Summary of 'The Money Myth Exploded'

Thanks to my friend Francesco for first sending me this story, written by Louis Even, which brilliantly explains in a simple way the insanity of the money system. The following is a summary of the story's narrative with my own comments in bold. It should be noted that until widespread attention was given to this subject via the Internet, and possibly still even now, many bankers and economists confessed to being ignorant of how money actually worked, and how faith-based it was.

'A shipwreck leaves 5 survivors, whose makeshift raft is carried by the waves to an island, which they come to call 'Salvation Island'. The 5 are a carpenter, a farmer, an animal breeder, an agriculturist and one who is both a prospector and a mineralologist. Finding the island to be rich in semi-domesticated animals, soil suitable for cultivation, fruit trees, large stands of timber, and signs of rich timber deposits, each could serve the common good with his own particular talent.'

The clear indication here of course is that the members of society have between them, like the islanders, all the diverse skills required for a society to function, given the abundance of materials on our planet. 

'Over time, houses and furniture are built, and the fields are tilled and seeded. The island has true wealth, that of food, clothing and shelter, of all the things to meet human needs. Any surpluses of production are exchanged for other surpluses. It isn't a perfect life but is still preferable to urban depressions suffered in the past. There are no taxes or fear of property seizure by bailiffs. All they are lacking is a system of exchange preferable to pure bartering, whose drawbacks are that value is not always easy to compare between items, and said items for exchange are not always produced at the same time. Apparently, they have no idea how to set up an effective money system.'

It might seem strange that they couldn't think of something usable, but the setting up of a money system is something that seems to have eluded many over the years, and of course certain equipment is usually required.

'Just when it seems to be an unsolvable dilemma, another shipwreck refugee rows onto the shore. He happens to be a banker called Oliver, bespectacled, wearing a smart suit and full of confidence about his ability to solve all their problems very quickly. The 5 workers immediately defer to this angel sent from the heavens, and it is made clear that no work is expected of him except to manage their money. Oliver has paper and a printing press with him, and also a small barrel 'full of gold', which he explains must be hidden as befitting 'the soul of healthy money'. After printing $1000 in $1 notes and presenting each worker with an equal share, he buries the barrel of gold.'

Note here the immediate deference given to the man in the suit, whose perceived high status and confident demeanour are never questioned. The workers are immediately in a place of inferiority and blind trust. The uninspected barrel of gold is all that's needed to justify the legitimate printing and distribution of paper money.

'Oliver thinks to himself, 'My! How simple it is to make money. All its value comes from the products it will buy. Without produce, these bills are worthless. My five naive customers don't realise that, and their very ignorance makes me their master.' Oliver carefully explains to his workers that the money is his, based on his barrel of gold, and that they have to pay 8% interest on the loans from Oliver. They all sign a paper, binding themselves to pay back both the 8% interest and the principle (the amount loaned) under penalty of confiscation of property. Oliver explains that this is 'a mere formality' and that he has no interest in their property. None of the 5 workers, so happy to have these precious pieces of paper money in their hands, question the friendly banker.'

We all grow up associating these attractive pieces of printed paper with monetary value, so who wouldn't feel happy to be given large numbers of them? We are also well-conditioned through school education, television and print media, to trust confident people who look smart and appear to have all the answers.

'At first, everyone is delighted as trade doubles. However, Tom the prospector quickly realises that to pay back the full $1000 plus interest (i.e. $1080) is simply not possible with only $1000 in circulation. Oliver can quickly take over the whole island if he desires. Production has increased but the money hasn't, and all 5 of the workers are struggling to reach their debt obligations. Foreseeing this, Oliver agrees that only the interest need be paid back, and that the original $1000 can continue to be held by the men, though it is still owed and not cancelled. With the unlikelihood that all will be able to pay back and produce equal amounts, he encourages them to set up a tax system where those with more money pay more into the common pot, and all the money raised is collected in order to pay back the interest to Oliver. The workers are still dubious but accept it for now.'

The banker took pains to point out that his requirement of just the interest was a way of adapting to new circumstances driven by the unrest of the workers, which governments claim to want to do when the people don't react well to a certain policy. This is a ploy often used by those in power, and the idea that anything is pre-planned and secretive is of course written off as 'conspiracy theory' (see blog post entitled 'Conspiracy Theory - A Powerful Phrase!'). While it's true that this adaption to circumstances is true on a small scale, there is ample evidence that social engineering happens many years, probably decades, in advance, and that the clever people in charge, who are not buffoons as they are often portrayed, have already anticipated reactions and planned many moves ahead, like a grandmaster on the global chessboard. 

'Oliver exults, 'These people are stupid, and their ignorance is my strength. They ask for money and I give them the chains of bondage. They could mutiny if they wanted, but they are honest, hardworking men who have signed a pledge and are sure to honour it.' Drunk with power and possibility, he remembers the famous pronouncement , 'Give me control of a nation's money, and I care not who makes its laws.' If he can instill his philosophy into the minds of those who run society, the masses would be content to live in slavery with the elite as their overseers.'

We really could mutiny if we wanted, particularly when we consider our monumental advantage in terms of numbers to the tiny elite. Smaller nations have achieved the taking back of power, as seen in the largely-unreported action taken by the people of Iceland to see that the bankers' debts did not become their burden. Organisation isn't easy, but a first step is to realise the sophistication of the propaganda exercise going on all around us and to reject the predictable and limiting labels of 'extremist', 'paranoid' and 'conspiracy theorist'. Instead, we need to glorify thinking and careful consideration of reality.

'On the island, production was up but money tended to clot rather than circulate due to the pressing need to pay Oliver back his interest. Those paying higher taxes complained and raised their prices, forcing those paying less or no taxes to buy less. If one employed another, they got locked into a stalemate and constant friction over money and the struggle to meet the cost of living. Life seemed to have lost its joy and the work was simply and only a means to an end. They tended to blame each other for their plight. Harry the agriculturist concluded that 'progress' had spoiled everything, and Oliver's system seemed to have been designed to bring out the worst in all those involved in it. His friends, who weren't as stupid as Oliver thought, quickly agreed and confronted Oliver once again. 'Money's scarce because you take it all. We work and work but our situation gets worse and worse.' Oliver's only response is to try to convince them that 'a good banking is a country's best asset', and offer to mortgage their latest acquisitions and lend them more money (based on his hidden barrel of gold), as well as creating a 'consolidated debt' that can continually be increased ad infinitum (necessitating higher taxes), or at least for as long as there is ink for his printing press. In the end, it comes down to Oliver's belief that 'the degree of a country's civilisation is always gauged by the size of its debt to the bankers.''

This last section is fairly self-explanatory, but what leaps out is the successful 'divide and conquer' strategy, and all the stress and tension that is created by this need to pay back a debt that is carelessly and frivolously handled and, as we shall see later, not what it seems. Oliver's belief about debt and civilisation is certainly a message that is diseminated in the mainstream, where the United States of America is still thought to be the global superpower despite its mammoth national debt rendering it, in literal terms, the poorest country in the world. It survives of course on military might but also reputation, perceived collateral, faith and propaganda.

'After one final plea about the virtues of national debts and his being 'the torch of civilisation' on the island, he finally turns nasty and proceeds to remind them of the pledges they signed and finally demand back the money he originally loaned them as well as the interest! In other words, he starts to put the squeeze on the death grip. To maintain his control, he also employs the classic contrived tactics of maintenance of ignorance, constant distraction and ideological division. Observing a fairly even split between conservatives and liberals with varying levls of neutrality, Oliver sought to block the union of the islanders by creating and printing 2 weekly newspapers, each applying to the opposite ideology. The Liberal paper blamed everyone's troubles on the Conservatives' relationship to big business, while the other blamed the Liberals' political affiliations.'

The word mortgage (mort-gage) literally means 'death pledge'. The division tactics are plain for all to see in the print and televisual media, with their clearly biased views, affiliations and occasional large monetary 'donations' to political parties. What is puzzling is that the majority of the educated public can see the central illusion of 'the left' and 'the right', while still allowing it to be part of their discourse: cognitive dissonance. Originally meaning a simple division of pro-monarchy and anti-monarchy in revolutionary-era France, these terms have now assumed a contrived life of their own, with seemingly every talking point under the sun having a clear 'left' and 'right' position. This is not to mention the general similarities on most central topics, noted by many, between the 2 main parties in the U.K. and U.S. political systems at least, and this is surely true in many or most other countries' political systems.

'The story's conclusion starts with Tom the prospector finding an empty lifeboat containing a book called 'The First Year of Social Credit', which explains how money gets its value not from gold but from the products it buys. Money should involve credits passing from one account to another according to purchases and sales, so that it equals production, rather than interest being paid on newly-created money. Progress is marked by the issuance of an equal dividend to each individual, and prices are adjusted to the general purchasing power by a coefficient of prices. Tom sets up a system for his island mates which involves non-paper credits and a credit fund which is periodically increased but not to the detriment of others, with no interest payments required and money as an instrument of service rather than a master or executioner. Oliver no longer has the faith of the islanders and thus has no power and no more option than to disappear. The islanders find and smash open Oliver's barrel and find it...full of rocks, not gold!'

So, in a nutshell, the banker with his nice suit and air of respectability and wisdom had carved up the island based on nothing but the islanders' reverence to the idea of gold. Just as paper notes were originally I.O.U. receipts on gold and morphed into 'fiat' currency, which basically means that it's the only paper money which can be used, a recent study found that 97% of the 'money' circulating in the British economy was digital. Yes, 97% of what flows in the economy is a figure on a screen!, and since the gold standard was removed many years ago, it is basically being created out of thin air. 

Awareness of this fact is one thing, but there are various groups working on banking reform, which is a real possibility with the combined pressure of these groups. One of the more accessible is 'Positive Money' (website link below), who are gradually gaining mainstream exposure and educating the people on this most vital of truths. There is plenty of easy-to-digest- material on this subject, and you will never look at 'money' (or indeed faith) in the same way again.

links:

http://www.michaeljournal.org/myth.htm - the full story in text form with animated colour pictures 

http://vimeo.com/70176604- a humurous video version filmed in New Zealand

https://www.youtube.com/watch?v=jqvKjsIxT_8- the first of a 3-part animated series about money and banking

https://www.youtube.com/watch?v=dQ6hg1oNeGE- an animated story in German with English subtitles

https://www.youtube.com/watch?v=d3mfkD6Ky5o- 'Positive Money''s edit of the documentary '97% Owned', about the modern money system.