. They would also have much more disposable income to meet and satisfy other needs.

There are many benefits under this Public Credit Money System:

1. Money becomes permanently available at reasonable rates.

2. Business activity and employment surge forward.

3. Inflation is halted, protecting wages, savings, and those on fixed incomes.

4. Bankruptcies are no longer necessary to balance successes.

5. Private debt is made payable at all times.

6. Prices fall along with debt and stabilize when debt becomes payable.

7. Cycles of boom and bust are eliminated.

8. All existing primary debt, both public and private, diminish and ultimately reach a level below that of the money supply.

9. Federal government borrowing ceases entirely.

10. Federal taxation is drastically reduced immediately.

11. Provincial and local taxes are gradually reduced to much lower


12. The national debt is reduced and eliminated, never to grow again.

13. Working people at all levels can afford to buy homes and enjoy comfortable and prosperous lives.

14. Constitutional government rises superior to and replaces private monetary authority, power and influence.

15. The present practice of usury by the private banks is eliminated.

16. No more scrambling for reserve funds by the private banks.

As Canadians, each of us is responsible for learning the truth about why we are buried under this mountain of public and private debt. A debt which we will leave to our children to suffer with. A debt that will drive us to a total economic collapse unless we make the necessary changes NOW! Here is a short list of a few of the basic and necessary changes that need to happen.

1. A Canadian Treasury (a publicly owned and controlled Bank of Canada) shall be the sole and exclusive source of all original monetary issue.

2. The Bank Act of 1913 and all of its amendments, codes and regulations are repealed. All assets of the private corporation, the Bank of Canada, shall be transferred to the Canadian Treasury, a publicly owned Bank of Canada.

3. Private banks and other financial institutions are prohibited from creating money or money credits in any form.

4. As designated under the BNA Act of 1867, the Federal parliament shall have exclusive authority over currency and coinage and the issue of paper money and credit. In addition, the Federal Parliament shall also have exclusive authority to provide and regulate money and money credits for all the requirements of Canada, both public and private.

5. Money and credit needed to pay obligations of the national government shall be spent into circulation debt-free.

6. The BoC shall service the financial needs of the private sector through loans to banks and other private entities.

7. The interest rate charged by the BoC on all loans to the private sector shall be regulated mathematically to withdraw money from circulation at a rate that will maintain a balance with public expenditures. Taxes will be levied only if and when authorize expenditures would call for a BoC interest rate greater than a reasonable statutory ceiling rate.

8. Provincial and municipal levels of government will qualify for interest-free loans direct from the BoC to finance their respective duly authorized and voter approved projects.

9. All legitimate financial obligations in effect hen the PCMS Bill becomes law shall remain in force until paid.

10. Federal government borrowing is prohibited in all its forms.

This is the stuff that makes my brain hurt. This may be a good time to remind ourselves of what the banks think of this financial policy.

“If that mischievous financial policy, which had its origin in the North American Republic, should become indurate down to a fixture, then that government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and the wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.” The London Times

Perhaps it is time for monarchies to quietly slip away and be no more. A banker once said, “Permit me to issue and control the money of a nation, and I care not who makes the laws…” It is time to say to The Private Debt Money System bankers, “enough, you have had your day.” Perhaps it is time for them to quietly slip away and be no more. It was bankrupt monarchies who gave The Private Debt Money System bankers, first their foothold, and second, their stranglehold on the economies of the world. Both no longer serve the people. Both need to step aside and let the people serve of themselves, by themselves and for themselves.

The following is a further option offered to the Provinces of Canada. The following was taken from the same web site as the above. It is written with British Columbia in mind but applies to all provinces.

Provincial Credit System

A second option available to the provinces, failing action by the Federal Government, is to set up its own mechanism to provide additional credit to British Columbians based upon the wealth of the province. The BNA Act of 1867, our Constitution, Section 92.3, the Province is allowed to “borrow on the sole credit of the Province”, That is to say, upon the real wealth of the Province. A few years ago, The World Bank published a report in which they estimated the worth of Canada’s natural resources at 2,500 trillion dollars! This figure did not include our water resources or the resources of the northern territories.

Based upon the size of British Columbia and its known resources, BC.’s wealth could be conservatively estimated at 150 to 200 trillion dollars. More than enough to make all British Columbians very wealthy. Under the BNA Act of 1867, the Provinces or more precisely, the people, hold exclusive authority over their natural resources. Presently, governments borrow from private banks and other sources because these lenders recognize this natural wealth and lend against it. Therefore, there is no doubt that there is actually a Provincial credit and the Province can certainly establish its own mechanism to use this credit directly, without mortgaging its wealth nor going into debt and paying unnecessary interest charges to individuals or corporations, like the private banks.

What is needed in BC? as well as other Provinces, because they face the same problem, is a Provincial Public Credit System. A mechanism whereby the Province can provide credit within the Province of BC. for its own legislatively approved expenditures, including health, education, highways, bridges, resource development and other concerns. This credit would be interest-free and repaid through taxes or user fees to keep the system in balance. The key here is “interest-free”. Interest charges amount to a growing, significant expenditure for government, business and individuals. These interest expenditures are absolutely unnecessary!

A prime example as to how this can be utilized, would be mortgages for provincial residences in BC. The Province, through a system of “public” banks or credit unions, can issue “credit” (loans) to British Columbians for the purchase of a principal residence within BC., interest free! The only necessary charge would be a nominal administration fee to monitor and process payments. (We don’t need to borrow from the private banks and pay them interest!!) This single action alone would allow every British Columbian to own their own home within a few short years. No more paying for a home 3, 4 or 5 times over because of burdensome interest charges levied by private banks. This single act alone would also free up hundred’s of millions of dollars for consumers to spend on other goods and services, creating thousands of new jobs and giving the economy an enormous boost.

Another example would be resource development. The Province, through a Provincial Credit System can advance credit to companies to develop our natural resources. For example, if we needed to increase our natural gas production, the Province can provide the credit needed for the private sector to construct the facility. By charging a nominal rate for the use of the Provincial Credit plus a royalty percentage based on production, the Province would earn revenues to repay the credit advance and support some of the other needs of the Province. In Alaska, the state collects royalties from the producers, who develop their natural resources, and then pass some of this revenue on to each and every citizen of the state in the form of a state dividend. There is no reason why this cannot be done here.

In 1939, the Provincial Government of Alberta under William Aberhart passed a law, which was to provide exactly this. The Alberta Credit House Act was passed with the intention of providing additional credit to Albertans. This is were the network of “Treasury Branches” originated. It was the intention of the Alberta Government to provide interest free credit to Albertans and get away from the debt money system operated by the private banks. Unfortunately, World War II brought about a suspension of this Provincial Credit System and in 1943, William Aberhart died in a car accident. The Act is still on the books but it has never been implemented.

This system would operate similar to the pictoral example of the Public Credit Money Sink. The only difference would be that the Province would create credit and issue it within the Province to meet our provincial needs and extinguish the advances (loans) as payments came in. The Provincial Credit Office would come back in the form of a regular payment schedule (in the case of credit advances to the private sector for development of provincial natural resources) or through taxes and fees for public services to keep the system in balance.

To summarize, governments at all levels, private industry and the public at large are all under financial pressure. We see, on a daily basis, government cutbacks, budget shortfalls, reduction in services, pressure to either raise taxes or find other means to raise revenue and an increasing public debt which cannot ever be paid back under the present debt money system. Business either moving out of province or going under, leaving thousands of our citizens unemployed, unions striking for higher wages and benefits, injured workers fighting for support payments which are harder to come by or are reduced. More and more, wives are forced to work to provide a second income in order for families to survive, husbands are taking on a second jobs, part time work or working overtime and weekends just to make ends meet. And on top of all this, personal debt has climbed to an all time high and shows no sign of stopping.

The problems are daunting but not impossible to overcome. But the promises and the remedies offered by past and present governments will not solve the problems. Provincially, we have the power to make the necessary changes. All that is required is the will to do what must be done. We need to establish our own mechanism for providing credit within the Province. A growing and expanding economy requires a growing and expanding supply of money to meet the needs of society. Under our present system, the banks supply the “money” to meet demand but extract more back in the form of principal and interest payments. This causes the constant shortfall of the money supply in the economy and results in problems such as those referred to above. Under a Provincial Credit System, the supply of “credit” will always be adequate enough to meet the needs of the people and provide for a prosperous future for all of us.

The above writing indicates just a few of the many advantages to The Public Credit Money System that pertain to Canada and its Provinces. There are many more. If Canada would implement a PCMS it would not just be Canadians who would benefit. Under our present system we are forced to say to other countries that need help, “We cannot afford to help you.” Or “We can only help you this much.” We sit silently and wring our hands at the news that 18,000 children are starving to death daily in this world. I do not believe there is one Canadian who would refuse to help any starving child if they thought that there was a way to do that.

Let me be the first to tell you that there is a way. Canada could become a world leader in assisting others. We have the opportunity to demonstrate to the world that what we can do, they can do. The production of food would not be tied to a market with limited dollars. Supply would equal demand, for supply would depend on need not money.

Earlier, when I talked about changing our thought system, this is what I meant. We can eliminate thoughts such as, “We do not have enough money. Money does not grow on trees, you know. And who is going to pay for this. Etc. etc.” Almost every decision we make today is made based on the amount of money we have or do not have. That holds true on a personal level, business level and governmental level. Can you imagine a country where money is never the basis of any decision you make? Would you like to live in a country like that? Would you like to be a citizen of a country that leads the world in knowing that this is possible not only for them but for others as well? If you do want these things, then join with me in petitioning our government to take back the control of our money from private banks, and at the same time, control of our country and our destiny.

The only way to win is not to play the game,


If you’re losing the game, change the rules.

The phrase, “The only way to win is not to play the game” comes from a movie called War Games. The specific scene was one in which a large military computer has been asked to find the answer to a question like, “How can we win a nuclear war?” On the monitor of this computer the audience could watch on a map of the world a missile being launched from Russia and traveling toward North America. Then, a second missile would be launched from United States to intercept the first.

Eventually one missile would get through the defensive intercepting missiles and a nuclear bomb would explode over a city in one country. Soon many bombs were exploding over all areas of the map as the whole world was destroyed. Scenario after scenario was tried, all ending with the same result; the whole world destroyed. Eventually after trying what seemed like many thousand scenarios the monitor became blank. After a long silent pause the computer said, “The only way to win is not to play the game.”

The second line, “When you’re losing the game, change the rules.” Comes from a T-shirt my daughter wore when she was about two years old.

It seems that both of these lines are prevalent to this discussion. The second line from above points to the fact that we, the human beings of this world, are losing the game, and we need to changes the rules that now benefit the banks. The first line from above gives us a hint as to how to accomplish this.

Another quote that is prevalent to this discussion comes from a very unlikely source. It comes from the Chinese general and philosopher Sun Tzu. In 500 BC Sun Tzu wrote a treatise called The Art of War. In it he said:

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

At the end of chapter two Mahatma Gandhi was cited as someone who may be an example to follow. By this I meant that he knew his enemy and if we are to learn from him we need to know ours as thoroughly as he knew his. Mahatma Gandhi knew the English had a conscience and that their conscience would not allow them to continually kill defenseless people. He knew the English better than they knew themselves.

This tactic of nonviolent resistance can only work, however, if your enemy has a conscience. You would not want to try it against someone like Sadam Hussein. He had no problem killing thousands, or maybe hundreds of thousands of defenseless people. This tactic would also not have worked against Hitler. It is a hard statement to prove, but it seems to me that the evidence available indicates that the corporate and banking interests also have no conscience.

This is not specific to all corporations. There are those with a social conscience but on a global scale many do not. These ones have no trouble putting people to work for long hours in sweat shops in poverty stricken countries, or employing other unscrupulous tactics citing the need for corporate survival and profits as justification for what they do. Even our current Prime Minister cited these reasons when asked why he did not register his ships in Canada. He wasn’t avoiding paying Canada its rightful taxes, he was merely doing what was necessary to survive and compete on a global level.

So, how does one deal with an enemy who is not confined to a specific geographical area; does not appear to have one leader; is not restricted to one government, one corporation or one bank; appears to have no separate parts but has thousands of pieces all over the world; cannot be pinned down to one place at one time and who seems to be everywhere and nowhere at the same time?

We need to ask what keeps this enemy alive and what supports its growth. The answer to both these questions is consumption. The present corporate and banking structures are maintained and nurtured by our consumption. Our consumption has had a negative effect on us. We have become fat, lazy but saddest of all, we have become blind. We don’t see how much we resemble the plantation slave owners of the southern states before the civil war. We fill our bellies with a big lunch, go out and sit on our shaded porch and contemplate the good life we have while the slaves labour in the cotton field under the hot sun. The difference is that the slaves are no longer in our back yard and we do not see that we ourselves are slaves to a monetary master. Like the slave owners of the past we do not want to give up our comfortable life by freeing our slaves.

The opposite of consumption is conservation. By working together and making a dedicated effort to conserve we can bring about the demise of The Private Debt Money System and bring to life The Public Credit Money System. But it will not be easy. It means that we buy only those things that are essential to living, and we buy them from local producers. It means that we inform our politicians that we will continue to live this way until they reclaim our money from the private banks. It means that we become willing to live with less until all can have more. It means that we become willing to do this even if we are the only ones doing it. It means that we become willing to teach by example more than by words. It means not judging those who choose not to follow our example. This will not be easy because when we attempt to do any of these minor things, never mind the major things that will be necessary, we will see how addicted we are to the patterns we have set up in our life. Our ultimate addiction will rear its ugly head.

For my part, I have lived this way for the last few years. I have no bank account because I have no money to but in one. I travel using my thumb because I have no vehicle. Everything I own can fit into a pack on my back. I wear my cloths until they are ready to fall off my back. I own one pair of shoes at a time. I work to make what little money I need by doing odd jobs of any kind. I will live this way forever or until Canada has The Public Credit Money System.

Please see:

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