always abstruse
  but always correct

.. when I say "all" ...

  .. I usually mean "most" ...

    .. pettifoggers please take note


Thesis/Subtitle: there is a bankster conspiracy

Concomitant: 'hidden' in plain sight

Corollary: proof of perfidy


Note: This compliments my "bankster swindle" article.

Musing 1: We (in Aus, EU, UK, US - 'the West') live in so-called democracies = "of, by, for the people" arrangements, whereby we 'freely' (absent lying propaganda, say) choose representatives to govern for us - on the understanding that such representatives work in ours, we the people's *best* interests.

IF not the case THEN watch out!

End musing.


Trigger article:

Clarke and Dawe discuss the market meltdown
Broadcast: 02/10/2008
  «BRYAN DAWE: Well can you explain how it works?

JOHN CLARKE: How the economy works?

BRYAN DAWE: Well, yeah. What's the problem at the moment, for instance?

JOHN CLARKE: Well what we’ve got at the moment is an international credit crisis at the moment.

BRYAN DAWE: Yes, how does that happen?

JOHN CLARKE: Well, I'm a bank Bryan, and I borrow money and lend it out. And I charge more to the people I'm lending it to than I pay the people from whom I'm borrowing?

BRYAN DAWE: Well who do you borrow money from?

JOHN CLARKE: Well, you know, from depositors Bryan. Have you got a dollar?

BRYAN DAWE: Well yeah, sure.

JOHN CLARKE: I borrow your dollar, and I give you, you know, there's your bank balance.



BRYAN DAWE: Right, OK. And you pay interest to me on that?

BRYAN DAWE: I do, but I also charge you fees.

JOHN CLARKE: Well why do you charge me fees?

BRYAN DAWE: Well because Bryan I'm looking after your money. Your money is secure with me, I'm a bank. I mean, this is a very important amount of money; this is probably your nest egg, it's safe with us.

JOHN CLARKE: How much interest do you pay me?

BRYAN DAWE: Approximately the same as I'm charging you in fees.

JOHN CLARKE: Oh good deal for me.

BRYAN DAWE: Well your money's secure with us Bryan. And I then lend that money to businesses, and those businesses generate income. And this is how we build the economy.

JOHN CLARKE: And they put the income into the bank?

[They] do, of course Bryan. That builds the savings [pool], and we can invest more money.» 
[AusBC/7.30/Clarke and Dawe]

[from the AusBC website: Video

Clarke and Dawe discuss the market meltdown

Windows Media Broadband Dial-up 
Real Player Broadband Dial-up]

Comment 1: The C&D article should go on to discuss the EU-debt crisis, but gets a bit side-tracked into the GFC, namely the international investment market part of it. Unfortunately for both C&D and us, it doesn't explain the real problem... with the GFC, EU or banking, but it does give us a start on money = $s.

Comment 2: The above 'snip' describes basic banking, in a somewhat light-hearted fashion. Of course "It is not simple" - (these modern days, what with derivatives, etc.) - but it's not too complex either; in fact JKGalbraith wrote:

  «"The process by which banks create money is so simple the mind is repelled."» 
[Money, Whence it Came, Where it Went, 1975, p18]

More from Galbraith:

  «"The deposits of the bank ... were ... subject to transfer ... to others in settlement ... The coin on deposit served no less as money by being in the bank and being subject to transfer by the stroke of a primitive pen.
Inevitably it was discovered ... that another stroke of the pen would give a borrower from the bank, as distinct from a creditor ... a loan from the original and idle deposit. It was not a detail that the bank would have the interest on the loan so made. ...
[the loan having been made as a book-entry deposit] ... But there was now also a new deposit from the proceeds of the loan. Both deposits could be used to make payments, be used as money. Money had thus been created."» 
[ibid. p19 [my emphasis]]

Comment 1: And so on, ad infinitum, but ...

Comment 2: My own version follows (based partly on this 47 minute video, as an adjunct to Galbraith's "Money ..."); I will start with 'real' money (gold, silver etc.), not because I favour any sort of 'return to specie,' but because it adds a bit of ¤glitter¤ (in this 'story,' cash = modern-day banknotes would do almost as well as specie):

1. The story starts with a goldsmith, say - someone who had a personal store of gold and/or silver, and a big strong, lockable cupboard = safe, so called for obvious reasons; i.e. to keep the bullion safe from any 'light-fingered Louies' passing by. Neighbours observed this sagacity and agreed, then asked to store their treasures in the 'communal' safe – naturally (incipient neoliberalism) paying some storage fees.

2. The goldsmith (now turning *banker*) lent some of his own specie, charging interest = % (for the service, plus a risk premium; pragmatically disregarding that charging interest was otherwise known as usury - in the old-time religions, and frowned upon = a 1st (minor) banker sin.) He invents the promissory note = 'paper money' as an alternative to carrying large weights of precious metal about (simultaneously avoiding some more risk).

2a. Note that the 'paper money' = promissory note is based on something like this actual promise: 'Redeemable in gold or silver.'

3. He then notices that his neighbours hardly ever take their own specie out of his safe, and gets an idea; he could also make loans based on the neighbours' money, now paying them some compensatory interest (= profit-sharing), as well as still charging them storage fees. So far, so good, and just as per Clarke and Dawe.

4. Next step is for the banker to notice that all (most!) bullion lies undisturbed in his safe - so why not lend out a bit more than there is specie-backing? Ta ra! - The 1st (major) sin of banking!

5. Enter greater greed allied to greater risk: The banker (now turning *bankster*) goes mad, lending sooo much that one day, the neighbours, plus some (perhaps not all but many, not necessarily most) of those holding his notes turn up in a rush (called “run on the bank”), all demanding their promissory notes' redemption. Ooops! - Not enough specie = 1st bank crash. To be followed, down through the years (why no long-term learning?) - by many more such crashes; problem.

6. Galbraith ["Money," '75, ibid., p29] lists 4 possible counter-strategies (my paraphrasing):

6/1. Banks could be audited often, to ensure that they did not over-lend.

6/2. The reserves could be specified, to keep lending within bounds ('fractional reserves.')

6/3. Banks could be assured of rescue ('government guaranteed.')

6/4. Banks could be relieved of having to redeem in specie (Q: What then? Usually, such a refusal = trouble.)

Comment 1: All those or more could be applied, or not - recall recent 'deregulations.'

Comment 2: You, dear reader, may decide if any of the suggested remedies could work and/or are fair, but it's obvious that 'our current system' is not working at all well.

Comment 3: In any case, we now have a GFC continuing, the EU possibly crashing; banking chaos as good as everywhere - *something* is (still) going *very* wrong, so much for banking 'geniuses' and especially 'masters of the (financial) universe!'

7. Some might say 'adding insult to injury,' Nixon put the $US off gold and onto fiat (later oil = petro-$s) on 15Aug'71, effectively declaring the US broke and destroying 'Bretton Woods' which, including 'voodoo' = neoliberal economics plus deregulation and the existing bankster swindle, led us to here = GFC continuing, EU crashing etc.. IF any proof were needed, THEN look only a) to the massive bank-bail-outs (why the hell should banks be given the people's money? The banks are the *creators* of money!!?) and b) to Bernanke + quantitative easing = print, print etc., now in its 4th iteration.

8. As an overlay, so to speak, we now have 'derivatives,' which are ephemera based partly on real objects; MBS = mortgage-backed securities and CDS = credit-default swaps and then a whole weirdo-menagerie, many of which are outright gambles, although one original idea behind their invention was risk-minimisation (haw!) Derivatives will not be further discussed – as not being important to what's coming here next, but 1st...

9. Summary: Absent specie, as in a fiat = our current system, some 'lip-service' is still paid to the 'real money' concept, in that banks are required to maintain some deposit reserves, essentially cash, although as money is fungible, there can be no 'real' distinction. Under fractional reserve banking, 'trading' banks (other sort = 'investing' = mainly gambling, both sorts often now combined) - may loan out some multiple of their deposits (a multiple of 10 say, or perhaps 30 or even beyond), always hoping for no rush of withdrawals. But as both C&D and Galbraith indicate, someone's deposit, 1st lent *as a book entry* to some 3rd, immediately itself becomes a deposit (in same, or other bank) - which may form the basis for another loan, etc., ad infinitum. Basically, after going off specie, *all* money 'out there' is borrowed, excepting the value of the specie before 15Aug'71 (which still exists somewhere, but who knows where? - Doesn't matter much, and not at all in this story - and the books all still 'balance.')

10. Here, an exception to all = most, namely all = all; *all* money 'out there' is now borrowed - and at some % (more on this coming). Even then there is an exception; namely that some central bank may 'print' money (real now = banknotes, virtual = keystroke book-entries) - but that is only exceptional because it requires no underlying reserve, and the money doesn't go (directly) into circulation. Some central bank 'printed' money may be used to purchase govt. bonds or be borrowed by trading banks (these days at minimal to zero, even -ve interest), thus 'pumping up' trading banks' reserves. OR, as in the US, 'the Fed' may purchase otherwise worthless MBSs, say, thus bailing failed gamblers out, and loading up 'the people's bank' (except the US Fed = private) with toxic rubbish. But to emphasise, *all* money is now borrowed - and at some %.


Argument 1: Well, so what? That's the way things work, OK?

Me: Nooo, not at all OK. I went looking for some figures; here's what I found:

  «Broad money is defined as ".... M3 plus other borrowings from the private sector by AFIs, less the holdings of currency and bank deposits by RFCs and cash management trusts." (it's in the Notes tab of the spreadsheet below [refer cited article])
This shows that the Australian money supply, as defined in 'broad money' terms, has doubled in the last 7 years:
Dec 2003: $667.4 billion
Dec 2010: $1329.4 billion»
[hardly matters where/who; just interested in the magnitude]

Comment 1 (aside): M3 is a technical term and may have problems (see here, say); the US ceased publishing M3 statistics some time ago, due, one supposes, to the fact that the graph was tending asymptotically to the vertical [!!?] Perhaps their statistics were being 'polluted' by some new-fangled derivatives?

Comment 2: If we take 10:1 as a conservative estimate of the 'reserve ratio,' take 3% as the savings return and 7% as the loans rate [these values as sample only; they do vary, often and by lots], money supply doubling in 7 years = 10.35% p/a 'growth' gives $1466.9bio in 2011 and $1618.7bio as the money supply in 2012; 9/10 @ 7% = $102.0bio - 1/10th @ 3% = $4.9bio gives $97.1bio nett, being the cost to the economy of 'renting' our money. Aus GDP estimated at $1,603bio, gives ~6% as the 'banking skim-off' for 2012. This ~6% 'leak' goes on, year upon year... essentially *unearned* income = economic rent to the banks. Must it be so? Ellen Brown - and I - think not, and recall that Aus' biggest bank, now CBA, actually belonged to us, we the people, before a) having the central bank functions stripped out (RBA created by Libs in 1959), and b) being privatised (between 1991 and 1996) by the economic vandals running the country (this time it was Lab, but Lib is just as bad; both try to privatise like the traitorous fools that they are; bipartisan = un- & anti-democratic.) Perhaps my estimate is *far* too conservative:

It’s the Interest, Stupid! Why Bankers Rule the World
By Ellen Brown
November 08, 2012
  «In the 2012 edition of Occupy Money released last week, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our GDP. That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of “Wall Street greed” but because of the inexorable mathematics of our private banking system.
This hidden tribute to the banks will come as a surprise to most people, ...»
[globalresearch/Ellen Brown]

Comment: What I said - but *much* worse; not ~6% but more like 35% to 40% of everything we buy - a true shocker.

Q: Can I explain this difference? A: Perhaps; although my ~6% is my estimated gross cost of money, a) it may be on the low side; if the 10:1 is higher towards 30:1 and/or if my 7% loan interest estimate is too low, say, and b) since most products go through several stages, like 1) Initial production, 2) Distributor, 3) Wholesaler, with 2 and/or 3 involving 4) Transport then 5) Retail, some of my ~6% could be added multiple times. Here, some confirmation of (b):

  «... Tradesmen, suppliers, wholesalers and retailers all along the chain of production rely on credit to pay their bills. They must pay for labor and materials before they have a product to sell and before the end buyer pays for the product 90 days later. Each supplier in the chain adds interest to its production costs, which are passed on to the ultimate consumer. Dr. Kennedy cites interest charges ranging from 12% for garbage collection, to 38% for drinking water to, 77% for rent in public housing in her native Germany.» 
["It’s the Interest," ibid.]

Comment: What I said. Figures could be checked by looking at bank profits; often new, higher records being declared. Recall bank profits are *after* the often extreme remuneration/bonus packages, luxury office accommodations & other such etc.s and any taxes they still can't avoid - after all their 'lobbying' = bribes.

Next Q: What can be done? A: Ellen Brown again:

Ellen Brown
 August 31st, 2011
  «If its secret isn’t oil, what is so unique about the state? North Dakota has one thing that no other state has: its own state-owned bank.
Access to credit is the enabling factor that has fostered both a boom in oil and record profits from agriculture in North Dakota. The Bank of North Dakota (BND) does not compete with local banks but partners with them, helping with capital and liquidity requirements. It participates in loans, provides guarantees, and acts as a sort of mini-Fed for the state.
Timothy Canova ... writes of North Dakota and its state-owned bank:

The state deposits its tax revenues in the Bank, which in turn ensures that a high portion of state funds are invested in the state economy. In addition, the Bank is able to remit a portion of its earnings back to the state treasury ... Thanks in part to these institutional arrangements, North Dakota is the only state that has been in continuous budget surplus since before the financial crisis and it has the lowest unemployment rate in the country.»
[webofdebt/Ellen Brown]

Comment 1: Ah ha! A publicly-owned "mini-Fed" working *for* the people!

Comment 2: One needs to extend the application of this. But before that, this:


Argument 2a: 'A fair exchange is no robbery'

Argument 2b: 'No taxation without representation'

Private banks creating money and charging interest on it is a rip-off.

This is not to say that trading banks do not perform useful functions, or may not charge for their services, nor that loan interest rates should or should not be manipulated, just that charging interest on our entire money supply and putting the proceeds into private pockets is a) offensive since no work is involved = economic rent, outside of the fee-for-service, and b) is a 'stealthy' tax on the economy, disguised as some sort of service charge on the one hand, and a regulator of borrowing on the other.


Musing 2: Money itself is a 'public good' and should obviously be managed responsibly (the issued-volume should be controlled such that inflation is kept at *zero* - IF the RBA can aim at 2-3% THEN it means they are assumed to have some sort of control, and a zero inflation-rate protects savings); and as the money-supply interest acts as a tax = it *is* a tax, it should be remitted to the people directly, or possibly to the people via the government, IF any government can *provably* operate in the people's best interests. The BND-concept shows us the way, which should be extended such that the money-supply interest goes to the people and not the banksters and their shareholders. IF the RBA were to create all the money, THEN the banks could get their money from the RBA as a loan at interest, then act as distributors, for suitable (service-industry, fair) fees.

End musing.


Argument 3: There is still another problem, in that the 'private banks creating money' system creates only what they loan, but nothing for the interest. You should be able to see this for yourself; all money 'out there' results from some loan; when a loan is paid back the debt is cancelled; if any money gets deposited (as savings, say) it may be 'multiplied' up and re-issued as more loans, but no = *zero* money even exists to cover the loan-interest, except for borrowed money. Here again Ellen Brown suggests a workable solution (as in preceding musing 2): IF all the loan interest accrues to the people's govt THEN that govt can spend it back into the economy for *required*, egalitarian infrastructure and services, *then* the interest would be covered and the books can be made to *properly* balance!


Fazit: Private banks creating money and loaning it out at interest is inequitable (wickedly transferring wealth to the rich as a sort of 'free lunch') - but worse; it creates mounting debts which can never be paid off, literally an impossible situation - only kept going by continuous growth, also completely impossible on a finite planet. Something's gotta give, and it's likely to end *very* badly.

Further, the rip-off of us, we the people by the private banks surely has not escaped the notice of the 'supposedly clever,' so-called 'leaders' running the country, in industry and the universities, plus the MSM+PFBCs, all together most of the M/I/C/$4a†-plex; that this iniquitous system a) was ever allowed to arise and (worse) b) be allowed to continue, condemns the whole ugly lot = the 'proof of perfidy' in my intro. Recall also, that what is now the CBA was once almost the BND in function (see here (repeat)) and could have been developed to do it all - but was dismembered and privatised = deliberate destruction by our rulers.


PS (16:41) In case you think I didn't notice, my estimate of 'money economic rent' = $97.1bio = ~6% of GDP, IF something like it was transferred, via *honest* representative govt, from the voracious private banking system to required, egalitarian infrastructure and services, THEN such a handsome sum could a) enable a combination of govt 'debt relief' = deficit reduction (although this is mostly furphy, see Keynes, plus the 'missing' fair taxation scenario), and/or b) tax relief for us, we the people. A so-called win-win-win; the 3rd win being for truth & social justice. One really has to wonder, not at the immorality of the wicked ones (we don't have to guess at their motivation = criminal greed), but how they internally compensate for their cognitive dissonance: Oh, so publicly pretending to be doing us, we the people some sort of favour ('only trying to help,' say), whilst all the while in actual fact, so *viciously* ripping us off! But now we can see ...



[1] deceive  v. (-ving) 1 make (a person) believe what is false; purposely mislead. 2 be unfaithful to, esp. sexually. 3 use deceit.  deceive oneself persist in a mistaken belief.  deceiver n. [POD]

[2] lie2  -n. 1 intentionally false statement (tell a lie). 2 something that deceives. -v. (lies, lied, lying) 1 tell a lie or lies. 2 (of a thing) be deceptive.  give the lie to show the falsity of (a supposition etc.). [Old English] [ibid.]

[3] pettifog  v. (-gg-) 1 practise legal trickery. 2 quibble or wrangle about trivial points. [origin unknown] [ibid.]

[4] conspiracy  n. (pl. -ies) 1 secret plan to commit a crime; plot. 2 conspiring. [Latin: related to *conspire] [ibid.]

[5] perfidy  n. breach of faith; treachery.  perfidious adj. [Latin perfidia from fides faith] [ibid.]

[6] money  n. 1 coins and banknotes as a medium of exchange. 2 (pl. -eys or -ies) (in pl.) sums of money. 3 a wealth. b wealth as power (money talks). c rich person or family (married into money)... [ibid.]


ELO/Os = hapless erstwhile legal owner/occupiers

I/J/Z-plex; illegitimate IL squats on genocidally ethnically-cleansed = improperly alienated, mainly Palestinian ELO/Os' land/property = IL is an un-remedied crime-scene and *all* I/J/Z-plex (except any actively opposing) are guilty; sole remedy = reparations = revest where possible, adequate = acceptable recompense where not + *sincere* apology

M/I/C/$4a†-plex = military, industrial, Congress (US-speak for parliament); $ = banksters, 4 = 4th estate = MSM+PFBCs, 'a' = academia incl. think-tanks, † = the churches.

MSM = mainstream media (print and broadcast), aka 'corrupt&venal'

neoliberalism = 'economic rationalism,' 'supply-side,' (wicked) privatisations, 'small govt.' = minimised to no égalité etc. + globalisation = wage arbitration etc. = <1% rips off 99%+

PFBCs = publicly-financed broadcasters, like the AusBC

ppp-dd'd = pushed propaganda paradigm dumbed-down

PRopaganda = PR + propaganda, usual qualifier: 'lying'

SQSHsO = snivelling quisling sycophantic hangers-on

the Enlightenment well summarised by liberté, égalité, fraternité

US-MMH = Media (aka press, radio + TV), Madison Ave., Hollywood

US&/Zs = the US of A and/or Zionists; sometimes indistinguishable

XS-CO2-CCC = excess CO2 climate-change catastrophe

Zionism (latest post-Jabotinsky, '23) = permanent war

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