Captured By The Debt Spider
Ellen Brown – The late Dr. Carroll Quigley was a writer and professor of history at
Georgetown University, where he was President Bill Clinton’s mentor.
Dr. Quigley wrote from personal knowledge of an elite clique of global
financiers bent on controlling the world. Their aim, he said, was
"nothing less than to create a world system of financial control in
private hands able to dominate the political system of each country and
the economy of the world as a whole."
This system was "to be controlled
in a feudalist fashion by the central banks of the world acting in
concert, by secret agreements." He called this clique simply the
"international bankers." Their essence was not race, religion or nationality but was just a passion for control over other
humans. The key to their success was that they would control and manipulate the money system of a nation while letting it
appear to be controlled by the government.
Professor Henry C. K. Liu is an economist who graduated from Harvard and chaired a graduate department at UCLA before becoming
an investment adviser for developing countries. He calls the current monetary scheme a "cruel hoax." When we wake up to that
fact, he says, our entire economic world view will need to be reordered, "just as physics was subject to reordering when man’s
world view changed with the realization that the earth is not stationary nor is it the center of the universe."
The hoax is that there is virtually no "real" money in the system, only debts. Except for coins, which are issued by the
government and make up only about one one-thousandth of the money supply, the entire U.S. money supply now consists of debt to
private banks, for money they created with accounting entries on their books. It is all done by sleight of hand; and like a
magician’s trick, we have to see it many times before we realize what is going on. But when we do, it changes everything.
All of history has to be
The following chapters track the web of deceit that has engulfed us
in debt, and present a simple solution that could make the country
solvent once again. It is not a new solution but dates back to the
Constitution: the power to create money needs to be returned to the
government and the people it represents. The federal debt could be
paid, income taxes could be eliminated, and social programs could be
expanded; and this could all be done without imposing austerity measures on the people or sparking
runaway inflation. Utopian as that may sound, it represents the thinking of some of America’s brightest and best, historical
and contemporary, including Abraham Lincoln, Thomas Jefferson and Benjamin Franklin. Among other arresting facts explored in
this book are that:
"Federal" Reserve is not actually federal. It is a private corporation
owned by a consortium of very large multinational banks.
for coins, the government does not create money. Dollar bills (Federal
Reserve Notes) are created by the private Federal Reserve, which lends them to the government.
currency (coins and dollar bills) together make up less than 3 percent
of the U.S. money supply. The other 97 percent exists only as data
entries on computer screens, and all of this money was created by banks in the form of loans.
money that banks lend is not recycled from pre-existing deposits. It is
new money, which did not exist until it was lent.
- Thirty percent of the money created by banks with accounting entries is invested for their own accounts.
This last bullet is a major allegation – 30% of bank created money goes to their own investments? She covers this in detail in her must-read book "The Web of Debt." But, I still have a hard time accepting 30% and would appreciate if anyone can add or subtract from her comments.
American banking system, which at one time extended productive loans to
agriculture and industry, has today become a giant betting machine. An
estimated $370 trillion are now riding on complex high-risk
bets known as derivatives – 28 times the $13 trillion annual output of
the entire U.S. economy. These bets are funded by big U.S. banks and
are made largely with borrowed money created on a computer screen.
Derivatives can be and have been used to manipulate markets, loot
businesses, and destroy competitor economies.
It’s like our real economy is a Super Bowl gambling event (yes the Steelers won!) and the bankers create bets like bookies – who will win the coin toss? Who will fumble first? Will the score be over or under 41? I wouldn’t care if they were betting their money but they’re not, they’re betting money that becomes our liability if and when they lose. Winnings are handsome profits on money they never had. Why aren’t these nationalized too?
- The federal income tax was
instituted specifically to coerce taxpayers to pay the interest due to
the banks on the federal debt. If the money supply had been created by
the government rather than borrowed from banks that created it, the
income tax would have been unnecessary.
interest alone on the federal debt will soon be more than the taxpayers
can afford to pay. When we can’t pay, the Federal Reserve debt-based
dollar system must collapse.
T-bills on the national debt roll over periodically, when they do they are subject to new interest rates.The "Road to National Insolvency" reminds us of some disturbing issues:
- To cover this year’s deficit, the Treasury must sell more T-bills. Thus the Treasury won’t just
auction $2 trillion of T-bills to fund the 2009-10 Federal deficit – it must also sell untold
billions more to replace all the Treasury debt which is coming due and must be rolled over into
new Treasury bills.
- The current era of low interest rates a.k.a. "cheap money" has allowed the Treasury to borrow
stupendous sums of money at low rates of interest.
- Even as these historically low rates, the interest on the public national debt (that is, not
including the interest paid on the Social Security Trust Fund, which is considered
"intergovernmental holdings") reached $260 billion in fiscal year 2009. The Treasury includes
all interest, including that "paid" to the Social Security Trust Fund for the Social Security
taxes collected but promptly "loaned" to the the general fund to spend, so you find news articles
like this: Uncle Sam Will Pay $450 Billion This Year Just to Cover Interest on National Debt
- According to the Treasury Department report, released on Dec. 10, the federal government expects
to pay $449,070,000.00 in interest on Treasury debt securities for FY 2009.
The Health and Human Services budget, which includes Medicare and Medicaid, will
cost $739,241,000.00 for the fiscal year; Social Security Administration, $699,976,000.00;
and the Defense Department-Military budget, $656,722,000.00.Here is a link to the Treasury’s accounting of the debt: The Debt to the Penny and Who Holds It. It states that the debt held by the Social Security Trust
Fund and other governmental agencies is $4.4 trillion, and the remainder of the debt (owed
to citizens or "external" owners) is $6.6 trillion.According to the Treasury, the average interest paid on this $10.95 trillion in debt is 3.7%. In January 2001,
not very long ago, the average interest paid was 6.5% – almost double the current rate.
Historically, a rate of 6-7% is not uncommon.
- Thus a return to 7% interest rates would in effect double the interest paid annually
to nearly $1 trillion per year. As noted above, this debt is spread out over varying maturities,
so a rapid rise in interest rates would only effect a small portion of old debt at first.
Nonetheless, all new debt would be paying the new higher rates, and every month more of the
existing $11 trillion in debt would roll over at the higher rates. Think of that $11 trillion in debt as a mortgage which resets to higher interest rates
as the "owner" keeps adding debt. Just like the homeowner who manages to make mortgage payments
when the low "teaser" rates are in effect but who is unable to pay the mortgage when rates revert
to actual market rates, the U.S. government will become insolvent as rates rise.
- Contrary to
popular belief, creeping inflation is not caused by the government
irresponsibly printing dollars. It is caused by banks expanding the
money supply with loans.
- Most of the runaway
inflation seen in "banana republics" has been caused, not by national
governments over-printing money, but by global institutional
speculators attacking local currencies and devaluing them on
- The same sort of
speculative devaluation could happen to the U.S. dollar if
international investors were to abandon it as a global "reserve"
currency, something they are now threatening to do in retaliation for
what they perceive to be American economic imperialism.
- There is a way out of this morass. The early
American colonists found it, and so did Abraham Lincoln and some other
national leaders: the government can take back the money-issuing power
from the banks.
The debt is not sustainable, even if we plan on pushing it to future generations. This is the fundamental issue that should be discussed.The
debt doubles over the next 4-5 years, causing interest payments to
double from $450B to $900B a year. But interest rates also double due
to the global shrinkage of surplus capital and the monumental rise in
demand for capital (borrowing). The $900B in interest then
doubles to $1.8 trillion – roughly equal to Medicare, Social Security and the Pentagon combined.
"Can’t happen? Really? With tax revenues dropping along with profits, employment and assets,
then where will the political will arise to cap entitlements and other spending? I predict the
U.S. will continue borrowing trillions of dollars until it is no longer able to do so."
"By then, the interest owed each and every year will crowd out all other spending. With the debt
machine broken, the government will simply be unable to service its debt and fund all its
mandated entitlements and other programs. It will be insolvent."
- The interest alone on the federal debt will soon be more than the taxpayers can afford to pay. When we can’t pay, the Federal Reserve debt-based dollar system must collapse.
I believe that is what’s happening now with the so-called Fed buying treasury notes to monetize the debt. It’s the last step before collapse.
I agree, but you know the government, can’t, and won’t, take back this power from the FED.
The only way I see this as a possibility, is if the people stand up for themselves.
We have more power than they give us credit for. Everyone needs to unite for a singular cause, and make our cause heard.
I really believe they are trying everything in their power to keep us as dumbed down sheeple. All this Jay Leno, and 60 minutes, is just to appease the people, and divert our attention from the real cause. I though it was a platform of "change"? We need mainstream media to spread our cause, but they won’t, they know the danger of doing so. Can you imagine what would happen if they did a 60 Minutes on why we should end the FED, cause and effect? They never would, or anything of the like for fear of insighting truth into people, and possibly a revolution.
For something like that to happen, to truly band people together. I hate to say it, but MSM would have to be onboard, their is just no other way to reach that many people.
Glenn Beck, like him or not, he is the clostest to MSM spreading a voice. If you got Bill’O, Hannity, Matthews or Obermann spreading this word, I think more would listen.
I was hoping the Cardinals would win.
Thanks for the post. I had referred to Ellen Browns book in another thread today. She does a great job. CMs latest report also speaks directly to this issue and the referenced Rolling Stone article is like a magnifying glass looking into the real workings of behind the scenes manipulations of the greedy and stupid.
I have been looking for signs that perhaps Obama would choose to chart new waters. I see no indications that is true. I like him but his interview with Leno was strangely status quo. I wondered aloud to my wife what sort of "fireside chat" I expect he will need to deliver to inform the citizenry that America as we have known it is factually collapsed and bankrupt and no longer can afford to purchase enough oil to keep society in the manner it is accustomed. (Probably blaming it on the Saudis or something to the effect that they no longer accept payment in worthless US Dollars!)
Local groups of people who have been quietly preparing for the inevitable will then carry the day. No matter how many ways I run this I can’t see how we have the leadership to simply change the broken system without a collapse making it’s failures appear as a self evident truth.
Looking forward to the Lowesville Conference. The timing could not be more appropriate. Time to lock and load. (Lock the doors, load the pantry and know thy neighbors!)
The oligarchs have Obama comfortably in their back pocket. He’s "made" by the true mafia.
SPM said –
I agree, but you know the government, can’t, and won’t, take back this power from the FED…For something like that to happen, to truly band people together. I
hate to say it, but MSM would have to be onboard, their is just no
other way to reach that many people.
Unfortunately I think you are right – it will be an uphill battle to spread the truth to an adequate amount of people to actually make a difference. It would be great if the End the Fed movement had a champion to push the issue hard but I guess that is political suicide. Hopefully the End the Fed rally in April will be well attended but like you say, if the MSM doesn’t cover it, it will be as if it never happened.
ckessel said –
Local groups of people who have been quietly preparing for the
inevitable will then carry the day. No matter how many ways I run this
I can’t see how we have the leadership to simply change the broken
system without a collapse making it’s failures appear as a self evident
Coop, I saw your mention of Ellen Brown’s book and was pleasantly surprised that you gave it a good endorsement. I like the way she goes beyond the problems to discuss solutions.
I am continually amazed at how well the people are regimented to accept that our government is working. For example, there is no social security trust, every penny is loaned to the government – does anyone think that they will get any money out of social security? I would have bet that this issue alone would bring angry people out in the streets demanding that the borrowing stop.
Another good read is "Debt Virus" by Dr. Jaikaran who does an excellent job of detailing our predicament. Your comment:
"I am continually amazed at how well the people are regimented to accept that our government is working." hit a common chord with me today.
After a somewhat futile conversation with a local elected official as regards your topic, I stopped and asked if he would be willing to read and evaluate a book on the subject of economics for me. He said gladly, sensing I had given in to his rationale and likely assuming I was in agreement with him, so I gave him the "Web of Debt".
Round Two coming up!
Coop – I will definitely give the "Debt Virus" a read. Your idea of sending a local politician the "Web of Debt" is an excellent plan – I’m going to contact my representative – who voted against the stimulus package – to hopefully get him to accept the book.