The Worm in the Apple by Stephen Cook
PROFIT BY THE MISFORTUNE OF OTHERS
The money lenders/early bankers soon discovered that even more profits could be made by manipulating a nation's economy. This was done by periodically tightening up on money supplied to the economy through lending; then making money easy to borrow and thus plentiful; then tightening up on it again. You have already seen how the practice known as fractional reserve lending (FRL) enabled the bankers to greatly increase the amount of money in circulation simply by creating it out of thin air. Money thus created and loaned into existence soon became a major component of the total money supply. In fact its proportion has gone on increasing to a point where today it comprises a staggering 97% of all the money in circulation. Hard currency the notes and coins issued by the government and spent (not loaned) into the economy - is now a meager 3%. But even in earlier times, debt-money created by the bankers was significant enough in volume to affect the entire economy. The bankers evolved a scam that works like this: when they made money easy to acquire by offering cheap loans, money was plentiful and economic activity picked up. Businesses expanded. More money was then needed to match the increased production and as loans were cheap and "consumer confidence" high, people could be seduced into taking out more loans. The bankers would then tighten the money supply by making money (loans) more difficult and expensive to get. What would happen then, is by and large what happens today when the money supply is tightened: increased repayments on past borrowing reduced disposable incomes - the amount of money people have available to spend on goods and services. This hits industry's ability to sell its goods and prices drop. Industry also has increased interest payments to contend with so between its own increased interest payments and falling prices, profits are hit. Wages go down and/or businesses go bust. People are thrown out of work so they no longer are earning wages they can spend on industry's goods and services but they still have to pay off their own loans, taken out in better times. So people find the property against which the loan was secured is repossessed. As less money is being issued into the economy by lending and more money is being removed from it by increased repayments there is a shortage of money created throughout the economy. But as the banks have tightened up on lending new money into existence, the shortfall is not replenished. The shortage of money continues until - and not before - the bankers decide to allow more money into the economy by - 51 -