What if our religions and many great philosophers were right about usury? What if there is something inherent in the creation of interest-bearing debt that leads to profound economic injustice?
I will admit that there was a time when I saw the prohibition against usury (creating debt with interest) as a quaint relic of the past. I reasoned like this: The prohibition against usury arose from situations where lenders charged outrageous rates of interest, but surely there's nothing wrong with lending at a reasonable rate of interest. How else would we have access to capital when we need to buy a house or start a business? How else would we keep up with inflation?
Well, what if it could be shown that inflation itself is the net result of the system of debt based on the charging of interest, a vicious cycle. What if the charging of interest inevitably leads to an increasing proliferation of debt and an increasing inequality between rich and poor?
It is becoming more and more obvious to many people that there is something terribly wrong with the economic system under which we live. Vast amounts of wealth continue to be more and more concentrated in less than one percent of the population. And within our political system we do not find leaders who are willing and able to clearly identify the problems of our monetary system, nor offer coherent solutions. Systemic greed favors a tiny class of people who concentrate more and more capital, as well as more and more control over our lives.
As Henry Ford said, "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." But all the lawlessness, fraud, and criminality is so well-dressed in respectability, and even admiration, that most people are blind to what's happening right before their eyes. If we could truly see the naked reality of this situation, we would be witnessing these banksters for what they are: at best, conscienceless champions of greed who add nothing to the productive economy, pursuing their own short term advantage; and in many cases, soul-less con-men plundering nature, profiting from endless war, privatizing profit, foisting liabilities for all their damages on the public at large, and charging us interest on all the debt!
The conflict between sovereign citizens and an oppressive central banking system predates the founding of our country. The currency act of 1764, passed by the British Parliament under the influence of the Bank of England, was the cause of economic hardship and unemployment in the colonies, and according to Benjamin Franklin was the primary cause of our revolution.
The super rich have relentlessly striven to dominate and control all resources, economic activity, and political power. The central banks of the world, governed by a few unelected individuals, have claimed for themselves the unrestricted power to set interest rates and control the money supply. President James Garfield, an implacable foe of the banking cartels, expressed his opposition by saying, "Whosoever controls the volume of money in any country is absolute master of all industry and commerce. . . And when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how inflation and depression originate." Garfield was assassinated in 1881.
The bank panics of 1873, 1893, in 1907 were crises engineered by international bankers through the manipulation of credit, which further set the stage for the public to believe that a central banking system was needed to protect them. Senate Republican leader Nelson Aldrich spent two years in Europe consulting with the central bankers of Germany, France, and England, and upon his return lobbied for the creation of a central bank for America. His wish would soon be realized.
In November 1910 a secret meeting on Jekyll Island attended by Aldrich and representatives of major, interconnected banking families -- the Morgans, the Rockefellers, the Schiffs, the Vanderbilts, the Warburgs -- formulated plans for what would become the Federal Reserve. The Federal Reserve Act passed Congress on December 23, 1913, at a time when few members of Congress were present because of the Christmas holidays. Congressman Charles Lindbergh, Sr. said upon its passage, "From now on, depressions will be scientifically created.... Invisible government by the monetary power will be legalized. People may not know it immediately, but the day of reckoning is only a few years removed.... The worst legislative crime of the ages is perpetuated by this bill."
From this point on, money creation was in the hands of these private bankers who have been able to manipulate the economy through a series of financial bubbles and busts. Also known as "pump and dump," these intentionally created cycles have allowed the central bankers to further consolidate their wealth by buying assets on the cheap during the busts by having privileged access to vast amounts of capital, while continuously creating more and more debt through the fractional reserve system.
If you could join this club with all its privileges, you would be able to borrow as much money as you like at nearly 0 percent interest, you would be able to extend mortgages to others just by making an entry on your account ledger, you would be able to buy up mortgages and debts of others, purchase any equities, commodities, or real property. And, oh yes, you would also be able to gamble with these great sums of money! Except that your bets would be insured. . . by the rest of the population. The justification for all these privileges is that by increasing your wealth in this way, some of this wealth would gradually trickle down to the rest of the population if and when you decided to let it.
How did we get from merely charging interest to the universal system that is now enslaving most of humanity? Well, in America it went something like this: our Constitution mandates that money creation is the right of the Treasury Department. Some of our founding fathers understood that a central banking system, like the Bank of England in their time, is designed to profit from lending to governments, especially by financing wars, and eventually leads to the control of government itself. Presidents Thomas Jefferson and Andrew Jackson were two courageous opponents of the idea of a central bank. A "maxim" attributed to the House of Rothschilds says, "Let us control the money of a nation, and we care not who makes its laws."
In other words, these banks acquire capital that can be used as reserves for lending at a ratio of 10 to 1, though in some recent situations today the leverage is much higher -- 50 to 1, for instance. The money that is lent as debt multiplies through the whole banking system through further leveraging, bringing not only individuals but whole countries into unsustainable debt. In other words, the debt created is much more than the real world assets needed to eventually pay off the debt. This inevitably leads to extreme levels of indebtedness in which not only individuals but whole countries owe more than can ever be repaid, and the banking cartel confiscates what real assets exist.
It's a very clever system, designed to appropriate all of our common wealth and transfer it to the banking class. The financial sector produces nothing; it exists as an intermediary between producer and consumer. In 1870 was only 2 percent of the economy; it reached 5 percent in 1980, and in 2010 it was 9 percent of GDP. It not only puts our whole financial system at risk through its derivatives, it skims trillions of dollars from the real economy without producing anything.
The Fed has institutionalized inflation, causing the dollar to decline to less than 5 percent of its 1913 value. But, one might argue, our wages have increased too. What is obscured here is that inflation disproportionately harms the average person, depleting their savings, pensions, and retirement resources, while giving a major advantage to those with greater capital who gain through speculation and other investments.
The Fed's recent spell of "quantitative easing" has boosted the value of stocks by more than 25 percent this year alone, but the vast majority of that wealth has gone to a tiny percentage of the population who own stocks. QE has been described by billionaire hedge fund manager Stanley Druckenmiller as "the biggest redistribution of wealth from the middle class and the poor to the rich ever."
In the current system capital automatically flows to whatever makes the most money, no matter how destructive it is to life. We don't spend dollars, the dollars spend us! From the apparently insignificant beginnings in the mere charging of interest, a whole system of out-of-control capital has developed.
Almost every religion has warned against usury (interest-bearing debt) and many great thinkers, as well (Solon, Plato, Aristotle, Cato, Cicero, Seneca, Jesus, Muhammad, Aquinas, Jefferson, and Goethe). What we are witnessing today is just the most sophisticated and comprehensive rip-off in the history of the world.
What if we found out that most of the wars of history were caused not by religions and clerics but by banks and financiers? Politicians and governments are bought and paid for. Wars are financed with credit extended to both sides of the conflict by bankers who stand above the fray but profit handsomely. The public would never be willing to pay for such wars if they immediately had to pay out of their own pockets. But the system doesn't work that way. It would be too obvious. Instead, irrational fears are promoted, enemies and scapegoats are proffered, we stumble blindly into war, the costs are temporarily deferred, while the majority of us, and future generations, are stuck with the costs. It is time for communities of faith to confront this unjust system that pillages our whole economy and enables the war-making machine.
Sacred economics is an economics that serves the cause of human dignity and well-being. The Financial Tyranny we have today is a consciously designed system of debt enslavement that perpetually harvests the energy and substance of the people.
In this system all money is created as debt, first of all to the Fed and other central banks, then to all banks and credit card companies that extend debt to borrowers, to businesses, and to government. More and more money is "being made" through financial instruments, through the Fed's pumping up the economy with empty dollars; less and less through actually making things. And all of this "money" comes into being as debt owed to the Fed.
Is there a solution, an alternative to this interest based system? As a minimal first step, reinstitute Glass-Steagall, to separate normal banking from investment, i.e. take the heroin away from the addict, do not let these too-big-to-fail banks gamble with money that is not theirs. Next, revisit the Chicago Plan, devised during the Great Depression by some of the world's best economists, though vehemently opposed by the banking cartel at the time. Eventually, end the Fed, restore money creation to the Treasury so that money will not be created as debt, but money will be created as a reflection of the actual resources of the country.
Yes, it is difficult to grasp how fundamentally our monetary system needs to change in order to avert economic and environmental catastrophe. There are two interconnected problems here: one is the intrinsic nature of debt-with-interest that empowers capital to prevail over human needs. The second is the extent of the privileges given under the current financial architecture to the worldwide financial elite, namely the Fed and other central banks.
Jesus threw the banksters out of the temple and proposed the forgiving of debts. People of good faith must try to understand this system of debt-enslavement and organize to end it. Our economy requires the suicidal increase of consumption to meet the requirements of increasing debt. It is a profoundly unrealistic and unsustainable trajectory that makes an idol of profits no matter what the cost to human life and dignity. We need a new vision of economic justice, a sustainable economic system that respects the sacredness of life.