Who are the Financiers? [Part 1]

In my last post, I talked about the "financiers" and their role in enslaving the public through bubbles in asset prices and through inducing the public to take debt purchasing bubble-priced assets. In this post, I will talk about who the financiers are.

Have you ever gone to a get-rich quick seminar? I have. Typically, there will be one charismatic speaker making a presentation to an audience. The speaker has a slogan that sounds really nice and appealing such as "The secret to wealth is to transform from working hard for money, to letting your money work hard for you". Isn't "money working hard for you" an interesting term? How can money work for you? Money is a dead object, by definition a dead object cannot work, let alone work hard.

The way money can work for someone is if it is lent out with interest. This is called "debt". For example, if A has $100 and lend out the money to B with a 10% interest for 1 year, then B agrees to pay A back his original money ($100) plus the interest ($10) for a total of $110. Let us assume that in the world where A and B live, there is a constant amount of money in circulation. In order for B to get the $10 that he didn't have before, he has work hard to make sellable goods or services so that others are willing to pay him $10 or more in exchange for B's labor. Using this money, B returns $110 to A after one year. Therefore, A's money has grown because of the labor of some one else, in this case B. Thus, it is inaccurate to say that money can work hard for some one. It is more accurate to say that money can buy labor of some one else.

Now imagine that A is the only lender in the world. The total money in the system is, say, $1000. Initially, A owns $100, and the rest ($900) is owned by others. A lends out $100 to the world at 10% interest for one year, and gets back $110. In the second year, A lends out all his money $110 to the world, and gets back $121 ($110 principal + $11 interest). And so on. Here is what happens with A's wealth:

Year 0: A has $100, world has $900

Year 1: A has $110, world has $890

Year 2: A has $121, world has $879

Year 3: A has $133, world has $867

...

Year 10: A has $259, world has $741

...

Year 20: A has $672, world has $327

...

Year 24: A has $985, world has $15

In just 24 years, A has accumulated almost all the money in the world, leaving the whole world to own just $15! As I mentioned before, A has accumulated all the money. Since money is essentially a claim on other people's labor, A has a claim on the rest of the world's labor. In other words, A has become a king, controlling what the rest of the world's wealth and labor.

Going back to the original question, A is the financier, while B and the rest of the world are the public.

We can make one interesting observation: any system that relies on debt is bound to be unstable at some point, as over time, wealth gets concentrated in the hands of the few, at the expense of many.

In addition, once wealth is concentrated in the hands of a few, loan cannot be paid back, since there is no longer enough money in the world to pay back debts. In the example above, if A lends out all his money in Year 25, nobody will be able to pay back the debt because to pay back the debt, the world needs $1,083.50. It simply does not have that much money! So what will happen is that the world defaults their debt, and A takes possession of the collateral of the debt. What collaterals? Whatever the world pledge to secure their debt. It could be their land, their daughters, their obedience, etc. Therefore, the second observation is that a debt-based world, over time, becomes incompatible with democracy as it leads to the concentration of power in the hands of the few.

Take time to digest the two observations that we just made. The observations are very basic but are powerful in helping us to understand the monetary system in the world today.

What does the Bible say about debt?

God recognized the danger of a debt-based system, and the concentration of wealth and power in the hands of the few. This is His word in Leviticus 25:37-43:

³⁷ You must not lend him money at interest or sell him food at a profit. ³⁸ I am the LORD your God, who brought you out of Egypt to give you the land of Canaan and to be your God.

³⁹ " 'If one of your countrymen becomes poor among you and sells himself to you, do not make him work as a slave. ⁴⁰ He is to be treated as a hired worker or a temporary resident among you; he is to work for you until the Year of Jubilee. ⁴¹Then he and his children are to be released, and he will go back to his own clan and to the property of his forefathers. ⁴²Because the Israelites are my servants, whom I brought out of Egypt, they must not be sold as slaves. ⁴³ Do not rule over them ruthlessly, but fear your God.

A few important observations:

1. Verse 37 speaks against lending money at interest, which is a statement against using a debt-based system.

2. Verse 40 describes a reset mechanism. In the year of Jubilee, basically every 50th year, the debt system is annulled, and wealth and power re-distributed to the original state. Every person, even if he has already become slave, due to his/her inability to pay back his/her debt, can go back to own the land that his/her ancestor once owned, and wipe out his/her debt.

3. Verse 42 predicts that a debt-based system leads to slavery.