Sunday, December 18, 2011


By D.K.Burton

The history of debt

The idea of debt stems from the Babylonian economic system of more than 4000 years ago, around 2000 BC. Instead of coins, the Babylonians used clay tablets representing the promise to pay. Money was borrowed when it was needed to survive, as opposed to today’s tendency for people to borrow for “wants”. A need is not a mobile phone, MP3 Player or a Porsche-these are all “wants”. People borrow to show off to people they don’t know or like, plus what they borrow for always falls in value (the above); when combined with the cost of money, this means big losses!

The creation of money

Money is created out of nothing. Over the centuries coins and bullion were used. They became too awkward to deal with, so the people who stored them (smiths and smelters) issued paper receipts instead (now called IOUs).

Only 10 percent of the value of what is stored was being used at any one time, so they began to lend more than they had, and the banking system was formed. Paper money, called “fiat currency” has been used now for hundreds of years. History shows that this system is cyclic and has always ended badly, with a complete debasement of the value of the currency, similar to what’s happening to the $US now. Banks have been lending up to 100% of the value on some assets. This is doomed to fail. There is no real money; it’s only a computer entry from one account to another. If everyone went to the banks to draw out their cash – what’s known as a run - the banks would fail. Of course, only the people with no debt and term deposits can draw out all the money, the rest can’t, which leaves 98% stuck, and 2% with the cash.

The Matrix of money works like this; the government prints a $100 note for 6 cents, sells it to the bank for say 4%, which is $4.00 on $100. Now 6 cents into a $4 is 6,666% return. Then the banks lend it out to say a credit card at 19% or $19 on $100. This is 31,666% return on 6 cents. It gets worst, as the banks have been lending out around the world, 100, 200, who knows, maybe 500 times the $1 on deposit. If you lend $100 out, say, 100 times it equals $10,000.00, using say 10% interest rates that’s $1000.00 per/year. Now 6 cents into $1000 is a 1,666,666% return. Now if it’s 500 times, rather than 100 times, then it is 8.3 million percent. Of course, they aren’t printing fresh money each year to replace that $100, so say it lasts 10 year? 6 cents into $10,000 (10 years of interest at 10 percent) is 16 million percent return. Now, if its 19% like on credit cards, this means a 31 million percent return over 10 years.

For this system to work, the bank relies on you staying in debt and paying interest. When people don’t want to borrow, or pull their money out of the bank - like in the great depression - the system will collapse; or if everyone wanted to pay off their debt at the same time, it would collapse, and this is what is going to happen because the mathematics of money just can’t work - and the next great depression will prove this to be correct. Not everyone can pay off their debts because there is more debt than paper money in circulation - only 2% can.

Do you want to be in the 2% or 98%? It’s your call.

If you are in the 98%, it will be the banks’ call. They control your future, not you. Remember, if you are in the 2%, the other 98% are after your money. Go to this link to Money as Debt (48 minutes)

Money is only created for people to work for wages. Look how much work is done by the masses for 6 cents. Look how much debt you can get them into for 6 cents. What a brilliant system has been created. Look how you are controlled!!

Don’t forget also that governments and big business (especially the banks) prefer a placated docile public – distracted and struggling, and without the energy and opportunity to look too closely at what the government / bank alliance is up to.


zhou said...

The Stock Market

The stock market is only an extension of money. Companies float on the stock exchange to off-load their assets to the public at inflated prices, and to create a large amount of money for the owners. Shares are issued to get interest-free money from the public, and then the directors and staff can have a fat time, travelling, dining, cars, bad investments etc, and then when they have used all the funds, they issue more shares... like they print money. All banks around the world have done this to get more funds, to make their balance sheets look good from the bad debts they created. Members of the public are so stupid they even borrow money from the bank to buy stocks, doubling up their risks. So when the company has been stripped and gone bankrupt they are left holding worthless pieces of paper, plus the debt to the bank they can’t pay back. No one floats a great company, they keep it for themselves. There has been a large number of CEOs that have committed fraud, stealing share holders funds. Not only are they overpaid, they have to steal from you as well. If these CEOs are so good, then why don’t they say: ‘I will work for nothing and only get paid a % of the shareholder’s funds when we have no debt and cash in the bank.’? They couldn’t do it as they would starve to death. This is why I have never owned a share for 18 years, and never will. I don’t need shares to make money and neither do you!! You are crazy to own stocks ever. You will lose all your money.


The inflation really started when we went off the gold standard in 1971 - a move pushed through by Richard Nixon (front man for the Federal Reserve).

Most people are not aware that the Federal Reserve is not owned by the US government. It is in fact a privately held company. It started with a secret meeting in 1910 between the Rothschild’s, Warburg’s (Europe), Rockefellers and Morgan’s (USA). The Federal Reserve was formed at 6:05 pm on the 23rd December 1913; it was done on this date, as most members of the congress were on leave just before Christmas, so it was passed quickly.

US President, Thomas Jefferson warned I

f th"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered… I believe that banking institutions are more dangerous to our liberties than standing armies..."
--Thomas Jefferson

Going off the gold standard meant that they could print money with no assets backing the paper money. As money was printed, it then became easier and easier to borrow up to 100% of the asset; this of course pushed the value of the assets higher, so you would borrow more as the equity increased, putting you further into debt. When the borrowers stop borrowing and the credit is pulled in, you are left holding over-inflated assets at the top of the market and which are about to crash in value. This of course created the bubble in the share market, land prices and other debt-ridden products. People borrow at the top, not wanting to miss the greed from the boom which they thought would last forever, and they are the ones that liquidate at the bottom when fear sets in.

Now if printing money creates inflation, how is it we only have 2% inflation, as stated by governments? What they have done is taken food and oil out of the index, the things that measure and create inflation. Go to .

zhou said...
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