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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

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