The Private Bank: Financial Friend or Foe?

'I believe that banking institutions are more dangerous to our liberties than standing armies.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.'

Thomas JeffersonThomas Jefferson 1802

Deirdre Kent is a founding member of Living Economies, a lifelong social and environmental activist, former city councilor and grandmother. She lives with her husband on an organic fruit and nut small holding in Otaki managed by permaculture principles. She’s been my most recent guest on Voices from the North.

Deirdre Kent is the author of Healthy Money, Healthy Planet: Developing Sustainability through New Money Systems that was published in 2005.

She claims our current financial crisis is not about toxic financial products or bad debts. We need to ask the more fundamental questions about how money is created in the first place. Why does every economist and politician claim we have to have economic growth? Deirdre has been crying out in the wilderness for a long time and the current domino effect of money problems around the world has been an unavoidable scenario in an unsustainable system based on constant growth of money and goods.

Deirdre mentions a book she’s reading called The Creature from Jekyll Island. Put simply, this may be the most important book on world affairs you will ever read. It describes the formation of the Federal Reserve System at a conspiratorial meeting that took place on Jekyll Island off the coast of Georgia in 1910. This highly secretive meeting marked the beginning of the complete takeover of the US government by powerful private bankers.

Deirdre explains why our current ailing system is dependent on continual growth, which is, of course, not sustainable on a finite planet with finite resources. The current fractional reserve of banks is 70 to 1. That means there is only $1 backing every $70 in circulation. Does that sound prudent and safe to you? America stopped publicizing their money supply (the M3) a few years ago. Private banks determine the money supply, Deirdre states that politicians are very small players.

Under the current intentionally flawed system, money flows from the poor to the rich in every instance. The interest we truly pay is built into the purchase price of everything we buy because a manufacturer borrows money to make the goods in the first place.

There are solutions. Deirdre suggests creating social bonds in your own local community and developing strong and vibrant community trading schemes, local currencies and barter systems. Green dollar systems originated in 1987 and some, as in Golden Bay on New Zealand’s South Island and the Wairarapa on the North Island, are still going strong. New examples are springing up all the time like the local currency on Salt Spring Island in British Columbia. The success of these systems is based on trust and relationships. Deirdre suggests strongly that we need an organic model for international finance with an ethical base. She speaks about an example of a Time Bank system in Lyttleton and the positive possibilities of this sort of system in helping the sick and the elderly through more equitable ratios of job/work value.

The interview closes with a discussion about the enormous value of social networking. John mentions www.gaia.com at this time. Anyone anywhere can create a social network for free today using software like that available from www.ning.com.

Visit Living economies at www.le.org.nz to order Deirdre Kent’s book, Healthy Money, Healthy Planet.

Click here for the interview.

You can't solve the problem when you don't know the source.

John Haines is the author of In Search of Simplicity: A True Story that Changes Lives, a book guaranteed to change the way you see the world. He presents the popular interview program, Voices from the North, in New Zealand's far north.