The Counterfeiting Cannibals of Canal Street

Video Rebel’s Blog

I am writing about the Bankers who are driving 7 billion people off a cliff towards the certain destruction of our economic life. Money is a difficult subject to understand but I think it is worth the effort if it prevents Wall Street and the City of London from starving half a billion people to death and risking World War III for the rest of us.

I want to start with a simple but basic equation: M x V = P x T. The Money Supply M times the Velocity V or the number of times money changes hands in a year equals Prices times Transactions. We are already in a Depression. The real inflation rate in America is 8.5% so even if economic growth is 1.5% the economy is contracting 7% a year. Native born Americans under 55 have lost 4.9 million jobs since 2007. Depressions used to be called Monetary Contractions. Real wages are contracting. We have doubled the number of people receiving Disability since 2007 because the government needs to hide millions of unemployed people.  

080812top-Copy_small The Counterfeiting Cannibals of Canal Street

Under our present system Bankers are allowed to charge us interest on money they created out of nothing. The Bankers create our money as a loan at interest. The Federal Reserve makes paper money and charges us interest for the privilege of using it. Banks create checking account money when we sign loan papers and promise to pay interest. If we never borrowed money, there would be none and we’d be walking around with bushels of wheat to barter for things. Notice though that when we repay a loan we are contracting the money supply.

Another point of interest is that when we default on a loan or the bank forecloses on a farm or a house that the money supply also contracts. That’s what happened in America in 1933. Homes and farms were foreclosed. Loans were called in. Businesses shut down and were boarded up. As these loans were cancelled, the Money Supply contracted. At least 3 million Americans starved to death because the Federal Reserve and the banking system would not create enough money to do business.

Depressions are created in the West by the accumulation of Unpayable Debts. The economy slows down because everyone has trouble either making interest payments or collecting what is owed them from someone with too many loan payments. The Depression in the US in 1933 cancelled Unpayable Debts by defaulting on loans. In 1923 Germany Hyperinflation cancelled debts. One man paid off his farm loan by selling two eggs. Germany did not create enough money to do business until Hitler became Chancellor. In America the Federal Reserve and the Treasury did not create enough money to do business until the war in Europe started. Let me repeat that more than 3 million Americans starved to death while we waited for the Federal Reserve and the Treasury to what they were supposed to do which is to create a sufficient amount of money to do business.

We need to talk about the fractional reserve banking system. If Mrs Smith deposits $100 in her account, her bank can loan out $1,000 because they are allowed to loan out ten dollars for every dollar on deposit. Take another look at that M x V side of the above equation. Suppose there is a Bubble in housing and six trillion dollars are loaned out based on $600 billion in deposits. The Money Supply will increase by a net total $5.4 trillion. That increases the M x V side of the equation must now equal the P x T side. The Price of housing and building supplies goes up which encourages a whole new wave of speculative buyers to rush into the market thus further increasing the number of Transactions. This is called a Bubble. They are inherent in factional reserve banking. The problem is that Bubbles burst and millions of people are financially ruined.

When people have trouble making their mortgage payments, they can lose everything in foreclosure. That is the end of the Bubble. It is also called a Monetary Contraction or Depression. Notice what happens when ten million homes go in to foreclosure. On the way up a $30,000 deposit became a $300,000 home loan. Suppose the home is sold at auction for a $100,000 loss to the bank. Multiply that $100,000 times ten million homes. The resulting trillion dollars is subtracted from M x V. This a serious Monetary Contraction which explains why the banks are terrified of foreclosing on loans where there is no recovery at auction.

Now we are ready to understand reform.

If Bubbles are created by fractional reserve banking, then we ought to ban it. Henceforth, only government should be allowed to create paper currency and checking account money. And do so without charging interest. Suppose we wanted to create money without inflating prices. I would recommend that Money M be increased at the same rate as Transactions T. If the ratio between the two is constant, then we will have price stability. In current terms we could safely increase the American Money Supply by $550 billion dollars a year.

We need to repair America’s aging infrastructure. We have 1,700 dams and levees in desperate conditions. We have thousands of bridges and an unknown number of roads, sewers, water treatment facilities and other basic structures that need either repair or replacement. I propose that we give $100 billion a year to the states based upon their  population so a state with 6 million citizens would get 2% of that money or $2 billion a year. This will create jobs.

Economists all agree that if we increased spending on investment by $400 billion a year that we would create more jobs than if we just gave that money as a transfer payment to programs ranging from Food Stamps to Healthcare. What I propose is that corporations of sufficient size go directly to the newly revised Federal Reserve and get zero interest loans of $100 million or more provided it is for an investment on American soil that increases productivity. Raising output eliminates bottlenecks and inflation. Small businesses and farmers can go to either the Small Business Administration or the Department of Agriculture to expand output. Instead of interest a fee would be paid as is the custom in Muslim banks. The actual money for these loans would come from the Federal Reserve but the fees would be collected by reformed banks who would be in charge of the loan process and the collection of payments.

In a year when the first payments are received this money can all go to fund transfer payments for Social Security and Healthcare.

I should point out to new readers that these corporations would be unlike today’s if I had my way. If we had a military coup, our soldiers could invade offshore bank havens to seize the assets of both War and Banking Criminals. That would include stocks, bonds, real estate and bank deposits. These funds plus all the money held by tens of thousands of government agencies listed at would pay for Debt Cancellation. Government debt should be made illegal. The savings on interest payments plus full funding of pensions and $100 billion a year in revenue sharing for infrastructure should be sufficient to ban property taxes which in some states are called school taxes.

My regular readers know that I would like to give every adult citizen $20,000 in grants from those seized assets to be used to pay off debts or to fund retirement or make a down payment on a home. I would also recommend that we take all of the scientific advances made by the Secret Government and give those patents to new corporations along with loans in the hundreds of millions if not billions. Shares in these new technologies should be distributed to people of a certain age who would benefit the most from stocks whose value would double 7 times in 15 years.

I believe the Secret Government has planes that fly 40,000 mph (64,373 kmh) and new materials that withstand that much friction. They have a superconductor and free or nearly free energy. The latter should be used to replace nuclear power plants near earthquake fault lines to prevent half a dozen Fukushimas. They also probably have a Universal Vaccine that makes your body work better. And they definitely have batteries that are 20 years in advance of what is presently available.

I should explain the title of this article: The Counterfeiting Cannibals of Canal Street.

Bankers are counterfeiters because they create money out of nothing and charge us interest. Bankers are cannibals because they produce nothing but interest payments, Bubbles, Depressions, wars and mass starvation. Foundations have done studies telling us that when the Dollar Dies, half a billion people will die from starvation or in Food Riots. Bankers are worse than cannibals in some primitive society. They ought to know that what they are doing is despicable and beyond contempt. I chose the words Canal Street in the above title for two reasons. Canal Street is alliterative and sounds better than Wall Street. And I always loved New York. Canal Street and also Hester Street are places in Manhattan where vendors sell fake Prada and Gucci products. But at least these people are making something their customers want to buy.

Bankers are worse than pond scum. They are the lowest form of human life and should be forever held in contempt.

Below is a video from an IMF economist whose work on ending fractional reserve banking I wrote about before. I will cite that article below.