We live in the age of technology and automation; we live in a country with huge natural resources; Australians are resourceful hard working people. We have everything we need to create a prosperous, environmentally conscious and people friendly country. Why are we going backwards? Why does Australia have huge levels of foreign debt, foreign ownership and crippling taxation. Why are Australian workers being stripped of hard won conditions and left with little job security. Why are Australian businesses finding it harder and harder to stay afloat. Why are so many Australians saddled with huge debt and uncertainty about the future. Why have young Australians been priced out of the home market.
The answer is simple. Foreign controlled private banks have hijacked the role of creating our money supply and our government be it Liberal or Labour does nothing about it. Australia is run for the benifit of International Bankers and their associated soul-less Trans-national Corporations and not for the benifit of the Australian people.
The people of Australia need the most important political reform in our history. That is to bring about a democratically elected people’s government which creates the money supply for our country.
This goal was almost achieved with government owned Commonwealth Bank of Australia which in its early days conferred huge benefits upon the Australian people and came to be affectionately known as “The People’s Bank”.
In 1911 the Andrew Fisher Labour Government established the government-owned Commonwealth Bank. Under the management of Sir Dennison Miller, the “People’s Bank” financed Australia’s effort in World War I, built the Transcontinental Railway, established the Australian Steamship company and conferred many other benefits on the Australian people. All of this was achieved without the government having to increase taxes or borrow from overseas. The People’s Bank created the money using the “whole of the resources of Australia” as backing for that money. In contrast to this Great Britain which financed it’s World War I effort by borrowing from private bankers was still paying off it’s WWI debt in the 1990’s.
“In the Australian Press of July 7, 1921, Sir Dennison Miller is reported to have said this:-
“The whole of the resources of Australia are at the back of this bank, and so strong as this continent is, so strong is this Commonwealth Bank ……Whatever the Australian people can intelligently conceive in their minds and will loyally support, that can be done.”
In other words, that which is physically possible can be made financially possible by a people’s government owned bank.” (1)
In 1924 the Nationalist Party government lead by Sir Stanley Bruce appointed a board of directors to the Commonwealth Bank which favoured the foreign-controlled private banks. This was effectively the end of the “People’s Bank” and the Australian people went on to suffer greatly from the effects of the Great Depression.
In 1929 the Great Depression was intentionally caused by the international bankers. They did this by reducing lending which caused a reduction in the money supply to a level at which the economies of the world could not function properly. There was plenty of demand for food, goods and services, and there was plenty of productive capacity in the form of factories, farms, willing workers and willing business people, however, there was not enough money in the economies to match up the supply with the demand.
In the words of U.S. Congressman Louis T.McFadden talking about the Great Depression:-
“It was not accidental. It was a carefully contrived occurrence… The international bankers sought to bring about a condition of despair here so that they might emerge as rulers of us all.”
If Sir Dennison Miller had still been the manager of the Commonwealth Bank he would have injected enough money into the Australian economy to keep it functioning healthily and thus Australia would have avoided the ill effects of the Great Depression.
In 1937 after 2 years of enquiry the Australian Royal Commission on Money in Section 504 of its report stated:-
“….the Commonwealth Bank can lend to the Government or to others in a variety of ways, and it can even make money available to the Governments and to others free of any charge…”
As this last clause led to a good deal of controversy as to its exact meaning, Mr. Justice Napier, Chairman of the Commission, was asked to interpret it, and his reply, received through the secretary of the Commission (Mr. Harris) was as follows:-
“This statement means that the Commonwealth Bank can make money available to Governments or to others on such terms as it chooses, even by way of a loan without interest, OR EVEN WITHOUT REQUIRING EITHER INTEREST OR REPAYMENT OF PRINCIPAL.” (2)
You might think that this should have heralded a new beginning for the “People’s Bank”, however, C. Barclay-Smith had this to say in his book “It’s Time They Knew”:-
“The personnel of these Royal Commissions were mostly men in the fifty-sixty age bracket. they were men who had built up successful careers in industry, law, accountancy, and commerce. …………They had all personally done well under the financial system they were asked to inquire into………… They were pledged to the preservation of the status quo. …………. their reports for the most part white-washed the prevailing financial and monetary system.” (3)
C Barclay-Smith said about the politicians:-
“…..finance is all-powerful. It controls the Press……also the radio, the T.V., all means of dissemination of knowledge in fact, and is in a position to make and break anyone who dares to challenge and expose its power. Most politicians quickly learn that if they are going to “get on” , the simplest policy is to play safe, conform to orthodox practices and procedures, and “don’t stick one’s neck out”. (4)
King O’Malley, who had been instrumental in the formation of the Commonwealth Bank, wrote the following during the 1939 ‘Save The Commonwealth Bank Campaign,’ when he was over 80 years of age:-
“I trust that good and patriotic Australians will swear by the altar of their gods, the tombs of their ancestors and the cradles of their children, that they will never vote for Parliamentary candidates whose secret mission is to destroy the Commonwealth Bank … and whose brains, if extracted, dried and placed in the quill of a cocksparrow and blown into the eye of a bee, would not even make him blink.”
In 1947 the Ben Chifley Labor Government tried to re-establish the “People’s Bank” by nationalising the private banks. This effort was defeated by the High Court.
In 1991 Labor Prime Minister Bob Hawke put the final nail in the coffin of the “People’s Bank” by starting the privatisation of the Commonwealth Bank. Paul Keating continued in 1993 and John Howard finished the job in 1996. Since then the burden of taxation, foreign ownership and foreign debt has continued to get worse while our leaders continue to sell off our Nation.
At present more than 97% of our money supply is created by the private banks which are not controlled by Australians. Our economy is being run for the benefit of international bankers and their associated multi-national corporations. The proof of these claims is in the fact that Australia has huge levels of foreign debt and foreign ownership. We are constantly told we need foreign investment. This is and always has been a complete hoax. The only thing we receive from foreign investment is perhaps some pieces of paper or some digits on a computer screen. The real investment is Australian people-power, know-how and raw materials.
Only by giving the role of creating the money supply to a people’s government will we be able to ensure that the money supply is used to guarantee a prosperous, environmentally conscious and people friendly economy. Only then will all Australians, present and future, be able to have a “fair go” in what used to be called the “Lucky Country.”
Why a People’s Bank?
Money plays a central role in most of our activities. It lies at the heart of all political policies. Our present money supply system is responsible for so many of the country’s economic, social, political, environmental, medical and other problems that only a reform of the money supply system itself has any hope of addressing them. Without reform of the money supply system, any other political reform will never go anywhere near solving these problems.
If you think that all the money in the Australian economy was created by government agencies (the Australian Mint and/or the Reserve Bank of Australia) in the form of notes and coins, you are sadly mistaken.
At the present time, less than 3% (or 3 cents in the $1) of the money in the Australian economy was created by the government. The remaining more than 97% (or 97cents in the $1) was created by the private banking system.
Go into a bank for a loan and you might think that the money that you borrow is some fellow customer’s hard-earned savings. It is not. Banks do not lend cash when they grant you a loan. Instead they grant you credit. This credit can be spent like cash and to all intents and purposes it is as good as and exchangeable for cash. Money is created out of thin air like this by the private banking system not only when they lend to private individuals, but also when they lend to businesses and to the government.
The banks have been able to extend their money creation to its present 97% of the total money supply because in today’s economy, with increasing use of credit cards, debit cards, cheques and bank transfers, very little of the money that we use, either as individuals or as organisations, exists in the form of cash.
Our Constitution provides for our government to create money but the “Founding Fathers” probably did not foresee the explosion in bank credit and the cashless society.
Little Cash Needed
Banks only need to retain very small reserves of government-created money (cash) in order to meet the dwindling demand for cash. The rest of the time, they happily pass cheques and similar payments between each other which are ‘backed’ by nothing more than a ledger or computer entry in the form of somebody’s debt.
Bank-created money is responsible for most of the economic problems that occur within Australia and throughout the world. Three of the problems are as follows:-
1. Government Borrowing
Most governments throughout the World have massive borrowings from private banks called the National Debt. This may seem odd in view of the fact that most governments have the power to create money for use in their economies. Perhaps the reason is that organisations (e.g. banks) which can create money are in a very good position to influence your average politician.
The government then has to tax the people to pay the interest on the National Debt and also to repay the loan to the private banks.
Even if the Australian government manages to pay off the National Debt it is not necessarily a good thing. Without a deficit the money supply may not be sufficient to ensure a healthy economy. Those countries which have run large deficits in recent times have tended to have the greatest economic prosperity. This is due to the abundant supply of money in their economies. In Australia the money short supply resulting from repayment of the National Debt has been overcome by:- 1. Selling off Australia’s National assets; 2. A massive increase in private foreign debt and foreign ownership resulting from foreign investment (also a selling off of Australia); 3. Over-taxation of the Australian people including the introduction of the G.S.T.; 4. Degradation of services supplied by the government including Health, Education, Transport etc.
The fact is that the Australian people would be better off with a large National Debt. They would however be much better off if the government, instead of borrowing, would create the money supply and spend it into the economy in the form of capital works, government services, and social security payments.
2. Boom and Bust Business Cycle
There is little control over how much money the banks create. The only influence that the government has upon the process is through appointing the members of the Reserve Bank Board. The Board in turn attempts to control the level of borrowing and therefore the amount of money created by the banks by raising or lowering interest rates. If the Board believes there is so much money being created that inflation becomes a problem, interest rates are raised so people borrow less. The trouble is that raising interest rates itself causes inflation, so inflation is only controlled when businesses start going bankrupt and when householders get their homes repossessed.
If too many people experience financial difficulties and the economy heads into recession, interest rates are lowered and the whole boom-and-bust cycle begins again. This ‘natural’ economic cycle is often referred to by politicians and economists, but there is nothing natural about it. It is caused by our reliance upon an unstable money system, and it can cause great hardship for people as businesses close and homes are repossessed. The boom and bust cycle is also intentionally used to bring about a transfer of wealth from the productive section of the community (e.g. manufacturers, farmers and businesses and workers who provide useful services to the community) to the unproductive banking class.
3. An Unrepayable Debt
As anyone who has ever borrowed money will know, the amount of money required to pay off an interest-bearing debt is always greater than the debt itself. So imagine that all (100%) of the money in the economy was in the form of an interest bearing-debt. Let us assume that we have to pay interest on this for a given period at 5%. We will need 105% of all the money that we have. This is an impossible sum as we cannot have more than 100% of the total!
The amount of interest-bearing debt money in the Australian economy is more than 97%, which is very close to 100%. Therefore the amount of money required to repay all of Australia’s debt plus interest is greater than the amount of all the money in the economy. Because of this problem of unrepayable debt, Australia and in fact the whole World is forced into the situation where there is only enough money available to sustain a functioning economy if and when the size of the economy continues to grow. With a growing economy, more money is continually being borrowed into existence, thus enabling the continued servicing of the already existing debt. If the amount of debt remained stable the payment of interest would cause the amount of money available in the economy to decrease, which would lead to an economic slowdown. This addiction to economic growth results in the environmental degradation we all see.
The Choice to be made.
Australia has to make a choice between two alternatives:-
1. Allow the government to continue selling off Australia’s assets, continue the massive increase in foreign debt and foreign ownership, continue the degradation of government services, continue over-taxing the Australian people and continue the mad commitment to economic growth at the expense of the environment, or:
2. We can replace our interest-bearing debt-based bank-created money system with a debt-free system of money created by the people’s government. This money would then be spent into circulation by paying for capital works (e.g. environment protection works, dams, water diversion projects, roads, hospitals, schools, railways, renewable power generation, defence assets, land regeneration, cultural assets etc.) government services and social security payments. This would dramatically reduce the need for taxation which in itself will greatly increase prosperity. It will put an end to the selling off of our nation and guarantee that government services such as health, transport, education etc. are supplied according to the needs of the community and not according to how much money is made available by the private banks. Productive members of the community will get to keep the rewards of their hard work and initiative, instead of slaving to pay interest and constantly worrying about how they will keep up the bank payments should there be a downturn in the economy or should they lose their job.
This is not a new idea, although it gets little attention in the mainstream media. This is hardly surprising considering the consolidation of the media into a few corporations and the dependence of those corporations upon the banks..
Abraham Lincoln proposed this system in 1865 shortly before his assassination in the following words:-
“The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government’s greatest creative opportunity. Money will cease to be master and become the servant of humanity. Democracy will rise superior to the money power.”
“All that is necessary for the triumph of evil is that good people do nothing.”
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