Tragedy and Hope 101 The Illusion of Justice, Freedom, and Democracy Joseph Plummer: CHAPTER 4 Money: The Ultimate Instrument

 

Tragedy and Hope 101 The Illusion of Justice, Freedom, and Democracy Joseph Plummer: CHAPTER 4 Money: The Ultimate Instrument

 

CHAPTER 4
Money: The Ultimate Instrument

“Antiquity presents everywhere...the spectacle of a few men molding mankind according to their whims, thanks to the prestige

of force and fraud.”

—Frederic Bastiat1

Hopefully by now we’ve established the fact that a small, powerful, and secretive group can alter the course of world history. Additionally, we’ve established that this form of coercive power (hidden, dishonest, and dangerous) is nothing new. It existed thousands of years ago, it existed hundreds of years ago, and it exists today. Only the names, sophistication, and reach of the “instruments” have changed. Since this form of power is inherently illegitimate, we need no further justification to free ourselves from it.

As noted, a handful of individuals have played such an important role in the creation of our current system that their names must be mentioned. However, targeting individuals within the system isn’t going to solve our problems. Even if only one out of one thousand people are genius-level sociopaths (the percentage is probably much higher), that equals seven million potential recruits for the Network to draw from. In other words, there will always be an inexhaustible pool of replacements available to fill the tiny number of key policy-making posts within the system. For this reason, the predatory system itself must be destroyed.

Fortunately for us, there is a vital target for us to strike; one foundational element that the entire system is built on and cannot

1 The Law, page 50

stand without: the Network’s control of money. This is their primary weapon, and it is well within our power to take it from them.

The vast majority of people—people like you and me—don’t think of money as a weapon. For us, it’s simply something that we earn and then use to purchase products and services. The Network, on the other hand, has a much, much deeper understanding of what money is and how to wield its power. For them, money isn’t about acquiring more material goods or services; it’s about acquiring more control over the resources and instruments that govern human behavior. When viewed in this light, their seemingly insatiable desire to accumulate and control money makes more sense.

Keep in mind, this doesn’t mean that personal ownership of money is the Network’s most effective monetary weapon. In fact, we could take away the personal fortunes of all of its members and, if that’s all we did, their power would remain undisturbed, and they would rebuild their fortunes in no time. This is because the Network knows something that most of us do not: control of money, not actual “ownership,” is what truly matters. Where you and I cannot imagine having the ability to control money that doesn’t belong to us, the Network cannot imagine having it any other way.

In this chapter, we’ll cover the three primary mechanisms that the Network uses to perpetuate its monetary power. These mechanisms are: (1) the ability to combine and control the earnings of others, (2) the ability to directly confiscate the earnings of others, and (3) the ability to create money out of thin air.

1: Combine and Control Money

Beginning on pages 50–51 of Tragedy and Hope, Quigley speaks of a group that employs “financial capitalism” to monopolize business and control government. As experts in “financial manipulation,” these men “aspired to establish dynasties of international bankers” and, according to Quigley, they

succeeded at a level that rivaled the political dynasties of past centuries. Centered in London, with offshoots in New York and Paris, the power of this group is described as overwhelming in significance and “occult” in nature. By 18502 they could access the immense monetary power of “the Stock Exchange, the Bank of England, and the London money market.” But this was just the beginning.

In time, they brought into their financial network...commercial banks and savings banks, as well as insurance companies, to form all of these into a single financial system on an international scale which manipulated the quantity and flow of money.

Just to clarify: these men did not own the money that citizens placed in commercial and savings banks. They did not own the money that citizens paid into retirement funds, insurance funds, or trust funds. However, as already mentioned, they didn’t need to own the money. All they needed was the power to control it, and that they had. As long as an institution within their “financial network” held the funds, they could direct those funds toward increasing their power. They, alone, determined how and where that enormous, international pool of money would be invested.

Bankers, especially...international investment bankers, were able to dominate both business and government. They could dominate business...because investment bankers had the ability to supply, or refuse to supply, capital...they took seats on the boards of directors of industrial firms, as they had already done on commercial banks, saving banks, insurance firms and finance companies....they funneled

2 It’s worth noting that this period of “financial capitalism” clearly predates the Rhodes-created network that Quigley describes in both The Anglo-American Establishment and Tragedy and Hope. As such, it’s reasonable to suggest that the real roots of the Rhodes network (and the real power) existed long before Cecil Rhodes entered the picture. However, since this book focuses on the proven conspiracy (identified and exposed by Quigley), a detailed account of what existed before Rhodes will have to be told elsewhere.

capital to enterprises which yielded control, and away from those who resisted.3

Side Note: Quigley points out that bankers have far less power over those who can finance their own operations.4 As such, any group seeking to create a ruling “dynasty of international bankers” would be wise to create a system that is built on debt and undermines independent financing. Anything that devours or wipes out the wealth of outsiders will create endless opportunities for members of the dynasty who have an inexhaustible5 supply of money to loan (always with strings attached):

The power of investment bankers over governments rests on a number of factors, of which the most significant, perhaps, is the need of governments to borrow money. Just as businessmen go to commercial banks for current capital advances...so a government has to go to merchant bankers (or institutions controlled by them) to tide over the shallow places caused by irregular tax receipts. As experts in government bonds, the international bankers not only handled the necessary advances but provided advice to government officials and, on many occasions, placed their own members in official posts...

In addition to their power over government based on government financing and personal influence, bankers could steer governments in ways they wished them to go by other pressures. Since most government officials felt ignorant of finance, they sought advice from bankers whom they considered to be experts in the field. The history of the last century shows...that the advice given to governments by bankers, like the advice they gave to industrialists, was consistently good for bankers, but was often disastrous

3 Tragedy and Hope, pages 60 and 61
4 Tragedy and Hope, pages 56 and 60
5 These international bankers eventually gave themselves the power to simply create money out of thin air, so they could then “loan it” to others.

for governments, businessmen, and the people generally. Such advice could be enforced if necessary by manipulation of exchanges, gold flows, discount rates, and even levels of business activity.6

To summarize: using enormous amounts of other people’s money, international bankers essentially purchased their way into powerful business and government positions. With each new position, they gained control of more money. With control of more money, they gained access to more positions (so on and so forth). Through this process they secured enough monetary power to enforce their “advice” on both businesses and governments alike, expanding the reach of their hidden dynasties each step of the way.

This now brings us to the Network’s two crowning achievements of 1913: the federal income tax and the Federal Reserve System.

Using government as its instrument, the Network granted itself the legal authority to both create and directly confiscate the money it needs to finance its global objectives. The enormity of this topic, especially regarding the legal right to create money, requires hundreds of pages to cover properly. This chapter will provide only a short introduction. To fully understand the power derived from creating money, I highly recommend further research into the Federal Reserve System.7 For now, let’s start with the easier of the two funding mechanisms: not money creation, but money confiscation.

2: Confiscate Money

On page 938 of Tragedy and Hope, Quigley draws a flawed conclusion. He assumes that J. P. Morgan, Rockefeller, Carnegie, etc., must have lacked control over the government in 1913. If they

6 Tragedy and Hope, pages 61 and 62
7 For a good beginner’s guide (under two hundred pages) read Dishonest Money: Financing the Road to Ruin. For a much more thorough account (six hundred pages), I highly recommend The Creature from Jekyll Island.

had more power, he suggests, they would have stopped the federal income tax from becoming law. Like so many others who’ve accepted the alleged purpose of the income tax, Quigley fails to put two and two together: an income tax that is paid into a system that the Network controls only serves to strengthen the Network’s position. It creates another massive flow of other people’s money to tap into.

Even if high-ranking members like J. P. Morgan, Rockefeller, Carnegie, etc., had paid the income tax like everyone else, they’d still gain control over far more money than they paid in. (The amount of money collected from the rest of the population each year ran into the billions by 1917, then the tens of billions by the mid-1940s, then the hundreds of billions by the mid-1970s, and it runs into the trillions today.)8 Remember, they don’t have to own that money to determine how it’s spent.

Of course, these men did not pay income taxes like everyone else. Instead, they used the government to establish “tax-exempt” foundations before the income tax became law. This not only enabled them to shield their own fortunes, but it also enabled them to gain further control over Ivy League education and the federal government itself. Remarkably, Quigley acknowledges the ultimate effect of the income tax and the tax-exempt foundations, but he doesn’t seem to think about it much further:

These tax laws drove the great private fortunes...into tax- exempt foundations which became a major link in the Establishment network between Wall Street, the Ivy League, and the Federal government.9

For insight into how the Network really felt about the income tax, we can simply turn our attention back to E. M. House. In his book Philip Dru: Administrator (written anonymously before the income-tax amendment was passed), House openly attacked the “grotesque” American Constitution because it prevented “the

8 USGovernmentRevenue.com 9 Tragedy and Hope, page 938

government” from collecting an income tax from its citizens.10 Shortly after House’s choice for president (Woodrow Wilson) was placed in office, the “grotesque” constitutional barrier was removed, and the money began to flow.

Sadly, few Americans realize that the United States did not have a permanent personal income tax prior to 1913.11 Think about that for a minute...America went from being a sparsely settled nation of wilderness in 1776 to the most prosperous and arguably most powerful nation on the planet without an income tax. Contrary to the popular canard, a lack of income tax does not mean your country is doomed (socially, politically, militarily, and economically) to the global status of Somalia.

Here’s another little-known fact about the income tax: if we abolished the personal income tax today, the federal government would still collect about $3 billion per day ($125 million per hour) in revenue. Compare that to its revenue in 1913 of less than $1 billion per year,12 and the obscenity of what the Network has achieved becomes pretty clear. Even after adjusting for inflation, the numbers are still alarming. (One billion dollars per year in 1913 would equal about $25 billion per year today.13 At the current rate of federal spending, that inflation-adjusted $25 billion would be gone in a little over two days!)14

All of this federal spending requires an ever-expanding river of money. Follow that river, and you’ll find that it inevitably empties into an ocean of Network-connected industries and “interests.” Even humanitarian “government” services like food stamps are handled by JP Morgan and generate millions of dollars for the firm. Start looking into the military-industrial complex, which serves the ultimate Network interest (its sovereignty-destruction

10 Philip Dru: Administrator, page 107
11 A temporary income tax was imposed by Lincoln to fund the Civil War in 1861. Though the tax outlived the war, it ended circa 1873. An attempt in 1894 to create a permanent income tax was ruled unconstitutional by the Supreme Court a year later (see: Pollock v. Farmers’ Loan & Trust Company). It wasn’t until 1913, with the passage of the sixteenth amendment, that our current federal income tax came to be.
12 USGovernmentRevenue.com/classic
13 USInflationCalculator.com

14 USGovernmentRevenue.com/classic

project), and the costs, financial and otherwise, boggle the mind. But as bad as all of this is, we’ve still only scratched the surface.

Yes, the income tax essentially handed the Network a license to steal. Without its instrument (government), there would be no way to directly confiscate trillions of dollars annually from the labor of US citizens. The power of this funding mechanism, which did not exist for nearly 140 years of our nation’s history, has strengthened the Network’s global influence beyond measure. However, even on its best day, the so-called income tax runs a distant second to the greatest monetary power of all: the power to create money out of thin air.

3: Create Money—Create Credit—Create Inescapable DEBT

In the next chapter, we’ll briefly cover the basic mechanics of creating money, credit, and inescapable debt. For now, let’s cover something that’s arguably more important and definitely easier to understand: the implications of possessing such incredible monetary power and the story of how the Network seized it. First, the implications. We’ll start small and work our way up.

Can you imagine if the government gave you 100 million dollars? Think about that for a minute. Tomorrow, at noon, the government has agreed to transfer $100 million into your bank account, no strings attached...Got it? OK, let’s go a little further.

Can you imagine if the government gave you 500 million dollars? How about $1 billion? Better yet, what if it simply decided to give you $1 trillion? It’s difficult to get your mind around such large numbers, but really try to imagine what it would be like. For instance, if the government gave you $1 trillion and if you invested it, earning only a 7 percent annual return, you’d wind up with over $5.5 billion per month in additional income (roughly $192 million per day.)15Imagine having the ability to spend $192 million per

15 Seven percent of $1 trillion equals $70 billion per year. $192 million per day, times 365 days, equals $70,080 million (or, $70 billion and $80 million).

day without ever depleting a penny of the $1 trillion you were given. How much power would you have? And with so much money to spend, how many individuals and institutions would want to be your friend?

Now, let’s take it one step further...What if the government gave you all of the dollars? What if you were given the exclusive right to create every single dollar that exists? Try to get your head around that concept. (If a dollar exists anywhere in the world, it only exists because you were given the right to create it.) Now how much power do you have? The following quote provides a pretty good idea:

“I am afraid the ordinary citizen will not like to be told that the banks can, and do, create money...And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hands the destiny of the people.”—Reginald McKenna, British Chancellor of the Exchequer, as quoted in Tragedy and Hope16

That statement is about as straightforward as it gets, and it comes from a man who had intimate knowledge of the topic. He worked at the highest levels within the system and is stating, unequivocally, exactly how it is. Those who create money and control the credit of the nation “direct the policy of governments and hold in the hollow of their hands the destiny of the people.” So why is it, if creating money and controlling credit confer so much power, that so few people understand either of these topics? Shouldn’t we all be taught the dangers of such power? Is it any surprise that we aren’t?

Again, Quigley provides some insight. He explains that, for the Network to achieve its objectives, “it was necessary to conceal, or even to mislead, both governments and people about the nature of money and its methods of operation.”17 This practice of deceiving

16 Tragedy and Hope, page 325 17 Tragedy and Hope, page 53

governments and people about money continues to this day because it’s the only way for the Network to maintain its current level of power. Rest assured, if the vast majority of people do not understand what central banks are or how they operate, it’s because they were not meant to. Our global monetary system was created by men who “conceal” and “mislead” as a matter of course. It’s not only how they conduct their business, it’s how they intend to secure their “far-reaching aim,” reiterated below.

The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control...able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled...by the central banks of the world acting in secret agreements...Each central bank, in the hands of men like Montagu Norman of the Bank of England [and] Benjamin Strong of the New York Federal Reserve...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world. In each country the power of the central bank rested largely on its control of credit and money supply.18

It was, for this purpose, that the Network created the Federal Reserve System.

The Federal Reserve System

In chapter 3, we covered President Taft’s undoing: he refused to support the Network’s plan to create a central bank in the United States. And since the Network couldn’t fully “dominate the political system” of the United States without control of its “credit

18 Tragedy and Hope, page 324

and money supply,” Taft was toppled and Wilson was installed. Shortly after taking office, Wilson signed the Federal Reserve Act into law, and the central bank was born.

However, this isn’t the full story of how the Federal Reserve System came to be. Just as citizens were misled into believing that they chose Wilson in the 1912 election, they were also misled into believing the Federal Reserve Act was written to protect them from predatory international bankers. The sad truth is, predatory international bankers secretly wrote the legislation themselves and used government to turn their wishes into law.

This is a piece of the puzzle that Quigley seems to have missed. He acknowledges that Network titans like Rockefeller and Morgan had enough power to cause a financial panic whenever they chose. He admits that they used their power to their own advantage, wrecking “individual corporations, at the expense of the holders of common stocks.” He even admits that J. P. Morgan precipitated the “panic of 1907.”19 But the fact that their power could have been used to both take out competition and incite public demands for “monetary reform” (reform that would be directed by the Network itself) is not covered. It’s a glaring omission.

In short, the Network needed a central bank to “dominate the political system” of the United States, but it needed another crisis20 to finally sell the scheme. With that perspective in mind, the panic of 1907 looks very different. First, J. P. Morgan causes the panic (which, to this day, is rarely mentioned), then he and Rockefeller

19 Tragedy and Hope, page 72
20 The panics of 1873 and 1893 caused widespread suffering and stirred demands for monetary reform. Public opinion was already leaning heavily toward the need for legislative intervention, and the panic of 1907 provided the final push. If the idea that bankers would actually create a panic to serve their interests seems like a stretch, consider the case of Nicholas Biddle. As President Andrew Jackson was trying to shut down Biddle’s 2nd Bank of the United States, the banker intentionally crashed the economy and blamed the ensuing financial crisis on Jackson. This served to turn public opinion against Jackson and in favor of the bank. Discussing the tactic, Biddle commented, “Nothing but widespread suffering will produce any effect on Congress...Our only safety is in pursuing a steady course of firm restriction...I have no doubt that such a course will ultimately lead to...recharter of the Bank.” Referring to Jackson, Biddle remarked, “This worthy President thinks that because he has scalped Indians and imprisoned Judges, he is to have his way with the Bank. He is mistaken.” (As quoted in The Creature from Jekyll Island, page 354)

halt the panic (for which, to this day, they’re still portrayed as saviors), and out of the suffering and chaos, “public demands” for legislative intervention finally reach critical mass. “The government” then forms a monetary commission to investigate and solve the problem (headed by none other than Network insider and US senator, Nelson Aldrich), and the commission decides that a central bank is needed to solve the nation’s woes. From there, it was simply a matter of writing the legislation and handing it off to the “right” politicians.

Of course, the Network had to conceal the fact that it would be writing the legislation itself, and this presented some problems. The lengths it went to in order to hide its role reads like a scene out of a James Bond novel.

If you were alive in 1910, you wouldn’t have been invited to the meeting...In fact, you would have never known that a meeting took place. Despite the enormous impact on your country’s future, the scheme to create a new “monetary system” was none of your business.

This is where the story of the Federal Reserve System begins. The banking empires of Rockefeller, Rothschild, Morgan and Warburg...sent [six] representatives on their behalf to the privately owned Jekyll Island off the coast of Georgia. To prevent the men from being recognized, the island’s permanent employees were sent on vacation and carefully screened temps took their place. Each man was sworn to secrecy and instructed to only use their first name to further conceal their identity. (Nearly two decades passed before any of the conspirators publicly admitted they’d participated in the meeting.) In that meeting, the financial elite created for themselves the monetary system that we live under today.21

Had this meeting been covered in the press, the headline might 21 Dishonest Money: Financing the Road to Ruin, pages 2 and 3

have read: “POWERFUL BANKERS CONSPIRE ON PRIVATE ISLAND TO SEIZE MONETARY CONTROL.” But then again, had it been covered in the press, the Federal Reserve Act would have never passed. Citizens wanted Congress to weaken the destructive powers of international banking interests, not expand them.

Unfortunately, the Jekyll Island story didn’t leak until 191622, years after the damage had already been done. And even after it was exposed, “educators, commentators, and historians” continued to deny that the meeting ever took place.23 Anyone who pointed out the nefarious origins and authors of the Federal Reserve Act was smeared and dismissed as a conspiracy theorist. Fortunately, the truth finally did come out, and the conspiracy theorists were vindicated. Perhaps the most definitive admission came from Frank A. Vanderlip, president of the most powerful New York bank at the time (National City Bank of New York, now Citibank):24

There was an occasion near the close of 1910, when I was as secretive—indeed as furtive—as any conspirator...I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System...Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage by Congress...although the Aldrich Federal Reserve plan was defeated when it bore the name of Aldrich, nevertheless its essential points were all contained in the plan that finally was adopted.—Frank A. Vanderlip in the 1935 Saturday Evening Post article, “From Farm Boy to

22 Reported by B. C. Forbes, who went on to found Forbes magazine; reference Secrets of the Federal Reserve, page 2
23 The Creature from Jekyll Island, page 8
24 http://en.wikipedia.org/wiki/Citibank

Financier”25

Despite this admission over seventy-five years ago, despite other participants and their biographers who’ve admitted the same, despite the fact that Federal Reserve Chairman (Ben Bernanke) returned to Jekyll Island in 2010 to commemorate the FED’s founding one hundred years earlier26; still the vast majority of people have never heard of the trip to Jekyll Island and have no idea that “international bankers” created the system that was supposed to protect them from international bankers.

But again, should we be surprised? The education system and mainstream media are the two most powerful instruments for distributing information and creating mass awareness. Regarding the media, just a handful of global news corporations can, in one day, make billions of people around the world simultaneously aware of something that was completely unknown the day before. With this kind of power, the Network can choose to spread any lie, or withhold any truth, that it chooses. Then there is education: millions of students can be taught the real story behind the Federal Reserve System, or they can be taught the smokescreen of “government intervention to protect the public.” They can be taught the dangers of centralized banking power, or they can be taught nothing at all. At the end of the day, if people aren’t looking beyond the Network’s instruments for their information, they cannot expect to know what the Network doesn’t want them to know.

Even Quigley, apparently, was unaware of the trip to Jekyll Island. He makes no mention of the meeting in either Tragedy and Hope or The Anglo-American Establishment. Since he obviously had no aversion to exposing comparable duplicity, it’s reasonable to assume he didn’t know that particular part of the Fed’s history. Or, perhaps he consulted some of the respected “educators and

25 www.SaturdayEveningPost.com/2012/05/24/archives/banking.html
26 From the Federal Reserve Bank of Atlanta website, titled “A Return to Jekyll Island”: “The conference was held to mark the centenary of the 1910 Jekyll Island meeting that resulted in draft legislation [the Aldrich Plan] for the creation of the U.S. central bank.” http://www.frbatlanta.org/news/conferences/10jekyll_index.cfm

historians,” who convinced him there was no evidence that it ever happened. Whatever the reason, it’s an unfortunate oversight. Nothing demonstrates the Network’s power more convincingly than its ability to secretly write legislation that governs, or outright creates, its own instruments. And on that note...

With its legislation successfully written, Taft ousted, and Wilson in the White House, it would seem that the Network could rest easy. However, there was one more swindle needed to guarantee passage of the Federal Reserve Act. To help garner public support, the very same people who helped author the legislation on Jekyll Island began speaking out publicly against it.

As the Federal Reserve Act moved closer to its birth...both Aldrich and Vanderlip threw themselves into a great public display of opposition. No opportunity was overlooked to make a statement to the press—or anyone else of public prominence—expressing their eternal animosity to this monstrous legislation...Since Aldrich was recognized as associated with the Morgan interests and Vanderlip was President of Rockefeller’s National City Bank, the public was skillfully led to believe that the [big bankers were] mortally afraid of the proposed Federal Reserve Act. The Nation was the only prominent publication to point out that every one of the horrors described by Aldrich and Vanderlip could have been equally ascribed to the Aldrich Bill as well. But this lone voice was easily drowned by the great cacophony of deception and propaganda.27

The newly packaged Glass-Owen Federal Reserve Act, which mirrored Aldrich’s version in “all essential provisions,”28 was put forward by Democrats as being radically different; a bill written by selfless public servants to protect the citizenry from selfish, out-of- control banking interests. And as Vanderlip, Aldrich, and other “big-business Republicans” continued to attack the “new”

27 The Creature from Jekyll Island, pages 463 and 464 28 The Creature from Jekyll Island, page 461

legislation, more and more well-meaning Americans fell for the ruse.

The voice of the people expresses the mind of the people, and that mind is made up for it by...those persons who understand the manipulation of public opinion...It is they who pull the wires which control the public mind and contrive new ways to guide the world.29

Meanwhile, as the citizens were being guided to the desired opinion publicly, Edward Mandell House ensured that Wilson and Congress were being properly guided privately. The Intimate Papers of Col House leave little doubt that he acted as the direct liaison between the Network and relevant politicians during the creation of the central bank. (House directed the politicians while Paul Warburg, the primary author of the Jekyll Island legislation, directed House.) Ed Griffin summarizes House’s role this way:

As far as the banking issue was concerned, Colonel House was the President of the United States, and all interested parties knew it. Wilson made no pretense at knowledge of banking theory. He said: “The greatest embarrassment of my political career has been that active duties seem to deprive me of time for careful investigation. I seem almost obligated to form conclusions from impressions instead of from study...I wish that I had more knowledge, more thorough acquaintance, with the matters involved.” To which Charles Seymour adds: “Colonel House was indefatigable in providing for the President the knowledge that he sought...The Colonel was the unseen guardian angel of the bill.”30

Here is a perfect example of Quigley’s observation: ignorance

29 Edward Bernays, Propaganda
30 The Creature from Jekyll Island, page 459

of banking led politicians to trust the advice of bankers and that this was “consistently good for bankers, but was often disastrous for governments...and the people generally.” The great irony is that Quigley himself does not seem to fully understand the nature of the banking system. There are a few things in Tragedy and Hope that support this conclusion; I’ll cover them briefly.

First, on page 58, Quigley presents what he calls a “paradox” of banking practice: bankers prefer monetary deflation (a reduction in the money supply) because it increases both the value of the money that they control and the interest rates that they can charge borrowers. However, he states that they inevitably abandon the “deflationary idea” in favor of inflating the money supply (which they accomplish by issuing bank loans) because of their “eagerness to lend money at interest.”

To Quigley’s credit, he acknowledges that bankers can gain an extra form of profit from this supposed “conflict”: by increasing the money supply with loans, they increase the indebtedness of others and drive prices up. Then, by decreasing the money supply, they can force many debtors into foreclosure and confiscate whatever collateral was pledged to secure their loans. He also acknowledges that this manipulation of the money supply was a “prominent aspect” of the so-called “business cycle” and that it was “destructive to business and industry.”31

My question is: Where is the paradox?

If you’re a member of the Network, this is a fundamental feature of the banking system that you’ve created. What better way to crush or control competitors in “business and industry”? You not only enjoy the normal benefits of controlling loans (loaning money only to those who yield control and withholding it from those who resist), but you also have a mechanism for trapping debtors and then seizing their assets. If you do decide to confiscate their collateral—rather than bury the borrower in additional debt with additional strings attached—you’ve effectively gained ownership of a real asset with money that you created out of thin

31 Tragedy and Hope, pages 58 and 59

air. (Remember, that’s how our current banking system operates. When the Network wants to issue a loan, it pulls a check from its magic checkbook, writes in the loan amount, and poof—the money for the loan is created on the spot.)

Quigley states that too much deflation could sometimes be “disastrous” for the bankers because it forced “the value of the collateral below the amount of the loans it secured.” Sorry, but even this claim needs addressed. An unpaid principal loan balance of say $100,000, secured by an asset that sells for only $80,000 (or less), does not necessarily equal a loss for the bank.32 And if the goal is to drive a competitor into bankruptcy, then the math involving so-called “losses” gets even more interesting. What appears to be a loss on paper (due to a gap between the amount of principal owed on a loan and what is ultimately obtained during liquidation) can actually be viewed as a great investment. Sure, a portion of the dollars (created out of thin air) are not fully repaid, but that “cost” is minor compared to what it would have cost to purchase the competitor outright. Add in the dividends of market consolidation, and the return on investment is simply fantastic.

Next, there is the issue of the gold standard. Here again, it seems that Quigley has fallen for a false narrative: in this case, that the gold standard was the most sophisticated mechanism of monetary control that the elite could devise. That gold (rather than the control of money and debt, which gold only facilitated) was the root of their monetary power. If these myths are accepted as true, then his assertion that bankers sincerely tried to “save the gold standard” makes perfect sense. However, a closer look at their actions (and the ways in which they benefited from those actions), leads to a more logical conclusion: it was far more profitable to destroy the gold standard than it was to preserve it. To create ever-

32 As a simple example, consider an interest-only loan on $100,000 at 6 percent interest. At the end of five years, the debtor defaults, and the asset is sold for only $80,000. In this case it looks like the bank has lost money (the debtor still owed $100,000, and the bank only recovered $80,000 from the sale of the asset). However, if you factor in the INTEREST payments that were made over five years ($30,000), you see that the bank actually walks away with a profit of $10,000 ($80,000 sale price + $30,000 in interest payments equal $110,000). In rare instances, the bankers might actually lose some of the dollars that they created out of thin air for a loan. When that happens, those “losses” tend to be turned to profits via “government” bailouts

increasing piles of money and debt out of thin air, the limitations of gold had to be removed.

On pages 256 and 257 of Tragedy and Hope, Quigley nearly stumbles into the truth. While discussing the beginning of World War I, he tells the story of military men and financial experts who believed the war would be over within six months. This prediction was based on the fact that gold reserves (used to pay for the expenses of war) would be depleted within that amount of time. However, by suspending the gold standard, the duration of the war (along with the enormous debts and banker profits associated with it), grew far beyond anything that a gold standard would have supported.

All the Great Powers were on the gold standard under which...paper money could be converted into gold on demand. However, each country suspended the gold standard at the outbreak of war. This removed the automatic limitation on the supply of paper money...each country proceeded to pay for the war by borrowing from the banks. The banks created the money which they lent by merely giving the government a deposit of any size against which the government could draw checks. The banks were no longer limited in the amount of credit they could create because they no longer had to pay out gold for checks on demand...the problem of public debt became steadily worse because governments were financing such a large part of their activities by bank credit.33

From this perspective, the advantages of permanently “suspending” the gold standard are self-evident. When a bank creates “paper money” loans that are backed by gold, it runs the risk of losing its gold reserves. When a bank creates paper money loans that are backed by nothing, then its gold reserves are perfectly safe. Additionally, without gold backing, there are no

33 Tragedy and Hope, page 257

longer any firm limits on how many loans the banking system can create. Limits, if any, are determined by the wishes of those who control the system and the limitless borrowing needs of government, business, and individuals.

Last but not least, Quigley asserts multiple times that the reins of power passed from “financial capitalism” to “monopoly capitalism” with the destruction of the gold standard.34 (Once again, implying a loss of gold backing equaled a loss for those who wielded banking power.)

It would be easy enough to dismiss this supposed shift in power as a distinction without a difference because, at most, it amounted to a shift in methods of control rather than a shift in management. (The same Network that controlled financial capitalism paved the way for monopoly capitalism, and the primary leader of the Network, Lord Milner himself, had written of his desire to abandon the gold standard as early as 1923.)35 But there is a larger point to be made here.

If “monopoly capitalism” is all powerful because it can self- finance, manipulate the price of goods within its market, and use its inflated monopolistic profits to wield monetary influence, then there are no words to sufficiently describe the power of “financial capitalism.”

• Not only can financial capitalists “self-finance,” they can do so by simply creating money out of thin air and loaning it to others at interest. (What could possibly be more powerful than that?)
• Not only can financial capitalists manipulate the price of goods in a particular market, they can manipulate the price of goods in any market. (Real estate, food, energy, stocks, bonds, education...anything that has a price will be affected by those who manipulate the quantity and flow of money.)
• Not only do financial capitalists enjoy the influence of

34 Some references: Tragedy and Hope, pages 50, 62, 79, 338, and 502 35 The Anglo-American Establishment, pages 122 and 123

monopolistic profits, they enjoy the influence of having monopolized the creation of money itself. Stated another way: when a “monopoly capitalist” accumulates his first billion dollars, it’s only because others have borrowed that billion dollars into existence from the Network’s banking system.36

If Quigley truly understood the Network’s banking system, he would have never fallen for the lie, undoubtedly perpetuated by the Network itself, that banking power peaked in the 1930s. The exact opposite is true. It wasn’t until the 1930s that international bankers began chipping away at the limitations of gold and inching the world ever closer to a purely debt-based standard.

As powerful as the Network’s position was under the gold standard, it has increased immeasurably under their 100-percent debt-based standard. They can now create, destroy, and direct as much money as they see fit. They currently earn interest on every single dollar in existence, because every single dollar in existence has been created and loaned into the economy by them.

Accordingly, their debt-based system guarantees that nations will remain forever trapped in debt. (As a nation and its citizens attempt to reduce their debt to bankers, they simultaneously reduce their nation’s money supply. Paying off all debt would reduce the money supply to zero...not only would this be impossible, but financial chaos and “emergency government borrowing” would be triggered long before any significant reduction in debt was achieved.) This is not a system that was designed with our best interests in mind.

In the next chapter, we’ll cover the Network’s banking system in more detail. We’ll also cover the steps that we must take to free ourselves from their illegitimate monetary control.

36 For more information on how the money-creation process works, see MeetTheSystem.org, chapter 8