Dave Volek, on WriterBeat.com, wrote an article January 12, 2019 on The Money Masters, a 3.5-hour YouTube presentation on historical manipulators of wealth. Volek’s article and the subsequent comment thread were enlightening, with contributions from people apparently well versed on the subject. My own interest in how all this works rests on readings such as The Creature from Jekyll Island: A Second Look at the Federal Reserve, by G. Edward Griffin, Wealth of Nations, by Adam Smith, The Robber Barons, by Matthew Josephson, Confessions of an Economic Hit Man, by John Perkins, and Hamilton, by Ron Chernow, among others, as well as business news in various periodicals and newspapers for a couple of decades. Commentators on Dave’s article linked to other on-line videos, some of which I also watched, but I ended up with more questions than answers.
These are the links to the article and videos referenced below:
The Money Masters: https://www.youtube.com/watch?v=gFj_cqNBaZY
Money as Debt: https://vimeo.com/131985511
America: Freedom to Fascism: https://www.youtube.com/watch?v=O6ayb02bwp0&app=desktop
THE MONEY MASTERS
The Money Masters, made in 1996, gave an overview of historical attempts to own and control wealth. The usual culprits were mentioned: Alexander Hamilton, the Rothschilds, the banking cartels, including the Federal Reserve, among others. It mentions the link between central banking and the income tax.
But there was an agenda, because the makers stressed reform of the banking system in favor of the government’s printing its own money and bypassing debt and the Fed. I believe Mefobills on WriterBeat advocated the same, calling it “sovereign finance,” and according to him, that’s how Canada financed its transcontinental railroad debt-free. As William Still, the creator of The Money Masters confirmed, anything that can be accepted in payment of taxes constitutes legal tender. If I remember right, that’s how states in the early days (before the Constitution) gave legitimacy to their currencies. Apparently, that’s how Maduro in Venezuela plans to legitimize his block-chain petro, backed by oil.
The documentary is spotty and ultimately unsatisfying. It hinted at things I knew; and tied concepts together in a time line that was instructive; and it served the purpose of showing how the international bankers manipulated historical events to create wars, for instance, and to determine the winners and losers. Napoleon’s battle at Waterloo was given as an example, and the Bolshevik revolution in Russia. The documentary claims that in WWII, the Rothschild branches in England, France and Germany, respectively, loaned money to those governments, and of course profited from all. It said the arrangements were that the war’s winners would cover the debts of the losers. The reason given for overthrowing the Tsar in Russia was that he refused a central bank.
While I can accept all this so far, I question the premise that a government has any better financial sense than a banker. Both are profiting from other people’s energy/money and have theoretically infinite power over it. The documentary says—correctly—that a debt-based dollar with the Federal Reserve as go-between has no more value than a dollar created by the government, except the latter is interest free. It suggests the federal government could lend its own dollars to states and localities interest-free for local projects. The problem, says the documentary, is the usury of interest—especially to profiteers like the Fed. It also condemns fractional reserve banking and gives a good explanation of how that works.
But who’s to say government-determined projects are in taxpayers’ best interests? It still constitutes a debt to the government, even if your property is flooded by a dam the government deems necessary. Would Savannah borrow from the federal government as liberally as it sells bonds to finance its replacement of school gym floors or to replace grass with astro-turf on the sports fields? Wouldn’t taxpayers be just as obligated, even if the loans carried no interest? That would give the taxing powers license to borrow for ever more wild-eyed projects.
MONEY AS DEBT
A commentator on Dave Volek’s article, Logical Man, recommended Money as Debt, so I watched that 45-minute video, too. It had the same theme as The Money Masters and the same agenda. Essentially both denounced interest and claim the government should issue interest-free money to lend to smaller governments (states and municipalities) for infrastructure projects and the like.
Money as Debt (which should be “Debt as Money”) gives a good scenario of why interest on principal perpetrates an ever-increasing debt bubble. If principal is created as bank credit, where does interest come from? All those debtors must scramble to pay interest or go bankrupt and lose their assets. A typical strategy for the bankers is to generate new loans to cover the interest on old loans, thus including old interest in new principal. The Creature from Jekyll Island describes this in some detail.
Money as Debt claims that without debt there would be no money, an argument I’ve heard before. That’s only because we live in a stupid system built on living beyond one’s means, starting with the government(s). Second, the government exists to fund itself through extortion and war, so it spends a goodly portion of its income creating mayhem around the world that it then extorts more money to repair.
While The Money Masters disparages the gold standard—it’s too easy to corner the gold market—I believe some kind of standard is necessary to keep government within limits. What’s to stop any government at any level from printing or borrowing unlimited funds to justify government contracts to friends and business associates, as now? The specious argument that gold is too easy to corner assumes a fixed price. Even if the central banks hold most of the gold now, it does them no good sitting in vaults, especially if they’re not allowed to print IOUs instead of selling the gold itself.
If the federal government decides to go to war, or wars, as now, who could stop it? Would states and localities be required to pay for it, as now?
The pundits make a distinction between government finance and individual finance. They presume that’s okay, even though all acknowledge the government is corrupt. But to spend without permission, and especially to go into debt in other people’s names, is a reprehensible practice and symptomatic of the autocratic paternalism of all governments today. Those who buy bonds collude with the deception and become willing conspirators in exchange for their purchased position in the “ruling class.” I could say the same for stock purchasers, who also understandably want something for nothing in the form of dividends. Here we have people actively contributing to destruction of the planet to “grow the economy” while actually depleting it.
But no one addresses such sticking points as the effect of the petrodollar or that paying off a debt contracts the money supply, as does writing off a debt, as happens in bankruptcy. No one can know how much money is out there, especially as every country has its own. China and Russia are talking about (and may have enacted) gold-backed currency. This may be a factor in US demonization of these two governments.
No one but me suggests that credit is destructive, whether it charges interest or not. Unlimited credit provides unlimited opportunity to do stupid things, and if you’re a government, those stupid things cost everyone and benefit only a few. Then there are the government contractors, which in my ideal society would not be allowed.
AMERICA: FREEDOM TO FASCISM
I ended up watching a 2.5-hour video by Aaron Russo entitled America: Freedom to Fascism, made about 2006. This was also recommended by a commentator, Jeffry Gilbert, on Dave Volek’s The Money Masters post. Russo’s video is about the income tax and goes into some detail refuting the belief that there’s a law requiring wage earners to file. The 16th amendment, he claims, imposed no new taxes, something affirmed in at least five Supreme Court rulings since 1913. According to the Constitution, two types of taxes are allowed: direct and indirect. Direct taxes must be apportioned by population. The Supreme Court has defined “income” as profits from a corporation, not wages, which it defines as receipts from sale of time or labor.
Russo interviewed people like former US Congressman Ron Paul, several former IRS agents, a restaurant owner who was targeted by the IRS for presumed drug dealing, and several people from an organization called “Tax Honesty.” Most interesting was an interview with a former commissioner for the IRS, who wrote the tax code and who now works for a high-powered law firm. This guy could not or would not answer whether there’s a specific law requiring people to file. He essentially said Supreme Court rulings saying the 16th imposed no new taxes were obsolete and irrelevant. Yet the IRS code says it’s a voluntary tax.
All this was linked to the Federal Reserve, and the video’s ultimate agenda was to abolish the Fed, which Congress has the power to do. Russo raised the question of whether there is any gold left in Ft. Knox. Some believe the gold is being held as collateral in the Fed’s New York office basement against the national debt.
Russo also mentioned the federal government’s obligation/responsibility to coin and issue its own money.
In any case, I surprise myself by piercing other peoples’ (and general) assumptions, on which the whole authoritarian power structure rests. The primary assumption is that the masses are stupid, childlike, and don’t know what’s good for them.