MUST watch: Money as Debt - how banks create money
I previously mentioned this film by Paul Grignon in another post a few months ago, but it has been updated and definitely deserves to be featured in a separate posting:
Money as Debt (47 minutes)
A MUST watch to get a clue how the banks create money by lending, about FIAT money, fractional reserve banking, etc.
And while these words may sound intimidating, this movie explains how money works in an entertaining and very easy to understand cartoon. It’s actually humorous.
The money to pay the INTEREST on all the loans does NOT exist!
To create money to pay interest, we need more DEBT. And eventually the debt bubble bursts.
Why does the government BORROW money?
The LENDERS end up with all the MONEY.
The SOLUTION to all problems?
The banks operate as NON PROFITS and return the interest to society.
In 1913 Wilson Woodrow signed into effect the Federal Reserve Act. One of the many quotes in Money as Debt:
I am a most unhappy man. I have unwittingly ruined my country.
A great industrial nation is controlled by its system of credit.
Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men.
We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized word, no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.
- Woodrow Wilson,
President of the United States 1913-1921
Here’s another good quote:
Whoever controls the volume of money in our country is absolute master of all industry and commerce ... and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.
- James A. Garfield
assassinated President of the United States
This Rockefeller quote explains why I stopped giving interviews many years ago.
The media is as corrupt as anyone and refused to publish the truth about credit and credit scoring, resulting in a giant waste of my time every single time I agreed to an interview. The reporters meant well, the editors did the deleting and rewriting.
We are grateful to the Washington Post, the New York Times, Time magazine and other great publications whose directors have attended our meetings and respected the promises of discretion for almost forty years.
It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years.
But, the world is now more sophisticated and prepared to march towards a world-government.
The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the National auto-determination practiced in past centuries.
- David Rockefeller in an address to Trilateral Commission meeting, 1991
From http://paulgrignon.netfirms.com/MoneyasDebt/ProducersComments.html
…
In 1997, as a result of an inheritance, I was able to realize another long-held ambition. I set myself up as a digital video maker and produced several professional video projects.
In 2002 I was commissioned to produce a video for United Financial Consumers (http://www.ufc.ca), a small organization dedicated to defending credit customers from the predatory practices of banks. I taped a 5-hour seminar explaining an innovative strategy for reclaiming the equity banks defraud us out of when we sign for a so-called “loan”. I prefaced this rather abstruse lecture material by telling “The Goldsmith’s Tale” in animation form. Entitled “Money as Debt”, it was my first full animation project.
Other monetary reformers saw this original “Money as Debt” cartoon and approached me about using my animation as part of an information package being sent to municipal politicians, urging municipalities to demand interest-free loans from our publicly owned Canadian central bank, the Bank of Canada.
The Canadian Action Party, a federal political party devoted to monetary reform posted it on their website.
Two gentlemen from the American Monetary Reform Institute in the USA also saw the animation. One described my cartoon as “far and away the best explanation of fractional reserve banking” he had ever seen. They requested that they be able to use it for their educational purposes as well.
I informed them that I was in the process of writing a much-expanded script. I knew there was a lot more to explain and felt certain that an animated cartoon was the best way to overcome the eyes-glazed-over reaction one often encounters when trying to interest people in this subject. I asked them if they could wait a few months until I had finished the project to my satisfaction.
They agreed to wait and to assist me. Their avid interest in the project spurred me on. I worked day and night (12 -20 hours per day) for 6 months to complete the movie.
My new US contacts were able to provide me with very valuable information and feedback on my script. One of them, a senior member of the Institute, had learned this information directly from US Congressman Wright Patman, who was Chair of the House Banking and Currency Committee for 12 years.
With the help of my partner Tsiporah and my neighbour and voiceover man, Bob Bossin, the final script was edited and rewritten numerous times. Money as Debt is now a colourful, fast-moving 47- minute animated short feature that explores the basic concepts of money creation in words and pictures that are not only clear but also enjoyable. It is intended for all audiences, including elementary school children. My particular hope is that it will convince environmental, social justice and electoral reform advocates that monetary reform is essential to the goals they hope to accomplish.
Money created as interest-bearing bank credit is a magic trick, a fraud - now 3 centuries old; one that very few people have seen through despite, or rather because of, its utter simplicity.
It is my intention to make this mysterious debt-money system comprehensible to everyone. It is also my intention to foster sufficient understanding of the problems with this money system that citizens will be motivated to join the monetary reform movement and/or create local alternatives to the global monetary system - a system in which most of the productive people of the world are collectively chained to an ever-increasing and perpetually unpayable debt.
This is a system designed for elite control of the people by those who have given themselves the privilege of creating money. It is also, I believe, a system that is designed for catastrophe. As the movie explains, there can be no sustainable civilization without a sustainable money system
...
Not that I’m hoping for someone to die, but I’m missing that inheritance.
I find myself completely unable to EXPLAIN how CREDIT REPORTING and CREDIT SCORING make this exploiting system possible.
In short, a large part of the population is HAPPY with the way things are because they BENEFIT. They are the people with the power and resources to make a difference. But they see no reason to do so because they value their property and money. This includes many people who cheerfully buy ID theft protection (another giant scam), pay the credit bureaus to monitor their credit reports and waste their time on reviewing the reports and worrying how to get a little closer to an 800 FICO score.
The rest of the people are the suckers who borrow lots and at high rates and who make it all possible.
When it comes to documenting how horrible the system is, I just run out of time. And no matter how many screenshots I post, I think most readers just don’t get it. So unless the information is packaged as a cartoon, I’m wasting more time.
I started at http://creditlegislation.org/ and I posted the screenshots to document that Fair Isaac ADDS entirely FICTITIOUS late payments to consumer credit reports.
Notably, these lates are only in reports containing charged off accounts. The lates are NOT added by creditors, but Fair Isaac designed its credit scoring software to “misinterpreted” the reporting of the charged off account on Equifax reports.
One of these fictitious late payments can lower FICO scores by 50 points or more! Fair Isaac cleverly targets people who most likely do not have the resources to sue. I’m not aware of a SINGLE suit.
The obvious result is that a consumers who had bad credit years ago continue to suffer from artificially low scores because those recent fictitious lates are rated as if the consumer had just recently paid late.
And that’s just ONE of MANY credit scoring and reporting “bugs.”
I personally notified Fair Isaac’s Barry Paperno and I established that it’s not a unknown “bug.” Fair Isaac did NOTHING to fix its software. They ignore me, because they can. They know that legislators and regulators couldn’t care less about the American people, they only care about the BANKS. And every low FICO score very likely creates more money for the banks.
Another very interesting fact is that in the 2003 FACT Act, Congress took away the private right of action to sue persons obtaining credit report data for promotional purposes without providing a firm offer.
The government encouraged creditors and especially mortgage lenders to send any and all promotions, including false statements of being pre-approved for mortgages. The most targeted consumers have derogatory data on their credit and/or low credit scores, as they are most profitable.
I’m going to have to look into the American Monetary Reform Institute at http://www.monetary.org/.
And I just wish I had more time, have to work on my Focus filing due this Friday.
As I’ve been talking to “well off” friends and neighbors about the credit crisis, credit reporting and scoring, it has become totally clear that they either don’t believe me or they think it’s not a problem, mostly because it’s not THEIR problem.
They are CONVINCED that their investments will continue to produce income and that everything will be fine and dandy, at least for them. Their solution is to recommend that everybody get their own investments.
Somebody posted a link to my Open Letter to WaMu at a blog and commented that he didn’t understand why I stopped paying. He suggested to simply PAY OFF the $8,000. So many people WITH lots of money can’t conceive the notion that one might not have an extra $8K sitting around.
And that takes me back to “RESISTANCE: 20 reasons to stop paying your credit cards.”
The people who HAVE the money will do nothing to change this corrupt system.
If you have a better idea, please post a comment.
Posted by Christine on 02/11/2008 at 12:01 PM
Action Alerts • PUBLICIZE the issues • (2) Comments • Permalink
Hi Christine,
Unless you have already read it, here is a very good article by a Mr. Mierzwinski with PIRG. Written in plain talk and certainly along the lines of the Woodrow Wilson quotes.
http://www.pbs.org/wgbh/pages/frontline/shows/credit/interviews/mierzwinski.html
The consumer program director of the U.S. Public Interest Research Group (U.S. PIRG), Mierzwinski has authored many reports on credit cards and credit reporting. Here, he talks about the 10 banks that dominate the credit card industry, the power of its lobby in Washington, why the industry doesn’t want the states to have any regulatory power, and the different bills the industry has helped kill over the years that would have protected consumers from unfair practices…
Q...And this is all throughout Congress? It’s not like the Democrats or the Republicans are in favor with the credit card industry?
A. Credit card companies have power over the entire Congress. Absolutely. The banking committees are usually dominated by members from the states where the credit card companies and the other banks do business. ...
The consumer advocates against the credit card industry is really David vs. Goliath. We’re David, with our little bag of rocks, and Goliath is crushing and influence peddling. They’re massively powerful compared to the few consumer advocates. And not only the credit card companies, we’ve [also] got to look at the banks who are ripping people off by charging them bounced-check fees; we’ve got to look at the rent-to-own stores, the mortgage scams and everything else. So the credit card companies are only one of the industries that a very small number of consumer groups try to fend off on a daily basis. And again, none of the consumer groups make any political influence peddling through political contributions, so we’ve got one hand tied behind our backs to start with.
Q. What, in your view, are the problems of the credit card industry?
A. Well, I think people should understand the credit card industry is a very concentrated pyramid. There are a few very large companies that dominate the business. Maybe 10 companies have 90 percent of all credit card accounts; all credit card payments owed are owed to 10 companies. Doesn’t matter that 6,000 credit unions and tiny banks might offer a credit card—these 10 companies control the business.
The main practices of the credit card industry that hurt consumers: First, many of them are doubling or tripling your interest rate if you miss one payment or if your credit score declines, even if you miss a payment to a different company, they could increase your interest rate. So first, penalty interest rates for missing one payment. Second, deceptive and misleading offers of zero percent interest or $100,000 limits on a titanium card that nobody qualifies for. And third, they lie to us about how much it costs to have a credit card. The credit card companies refuse to tell us that if we only make the minimum payment that they request, that it could take seven to 15 years to pay off even a $1,000 balance, even if we never use the card again. ...
I hadn’t seen that, thanks.
I have had some communications with Ed Mierzwinski some time ago, see http://creditsuit.org/credit.php?/blog/comments/credit_reports_contain_serious_errors/
The bottom line is that they do NOT want any changes.
PIRG has LOTS of $$$.
Very much like ACORN, they talk about how this, that and the other sucks and that’s that.
PIRG doesn’t hold legislators responsible. They don’t name NAMES, they don’t file lawsuits, they do NOTHING to make a difference.
Talk is cheap and they take NO action.
Are they afraid to lose their jobs if things got better for consumers?
