Pierre Marchildon, Full-time Pilgrim of St. Michael
Pierre Marchildon, Full-time Pilgrim of St. Michael
Pierre Marchildon, Full-time Pilgrim of St. Michael
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A superpower dominates governments<br />
The superpower resides in the banks<br />
by Louis Even<br />
Textbooks generally distinguish three great<br />
powers belonging to the Government that are<br />
necessary to keep order and stability in the nation,<br />
to protect the lives, goods and rights <strong>of</strong><br />
the citizens: the legislative, the executive, and<br />
the judiciary.<br />
The legislative power is the power that<br />
makes laws.<br />
The executive power is the power which administers<br />
the nation in conformity with its laws.<br />
Finally, the judiciary power is the power that<br />
enforces the laws <strong>of</strong> the country, to prosecute<br />
and condemn those who transgress them, to<br />
pass judgment on the litigation’s between citizens<br />
throughout that country.<br />
It is the Constitution <strong>of</strong> the nation that defines,<br />
grants and divides the juridiction <strong>of</strong> these<br />
three powers. These are therefore constitutional<br />
powers.<br />
However, there is another power, which<br />
is not mentioned in textbooks <strong>of</strong> colleges and<br />
universities, a power that is not establised<br />
or defined by the Constitution, but which is<br />
actually greater than all three <strong>of</strong>ficial constitutional<br />
powers; a power that dominates the<br />
lives <strong>of</strong> individuals, families, institutions, even<br />
governments themselves.<br />
This superpower is the monetary power,<br />
the power to control money and credit.<br />
It is this power that was denounced by Pope<br />
Pius XI in his Encyclical Letter Quadragesimo<br />
Anno, in 1931:<br />
“This power is being most forcibly exercised<br />
by those who, because they hold and<br />
control money, are able also to govern credit<br />
and determine its allotment, for that reason<br />
supplying, so to speak, the lifeblood to the entire<br />
economic body, and grasping, as it were,<br />
in their hands the very soul <strong>of</strong> production, so<br />
that no one dare breathe against their will.”<br />
Everybody knows where the three constituional<br />
powers reside: the legislative power has<br />
its seat in parliaments, the executive power resides<br />
in the <strong>of</strong>fices <strong>of</strong> ministers, and the judiciary<br />
power resides in the courts.<br />
But where does this superpower, a power<br />
not mentioned in the constitution, the power<br />
that controls money and credit, reside?<br />
It resides in the banking system. It is in the<br />
banks that financial credit is actually created<br />
and cancelled.<br />
Banks create money<br />
It is when a bank grants a loan, either to a<br />
contractor, a retailer, or to a government, that<br />
new financial credit is created. The banker<br />
doesn’t use the depositors’ money, but simply<br />
credits the borrower’s account with the loan<br />
granted, just as if the borrower had deposited<br />
that amount. But the borrower actually neither<br />
brought in nor deposited any money, since he<br />
came to the bank to get money that he did not<br />
have.<br />
The borrower will now be able to issue<br />
checks on this account that he did not have<br />
when he entered the bank, but that he now has<br />
upon leaving.<br />
No account <strong>of</strong> any other customer <strong>of</strong> the<br />
bank was reduced. This is therefore a new account,<br />
added to the accounts that already exist.<br />
The total credits in the total accounts <strong>of</strong> the<br />
banks in the country are therefore increased by<br />
the amount <strong>of</strong> this new account.<br />
Louis Even (1885-1974)<br />
founder <strong>of</strong> the “<strong>Michael</strong>” Journal<br />
There is therefore an increase in financial<br />
credit, modern money, which will be put into<br />
circulation by the checks <strong>of</strong> the borrower issued<br />
on this new credit.<br />
On the contrary, when a borrower comes to<br />
the bank to repay his loan (credit that had previously<br />
been borrowed), it reduces the quantity<br />
<strong>of</strong> credit in circulation accordingly. The total<br />
quantity <strong>of</strong> blood in the economic life is thus<br />
reduced by the same amount.<br />
A simple bookkeeping operation, made<br />
with one stroke <strong>of</strong> the pen, had created financial<br />
credit. Another simple bookkeeping operation,<br />
when the loan is repaid, cancels, destroys this<br />
credit. This credit disappears the same way it<br />
was created, through a simple bookkeeeping<br />
operation.<br />
It is easy to see that, if during a given period<br />
<strong>of</strong> <strong>time</strong>, the total <strong>of</strong> the loans exceeds the total<br />
repayments, this puts more credit into circulation<br />
than what is cancelled. On the contrary, if<br />
the total <strong>of</strong> the repayments exceeds the total<br />
<strong>of</strong> the loans, it causes a period <strong>of</strong> reduction <strong>of</strong><br />
credit from circulation.<br />
If the reduction period persists, the whole<br />
economic body is affected by it: it is called a<br />
crisis — a crisis caused by a restriction <strong>of</strong> credit.<br />
These periods <strong>of</strong> increase and reduction<br />
are not due to mere chance, but to the action<br />
<strong>of</strong> the banks. They are not like the seven fat<br />
and lean cows <strong>of</strong> Pharaoh’s dream in the Book<br />
<strong>of</strong> Genesis, but banking cows which are made<br />
fat or lean according to the rate <strong>of</strong> loans and<br />
repayments.<br />
Whatever the conditions <strong>of</strong> economic life in<br />
the past centuries, money is nowadays a must<br />
to maintain production that comes from various<br />
sources, goes through various succesive<br />
stages, until the finished goods are thrown on<br />
the market.<br />
However, those who need these goods to<br />
live can obtain them only provided they can<br />
show the money to the suppliers. Money is<br />
basically a licence to live, and those who control<br />
these licences, who allow or refuse them,<br />
who condition their quantity and length in circulation<br />
actually control our lives in such a way, as<br />
Pope Pius XI wrote, that “no one dare breathe<br />
against their will.”<br />
Money would be worthless if there were no<br />
products on the market. Now, it is the population<br />
<strong>of</strong> the country that makes the products; as<br />
for the controllers <strong>of</strong> money and credit, they<br />
produce absolutely nothing: they do not cause<br />
a single stalk <strong>of</strong> wheat to grow, do not produce<br />
one single pair <strong>of</strong> shoes, do not manufacture<br />
one sole brick, do not dig into a mine shaft, and<br />
do not pave one square inch <strong>of</strong> road.<br />
It is the country’s population that carries<br />
out these projects. But to be able to produce all<br />
these things, the population needs the approval<br />
<strong>of</strong> the controllers <strong>of</strong> money.<br />
(continued on page 9)<br />
At the bank, the pen that rules the world<br />
Page 8 “<strong>Michael</strong>” Journal, 1101 Principale <strong>St</strong>., Rougemont, QC, Canada — J0L 1M0<br />
Jan.-Feb.-March 2008<br />
Tel.: Rougemont (450) 469-2209; Montreal area (514) 856-5714; Fax (450) 469-2601; www.michaeljournal.org