Economic Security Equals Personal Security.


As this site is concerned with our Freedoms, our Rights and our Security, its time to take a broader brush and give a lot of thought to our Economic Security.

Why do we have an economic system that turns the government into an end, instead of a means, and the individual into a means instead of an end?

What has happened to the Constitutional demand that all institutions exist to serve the individual, that the State exists to serve its citizens? Now it appears that the only reason for individuals to exist, is to serve the State.

If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it. The problem is not that people are taxed too little, the problem is that government spends too much. —Ronald Reagan.

Real economic security would mean that individuals in society must have sufficient purchasing power to provide effective demand in order to consume what they produce. Absolute economic security resides in the possession of a sufficient income at all times to buy the goods and services without which their would be no demand, no production and no payments of wages.

We have next to ask, where do wages, and dividends come from? All incomes as purchasing power are distributed into the hands of consumers through the operations of productive industry. All real purchasing power arises in production. It takes the form of wages, salaries and dividends paid directly to individuals engaged in industry or indirectly from them, through taxation, to those bureaucrats and beneficiaries who spend the money we produce. With loans they are spending future income from production. There is no other form of purchasing power in the Western World system of economics.

Why is there never enough purchasing power in our national economy?

Government doesn’t produce, it only consumes and produces a large negative effect. Here are some of the reasons we have poverty amongst the plenty.

In 2015-16 it took $405.4 billion in taxation, but its total expenses for 2015-16 were $434.5 billion, so the balance was a further debt of 29.1 billion. Just paying the interest on that is taking spending’s from our future earnings, or the earnings of our children.

In 2012 Australian Households spent a total of $642 billion on general living costs but in the same year only earned $521.3 billion in wages and income. So again the balance goes in a $120.7 Billion dollar debt which has to be paid from our future earning.

The manufacturing industry in Australia has declined from 30% of GDP in the 1960s to 12% of GDP in 2007. Yet in 2012 we still donated $7.7 billion in Foreign Aid.

From the figures above we can understand that although Australians earn over a Trillion dollars annually their government masters, remove over $400 billion in taxation which is used to pay their governments interest on its debts. (According to a report released in October 2013, the nation’s poverty rate increased from 10.2 per cent to 11.8 per cent, from 2000/01 to 2013.)

The above general formula is endemic to most countries in the Western World, the governments are run in debt to the banks and so to are 90% of there populations.

There is no single cause operating in the western world today which is of such importance and is so fraught with the possibility of world disaster, as is the disparity between purchasing power and prices. The longer it continues, unchecked the more certain and with more speed approaches either Depression, or War, or Both.

What causes that disparity, that lack of spending power? It is simply that when any item is being produced only a part of its final selling price is the wages and income factor. Say with a packet of .22 ammunition, its production can be split into

A. The cost of lead, powder and brass,

B. The cost of wages and dividends,

C. Taxation and Interest.

Only the earnings, wages and dividends goes into the economy to allow income to be spent on purchasing what they produce.

Governments Sell Tomorrow, To Pay For Today.

Taxation and Interest remove money from the economy, so instead of economic security you have economic slavery. All Government spending is borrowed from the four major banks, and all of the Taxation (Government Revenue) goes to pay the Bank interest on the Government Debt. The Governments Principle Debt just increases annually.

Look at your electricity bill only a part of your payment will go back into the economy in wages, the rest will be negatived by government tariffs and interest. Though these costs, representing profits, interest and depreciation, are all loaded into prices, the money to liquidate them is not distributed to the public neither as wages, salaries, nor dividends. So to afford them the public have to borrow from the banks.

Therefore, prices are always greater than the money available to buy them. In other words, there is always a disparity between the flow in the generation of purchasing power and the generation of prices in any one productive period. As can be seen, this is due to accounting all costs into prices without making provision for liquidating all of them.

This is the flaw in the finance-economic system, and is the main cause of all the economic troubles in the world. It is directly traceable to the use of debt for money and to the policies and practices of the monopoly of credit. Under the present financial system, there is no sound means of bridging the gap between purchasing power and prices.

Now I am not suggesting that the current position of some of the people doing well and the majority struggling in debts should be swapped for socialism.

Margaret Thatcher, Prime Minister of Great Britain from 1979 to 1990, summed up socialism nicely: “The problem with socialism is that you eventually run out of other people’s money.”

Socialism takes income away from productive people and gives it to non-productive people. When a percentage of your hard-earned money is confiscated, you have fewer choices and a lower standard of living. If a larger amount of money is confiscated in taxation, you’re a slave and your only reason for continuing to work is to lessen the depth of the debt.

Socialism is simply a camouflaged Communism.

The once-mighty USSR fell apart in 1989 due to iron-fisted socialistic policies that destroyed the economy while taking away virtually ALL freedoms from its citizens.

People who have recently visited Cuba report that it’s like time has stopped in 1959 when Castro and communism took over. Literally all the cars on the road were manufactured in, or before, 1959. Cuba today still looks like 1955. Unemployment is 48 percent and 80 percent of those who have jobs work for the government, making Cuba’s economy a disaster.

Venezuela is a bigger disaster, their hospitals are germ-infested trash dumps and they’re currently rioting over food. Venezuela’s hospitals are horrible. In less than 20 years they’ve gone from the most prosperous South American nation to the poorest, all because it elected a socialistic government that did away with good economic policies.

North and South Korea are perfect examples of the difference between a free economy and communism (slavery). In communist North Korea, 2.5 million people starve each year. In capitalistic South Korea, her GDP is the 10th largest in the world.

The application of science and technology to production now enables mankind to ensure a reasonable sufficiency of material needs to all, without continuing economic servitude. But the existing financial system is fundamentally flawed. It is endangering the planet through ruthless exploitation of its limited resources in pursuit of financial profit and its wish for ever greater power over the people.

Industry, to be successful, must get back from the public in the prices of its goods more than it pays out to suppliers of materials and labour involved in their manufacture. Otherwise, it could not make a profit. Then the GST factor takes a great slice out of the available spending power.

As industry by necessity distributes all incomes as purchasing power, where does industry, in its turn, get the money for its infrastructure? A brief examination will show that industry is financed from savings, or from loans or overdrafts from the banking system.

Let us follow logically the results flowing from the disparity in which the producers, wage earners, farmers can never find the money or means of exchange to purchase the goods that they produce and need.

It must be evident at the outset, that in every cycle of production a proportion of the goods must remain unsold. As further cycles are completed, the unsold portions must pile up till it is useless and dangerous to produce more for the time being, so banks restrict credit, production slows down, and men are laid off.

When workers are laid off, wages cease, purchasing power further diminishes, less goods are sold, credit is further restricted or called in and cancelled. There is a rush to sell below cost and bankruptcies occur.

Standards of living now fall rapidly; there is further unemployment; dole conditions and acute depression appear; governments start relief works, and the banks readily lend to governments the credit they refuse to industry. Debt and taxation grow apace. As the spending power decreases much of the surplus goods remains unsold, and we have starvation and poverty in the midst of abundance. Goods are wantonly destroyed by oversized banana, oversized pigs etc. and production is forcibly restricted. With mass unemployment everywhere, we are told to work harder, save more, and spend less. Saving and spending less is also a negative.

Parallel with these manifestations is the struggle to find markets abroad for the goods that cannot be sold at home. As all nations are doing the same thing, and are in the same economic plight from the same cause, this leads to commercial hostility, international friction, and finally and inevitably, to WAR.

Government is not a solution to our problems, government IS the problem
Government does not solve problems, it is the root source of the main problem. Government gives the nations right to create credit, to the four main‘Banks of Issue’ and allows them to create it and charge us all for the privilege to borrow it from them.

As a simile imagine that all the oil and gas beneath the land mass of Australia, which is really the public credit, or wealth of Australia owned in title by the Commonwealth Government on behalf of all its citizens, was given away to a private company at no charge, and then every time the government, or the people wanted some oil and gas the private company lent it to them and then charged and ever increasing interest rate, plus demanding the full return of the oil and gas.

Current governments have never dealt with the root problem, the monopoly of credit creation by the international banking system, they take the donations from banks into their party election funds and considers themselves lucky. The first government that ever succeeds to handle this problem might never be given an election donation by a Bank but would be elected forever by the people.

The Black Heart of the Problem.

The banks only lend money/credit as a repayable interest-bearing debt, with number one priority over the assets of the borrower, so it is clear that the banks entirely control production in this way. In the national economy of ever increasing disparity between prices and spending power, as loans are paid back and the credit crossed off, and as the interest is paid the spending power within the community decreases, and only increases when the Banks create and issue more debt. The Banks choses who wins and who goes without, who succeeds and who fails.

We have already seen that the money flowing through industry is the only source of purchasing power, so it is also clear that the banks, in controlling production, automatically control consumption as well.

That is to say, the whole economic system is dominated by the banks and, consequently, they dominate the lives and destinies of the people, and dictate the policies of governments. History proves this conclusively.

It must be remembered that the banks have discretionary powers to call in loans and overdrafts even before the goods they brought into existence have been sold, and they sometimes exercise this power with disastrous effects on the community. Now let us go still another step further and ask where do the banks get the money they lend to industry, and which gives them control of the community.

The answer is again quite simple:

In the terse phrase of the English economist, Sir Ralph George Hawtrey, “They create the means of payment out of nothing.” The money so created is called bank credit, but it really is the public credit, like the oil and gas under our feet, it belongs to all of us.

Banks do not lend the money deposited with them by their clients as most people suppose. Every bank loan or overdraft is an absolute creation of new credit and this credit functions as money.

When cheques are drawn against this credit, they come back into the banking system and form deposits. Practically all deposits are created in this way. Instead of deposits being used by the banks to create loans, as is generally believed, the loans are book figures, (or electronic) and real money or credit has to be deposited to write the loan off the books.

The actual creation of bank credit is an almost costless operation as it consists merely of written entries in bank ledgers or computers, and made effective by written entries in cheque books, or credit cards. Banking, is mostly bookkeeping. Finance is mostly accountancy, and money is mostly figures.

Though bank credit is supposed to be issued against the security of the borrower, it is really issued against the productive capacity and the real or “social” credit created by the communities wealth as a whole. The banks, however, treat this community credit as though they are the sole owners, and are thus in the unique position of being able to lend something they do not own, and of being well paid for it.

As banks have the sole privilege of creating and issuing money in this way, they thus constitute a monopoly of credit that functions as money which keeps the whole community, to whom the credit rightly belongs, in subjection through debt. This monopoly of credit or money creation is the greatest power ever vested in any institution in the history of the world.

The economy should exist to provide people, as efficiently as possible, with the goods and services that they need to survive and flourish. That is, production exists for the sake of consumption, not for the sake of money-making, employment, satisfying the creative impulse, or ‘moral’ discipline (considered as ends in themselves). It most certainly does not exist for the sake of centralizing wealth and power in the hands of a Banking oligarchic elite.
Ron Owen

The Way Out, and the way to Freedom will be in next months bulletin.
Here is the second part of that article.

Most Bulletins we discuss Personal Security, sometimes National Security, and as all security issues of any sort affect us all. Last month we discussed economic security.

As previously explained the major Banking Houses such as Westpac, ANZ, National and the New Commonwealth Bank are given the monopoly of credit by the major political parties who are dependent on the large election donations that are distributed by these Banking Houses. In Australia the Commonwealth Constitution gives the government of the day, the right to use the public credit.

Part V. – Powers Of The Parliament.

Legislative powers of the Parliament

51. The Parliament shall, subject to this Constitution, have powers to make laws for the peace, order, and good government of the Commonwealth with respect to:-

(iv.) Borrowing money on the public credit of the Commonwealth:

(xii.) Currency, coinage, and legal tender:

(xiii.) Banking, other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money;”

Prime Minister Andrew Fisher MP, (represented Gympie)

That was the section used by the Andrew Fisher Government, under the good encouragement of King O Malley MP

King O Malley MP an American who worked in a Bank when he was 14.

and under the good guidance of Sir Hugh Denison Miller, to form the Old Commonwealth Bank, that used the public credit to give Australia its greatest economic leap forwards. Even through four years of war, and massive industrial growth, including building the Trans-Australian Railway which linked Western Australia to the Eastern States.

The line was commenced in 1912 and worked on during World War One and completed in October 1917, over a thousand miles of desert railway line united a country. The Governor of the Bank, Sir Hugh Denison Miller wrote a cheque for Four Million pounds to pay for the enterprise and due to the fact that all of those pounds had to find their way back to the Commonwealth Bank, the clearing house, all of that credit could be cancelled, causing no debt. In the same way that the current clearing house banks  could cancel everyone mortgage debts without suffering a loss, or a downturn in trade. That credit will circulate back though their coffers, they will still make money from the buyer and the seller, every transaction adds to their wealth.

Sir Hugh Denison Miller.

Sir Hugh Miller, when publically asked why Australia had fought the four years of war and was the only country in the world with no debt, answered that he could have found the money/ credit for three wars with three times that amount, without any detriment to the bank, or the nation.

All we need is a Government with the Backbone to Represent the People instead of the Banks.

Major CH Douglas, a world renown economist, stated,

“The prerequisite to resolution of these problems is the elimination of this monopoly of financial power, and its control by national governments through a properly constituted statutory authority, a National Credit Authority, answerable to parliament but immune from political manipulation. This Authority would maintain the national accounts of production and consumption in both physical and monetary terms (as is already done by the Bureau of Statistics in calculating gross Domestic Product and Gross National Product), and regulating the issue of credit in accordance with the performance of the economy. It would operate in the interests of the citizens, and with compatible arrangements for mutually complementary international trading.”

Which was the position given to the old Commonwealth Bank between 1913 and1922 when its control over the ‘public credit’ was greatly diminished and shared again with the major private banks. This backwards step was initiated by the incoming Bruce/Page Coalition government whose election had been duly financed from private bank donations. We have been in debt ever since. All that changes is the amount. As far back as the 1990s 90% of the National Debt to the Clearing House Banks was for the outstanding interest, the principle, the initial loan being less then 10% but as the unpaid interest over 50 years compounds and increases like a virus.
Raising taxation to pay it to the banks in exchange for the ‘public credit’ lead to intolerable burdens of public and private debt and ever-increasing taxation. They must eventually culminate in the breakdown of the economic system and the moral of the community. The means to that end are known and available. There is growing international recognition that such change is necessary. A return to the Old Commonwealth Bank system would then ascertain from all available sources the financial and economic position of the nation as a business concern, and draw up a correct Trading Account and Balance Sheet of the Nation. As we are a hard working nation, with immense national wealth which is continually increasing, there would be a considerable credit balance in every accounting period, representing the profit of national appreciation of wealth over national depreciation.
Credit would be issued against the profit balance to establish an equation between purchasing power and prices, pay a social dividend, or meet any commitment deemed necessary for the safety or welfare of the people of Australia.
Once we have established the control of our national credit, the power to do things would no longer be determined by money conditions. Under Public Credit, “what is physically possible is financially possible.”

The German Economic Miracle 1933 to 1939.

Another example of the potential of the use of ‘public credit’ if not eventually for a good cause it does show that the system works.

Hjalmar Horace Greeley Schacht Hitler’s Minister of Finance

Hjalmar Horace Greeley Schacht was appointment as Germany’s Reichsbank president on 17 March 1933 by Adolf Hitler and as Germany’s Minister of Economics in 1934. Schacht supported public-works programs and lent money to new industry, he used an innovative solution to the problem of the government deficit and instead of borrowing money from the major clearing house banks he created mefo  bills which served as bills of exchange, convertible into Reichsmark upon demand. MEFO had no actual existence or operations and was solely a balance sheet entity. The bills were mainly issued as payment to armaments manufacturers. Mefo bills were issued to last for six months initially, but with the provision for indefinite three-month extensions. The total amount of mefo bills issued was kept secret. Essentially, mefo bills enabled the German Reich to run a greater deficit than it would normally have been able to. By 1939, there were 12 billion Reichsmark of mefo bills .This enabled the government to reinflate their economy, which culminated in its eventual rearmament.

MEFO bills paid for German re-armament, what we call the bills for Australia’s re-armament could be LAFOs or any name but the system could save us.

Then Schacht disagreed with what he called “unlawful activities” against Germany’s Jewish minority and in August 1935 made a speech denouncing Julius Streicher and Streicher’s writing in the Nazi newspaper Der Stürmer. Following the Kristallnacht of November 1938, Schacht publicly declared his repugnance at the events, and suggested to Hitler that he should use other means if he wanted to be rid of the Jews. He put forward a plan in which Jewish property in Germany would be held in trust, and used as security for loans raised abroad, which would also be guaranteed by the German government. Funds would be made available for emigrating Jews, in order to overcome the objections of countries that were hesitant to accept penniless Jews. Hitler accepted the suggestion, and authorised him to negotiate with his London contacts. Schacht, in his book “The Magic of Money (1967)”, wrote that Montagu Norman, governor of the Bank of England, and Lord Bearstead, a prominent Jew, had reacted favourably, but the spiritual leader of the London Jews, Chaim Weizmann, opposed the plan. A component of the plan was that emigrating Jews would have taken items such as machinery with them on leaving the country, as a means of boosting German exports and manufacturing.

A motor car for every home, motor ways to drive them on and full employment was the goal of Germany in the 1930s.

He remained President of the Reichsbank until Hitler dismissed him in January 1939. After the attempt on Hitler’s life on 20 July 1944, Schacht was arrested on 23 July. He was sent to Ravensbrück Concentration Camp, then to Flossenbürg, and finally to Dachau Concentration Camp.

All We Need is a Brave New Government That Owes NO Allegiance to The Banks.

Imagine,if we had a government that had received no election donations from the big banks, it could ask on of the clearing house banks to create a government credit every year, on the public credit from which the expenses of the government could be withdrawn from. If all of the big four clearing house banks refused, the government could follow Prime Minister Andrew Fisher’s example and create its own bank and deposit all the government resources within that bank. It could legislate for that new bank to handle the note issue, pensions,  the pay to public servants, the holder of all government insurance etc. The major Banks would be insane not to assist the government as they would not want competition on that large scale.
So then instead of paying GST to the government, which effectively slows our economy, by making our produce more expensive, sometimes un- buyable for many people, the government pays a bounty of 10 % to all goods for sale that were Australian produced. This factor would ensure that the money or credit issued against the profit balance in the nation’s books would not only increase purchasing power, but, at the same time, reduce prices. This could be covered by a tariff of 20 % at the Customs barrier on all imported goods. Plus payment of a 20 % bounty for all exports of Australian goods to the manufacturer or producer. This money would  increase the people’s purchasing power  in the form of a national dividend which would benefit all individuals and irrespective of employment. This credit comes from the national profit already mentioned, and would provide the means of Australia’s future economic security.

At present all our taxes presently go to service the interest on the government debt and never even starts to pay off the principle. All we need is a government (like the one of Andrew Fishers, that was not dependent on Banker election donations) to tell the banks that they are using our public credit and charging us for the gift, so wipe the past debts, and every year create a government credit (call in MEFO or MONOPLY) for the billions it needs for defence and pensions. Close all other government spending and ensure all government spending is onshore, within Australia. Then forget every other form of taxation /theft forever.

No longer will governments pass legislation instituting socialistic policies which forcibly takes from those who have worked hard, and gives it to those who don’t want to work at all.

The most effective “planning” in the world is adequate money in the hands of consumers. Having effective demand in this way, the government could give the necessary orders, and industry would be enabled to function to the limit of producer capacity or to the limit of consumer demand, whichever occurred first. The standard of living would thus rise to untold heights.

Yes we would need a very strong immigration policy because the World would want to be beneficiaries of an Australian economic miracle. A copy of the Old Commonwealth Bank could finance all of Australia’s needs, and fulfill projects like the Bradfield scheme and new defence industry.


By this method, the consumer’s money would have increased its buying power, and all goods could be sold without loss to the producers. Inflation would be impossible, and all the economic uncertainties of boom and slump incidental to the present “trade cycle” would disappear, The economic system would be stabilized.
When we have a government brave enough to implement this new system, borrowing for national purposes would be unnecessary; public works could be constructed without debt, people could afford their own health plans, health costs would reduce without any government subsidies, unemployment would only affect those who do not want to work.
Ron Owen