Deflation Made Simple (Part II)

A falsely vilified phenomenon (Entry 142)

Alright. We have arrived. The fully corrupt Bank of England — the Grand Facilitator of the English empire and hidden destructive force of free market enterprise is upon us. Let us dig in!

Already we have rendered clear the moral nature of money and its several immoral perversions.

Already we have shown, with the utmost clarity, the difference between money-in-exchange and money-in-use and the vital role that this latter plays in the balance of real savings and real investment in order to satisfy efficiently a society’s preference for future over current consumption (Images 17 and 18).

Already we will discussed the corrupt practice of lending money into existence — the creation of money out of nothing (money-ex-nihilo). See Entries 113, 129-131, 133.

This corrupt monetary practice was introduced into England for the purpose of funding war and enriching a small group of financial investors in the name of a uniform, easy-to-use counterfeit currency that replaces real money and “better satisfies” the commercial needs of English society and all of humanity. Although this corrupt monetary practice has surely fueled empire and enriched bankers and their closest associates, it has repeatedly failed in its ability to bring the prosperity promised.

As we move forward through this book-in-the-making, you will come to realize that money-ex-nihilo is a consciously conceived, innocently depicted, wicked perversion of real money that brings repeated, short-term, financial relief and repeated, long-term, cyclical, economic destruction.

Further, you will learn that central banking is the institutional artifice that brings about this relief and destruction and enriches the banks’ owners. In addition, you will learn how these owners work in tandem with the state to manipulate its citizens and inhibit their ability to keep the power of the state and, of course, that of the bankers and their friends in check. You will also learn that central banks do not serve many of the very goals that they claim to serve. And finally, you will learn all of this —not merely in theory, but with clear historical examples.

Indeed, central banking serves the same primary goals today that it served in 1694 when the Bank of England was initially founded. Everything that has followed in its regard is little more than sophisticated refinement of the same crime that was committed in 1694. What is worse, this criminal activity is currently being carried out in the name of the Judeo-Christian tradition (Entry 130) — a tragic farce with far greater ramifications than even that of WuFlu or the Crime of 9/11!

That Christians and Jews alike kneel before their respective gods and pray for the wisdom to throw off the terrible yoke that late 17th century human folly has cast upon them, you, me, and the rest of humankind!

And now, let us begin our humble discussion of the foundation of the Bank of England with several passages taken directly from the writings of William Paterson (1658-1719), the acknowledged founder of the Bank of England.

Although undated the following passages appear to have been written between 1691 when the Bank of England was first proposed to the English Parliament and 1694 when the Bank of England was founded. In these passages we learn of the master thief’s own good intentions to tweak the monetary system of England in an effort to make an extra buck for himself and his friends, satisfy the king’s desire for war, and provide the city of London and all of England with a uniform paper currency.

Alas, Paterson wrote in somewhat stilted, archaic, but understandable English the following:

”To the raising of the Bank at Amsterdam … [t]here were also, in the third place, an accommodation provided by the magistrate, that in case any money more were left in the bank there should be those that should receive, keep, and deliver it out again, as the owners should from time to time appoint. And for security of what money any man should leave in the Bank, the whole city was, by the magistrate's authority, engaged to make it good.”

From this statement it should be clear that: one, Paterson is writing about the Bank of Amsterdam; and two, that the entire city of Amsterdam was obliged by the “magistrate’s authority” to make good on a depositor’s claim of redemption.

Paterson later wrote:

“From these two examples of Flanders and Holland, it is by long experience manifest, that credit, though founded on the first example, upon personal security only, and in the second, upon a mere supposition that such a sum of money lies in the Bank, when there is not in truth one-fourth part, if the bottom of the Bank should be discovered, is yet to all intents and purposes equal, and as the power of easier, quicker, and safer despatch of all payments, far to be preferred before money.”

In this second statement Paterson draws a comparison that would have been scandalous in the city of Amsterdam during the first half of the 17th century, but appears to have been somewhat known outside of the bank and clearly acceptable within the bank by the end of the second half. We have merely to recall that the Bank of Amsterdam secretly funded the building of Amsterdam’s new city hall, and that it had lent money to the VOC (Entries 120, 122, and 127), to know that something was already afoul by 1672. Indeed, by 1743 the VOC had received a whopping permanent line of credit of 7 million Guilders!

We also learn from the second statements that what was practiced, but not necessarily widespread among the guildsmen-bankers of London before the foundation of the Bank of England, may have been practiced in the province of Holland beyond the walls of the Bank of Amsterdam. Clearly, according to Paterson, the bank was lending out three times more money than it had on deposit and effectively quadrupling the money supply available to the bank’s depositors and friends of the bank’s management!

In his third statement Paterson wrote:

”Now, if it cannot be denied that the credit in the two examples above mentioned, though seemingly founded and secured, is yet to all intents as good, and in many and considerable ones, far better than money, I shall, from the premises, propose some queries to the consideration of such as are in place to judge and make use of them.”

In effect, Paterson makes the claim that belief alone is sufficient, and that once that belief is established one can, without guilt or contrition, comfortably transfer the right-of-use of a person’s property away from that person to another person without the former’s permission for the sake of filling one’s own pocket!

Let us be absolutely clear. For Paterson the mirage and reality of real wealth are equivalent. Clearly he believes that it is worth exploring the idea that you have only to be able to make payment on demand, and that this is a license to take for yourself the right-of-use of another’s property!

In liberty, or not at all,