Monday May 4th 2020
By Joe Hill
What is the current state of the economy? If you’re reading this article you probably have a thousand questions and few answers. At least I did when I began trying to wrap my head around the dreaded, conversation ruining, economy. Already you know the conversation isn’t going to be fun. No orgasms or fart jokes here (Unless you’re a sadomasochist like myself, in which case get ready to meet your new favourite hate-lust dominatrix). Why do this to yourself, you’re probably wondering? Why bother? Isn’t it easier to not understand? Isn’t it nicer to feel the glaze begin over your eyes? Isn’t it tingly to feel the blood pool to your stomach and ass, and watch the night away in an inebriated bliss? No. This is the work of a dark force, a quiet shadow which moves decisively, quietly, plotting the end of luminescence, of the radiance which beams from truth, of the beauty in sweet justice. To those dark forces which plot this devious end, we stand opposed. That is why we pay attention to the economy.
It is important people understand what I mean when I speak of the economy. I am speaking of the fundamental element from which the ‘logic’ of the global system unfolds. It is the keystone which holds the entire structure together, upon its removal the structure would fail. This is: the means by which money is created, the principle by which private banks legally create money by creating loans. This was covered in my article, Money Creation as Master: I, and I highly recommend you begin with this article before reading this one further.
Now, it is from this fundamental principle: that banks create money, and by creating money, they steal (value/labour/control over the money supply/money) from the poor. This is known as inflation. This root principle is the cancer from which all of the distressful symptoms of sickness flow. We can only get a holistic view from this starting position, anything else will lead down a labyrinth of banality.
I think it is important to insist and clarify another important point: the motivations of the ruling financial class. What they practice, and have practiced for centuries, is what might only be adequately described as black alchemy. Alchemy as most people know it, is the process of transforming lead into gold. However, it is really a system integrating the mental with the physical, the sacred with the profane, a harmonization of spirit and matter guided by a spiritual intent to move from something base, be it dirt or lead, or a low vibration, or a rudimentary lo-fi system, and into something high frequency, infinitely complex, eternally mysterious, gold bejewelled machine elves thinking miracles. Dark alchemy is similar to alchemy of light, except it contains a schism and perversely believes this power can be used to dominate one form over another.
“Let me issue and control a nation’s money and I care not who writes the laws,” these were the famous words of Mayer Amschel Rothschild, founding father of the Rothschild family banking dynasty, the most powerful banking dynasty in history. House Medici, who mastered the double entry ledger system, controlled Venice by controlling the money supply. The Medici family gained so much power, they produced four popes. Richard Fuld and Jamie Dimon chose to use their power as Directors at the Federal Reserve to give their companies (and by proxy themselves) hundreds of billions of dollars because like their ancestors who also practiced black alchemy, they wish to dominate and control.
In my previous article, I briefly described the real nature of inflation and money creation in a thought experiment by conceptualizing a $1000 economy with only a few market participants. Let’s again think about a tiny economy, an economy between me, you, and your best friend.
Let’s say between the three of us, we each have $300. I have $300, you have $300, and your best friend has $300. This would make the total money in our economy $900.
Let’s say I am the Master of Money, and as a black alchemist I can make new money. Say I create another $300 and give it to myself. I now have $600, you have $300, and your best friend has $300. The ratio of control over the money supply shifted enormously with this move. Before I created the new $300, we all had 33.33% control over the money supply. Now however, as our economy grew from $900 to $1200, I now have 50% control over the supply, you now have 25% of control, and your best friend has 25%. We covered this previously, and we also learned as is often incorrectly stated about the fiat money system, this inflation, this new $300, did not come out of thin air, it is not backed by ‘nothing’. This value was transferred from the poor powerless to the Master of Money, the one who creates money.
I stole from you and your best friend. You earned your ratio over the money supply through gruelling hard work. By turning numbers made by me, into gold, real value over the economy, I am now in a position of power and prestige. I stole power/value from you and your best friend. Again, I covered this previously.
Let’s add a new wrinkle: previously the three of us had been buying all of the food we need from a merchant from another economy. We would buy a one-time year’s supply of food for $100 each. The merchant only has three equal third supply packs, each $100. Before when we each had $300, there were no problems. But now that I as Master of Money have $600, I choose to buy the entire supply of food from the merchant for $325. The merchant agrees happily. Now I have all of the food and $275. Now I decide the one equal third supply will cost $150. You and your best friend are devastated as this is a price increase of 50%, and you both need $100 to pay rent and $100 to pay for services. You and your best friend are short $50 to buy the food you need. As Master of Money, you both come to me and ask for a loan. I agree to loan you each $50, and so I create $100 and deposit $50 into two accounts you each hold with me. However, when I create this loan, this new money, I attach interest to it. Each $50 must be paid back at 10% interest a month. You both agree, and spend your $50 debt to each pay me $150 for food. Now you each have $0.00, and I have $575. But you both have accounts with me which owe $5.00.
What just happened here? I have $575, and the merchant has $325. The service seller has $200 and the landlord has $200 which they both got from you and your best friend. Our economy has grown to $1300. You get a job with the merchant but he only pays $1 per month. Your best friend gets a job with the landlord but she only pays $1 a month. Seeing as your single dollars aren’t enough to even cover the interest on your debts, you and your best friend start accumulating more debt. After one year of each only earning a dollar per month and accumulating debt, you both owe me $56.00 each.
Now, if we imagine my $575 is tied to other assets or other accounts, the service seller’s $200 is spoken for and the landlord’s $200 is occupied, then there isn’t an available $112 in the system for you both to pay your debt. Again, this debt you both owe to me is from money which I stole from the two of you, way back when I increased the money supply by creating a new $300. As we can see, this is a debilitating flaw in the system if it is purporting to be equitable. By creating a debt with interest, I put a demand on the system which mathematically can’t be filled. There was only the principle $100 created, the $112 accumulated in interest over the year was never created. You were both destined for failure.
Now, some might argue and say you both could’ve earned the $112 from either myself, the merchant, the service seller, or the landlord, as we each had $575, $325, $200, and $200 respectively. But we have huge means at our disposal to prevent you both for doing so. We have all of your financial details, your credit scores, income history, current net worth. It is in our financial interest to keep you and your best friend in debt to us. Debt in this situation becomes an instrument by which those in power can maintain power by forcing an unequal competition between the debtors. This illusory dynamic, that obtaining $112 is actually possible, keeps the two of you at an intellectual distance from the actual economic reality. And if we multiply the cases of debtors who owe interest into the millions, the situation becomes even more clear. Interest will always be vastly more than principle. All interest can never be paid back because there was never money created to make that possible.
This example briefly demonstrates how easily a Master of Money can begin to overtake things of real value, such as the food supply, and coerce others into debt bondage slavery. Holding these ideas, let’s move from the thought experiment and back to reality.
What is the current state of our global economy? Since we now understand that almost all of the money in our system is created by banks when they create loans, we now have a basic understanding of how the economy ‘grows’ and ‘expands’. The easy expansion and contraction of the fiat/debt system was only made possible when in 1971 then U.S. President Richard Nixon ended the Bretton Woods Agreement and decoupled the dollar from gold. This was the move which opened up Pandora’s Box and unleashed an unprecedented new economic paradigm. Mayer Amschel Rothschild’s wish would be granted to banks all around the world. Now banks would decide when economies would grow and when they would shrink, as they would decide when there would be money (loans/low interest rates) and when there wouldn’t be money (austerity/high interest rates). This new method of money creation made the take over of the global economy possible, it was the beginning of the largest transfer of wealth in human history.
The above photo is a graph from the Federal Reserve Bank of St. Louis tracking total federal debt in the United States. As you can clearly see, debt has gone parabolic post 1971, at the exact same time the value of the dollar was decoupled from gold and the rollback of financial regulation allowed private banks to begin creating more money at their will.
Above is a graph provided by Trading Economics based on the Canadian Department of Finance statistics tracking total federal debt in Canada from 1962 – 2019. Canada too faced the same fate as the United States post 1971, a parabolic rise in national debt.
The United Kingdom as well saw a parabolic rise in national debt post 1971. Data provided by British Historical Statistics.
And in Italy this onslaught of debt began post 1971 as well.
These charts are a macro geopolitical example of the thought experiment I illustrated at the beginning of this article. The power of money creation is that it is a transfer of power from one person, or the general public, to another person, or a multinational corporation and its executives. Thinking about these debts in terms of actually being able to pay them back is a pointless exercise, these debts can never be paid back. They’re simply visual representations of the new power dynamic at work. The whole world has followed this model. The world is in debt $257 trillion. The idea that debt holders created $257 trillion worth of value which must rightly be paid back in order for governments and commoners to move forward and live debt free is a farce. This model of thinking is simply the coopting of democracy with fascism. And as I said, the project took a significant leap forward with the end of gold and Bretton Woods. And now with COVID19, another leap is about to happen. But first let’s look at post 1971, what was gold replaced with?
Post 1971 is when nations one by one began to fall under the Bank for International Settlements framework. The BIS was created in 1930 to facilitate war reparations payments by Germany after World War I. Quickly though, it evolved into a global payments apparatus to create a common network between European and Western nations. The BIS had many interesting characters in its early days. Former Board of Directors members include:
Walther Funk, former State Secretary for the Ministry of Public Enlightenment and Propaganda, and former President of Reichsbank. Funk made his name in the Nazi party by confiscating gold teeth implants among Jews sent to concentration camps and having it melted down into gold bullion to support the Reichsbank.
Emil Puhl, Director and Vice President of Reichsbank, top Nazi economist. Puhl saw to it that the corpses of holocaust victims would be scoured for any missed valuables, particularly gold, to be melted into bullion for the Reichsbank. Puhl facilitated the movement of gold stolen from occupied countries.
And finally, Hermann Schmitz, former CEO of IG Farben and Reichstag member. IG Farben was a German chemical and pharmaceutical powerhouse which came together by a 1925 merger of many companies, including Bayer (Bayer still operates today). Once the most powerful corporation in Europe, IG Farben utilized slave labour from concentration camps and provided the deadly chemical Zyklon B which would be used to murder over a million victims in gas chambers. Hermann Schmitz was given quite a lenient sentence, four years in prison, by American prosecutors at the Nuremberg trials. Schmitz would take a board position with Deutsche Bank when released from prison in 1950.
Whatever the other European and North American board directors of the Bank for International Settlements thought of their Nazi colleagues, we’ll never know. But as the saying goes, actions speak louder than words, and American and European central bankers gladly accepted gold payment from the Nazis during the Third Reich and helped facilitate the movement of looted gold from invaded countries back to Germany.
In 1974, Herstatt Bank went bankrupt due to disruptions in currency markets, particularly with the US dollar. As we now know looking back, this was directly linked with the end of Bretton Woods and the alliance between America and Saudi Arabia to create what we know as the petrodollar, whereby all oil in Saudi Arabia would be sold in US dollars, effectively making the US dollar the global reserve currency. Herstatt Bank, coincidentally was also heavily funded by the Quandt group, a Nazi linked investment group which held significant stake in many companies, including 30% in BMW. Herbert Quandt and his family were never convicted or tried for crimes against humanity, even though an independent study found, “The Quandts were linked inseparably with the crimes of the Nazis,” and utilized 50,000 slaves from concentration camps.
The end of Bretton Woods, the alleged ‘stagflation’ crisis in the United States, and the failure of Herstatt Bank, lead to the creation of the Basel Committee on Banking Supervision. The creation of this committee in 1974, represented by the Group of Ten countries initially, but today represents 62 countries, sought to consolidate banking standards internationally. This was outlined in the Basel Accords.
Ostensibly, the Basel Accords were advertised as a means to create global credit, asset and risk standards, which seemed great on the surface. But the real underlining goal of the accords was to create a new hegemonic framework of cooperation among international financial titans. As the original Basel Accord documents state, “The framework should be in fair and have a high degree of consistency in its application to banks in different countries with a view to diminishing an existing source of competitive inequality among international banks.”
Mayer Amschel Rothschild’s words surely echoed in the closed BIS boardroom meetings of Nazis and their collaborators. To dominate the globe takes cooperation, not competition. And this cooperation sought to supersede national sovereignty as the Basel Accord documents continued, “The national supervisory authorities represented on the Committee intend to implement in their respective countries [this framework]…Banks have welcomed the general shape and rationale of the framework and have expressed support for the view that it should be applied as uniformly as possible at the national level.” No one on Earth elected this committee, and yet, over the course of many private meetings it developed the framework for the new standard of international finance which would dominate the next 30 years.
The largest achievement of the Basel Accords was the introduction of a new standardized risk weight framework, which was broken down into 5 risk categories: 0%, 10%, 20%, 50%, and 100%. 0% being the least risky and 100% being the most risky for on balance sheet assets. This framework of standardized risk assessment in practice creates a monopoly on economic ideology whereby the inherent bias of the Basel Committee on Banking Supervision becomes ‘reality’ which would be enforced by ‘national authorities’ who receive their orders from this supranational committee. What does this mean? It means OECD countries’ federal debt held by private firms will carry an automatic 0% risk assessment rating, but “Commercial companies owned by the public sector will attract a uniform weight of 100% inter alia in order to avoid competitive inequality vis-à-vis similar private-sector commercial enterprises.”
To breakdown that last quote in layman’s terms: Commercial companies owned by the public that create high paying union careers and siphon excess profits to public treasuries will be punitively punished by an international credit and risk framework for creating an economic inequality against private commercial companies which look to maximize profit at the behest of a small faceless few.
This global ‘standardization’ was not just a new framework for global finance, but was a framework for global governance. The homogenization of risk assessment would be the new global tool to implement undemocratic policy at ‘the national level’. This will be expanded on much further in Money Creation As Master: III.
These new frameworks and the end of Bretton Woods laid the foundation for the coopting of governments and real assets by the financial class. A key illustration is the debt levels of various federal governments shown previously. But this takeover via money creating capabilities also extended to the largest multinational companies in the world. Here are some examples:
Alphabet Inc. (GOOG)
Notable top shareholders are Vanguard Group, Blackrock, and State Street. Vanguard as of 2019 has $5.3 trillion in assets under management. Blackrock as of 2019 has $7.4 trillion in assets under management. And State Street as of 2019 has $2.5 trillion in assets under management. United States GDP in 2019 was roughly $21 trillion.
Facebook Inc. (FB)
The Boeing Company (BA)
The Walt Disney Company (DIS)
Amazon.com Inc. (AMZN)
General Dynamics Corporation (GD)
Lockheed Martin Corporation (LMT)
The New York Times Company (NYT)
Tesla Inc. (TSLA)
The Goldman Sachs Group Inc. (GS)
Johnson & Johnson (JNJ)
Fox Corporation (FOX)
General Electric Company (GE)
ViacomCBS Inc. (VIAC)
AT&T Inc. (T)
It’s important to note, AT&T owns networks such as CNN, TNT, TBS, HBO and Cartoon Network.
The list goes on and on. You could spend hours thinking of major (and even minor) US corporations, and almost certainly one of Vanguard, Blackrock, or State Street will have some ownership. Does it matter that three hedge funds with combined assets nearing US annual GDP have significant ownership over seemingly every major US company, from weapons manufacturers, to pharmaceuticals, to data, and to mass media? Well, by these numbers: 10 hedge funds, banks and private equity firms own collectively 48.94% of Lockheed Martin. 10 hedge funds, banks and private equity firms own collectively 52.24% of The New York Times. 3 of whom, Vanguard, Blackrock and Wellington Management Company, have ownership in both Lockheed Martin and the New York Times. The New York Times was notorious for spreading misinformation and outright lies in the lead up to the Iraq War…which directly benefitted Lockheed Martin…and the hedge funds, banks, and private equity firms which own both of these companies.
All of this is only possible by the alchemical ability of money creation. In Money Creation As Master: III, we will take a more in-depth look at how governments around the world are quietly controlled by banking offices in New York City. The future of our freedom, love, creative potential, everything that makes us beautifully human, lies in the destruction of this silent tyranny of inflation.