Busted: Bankers and The Global Economy

April 18, 2008

Theft by Inflation

Money and inflation rule the roost. M3, the broadest measure of the U.S. money supply, shot up from $3.7 trillion in February 1988 to $10.3 trillion 14 years later, when the Fed quit reporting it. Undoubtedly, the Federal Reserve did not want to report a realistic measure of inflation in such an obvious fashion. By the spring of 2007, inflation according to M3 statistics was growing at a rate 11.8 percent per year.

Where did all this new money come from? The U.S. government did not step up its output of coins, and no gold was added to the national money supply, since the U.S. government went off the gold standard in 1933. This new money could only have been created privately by “bank credit” advanced as loans.

The problem with inflating the money supply with banking credit is that the process inflates prices. More money competing for the same goods drives prices up. The dollar buys less, robbing people of the value of their money. This rampant inflation is usually blamed on the government, which is accused of running the dollar printing presses in order to spend and spend without resorting to the politically unpopular expedient of raising taxes. Technically, the only money the U.S. government actually issues are coins.

Price inflation is only one problem with the central banking model of private money creation. Another is that banks create only the principal but not the interest necessary to pay back loans they create. Since virtually the entire money supply is created by banks themselves, new money must continually be borrowed into existence just to pay the interest owed to the bankers. A dollar lent at 5 percent interest becomes 2 dollars in 14 years. That means the money supply has to double every 14 years just to cover the interest owed on the money existing at the beginning of this 14 year cycle. Figures from the Federal Reserve confirm that M3 has doubled or more every 14 years since 1959, when the Fed began reporting it. The translation is that every 14 years, banks siphon off as much money in interest as there was in the entire economy 14 years earlier. This tribute is paid for lending something the banks never actually had to lend. This is doubtless one of the greatest scams ever perpetrated as the private scam now affects the entire global economy. The privatization of money is the underlying cause of economic slavery, poverty, underfunded government, and an oligarchical (corporate) ruling class that fights to maintain power.



  1. I’m tired of being ripped off. That is why I deal only in cash and stay away from debt. Inflation affects me, but I don’t help it along.

    Comment by rummagingron — April 18, 2008 @ 2:43 pm

  2. cash is the problem. it is cash that is loosing its value. It is the savers (cash holders) who are left holding the bag.

    Comment by doglar — August 24, 2008 @ 1:01 am

  3. I sincerely believe that banking institutions are more dangerous than standing armies.”
    How the Federal Reserve Bank steals our money
    “If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.

    Comment by rafa — November 6, 2008 @ 8:15 am

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