fractional reserve banking

Delinquent Finance – II

Delinquent Finance – II on February 4, 2012

Delinquent finance has today a religious significance because it is playing a major part in the enslaving of the entire world by the conscious or unconscious enemies of God, the smartest of whom have to be well aware that their ultimate purpose is to send every single soul down to Hell. However, before we present any other piece of their financial machinery, it is necessary to understand the full delinquency of fractional reserve banking, first introduced in the “Eleison Comments” of October 29, last year.

Fractional reserve banking means that a bank need only hold in reserve, ready to be paid out to customers, a small fraction of the money they put into circulation. It arose in Europe in the late Middle Ages when bankers observed that if they took in as deposits, say, 100 ounces of gold and gave out 100 slips of paper certifying that the owner of the certificate could claim so much gold from the bank, then almost never at any one time would more than, say, ten customers ever bring in a certificate to claim back a deposit of gold. And as long as the people had confidence that the bank could and would always have gold to give in return for certificates, then these pieces of paper could happily serve as money, and as such they would circulate amongst the people.

However, the bankers realized meanwhile that in the normal run of business, they needed to hold in reserve only ten ounces of gold for 100 certificates, or, if they held 100 ounces of gold deposited with the bank, then they could issue 1000 paper certificates. Of these, 900 would have nothing at the bank to back them. They would be “funny money,” created by the bank out of thin air, but that would not matter so long as not more than a proportion of one customer out of ten wanted to cash in his paper for a piece of gold.

If they did, then the bank would not have the gold for all the certificates, and either it rapidly borrowed some gold from elsewhere to hand out, or the people risked realizing what a confidence trick had been played on them. If their confidence in the bank then vanished, everybody would want their money back at once – bank runs are only made possible by fractional reserve banking – and large numbers of customers would be left holding in their hands nothing but worthless pieces of paper. The bank would of course be bankrupt, and one could hope it would disappear altogether.

Thus wherever there is fractional reserve banking, the bank is intrinsically fragile, and it is, ultimately, playing a confidence trick on its customers. Extrinsically, it may protect itself by having a guarantee of support in case of need from, often, a central bank, but that guarantee is only as sure as the guarantor, and in the meantime it gives a dangerous power to any central bank. Thereby hangs another tale of financial delinquency, but that of compound interest must come first.

Power is at stake, and ultimately souls. Let nobody say these questions have nothing to do with religion. Think of the Golden Calf.

Kyrie eleison.

Necessary Child

Necessary Child on December 24, 2011

Constantly in the news today is the world’s financial and economic crisis, especially in Euroland. A Dutch commentator (courtfool.info) proposes for his country a classic solution: get State money out of the hands of the banksters. Christmas may seem a strange moment to consider such money problems, but the whole question is whether apparent solutions are real solutions.

Unless the Euro was positively designed as a means of forcing political unity upon the variety of European nations, it was, as a common currency for a dozen very different national economies, flawed from the start. To begin with it did enable the poorer member nations to borrow and spend, borrow and spend, while it did help the richer nations to export and lend, export and lend, but the process could not go on for ever. When the poorer countries could no longer manage even the interest on their debts, the richer countries were also threatened with the paralysis of their economies by the bankruptcy of their major banks that had made the foolish loans.

At this point the European Commission, the European Central Bank and the International Monetary Fund co-operate to provide emergency funding, in other words to solve the problem of debt by more debt! However, a condition of receiving these funds is that the hopelessly indebted countries must submit to international guardianship, which will impose spending cuts that make the national governments less and less able to rule. As for the richer governments, they too must make themselves unpopular by cutting spending, in order to cover the losses incurred by their major banks’ foolish loans, says Mr.de Ruijter.

Now comes his solution. He says it is simple. Instead of pouring dozens of billions more into a Euro that is doomed to disappear sooner or later, and instead of having the international agencies impose spending cuts, “we can introduce State money.” A State central bank will replace the present central bank which, as in almost all States of the world, is now under private control. The State bank alone will be authorized to create money. All loans will be supplied as State money. All private or non-State banks will be forbidden to create balances out of thin air, in other words fractional reserve banking will be forbidden (cf. EC 224). These non-State banks will receive a fee for their services, but they will not be allowed to charge interest.

And who will control the State bank? Mr.de Ruijter writes, “It will fall under the responsibility of the Minister of Finance, and it will be controlled by Parliament. A commission of well formed people will watch over the long term interest of the money system.”

Well and good. But, Mr. De Ruijter, who will do the forming of these “well formed” people? At what school will they learn truly to look after the common good? And what motivation will be given to them powerful enough to prevent them from being cunningly bought out by the banksters? Democracy? It is democracy that has landed Europe in its present mess!

There is only one true and complete solution: the divine Child in the Crib of Bethlehem. Happy Christmas, dear readers (and thanks to all of you that sent me a Christmas card, but thanks also to those that didn’t!).

Kyrie eleison.

Delinquent Finance I

Delinquent Finance I on October 29, 2011

The imminent collapse of global finance, and/or the advent of global finance on the way to global government which that collapse has been designed to bring on, should be making souls think: how did we get into this mess, and how do we get out of it? If Almighty God has had no part to play in such a serious crisis, then obviously he is not serious but just a feel-good Sunday pastime. On the other hand if he is as important as once the builders of medieval cathedrals obviously thought, then neglecting him will have had a central part to play in today’s triumph of finance over reality.

Indeed one must go back to the Middle Ages to understand where today’s disaster has come from. As the Faith began to droop after the high Middle Ages, so men became more and more interested in Mammon, the other great motivator of their lives (Mt.VI, 24). Thus money, natured to be the servant of the exchange of real goods and services, was unhooked from nature to become modern finance, master of the global economy. A key step in this process, leading directly to today’s mountains of unpayable debt in all directions, enslaving the world to the visible bankers, or rather to their invisible controllers, was the post-medieval spread of fractional reserve banking.

When money serves the economy, a wise State will ensure that its total quantity in circulation goes up and down with the total quantity of real goods to be exchanged in that economy, so that its value will remain steady. Too much money chasing too few goods will mean its value drops by inflation. Too little money pursued by too many goods will mean its value rising, by deflation. Either way its changing value destabilizes all exchanging of goods. Now if banks, in which depositors deposit real money, need keep only a fraction of that real money in reserve to back a much larger quantity of paper money which they can put into circulation, then by putting too much or too little into circulation, they can play with the value of money and make fortunes by lending out cheap money and demanding back expensive money. Thus financiers can take over control from the State.

Worse, if fractional reserve banking enables banks to disconnect money from reality and fabricate it at will, and if they can charge even slight compound interest on their funny money, then logically they can – and do! – suck all real value out of an economy, reducing most depositors to borrowers and most borrowers to hopeless debt-slaves, or mortgage-slaves, taking care only not to kill off completely the goose laying the golden eggs for their benefit. The divinely inspired wisdom of the law-giver Moses was to put brakes on all lenders’ power by cancelling all debts every seven years (Deut.XV,1–2), and by restoring all property to its original owners every 50 years (Levit.XXV, 10)!

And why did Moses, great man of God and therefore man of deep “spirituality,” concern himself with such materialistic questions? Because as bad economics can turn men to despair, towards Hell, away from God – look around you, today and above all tomorrow – so good economics make possible a wise prosperity which in no way worships Mammon, but makes it rather easier to trust in the goodness of God and to worship and love him. Man is soul and body.

Moses would surely have smashed fractional reserve banking, like he smashed the Golden Calf!

Kyrie eleison.

Quaking Responsibility

Quaking Responsibility on March 26, 2011

Many people today have such a sentimental idea of God, or such a poor idea of his power, that they cannot imagine him punishing, let alone using the material universe or its weather to punish. Yet there is a strong argument that the very instability of the earth’s tectonic plates, giving rise to disasters such as we have just seen in Japan, was a result and punishment of men’s sin. Here is the argument (of which I for one never learned anything in school):—

Before Adam and Eve sinned, human nature was a glorious creation of God, strong and stable, but not unbreakable. Revolt against God could break it. So when Adam and Eve committed original sin, all their descendants (except Our Lord and Our Lady) inherited a wounded nature, so that all of us can suffer, have to die, and only with difficulty control our lower nature. Similarly with the physical nature of our planet. Before the Flood in the time of Noah, it was like a paradise garden, a glorious creation of God, strong and stable, but not unbreakable. The universal corruption of mankind (Gen.VI,5,11,12) could and would break it.

Now many geologists today may have no faith in the Flood as described in the Bible, but they do believe in some almighty prehistoric convulsion of the earth’s surface as a way to explain, for instance, the fossile evidence of marine animals to be found today high in some of the earth’s mountain ranges,such as the Rockies in North America. Originally, they speculate, the rocky circumference of the earth was kept farther out from the earth’s centre by huge subterranean chambers of water, on which the rock pressed down by gravity. If then that spherical shell of rock began anywhere to crack, the water would burst upwards, flooding the open surface above, and the rock would crush downwards to take its place. The huge tensions involved could spread the flooding and collapsing all over the world. (Note that from Scripture it seems clear that the waters that made the Flood not only rained down from above but also burst up from beneath: Genesis VII, 11; VIII, 2.)

But it is obvious that if all around the earth its circumference of rock collapsed inwards to form a smaller circumference, there would be too much rock for too little space, so that it would not only crack, to form the clashing tectonic plates, but it would also crumple, to form, amongst other observable features of our planet’s geology today, the huge mountain ranges, lifting marine animals way above the sea. Mount Everest is still being lifted a few centimeters each year, by the plate of India being pushed beneath the Eurasian plate of China and Tibet.

Thus as original sin generated from then on punitive tensions within human nature, so mankind’s prehistoric corruption generated tensions within the earth’s crust which underlie all such historic earth- and seaquakes as we have just seen in Japan. “Nature,” said Our Lady at La Salette in 1846, “is asking for vengeance because of man, and she trembles with dread at what must happen to the earth stained with crime. Tremble, earth, and you who proclaim yourselves as serving Jesus Christ and who, on the inside, only adore yourselves, tremble, for God will hand you over to his enemy, because the holy places are in a state of corruption.”

Let us tremble. Let us pray!

Kyrie eleison.

81 / 121 Re-Structuring

81 / 121 Re-Structuring on June 27, 2009

Tomorrow, or the day after, there is hardly a box outside of which it will not be necessary to think. In Church and world, the mentalities and structures of so-called “Western civilization” are collapsing around our ears. Still the mass of Western souls are preferring to slumber on in their audio-visual dream, but reality is closing in all the time – they may awake not before they are shackled into the New World Order.

The USA has for nearly a century acted as the shield and sword-bearer of “Western civilization.” Now its financial, economic and political power structures are melting down in a welter of greed, corruption, selfishness and dissolution slung between Wall Street, New York, and Washington, DC. However – let it never be said too often – “We the people” have only ourselves to blame. We have wanted the cause: godless materialism. Now we must live with the effects: the final breakdown of fractional reserve “banking,” of paper “money,” of democratic “politics.”

City structures are crumpling. In Flint, Michigan, original home of General Motors presently employing 8,000 local people where once it employed 79,000 and now bankrupt, local politicians are pioneering an idea to save their dwindling city: raze entire districts and return the land to nature. This idea so appeals to the Federal Government that another 50 cities have been earmarked as potential candidates for salvation by the bulldozer, including Detroit, Philadelphia and Baltimore.

State structures are failing. In California, Controller John Chiang said a few days ago that if State lawmakers cannot quickly solve California’s 24 billion dollar deficit, then next week he will have to pay State debts with paper promises to pay. “Unfortunately,” said he, “the State’s inability to balance the check-book will now mean short-changing taxpayers, local governments and small businesses.” It is easy to imagine how these will react, but it is not easy to imagine how the budget deficit will be solved.

As for our national structures, if we will not acquiesce to their being merged into the international New World Order, then surely a Third World War will be engineered to persuade us, starting with an 81/121 (a 9/11 squared)! Yet all these collapses pale in comparison with Vatican II, because it was the Catholic Church that was upholding “Western civilization.” If the Catholic collapse is not soon reversed by the Consecration of Russia to the Immaculate Heart of Mary, then one must wonder if the healthiest elements in the Church will not need re-structuring as an underground resistance movement.

Kyrie eleison.

Credit Crunch

Credit Crunch on September 8, 2007

A global financial problem may soon be changing the lives of all of us. Let me offer a few answers

(A) to a few elementary questions (Q):

Q. What is the problem? I have not yet felt anything. A: The problem is a credit crunch, or, a worldwide lack of money. Money circulating in an economy is something like oil circulating in an engine. Just as an engine will seize up if there is not enough oil, so an economy will seize up if there is not enough “liquidity,” or money circulating.

Q: I might understand one or a few nations being short of money, but how can they all be short at once? How can such a problem be global? A: Because the unprecedented ease of communications and trade between modern nations by, for instance, airplanes and electronics, is making the world into a “global village” where all the national economies interlock, so that if one nation, especially the USA, sneezes, they all catch cold. That is what is now happening.

Q: Still, how can not enough money be circulating amongst all the nations at once? A: Because the 300-year rise of “fractional reserve banking” means that the vast amount of money circulating worldwide comes into existence in the form of a loan. For instance you are most likely unaware that there is every probability that even the cash in your pocket was borrowed by your country’s government from the country’s (non-government) central bank, to which the government is paying interest on that cash! Now for a loan to take place, both lender and borrower need confidence, the lender that he will be paid back, the borrower (if he is honest) that he will be able to pay back. This confidence has been dwindling in a big way, worldwide, since about July.

Q: Why? A: Mainly because of a new form of debt paper being introduced a few years ago called “derivatives,” named from debt deriving from other debt. Even many experts are not exactly clear how derivatives work, which must be part of the problem. However, one very successful American investor, Warren Buffett, who must have studied them, has called them “weapons of mass financial destruction.” Indeed. There is now a shaking 30 trillion US dollar mountain of derivatives threatening the world’s financial system.

Q: What do we do? A: One, be ready for hardship. Two, do not be surprised if a 9/11 Part II happens to distract us. Three, turn to the Gospel:— “Seek ye first the Kingdom of God, and all these things will be added unto you.” “Fear not him who can harm only the body. Fear him who can throw body and soul together into Hell.” Economics are only of things bodily.

Kyrie eleison.