(i) The Establishment of the late 1800s destroyed the Plains Indians’ economic independence, self-reliance, self-sufficiency, and security by killing off the buffalo and thereby rendering the nomadic hunters abjectly dependent on niggardly handouts from the Great Father in Washington’s corrupt Indian agents. This was economic subjugation through control of the actual physical resources necessary for the Indians’ survival.
Yet even before that era, the Establishment had already created institutions designed to deprive all common Americans of their economic independence, self-reliance, self-sufficiency, and security—as well as the ability to retain the real wealth they created and earned by dint of their own efforts. These institutions included the first and second Banks of the United States, numerous State banks, and the National Banks first set up during the Civil War. Eventually, these schemes for the incestuous coupling of bank and state matured into the modern Federal Reserve System, under the aegis of which bank and state now appear inseparable. This was—and remains—economic subjugation through control over so-called “financial” resources.
Control over “financial” resources does provide an extensive measure of control over physical resources of all kinds—otherwise, to modern men steeped in the sin of avarice, it would be pointless. But its great strength as a devious device for social control is that it is indirect, operating through the pseudo-intellectual and legalistic fictions called “currency” and “credit” that not one person in ten thousand understands. Contemporary “currency” purports to be a medium of exchange, a measure of value, a store of value, and even “legal tender” for all debts, public and private—although, in contradistinction to the “money” of the free market and the Constitution, it is not itself composed of silver, gold, or any other valuable physical substance, and is not redeemable in any such substance at a fixed rate of exchange guaranteed by law.
At base, such “currency” amounts to nothing more than the politicians’ trick of transmuting their naked command into an instrument for transferring real wealth. After all, translated from the Latin, the familiar term “fiat currency” means “let it be currency.” Such “currency” is not akin to true “money” by dint of its economic nature and free acceptance among people in the marketplace, but is required—by dint of the government’s physical compulsion when other means fail—to be taken or treated as “money” by everyone. And contemporary “credit” is even more ethereal, being nothing other than the creation of new “currency” out of new debt—the bankers’ alchemical trick of transforming liabilities into assets simply by saying it is so.
Moreover, modern “currency” and “credit” are not even necessary resources for contemporary Americans. The Plains Indians could not survive without food—if not buffalo meat, then whatever rations the Indian agents deigned to provide. Their dependency was physical, and eventually became insurmountable by any actions within their power. Contemporary Americans, conversely, could easily survive without today’s fictitious “currency” and “credit”—and would be far better off without them, and certainly without the parasitical politicians and special-interest groups that fatten off of them. Modern Americans’ dependency is psychopathological, and its continuation largely self-imposed, proving once again the truth in the wag’s dictum that “You can fool all of the people some of the time, and some of the people all of the time—and that’s good enough!.”
Yet, although ultimately derived from nothing more substantive than economic, political, and legal fictions and deceptions, the Establishment’s ability to create “currency” and “credit” ex nihilo and ad infinitum remains the primary source of its tremendous economic, political, and cultural power, both open and subterranean.
On the surface, that power dominates both the economy and the political process. The entire economic life of the United States has degenerated into servile dependence upon whether the Federal Reserve System increases or decreases interest rates (and by how much)—that is, upon how fast the banks create new “currency” and “credit” (because no significant overall contraction in the so-called “money supply” has occurred since the banking collapse of the early 1930s). The Constitution identifies “We the People of the United States” as its authors. The markets are composed of We the People in their capacity as free economic actors. Congress is the agent of We the People in their capacity as political sovereign. And the Board of Governors as well as the entire Federal Reserve System are the mere statutory creatures of Congress. Nonetheless, the markets await each announcement of the bankers’ pleasure with baited breath. Congress sits in awed silence as the various Chairmen of the Board of Governors lecture it. And We the People do nothing. Self-evidently, this state of affairs proves that, as a practical matter, where money and banking are concerned the free market is held captive by a special-interest group, the constitutionally empowered National legislature is not the actual lawgiver, and worst of all the titular National sovereign is subordinate to someone else.
During the late 1800s and early 1900s, the alliance among politicians, bankers, and their clients in high finance and big business to control America was widely known as “the Money Power.” As Frederick Townsend Martin observed in 1911, in his book Passing of the Idle Rich, [Also read the book; “The Coming Battle” originally published in 1899] [i]t matters not one iota what political party is in power or what President holds the reins of office. We are not politicians or public thinkers; we are the rich; we own America; we got it, God knows how, but we intend to keep it if we can by throwing the tremendous weight of our support, our influence, our money, our political connections, our purchased senators, our hungry congressmen, our public-speaking demagogues into the scale against any legislature, any political platform, any presidential campaign that threatens the dignity of our estate.
Nothing has changed since then. Today, perspicacious Americans can identify the people who “own America” economically and politically. The question is what can common Americans do about them.
Under the surface, too, the power over modern “financial” resources—the power to create “currency” and “credit” ad libitum—exercises an insidiously corrupting and self-reinforcing influence over Americans. This is no accident. Those seeking to exploit, dominate, and oppress others usually attempt, at an early stage of the process, to corrupt their victims, so that they can manipulate and control them through their vices. In the late 1800s, the Establishment corrupted the Plains Indians and undermined their personal self-respect and communal coherence by plying them with “fire water”. That was simple psychological corruption mediated through physical addiction. False prosperity generated through unlimited debt made possible by expanding supplies of new “currency” and “credit” emitted by the banks is the contemporary “fire water” on which the Establishment has hooked all too many Americans.
Importantly, whereas each Indian’s addiction to “fire water” was a personal predicament, and became a social problem only after sufficient numbers succumbed, Americans’ intoxication by contemporary “credit” is a socially destructive phenomenon from the inception in every instance in which it is involved. Traditional “credit” is simply a deferred execution of a contractual obligation, as when a buyer purchases some commodity today, but pays for it only later on. In such a transaction, the seller has extended “credit” to the buyer, in the form of time. The buyer may pay more for the commodity than the original price (if the “credit” incurs “interest” or some “service charge”); or the seller may receive less than that price in real terms (if the “credit” does not incur such a surcharge, and the seller has a positive time preference). But, in either event, the transaction involves just those two parties, and has no effect whatsoever on the so-called “money supply” of society as a whole. Different amounts of “money” change hands, depending on the terms of the transaction; but the total supply of “money” throughout society remains the same, whatever the terms.
Much contemporary “credit,” distinguishably, is made possible only through the creation of new “currency” when the “credit” is extended and for that purpose. A bank “credits” a client’s account with some amount of “currency” created in order to make that very loan. Thus, the transaction increases the total “money supply.” More consequentially, the new “currency” then enters the economy at a particular point and time, and then spreads through the market on some idiosyncratic path, changing the structure of prices and redistributing real wealth as the market realizes there has been an injection of new purchasing power, and reacts to it. Exactly who the losers in this process may be is difficult to predict. But the bank that generates the new “credit” and its client who employs it are always the winners. And surely society always loses overall. For if banks throughout the system create significant amounts of new “credit” in the capital markets—thereby imposing so-called “forced savings” on the rest of society—their actions set in motion the familiar “business” (or “boom and bust”) cycle, leading eventually to depression, or perhaps to hyperinflation followed by depression. And if the banks create new “credit” for the public treasury—that is, by “monetizing public debt”—their actions facilitate a particularly vicious species of “taxation without representation,” in which part of the present generation receives the benefits of governmental deficit spending, while future generations of taxpayers—who have cast no votes in the matter—are expected to pay for them.
Although socially destructive and politically abusive, the contemporary “currency” and “credit” scheme is self-reinforcing in its degeneracy. Its first stage involves simply the organization of avarice: providing the means by which some people can obtain something for nothing by redistributing other people’s wealth through spending new “currency” into circulation. This is bad enough. For the easy availability of “credit” convertible into new “currency” encourages an unbridled, debt-based consumerism, steeped in hedonism, materialism, and a mania for “economic growth” which inevitably results in a self-imposed serfdom of consumers to the creators of “credit” and “currency”—whether those consumers be private individuals or public treasuries.
The second stage is worse. It entails support by the clients of the creators of “credit” and “currency” for the entire economic, political, and ideological system that allows the latter to ply their trade—because that system is the only source of future “credit” to subsidize the clients’ on-going exorbitant life-styles that require spending beyond their real means. A never-ending cycle of overconsumption, financed with private and public debt floated by expansion of “credit” and “currency,” demands support for politicians who promote policies that grease the skids for such false prosperity. This turns voters hooked on debt-based consumerism into dependents of the politicians, rather than the politicians being servants of the voters. In their turn, the politicians become dependent on the bankers—so that political, as well as economic, power inexorably gravitates towards one special-interest group to a degree no free society would ever countenance.
The third stage is worse yet. For the types of politicians who support endless expansion of “credit” and “currency” tend to bring with them a compendious agenda of other economic, political, social, and cultural corruptions. For example, no politician who approves of Congress’s creation of the Federal Reserve System, and the System’s “monetization of public debt,” likely employs “original intent” in constitutional interpretation, opposes the delegation of governmental powers to private special-interest groups, believes in limited government, or wants to reduce to the minimum bureaucratic intervention in the free market. Rather, he most probably advocates “the living Constitution” (that is, the Constitution politicians and judges make up as they go along, to serve their immediate interests), political-cum-economic “partnerships” between government and influential private interests, and comprehensive political “management” of the market (what used to be called “central planning,” before the collapse of the East bloc finally discredited that rubric).
The fourth stage is worst of all. For, after this process has worked its insidious wiles on several generations, spiritual corruption takes over. Whatever they may believe, people act as if there were no god but Mammon, with Caesar his prophet and the bankers his priests.
In sum, contemporary “credit” and “currency” constitute a social narcotic more dangerous than the alcohol to which the Plains Indians became addicted. For chemical dependencies hardly ever approach the point at which so many people are affected that an entire society collapses. But a general breakdown has not infrequently afflicted countries hooked on the endless expansion of fictitious “currency” and “credit”1—such as Germany in the early 1920s, and Argentina and other major South American countries serially since World War II.
And this is not the only parallel in the history of oppression that contemporary Americans need to recognize as applicable to them.