The people and their businesses engage in commerce with each other and pay taxes to the nation state. The nation state in turn may give grants to businesses, and act as employer to a certain segment of the population (public sector) and also pays welfare remittances and provides services to the populace, like education and healthcare. All very noble, so what’s the problem?
Our nation states, Ireland Inc. in this case, could issue the money that is needed within society. Unfortunately the modern nation state around the world does not perform this task . It has outsourced the production of money to third parties.
These third parties are the privately owned central banks of the world. In Ireland this function was served by the Irish central bank until 1999 but now resides with the ECB in Frankfurt.
These private central banks issue the money society needs, but the only way money can be issued is if someone somewhere takes on a debt. Either people, businesses or governments.
Obviously people and businesses in Ireland never borrow directly from the ECB. We borrow from our local high street banks. They get their authority from the ECB to digitally create debt on a computer screen; be it in the form of mortgages, car loans, business loans etc.
When our governments inevitably fail to balance their budgets year on year they borrow directly from the central bank they report to: in Ireland’s case the ECB, in the case of America the Federal Reserve, England the Bank of England, etc.
This may often happen via the bond market, which is just another layer between government and bank.
We are all at the behest of privately owned central banks. They control society because they issue the money society needs either directly to governments via the bond markets or to the people and businesses via their local high street banks. They supply us with debt, i.e a principal figure we borrow, but expect us to repay both principal and interest to them. Here lies the crux of the problem.
By Barry Fitzgerald