The power to create and destroy life is considered one of the central attributes of God, at least in western civilization.
The first words in the Bible are: "In the beginning God created..." Those words were originally written in Hebrew and the Hebrew word used in Genesis 1:1 was bara, which means to create something out of nothing. Theologians call it creation ex nihilio - to make something out of nothing.
In the middle of the 20th century, the "death of God" was proclaimed. It was the detective work of an acquaintance of mine who gave me a glimpse of the new god, one that also creates something out of nothing.
Mark Anielski, a Canadian economist, sent me a paper he presented at the 34th annual conference of the Canadian Economics Association in June. The paper delves into the complex topic of money - the very lifeblood of our economy - and its creation.
In it, he quotes Reginald McKenna, Britain's former Chancellor of the Exchequer and former chairman of the Midland Bank: "I am afraid that the ordinary citizen would not like to be told that banks can create money and destroy money. The amount of money in existence varies only with the action of banks in increasing and decreasing deposits and bank purchases. Every loan, overdraft, or bank purchase creates a deposit and every repayment of a loan, overdraft or bank sale destroys a deposit."
We have a debt-based fractional reserve money system that controls the blood flow of the economy. Nearly all of our money supply comes in the form of debt: mortgages, government debt (bonds), commercial debt, margin debt (borrowing against equity capital gains) and individual debt (credit cards). This all represents a claim against real wealth, which is finite.
There are basically two types of money - government-created, debt-free notes (currency and coins) and bank deposits, created through loans. Over 98 percent of the money in the US and Canada is now in the form of debt!
"It must be recognized that deposits and loans only represent bookkeeping entries. As such, when a bank charges interest on a new loan, it is receiving income on a bookkeeping entry that it created out of nothing. Thus, over time, it oversees the transfer of wealth to the bankers of the world.
"Of special significance are bank loans given to government. Borrowing money through banks makes governments dependent on the bankers, while over time transferring wealth from taxpayers to the bankers to pay the interest on these loans that were created out of nothing. Today, this interest represents a large percentage of all taxes collected, with most tax departments now representing a collection agency for world bankers," Aneilski says.
So when president-elect Bush talks about the tyranny of taxes, he's either glossing over an important truth or is ignorant of a central economic fact - our tax system is a mechanism of massive wealth transfer to the rich.
The former director of the Bank of England, Lord Josiah Stamp, says candidly: "If you want to be slaves of the bankers, and pay the costs of your own slavery, then let the banks create money. The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of slight of hand that has ever been invented. Banking was conceived in iniquity and born in sin."
That's not how our next president sees the economy. "This is a miracle, but not a mystery," he told the Greater Des Moines Chamber of Commerce in a December 1999 speech. "The momentum of today's prosperity began in the 1980s (when Reagan went on his bank de-regulation bonanza) - with (get this) sound money, deregulation, the opening of global trade and a 25 percent tax cut...creating new wealth out of silicon and genius."
The total outstanding US debt has grown from $425 billion in 1950 to $25.6 trillion as of 1999. As of December 1999, US market credit debt exceeded the entire $2.5 trillion debt of the Third World.
"It is important to realize that, because of the nature of the debt laying claim to real wealth, in excess of the physical supply of real wealth, it means the debt is effectively unrepayable," Anielski says. "There is only one conclusion to this journey: the repudiation of all debt or the collapse of the entire (economy) as the debt becomes impossible to repay."
Speaking of the World Bank and IMF, Bush has said: "They should not impose austerity, bailing out bankers while impoverishing a middle class. They should not prop up failed and corrupt financial systems."
The Good Book says no man can serve two masters, God and mammon. But who believes that anymore? Behold our new god.
Sean Gonsalves is a Cape Cod Times staff writer and syndicated columinist.
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