What is Social Credit?

Here are excerpts from a booklet published in 1981, written by Geoffrey Dobbs, of England, an early follower of the late Clifford Hugh Douglas, who was the first to explain the Social Credit Philosophy:
Please explain in simple terms, “what is Social Credit?”... Couldn't I sum up the gist of it in a single sentence? Certainly I could — even in two words: practical Christianity!... But let me expand it a little. Social Credit is a name given to a certain movement of the human mind and spirit (not an organisation) which stems originally from the mind and writings of a man of great insight and genius, the late Clifford Hugh Douglas. Its aim is to “bind back to reality” or “express in practical terms” in the current world, especially the world of politics and economics, those beliefs about the nature of God and man and the Universe which constitute the Christian Faith, as delivered to us from our forefathers, and NOT as altered and perverted to suit current politics or economics, which stem from a non-Christian source.

What is religion?
It is often the best Christians who are the most chary about getting involved in politics or economics, because experience has taught them that this commonly means putting «Caesar» before God, i.e. in modern terms giving some passionately held political or economic belief or “ideology” precedence over Christianity. Thus, if we define «religion» as that fundamental belief about the nature of things which determines and directs a man's life and behaviour (his life-policy so to speak), in such cases it is the “ideology”, whether of Left or Right or Centre, of this Party or of that, which is the man's actual religion; his Christianity is a secondary matter, a mere opinion which he favours but does not “bind back” (re-ligare) to the real world.

It was Douglas who wrote: “Christianity is either something inherent in the very warp and woof of the Universe, or it is just a set of interesting opinions.” To those who “adapt” the Faith to fit their politics or their economics, it is clearly the latter.

The pit of Social Credit Parties
I am not denying that some people who call themselves social crediters have fallen into this pit, notably those who have used the name to promote the interests of a political Party, with a certain petty success in Canada and New Zealand. The aim of a Party is «power and status for us and our group» which is quite incompatible both with Christianity and with Social Credit. It is significant that so-called «Social Credit Parties» always end by denouncing Douglas and departing further and further from anything resembling Social Credit policy...
There is all the difference in the World between changing Christianity to fit the “realities» of an artificial and man-made World, and changing the World to fit the ultimate reality of the Kingdom of God. Social crediters attempt the latter. They sometimes stray from the way, which is one reason why they need your help.

The social credit
This movement has been influencing the World for sixty years. Its effects have been widespread, but unpublicised. One of its gifts to the human mind and at least the English language is the term: the social credit (without Caps.) which is the name of something, which exists in all societies but which never had a name before because it was taken for granted. We become aware of it only as we lose it.

“Credit” is another word for «faith» or «confidence», so we can also call it the Faith or Confidence which binds any society together — the mutual trust or belief in each other without which fear is substituted for trust as the “cement” of society... Though no society can exist without some social credit, it is at its maximum where the Christian religion is practised, and at its minimum where it is denied and derided.

The social credit is thus a result, or practical expression, of real Christianity in Society, one of its most recognisable fruits; and it is the aim and policy of social crediters to increase it, and to strive to prevent its decrease. There are innumerable commonplace examples of it which we take for granted every day of our lives. How can we live in any sort of peace or comfort if we cannot trust our neighbours? How could we use the roads if we could not trust others to observe the rule of the road? (And what happens when they don’t!)

What would be the use of growing anything in gardens, farms or nurseries if other people would grab it? How could any economic activity go forward — whether producing, selling or buying — if people cannot, in general, rely upon honesty and fair dealing? And what happens when the concept of the Christian marriage, and the Christian family and upbringing, is abandoned? We see, do we not? — that Christianity is something real with desperately vital practical consequences, and by no means a mere set of opinions which are «optional» for those to whom they happen to appeal.

Of course, social crediters are not the only people who are trying to promote the social credit. Most decent, sane people instinctively do so, including many God-fearing people of other religions, and even some atheists who were brought up in Christian homes and are living on the moral capital of their parents or teachers. But social crediters are the only people who are consciously engaged in it, and know where they are going, so that they can point the way to those who are unconscious. (...)

Social Discredit
Just as there are social crediters, conscious and unconscious, trying to build up the social credit, so there are others — social discrediters — trying to destroy it and break it down, at present, with all too much success. The conscious ones include the communists and other revolutionaries, who quite openly seek to smash all the links of trust and confidence which enable our society to function until the Day of the Revolution dawns... But it is the unconscious social discrediters who are responsible, in the West, for the present success of the conscious ones....

Why do the shops and the manufacturers foist upon us so many shoddy, rubbishy, throw-away things, at outrageous prices, and trick us into buying them with clever packaging and advertising? Why are most repair services so scandalously slow, expensive and inefficient, and so many small services which made life easier now unobtainable? And above all, why do millions of decent working people of all classes take part in ironically named «industrial action» (strikes), deliberately designed to damage services to their fellow men?
Just think of the damage that has been inflicted on the public in recent years by dockers, firemen, railwaymen, miners, teachers, garbage men, ambulance drivers, hospital workers, etc. They can't be all com- munists or callous criminals! What on earth can make normal decent people descend to this spiritual level? We all know what it is. There is one common factor running through all this destructive and discreditable action: the compulsive need for more money to meet the ever-rising cost of living.

Money and the Experts
So now at last I have come to the question of money, which is what some people think that Social Credit is all about; but it isn’t! Social Credit is an attempt to apply Christianity in social affairs; but if money stands in the way, then we, and every Christian, must concern ourselves with the nature of money, and just why it stands in the way, as it surely does. There is a dire need for more people to look deeply into the operation of our monetary system, though that is not everyone's job. But when the consequences are so desperate, everyone can at least grasp the outline of what is wrong, and could be put right, which will enable them to act accordingly...

The specialist and the expert (economists and bankers) must be held responsible for devising the correct methods, while the sphere of the consumer and the public is to insist upon the results required and to replace the experts who do not deliver them, or require that our representatives do so. This works well until we come up against a monopoly of experts (probably paid by a bigger Monopoly such as the State or Big Business) who decide that they know best what we ought to have, which is invariably what we do not want, and assure us that what we do want is ridiculous or undesirable or technically impossible, even when we have had it before and know it is possible. We then have to look for honest experts, who will look into the matter technically, advise us whether it really is possible, and if so propose effective means of obtaining the desired objective.

In a sense, Douglas himself was the first of these honest experts, as he used his expert knowledge of engineering, including pioneer work in automation, and in industrial accountancy, to put his finger on the defect in the financial system, and to propose effective means of correcting it... He started by simply assuming that the purpose of production was to produce what people as consumers wanted as exactly as possible with as little waste of materials, energy or human effort as was practicable.

Having drawn attention to a failing in the way money was issued and controlled which prevented this purpose from being achieved, Douglas expected that it would be honestly investigated and put right if confirmed.
Instead he found that those who controlled the economy through finance were well aware of the situation, but had quite other purposes in mind, mainly the full employment of the working lives of the whole population as hired labour, forced by the need for «pay» to carry out the purposes of those who issue and direct the flow of money (i.e. bank credit).

As Douglas pointed out, the two policies are wholly opposite and incompatible, but he soon found that in economics one is not permitted to raise questions of such a fundamental nature as «What is money, and what are industry and commerce for?» Such questions are answered, not by economics or science of any sort, but by religion, and the answers are most revealing as to the type of religion which they express. It was in this way that social crediters discovered that the plain common sense which they were trying to bring to reality was in fact Christian in origin.

What is money for?

The first point about money is that it has now ceased to consist of a material commodity, such as gold, a part of the reality of this planet, given to us freely by the Creator... As the productive power of our technology increased, there was less and less sense in restricting the distribution of its products in relation to the amount of one particular metal which was found. The substitution of a system of pure accountancy — simply numerals on paper, and nowadays, magnetic charges on computer tapes — was an enormous advance without which our industry and commerce could never have expanded as they have.

But notice the changes which have occurred! The new money, commonly called bank credit, is entirely artificial, written into existence by certain men, who have a centralised monopoly of its issue and direction. Being purely symbolic it is subject to no natural limits whatever. It is as easy to write a million as a hundred pounds. And it does not come freely into existence, but always as a debt, i.e. a loan repayable to those who issue it...

Make no mistake! Money is the means to the most complete dictatorship over human lives which has so far existed. Just consider the power that it exercises over every aspect of our society, including our own lives, and all the media and the influences and institutions that press upon us. Perhaps now you will understand why Douglas and his followers who exposed these facts about the monopoly of credit are not «acceptable» to the political parties or to the university schools of economics, or given any hearing or publicity on the national media.

If you will think it over, you will see that an economy entirely dependent upon debt-money issued in this way cannot possibly repay the debt without bringing itself to a standstill in chaos and starvation and revolution, unless, of course, it borrows more and more. That is, we are caught in a trap of irredeemable debt from which there is no escape within the rule of the present money system, that all new «credit» must be issued as debt...

It has been said that Money is the God of this World, and also that the love of money is the root of all evil (not money itself). Also that the test of loving God is that we obey His commandments. So which God do we obey most?...

Plenty of God-given resources
When Our Lord was asked a trap money question; offering phoney alternatives: «Is it lawful to pay tribute to Caesar?» he refused to fall into either trap of partisanship, but re-thought it so that it could receive a true answer, and that is what we should do when confronted with the political choice between more unemployment or worse inflation. What, then, is owing to God in His created world of more than ample economic resources for all our needs and vast technological know-how inherited freely from the past inspiration of scientists and inventors by the Spirit of Truth?

Surely, it is that the choice freely offered by Him shall not be withheld or distorted by a man-made system of accountancy which ought to facilitate that choice. It should reflect, not dictate, the choices made by people, as in fact it does in a very partial and imperfect fashion.

The creation of useless jobs
There is immense confusion of thought about this, much complicated by the puritan idea that it is wrong for anyone to receive “something for nothing”, even, it seems, the gracious gifts of the Creator, handed on to us through our cultural inheritance. We should all “merit” what we receive, through our «honest sweat» for the common good in some «job», but if our labour is not needed because some technical device will do the work better, then it is demanded that useless or redundant jobs should be created in order to cheat us into a feeling of self-satisfaction and righteousness, because we imagine that we can “hold up our heads” as we are “pulling our weight” and “earning our living”.

Although in fact probably about half the “employed” population would be making a bigger economic contribution if they stayed at home, drawing the same income, and abstained from interference with the economic process, except, maybe, to look after their house and family, dig their garden, and give their neighbours or anyone else who needed it, a helping hand with those little services which have been priced out by the «employment» system; without, incidentally, flattering themselves that they were thereby «meriting» all that they were receiving...

Despite all the efforts made recently to convince us that the Earth is a poor, barren place, already grossly over-populated by a mass of witlessly proliferating humanity, in dire need of draconic regulation and control by a central World Government and a vast bureaucracy, it is abundantly clear that wherever people are free to produce without interference, and their efforts are financially rewarding, ample produce becomes available, which may become «burdensome surpluses» when purchasing power is restricted. Natural catastrophes apart, the extreme poverty and starvation in the Third World, of which we hear so much, are man made, and where not due to war, revolution or civil chaos, are due to the maltreatment of nature under financial pressure. Conservation, restoration and diversification, which offer the true, long-term economies, are always too expensive for the poor, and impossible for the debt-ridden...

Debt-free money and dividends

Debt-free credit, applied to price reduction, is the only way in which the progressive inflation inseparable from our present system of debt-financing can actually be brought to a halt without strangling the economy.
In the same way, the only possibility of liberating people from the soul-destroying burden of useless routine labour or mechanical work better done by machines, and the even more soul-destroying burden of unemployment, is by distributing the «wages of the machine» to all, not on our «merits» but as our share in the cultural inheritance. This again would require the use of debt-free credit, not in unlimited amounts, but precisely to the amount required for the cancelling of debts, and which would otherwise be met by borrowing, or by «cuts» and unemployment...
.
The alternative is to continue living in this money-dominated world of wholly loan-financed «employmentism» until either hyper-inflation, or mass-unemployment, drives us into desperation, revolution and the totalitarian wage-slave State. The ultimate consequences, however, are far deeper than the political or the economic.

Faith and works

How then can our aims ever be implemented — especially as Party politics or other means of imposing them upon other people are quite incompatible with them? Seek first the Kingdom — and that means returning to God's reality, and comparing it with the all-too-pressing pseudo-reality of man's money-dominated world, and taking the trouble to understand how much the Christian religion, which is in fact a part of the «warp and woof of the universe», has been corrupted and turned from its path by the implicit, unconscious acceptance of the domination of «money» with its false values, as a part of the «reality» — of the «modern, changed situation» to which, it is constantly urged, our religion must adapt itself.

Until that is put right, Christians cannot even start to restore the social credit — the faith of society; they may even be helping to destroy it. But after that, a great vista opens of hope and faith, thought and study and action. Hope, because we are not frustrated by «the nature of things», only by the corruption by power of certain men, and we know there is a way out. Faith, because it is the substance of things hoped for, the evidence of things not seen; and we have the hope, and have studied the evidence; but faith without works is dead, and ours is very much alive. So that leads on to action... Every social crediter is a focus for such action among his fellow citizens, helping them and showing them how to defend or increase the social credit... There is a place for you in this adventure!

Source

To solve the problem of poverty

by Louis Even
There are a lot of good things in our country, but many individuals and families who need these goods lack the right to have them, the permission to get them. Is there anything lacking but money? What is lacking, apart from the purchasing power to make the products go from stores to homes?
Money begins somewhere

But then where does money begin, the money that we lack in order to buy the goods that are not lacking?

The first idea that we keep alive in our minds, without really realizing it, is that there is one fixed quantity of money, and that it cannot be changed; as if it was the sun, or the rain, or the weather. This idea is utterly wrong; if there is money, it is because it was made somewhere. If there is not more, it is because those who made it did not make more.

Another prevalent belief about the origin of money is that the Government makes it. This is also incorrect. The Government today does not create money, and complains continuously about not having any. If the Government were the source of money, it would not have sat around idly for ten years in front of the lack of money. (And there would not be a $500-billion national debt.) The Government takes and borrows, but it does not create money.
Our standard of living, in a country where money is lacking, is not regulated by the volume of goods produced, but by the amount of money at our disposal to buy these goods. So those who control the volume of money, control our standard of living. “Those who control money and credit have become the masters of our lives... No one dare breathe against their will.” (Pius XI, Encyclical Letter Quadragesimo Anno).
Two kinds of money
Money is whatever serves to pay, to buy; whatever is accepted in exchange for goods or services.
There are at present two kinds of money in Canada: one we call pocket money, made of metal or paper; and the other we shall call book money, made of figures in a ledger. Pocket money is the least important; book money is the most important.
Book money is the bank account. Business operates through bank accounts. Whether pocket money circulates or not depends on the state of business. But business does not depend upon pocket money; it is kept going by the bank accounts of businessmen.

With a bank account, one makes payments or purchases without using metal nor paper money. One buys with figures.

Let us suppose I have a bank account of $40,000. I buy a car worth $10,000. I make my payment by a cheque. The car dealer endorses the cheque, and deposits it at his bank.

The banker then makes changes in two accounts: first, that of the car dealer, which he increases by $10,000; then mine, which he decreases by $10,000. The car dealer had $500,000 — he now has $510,000 written in his bank account. I had $40,000 in mine — my bank account now shows $30,000.

Paper money did not move in the country because of this deal. I simply gave some figures to the car dealer. I paid with figures. More than nine-tenths of all business is done this way. It is book money, the money made of figures, which is modern money; it is the most abundant money; its volume is ten times that of paper or metal money. It is a superior type of money, since it gives wings to the other. It is the safest kind of money, the one that no one can steal.

Savings and borrowings

Book money, like the other type of money, has a beginning. Since book money is a bank account, it comes into existence when a bank account is opened without money decreasing anywhere, neither in another bank account nor in anyone's pocket.

The amount in a bank account can be increased in two ways: by saving and by borrowing. There are other ways, but they can be classified under borrowing.

The savings account is a transformation of money. I bring along some pocket money to the banker; he increases my account by this amount. I no longer have that pocket money; I have book money at my disposal. I can get back pocket money by decreasing the amount of book money in my account. It is a simple transformation of money.

But since we are trying to find out how money comes into existence, the savings account, being a simple transformation of money, is of no interest to us here.

The borrowing (or loan) account is the account lent by the banker to a borrower. Let us suppose I am a businessman. I want to set up a new factory. All I need is money. I go to a bank and borrow $100,000 under security. The banker makes me sign a promise to pay back the amount with interest. Then he lends me the $100,000.
Is he going to hand me the $100,000 in paper money? I do not want it. First, it is too risky. Furthermore, I am a businessman who buys things at different and widely separated places, through the medium of cheques. What I want is a bank account of $100,000 which will make it easier for me to carry on business.

The banker will therefore lend me an account of $100,000. He will credit my account with $100,000, just as if I had brought that amount to the bank. But I did not bring it; I came to get it.

Is it a savings account, set up by me? No, it is a borrowing account made by the banker himself, for me.
Money creators

This account of $100,000 was made, not by me, but by the banker. How did he make it? Did the amount of money in the bank decrease when the banker lent me $100,000? Well, let us ask the banker:
— Mr. Banker, have you any less money in your vault after having lent me $100,000?
— I haven't gone into my vault.

— Have other people's accounts been reduced?
— They remain exactly as they were.
— Then what was decreased in the bank?

— Nothing was decreased.
— Yet my account has been increased. From where did the money you lent me come?

— It didn't come from anywhere.
— Where was it when I came into the bank?
— It didn't exist.

— And now that it is in my account, it exists. So we can say that it was created.

— Certainly.

— Who created it, and how?
— I did, with my pen and a drop of ink when I inscribed $100,000 to your credit, at your request.
— Then you create money?
— The banks create book money, the money of figures. That's the modern money that puts into circulation the other type of money by keeping business on the move.

The banker manufactures money, ledger money, when he lends accounts to borrowers, individuals, or governments. When I leave the bank, there will exist in this country a new source of cheques, one that did not exist before. The total amount of all accounts in the country was increased by $100,000. With this new money, I will pay the workers, buy materials and machinery — in short, build my new factory. Who, then, creates money? — The bankers!

Money destroyers

The bankers, and the bankers alone, make this kind of money: script or bank money, the money that keeps business moving. But they do not give away the money they create. They lend it. They lend it for a certain period of time, after which it must be returned to them. The bankers must be repaid.

The bankers claim interest on this money that they have created. In my case, the banker will probably demand $10,000 from me in interest, at once. He will withhold it from the loan, and I will leave the bank with $90,000 in my account, having signed a promise to repay $100,000 in one year's time.
In building my factory, I will pay my men, buy things, and thus spread my bank account of $90,000 throughout the country.

But within a year, I must, through the profits I make selling my goods for more than they cost me, build my account up to not less than $100,000.

At the end of the year, I will pay back the loan by making out a cheque for $100,000 on my account. The banker will then debit my account by $100,000, therefore taking from me this $100,000 I have drawn from the country by selling my goods. He will not put this money into the account of anyone. No one will be able to draw cheques on this $100,000. It is dead money.

Borrowing gives birth to money. Repayment brings about its extinction. The bankers bring money into existence when they make a loan. The bankers send money to the grave when they are repaid. The bankers are therefore also destroyers of money.

And the system so operates that the repayment must be greater than the original loan; the death figures must exceed the birth figures; the destruction must exceed the creation.

This seems impossible, and collectively, it is impossible. If I succeed, someone else must go bankrupt, because, all together, we are not able to repay more money than has been made. The bankers create nothing but the capital sum. No one creates what is necessary to make up the interest, because no one else creates money. And yet, the bankers demand both capital and interest. Such a system cannot hold out except for a continuous and ever-increasing flow of loans. Hence the system of debts, and the strengthening of the dominating power of the banks.

The national debt

The Government does not create money. When the Government can no longer tax nor borrow from individuals, due to the scarcity of money, it borrows from the banks. The operation takes place exactly like mine. As a guarantee, it pledges the whole country. The promise to pay back is the debenture. The loan of the money is an account made by a pen and some ink.
And the country's population finds itself collectively indebted for a production that, collectively, it made itself! It is the case for war production. It is the case also for peacetime production: roads, bridges, waterworks, schools, churches, etc.
The monetary defect

The situation comes down to this inconceivable thing: all the money in circulation comes only from the banks. Even metal and paper money comes into circulation only if it has been released by the banks.
Now the banks put money into circulation only by lending it out at interest. This means that all the money in circulation comes from the banks, and must someday be returned to the banks, increased with the interest.
The banks remain the owners of the money. We are only the borrowers. If some manage to hang on to their money for a long period of time, or even permanently, others are necessarily incapable of fulfilling their financial commitments.
A multiplicity of bankruptcies, both for individuals and companies, mortgage upon mortgage, and an ever-increasing public debt, are the natural fruits of such a system.

Decline and degradation

This way of making the country's money, by forcing governments and individuals into debt, establishes a real dictatorship over governments and individuals alike.
The sovereign Government has become a signatory of debts to a small group of profiteers. A minister, who represents millions of men, women and children, signs unpayable debts. The bankers, who represent a clique interested only in profit and power, manufacture the country's money.
This is one striking aspect of the degeneration of power of which Pope Pius XI spoke: governments have surrendered their noble functions, and have become the servants of private interests.

As for individuals, the scarcity of money develops a mentality of wolves. In front of plenty, only those who have money — the too scarce symbol of goods — have the right to draw on that plenty. Hence the competition, the tyranny of the “boss”, domestic strife, etc. A small number preys on all the others. The great mass of the people groans, many in the most degrading poverty.
The social control of money

It is Saint Louis, King of France, who said: “The first duty of a king is to coin money when it is necessary for the sound economic life of his subjects.”

Book money is a good modern invention that should be retained. But instead of it proceeding from a private pen, in the form of a debt, those figures, which serve as money, should come from the pen of a national organism, in the form of money destined to serve the people.

One must stop suffering from privations when there is everything needed in the country to bring comfort into every home. The amount of money should be measured according to the demand of the consumers for possible and useful goods.

It is therefore the producers and consumers as a whole, the whole of society, which, in producing goods in front of needs, should determine the amount of new money that an organism, acting in the name of society, should put into circulation from time to time, in accordance with the country's developments.
Thus the people would recover their right to live full lives, in accordance with the country's resources and the great possibilities of modern production.
Who owns the new money?

Money should therefore be put into circulation according to the rate of production and as the needs of distribution dictate.

But to whom does this new money belong when it comes into circulation in the country? — This money belongs to the citizens themselves. It does not belong to the Government, which is not the owner of the country, but only the protector of the common good; nor does it belong to the accountants of the national monetary organ- ism: like judges, they carry out a social function and are paid, according to law, by society for their services.
To which citizens? — To all. This money is not a salary. It is new money injected into the public, so that the people, as consumers, may obtain goods already made or easily realizable, which are awaiting only sufficient purchasing power for them to be produced.
There is no other way, in all fairness, of putting this new money into circulation than by distributing it equally among all citizens without exception. Such a sharing also makes it possible to derive the maximum benefit from the money, since it reaches into every corner of the land.

Whenever it might become necessary to increase the amount of money in a country, each man, woman and child, regardless of age, would thus get his or her share of the new stage of progress that makes the new money necessary.

This is not payment for a job done, but a dividend to each one for his share in a common capital. If there is private property, there is also community property that all possess in the same way.
Result: order restored

What, according to us, would be the effect of this financial reform? First of all, in a general way, order would be restored in the money sector, consequently in economics, with echoes in the political and social spheres.
Goods would be made to serve needs. The accumulation of money would stop being the commanding aim of industry. (And one would therefore not need to create artificial needs to sell useless products, thus reducing waste and pollution.)
The way to obtain the implementation of an honest money system is to form a public opinion sufficiently enlightened and motivated to make a successful demand for it. So there is no question of an election campaign, but rather of an education campaign.

This propagation of study among the masses requires the devoted efforts of numerous apostles who are not afraid of self-abnegation and sacrifice. And it is still in order. The present disorder is the result of all kinds of selfishness. All this must be expiated and corrected. As Pope John Paul II put it in his encyclical letter Sollicitudo Rei Socialis: “These attitudes and `structures of sin' (love of money and power) are only conquered – presupposing the help of divine grace – by a diametrically opposed attitude: a commitment to the good of one's neighbour.” (n. 38)
So, the surest and only way of advancing the cause of honest money is that method which develops study and devotion. This is the method advocated by the Pilgrims of St. Michael, with the “Michael” Journal. Come to our meetings, order leaflets like this one to distribute around you, solicit subscriptions to the “Michael” Journal!
Louis Even

Source

Michael Krieger On The Rebirth Of Barter

Via Michael Krieger of 'A Lightning War For Liberty' blog,

Justice in the hands of the powerful is merely a governing system like any other. Why call it justice? Let us rather call it injustice, but of a sly effective order, based entirely on cruel knowledge of the resistance of the weak, their capacity for pain, humiliation and misery.
- Georges Bernanos
(1888-1948)

Outwardly we have a Constitutional government. We have operating within our government and political system, another body representing another form of government, a bureaucratic elite which believes our Constitution is outmoded.
- Senator William Jenner
(1908-1985) U.S. Senator (IN-R)

The Final Act of the Uruguay Round, marking the conclusion of the most ambitious trade negotiation of our century, will give birth – in Morocco – to the World Trade Organization, the third pillar of the New World Order, along with the United Nations and the International Monetary Fund.
- Government of Morocco
April, 1994   Source: New York Times, full page ad by the government of Morocco

The Rebirth of Barter
One of the most important articles I have read this week comes from Forbes contributor Gordon Chang.  In it he states that China is preparing to avoid U.S. sanctions on Iran by paying for oil with gold.  Not only that but he also mentions that China has already been bartering with Iran to get a hold of petroleum.  He states:

So how can Beijing keep both Iran’s ayatollahs and President Obama happy at the same time?  Simple, the Chinese can avoid the U.S. sanctions through barter.  China has already been trading its produce for Iran’s petroleum, but there is only so much gai lan and bok choy the Iranians can eat.  That’s why Iran is also accepting, among other goods, Chinese washing machines, refrigerators, toys, clothes, cosmetics, and toiletries.

The barter trade works, but Iran needs cash too.  As it is being cut off from the global financial system, the next best thing is gold.  So we should not be surprised that in late February the Iranian central bank said it would accept that metal as payment for oil.   Last year, China imported $21.7 billion in Iranian oil and exported $14.8 billion in goods and services.  As the NDAA goes into effect, look for Beijing to ship gold to Iran to make up the difference.

Thus, the leadership in America in its infinite stupidity has actually accelerated the demise of the U.S. dollar as the world’s reserve currency.  After its “kinetic action” in Libya succeeded in toppling the regime there, Washington’s geopolitical hubris grew and it has attempted to muscle Iran into a corner.  Instead, all it has done is alienated our “allies” that need Iranian oil to survive and in the process quickened a move away from the dollar to settle certain transactions.  Read Gordon’s article here.

In a similar move on a more micro level, the government of Spain in a similar desperation has banned the use of cash transactions above 2,500 euros (read this great article here on it).  How do you think citizens are going to respond to this?  People are already in the streets.  They are not pleased with what is going on.  Then the government is going to tell them they can’t use cash amongst themselves so that the authorities can track every single thing they do and bleed them with taxes until they are slaves on a banker plantation.  Everything is going to go black market and to a barter system.  It will happen country by country as governments get increasingly desperate and the authoritarian clamp down continues.  It will happen on an increasing level until all of these house of cards bureaucratic states fail and something new is reborn.  In case you haven’t seen it yet, this one town in Greece is already leading the way. This story outlines what will be a mega trend globally over the next decade.

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