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article imageOp-Ed: How to deal with the banksters — A lesson from the soaps

By Alexander Baron     Jul 7, 2012 in Politics
A recent episode of the UK soap “Emmerdale” contains a salutary lesson for all politicians, Greek and others, when dealing with the banking cartel.
The plot is not important but in the UK soap Emmerdale, a man who has no real resources has taken out a loan of £1,000, an extremely modest sum in the grand scheme of things, but not for him. Unable to pay it back, he has other problems, one being that he has succumbed to a form of mental illness, perhaps schizophrenia, which leads to him being sectioned.
While he is in hospital, the two men from whom he has borrowed the money come looking for him. They are back street loan sharks, and however unpleasant or notorious they may be, it is not unreasonable for them to seek both repayment of the original loan and something on top. The problem is that being back street loan sharks, this something on top amounts to a further £7,000, which for the short period of the loan is extortionate in anyone's book. They call on his wife who gives them £50 and promises more. The next time they call, she gives them another £50, which they say may just about cover their travel costs.
The next time they come, they are met by his feisty daughter, who offers them the £1000 they loaned in full settlement. They are not inclined to accept this, so she offers them another thousand. £2000 in full and final settlement, take it or leave it. The men have the law on their side, odious though they may be, but the daughter points out that this is the best offer they will get; if they call in bailiffs to clear the place, they will surely be left out of pocket. They accept her offer, and that is the end of the debt. At least until the scriptwriters decide otherwise, or perhaps the local vicar who has fallen on even harder times will be transformed into a serial killer, but the soap ratings wars need not concern us here.
There are both differences and parallels between the situation faced by the family of Zak Dingle in Emmerdale and those faced by our leaders.
Although the loan sharks were unpleasant people living on the edge of the law, they were lending real money, and were entitled not only to repayment but something on top. That extra is known as interest, it is computed as compound interest, and it soon mounts up, because compound interest is exponential. According to Professor Bartlett, our failure to understand the exponential function is Man's greatest challenge, let us though stay within the purely economic sphere.
According to the banksters, we are all facing an age of austerity - we means us, not them. This is because we have all been spending too much, Greece in particular has borrowed so much money that it can't repay it, and the only way forward is austerity. The Greeks - and by inference everyone else - have to cut public services, and, in the words of British Prime Minister David Cameron, pay down the deficit. If we don't, the sky will fall.
Unlike the back street money lenders who came hunting for an outrageous return on their real money, the banksters demand even more outrageous returns on money that has been created out of thin air. In 1913, they imposed the Federal Reserve on the United States, and more recently they have imposed the Treaty of Maastricht on Europe. This means that apart from the coin and note issue - about 3% - all money in existence comes from them, they have what Major Douglas called the monopoly of credit.
If all money, or almost all money, is created as an interest-bearing debt, then it is irredeemable. Major Douglas used calculus to prove that banks create money (something that is accepted now by all except a few idiots called socialists). The question of irredeemable debt is not higher mathematics though, rather it is primary school or pre-school stuff. Think not? This has been done before, but it is worth repeating here.
Imagine a nursery group with three or four kids playing games. You have a tin of building bricks and say, right boys and girls, there are ten bricks here. If I let you play with these, will your promise to give me back eleven at the end of the day? They may well all shake their heads, but how long will it take even a three year old to realise you can't get eleven bricks out of a box containing ten?
Mainstream economists acknowledge this problem, even they are not that dumb, but what is their solution? Simply to shrug it off arguing that the debt can be and is simply rolled over, and that the more wealth a nation creates, the deeper in debt it will go to the banksters, but that's okay, we can keep on rolling it over.
The increased debt leads to all manner of social evils, including inflation, as governments try frantically to reduce the actual burden on their people. It leads also to taxation, and to taxation by stealth. Think of all the taxes you and everyone pays. There is income tax, value added tax, national insurance, sales tax in some countries. And taxation is cumulative. You pay tax on that can of beans you buy from the supermarket, the supermarket pays national insurance on its employees, they pay income tax, and if they drive to work, tax on their cars, duty on their fuel, you name it.
Then there are the stealth taxes like the London congestion charge, outrageous parking charges, massive fines for parking in the wrong place, and in some countries, graft and corruption, which may be due to a culture of bribery, or to the fact that government employees are in the same boat as most of the rest of us, and need to resort to such measures to maintain their standard of living, or even a roof over their heads.
Of course, it is fashionable in some quarters to bash the rich, a recent case being that of the comedian Jimmy Carr, but the rich are an easy target; it may make ordinary working people feel better to vent their spleen on them, but making the richer poorer does not make the poor richer.
So what is the solution? As in the TV series Emmerdale, it is to stand up to the bully boys who demand from us what they are not entitled to. [There have been two similar plots in another soap, Coronation Street, so perhaps someone at ITV knows something?]
The big problem is that the law is on the side of the banksters, which is hardly surprising because these laws were written by their front men. It is time for all honest politicians to say enough is enough, to shake off their chains by redrafting the laws of their countries to enable them to mint and print their own currency - all of it - and to stop paying interest on money they never borrowed or never needed to borrow. There are politicians who would be willing to do this, even David Cameron stood up to the banks last December, and with a groundswell of informed public opinion that is possible on a larger scale in Britain, Greece, throughout Europe, the USA, Canada, and indeed everywhere.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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