a figment of Larry Hannigan
"I want the earth plus 5 percent"
Barter For generations people used the barter system. A man supported his own family by providing all their needs or specialized in a particular trade. The surplus assets of its own production, he exchanged for the surplus of others.
In each community a simple Government had been formed to ensure that the freedoms and rights of each person would be protected and not forced any man to do anything against their will by no other man or any group of men. This was the only purpose of government and each Governor was voluntarily supported by the local community who elected him.
However, market day was a problem they could not solve. "It was worth a knife one or two baskets of corn? A cow was worth more than a car ... and so on. None could think of a better system.
Fabian, the goldsmith, had announced, "I have the solution to our bartering problems, and invited everyone to a public meeting for tomorrow. "
Money
The next day was a great scene in the town square and Fabian explained all about the new system which he called" money ". He said:" The gold into ornaments and Jewelry is an excellent metal. It does not tarnish or rust, and will last many years. Refine some of my gold coins and call each coin a dollar. " He explained how values \u200b\u200bwould work, and that "money" would be really a medium for exchange, a much better system than bartering.
One of the Governors questioned, "Some people can dig gold and make coins for themselves, "he said," That would be most unfair ", Fabian was ready with the answer." Only government-approved coins can be used, and these will have special marking stamped on them. "This seemed reasonable and was proposed to give each man an equal number of coins. "But I deserve the most," said the candle-maker, "Everyone uses my candles." "no," said the farmer, "without food, no life here , we have to have the largest amount of money. "And the discussion continued.
Fabian let them argue for a while and finally said," Since none of you can agree, I suggest that each gets the amount they require from me. No limit, except for its ability to repay. The more money each gets, the more you return at the end of the year. Interest
"What will you receive?" People asked Fabian.
"Since I am providing a service, ie, the source of money, I am entitled to payment for my work. Let's say that for every 100 pieces you obtain, you repay me 105 for each year that you owe the debt. The 5 will be my payment, and call this charge interest. "
There seemed to be otherwise, and also 5% seemed little enough año.Fabian not lose a minute. He made coins day and night, and at the end of the week he was ready. People queued to get into his tent, and after the coins were inspected and approved by the Governors the system commenced. Some borrowed only a few and they were to try the new system.
Price found that the money was great, and they soon valued everything in gold coins or dollars. The value they placed on everything was called a "price" and the price mainly depended on the amount of labor required to produce it. If it took a lot of work the price was high but if it was produced with little effort the price was low. Free competition
In one town lived Alan, who was the only watchmaker. Their prices were high because the customers were willing to pay for one of their watches. Then another man began making watches and offered them at a lower price to get sales. Alan was forced to lower their prices, then prices came down, so that both men should strive to provide the best quality at the lowest price. This was the genuine competition. Debt
At year end, Fabian left his shop and visited all the people who owed him the coins. Some had more than they borrowed, but this meant that others had less, since only a certain number of coins was initially distributed. Those with more than returned the borrowed borrowed plus 5 additional 100, but anyway, after returning their currencies, they had to borrow again to continue.
The others discovered for the first time they had a debt. Before you pay more money, Fabian took a mortgage on some of its assets, and each came once more to try to get those extra 5 coins which always seemed so difficult to find.
Nobody noticed that, on the whole, the country could never get out of debt until all the coins were returned, but although all the coins were returned, they were always those 5 additional 100 who had never been put outstanding. None other than Fabian could see she was unable to pay the interest, the extra money had never been put into circulation, so someone always lacked.
was true that Fabian spent some coins, but he himself could not spend as much as 5% of the total economy of the country. There were thousands people and Fabian was only one. On the other hand, he was still a goldsmith living a comfortable life. Bank
In the back of his shop Fabian made a safe and people found it convenient to leave some of their coins in it as a security deposit. He charged a small fee depending on the amount of money, and the amount of time they stayed with him.
he was the owner of the coins, a receipt for each deposit. When a person went shopping, it usually took many gold coins. The person gave the merchant one of the receipts for Fabian, depending on the value of goods I wanted to buy.
traders recognized the receipt as being genuine and accepted it with the idea of \u200b\u200btaking then to Fabian and collecting the appropriate amount in coins. The receipts passed from hand to hand instead of transferring the gold itself. People had complete confidence in the "receipts", and accepted as if they were gold. Before long, Fabian noticed that it was very rare that someone actually asked him his gold coins. Bank Deposit
He thought: "Here I am in possession of all this gold and I continue to work hard as a craftsman. It makes no sense. There are dozens of people who would happy to pay me the interest in the use of this gold, which is posted here and that their owners rarely complain. Loans
"True, gold is not mine, but it is in my possession, which is all that matters. I do not need to make more coins to pay, I can use some of the coins stored in the safe ".
One day, a very large loan was requested. Fabian suggested, "Instead of carrying all these coins we can make a deposit in his name, and then I will give several receipts to the value of currencies." The borrower agreed, and went with a bunch of receipts. He had obtained a loan yet the gold remained in the safe of Fabian. After the client left, Fabian smiled. Could have the cake and eat it up too. He could "lend" gold and still keep in their possession.
friends, strangers and even enemies needed funds to conduct its business, and provided they could ensure the return, they could borrow as much as needed. Just writing receipts Fabian was able to "borrow" as much money as several times the value of gold in his safe, and he even owned the money in it. Everything was safe as long as the true owners did not call for their gold and confidence people were kept. Seats
accounting
He kept a book showing the debits and credits for each person. In fact, the lending business was proving to be very lucrative. His status in the community grew almost as fast as his wealth. He was becoming a man of importance, he called for respect. In finance, his word was like a sacred pronouncement.
banking system
Goldsmiths from other towns became curious about their activities and one day I called to see him. He told them it was what he did, but was careful to emphasize the need for secrecy. If their plan was exposed, the scheme would fail, so they agreed to form their own secret alliance.
Each returned to his hometown and began to operate as Fabian had taught. Cheques
People now accepted the receipts as being as good as gold itself, and many receipts were deposited for safe keeping in the same way as coins. When a merchant wished to pay for other goods, he simply wrote a short note addressed to Fabian in instructing him to transfer money from your account the second trader. We took Fabian only a few minutes to adjust the numbers in the book.
This new system became very popular, and notes with instructions to transfer were called "checks." Tickets
Late one night, the goldsmiths had another secret meeting and Fabian revealed a new plan. They called the day after a meeting with all governors, and Fabian began. "The receipts we issue have become very popular. No doubt most of you Governors are using them and find them very convenient." Governors settle. They agreed, but wondered what was wrong. "Well," continued Fabian, "some receipts are being copied by counterfeiters. This practice must stop."
The governors were alarmed. "What can we do?" asked.
Fabian replied, "My suggestion is: first of all, let it be the work of the government to print new notes on special paper with very intricate designs, and then each note will be signed by the chief governor. The notes will call ' notes'. The goldsmiths will be happy to pay the costs of printing, it will save a lot of time we spent writing our bills. " The Governors reasoned, "Well, is our job to protect people against counterfeiters and the advice seems certainly a good idea. "They agreed then print the" notes ".
The idea sounded good, and without much thought, impressed a lot of brand new banknotes. Each ticket had a value printed on it - $ 1, $ 2, $ 5, $ 10 etc. Small printing costs were paid by the goldsmiths.
tickets were much easier to transport and were quickly accepted by the people. Despite their popularity, these notes were used only for 10% of transactions. The records showed that the system of checks was used for 90% of all businesses.
gold reserves
"Secondly," Fabian said, "some people have done excavations and are making their own gold coins. I suggest you pass a law so that anyone who finds gold nuggets must hand them over . Of course, it will be paid with cash and coins. " Saving
The next stage of the plan began. Until now, People Fabian was paying to save your money. To attract more money from the safe, Fabian offered to pay depositors 3% interest on deposits. Most people thought he was paying that money to borrowers at 5% and its profit was 2% difference. Also, people did not ask much, because they get the 3% was much better than being paid to deposit money in a safe place.
The amount of savings grew and with the additional money in the vaults, Fabian was able to provide $ 200, $ 300, $ 400 to $ 900 for every $ 100 in notes and coins held in storage. He must be careful not to exceed this factor of 9 to 1, as one person in ten, you withdraw the deposit required to use their money. If not enough money available when someone needed it, people would begun to suspect, as passbooks showing exactly how much they had deposited.
Beyond this, over $ 900 in financial records that had lent Fabian writing checks himself, could claim up to $ 45 of interest, (45 = 5% of 900). When the loan plus interest was returned ($ 945), the $ 900 is canceled in the debit column and Fabian kept the $ 45 of interest. Therefore, it was more than happy to pay $ 3 interest on the $ 100 originally deposited, which had never left the vault. This meant that for every $ 100 that held in trust, it was possible obtain an 42% gain, while most people thought he was earning only 2%. The other goldsmiths were doing the same thing. Created money in the air, just signing a check, paid and over charged interest. Credit
True, they were not doing bills, the government printed the bills and handed them over to the goldsmiths to distribute. The only expense of Fabian was the small printing fee. However, they were created money "claim" that came out of nothing and charges interest on top. Most people believed that the money supply was a government operation. Fabian was also believed to provide the money that someone else had deposited, but there was something strange: No deposit decreased when Fabian gave a loan. If everyone had tried to withdraw their deposits at the same time, the fraud had been discovered. Issue
had no problems if someone asked for a loan in currencies or billetes.Fabian simply explained to the Government that the increase in population and production required more notes, and obtained for the small cost of printing .
Something is wrong
One day a man who used to think much went to Fabian. "This interest charge is wrong," he said. "For every $ 100 you paid, is asking $ 105 in return. The $ 5 extra can not be paid because there are never. Many farmers produce food, many manufacturers produce goods, and so do everyone else, but only you makes money.
Buying Power "Suppose there are only two employers in the country, and we use the rest of the population. We borrow $ 100 each, paid $ 90 in wages and expenses and we are left with a $ 10 profit (our wage). That means that the power total spending, of all people, is $ 90 + $ 10 multiplied by two, this is $ 200. But to pay you, we should sell our entire production for $ 210. If one of us succeeds and sells all that he produced for $ 105, the other man can hope to earn only $ 95. (If the total purchasing power is $ 205, and one of the businesses sold $ 105, only $ 95 left in the hands of people to buy at another employer). In addition, part of the goods can not be sold, because there would be more money in the hands of consumers to buy them. Selling for $ 95, the second contractor still owe you $ 10 and can only borrow demanding more pay. This system is impossible. "He continued," Surely you should issue $ 105, this is 100 for me and 5 so that you spend. In this way there would $ 105 in circulation, and the debt can be paid. "
Financial Guru
Fabian listened quietly and finally said," The Financial Economics is a very deep, man , it takes years of study. Let me me worry about these issues, and you worry for their own. You must become more efficient, increase production, reduce expenses and become a better employer. Always be willing to help in these matters. "The Man was unconvinced. There was something wrong with Fabian's operations and he felt that his question had been answered evasively. However, most people respected Fabian's word -" He is the expert, the other must be wrong. Look at how developed the country, how our production has increased, better let him handle these issues. "
Strike
To pay the interest on the loans they had asked, traders had to raise prices. Employees complained that wages were very low (when you could buy less price goods with their wages). Employers refused to pay higher wages, saying it would fail. Farmers could not get fair prices for their production. Housewives complained that food was very expensive.
And finally some people called themselves "on strike", something I had never heard of before. Others had been hit by poverty, and their friends and relatives had no money to help them.
Most had forgotten the real wealth all around them, fertile land, large forests, minerals and livestock. They could only think about money, which always seemed to be missing. But they never questioned the system banking. They believed that the government was driving.
The economic situation worsened. The employees were sure that the bosses were taking much profit. Employers say that workers were very vague and were not doing their day's work honestly, and everyone blamed everyone else. The rulers could not find an answer, and besides, the immediate problem seemed to be to combat the growing poverty. Help
social
The government then launched welfare schemes and made laws forcing people to contribute to them. This angered many people who believed in the old idea of \u200b\u200bhelping the neighbor voluntarily. "These laws are nothing more than legalized robbery. Get something out of a person against his will, beyond the purpose for which it is used, no different from stealing."
But each man felt helpless and feared going to jail if not paid. These welfare schemes gave some relief at first, but while the problem of poverty increased again and more money was needed for charity. The cost of welfare schemes rose higher and longer and the size of government grew.
Most rulers were sincere men trying their best. They did not ask for more money like the people (raise taxes) and finally had no choice but to borrow from Fabian and his friends. They had no idea how they would do to return it. The situation worsened, the parents could not pay teachers for their children. They could not pay doctors, and transport companies were going bankrupt. Utilities
One by one, the government was forced to take these services on their behalf. Teachers, doctors and many others became public servants.
Very few were satisfied with their work in the State. Receiving a reasonable wage, but lost their identity. They became small cogs in a giant machine.
There was no room for personal initiative, little recognition for effort, their income was fixed, and only when a superior was promoted retired or died. Tax
desperation, the governors decided to seek the advice of Fabian. He was considered very wise and seemed to know how to solve money matters. Fabian
listened to explain all their problems, and finally said, "Many people can not solve their problems themselves, they need someone to do it for them. Surely you will agree that most people have the right to be happy and be provided with basic live. One of our great sayings is "All men are equal." Is not that right? "
" Well, the only way to balance things is to take the excess wealth of the rich and give to the poor. Introduce a tax system. The more a man has, the more you pay. Collect taxes from each person according to his ability, and give to each according to his need. Schools and hospitals should be free for those who can not afford. "
Public Debt
He gave a long talk about high ideals and finally said:" Oh, by the way, no forget you owe me money. Have been borrowing for long. The least I can do to help is, as a focus for you, I only pay the interest. We leave the capital as debt, pay only the interest. "They went out and without much discussion of the philosophies of Fabian, introduced the graduated income tax: the more you earn, the higher your tax rate. Nobody liked this , but either paying taxes or going to jail.
The new taxes forced traders to raise their prices again. The workers demanded higher wages which caused many businesses closed, or to replace men with machinery. This caused additional unemployment and forced the government to introduce further welfare schemes and more unemployment insurance. Grants
rates were set and implemented other protective mechanisms to protect some industries and providing employment to be maintained. Some people wondered if the purpose of production was to produce goods or simply providing employment. Controls
As things got worse, they tried wage control, price controls, and all sorts of controls. The government tried to get more money with a sales tax, payroll taxes wage taxes and all taxes. Someone noted that the road from the wheat harvest to the table of households, there were over 50 taxes on bread.
"experts" were introduced and some were elected to govern, but after each annual meeting appeared no solutions, except for the news that taxes should be "restructured", but always, after the restructuring, the sum Total taxes increased.
Fabian began to demand his interest payments, and a larger portion and largest tax money was needed to pay.
Policy Then came party politics - people arguing about which party could best solve their problems. They argued about personalities, idealism, slogans, everything except the real problem.
deliberative councils were in trouble. In a city the interest on the debt exceeded the amount of taxes to be collected in a year. Throughout the country, the unpaid interest kept increasing, the interest charged on unpaid interest. Control
information
Gradually, much of the country's real wealth was acquired or controlled by Fabian and his friends and with it came greater control over people. However, control was not yet complete. They knew the situation would not be secure until every person was controlled.
Most people who opposed the system was silenced by financial pressure, or suffer public ridicule. To accomplish this, Fabian and his friends purchased most of the newspapers, TV and radio stations. After carefully selected people to operate them. Many of these people had a sincere desire to improve the world, but never realized how used. Their solutions always dealt effects of the problem, never the cause.
had several newspapers, one for the right wing, one for the left wing, one for workers, one for employers, etcetera. It did not matter much in what you believe, if you did not think the real problem.
.
The story you read is, of course, fiction. But if you find it disturbingly close to reality and wants to know who Fabian is in real life, a good starting point is a study of the activities of the English goldsmiths in the XVI and XVII. For example, the Bank of England began in 1694. King William of Orange was in financial difficulties as a result of a war with France. Goldsmiths "Lent him" 1.2 million pounds (an impressive number in those days) with certain conditions: a) The interest rate would be 8%. It must be remembered that the Constitution stated that charging interest was punishable by death.
b) The king was to grant the goldsmiths a charter for the bank that gave them the right to issue credit.
Before this, their operations of issuing receipts for more money than they had in stock were totally illegal. The king's letter made it legal. In 1694 William Patterson got the letter to the Bank of England (Author's note).
Quotes:
Encyclopedia Britannica, 14th Edition - "Banks create credit. It is a mistake to believe that bank credit is generated in part by depositing money in banks. A loan made by a bank is a clear addition the amount of money in the community. "
Lord Acton, Lord Chief Justice of England, 1875 - "The battle that has seeped under the centuries and will have to be fought sooner or later is the people vs. Banks."
Mr. Reginald McKenna, Chairman of Midland Bank in London - "I'm scared, because ordinary citizens will not like to know that banks can create and destroy money to taste. And the banks control the credit of the nation direct the policy of governments, and hold in their hands the destiny of the people. "
Phillip A. Benson, president of the American Bankers Association, June 8 1939 - "there is no direct way to capture control of a nation through its system of credit (money)."
banker Magazine USA, August 25, 1924 - "Capital must protect itself in every possible way, by combination and legislation. Debts should demand, bonds and mortgages should be required as quickly as possible. When the processes of law people lose their households will become more docile and more easily govern the influence of the strong arm of government applied by a central monetary power under the control of the main financiers. This truth is well known among our principal men now engaged in forming a financial empire to rule the world. Dividing the voters through the political party system, we can make them lose their energy in fighting over questions of no real importance. Thus by discreet action we can secure for ourselves what has been so well planned and executed so successfully. "
Sir Denison Miller - during an interview in 1921, when asked if he through the Commonwealth Bank, had financed Australia during the First World War by $ 700 million, said, "So it was, and have financed the country for a similar sum if the war continued." Asked if that amount was available for productive purposes at this time of peace, he replied "yes."
Extract from a letter written by Rothschild Brothers of London to a firm of bankers in New York on June 25, 1863: "The few who can understand the system (checks and credit) will be so interested in its benefits, or be so dependent on its favors, that there will be no opposition from that group. While , on the other hand, many people mentally incapable of comprehending the tremendous advantage that capital derives from the system, take their burdens without complaint and perhaps without even suspecting that the system is inimical (hurtful) to their interests. "
delivering our Booty, No. 2 - "In the U.S., the money supply is controlled by the Federal Reserve Board. This is not a government department but a Board of Private Bankers. Most of us believe that the Federal Reserve is a federal national government .... This is not true ... in 1913, President Woodrow Wilson signed the document that created the Federal Reserve, and ordered the American people to debt slavery until the time when the people awaken from their stupor and overthrow this vicious tyranny "...
" To understand how the issue of money in a community can be illustrated by comparing the money in the economy with tickets in a railway system. The tickets are printed by a printer that is paid for their work. The press never claim ownership of the tickets ... And we can never imagine a railway company refuses to give passengers seats on a train because he has not printed enough tickets. With the same reasoning, a government should never deny people access to normal trade, excluding it from the economy, saying "do not have enough money (paper money)." (How the railway company, simply send missing print tickets).
Suppose the government borrows $ 10 million to banks. Only costs the bankers a few hundred dollars to print money, and a few others to do the accounting. Do you think it's fair that our citizens should fight for every penny to keep their homes and families together, while the bankers grow fat on these benefits?
Credit Bank created by a government is better than credit created by private banks, because there is no need to recover taxing the money people, and there is no associated interest costs to increase. Public works built with the Government Credit Bank is the asset that replaces the money created to implement it, once the work .
Source: www.nuevasbases.org
H 94 - March 15, 2002
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