T P W I

As a rule, those who conduct an injustice of some kind are not usually keen to publicise it. There are some exceptions of course, despots who like to make examples of others in the manner of a show trial or a public execution, or war criminals who think that what they are doing is an act of leadership, but generally speaking many evil truths of history remain well hidden. This is particularly so in matters of business, where suspicious contracts and agreements are much easier to hide than, say, dead bodies at the scene of a massacre.

It is an especially difficult task to uncover the machinations and plotting of the elites in a society for they have the most ability to engage in cover-ups. They have their tentacles in the infrastructure of law, policing, surveillance, politics, media, and academia, and through these they try to ensure that their interpretation of events is the one that prevails. History, after all, is “his story”. Occasionally a diary will crop up containing an admission, a nugget of truth will emerge unintentionally in an interview somewhere, or a file will be inadvertently declassified by a government department. Often, these discoveries are made years or decades after the fact, the people who suffered the injustice are long dead, and attempts at recompense are therefore pointless.

The battle waged by journalists to uncover the truth of the here and now is therefore a vital one. As the media within which those journalists work is largely owned by elites, the sincere journalist can face a spider’s web of intrigue when trying to navigate his or her way through to reality. With regard to the history of banking and money, this grandest fraud of economic history, and perhaps therefore the grandest fraud of history itself, the effort of truth seeking must rely largely upon an assessment of events, the circumstances in which those events occurred, and the identity of those who benefitted from them. In short, the truth seeker is confined to a circumstantial method. He or she will never be invited into the boardrooms of international banks, the family offices of billionaire investors, or the presidential palaces to hear what plots are being hatched against humanity. All one can do is piece together what is actually happening like all detectives must do with a healthy dose of intuition. And then, as in many great novels, when the detective reveals his conclusions in public, the villain will deny, gaslight, rubbish, or refuse to engage at all.

The elite media does not of course seek to suppress all forms of criticism and debate. This would be too obvious, especially where the wider population is well educated and slightly cynical. Instead, criticism is permitted, but mostly of things that are minor, inconsequential to the grand scheme of things, and generally irrelevant to the daily sufferings of the masses. In the tabloid press, passionate debates rage over the hairstyle of a particular actress, a match played between two football teams, or the plot lines of the latest soap opera. In the more intellectual media, debate is slanted away from key issues in more sophisticated ways. Hence the economist Kenneth Galbraith once commented that the “study of money, above all other fields in economics, is the one in which complexity is used to disguise truth or to evade truth, not to reveal it”. (Galbraith, J. K., Money, Whence it Came, Where it Went, Houghton Mifflin, 1975, p. 5.)

Where one branch of the establishment finds itself in conflict with another, the mask does sometimes slip to reveal the movements of those powerful forces which normally operate out of sight. If a particular case does reach a critical mass of public indignation, a financial crisis, a spying scandal, an act of official corruption maybe, then government will typically launch an investigation, authors will write exposés and politicians will debate the rights and wrongs of the matter in the parliament. In the meantime, the grand fraud may well carry on in the background, explaining the comment of Montagu Norman, onetime Governor of the Bank of England, when he said “The dogs bark but the caravan passes on” (Time Magazine, July 21, 1941). If in due course new regulations are passed, one finds that they’ve been watered down by lobbyists or that they can be easily side-stepped with the help of a clever lawyer. And in most cases, those regulations usually address the cause of the last crime, not the next one.

The financial elites cannot relax, even in their existing position of power. To keep the lid on the huge fraud of money creation, even just to keep the subject out of mainstream discourse, requires them to paddle at some speed beneath the surface. We are led to believe, by them and particularly by their tentacles in media and academia, that mounting debt, endemic inflation, boom-and-bust, increasing wealth inequality, and recurring banking crises are just the natural way things are. All of which is a carefully crafted lie, fed to a largely unsuspecting populace by intelligent and well-resourced people.

An observer of these paddling ducks will usually notice key strategic themes repeating themselves through the decades. I have summarised below what appear to me to be the most important of them. I do not say that they are developed formally by a group or committee in the way that laws are. Often, they just occur to those who hold power precisely because they are intelligent and well-resourced. There is usually only one best move in any given chess position and a conspiracy is not required in order to identify it. I have given examples for most of the strategies which anyone with the time can research in depth and verify, and the point is that if a strategy can be shown to have been used just once, then it has probably been used many times.

Strategy 1. Financial Reward

The banking sector uses financial reward to help ensure that those who support, promote or implement their agenda are well rewarded. Rewards can take the form of contributions to political campaigns, generous advertising budgets paid to television companies, and contributions to the arts. Such payments create a lobby of people who depend on the banking system for their financial survival. The implicit deal here is that the employees will do the bank’s dirty work (create money out of nothing and lend it at interest), the politicians will not pass legislation that is severely harmful to the banking sector’s interests, the television companies will not make programmes with a generally anti-banking flavour, and the arts will be careful not to bite the hand that feeds them. On top of this, millions of shareholders will enjoy bank dividends and interest receipts to fund their retirement pots. Many senior regulators and politicians are also handsomely rewarded with well-paid assignments in banking (more on this in the “Revolving Door” shortly). These thankyous for the years in which they provided a bank friendly environment themselves act as an inducement to those who are next in the queue. Hence, Eddie George, the former governor of the Bank of England was rewarded with a board position at NM Rothschilds and Sons in 2003 after his retirement from the Governorship, and Tony Blair was appointed in 2008 by JP Morgan Chase to a senior advisory role on a salary in excess of £500,000 per annum (in 2003, JP Morgan had been appointed by the Bush/Blair Coalition Provisional Authority to lead a banking consortium handling Iraqi trade flows).

Strategy 2. Lobbying

Getting into close relationships, personal or professional, with lawmakers and regulators is a standard means by which corporate and other interests attempt to influence the policies adopted towards them. This is frequently done by means of funding at election time. Large financial organisations are major donors to the main US political parties, many making contributions to both parties at the same time with consequent suspicions concerning their objectives (it clearly cannot be to help one particular side win). In total, Wall Street companies and businessmen gave USD2.9 billion to Washington campaigns and lobbying during the 2020 election cycle. Lisa Donner, executive director of Americans for Financial Reform comments that “… this torrent of money gives Wall Street an outsized role in how we are governed, while driving and protecting policies that help this industry’s super wealthy amass even greater fortunes at the expense of the rest of us.” (CNBC, USA, Apr 15 2021).

Lobbying is not of course restricted to money donations. Some lobbyists, for example, provide sector specific “research reports” for politicians to digest, host private discussion forums, organise “fact-finding” trips (oppressive regimes favour this one) and so on. The use of “revolving doors” is another common tactic. Here, key executives move between the realms of politics, regulation and banking. This circulation of like-minded people within the banking and finance infrastructure causes similar attitudes to permeate at the managerial level, giving rise to a monoculture of thought, groupthink, and inertia. All of which can easily produce major errors of policy stretching over many years. More commonly, the revolving doors merely ensure that banks have good connections with people at senior levels in government and financial regulation and can thereby neutralise or minimise any damage that might come from those quarters. Examples of the revolving door are abundant. A former partner at hedge fund TCI became British Prime Minister (Rishi Sunak), a former CEO of Goldman Sachs became a US Treasury Secretary (Hank Paulson), and a former Bank of England employee became a Labour Chancellor of the Exchequer (Rachel Reeves). Brian Griffiths, a vice-chairman of Goldman Sachs, chaired the UK’s Griffiths Commission on Personal Debt in 2004, reporting into the financial problems faced by families in the United Kingdom. If banking is the prime cause of the debt problem, then appointing a banker to write a report on the cause of the debt problem is probably not wise, or to put it more bluntly: “The banks – hard to believe in a time when we’re facing a banking crisis that many of the banks created – are still the most powerful lobby on Capitol Hill. They frankly own the place.” (Senator Dick Durbin, WJJG Radio, Mornings with Ray Hanania, USA, 29 April 2009.)

Strategy 3. Financial Constriction

The ability to increase or decrease money supply (by lending more, or not renewing old loans, respectively) is in fact the ability to cause boom or recession in a country. The ability to choose which companies and which governments are able to obtain finance for their activities is a more specific power which can be used to produce highly targeted outcomes, politically, economically and even culturally. Both are formidable powers, and banking institutions have understood that fact from early times.

On the instruction of its chairman and main shareholder Nicholas Biddle, the Second Bank of the United States caused a nationwide recession in the years 1835 and 1836 by calling in loans. This was Biddle’s way of bringing pressure upon then President Andrew Jackson, who was against large banking organisations and in particular the Second Bank of the United Sates. Biddle on the other hand wanted a system of banking more akin to the one established in Britain and France, which places a central bank at the pinnacle of the banking system, and for Biddle the Second Bank was going to be precisely that. Jackson’s statement on the episode reads as follows: “The distress and alarm which pervaded and agitated the whole country when the Bank of the United States waged war upon the people in order to compel them to submit to its demands cannot yet be forgotten. The ruthless and unsparing temper with which whole cities and communities were oppressed, individuals impoverished and ruined, and a scene of cheerful prosperity suddenly changed into one of gloom and despondency ought to be indelibly impressed on the memory of the people of the United States. If such was its power in time of peace, what would it have been in a season of war, with an enemy at your doors? No nation but the free men of the United States could have come out victorious from such a contest; yet, if you had not conquered, the government would have passed from the hands of the many to the few, and this organised money power, from its secret conclave, would have dictated the choice of your highest officials and compelled you to make peace or war, as best suited their own wishes.”  (Andrew Jackson, Address to the American people, 4 March 1837, recorded in Richardson’s Messages, Volume 4, p. 1532.)

A few decades later, the American federal government was considering printing paper money of its own (called “greenbacks”) rather than borrowing at interest from the banks. Politicians correctly reasoned that if the government borrowed money from the banks, the banks would simply print it and then charge the government interest for borrowing it. Why not have the government print the money instead and thereby save all of the interest charges? For the bankers this policy spelt disaster. In 1877, James Buel, secretary of the Associated Bankers of New York, sent the following letter to members of the American Banking Association: “Dear Sir:  It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially the agricultural and religious press, as will oppose the greenback issue of paper money;  and that you also withhold patronage from all applicants who are not willing to oppose the Government issue of money.  Let the Government issue the coin and the banks issue the paper money of the country, for then we can better protect each other.  To repeal the Act creating bank notes, or to restore to circulation the Government issue of money, will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders.  See your Congressman at once and engage him to support our interests, that we may control legislation” (submitted in evidence given by Charles Lindberg, 63rd Congress, First Section, April 29th, 1913, quoting a circular to banks sent from James Buel, secretary, Associated Bankers of New York, at 247 Broadway, New York, 1877.)

The leverage that debt provides over commercial organisations is no less powerful. Global Restructuring Group (GRG), a profit centre within Royal Bank of Scotland (RBS), was accused in 2013 by Lawrence Tomlinson, Entrepreneur in Residence at the UK’s Department for Business, Innovation and Skills, of “engineering businesses into default” in order to “generate revenue through fees, increased margins and devalued assets” and that “conflicts of interest existed between West Register, a property management subsidiary of RBS which frequently bought distressed assets, and BRG, which sold distressed assets” (report entitled Banks’ Lending Practices: Treatment of Businesses in Distress, Lawrence Tomlinson, 2013).

One businessman who was subjected to the GRG treatment recounted to me how it operated. His company held the patent for software which was an essential component in the mobile phones of one of the world’s major manufacturers. Competing suppliers were keen to own that software but to purchase it from my business acquaintance would have cost tens of millions of pounds. One weekday in 2008 my business friend received a phone call from Royal Bank of Scotland stating that the bank wanted repayment of the company’s £10m overdraft within 24 hours. Repayment would have been possible given a few days perhaps, but not 24 hours. Companies simply don’t sit on that amount of idle cash. The bank knew this of course. It also knew that if the firm failed to repay the overdraft on time, then the bank could force it into insolvency, appoint an administrator and then force the sale of the company’s assets, including the patent. This is indeed what happened, very quickly, through a “pre-pack administration” where the sale of assets is concluded at the same time as the administrator is appointed. The bank could of course claim that the patent was being sold merely in order to help repay the loan that was due to it, but people on the inside knew what was really going on. The bank was using financial constriction to achieve an objective. Within a few months of the telephone call demanding repayment of the overdraft, my business acquaintance had gone bankrupt and his prized patent had been sold to … wait for it …. another client of RBS.

An Independent Review by the UK Financial Conduct Authority in 2017 found widespread, systematic and inappropriate treatment of customers by GRG which “prioritised its commercial objectives at the expense of turnaround objectives” (Independent Review, section 2.30a). To describe the likes of the patent episode above, the FCA uses the following language: “GRG did not adequately manage the conflicts of interest in its relationship with West Register, thereby leading to an environment where case strategy was influenced by the perceived or actual interests of West Register with a reduced focus on customer-led recovery and turnaround” (Independent Review, section 2.30e). Behind this mealy-mouthed sentence one finds hundreds of bankrupted businessmen, collapsed companies, lifetimes of work sold short, and the proceeds used in part to pay bankers’ bonuses.

Strategy 4. Media Advertising

Advertising has three important benefits for the banking industry. The first is obvious. If customers respond positively to advertisements, then more banking products are sold. Secondly, bank advertising can help set a public perception for the industry as a whole. This perception is crafted according to the era, so in the present decade it is one of caring, inclusivity, social and environmental responsibility, and so on. All of this reinforces the completely incorrect perception that banks are a beneficial and essential component of the modern economy. Thirdly, when television stations, advertising agencies, brand consultants and others come to depend for their living upon the advertising revenues earned from banks, the banks gain a strong lever over the content and opinions which are promoted. Newspaper and television editors are careful not to upset those who, in effect, pay their salaries.

Strategy 5. Education

The use of educational materials to reinforce understandings that are friendly to the banking sector has been a longstanding strategy. HSBC in the UK has published many children’s books on the subject of money, NatWest has run mini-banks in schools, and the Bank of England has for many years offered short presentations for children at its Threadneedle Street office. Some years ago I attended one such event during which the Bank’s economist explained that prices rise in the economy because as time goes by the population increases and hence there is more demand for goods and services. No mention at all was made of the role of the banking sector in expanding money supply, which is by far the more important factor in causing inflation. In academia, banks support research economists with large scale funding for all manner of complex research, but surprisingly little on the subject of money creation. One PhD student explained to me some years ago that his University Dean had guided him away from the subject of money creation on the basis that the bank which had financed the university’s construction programme did not view such research output positively! With the mainstream largely dominated by bank sponsored research, opposing researchers are easily portrayed as a minority, sometimes as “cranks”. Naturally, with fewer resources available to them, these opposing forces have to make Herculean efforts to match the standard and volume of research being produced by the mainstream. And without the roll call of “prestigious” banking and finance clients to their name, their credibility in front of politicians, media and regulators is harder to sustain, making them even less in demand and even less able to maintain themselves. Often, such people exit the sector for an area of work which can sustain them, leaving the field still more open to domination by establishment voices.

Strategy 6. Legal and Institutional Encasement

When a particular practice grows up over decades or centuries, it gathers around it an infrastructure of institutions that suits its own needs and interests. A legal system also develops that caters for the practice and the related institutions. Thus, an infrastructure of roads with roundabouts and traffic lights has grown up around the practice of driving cars, and a set of laws and government agencies has been established to govern how cars and roads operate. Likewise, in banking and finance, an infrastructure of central banks, commercial banks, mortgages, bond markets and credit cards has grown up around the practice of money creation and interest-based lending. Huge resources have been devoted to building a regulatory system to ensure (unsuccessfully, one has to say) the smooth running of the system. All of this may seem quite reasonable and even necessary until one recognises that such infrastructure and laws can operate not just to support existing practices, but also to prevent any alternative practices coming into being. For example, the fact that the IMF charter prohibits member countries from using gold as currency, and that UK banking regulations prohibit bank accounts which share losses with their depositors, prevents the development of a banking system based upon commodity money and genuine risk-sharing. The reformer who seeks to prove a different (and hopefully better) way of doing things therefore finds few major institutions within which to fit or promote his idea. Everything has to be started from scratch so to speak, making change very difficult. The laws and institutions are in fact a cage, an “encasement” as Kant might have called it, which traps society in one particular set of behaviours.

Strategy 7. Debating Tactics

Debating tactics are an essential tool of those seeking to prevent change, because before change can happen one generally has to convince others that it is necessary. The elites understand that if campaigners can be entangled in years of argument before change can even begin, then all the better for the existing way of doing things. The forms in which this strategy manifest itself include stonewalling, feigning of ignorance, ignoring, rubbishing, gaslighting, demagoguery, “kicking into the long grass”, and label sticking. If the above are done with confidence they are all the more effective, hence the use of confidence is itself a debating strategy.

In subjects where there is a strong vested interest, label sticking frequently comes into play early. One party tries to win the argument by sticking a particularly emotive label (for example, “conspiracy theorist”) on the other. Label sticking is an attempt to substantially win an argument without resorting to the pertinent facts or theories. It is typically practised in front of an audience because the mental images triggered in the minds of an audience by a two or three word label will require the other debater several hundred words to neutralise. At a minimum, this approach wastes valuable debating time which could otherwise have been devoted to core issues, and at best it helps the label sticker to be seen to win the debate without addressing the core issues at all. The audience is immediately encouraged to consider whether the campaigner is somehow unhinged or badly informed, and from there the battle is all uphill.

Demagoguery involves an appeal to base instincts and ill-informed opinion and therefore works best when used with an audience which has base instincts or is ill-informed, or both. A typical example is the politician who blames immigrants for a country’s economic problems. As with label sticking, the aim is to get the “crowd behind you” and if practised well it completely closes the ears of the audience to the other debater’s arguments.

Stonewalling and feigning ignorance are strategies for time wasting and disheartening the opponent. They can force the campaigner to make detailed explanations of background material in order to fill the silence or overcome the supposed ignorance. This is a double-edged sword, in that allowing one’s opponent to do the talking provides him with an opportunity to convince the audience on matters of fact and theory. However, it also provides the opportunity to trip him up on points of detail or expose flaws and gaps in his knowledge.

Strategy 8. Tribal Encasement

Perhaps the most powerful and least recognised force preventing system change in a nation’s economic and political life is that of tribal loyalty. A tribe has a particular common bond which drives them towards similar views and actions. Examples of the bond include a shared ethnicity, religion or political inclination, membership of a military organisation, even support of a football club or interest in a particular kind of music. Workers in some industries can display tribal characteristics, for example people who earn a living in the banking sector might bond to some extent over that common interest.

The fact that members of the tribe are dispersed and do not need to belong to a formal organisation is what gives them so much power to achieve their ends. Their actions are often carried out quietly and without verbal or written instructions from a high command, but if there is a high command then the tribal group is even more powerful because their efforts are coordinated and therefore more productive. The members of the tribe cannot easily be unseated from power in the way that a political party can be voted out at an election for example, precisely because they are not part of a formal group and do not operate within a governing structure such as a parliament. Uninformed observers may not even recognise that members of the tribe are present among them, and those who are informed will have great difficulty convincing anyone that the tribe even exists let alone that it is undermining non-members. This can remain the case in spite of abundant evidence that most of the “lucky” breaks, money, and positions of influence are accruing to members of the tribe.

Tribes identify the power structures in any given place and time and work to gain influence or control over them. In modern times a tribe might for example target the banking sector, the media, political chambers, the digital economy and national surveillance systems. In the information age, knowledge of others’ information is arguably the most desirable asset to have after the licence to manufacture money out of nothing. The foremost power structure of modern times is of course the great nation state. This entity can reach across the globe militarily, politically and commercially, and support movements and lobbies far beyond its own shores. It is therefore the greatest prize of all. Once positioned at its critical junctures, tribal members may attempt to alter the operating system of the state, for example by making it illegal to criticise the tribe or the tribe’s activities, by entrenching the institutional structures through which the tribe operates, by feeding surveillance data to key members of the tribe, and by funnelling the financial resources of the nation towards members of the tribe or activities that support the tribe’s objectives.

Knowing whether tribal control has been achieved, and who the tribal members are, is therefore essential for the serious campaigner. One would not, for example, want to unwittingly enlist a tribal member in a project which challenges the tribe’s power structure. Every campaigner must then make a judgement on how best to disclose their own views and proposals, because keeping silent for fear of the tribe is to be defeated. Where campaigners operate within a strong tribal context (examples include Baath Party Iraq, communist East Germany, army-run Egypt) they tend to hide behind the shield of academic neutrality (“… but I am merely researching what is happening …”), the veil of fiction (“… it’s just a story about a misguided young man …”), religious education (“… this is a set of moral principles laid down long ago …”), and so on. The more traditional solutions of graffiti and anonymous leaflet drops are still available of course.

Strategy 9. Physical Violence

If all else fails, reform efforts can be suppressed by physical violence. The most publicly accessible cases of this strategy are not seen in banking but in international commerce. The reader seeking further knowledge on this point may wish to pursue the story of Mr. Mosaddegh, the elected leader of Iran, who in 1953 investigated the activities of the Anglo-Iranian Oil company with the objective of ensuring that an appropriate portion of his country’s oil resources were being received for the development of his country. Or the story of Mr. Arbenz, the democratically elected president of Guatemala in 1954, who sought to establish basic workers’ rights and devote a larger portion of Guatemalan resources, primarily the country’s banana crop, to the development of his country. Or the story of Salvador Allende, the socialist president of Chile elected in 1970 with an agenda to provide land reform, basic healthcare, free education and improved housing to his people. All were unseated by coups organised by agents of the American government, and in the case of the Iranian coup with British assistance. These are among several dozen intrigues committed by first world nations against reform-minded developing nations in the last 100 years, all of them fundamentally violent, anti-democratic, colonial, and frequently profit-led in motivation. Collaboration between commercial interests and interests of state is frequent in this regard. Arbenz’s actions for example threatened the profitability of the United Fruit Company of the United States which had by that time achieved substantial control of the country’s agricultural output. It was lobbying from UFC through the office of the renowned public relations adviser Edward Bernays that triggered American intervention to unseat Arbenz. A forty year reign of civil war, military dictatorship and terror followed for the people of Guatemala. The details may change but the strategy has remained the same for centuries, from the appropriations concocted by the British government and the British East India Company in the 17^th Century to the exploitations inflicted on the Congolese people today at the behest of American and Chinese corporations. Samuel Huntingdon summarises things very well in The Clash of Civilisations when he writes: “The West won the world not by the superiority of its ideas or values or religion but rather by its superiority in applying organized violence. Westerners often forget this fact; non-Westerners never do.”  In many more cases, reform has been prevented not by violence itself, but by the threat of violence, thinly disguised in diplomatic language and delivered at the appropriate level of government.