Running Time: 02:06:00
Here's the transcript:
Niall: Hello and welcome back to SOTT Talk Radio. My name is Niall Bradley. With me today is Joe Quinn.
Joe: Hi there.
Niall: And Pierre Lescaudon.
Niall: Welcome back fellows. This week we're going to be talking with Ellen Brown. Ellen is the author of a dozen books on finance and health. And she's developed her skills researching as an attorney practicing civil litigation in Los Angeles. In her book Web of Debt, Ellen turns her investigative skills to an analysis of the Federal Reserve and the "Money Trust". She shows how this private cartel has usurped the power to create money from the people themselves and explains how we the people, can get it back. Welcome to the show Ellen. Are you there?
Ellen: I am.
Niall: Okay. Hi. Well it's great to have you on. This is an extra special day for Ellen. It's her birthday today. So thank you very much for taking time out come and talk to us for a while.
Pierre: And happy birthday.
Ellen: Oh, thanks!
Niall: Happy birthday.
Niall: We are familiar with your work. We must have some 50 articles written by you on SOTT.net over the years. And we've got your book, Web of Debt, which we highly recommend and we're going to use it as the basis of our quick chat with you today. So let's get straight down to it. In Web of Debt you explain the ABCs of money, where it comes from, how it typically functions. Everybody knows, right, that it's silly to believe that money grows on trees. Well, actually, the reality is even sillier than that. When I first read Ellen's explanation for how money is typically, at least initially created, I actually had to re-read the passage because I was thinking to myself, "No, no, it cannot be as simple as that." So I want to get straight in there to sort of demystify this illusion the whole house of cards seems to be built on. Can you explain Ellen, for our listeners, what this sleight of hand is, that creates money out of thin air?
Ellen: Well it's created by double entry bookkeeping. So really what's happening is that you the buyer create the money. I mean, your promise to pay is turned into money. So you go to the bank let's say to get a mortgage. And you will sign a paper called a mortgage. And the bank will write that up on one side of their books as an asset to themselves. Let's say it was for $500,000. So they'll write that $500,000 on one side of their books and then they'll write it as a liability to themselves on the other side of their books because they will write that sum into a checking account and you are now entitled to write a cheque to your seller for that sum or whoever else you're going to write it to. And they are liable to cover that debt. So they have to draw that - when your cheque goes out of the bank into another bank, they have to draw that from somewhere. But what they do is they draw it from their deposits, if they have them. And if the depositors have spent their money, then they draw them from the Fed funds in the U.S., which is that they basically borrow them from another bank.
Well, what they could have done - let's say your $500,000 went into another bank, they're basically borrowing the same $500,000 back that they just created. So it's like cheque kiting. So they pay very little. The Fed funds rate is 0.25%, so they're paying almost nothing to borrow this money. They borrow it from somewhere, but they could borrow it from the depositors. That's their cheapest source, or Fed funds, 0.25%, or they can borrow it from the Federal Reserve, 0.75% or the money market. There are various places they could get it. But they borrow very cheaply and then they lend it to you at a higher rate.
Which is what people think banks do, that they borrow short and lend long, but where the sleight of hand comes in is that the depositor's money is still there. They haven't spent it. They don't even know that it's being lent. I mean I suppose it's somewhere in the fine print when you put your money in the bank, but depositors - you never go to the bank and say - try to draw your money out and then the bank says "I'm sorry, we just lent that to your neighbour for 30 years and you'll have to come back later." They've always got your money available. And the reason it works is that it's all one big great big system and they can borrow it from many different places. So it's really just a pretence. But what they have done is create that money on their books as the equivalent of an overdraft in your account.
Niall: I see.
Joe: Right there that seems to me to be kind of a scam, in a way.
Niall: It smells, yeah.
Joe: Right at the very beginning there's something wrong with that because although I can understand in a way that if you look at a bank like a normal business, they make a product and they sell that product to a person. And they get money for it. But they have to then afterwards subtract their costs. So they make a profit essentially. Anybody that makes a product and sells it, they make a profit on what they sell. It might be 10, 15, up to 50% or more, whatever. But it's not the entire value of the product itself. But that's the case with banks, you know? Because I suppose the point is that it doesn't cost them anything to actually produce the money. What they're selling to people technically, is money. But it's just paper. So there's almost no costs.
Ellen: And the interest is much more than you think of. You think "Well, five percent or a service fee, that's right." But we're talking about five percent every year, so over 30 years - over 20 years that's 100%. Over 30 years - and that's just with straight interest, not counting compound - so that's 100% over 20 years. Over 30 years, it's 150%. So you have just increased the cost of your house by 150% - or by 250% of what you thought it was in the first place. Just for - and if they were taking a major risk, that would make it - maybe that would count. But they're taking the house as collateral. So they don't really lose. Even if you don't pay, they get the house. And their backed up by the government. The reason they can get this good deal from each other is that they've got the protection of FDIC insurance in the US. Now we've seen that they'll get baled out as being too big to fail and the government always steps in the save them. So we the people are actually underwriting this whole deal and the banks are making a huge amount of profit off it. Pretty much guaranteed profit.
Pierre: Ellen, there seems to be another paradox that you address in your book. If money is created out of loans, the money amounting to the principal, say you borrow $100,000 to buy a house, so after 25 years you have to reimburse $200,000, during this operation, the bank only $100,000 were created, so where do you find the other $100,000 interest to repay your loan? There seems to be a chronic shortage of money.
Ellen: Right. And it's in - they like it that way because bankers' business is to lend money. So as long as there's not enough money out there, somebody somewhere has to take out another loan in order to make up the interest. And that's how bankers stay in business. It's kind of like, you know, you mentioned I had written books on health and the politics of health. This is kind of like the health business. Their business is really sick people. They're in the business of - sick people is their market. And so they don't really have a great incentive to make people well. Just like bankers don't have a great incentive to get you out of debt. They want to keep you in debt because that's their business.
Niall: Exactly. Fewer people would collapse your own market.
Pierre: We mentioned money created out of thin air on one side, but collateral is a real tangible asset. That's a house. That's a house of citizens that get seized when citizens are unable to pay back that loan. And by definition, because of the very structure of this financial system, it's not possible to have 100% of the borrowers that pay back their loans, right?
Ellen: Right. Either somebody has to go in default or somebody has to take out a new loan somewhere, or you have to have inflation of the money supply. Like, you could have the government print money, which is like the social credit solution, which I think is actually a good solution. But the way it's set up now, yeah, they periodically create these great bubbles where it looks like a very good deal to borrow. And they push lending to sub-prime borrowers, etc., anybody can get a loan. So you have this huge bubble like in the housing market. And then they contract the money supply in some way, raise the interest rates or make borrowing more difficult and then you have a boom and a bust cycle and during the bust cycle, many people go into fault and then you have foreclosures and the bankers wind up with all the assets. So if you look globally, there is this huge growth of - I mean, there are just a few companies I've seen - seen articles about how few companies own most of the country now - or most of the world now in terms of the big businesses and of course the real estate.
Pierre: And there's an asymmetry in this burgle process because those big bankers on such a quantity of assets and liquidities, that they can manipulate the markets from A to Z. So I suspect that they buy when the value is low. They buy and the market becomes bullish and then they pierce the bubble, it drops and usually people, small investors that join the frenzy when it's too late, at the end of the bullish period, and they steal all the assets when the market gets bearish, the price drops, and they lose everything. And then the bankers come in when the prices are very low and they buy for one penny to a dollar, right?
Ellen: Right. And people blame themselves. They don't realize that it's a global thing. They think "Oh, I shouldn't have bought at the top. I am always jumping in at the wrong time." They sort of know in their hearts that they were trying to make a quick buck, jumping on this thing and they think "Oh, I just made a bad bet." But in fact, it's - the house, it's a huge casino and the house always wins.
Niall: In this way of looking at it, it actually sounds like it's a policy decision to deliberately inflate, say a housing real estate bubble and then to pierce it. Is that what we're looking at here? That far from being accidents of nature or just economic laws playing themselves out, you're looking at a situation where something is deliberately inflated in order to burst it and gain from it.
Ellen: Well it does look that way but it's hard to put your finger on who exactly would be controlling the whole system. But for example, in the housing bubble, what they did was - in the US - they got rid of Glass Steagall (Act) which separated investment banking from depository banking. And then the investment bankers designed this whole system of securitization where they could sell off - they could buy up bundles of mortgages and sell them off to investors. So the banks weren't keeping those on their books so they didn't really care if they went into default. They got their fees up front for churning these loans and then they went to the sucker investors basically, who got stuck with the bill when those homes went into default. But the regulators at the top, the manipulators of the system, should have - - I would presume they knew that they were about to create a disaster but they didn't care because they were working for Wall Street. That's their business.
So that's where - they should have regulated that stuff. They should have kept the regulations in place. They shouldn't have allowed that sort of - the capital requirements were imposed in order to limit the loans that banks could make and then they got around the capital requirements by this whole securitization scheme and they changed the laws to allow that. And it's always the lobbyists who change the laws.
Joe: Yeah. When I think of it, the whole banking system and how it works and the problems it has cause, particularly over the past number of years, I try to look at the basis of it and try and make some sense of it. And when I look at the basis of our banking system as it is today, my fundamental problem with it is that I can't find an answer, a good answer for what value there is in a bank providing the service of simply holding people's money, why they should deserve to make large profits on interest for example, for simply holding people's money which they make profits on, and also from loaning money to people. Because you don't need to be a private institution to do that and I don't think you should be a private institution to do that.
I think there is, as you have argued for quite a long time yourself, Ellen, and in your website Public Banking Institutes, makes the argument for a solution to this, which is that there should be state control over banks and the issuing of loans, for example. Because issuing loans to people is in the states' interest. People will get loans to set up a business or to produce - to contribute to the economy and the end result of that is that they become productive members of society and they produce things. They start making things. They contribute to the economy in a very real way and that then provides the benefit to the state in terms of taxes from a new business that a person would set up as a result of being given some money, being loaned money. So I don't think any of that - I don't think there's any good argument for that service essentially being offered at a fee or at a charge to a private institution when it could be - should be offered for free. Because the end results are there for the benefit of the local people in the local community and the local state.
But the situation we have right now is that there's these banks that are offering this service which really isn't a very good service at all, and making an awful lot of money off that simple service. They don't even provide any goods. They don't provide anything tangible to people. They just provide paper money and in a lot of cases, they don't even provide the paper. They just provide numbers on a screen. So how do these people justify getting large profits from that kind of a service? It shouldn't be private, you know. It shouldn't be a private interest type of thing, you know.
Ellen: Yeah, I totally agree. I saw a great video that said that what banks do basically is to create spendable IOUs. So if you went to the grocery store and you tried to write the grocer an IOU and say "I'm going to get paid on Friday. Here's my IOU. You can collect on Friday," the grocer won't take it because he doesn't know you and he doesn't know if you're good for the money. So you go to the bank and you say "Here's my IOU. I'll pay you on Friday." And the bank will give you spendable IOUs which are what we call money in return for - they'll check you out. They'll find out what kind of collateral you have in case you don't pay or how they can garnish your wages. They've got the court system behind them, and they have this whole machinery for making sure you pay or for collecting if you don't pay. So they will give you these little spendable IOUs.
But that, like you say, should be a public service. There's no reason why the government itself, which is - the spendable IOUs are government money. People accept them because they're backed by the government. So it should be the government that gives you these spendable IOUs that are just created on the books anyway. And the other services the banks perform, a safe place to keep your money - they are no longer safe because of these bail-in provisions that are coming out. I predict that the next big crash is going to be Bank of America or JP Morgan/Chase when they gamble away - they get caught in some big derivative spec and they will now with this - because they've mingled their investment side of their business with their depository business, they will just take our deposits - well they will have already taken them. That's the way the whole system works. They've used our deposits for their bet and if they lose the money, we don't have any recourse because derivatives go first in bankruptcy. So they'll just say "Well, we took the collateral and there's no more collateral. You all are out of luck."
And then the other reason is the cheque cashing services and you could easily do that. Like with postal banks, they've traditionally done cheque cashing services which are - those are just basic government banks. In fact the reason - we had a postal bank until 1967 and the reason it was initially very popular was that there wasn't any FDIC insurance. And so you were putting your money with the government. So you inherently had a government guarantee. And then in 1933 they came out with FDIC insurance so then the big banks could compete. But the FDIC insurance is not good anymore because there's not nearly enough money in the fund to cover a big bust at Chase or Bank of America. So we should go back to a government bank like a postal bank.
Joe: Absolutely. Ellen, we have a call here so we're going to go ahead and take it and see if anyone has an interesting question for you.
Joe: Hi caller, what's your name and where are you calling from? Hello. Caller.
Joe: Hi, what's your name and where are you calling from?
Caller: My name's Joe.
Joe: Hey Joe! Do you have a question for Ellen?
Caller: Yes. Are you for banks or against banks if they're honest banks?
Ellen: Well what we've talked about a lot - I'm president of the Public Banking Institute and what we talked about a lot in the U.S. is the Bank of North Dakota which is our only publicly owned depository bank. And of course we're totally for that model where the Bank of North Dakota is basically the central bank for North Dakota. But then they partner with the private banks which is perfectly fine. They partner with the local community banks and therefore they help them with their capital requirements. So they don't have to sell their loans off to investors. They keep their loans on their books. So they watch your mortgage for 30 years. They want you to pay off that mortgage, so they only take credit-worthy borrowers and they're willing to negotiate if you have a problem paying. These are friendly local banks.
Caller: So in other words the answer's yes.
Ellen: Yes for both. Yes.
Ellen: There are certain things that should be public and certain things that are perfectly fine being private. But I'm not for giant global international private banks. I think those are incredibly risky and they've taken over our government.
Caller: What do you think about the Dodd Frank Bill?
Ellen: Well, I don't think it has fixed the problem, partly because, because the banks are being more regulated, the lending is being driven into the shadow banking system which is completely unregulated. That's the repro market and the derivatives market. And what protects that is this super priority in bankruptcy is the Bankruptcy Reform Law of 2005 allowed them to go first in bankruptcies. So that's their guarantee, which is also a government guarantee even though they're totally unregulated. And when that system goes down, there's going to be no protection for (inaudible).
Caller: Well Barney Frank just said today on Meet the Press that by law, because the Dodd Frank Bill, you can't have the bailouts that you did back in the 2008, the government can't come in to bail out the banks. Is he lying?
Ellen: That's correct. They have said - in the Dodd Frank Bill it says that for most forms of derivative gambling, that we the people are not going to bail them out. There's some forms of derivative are allowed as being actually necessary to protect the depositors. But most of them are actually just investments on the part of the bank, where the bank is making money. And for those things, we the tax payers are not going to bail them out. So that's why they've come up with these bail-in plans which are - that these living wills that the Financial Stability Board in Switzerland, which is not us foreign imposed rules have required the banks to come up with these living wills to say what they will do in the event of - if they become insolvent and the government refuses to bail them out, which is a situation we have in the U.S. and also in Europe. They're balking at bailouts.
Ellen: So what they will do is bail-in the depositors' money. They're going to bail-in the creditors' money. They're not real specific but the largest class of creditors of a bank are the depositors.
Caller: So what does that mean for the banking system as a whole in case JP Morgan and Bank of America go almost belly-up?
Ellen: Well what they will do is take our deposits and when we turn to the FDIC ...
Caller: You mean like in Cyprus?
Ellen: Yes, like in Cyprus. And we'll say "Well, we're protected by FDIC insurance" so the FDIC - the FDIC fund has $25 billion in it and JP MorganChase and Bank of America both have over a trillion dollars in deposits. So let's say they have another huge bust ...
Caller: So it would be like a 33-to-1 Bear Sterns taking it back in 2008. Yeah.
Ellen: Right. So what if they lose $700 billion was what the bailout was.
Caller: There won't be enough to pay it out.
Ellen: Yeah, there's not going to be any money and the FDIC will - normally what they do is borrow from the treasury, but the treasury'll say "Sorry Dodd Frank says we're not allowed to cover this sort of bust."
Caller: Well yeah, I guess that means America's going to get on the dumper no matter what.
Ellen: Well, to me it's a little bit...
Niall: It's looking that way.
Ellen: When that happens, or at least - I mean what we need to do is set up a public system and rather quickly so we have something to move into should that happen. But if it does happen, it's when crises happen that people suddenly wake up and become willing to look at changing the system. The system needs a radical overhaul. You can't normally pull that off except when things are pretty bad.
Caller: Well you have more faith in the people than I do.
Joe: Well, time will tell.
Ellen: Well it's happened in other countries, like Argentina. They totally - they radically overhauled the system in 2001.
Joe: Alright Joe, thanks for your call.
Niall: Thanks Joe.
Pierre: Ellen, I have a question along this idea of money being created by public entities versus money being created by private entities. The argument against publicly created money is the inflation and like Keynes or Lincoln or Kerry showed, money creation, created by public entities, doesn't necessarily lead to inflation. Can you explain this point, for our auditors?
Ellen: Well, I lately have gotten into social credit, C.H. Douglas. When I wrote Web of Debt, it first came out in 2007, I was citing figures then from Richard Cook where the amounts that people earned in the U.S. from wages, salaries, all sources, was $10 trillion and at that time our GDP was $13 trillion. So we the people did not earn enough money to buy our own GDP. And the reason is that producers all along the chain of production borrow and so they have to pay back their borrowing costs and of course they want some profits. So they always set their price higher than what they paid out to their workers and suppliers. So the people out there who got the money can't afford to buy the products they made.
So if you added, like at that point I think that was 2006, those figures, if you had added $3 trillion to the money supply which would be a nice quantitative easing, you would merely - let's say you actually gave it to the people instead of doing what they do now, where they're just giving it to the banks in an asset swap - but let's say you directly paid that as social security or maybe paid off the student loans, or something that went directly into - or just as a dividend to the people, say every adult got $1,000 a month, I think that comes out to $3 trillion, you would merely bring the money supply up to where it could buy all the GDP without people having to borrow.
What we do now is we make up that extra $3 trillion by borrowing which is all the better for the banks and all the worse for us because it puts us in that un-repayable debt spiral. Then you might say "Well next year it's going to be" - if you try to do that every year, at some point you're going to inflate the system, which would be true. But so at that point you quit doing it. You monitor - you pump the money out there first and then when you see the prices are going up across the board, that's when you stop paying the dividend because there is enough money out there to buy things.
But if you figure that everybody - the average tax rate is 20% and that money, in a good economy money changes hands seven times in a year. So seven people will pay 20% in taxes. So that's 140%. At that rate, the government will get back more than the money it put out there in the form of taxes. Of course that's not quite true because you only pay taxes on your profits not on your actual payments. But anyway, they're going to get a lot back in the form of taxes in a vibrant economy.
Joe: Absolutely. So why isn't the government doing that? Why is the government in most countries allowing these banks to essentially take money out of the system and provide nothing in return?
Ellen: Well the bankers do pretty much control the system. Certainly in the U.S. they do. And people just don't understand how the system works. And that's why I keep writing, writing, writing, to raise awareness on that. And I think politicians, even if they mean perfectly well, they really don't understand that and they do think that it's going to inflate the system if Congress just starts printing money and giving it out.
Niall: Yeah, they have gone to a lot of effort to spread this lie, that's the reason why you the public through your representatives in government cannot create your own money system and run it and use it to create goods and so on, is because - well the underlying message that comes across is that you are all incompetent. You don't have the competence to do this. Things will spiral out of control. You can't control inflation, blah, blah, blah. They've gone to a lot of effort to ensure that everyone acknowledging goes "Yes, yes, of course, it's all so complicated. How could I possibly understand it? Here you take care of it."
Pierre: And this system you advocate for money issued by public authorities is not only theory. There are many examples of countries that experience very successful years of economic growth like Japan, China, even Nazi Germany, because one of the fundamental features was that the government had the power to issue money.
Ellen: Exactly. Well our government too has the power. They're just not using it. They could. I had suggested and everybody made fun of it, but I first suggested the trillion dollar coin in Web of Debt and then said that it actually made it as high as - it was suggested to the - anyway the President's spokesperson said "No, we're not going to do the trillion dollar coin idea," but it actually made it up that far. In the Constitution it says "Congress shall have the power to coin money and regulate the value thereof." But Congress itself has cut off that power by these regulations that were imposed in the 1980s that said you could only issue so many quarters and so many dimes and so many nickels. And anyway, you don't want to issue a trillion dollars worth of quarters. I mean, it would cost you a mint, so to speak.
Ellen: But you could - the one exception, the one loophole they left was for the platinum coin. So you could issue several trillion dollar platinum coins. It's not like you're going to go out there and spend them. First of all, who's going to make cash for them? What you do is, you put them in your bank account. So deposit it in your bank account with the Fed and now you suddenly have three trillion dollars that you can write cheques against as needed. But it just gets rid of this whole idea of "We have a debt ceiling. We don't have the money and where are we going to get the money?" And when you start to see prices going up, that's when you can start cutting back on what you put out there.
Pierre: To illustrate the concept of money, of forms of money issued by public authorities, you develop the example of stamps, postage stamps, in your book. Can you expand on this example and explain to our listeners.
Ellen: Postal stamps are a form of currency. You could actually - let's say you owed somebody some money and you just didn't have any money in your wallet. You could say "Well, but I have these stamps" and the person would take them because stamps are totally fungible. You know, you can always use a stamp, it's always good for 44 cents or whatever it is now, 46 cents. So stamps were issued - and we have equivalent things like in frequent flyer miles which really are a form of currency. Or even some people call coupons that you get at a grocery store are, in a way, a form of money because they increase the currency. Instead of having to pay $2.00 you only have to pay $1.00 plus the coupon. So they've supplemented your ability to spend.
I've seen these systems where there - they're internet trading systems where as soon as you go into the system you get, I forget what it is, $100.00 I think credit, that you just get for free, and then everybody spends their $100.00 credit on the other peoples' products. They just choose them off the internet like you're ordering from Amazon or something. And then all these products that up 'til then, there was no market for, suddenly find a market. Well, it's because you've added some currency into the system. The money is there to pay for them.
Joe: We have a question here from - we have a chat room going with people who are listening and they're discussing among themselves and we have a few questions. One of them was a question "Was the system, the current banking system, always the way it is in its corruption and the problems we have today? Was it always that way or did something significantly change somehow in recent, or fairly recent history?"
Ellen: We've had two systems competing with each other going all the way back to Sumeria which is like 5,000 years ago. But the one we always hear about is the private one. I mean that's the reason I wrote my latest book. It's called "The Public Bank Solution" and I mainly wrote it because the Bank of North Dakota was such a limited model and people would say "Well, they've got oil. They're a small state", etc. So I started looking at all the other public banks. Well it turns out that 40% of banks globally are publicly owned and they're largely in the big countries, Brazil, Russia, India and China, which are running circles around us in terms of productivity, in terms of growth, and they do it through this public banking system. But we just don't hear about it.
And historically, you had public banks. Both Sumeria and Egypt were basically - ancient Sumerian and ancient Egypt were basically public banking systems. They didn't use a currency as we know it. They didn't use coins or paper money or anything like that. Then they were competing with the usury bankers which, you know usury had a bad name in the Middle Ages - I mean it was actually literally illegal in the Middle Ages. So you had public banks in the Middle Ages along with the private banks.
Starting, say, in 1912, when we set up our Federal Reserve in 1913, Australia set up a totally public central bank, the Commonwealth Bank of Australia, which just started printing money, or basically funded development all across the country, just with the credit of the nation, rather like China does or whatever. They were just issuing their own money and did remarkably well including funding their participation in World War I, without having to borrow from the City of London. Well this totally alarmed the Bank of England because they were losing control of their colonies. They'd already lost them politically but now they were losing economic control which they had because everybody had to borrow from them. So they quickly put an end to that. They changed the system and set up this whole central banking system where now central banks issue the money virtually everywhere and lend it to governments rather than the government bank issuing money directly for the benefit of the government.
Joe: That kind of ties in with an article that you wrote just not so long ago on September 4th. The title was "Making the World Safe for Banksters - Syria in the Cross-Hairs". And you kind of make the argument that the current desire to bomb Syria is tied to Syria's financial system and also then relates also to Iran, Iraq, ...
Joe: And Libya a couple of years ago.
Ellen: Mm-hm. Those are the few countries that are still outside of this private central banking system. It's not really private. Many central banks are government owned, but they're called independent central banks which means they are not serving the government. They lend money to the government and they basically are serving the banks. They're catering to the banking system. But those Islamic countries particularly, are still outside the system because first of all they think usury is a crime. And those particular countries have central banks that are owned by the government and the government uses them to issue money and to issue credit for development purposes directly. They haven't joined the Bank for International Settlements and they haven't joined the World Trade Organization. So they coerce them economically and if that doesn't work, then they go to war.
Niall: Then they bomb them. Wow!
Joe: Yeah. So there's a nexus there between banks and the defence industry and governments and geopolitical strategies and stuff like that. But ultimately it's all just for profit. Does that seem to be the goal? That it's just greed?
Ellen: It does, but you would think - you would think the big bankers have plenty of money.
Ellen: My sense is that they're actually sort of running scared in the sense that they have to control the whole system or they could be found out. If somebody sets up a working model that is far better - well look at Hitler's Germany, for example. They were generated - they were very productive when everybody else was going through this horrible depression. And Japan was too. And both of them were just - they had stepped outside the - the Germans weren't paying off their loans. There was no way they could pay off those loans and so instead they were just issuing their own money and they got the economy rolling again. So this was a model that couldn't be allowed to survive and thrive. It had to be stopped and there was no way to stop it but to go to war.
Joe: And the end result then seems to be, whether it's just greed or just a desire for profit or a desire to keep the system intact in case they're found out, the end result in imposing this global financial system is really control over people. It has a definite control over peoples' lives in a very finite way.
Ellen: Yeah, and ownership of everything I think. Private ownership by a cartel.
Pierre: While reading your book Web of Debt, how this paranoid idea at the same time I was thinking about the psychopathy, psychopathology traits, and I wondered if beyond forces, those big bankers, were not also a means of controlling, enslaving and even creating dissention, competition amongst the people as if their getting hyper-rich was not enough, but in addition everybody else had to be miserable. That's what I understood by reading your chapter about patriarchal systems versus matriarchal systems.
Ellen: I would see it more as - well, it is sort of a - if you go out - this gets a little ...
Joe: Are we getting too conspiratorial?
Ellen: Yeah, I don't want to get too heavily into that but if you go all the way back to Sumeria, there were two brothers, Enki and Enlil supposedly, who were the two gods, the two competitive gods, and one saw people as their children, well these are actually, supposedly according to the Sumerian literature, these were actually extraterrestrials who came down and needed - I shouldn't go into this, I'll lose my credibility but I think it is really interesting.
Niall: You're safe here. Go on!
Ellen: It's rather - you know the movie the Matrix, it's like that. They're still out there on this fourth dimension and they're still controlling things. So there's this one force that is benevolent and sees us as their children. They actually genetically manipulated us to be - to be semi-gods. And then there's this other force that sees us as just workers, to be exploited, rather like cattle. So they don't identify, they don't emote with us. And I remember hearing - I can't even remember his name, but somebody did a movie and is now passed away who knew one of the Rockefellers who said "Why do you care about these people?" Like he really couldn't understand the feeling of caring about the masses. Like he really didn't identify with people as being his people.
Joe: That definitely fits with the kind of things they've been doing, and the effect they've had on the world today. We have another call here, we're going to maybe just go ahead and take it and see.
Caller: Oh, hi.
Joe: Hi. What's your name and where are you calling from?
Gary: Hi, this is Gary from Tuscon.
Joe: Hi Gary.
Gary: In fact I was just thinking - I think you're thinking of that Zeitgeist movie where it was a friend of one of the Rockefellers that was saying "What do you care about when the people who are going to be killed in 911?" I think that was where you were remembering that quote from.
Ellen: Yeah, it wasn't that but, he had made a movie himself but he may have been interviewed in it.
Niall: It sounds like it was From Freedom to Fascism by Aaron Russo.
Pierre: Aaron Russo, yes.
Ellen: Yeah, that was it. That was it.
Joe: You got a question Gary?
Gary: Yeah, I do. So with all of the, you know the World Bank and even nation states accumulating gold and silver, what are your thoughts about people perhaps taking their savings and transferring that into actual physical gold and silver. Not the GLD on the Comex, but the actual retaining of real precious metals or even other possible precious commodities. And I'll take my answer off the air, so thank you.
Ellen: Well it's not a bad - I personally have done that. It certainly used to be a good investment when it was going up, but now they've manipulated it so heavily that it can be risky like anything else. I mean, it's not going to go up just because it's a safe haven I don't think, because people don't believe that anymore. The market is not in favour of that. But the thing is, that is a personal - it's something you personally can do with your money. But what I'm more interested in is what does the government do with its money. Like the government can't buy gold, so you have governments that now have their money in Wall Street which is where it's very vulnerable and Wall Street is getting the benefit of using that money for their derivative schemes. And it could all be gambled away into their derivative schemes. So we should be setting up public banks, if only to protect our public money.
Joe: Yeah. I think the point may be that there's nothing necessarily wrong with the idea of banks as long as they're good banks, or they serve the people essentially. They just facilitate the flow of money and they - it should be a government organization because I think it was last week or the week before, we had a caller who - and we were touching a little bit on the banking situation, and this caller was suggesting that people just take all their money out of the banks, you know, as a kind of protest en masse. Remove all of your deposits from the bank.
Niall: If we all did it together at the same time, the system would crash and they'd lose, we'd win.
Joe: But I'm not sure that would - first of all I don't think it would work. You wouldn't get people to do it. They're too enured in the system. And also, I don't think necessarily the idea of a bank or a banking system is fundamentally evil or bad, if it's run in a positive, benevolent way. No?
Ellen: Yeah, I agree and certainly a public bank is good. But in Germany you have public, community and cooperative banks that do virtually all the domestic lending. Even though some of the community banks are privately owned, but they actually have a mandate to make loans in their local communities. So that's a good thing. I agree.
Pierre: Yeah, maybe you could describe ...
Ellen: And I don't think Wall Street would even - like you say, not everybody's going to do it. But they don't even want our deposits now. What do they have, 3 trillion in excess deposits, something like that? So they want to play in the derivatives market. That's where their big money is now.
Pierre: I'm wondering what your point of view is about the sustainability of the current financial system since they seem to have all the powers. They can issue money, they have their fingers in every pie, in governments, in agencies that control literally every market. So what might put an end to this system that has been creating for decades now enormous power?
Joe: Even if it's painful.
Ellen: Well I suspect there will be another collapse and this time the government won't bail them out and they will take our deposits instead, and that will totally infuriate people and then people will get on the bandwagon and change the system.
Niall: Yeah, people will go hungry.
Niall: And then they'll respond.
Ellen: I mean that will be - it would be nice if we could set up an alternative system before that happened, but one way or another I suspect it has to change because it's just not sustainable the way it is now.
Pierre: And taking out deposits is not unlike the quantitative easings that were made a few years ago. Basically when banks make profit, it goes in their pockets. When banks lose money, it's us, citizens that pay, either through quantitative easing or through deposit retainment.
Ellen: Yeah. That's it. We're underwriting the whole system. We're even underwriting the shadow banking system. That's what I'm just writing about right now. Because of the super priority in bankruptcy thing, they get to snatch all the collateral before anybody else and that's a law that the bankers managed to get passed. So if we're underwriting the system, we should get the profits.
Joe: Yeah, absolutely.
Ellen: Or we should not underwrite the system. We should - would retract all those laws that are allowing them to borrow very cheaply and basically export from the people.
Pierre: Ellen, one question that readers of your books might contemplate is, finally, is this whole financial system only driven by opportunities, greed and individual goals or is there some level of coordination at national or international level? Maybe you could tell us more about the Bank of International Settlements and how financial processes are coordinated?
Ellen: The Bank for International Settlements grew from that whole crisis where the - I wrote this in my new book, The Public Bank Solution - the Commonwealth Bank of Australia was doing so brilliantly well and the head of it made the mistake of going to London and bragging about how they had even funded World War I without having to borrow from anyone. And he said that the resources of Australia were unlimited. They were as - whatever the imagination could think of, they could find with their bank. Well this quite alarmed them and so they met with some other big bankers and set up - first it was their actual - the British Commonwealth at first they imposed these public, these central banks that would issue the money and lend it to governments. So that was the new system.
And then after World War I, England - they were no longer the money power because they had had to borrow so much to fund World War I. And so America then was the big money power. And so they set up the Bank for International Settlements which was the U.S., England, France and Germany. Supposedly Germany was in it because they were the ones who were supposed to be paying the reparations. But somehow by the 1940's the Germans were pretty much in control. They had turned this BIS around so that they were laundering - I mean it was alleged that they had laundered the European gold that they had confiscated through the BIS. And it became very controversial and there was an attempt to shut it down.
But no way were the bankers going to allow it to be shut down because this was their system by which they regulated money flows globally. I mean, that was the plan. And then it got bigger and bigger in - was it 1989, that the first Basel I came out and that totally - the Japanese banks at that time were the biggest banks in the world and the world's biggest creditors. And Basel I imposed - it just increased capital requirements by two percent but it was enough to crush the Japanese banks. And then Basel II imposed the market-to-market rule which ultimately - I wrote an article on this - it's kind of difficult to follow, but that ultimately was what crushed the U.S. banks. I mean, brought on the 2008 crisis.
And then Basel III, it looks like is designed to crush the public banks, the smaller banks because the capital requirements are so onerous that the small banks are forced to sell out to the big banks. And in the public banks, they're not allowing them to use their government guarantees for capital. So they're requiring them to come up with capital like everybody else, which means the public banks too are going to wind up crushed.
Pierre: Yeah, and what we see when we follow the evolution of those big bankers is that since they managed to seize assets along each crisis they engineer, they build financial and industrial empires where each time they buy new companies, new factories, small banks and they create huge conglomerates. And in the end a few families, Rockefeller, Rothschild, Morgan, a handful of families control huge market shares in industries, in steel, in military, in oil, in finance.
Ellen: Yeah, and I did just write an article on that too where, where do they get the money - I mean, why are they even allowed to buy things like that? It's because they do it through the repro market where they're using those excess reserves, excess deposits, they invest the excess deposits supposedly in safe things like government securities, which is what they're allowed to do, but then they use those securities, the treasuries, short-term securities, they use them as collateral in the repro market. And then the repro market's totally unregulated. They can borrow hugely on this collateral and then with the borrowed money, they do what are effectively leveraged buy-outs. So they can buy up whatever they want. They can buy up with that huge credit line that they basically get from the repro market, using our excess deposits as collateral.
Pierre: Maybe you can explain in simple terms how big players can manipulate financial markets, in particular through the use of short sales? So listeners understand how they take control any volition in the market, up or down.
Ellen: Sorry? Didn't hear the last - how they control what?
Pierre: How big players can control the market going up or going down through the use of derivatives in general and short sales in particular.
Ellen: A short sale is where you sell something that you don't have and then you're supposed to cover by buying that stock. Theoretically what you're doing is you borrow the stock from somebody and sell it and then you have to buy it - you would then buy it at the lower price. That will cause the price to drop and then you'll buy it at the lower price to cover. And the reason they - that is not too bad, but what is really bad is naked short sales where they never buy the stock because, for example with Bear Stearns, they crashed the whole company by short sales and then they never had to buy the stock back because there was no company after that.
And also market makers are allowed to do naked short sales, which means they're allowed to sell stock that they don't have and they never will have. They won't acquire it, because they're supposedly making market (inaudible). It's pretty complicated. But the thing is, if you have a whole bunch of sales, you have a cascade of sales, then that triggers stops on all these - people put stops on their stock, like if it drops below a certain level, then it will be sold automatically. So that can trigger a flood of sales, which drops the cost very low. And then they can come in and buy it at the very low price and acquire it very cheaply. Or they can do that to currencies. And that's how they can crash the currencies of governments, like they crashed the pound. George Soros crashed the pound just to show that he could do it. It's just like to prove how vulnerable the system was. Of course he made a mint doing it, but his argument was he did it just to show how bad the system was.
Joe: Yeah, I remember.
Ellen: And that's how they brought on the Asian crisis of 1997/98.
Joe: Ellen, I was looking at your Web of Debt blog and I saw that you have some speaking engagements coming up in Ireland next month. I suppose you've been keeping up with events over the last few years in Ireland, yeah?
Ellen: Yeah, but if you have more information for me, I'm collecting information now, so...
Joe: Well no, I'm assuming you've seen the tapes that were released, eventually, of the two directors, taped telephone conversations between two directors of Anglo-Irish Bank which was the major bank that went down back in 2009. And it's just that those tapes provide a real insight into the kind of mentality that these people have, the directors of these banks. You know, they were laughing basically at the fact that they had gone to the Irish Central Bank and said "Listen, we need seven billion" and they were kind of saying "Well," just saying that they pulled - I'm not being vulgar, but they - one of them said that they - when one of them asked the other where did they get this number seven billion from, ...
Niall: They just pulled it out of thin air.
Joe: They pulled it out of thin air, yeah. And they were laughing at just this idea of how they just went down and dropped this bombshell on the central bank. And he was basically saying, you know, people understood that he was going down and demanding seven billion Pounds or ten billion Euros of Irish tax payers' money that was going to be used, that should have been used to fund social services, that was now going to prop up this bank. Of course, it was eventually nationalized but, I don't know if you've seen those tapes. You should probably ...
Ellen: Yeah, I had heard something about it. I didn't listen to the tapes but yeah, it was the same mentality in our collapse. It was 700 billion and somebody asked "Where did you get the figure?" and that's what they said "We just pulled it out of the air. It seemed like that would cover it."
Joe: Yeah. Well one of the questions that - I don't know if you'll be asked this when you're in Ireland, but one of the questions that most people would want to know is where did that money go, when the banks were saying "We need x-number of billions to keep us going."
Niall: Or trillions.
Joe: Or trillions, whatever. And so where did the money go? It's gone. They were gambling on the international market and they lost it? So someone else got it? Some other banks or seven billion or 700 billion the richer as a result?
Ellen: Um, actually that's a good question. I'm going to have to look into that. You know, after that in the U.S. there was like 23 billion - or trillion, depending on who you read, 16 trillion at least, maybe 23 or 4, but that was money that was created by the federal reserve itself and it was just short-term loans. But the first ...
Ellen: But the original 700 billion was real money, real tax payer money and it did go to the bank. I think it went to - I'd have to refresh my memory but it went to buying - that they bought a lot of City Bank I think, like 80%. I mean they did ...
Joe: But when I say where did the money go I don't mean where did the bailout money go. I mean where did the money that was there before - that caused the bailout to have to be paid? You know, where did the bank's money originally - how did they lose it?
Ellen: Oh, well ...
Joe: Or any bank?
Ellen: Yeah, in the U.S., what happened was this whole system where you lend the money first, you create the loan, and then you have to borrow it from somewhere, quickly, you have to get liquidity, you have to grab the money from somewhere, to clear your cheques, they borrowed from the money market. Well the money market went down. It broke the buck and went below a dollar, it went to 97 cents. And so all the investors en masse pulled their money out of the money market. And then the banks were not - there was no liquidity. They couldn't cover the cheques and so they were technically insolvent. And so I think it was to replace that. They had those different facilities that they came up with, the term lending auction facility or TALF or something like that term, auction lending facility. So basically they were providing liquidity that was not provided, supposedly, by the money markets. But I had read that the money markets were back in operation by then, so it was really kind of just a ruse to set up this whole bailout system where the banks could borrow very cheaply from the Federal Reserve or from the government.
Niall: Yeah, that's something that struck me, is that it was back to business as usual pretty soon after, in the sense that no amount of bailout was actually going to cover the amount of toxic debt out there. But they seemed satisfied with the short-term solution, at least initially, the 700 billion figure. Now when I went back and looked at how the crisis in 2008 began, I was actually listening to one of your talks, and you pointed out that Lehman Brothers stock plummeted on September 11, 2008 and that this precipitated the crisis the following week where Lehman Brothers went under. But then I was also looking ...
Ellen: Today, actually, it's October 15th.
Niall: Oh, is it?
Ellen: Yup. That was the day.
Niall: This date five years ago. So there's also another - there's a talk given by a U.S. House of Representatives member, I think it's Paul Kanjorski ...
Niall: ... in which he says - he describes the situation at the time, you know, "We were in Congress, there was an air of panic and we were basically told - well the situation we found ourselves in was that somebody within the space of two hours on September 11, 2008 had pulled over half a trillion from the U.S. money markets" and they had to do something or they were looking at, you know, trillions being drawn out of the system. What happened there? Does that sound like that was, I don't know, some kind of financial attack on the country?
Ellen: Well I was highly suspicious by the September 11 thing. I don't know if you noticed but September 11 was also the day that they were trying to get Congress to vote to go to war with Syria. I mean, it seems to me that suspicious things happen on September 11.
Joe: Yeah, absolutely.
Ellen: Yeah, and in fact the Lehman Brothers thing wasn't as bad as they made it out to be and it was really a couple of days later ....
Niall: It was hype.
Ellen: ... I think on September 17th when the market really dropped and it looked like that was short selling, manipulated short selling. I think it was September 18th that Henry Paulson went to Congress I think, after the market really dropped.
Niall: Yeah. So that was hyped. That was a contrived crisis so to speak. It did end up being a real crisis, but not for them. It ended up being a crisis for the people but it was by no means a crisis for the banking system any more than it was just business as usual for them.
Ellen: Yeah, and Lehman Brothers, the reason it went down in the first place was that JP Morgan grabbed their collateral. It was because of this super priority in derivatives, which I think that's what they've got to get rid of, but of course if they do, they'll get rid of the whole shadow banking system which is half our credit market. So you can see where it's not that easy to untangle. But the whole system is based on fraud. It's incredibly risky and we need - I think the whole system should be public, really, or at least the major players should be public.
Niall: Yeah, it's their playground and they don't want to give it up.
Joe: Alright, well Ellen we don't want to keep you. We've run over our hour already. We don't want to keep you from whatever you plan for today. So we really appreciate you being on the show and talking to us. It's been great. And we will do it again sometime in the future.
Ellen: Okay, thank you very much. It's great talking to you.
Joe: Okay, have a great one.
Ellen: Take care. Bye.
Joe: Alright folks, we're going to a commercial break. You may have heard it before but ...
Niall: It's been a while. Let's play it again!
Joe: That's the way we roll. So we'll be back after this.
[Comets and Horns of Moses Ad]
Joe: Yes indeed, if you haven't got your copy of Comets and the Horns of Moses, you should get it today because time's running out to be up to speed on that particular topic which is really of the utmost importance. It makes the banking issue pale in comparison and ...
Niall: It does, it does.
Joe: And we may get into it one of these days.
Niall: Indeed. Now, having said that, the book by Ellen Brown, Web of Debt is really interesting. We do recommend that as well for readers. I think there were a lot - we had a short timeframe to talk to Ellen, so a lot of the technical stuff was probably a bit out there if you haven't heard it. But in her book she does explain it very well, in a fun way too. There's even a Wizard of Oz theme running through the book.
Joe: Well you know, my problem with the banking system is that when you read about it, and you read about, or you look at the language that they use to explain it, right there, I mean, suspicious, because it's written about and explained in a very complex and convoluted way that suggests to me that there's something being hidden or it's being written about in that language so people don't understand what's really going on.
Joe: Because what's really going on is quite simple. They've made it more complex if you want to get into how they go about their manipulations, that's all quite complex. But the base of it, as we've just discussed, is quite simple. It's a scan. It's banks which should be the issuing of loans and money is fundamentally in the interest of government or the state and the people that live in that state or in that government, in that country and it's simply a means to an end. The issuing of money or loans is a means to an end. It's not a commodity in itself. It's not something that should be sold to people like selling debt to people, like selling loans to people essentially, as if there's some kind of putting in on par with actual goods, for example, like a chair, or food, or skills, actual manual labour. They do nothing, that they provide no service, no tangible service whatsoever, or certainly no service that warrants them making large amounts of money on the basis of it, essentially profiting from simply a) providing, these days, a virtual environment for your money, your digits on a screen to be stored; and b) in the same way, issuing people with a loan to go and, to do something that's not free, that's not for free that it's a loan, but there should be no interest claimed on it because they don't deserve it. Issuing money and issuing loans is fundamentally a part of the local community.
Joe: And the structure of the local government or local state or whatever size you want to spread it out to, it should be a local government or even national government, depending on the size of the country, operation.
Niall: There's a place for banking in the same way there's a place for accounting. You need someone to keep the books.
Pierre: Yeah, it raises a fundamental question, the notion of value, value of currency and value of goods, the value of labour. And often in classic economist theories there's a distinction between capital and labour and in our freed money and time, capital is ruling labour. We are the slaves as labourers are the slaves of capitalists bankers. And that's very paradoxical in the sense that capital money is a piece of paper that has only the value that we attribute to it. Why don't the other side, other component of this alchemical dynamics, i.e. labour, has a very tangible value. This is hours of our sweat, of our skills, of our talents that are investing in the productivity. That's directly correlated of the value of a country, its GDP. The GDP of a country is a direct consequence of the force, the skill, the productivity of the people who work in this country.
Joe: Yeah, the point is, is that issuing money cannot be like the service of giving someone a loan or storing someone's money. It cannot be seen in a similar way to someone who provides a day's labour or someone who makes something and then sells it to someone else. You cannot sell holding someone's money. You can't charge for it, because money is not the same as those goods. It's not the same as labour or goods. Money is the third element, if you know what I mean in the transaction. It's what's exchanged and it's a means to an end, essentially in terms of facilitating exchange of goods within a country. You cannot put a price on that itself. The price is on the actual exchange of labour and goods, not the thing that facilitates it. They're charging money for the facilitating of it. It's ridiculous. When it's in the interest of the government to simply have something in place that allows the exchange of goods and services between people in the country, that's just something that facilitates it. It's like charging something for something that facilitates something else.
Pierre: Exactly. Money is a kind of grease.
Pierre: In the wheels. It's just a means. It's not a necessary means. The meanings are false, that is barter, that shows that money is not necessary to economic process and trade. But it is those processes because of the liquidity of its universal value, its tradability, it's transportability. So it has virtues.
Joe: Do you know what it's like, as it strikes me now? It's like, say you take, in the barter system, you have a guy who makes chairs and a guy, or a woman who raises animals. And those two people get together. One of them wants a chair, one of them wants some meat. And they exchange it and they come up with an equal, or there's an established value to each and they exchange it, those two products because they need them. Banks, are essentially a third person standing in the middle and charging both of them for the ability to simply exchange those two goods.
Niall: Yeah. A parasite.
Joe: What service does he provide? That is absolutely necessary? It's not necessary at all. He can maybe - and essentially that third person is the state or the government or the local state authorities who want to bring those two people together, they shouldn't charge for it because it's in the interests of everybody that that exchange of goods or services happens. You don't charge the two people for simply wanting to barter with each other. First of all they can do it themselves. Okay, you might need someone to organize it if it gets very big, but that should be the local authority in whose interests as representatives of the people, or are the people themselves, it is to have this facilitation, to facilitate the exchange of goods and services. It's parasitical, yeah, exactly.
Pierre: Parasitical and we can even imagine that charging legitimate, a little bit of interest, a few fees, because there is some effort involved. But today, we are far beyond that, far beyond charging for service that is legitimate or not. Today, more and more people and more and more nations are slaves to debt. That means that we became slaves to something that is just a facilitating, artificial construct.
Joe: I don't even agree that there should be some fee involved because in the context that any kind of banking, let's call that third person the banker or the bank, should be state controlled and state owned. It should be a state operation in the same way that the state provides services, because those two people who have had the barter between each other, they should be facilitated to do that in whatever means by a bank, by issuing money, etc. or loans even, etc., because ultimately when they do that exchange or on their goods that they amassed themselves, let's say, money, they pay taxes afterwards as well to the state. So it's in the state's interest to be that third person that facilitates that exchange via money or whatever, because they are going to get taxes from the two people, from the chair maker and the animal raiser, they're going to get it anyway, and they're going to get it ultimately as a result of the exchange between these two people. So they should not be taxing, or charging for the service of facilitating the exchange, when the exchange itself will bring them money. Do you know what I mean? That's where the fee comes in.
Pierre: And actually ...
Joe: On their taxes, not taxes by the facilitator at the banks who do nothing.
Pierre: Historically this notion of interest came from other kinds of loans. In the past, if individual A was lending, loaning say a herd of cows to individual B, when individual B returns the herd of cows usually there are a few extra cows. That's where this notion of usury and interest came from. And it was transposed to the financial system except that, unlike cows, bank notes, money don't reproduce during a given interval of time.
Niall: Yeah, and it's become even worse than that because the taxes - the taxes in addition to the interest that's paid back, are another form of interest. Because the taxes are not the way we've been thinking of taxes traditionally, that you pay taxes into a group fund and it will go into services for everyone. Substantially these days, the taxes go to the banks as well. I mean, this is a big bone of contention in the U.S., about the income tax. It never existed until the IRS was formed, until the Federal Reserve was formed. And there are a lot of people in the U.S. who say legally, technically, the government has no right because of a constitutional block against it, to raise income taxes from people.
Pierre: And one of the reasons those taxes are increasing, at least for the middle class and poor people, it's quite a different story for the very rich, is that in the U.S. and other countries, in most countries, budgets, public budgets are disbalanced. There's more spending, more expense than income and one of the reasons why there is a disbalance is because of the growing impact of the debt. The countries, usually use debt - 20% of their whole public budget to pay the debt. I'm talking about repaying the principal here.
Niall: Just the interest.
Pierre: Just paying the interest.
Joe: Yeah, it's ...
Niall: About the language, that is deliberately done. And in her book, Ellen Brown gives mind-bending examples. She says - here's a passage from the law that set up the Federal Reserve, for example. See if you can even understand it. And I mean, it's barely grammatically correct. I mean, it's incorrect. It's this completely obscure lingo and it's deliberately done that way. Now Ellen is able to translate - "here's what it is in simple plain talk" and if people saw the plain talk, they would say "No, I don't agree to - I'm not signing that! No way."
Pierre: Well, it reminds me of Europe until the 19th century. Some groups, some elite groups, doctors, priests, were still using Latin and not local languages. They were using Latin because it was a way to preserve secrecy and to hide things, because as explained in Ellen's book, clearly this whole system is based on the lie, on the sleight of hand. And in order to obfuscate the truth in order to hide what is really going on, they have all this jargon and those complicated terms in order to hide a very simple truth.
Joe: Yeah, it's the result of psychopaths, psychopathology in power, pure greed. I don't know, you look at the results of the whole credit crunch and the bank bailouts and stuff in different countries. For example if you look at Ireland you know, the end result of this greed and psychopathic ideology amongst these banking institutions and the bankers and all the people from the top down, kind of thing, who are just enriching themselves, seeing ways that they could con and scam the markets and scam all the people and scam each other to make as much money as possible for themselves, really out of nothing, the end result was that you had these bailouts where in Ireland for example, the European Central Bank and the various different banks in Europe that were owed money as a result of - part of the bank bailouts wasn't just bailing out Bank of Ireland, it was paying back investment banks and banks across Europe who had invested in Ireland and in the Irish banking system as well.
But they had taken a gamble. This was the whole argument at the time because the banks had been gambling essentially with their account holders' money for a long time. And they had been passing around these dodgy mortgages, etc., that were never going to be paid and they were passing them off between each other and someone was going to be left holding the baby, type thing.
And these people, since they were gambling, they knew they were taking bets and risking high risk investments all the time. If they lost, like any gambler at the casino, sorry, bye-bye. But apparently there was some other law at work that came into play that said that these people had to be paid back. And it came out of the Irish people's pockets directly in the sense that since then child support has been cut, unemployment benefits have been cut, social services of all types have been cut and investment in infrastructure have been cut because all that money was taken out and given to these banking institutions who had gambled and lost.
So the direct end result was - and a lot of people lost their jobs. A lot of people lost their houses. So the end result when it filters down to the ordinary person in the street is that they suffer and their quality of life etc. is diminished. Now the question is, is that by design? It doesn't have to be by design because it can simply be, if you put a very greedy person in the position of power anywhere, ultimately it's going to be other around that person who are going to suffer and lose out because they're going to try and - their greed will deprive other people. So it's a natural outplaying of greed at the top that people at the bottom will suffer. But ...
Niall: Well this didn't come completely out of the blue in 2008, because there were bailouts before that. There were savings and loan scandals before that. A lot of people lost big time when gambles failed and banks and other institutions were reimbursed with taxpayer money. But what happened in 2008 began the current narrative of bailing out the banks too big to fail. What else did they say? It was called a credit crunch. And I mean this is ostensibly the reason we're in a global economic recession right? Five years ago this week, I mentioned in the first half of the show, representative Paul Kanjorski, he was then chairman of the Capital Markets Subcommittee in the U.S. Congress. Have a listen here to what he told C-Span on September 18, 2008, one week after the beginning of the so-called 'credit crunch':
[Paul Kanjorski]: On Thursday at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous draw-down of money market accounts in the United States, to the tune of $550 billion was being drawn out in a matter of an hour or two. The Treasury opened up its window to help. It pumped $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic out there. And that's what actually happened. If they had not done that, their estimation was that by 2 o'clock that afternoon, five-and-a-half trillion dollars would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States and within 24 hours the world economy would have collapsed. Now we talked at that time about what would happen if that happened. It would have been the end of our economic system and our political system as we know it. And that's why when they made the point we've got to act and do things quickly, we did.Niall: An electronic run on the banks. Now he also said that, later on in that same interview, that somebody, using an analogy, somebody left us out in the middle of the ocean without a life raft. "Somebody". I mean, he was quite pointed, you know, that this has been something that was done on a massive scale. The Thursday, by the way, he's referring to was Thursday, 11th of September 2008. Seven years after 911, five years ago this week. I don't know if that's just symbolic or not.
Joe: Well, I mean, in line with what Ellen was saying about the control the central banks have and how they essentially now finance governments, this was happening with - the Fed is essentially America's central bank and this has happened within the Fed and he said - this representative Kanjorski said that the Fed noticed, but who's to say that someone within the Fed wasn't part of it.
Niall: Wasn't part of it.
Joe: Yeah, and it's a message being sent to the government or ...
Niall: The thing is, he sounds like he bought the bluff. Because he was genuinely scared and like "Oh my god, we've got to do something or the whole thing's going to fall". That was the bluff. Of course the whole thing wasn't going to fall. The system is fake anyway. They're not actually going to let their playground collapse if they can help it. So they contrive this panic and that initiated this chain reaction of events. It's not a new, it wasn't anything new. It was more of the same, bailouts essentially backing up the gambles that these people lose, just taking it to a whole other level.
Pierre: Yet, in 2008 during this crisis, Iceland didn't agree with the IMF directives. They didn't accept free trade, bailouts, injecting money in banks, money coming from the citizens, and they did much better than the other European countries that accepted the IMF rules. So there are other solutions. And something that is striking in Ellen's book as well that sometimes those crises may be due to purely greed or profit seeking. In some other cases, in most crises actually, most financial crises, you see the same pattern emerging again and again. Yugoslavia in 1994, Russia in 1989, in Southeast Asia in 2007. Each time the population and local government are blamed. Yeah, the government was overspending, the government was spending more than they were earning, the debt was gigantic. But actually the real story is that bankers suddenly, because usually of ideological reasons because the country is doing too well, like Yugoslavia, or because the country is not aligning with the neo-conservative ideology, they will suddenly switch off the money valve. Well no more money in the economy.
Pierre: And that's what triggers crisis, because if there's no more money, that's why money is important if it's used in a positive way because with that money, you still have the cows producing milk. You still have the chickens producing hens. You still have labourers with their working skills. But if you cannot pay the labourers and you cannot buy the milk anymore.
Niall: It's part of the trick. The trick is "Oh my god, oh my god, if we don't do something the sun won't rise tomorrow". And people just sort of hesitate long enough for them to get away with it because of course the real economy keeps going. Things keep happening. The next day you keep going to work, but the trick is to convince you that if such and such is not done, there'll be a run on the banks, your currency will collapse and ...
Joe: Well the thing about it is that there is market sentiment, right? And not enough emphasis is given to the idea of market sentiment. When you use the term, this is another fairly obscure term. But I'll give you two examples, one specific and one general is that in - I was referring to Ireland and those tapes by the directors of Anglo-Irish ...
Niall: The Anglo tapes.
Joe: The Anglo tapes that - you can look them up. They're not very long, but one of these directors was speaking to the other. His argument was, and the Anglo-Irish Bank wasn't a very - it wasn't the biggest bank, there are two other bigger banks in Ireland, the Bank of Ireland and the Allied Irish Bank, but Anglo-Irish Bank was in the hole. It had lost out big time in the financial crisis let's say, and it was going to the Irish Central Bank, to the government essentially, and saying "Listen you need to do something about this. You need to give us 7 billion." And they even used this - they even admitted to each other "Yeah, listen, we need more than that". They ended up getting about 20 billion or 18 billion or something, or it cost that much to shore it up after it was nationalized.
And they admitted that they needed more but they said "We said 7 billion. I just pulled it out of my ass" he said, "because we needed more but I didn't want to scare them off. So I wanted to get them in with 7 billion and once they were committed, then I would reveal that we need more and then they'd be hooped because they've already invested their money and they don't want to lose the money, right?" But one of the other arguments he said he used against the government, the central bank was saying "Listen we have" - they had about 100,000 investors. Ireland has 4 million people but so they had about a 100,000, mainly commercial business investments. And if they went under, if they collapsed and investments, or accounts were put into jeopardy as in people wouldn't be able to get their money out of the bank, everybody, all of the account holders would lose their money, this would have a knock-on affect for the two bigger banks, there would be a run on the banks. People would suddenly get scared, get spooked. They would see that oh my god, people aren't able to get the money from Anglo-Irish Bank, people in the other two bigger banks would suddenly go "I'm going to get my money out" and we would have this doomsday scenario where everybody tries to go and get all the money out at once.
This is the threat they used, the reason they give as to why the government had to step in and finance them. And the other - that's sentiment there, right? They did that behind a market sentiment and the other idea is that, it's fairly well known, that there are a bunch of, I think a few years ago they were described to be in the U.S. on Wall Street, there were over 25 bankers, hedge fund managers or whatever, the guys who get the best accounts with the most money and stuff, and they usually get 25, 30 million a year in terms of salary and mostly bonuses. And these guys are - their opinion is highly valued and they realize that their opinion is highly valued. So it's quite easy for someone, if they're well connected enough, to go to one of these guys, or more than one of them and say, "Listen, would you mind saying that you think this stock in this company doesn't look so good". And all it takes is a couple of these guys to express their opinion, even if it's a false opinion, even if they've being bribed essentially to say it, that their opinion that the stocks in a certain company aren't looking good, for them to drop 10, 20, 30%, for people to flee. And it's got nothing to do with the actual stock of the company that's producing the goods or anything. But nothing ...
Niall: No concern.
Joe: It's market sentiment. And market sentiment comes from people, individuals who put out communiqués to the press or amongst their social network friends, or whatever, and that's how - very little of it is based in any real, tangible, material kind of things. A lot of it has to do with manipulation in terms of sentiment, in terms of what people think. Because it's a very scary position to be in. It's your money that you've invested. And you need to make a judgment here as to whether you're going to invest in this one or that one and who knows where it could go. A very complex market. And people can get spooked very easy and all it takes is a word from someone. "I would get out of that if I were you." And you know, it snowballs.
Pierre: And you talk about the future in this case, that is by definition unknown. So there's a lot of irrational factors, a lot of fears, and those opinion leaders get their opinion widespread by medias also because there is a strong collusion between industry in general and banking, but particularly between banking and media corporations. JP Morgan, Rockefeller, while they were struggling in the beginning of the 20th century to transform public banking into the banking - the destructive banking we know now, one of the first moves was to acquire - I think JP Morgan acquired something like 20 major communication companies, medias, because they know that if you have the medias, if you control the medias, you control what is going on in people's minds. So those opinion leaders control medias and also some insiders, some people who know that and who know that the Wall Street Journal is just a propaganda outlet. They also know that those opinion leaders move such quantities of money, that they are market makers and if they say "down" the market will go down. So they follow in a very pragmatic way.
Joe: Yeah, it's completely manipulatable and manipulated. And people need to be really aware of that when they're engaging in any way in any kind of investment activities. Everything is against the little person, the average person in the street. And everything is for the people in the know at the top who are controlling the system. And it is a system that's been set up to be controlled and controllable. It's been constructed that way over the past, I don't know however many years. And like Pierre just said, the banks aren't just banks anymore. Think about where banks came from and what they should be. They're simply there to hold people's money.
Niall: A vault.
Joe: And issue loans. Right. But now, as you said, the four biggest banks in the U.S. for example, have investment portfolios in so many major corporations and industries. I mean, they're buying and trading - they're buying and selling oil and food, and construction industries. They have stakes in like all the major industries including oil, you know what I mean? They're literally taking over the world, you know.
Pierre: They control the tangible assets including commodities. And they also control the virtual markets that control the value of those tangible assets.
Joe: Yeah, that puts them in a far more controlling position than just a corporation. They are a bank and a corporation.
Pierre: There's a double control. And just going back to what you were saying previously, this hysterization of the masses by looming the fear that if you pull out the plug of the banks, everything would collapse. And this is simply not true. In Iceland and some other cases, Malaysia, a few countries, have not followed the rules of the international bankers and for example, you can let a bank get bankrupt while guaranteeing the depositors. We don't fund the bank, but all depositors will be paid back. Nobody really loses money. You can also nationalize a bank. What was done in the U.S. and Europe was all the more shocking that about 2 trillion was injected during this quantitative easing plan which is again a good example of this jargon. Quantitative easing it means, okay, we take money from citizens' pockets and we put it in the bankers' pockets basically. This quantitative ...
Niall: Even worse than that, we'll print a lot of money, give it to the bankers and then send the bill to the people. So it means their indebted more in the future.
Pierre: Exactly. And this quantitative easing could at least have led to a nationalization of the banks that were funded, but the way to avoid that is that they mounted - they created a scheme where it was some kind of loan that would be repaid or not, but in the end, citizens got indebted to save the banks. And in 2008 when the foreclosure crisis started, you didn't see one move or one law in the Congress to create some quantitative easing to help people who were losing everything. They were losing their houses to banks that created this crisis, that led to foreclosure while saving the house of citizens. And the government was supposed to be for the people and by the people, was not spending one penny to help citizens.
Niall: And in every year since then, year-on-year, for the last five years, banking profits have gone through the roof. They're breaking records year-on-year.
Niall: Like this year, Europe's largest bank, HSBC, posted record profits. And that's in spite of subtracting record fines for money laundering.
Joe: Yeah, absolutely. It's so disgusting.
Niall: They've still got the massive profits.
Joe: It's disgusting. I mean, even small banks, I remember looking a few years ago at the Royal Bank of Scotland, posted quarterly profits, maybe it was half yearly profits, but I think it was quarterly profits of 10 billion. Ten billion Pounds. That was the profits in one quarter of the year. So then you wonder where all the money's gone. It's not hard to find. But I mean, it's hard not to see - in one sense it's hard not to see that the end result was planned in terms of what Pierre was just talking about, in terms of the people losing their homes or their cars or their possessions that was the security for their mortgages, whatever, you know. Because the whole mortgage kind of crisis where banks were packaging all of these mortgages together and pretending they were rock solid, these were gold, when in fact they were a very different colour, because the people who owned these mortgages were very unlikely to be able to pay them back and they pretended that they were. And they traded them between banks, between each other saying "These are really good. These are people - these are gold members. These'll pay back on problem, you'll get your interest. You'll get your principal back, everything." And so they were making money off - it was like selling - I mean I don't want to use that - I don't want to be down on Gurdjieff, but it was like selling canaries, or sparrows painted yellow to look like canaries and getting a high price for a canary and then when it rains it washes the yellow off and it's a sparrow. And someone said "Well I just paid a lot of money for this canary and it's a sparrow. I can't sell it on anybody to get my money back." But in that case the sparrow's a house, right?
Pierre: But the sparrow is stolen in addition.
Joe: It's stolen originally.
Pierre: It's not the MBS candle is that it's a mortgage based securities where credible groups, assets based on nothing, people were paying for that. Paying basically for crap. It was paid on a collectible that was a house that would definitely be stolen because it was given in exchange, because the mortgage was based on money that didn't exist. And that was the case in the beginning of the 20th century. A lawyer sued a bank that seized his house, I think it was round 1920, for a mortgage of $14,000 and the attorney was being seized, claimed that the contract was void because the contents, the money had no real objective value. And it actually worked. He won because it was proved that the bank - it was just figures written on screen or paper, the operation, for this mortgage. So there was no money lent, so the contract was void. So there was no seizure. That showed, you can imagine the bankers when they saw this court decision, and then there was an appeal, the judge dismissed. I think the guy died, but it was an interesting precedent showing the extent of the scam. It's as if you're not being robbed once, people come in your house, they rob you, and they rob you again, and when you go to the police station, ...
Joe: They come and take your house.
Pierre: The cop just gets your car what you are driving there, and when you come back your house is taken. And when you're in jail, they even ...
Joe: Come and take your clothes.
Pierre: They steal your - stripped clothes.
Joe: Yeah, you know it's incredible the evil things they do and I can't imagine that they didn't realize that the end result was that for example, a lot of people were going to lose their houses. I mean it's a no-brainer. You take mortgages, a bunch of mortgages that you hold as a bank and you realize that these mortgages are unlikely to be repaid, but you dress them up and present them to a different bank and say "Listen, these mortgages are going to be repaid. It's an ironclad agreement here. These people are good investors. They have the means to pay it back. This is worth a lot of money. It's worth all of the money that the mortgages are worth, but I'm going to sell them to you at a little bit of a discount because I like you." And in fact they're worth - not even worth 10% of that let's say. So you sell them on, make a profit on them, dodgy good essentially, and you sell them all around between each other, between the banks, and everybody's passing them on and dressing them up and exchanging them and mixing them in together and the end result is that someone's left holding it. Someone's paid a lot of money for them and left holding these mortgages that they're not going to get the money paid back on. What they do get is the houses. The next step is "Well, if I can't get the mortgage repayments on this, I'm going to have to seize the house."
So it's not hard, I can't imagine that anybody who's doing this didn't understand the very obvious end result was that people were going to lose their mortgages. They were going to lose their house. The end bank that was left holding them was going to take their house from them, or their assets from them. And at the same time, banks were not only selling these between each other, but they were taking ordinary people's money who were investing in like different kind of mutual funds and hedge funds ...
Joe: And investing for their futures, putting 10 grand or 100 grand or whatever, into an investment bank. And the bank takes it and the bank puts that money into buying a bunch of these dodgy mortgages from another bank. And then they're the ones left holding it and they say "Jesus, these are worth nothing". And the people who have invested for their future, for their pension, etc. are told by the bank "Yeah, that investment that you gave us money for, it didn't work out. We told you it wasn't a sure thing." They screw everybody.
Pierre: You also have states and cities who were advised by those bankers and ended up investing some of the savings, some of the deposits into those toxic financial assets. I mean, those toxic financial products. And that's how you get the whole community getting bankrupt. Because all that savings, so then they disappear.
Joe: Meanwhile in the U.S., an article from a few days ago, "Kansas will kick 20,000 people off of food stamps."
Niall: Why? Because they don't have the money to pay them. They're not - apparently they're just not worth feeding anymore.
Joe: "Kansas plans to throw more than a fifth of a community of 90,000 unemployed residents off of the food stamp rolls. By reinstating federal work requirements for the program that they are normally waived during times of unusually high unemployment." So people on food stamps, a lot of people are on food stamps because they can't find a job and right now they're turning up unusually high unemployment. There are three times as many people working - well there are more than three job seekers for every job, let's say. So people get food stamps which - it's a certain amount of money every month that they can use to redeem for food in supermarkets. But they've come up with a new idea.
The government has come up with a new idea which is to basically put these people to work. They can't find a job so let's just put them to work doing whatever, anything, for - so, you know, give - it's a way, at least we're going to be getting not - if they were getting minimum wage they'd be very, very happy. They're probably getting, for the work that they'll be forced to do, simply to get some, not actual currency, but it's usually a plastic card that has a certain amount of credit on it, not even any money. It's not even a food stamp. It's not even a fake money, paper money, it's a plastic card they can use with a certain amount of money every month and when it runs out, that's it and you can use that in stores to buy cards. And that'll work maybe 40 hours a week or something, or more in some menial task and they'll get, you know, a pittance for it, and all they can do with it is use it to buy food.
Pierre: Just one point about that. It's symptomatic and the same is going on in Europe where basically you have very poor people living on food stamps being at the poverty level while forced at the same time to have an activity, some kind of work. It's not really work because of no wage, but there is the sweat and the time and the energy you spend on it. And in this sense, it's worse than slavery in ancient times. Slavery in ancient times, the slave was taken care of and he was fed. Today, modern day slavery, you have slaves, slaves of debt who are not even taken care of and who are not even fed. You have slaves who are starving to death at the same time.
Joe: They're not even given enough to actually keep body and soul together, you know? There's another story from Ohio. That last one was Kansas. This was Ohio. "Millionaire Ohio Governor John Kasich forces starving families to perform slave labour for food stamps. His administration in Ohio will limit food stamps for more than 130,000 adults in all but a few economically depressed areas. To qualify for benefits, able-bodied adults without children will be required to spend at least 20 hours a week working and training for a job, volunteering or performing a similar type of menial task unless they live in one of 16 counties exempt."
This is a millionaire, you know, telling people how much food they can have.
Niall: In the UK, I think in August, early August, it was reported that a million or so people were on something called "zero hours contracts" which basically means menial work, not even - barely, the wage that they would have gotten if employed full-time in Chinese or Indian factories. You're hired by a private company but I think some of the wages made up by the government is partly subsidized.
Joe: Well, you'll get food stamps essentially.
Joe: While working a full week.
Niall: It's essentially ...
Joe: While working a full week, you'll get food stamps, you get nothing from the company you're working for. So you're working for free for McDonalds, for example, 40 or 50 hours a week and in return, you get some food stamps from the government. So the government is taking away - in that scheme, it's taking away the very basic benefit of, for example, giving you actual money every month to do with as you will to provide for your own needs based on your own decision. They are making you work a full week but limiting what you can - to give you a small amount of money in return, not from the company, but giving you a small amount of money that you can only use for a very specific product, i.e., food.
Niall: Yeah, and this week they announced that "Oh, we actually overlooked some people." The figure is actually five-and-a-half million people. So in the space of a month they're sort of - it sounds like they're slowly getting out the truth, that the UK is a nation of slaves.
Pierre: And there's a total correlation of capital and labour, which are the two fundamental components of company, of economic development. The fundamentals, the two fundamental elements of the work contract is the labourer who gives time and the company that gives money. In those case, as you mentioned, the labourer slave's time the company doesn't give money anymore. And in those cases where unemployment is high, that's where money can be used very positively without creating inflation. And maybe I can try to describe it in simple terms because Ellen didn't have time to expand on this I think, important topic.
The prevalent ideology that in government issued money it would lead to inflation, the assumption is you inject massively money in the country, in your country, so people have more money, so they spend more, so you increase demand. There's more demand than supply so prices rise up, i.e., inflation. But this is only valid if you cannot gain productivity. All your labourers are already working. Let's take the same example. With a lot of unemployment, like in Germany, just after Weimar in the 30's, beginning of the 30's. Adolph Hitler designs construction plans for the country, highways, cars, steel industry, etc. He issued his own money and he injected this money in the companies that have to produce those plans, those goods. The company has to produce more so they have to recruit, so employment drops. You have more labourers. They produce more, so the supply increases, but at the same time all those new labourers they were unemployed before, they had no money. Now they have money so they can spend. So demand increases. So you have a positive circle where sound money creation feeds supply and demand and in the end which should be the one and only goal, in the end, the wealth of people, the living conditions ...
Joe: Living conditions should be the goal.
Pierre: ... increase. And in the 30's the very first highway network in the world was designed in Germany thanks to this publicly created money injected in the economy. Not for speculation. Not for clique.
Joe: But the goal is obviously not to keep people at a decent standard of living and giving them something, giving them an opportunity to be productive and to contribute to society and to benefit in kind and to live decent lives, which is totally possible. The goal apparently, whether it's by design or simply as a natural result of the greed at the top, is to make people suffer. And it's not just the food stamps in the U.S. There's something like 50 million people on food stamps in the U.S. And they're progressively going to be forced into slave labour to just get those food stamps. In the UK you mentioned there's maybe 4 million people having to resort to food banks because they don't make enough money to feed their families. And in response to that the British Education Minister Michael Gold, has claimed that the people are poor because they are forced to turn to food banks because of their own decisions. He said that they're unable to manage their finances. That's like a galling statement coming on the back of this whole financial crisis and the corruption and greed of these bankers type corporations and government, for him to turn around and blame the poor people.
Niall: And that is exactly the accusation they make on the next level up, when they say to a country, "You know, you're not able to look after your own finances. What's our proof? Well, look at what just happened to your currency." That's after they have attacked the currency in order to deliberately create the crisis. Over and over again, that's happened.
Joe: And in this article that I'm just reading about this guy, the education minister in the UK, Michael Gold, it says cuts to benefits, frozen or falling wages and rising food costs are being blamed in part for some people struggling to make ends meet. Now that ties into rising food costs. It ties into what's really going on and the real issues facing humanity that these people are trying to distract against, or distract away from, which is climate change, the total disruption of the kind of growing season, floods, fires, storms. All of it pointing to the fact that something is very wrong on our planet. Something is changing and it's got nothing to do directly, with the economy or the banking system. That's an indirect result, let's say, as we've talked about in previous shows, we have this mass and endemic pervasive corruption in the ruling elite, well they seem to coincide with these kind of earth changes that make suffering of the average person even worse. It's started by the greed of the elite and then it's worsened by environmental changes. And that seems to be the thing that they don't want people to be aware of.
Niall: So they try to suppress it but then ...
Joe: Well they create a hullabaloo about bombing Syria and, you know, potential war and be afraid and stuff when...
Niall: And in the meantime the environment changes again for the worst. And they have to try even harder to pull the wool over your eyes. You can see how eventually that dynamic will snap. It comes to a point where there's a break even point. It cannot go on indefinitely.
Joe: Well eventually people suffer so much that they can't take it anymore. Something breaks. Something, as we have said many times before, it's when people can't feed themselves that that's the breaking point.
Pierre: You were mentioning before the way currencies, national currencies are attacked to put the country on its knees and make them accept the IMF rules, free trade, and make it a new playground for speculators basically, and for ...
Niall: And for creditors.
Pierre: Yeah, exactly. And basically to loot the public assets, one penny for a dollar because of the degradation of their currency. And analysts have been trained to explain the Chinese boom that we witnessed over the last decades. Usually what is brought up as a plausible explanation is that the Chinese workers are working really hard, they're very motivated, they are slaves. But in many third world countries and first world countries, labourers work hard. They are skilled. They are motivated. And they're slaves too. One major difference between China and most of the countries is that the Yuen currency is not convertible. You cannot convert Yuen in dollars. And the second ...
Niall: So that prevents currency attacks?
Pierre: Yeah. You cannot attack the Yuen. It's not convertible and the other difference is that the Chinese federal bank that was recently called the Federal Bank of China - before it was Popular Bank or Public Bank - is publicly controlled. It's a public entity. The government chooses its own monetary policy. And two, their expansion, that double-digit growth that we've been witnessing for years now in China, I think it's mostly explained by those two factors, i.e., its sound monetary policy with created money going towards increasing productivity, supply, demand and ultimately quality of life. It's money made by the people, for the people.
Niall: Yep. But I wonder about something. Three months before, four months before he was assassinated, JFK supposedly signed an executive order, 11110, in which it allowed for issuing so-called greenbacks, interest-free money that effectively it was government money, as opposed to via the banking cartel. I've wondered if that had a ....
Joe: You don't have to wonder because it obviously did. When somebody like that gets into power - someone with a conscience gets into power in a major country like the U.S., there's a few very obvious things that will quite quickly come into focus as to what the problem is and what can you do about it, you know. If you're halfway intelligent, it's the corrupt banking system and well from talking about it, the way money is issued and the way money is made on money at the peoples' expense, it's the warmongering of the psychopath in power who wants to kill soldiers and keep people in fear and keep the entire world in a state of fear, and well, those are the two main things, you know.
Pierre: And the first decision, the first memorandum signed by Lyndon Johnson after Kennedy's death ... Was first cancel the saver-backed greenbacks. And now some people wonder, but wasn't it the military industrial complex that was behind the assassination? Some others wonder was it the banking system. Some others wonder was it the CIA, but when you dig behind the veil, you see that they are the main - the same people pulling the same strings of intelligence agencies, of banking corporations and industries in general.
Niall: Well on 911 supposedly, I'm not sure about this because I haven't really looked into it, but I've seen some compelling evidence that said that the precise places that were hit on the two World Trade Towers, World Trade Centre Towers and the section of the Pentagon that was impacted or blown up, happened to be places where some serious investigations of high level financial crimes were taking place.
Joe: It was also building 7.
Niall: Building 7 and building 6.
Joe: Yes, they were demolished as well.
Niall: Yeah. There was an explosion reported there before the tower even fell. "And housed in there was the Eldorado Task Force, an inter-agency money laundering watch group that had been investigating crimes associated with the plundering of Russia in the early '90s." Yet, after 911, there was all sorts of - "Their task was switched to investigating terrorist finances" which led them nowhere of course.
Joe: Yeah, they did a lot on 911, more than just taking down a few towers. Anyway, I think we're going to leave it there for this week.
Keep an eye on SOTT.net and the forum for information pertaining to next week's show. So we hope you enjoyed it. It was great to have Ellen on. See you next week.
Niall: Until then...
Pierre: Have a good day. See you next Sunday.