by Kieron McFadden

With grateful thanks to Dr Edward C. Hamlyn M.B.Ch.B who supplied much original research material and articles upon which this booklet is based.


A bullet wound in the foot is handled by removing the bullet, not shooting oneself in the other foot. We propose to show you where the bullet is lodged, how to remove it, handle the limp and save the other foot. A correct handling for our nation's woes opens up almost immediately whole new vistas of opportunity for this country that EMU would not achieve if it endured for a thousand generations.

A glazed expression will appear on the face of the average person if he is invited to take a look at the monetary system. He will immediately recoil in the near total conviction that money is far too complex for him to understand and, like microbiology, is something we are obliged to leave to the "experts". This response is the result of a lifetime of being educated into this belief.

Money is not essentially, nor inherently complex. It has become apparently complex precisely commensurate to the degree to which its purpose has been corrupted. It is an engineered complexity, designed to hide from view the iniquitous and grossly unjust way the monetary system has been, and is being manipulated by those who control it.

Historically and currently, this manipulation directly results in crimes against humanity on a scale which dwarfs the 'misdeeds' of any and all despots such as Adolph Hitler, Sadam Hussein and Slobodan Milosovic. Indeed, 99%+ of the peoples of the world, including we, are seriously adversely affected by it.

At the risk of sounding Orwellian, our money masters have now grown so powerful that they control governments and the media alike. Only the electorate (that means you and I) have the collective power to halt and reverse the complete take over of the world by the 'criminal' elite who control the monetary system. Make no mistake, '1984' is creeping in the back door.

It is essential that every adult in Britain gains some understanding of how the monetary system works (or rather doesn't work) and how it could and should work so easily. It is essential that you play your role in disseminating this truth, by passing this booklet on and/or urging friends, family and neighbours to contact BAMR. We are earnestly trying to do the job the media should be doing and we need your help.

It is a game in which we shall all win.

Kieron McFadden is masterful in taking the complex, unravelling it, and presenting the reality to the uninitiated in a way he can understand. This is the purpose of this booklet.

Lord Stamp, former Director of the Bank of England summarises the essence of what is so very wrong thus: "The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented...If you want to be slaves to the bankers, and pay the cost of your own slavery, then let the banks create money."

It is often said that truth is stranger than fiction. By the same token, truth is too often more unbelievable that fabrication. So if you find yourself recoiling in a state of disbelief as you read this booklet, it is not because one word is fabrication or speculation. It is because it is all true. Editor

"The process by which banks create money is so simple the mind is repelled."

John Kenneth Galbraith


When someone avoids giving specifics and what you get instead is a sales pitch thick with diplomatic jargon, then you can smell a rat. You know he is being evasive and that there is more to what he is saying than meets the eye.

To preserve our freedom, which is now threatened by integration into a Federal State of Europe, we need to see very clearly why our statesmen are so keen to persuade us to surrender control of our destiny to remote and bureaucratic powers based on foreign soil.

We know that the reality of European Union is that our laws will be made in Brussels, our gold reserves removed to Frankfurt and our national destiny decided in distant councils but we also know that our statesmen do not describe what is happening in these terms. They hide the truth with diplomatic jargon, or vague notions of how union is "an opportunity" or how we will be "left behind" if we do not join or that union is "inevitable" in any case.

What we are getting is a sales pitch. The lack of details and specifics, considering the importance of the issue and its ramifications for the future, is quite startling.

Is there then something about all this we are not being told?

There is a hidden purpose to integration which is being kept out of sight. The unspoken reality is that we might not like it if we discovered what it is.

Sure enough, when we discover the hidden agenda upon which some of our statesmen are working, we can see very clearly why the truth must be concealed. It becomes clear, too, that we are very carefully being kept in the dark because the truth is never ever revealed by the press or by the electronic media.

The real issues are never discussed, therefore we think they should be examined very openly in this booklet.

The hidden agenda, in case you were still wondering, concerns money.


Who creates it?

There is a truth about money which you are not supposed to know: that truth is that 97% of money in circulation, including all the money that sits in your bank account, is owed to the banks. All of it!

Almost our entire currency has only been lent to us and that fact will not change whether we call it the Euro, the Ecu, Intergalactic Credit or the Paper Doily.

If you thought that our government issues our currency, think again. It doesn't. Believe it or not our currency is issued by banks and it is issued as a loan, which we must pay back with interest.

As if that one startling fact were not enough there's more, much more, but bear with us and you will see what we mean.

Take a look at this simple fact: America, the richest and most powerful country in the world, has a national debt of over $5 trillion, added to which the sum of all its private and commercial debt is around $22 trillion. Japan's (the second richest economic power on the planet) national debt is $2 trillion, Britain's combined national, private and commercial debt to the banks is over 1 trillion and all the nations of the world are in debt.

Who lent all the nations of the world all this money? The Martians? Where does so much money come from?

The answer is: it does not come from anywhere. It does not exist until the moment it is loaned. It is conjured out of thin air!

Banks are not lending money some depositors left in their vaults. When they lend, no depositor's account is debited.

When, for instance, the bank very kindly lends Joe 5000, Tom does not receive a letter from them saying his savings are temporarily unavailable because they have be lent to Joe. It does not work like that, although people have been allowed to believe it does.

So what does go on when Joe is loaned 5000? What actually happens is that the bank simply enters the figure 5000 in Joe's account.....And that's just about it!

No money moves from one account to the other. The transaction is purely and only a ledger entry, the writing of figures in a column, the changing of numbers on a computer screen. A stab of computer keys and, hey presto, Joe now has the figure of 5000 in his account, which he can spend by writing cheques or whatever. That 5000 has now entered the economy as money although it did not exist until the moment it was loaned.

But Joe has to pay that money back, plus interest. He does that by working hard to earn it, selling assets or whatever and eventually pays the bank more money than he borrowed, say 6000. The bank now has 6000 in its vaults where no money existed to begin with.

Neat, isn't it? The bank lends 5000 it did not have in the first place, in the process creating a 5000 debt out of nothing and ends up with 6000 from the sweat of someone's labour.

This is the method used to supply the economy with money and it operates, often obscured by a smokescreen of added complexities, at every level: private borrowing, mortgages, industrial and commercial borrowing, government borrowing - right up to the cruel iniquity of Third World debt.

The government pays back its loans - or at least some of the interest on them - using money taken from the citizenry through taxation. So when we say the government pays back the non-existent money it borrowed, what we really mean is you pay.

It is not hard to see the inherent unfairness and dishonesty in such a system, particularly as banks make billions without having to earn them and even have the legalised power to foreclose or confiscate property where someone cannot keep up with their loan repayments.

Consider, for instance, mortgage lending. The bank conjures 70,000 out of thin air and lends it to Joe to buy a house. Joe buys the house and spends the next ten years working hard paying off interest at say 400 per month - depending on interest rates set by the banks! After ten years he has paid the bank around 48,000 in interest on the non-existent money it loaned him. But now the economy is in trouble due to the various problems we shall discuss later occasioned by the debt-money system and Joe loses his job or cannot keep up with his mortgage payments. So the bank repossesses the house. By providing exactly nothing in exchange but a ledger entry made by a sweep of the pen or a tap of computer keys, the bank has Joe's 48,000 plus his house, an asset worth 70,000, and may even send him a further bill on some pretext or other!

However legal such a system may be, there is no way such an iniquitous piece of sleight-of-hand can be considered fair or honest as the rest of us understand fairness or honesty.

If we focus on Britain, we discover that more money is owed to the banks than actually exists in circulation. Far more. If all the money owed to the banks were paid off, the entire money supply of the country would disappear into a black hole and there would still be colossal debts.


Money was originally invented by some genius whose identity is lost in antiquity as a convenient alternative to barter, an alternative without which a highly developed civilisation like ours could not exist.

Imagine trying to pay the taxi driver with a bag of coal or the grocery bill with a box of spanners and a set of golf clubs. Imagine trying to carry all that around with you when you go shopping.

So the idea which is money was conceived. All money is a system of tokens (notes or coins or even symbols) adopted to represent or stand proxy for goods and services. One can then exchange the tokens rather than bags of coal, boxes of spanners or what-have-you and the tokens are easy to carry around. One can then exchange the tokens for actual goods when one wishes to.

That's just about all money is: a system of tokens that have been adopted and agreed upon by people to represent goods and/or services.

Where Money Went Off The Rails.

The existing monetary system, whereby the money supply is issued by private institutions known as banks, out of thin air and as a loan which has to be paid back with interest, has been firmly established for 300 years. Although many challenges to it have arisen over those years, those running the operation have had things pretty much their own way in recent decades. The whole core basic of how our money is issued, by whom and with what result has simply vanished from the media, from political debate or even the economics textbooks used in schools and universities.

Even though President Abraham Lincoln and President John Kennedy, both attempted monetary reform that would restore to elected government the right to create and issue money, assassins stopped them dead in their tracks. Their successors immediately reversed the reforms.

Money's original purpose, as we have shown, was as a system of tokens to represent or stand proxy for goods and services. Where it is issued to a nation by that nation's government debt-free, that is precisely what it does; it remains a flexible and convenient system that enables the basic principles of exchange, supply and demand and reward for endeavour to operate smoothly.

Where money comes into existence as a loan, where every pound in circulation represents not only goods and services but also a debt greater than its face value, that money is pulled in two fundamentally different directions at once. As you will see, it becomes dysfunctional as a means of exchange and the whole economy, originally evolved to serve human need, begins to operate like a faulty machine spinning increasingly out of human control.

If you imagine a calculator, which unbeknown to the operator has a fault which holds down the number seven and multiplies every answer by seven, that calculator will always give the wrong answer. Two times two becomes twenty eight, three plus four becomes forty nine and so on. If the operator uses the calculator to work out his accounts or do his tax returns he will pretty soon wrap himself around a pole trying to make anything make sense.

The current money system has become just such a "held down seven" wrapping governments and honest men around said proverbial pole trying to make anything make sense and thwarting their best endeavours to come up with solutions to problems.

Thus for example we have in a world of unparalleled technical brilliance and productive capacity an apparent inability to distribute the fruits of that genius. There is grinding poverty even in the heart of the world's richest nation; Third World debt that keeps climbing even though nations render themselves destitute trying to pay it off; environmental destruction that everyone wants to handle, that we can handle technically and must handle if we are to survive, that nevertheless never gets handled; degraded food that is making us ill even though we have the technical ability to produce wholesome food in sufficient quantity to eliminate hunger and malnutrition; more and more tax for less and less in return; men who produce nothing of value making billions on money markets whilst professions of inestimable worth, such as nurses, are paid a pittance; the cost of a home rising ever higher at a time when we have never been able to build more quickly or cheaply. The list of "two plus two equals twenty eight" goes on and on.

The dysfunctional machine has been with us for a long time. So long, perhaps, that we think that is how the machine is supposed to be, that nothing better should be expected from it.

Money went off the rails, to be precise, in 1694 when England's King William found himself in debt to the sum of 20 million. He could not pay his army and was advised by his financiers to borrow money which they would issue to him.

Someone should have warned King William of the perils of listening to "experts" with a vested interest in their own "advice".

The Tonnage Act was passed which enabled the financiers to create, as credit, the currency required to run the economy. Even the word "credit" turns out to be a lie, as we shall discuss later.

In other words, instead of the government issuing the nation's currency, as had been the case up until that time, that duty was passed to the bankers of the day and has been in the hands of the bankers ever since.

But instead of just supplying the economy with it, they called it "credit", in other words a loan. Calling it a loan enabled them to charge interest on it.

So for every 1 million issued (loaned) to the economy by the bankers, 1 million was expected to be paid back to them, plus interest. In other words more money is owed than was created.

When the proportion of debt money increases to the point it has reached today where it comprises 97% of the total money stock, the debt can never be paid back because it is far greater than all the money in existence. What occurs then is a continual rescheduling of the loans, borrowing to pay back what one owes, then borrowing more to pay that back and so on forever.

The money stock is in effect trying to do two things at the same time: on the one hand it is serving its original function as a supply of tokens issued in sufficient volume to enable all the goods in the economy to be exchanged and on the other hand it represents a debt that must be paid back.

At every level indebtedness to the banks, the continual repayment of money to them, is becoming a bigger and bigger component of costs, committing more and more of disposable incomes, company profits or local and central government revenues to debt servicing instead of spending in the economy on goods and services.

In other words there is a continual and worsening shortage of spending power.

The ramifications of such a monetary system are dire as you will see. As a system of currency it does not work, except to make those who issue it very very rich by gradually siphoning off all the wealth of the country and depositing in their hands.


Economies, to function, depend upon the exchange and distribution of goods and services amongst people. Money is the system of tokens that is used to conduct that exchange. Therefore those tokens must be in sufficient supply in the economy to enable exchange to occur. If there are not enough of them, if people cannot get their hands on them in sufficient quantities, then all the goods and services available cannot be exchanged. Goods cannot be sold, consumers cannot buy. We get a breakdown of distribution.

As the stock of money in circulation grows, the problem of debt and shortage of money running through the economy becomes worse.

In the early 1960s 20% of our currency was composed of notes and coins issued debt-free by the government and the remaining 80% was debt created by the banks.

That was bad enough but today the stock of debt-free money has declined to just 3% of the total money stock, the remaining 97% is debt!

Debt at all levels has risen accordingly and with it a continual decline in spending power.

The government borrows money and local councils borrow money, we borrow money to buy a home, a car, a washing machines, a refrigerator and through deferred payments, HP, credit cards and overdrafts more and more of what we buy.

What is borrowed today must be paid back in greater amount tomorrow. When we pay back from our income what we have already borrowed, the amount of that income we can then spend on further purchases further reduces our ability to buy.

If one is not short of money one does not need to borrow. A shortage of money - spending power - runs through the entire economy.

While the system of debt-money is in place there can never be other than a shortage of money and a vast surfeit of debt.

There is an endless list of things crying out to be done: we need to build schools, hospitals, improve and repair existing amenities; we need to repair our broken down inner cities, clean up the environment and produce better quality food. Millions of people meanwhile are out of work and we need to provide for them and our youngsters the very work that is just begging to be done, proper meaningful work that gives them real worth.

Take one example: we need to build a new hospital. The materials to build it exist, the people to build and man it exist, the demand for it exists. But it cannot be built. Why? Because there is not enough money. So why not create more money so that the materials, skills and demand can come together?

It does not happen because governments simply refuse to take responsibility for a job that is rightfully and logically their duty: the creation and issuance of the nation's money.

So we wind up with a scarcity of money, an artificially created barrier to production because the only real barriers are absence of resources, skills, people or demand.

While we live in a civilisation of unprecedented technical know-how, the legacy of the debt money system is income tax, unemployment, business failure, declining services, decaying cities, bad food, poverty, a deteriorating environment and a very uncertain future.

It is not hard to see that an economy and an entire people weighed down at every turn by such awful burdens is going to become, in time, demoralised, confused and exhausted.

It may even lose so much of its zest, hope and confidence that it sees entry into the EMU as its only hope!

There are many more ramifications than those briefly touched on here but we hope they are enough for you to understand in essence what has been going on.

Lords of the House of Cards

Those who create and issue the global currency of debt, constitute a financial dictatorship which has dominion and sovereignty over all the peoples of Earth.

If all the money in existence is owed to the bankers and if our money represents goods and assets, then all the goods and assets are owed to the banks. Those who have access to bank credit survive and those who don't, perish.

Tremendous power is placed into the hands of bankers and they can make or break any nation or any industry as they see fit.

If all this makes your head spin, seems too bizarre or disturbing to confront, recognise that you are not alone - and that you are looking at the underlying flaw that has turned our civilisation into a mismanaged economic mess.

You are looking at one of the most audacious, dishonest, destructive and repellant deceptions ever foisted upon Man. You have come this far, so don't turn away. There's more.

The vulnerability of those who profit from our current money system is that they depend utterly on our continuing ignorance of the workings of what is essentially a global fraud.

The system they have created is inherently unstable, as will become obvious as you read through this booklet. As the economies of the globe teeter from one crisis to the next, the risk of one currency getting out of hand and exposing the flaw in the whole system demands that the number of currencies be reduced.

The greatest weakness of the creation and issuance of money as credit by financial institutions is the enormous number of different currencies, all of which must be under the control of one single financial authority.

The ideal, from the viewpoint of the financial dictatorship, is a single global common currency. Thus we see moves towards global government.

The Federal State of Europe with its common currency is one major step in that direction because it will enable the money of all the nations of Europe to be controlled from one central bank.


John F Kennedy and Abraham Lincoln were struck down before they could wrest control of their nation's destiny from the banking elite that controls the money supply.

Assassins cannot, however, be used to muzzle the Internet, which is why we can expect and must defeat moves to discredit and curb the freedoms of the Net. As the world becomes computer literate, the speed and ease with which information spreads presents a real headache to those seeking to keep the truth out of sight.

Those who seek to preserve our freedom can now bypass the press and electronic media and disseminate the truth without hindrance. Whilst ideas continue to flow freely and unhindered on the Internet, the credit based global monetary system is in danger and so are those who hold the hidden reins of power.

Why? Because the continuance of any fraud depends upon its victims remaining ignorant of the fact that they are being taken for a ride. Exposure will kill it, particularly when people come to realise the harm it has done to them personally, to their communities and indeed the planet on which they live.

Governments may be willing to condone a money system that has done their own people inestimable harm but the people themselves will not be. The "inconvenience" of democratic machinery still remains, whereby the people can remove from office those who do not work in their best interests.

It would be a mistake to imagine that the motivation of the financial dictatorship is greed, the lust for power or any other easily recognised human frailty. After all they already own all the money in existence and through it the assets of an entire planet.

However, if one examines with care how the international banking cartels engineered the present day conflict in the Balkans, or their involvement in building Nazi Germany's war machine [see BAMR's booklet The Spoils of War in Yugoslavia], or if one comes to understand the massive economic, social and environmental destruction that is a direct result of that fundamental hidden flaw in our money system, one gets a glimpse of the horrors for which the financial dictatorship is responsible.

Those crimes must be hidden from view at all costs.

Imagine someone who has day in and day out presided over such a catalogue of human misery. He and his cronies have produced nothing of worth and in the process smashed up industries, pushed once prosperous nations into poverty, thrown millions of human beings onto the scrap heap, siphoned off the wealth of a planet and caused the deaths of millions in an impoverished Third World.

Picture if you can such an individual's fear of the rest of humanity ever finding out what he has done. He knows the whole house of cards he has built is unstable and teeters forever on the edge of collapse and envisages a dire fate for himself if he ever loses control. He must therefore move quickly, to consolidate his control and put discovery and reform as far as possible beyond the reach of anyone.

The motivation of the elite global financial dictatorship is fear: terror, the likes of which no ordinary mortal has any conception. It is fear of retribution for crimes which are so terrible as to be unconfrontable.

The blight of the English Tonnage Act has spread world-wide and we could draw up an endless list of crimes against humanity caused by having a criminal financial elite in power behind the scenes. The provision of arms, for instance, to the Third World in return for the acceptance of debt has facilitated widespread genocide. And the debt itself has impoverished Third World nations, bringing upon them the atrocity of mass starvation.

Back home, if the electorate were told they are paying 33 billion in tax this year as interest on counterfeit money borrowed by their government, the financiers responsible could be in terrible danger.

Nor would the people like to know they have borrowed counterfeit money to purchase their homes and that if they fail to pay the interest on that counterfeit money their homes will be taken away from them.

When they have contrived a single common currency issued by a bank in Frankfurt, we would no doubt be considered extremists to suggest the birth of a Fourth Reich. But our history books tell us that was what Hitler had planned and the bankers helped their boy build his war machines with loans he paid back from the plunder of Europe before the whole thing collapsed in ruins. Then they helped Europe rebuild with the aid of further loans.

The motivation for EMU is an attempt by the banking elite to consolidate and protect their vast privileges and they are driven by fear of exposure.

What such people do not comprehend is that very few of us are interested in retribution. We just want to put things straight and enable Man - all men - to finally enjoy the untapped potential of his considerable ingenuity. As for the banker, we are not interested in punishing him: we just want to make him more honest.


If we accept the concept of democracy as being government of the people, by the people, for the people, an understanding of how the international banking cartels control the money supply reveals that our cherished democracy is little more than an illusion.

Real power resides elsewhere than in the hands of the people or their elected representatives.

Political power has passed from the Crown and from Parliament into the hands of the financiers.

What we have in Britain and for that matter what our friends and neighbours have in France, Germany, Holland, the United States or anywhere else, is not democracy. It is the apparency of democracy which acts like a veneer hiding the reality of control by an unseen banking elite. There is no better method of controlling a nation's money than to issue it.

When an unseen elite can manipulate the money supply to crush a nation, or shut down a mining or shipping industry or make strategic decisions about interest rates or control a country's press, this is government of the people but it sure as hell is not by the people or for the people!

We are all living under the burden of an unjust and parasitic financial dictatorship..

He or they who issue a nation's currency have sovereignty and dominion over that nation. We know this is true because we have been told it is so, by none other than the banker Amschel Rothschild who stated; "Give me control of a nation's money and I care not who makes its laws".

If a nation's elected government has no control over its money supply then that nation has no control, ultimately, over its destiny. It can be broken, economically, at will. It can quite easily be crushed by a manipulation of credit, interest rates and exchange rates. The very consciousness of its people can be manipulated via a media itself owned by or in hock to the banking cartels and by politicians, "experts" and opinion leaders friendly to banking interests.

Should there be a nation with serious misgivings about EMU for instance, it can be manoeuvred into such a position of demoralisation and economic decline that its people will, under a barrage of pro-EMU propaganda in which dissenting voices are marginalised, vote for EMU out of sheer desperation.

The financial dictatorship depends on governments continuing to play ball because governments could take away from them the right to issue our currency with a single act of Parliament.

Fortunately for us the democratic machinery is still in place and governments depend on our vote to put them in office.

The power to change all this lies therefore at the grass roots. It lies in your hands.

Simply insist your politicians enact monetary reform. If they won't, elect someone who will!


If you look in the dictionary you will find that imitation with intent to deceive is the practice of counterfeiting.

The issuance of currency "as credit" is in fact the intention to deceive people into believing they are borrowing money, when in fact that money does not exist.

If ever the meaning of a word has been corrupted it is the word credit.

Credit is derived from the word credere from which we get the word crede - what I believe.

When we are told our currency is being issued as credit we believe they are talking about money: a sum of money on deposit on which we may draw.

But this is not what they mean because the money is created out of thin air. It is not taken from a sum of money on deposit somewhere.

Our currency comes into existence as a debt. We owe a debt on something that did not exist in the first place!

Debt, as we all know is the opposite of credit. So they have reversed the meaning of the word credit in order to fool us. And they have succeeded very well.

We now happily borrow money that does not exist, pay interest on it and lose everything we have if we fail to do so, and are forced into the slavery of earning real money to repay that which never existed in the first place.

Hard to believe, is it not?

That is why we do not believe that we could have been cheated on such a vast scale for so long.


Britain's national debt is composed of thousands of pieces of paper - stocks, bonds and treasury bills - known as "gilts". They are for all intents and purposes an elaborate form of IOU.

The sum total of all the government's IOU's is currently around 400 billion and this debt is quite separate from the sum of the nation's private and commercial debt to the financial institutions, which is around 780 billion.

How does this massive debt come about? Each year the government fails to collect enough in taxes levied upon a nation weighed down by personal and business debt, where the entire economy operates from a position of built-in insolvency.

With debt built into the price of everything that is bought or sold in the economy, government cannot raise sufficient money to fund its public services and other expenditures, including repayments on its past borrowing.

All government budgets overshoot by billions of pounds, dollars or deutschmarks every year. Governments then borrow to cover this shortfall. It is worth pausing for a moment to examine the consequences to an economy should a government try, as Britain has done in the past, to reduce this shortfall, and thus the need to borrow, by cutting back their spending.

Let's imagine the government attempts to cut back its spending by a relatively modest 10 billion.

The government now has 10 billion less to spend into the economy. Therefore it has to cut costs somewhere, say by cutting back in the public sector. To do that it has to lay off thousands of public sector workers.

The social security budget would then have to rise to cover dole and redundancy payments.

This forces the government to cut back further in its public spending if it is to keep its spending on target, resulting in more lay-offs.

The increasing pool of now redundant public sector workers lose spending power as consumers, causing demand across the economy to drop. This drop in sales causes already hard-pressed industry to suffer a drop in sales, with resultant lay-offs, redundancies and business failures.

This adds a pool of unemployed from the private sector to the pool of unemployed from the public sector and the dole and social security payments become an added cost to the government, forcing it to cut back further if it is to keep its spending plans on target.

The throwing of thousands of people out of work, not only causes a further reduction of spending power and further loss of sales to industry but it also means there are thousands of people now not paying tax, which reduces the government's tax revenues, necessitating further cut-backs.

The government's other option is to raise taxation instead of cutting services. As soon as taxation is raised, slender business profits are cut forcing business to raise its prices, whilst the consumer's disposable income is cut, reducing spending power and adversely affecting sales throughout the economy, whilst at the same time exerting an upward pressure on wages.

The government could also try to avoid raising taxes or cutting back on public services by cutting back on the aid it gives to industry. Industry is already engaged in all-out economic warfare with foreign imports from nations whose governments are providing aid to their own industries and is already in any case having to cut profits to the bone, so loss of assistance from government adds to business costs and adversely affects industry's ability to price its goods competitively.

Governments could avoid all this if it were not for their near-superstitious terror of creating and issuing their own currency and spending it debt-free into the economy.

As it is, the government covers its budget shortfall by selling IOUs to banks and other financial institutions. When these IOUs mature they have to be paid back plus interest,

Each year billions in maturing IOUs have to be paid back. The government therefore has to find the money out of tax revenues which already fall short of the amount it needs to fund public services and other expenditure. In other words it is confronted annually with a bill it cannot pay, short of hiking tax so high as to kill off the entire economy!

It pays off the maturing IOUs out of tax revenue, which leaves it even more short of money to cover its other expenditures.

So it has to borrow more money by selling more IOUs to the banks and other financial institutions.

Eventually these too mature and have to be paid back, further exacerbating the shortfall in the government's tax revenue.

As each batch of IOUs have to be paid back with interest, more money has to be found than was issued in the first place.

The national debt escalates dramatically year by year, the loans are in effect continually rescheduled and the amount paid back from tax revenues increases.

But there is another farcical aspect to this process: where does the money come from that the financial institutions use to buy the IOUs?

The money held by the financial institutions that is used to buy the IOUs is money that was borrowed into existence in the first place! In other words the government is creating a second massive institutional debt on money which already has a debt behind it to begin with.

This, in essence, is why a national debt must go on racking up year after year - and so must the amount taken from tax revenue to service it.

It is the reason why any government that attempts to reduce its borrowing shoves its entire economy towards recession and places the burden of borrowing on mortgages and private and commercial loans.

It is the underlying reason why governments find it a struggle to fund all the services needed by the population, why the national health service, the coastguard service, the fire service, sewage disposal and adequate safe water to drink all decline as taxation creeps ever upwards.

It is the reason we get poorer economically while in terms of human and material resources and technological know-how we ought to be getting richer. It is the reason that, no matter what you are promised, no matter what tinkering governments undertake with the national finances, our economic situation must and will continue to decline.

The bottom line is we are using for money something we should not be using for money and it is slowly killing us.

EMU will solve none of this. It will simply administer our decline from Brussels rather than Westminster and remove forever our last chance to put it right.

And we could put it right tomorrow if we want to.

We need to understand this otherwise when the Government pleads poverty and says it cannot afford to do what we wish it to do, we shall believe it is true, for it seems simple common sense that if the Government is deeply in debt it ought to economise.

But the nation with the biggest and most robust economy in the world, the nation with the most massive productive capacity, the United States, is in debt to the tune of around twenty eight trillion dollars.

Under the system we have now, there has to be a national debt!

This gives the Government a two edged sword. It can spend as much money as it likes, on what it wants to do, and simply run up the national debt to finance it. Or it can point to the national debt, raise its hands in horror about how we are "living beyond our means" and plead poverty to save itself from doing anything at all which it does not wish to do.

It can "find the money" to dig the channel tunnel, expand our airport capacity, build more motorways, pay subsidies to the EC (to which we are net contributors) or drop bombs on people in Yugoslavia but it cannot "find the money" to pay our nurses or firemen, keep rural hospitals open or, under orders from the economic strategists of the EC, save the Ravenscraig steel plant or our coal mines.

The budget deficit and national debt enable the government to win every economic argument and enable what are in fact policy decisions - and very often European policy decisions - to be disguised as economic ones.

In simple terms, debt is used as a means of political control for which a budget deficit is essential.

This may explain why governments never take the obvious step of restoring unto themselves the right to issue the nation's currency. If they did they could issue it to fund all these needed government projects but without racking up a debt alongside it and without placing upon the taxpayer the burden of paying it back! Unfortunately in doing that, they believe they would lose their ready-made excuse for unpopular decisions.

What they have not yet twigged is that any government embracing such reforms would unleash an economic boom of such magnitude the public would probably forgive them the odd foible and go on electing them into office for the next thousand years!


The Government owns 50% of the shares of the Bank of England but has no voting rights in any decisions made by the bank.

The other shareholders in the Bank of England are never revealed and they hold the voting rights. This mysterious other 50% of shareholders may not even be British. Questions are not permitted in the House of Commons concerning the Bank of England.

This is an extraordinary state of affairs in a democracy. The creation and issuance of a nation's currency and the accumulation of its debts are issues absolutely central to its prosperity and the distribution and ownership of its wealth. A nation's currency is the very foundation of its economy and he who controls it, controls that nation.

Such matters naturally have a huge bearing upon government economic policies and fundamentally affect their success or failure in carrying out their respective mandates. It is no surprise then that successive governments have been reduced to a desperate tinkering with the economy, robbing Peter to pay Paul, raising one tax while reducing another and generally finding the continual downward slide of our economic fortunes thwarting all their bright hopes and sincere endeavours.

Governments are in the position of mechanics fiddling with a car engine trying to make it work but forbidden to ever look in the petrol tank, where if they did they would discover the car is out of fuel.

They are doomed to failure and disappointment because they are denied access to a crucial and fundamental area of the economy, one that is rigged. Their calculator has a held down seven.

If a people are denied democratic control of their currency, even denied the right to know how, by whom and on what criteria decisions are made concerning it, then they are not living in a democracy, regardless of what they have been told.

New Labour has given the Bank of England free rein to do what it likes. The Bank of England operates completely outside of political control and even further outside of democratic control.

Interestingly, at the same time all matters concerning our currency, how it is constituted, how it is issued and what it represents have vanished from all political debate.

Nobody even asks the Bank of England what it is doing. The Bank of England in fact seems to tell the government how things are going to be. Who's running whom?

It is a bank which has never been well named. It should be called the Flag Ship Bank of Britain's Financial Dictatorship. It supervises the counterfeiting of money by monitoring the rate at which our currency is issued as credit. It is a private financial institution. The identity of its shareholders is kept secret, which immediately tells us there's something to hide.

Even our elected representatives are not allowed to ask questions about it in our own Parliament.

It is not a bank belonging to England at all. Truer to say that England belongs to it, or the faceless men who own it.


Trade is the exchange of goods and services for the mutual benefit of both parties taking part in the exchange. It is through trade that the quality of our lives is improved and that is real wealth.

Trade got into trouble the moment the government surrendered to the banks its job of creating the nation's money.

The cost of debt repayment is now built into the cost of virtually everything we produce. Industry is forced to borrow more and more to invest and most companies, if they are solvent at all, are only solvent on paper by balancing their assets against their debts. To stay solvent they must recoup the cost of their debt repayment by adding it onto the price of the goods they sell.

Well, borrowing always was a sign of poverty wasn't it?

There is a shortage of spending power throughout the economy. Producers are squeezed by two pressures: the cost of borrowing eating into their financial viability on one hand, often exacerbated by fluctuating interest rates set by the banks, and on the other hand the problem of competing with other producers for the consumer's shortfall in spending power.

This creates a mad scramble, an interminable desperate paperchase, for scarce money.

Industry is forced to cut costs and find every way it can to maintain viability.

One way is to find methods of cutting corners and producing ever more cheaply and the process has bedevilled us all with cheap and shoddy goods - goods produced with far less quality and durability than industry could achieve were it not forced into a state of perpetual desperation.

This decline into cheapness is never more dangerously realised than in the area of food production where glossy packaging sells food depleted in nutritional value so grievously that it has become an active impediment to our physical and mental health. (see BAMR's booklet Genetically Modified Food)

To fall behind, to lose market share, is to lose already marginal viability and if one does that one cannot meet one's debt repayments - and there is the bank waiting to foreclose or repossess one's property.

As these pressures increase, producers are forced into commercial warfare, a life or death struggle for money that is always in short supply.

Slender unit margins are handled by bulk sales of cheaper goods, by the thirsty quest for new and ever more distant markets, by never surrendering an inch of market share to rivals because the tiniest slip can mean the difference between staying afloat or going under.

Thus we end up with debt-driven growth, growth driven not by real human need but by artificial "market forces" implanted in the economies of nations by the suicidal method of issuing currency as debt.

As the economy grows, so must the money supply. But the money supply comes to us as debt, so as it grows so does the burden of debt, increasing the desperate scramble for money.

The nation cannot balance its books, so the nation seeks to export in order to obtain enough foreign revenue to make good the short-fall. So does every other nation because every other nation has exactly the same problem.

Every nation tries to invade every other nation's home market. Nation A desperately produces refrigerators to export to nation B, while nation B is just as desperately trying to invade nation A's home market with its own refrigerators.

Export-or-bust becomes the overriding preoccupation.

Economies trade from a position of insolvency. Selling products abroad becomes not so much a matter of trading some surplus for things we do not produce ourselves but of dire necessity. Foreign sales bring in foreign revenue. That foreign money is raised in its country of origin with a debt behind it but when it buys our exported goods it arrives here as debt-free money because the debt remains behind in its country of origin.

Similarly when the nation buys goods from abroad, the money goes overseas and becomes debt-free revenue for some other nation, but the debt behind it remains here.

In this way pressure is created to export goods and to resist importing goods. And every nation is trying to export like mad and avoid importing at all costs. But for one nation to export another nation has to import!

The world in other words is at war. Companies are in a state of commercial warfare with other companies. Countries are in a condition of commercial warfare with one another.

Commercial warfare has replaced trade. It is a war of attrition in which there are no winners. Putting the word commercial in front of the word warfare does not make it more humane.

There is no place for ethics in war. No place for honesty, decency, trust or even respect for human life. No respect for the environment and no possibility of long-term survival for anyone.

Trade was supposed to be a matter of mutual benefit but the mad, desperate, tooth-and-claw scramble for scarce spending power is to universal detriment.

And all because our currency is issued as credit.


Britain is now small and weak, so the argument goes, and our only hope is to become a province of the United States of Europe.

In other words we are now small and weak and our only hope is to become smaller and weaker.

That is the fact of the matter: if you surrender control of your own destiny to another, if you subordinate your own decisions to him, if you surrender to him the power to devise your policies, to make your rules, manage your finances and decide upon the role you shall play in the scheme of things, then that is a downward direction. You are moving in the direction of less and less control, less and less significance.

You may be perfectly happy to do it but don't kid yourself about what you are doing.

No matter what club we belong to we will still have to stand on our own two feet: produce and sell our goods, create our own wealth, our industries will still have to survive in a theatre of global economic warfare.

Unless we are hoping for charity, for handouts from France and Germany, whose own economies are in just as much trouble and subject to the same debt-driven pressures.

Nobody can tell us exactly how Europe will be an answer to Britain's obvious problems because nobody has identified what caused those problems in the first place.

If a person gets sick, you might or might not patch him up and have him spend the rest of his days on crutches but you won't cure him until you identify and handle what caused him to get sick in the first place.

Britain, you may or may not be aware, has over the last three decades or so undergone the most dramtic decline of any nation in economic history.

Thirty to forty years ago, around half of one lifetime Britain, rightly or wrongly, had the largest empire the world has ever seen. Its products were as well produced and admired as Germany's, its people had a work ethic the Japanese would have been proud of and its global power rivalled the United States.

In those days Britain had textile, shoe, coal, steel, shipbuilding, motorcycle, automobile, aeronautical, electrical, electronic and home appliance industries to rival any in the world (and you may be able to think of others to add to the list). Today it doesn't. Even our farming and fishing industries are in trouble.

What happened to them? Where did they go in just thirty years? From world power to second-rate also-ran hoping to become a not particularly important province of Greater Europe in less than half a century? That's some decline!

What caused it? Did the British people suddenly just give up for no apparent reason? Was it the will of God? A sudden inability to do things we were perfectly capable of doing just a moment before? Mass hysteria?

Maybe we were just appallingly badly governed and EMU affords our statesmen the chance to blame the mandarins of Europe as we disappear further around the U-bend.

Perhaps we had better take a close look at what caused the illness before we call in the faith healers because maybe, just maybe, we could make the patient fit and well again.

If an economy is to expand, then the money supply to it has to expand commensurately, otherwise we get a scarcity of money, a fall in "demand" because people just don't have the money to spend.

But because money is not created and supplied by the government but loaned to the government, the government must and does run up a debt.

Britain's is no exception and the nation pays the banks around 33 billion a year in interest on its outstanding loans.

What is not generally known is that Britain has one of the lowest national debts in the world because for the past forty years successive governments have been pursuing a policy of restricting the national debt whilst most other nations have been doing the opposite.

Have you ever wondered how German, Japanese and American industries managed to out-perform ours? We've had a lot of wrong reasons foisted on us over the years: the superior work ethic of the Germans and Japanese, American corporate business acumen, the laziness of British workers, the incompetence of management, socialism, conservatism or something in the British genes. All of them are lies, which becomes obvious when one considers that while UK governments were busy inflicting on our economy the most restrictive financial policy in the world to ensure the national debt only grew from thirty to four hundred billion pounds, the Germans, Japanese and Americans were doing the exact opposite.

All three nations were running up their national debts so as to inject massive amounts of money into their economies, enabling them to support and subsidise industries which the UK government would not help. We are a poor nation, we are told, living beyond our means. For evidence just look at our national debt of 400 billion!

But we are not living beyond our means! We have the means to do almost anything, in terms of know-how, human resources, inventiveness, materials, need to work, willingness to produce and sell - even put a man on the Moon if we wanted to!

But it all sounds so reasonable. We have massive debts to the banks on which we pay billions every year from our taxes in interest payments. It seems as though we should be frugal, balance the books and get ourselves out of debt.

The government, accordingly, set about reducing the rate at which it borrows and between 1960 and 1994, sure enough, Britain was the only nation in the world to reduce its national debt as a percentage of its Gross Domestic Product. Not the size of its debt, you'll note, nor the amount of interest paid on it annually through taxation, merely its size relative to GDP. The debt still grew from around 30 billion in 1962 to around 400 billion in 1996 but the financial policy pursued by UK governments was the most restrictive in the world!

So what's the problem? The problem is that with the existing monetary system as soon as you start restricting debt, you restrict the money supply.

When the money supply to the economy is restricted, so is economic activity. The government now finds it does not have so much money to spend on the health service, for instance, or to subsidise industries that must compete with industries of other nations subsidised by governments that are not trying to be "frugal".

Embarking on a policy of restricting borrowing has had a catastrophic effect on the UK economy.

The money supply throughout the economy became scarcer. The government tried to make up the lost revenue by raking in more through taxation and so Britain became one of the most heavily taxed countries in the world. Because people were taxed more their disposable incomes declined, giving them less money to spend on the goods industry produces. This shrank "demand" (by which we mean ability to buy as opposed to need or desire) and made it harder for industry to sell its goods.

As money was now scarcer, the shortfall in spending power of the consumer, already endemic in a debt-money economy, was worsened. The consumer tried to make up that shortfall by demanding more wages.

But industry was already hard-pressed trying to sell into markets where "demand" was reduced, and threatened at the same time by imports from nations whose industries are not being strangled by their own governments. So industry could not meet the wage demands. Yet if it did not pay more in wages to increase the spending power of the consumer, the consumer had insufficient spending power to buy its goods!

We ended up with industry and its work-force at each other's throats. It is no coincidence that as governments attempted to restrict their borrowing, industrial strife was felt across the land.

Industrial strife petered out because the workforce became more and more indebted, tied to HP payments on the car, mortgages, credit cards, overdrafts, loans and so on. No-one dared be out of work even for a moment because the loan repayments never stop and jobs were becoming scarce as more and more industries were going bust or being deliberately closed down by a government failure to inject cash into them.

Job slavery had now entered the scene. Workers were unable to compensate for the shortfall in their spending power by demanding more wages, so the only other avenue, if they were to maintain their standard of living, was to borrow.

As the government restricted the rate at which it supplied money to the economy, money entered via its other route: private and commercial borrowing. Both industry and the consumer were forced to address the shortage of money by borrowing and so as government borrowing was pegged back, borrowing by industry and the consumer escalated to a point where private and industrial debt has reached around 780 billion (from 8.2 billion in 1963)!

In other words, if government does not borrow and run up the national debt, which we pay back as part of our taxation, you and I have to shoulder the burden and take on increased loan repayments.

Increased borrowing by industry and the consumer raised prices and reduced consumer spending power at the same time. Sales become harder, profit margins tighter, the pursuit of cheapness spread like a cancer.

Here, in essence, you have the reason for our economic decline. The efforts by governments to be frugal, restricted the supply of money to the economy.

And we all thought there was something wrong with us! The truth is our civilisation, our world standing, our standard of living, our jobs, our youth, our hope and our pride were flushed down the toilet by a government who pulled the chain! Why successive UK governments chose to embark upon this path is hard to comprehend.

One can only assume that they were badly advised by the "experts" who were on hand to assist them. But if the experts knew what the hell they were talking about, things would have gotten better wouldn't they? We don't listen to engineers whose bridges fall down or employ pilots who crash their planes so why listen to economic experts whose graphs and pie charts plot our decline but do nothing to reverse it?

But surely our leaders understood how debt-money works, considering how many ministers and MPs down through the years have themselves been members or affiliates of the banking fraternity.

Perhaps someone was softening us up for entry into Europe.

Why economic textbooks and economic experts failed to spot the fly in the ointment is also a mystery: the London School of Economics was itself founded by bankers so surely its graduates would have been taught such essentials?

Be that as it may, the price we have paid in lost status, smashed industries, redundancies, bankruptcies, disintegrating infrastructure, declining public services, decimated communities and low morale has been a terrible one.

Surveying the carnage and the smoking rubble of a once great empire one might imagine we had just been trounced by an enemy in war.

Well, maybe we have.


There are some interesting lessons we can learn from past "mistakes".

The first is that the government could have saved us a lot of grief if it had done essentially what President John F Kennedy was doing before the assassin's bullet blew the back of his head off.

The government could have issued its own currency, debt free, into the economy to make up for the shortage of money occasioned by its determination to "be frugal." 3% of our money, the notes and coins, are in fact still issued in this way.

There's nothing to prevent our Government creating the electronic money which now constitutes 97% of our currency and wresting this privilege from the private financial institutions.

The only safeguard required by the citizen is the right to know how it is to be done and the right to ensure that it is done correctly.


The existing mechanism by which the money supply is issued as credit is hidden from view. It is done under the authority of the Bank of England and no politician may ask for details. If too much credit is issued too fast the Bank of England orders an increase in interest rates.

If not enough credit is issued according to the wisdom of the private financial institutions, interest rates are lowered so that it gets easier to seduce people into debt. That is what is called consumer confidence.

When, thanks to lower interest rates, the economy starts do too well and people no longer need to borrow we are told the "economy is overheating" or that we have "dangerous levels of inflation" or some such excuse and interest rates are raised again. When the economy begins once more to creak under the strain, interest rates are lowered again.

Somehow the banks must keep the insane machinery running, controlling within an inch of its life a dysfunctional economy of which they and their friends are the only beneficiaries.

"Controlling inflation" is the excuse but the next time you hear it used, recognise that "inflation" as defined in economic textbooks is not what is occuring and something very different is going on.

Inflation is correctly defined as "too much money in the economy chasing too few goods." In other words it is regarded as a situation whereby more money has been pumped into the economy than there are goods to buy with it and industry then raises its prices in a fit of greed to absorb the excess money.

But inflation - too much money chasing too few goods - is not what we are experiencing! For the vast majority of us the exact opposite is true. There's never quite enough spending power for us to buy all the goods and services on offer. Industry's experience is that there's no problem producing the goods: the problem is in selling them because the consumer doesn't have enough money to express the demand!

The reality is that the productive capacity in the economy - the ability to produce goods not only in quantity but in much higher quality and durability than we are doing at the moment - far exceeds our ability to pay for it.

In other words, when the banks tell us that we have inflation, what they are telling us is a lie. It is quite possible that we have never actually had inflation as it is defined in economic textbooks.

The upward drift of prices and incomes is said to be the "proof" that we have inflation but it is cost of repaying debt that cuts the consumer's spending power and causes him to seek more wages in order to maintain his standard of living. Similarly it is the escalating and compounding cost of repaying past debts that pushes up industry's prices.

Debt as a factor is completely ignored. This is a grave oversight or deliberate obfuscation because the very foundation of our money supply is that it is a debt.

It is not surprising that this has proven to be a highly unreliable means of controlling inflation because raising interest rates increases the cost of borrowing, which exerts an upward pressure on prices and wages.

This also explains why efforts to "control inflation" depress an economy such as ours and cause it to teeter precariously on the edge of recession.

So the next time you are told that interest rates are being adjusted to control inflation, recognise that a) we do not have inflation b) what we have is debt c) you are being lied to and d) if this sounds like a godawful confusing mess, that's because it is.


A Third Alternative.

You may have been given the impression that Britain is faced with only two choices: monetary union with Europe or going it alone in our present knocked about state.

Neither is a very attractive choice is it?

But there is a third alternative for Britain, and for that matter all the nations of Europe, that is carefully kept out of sight.

That third alternative is to reform our currency.

Repeal the Tonnage Act of 1694 and remove from banks and other private institutions the right to issue money out of thin air, call it a loan, lend it to the nation and demand the nation pay it back plus interest.

Restore to government it ancient historical duty of creating and issuing the nation's currency.

Have it spend the currency into existence, never lend it.

Have it spend the money so as to reduce and eventually eliminate taxation, starting with PAYE, and for no other purpose.

By increasing the money supply commensurate with an increase in true wealth of the nation in terms of better production of goods and services, we keep money aligned to its true function which is to act as a means of exchange in the market place for goods and services.

It is not hard to imagine the opportunity for everyone represented by eliminating the twin blights of debt and taxation. So doing will restore to all men a fundamental human right: the right to keep the fruits of their labour.

As you can now see from this very brief discussion, there are more opportunities and options here than any government has ever dared dream of.

It is not hard to imagine the stable economic boom that will be created.

So let's dream. Let's create something far better than what European Union in its current form could ever offer. Let's become the envy of Europe, rather than its servant.


Knowledge of how the debt money system works, how to reform it and the opportunities for prosperity it opens up gives us the weaponry we need to win every European argument.

It is the weapon feared by those who would dupe us into EMU because it exposes their hidden agenda.

Sooner or later the penny is going to drop and some country is going to adopt monetary reform. Eventually all countries will follow suit, but being first will steal them a march with which the rest may never catch up.

We would like that country to be Britain. It provides us with the opportunity to become an economic powerhouse that will lead the world. Besides, it was Britain that bequeathed the world the debt money system in the first place so perhaps we owe it some constructive leadership.

This is the way forward that, if properly communicated, will fire the imaginations of the British people, give them hope for a decent and truly democratic future and a goal worth going for, that will unite us all.

Should any political party adopt it as a platform it will put them in power and keep them there for a very long time. And they will have earned it.

It is very simple to achieve. It demands no revolution, no violence in the streets or tearing up of what is left to us that we cherish. In the words of our president, Dr Hamlyn, it is easier done than said.

All it takes is one Act of Parliament.

The first step is to expose the fraud and make sure every man and woman in the country knows about it and understands it. It is their right - it is their money, their economy, their lives and their futures after all.

The next step is to insist that our politicians act in our interests and not those of the banks by enacting the reform.

If they won't do it, let's elect someone who will.

The first step, exposure, is what the financial dictatorship fear, because once their scam is public knowledge it will die.

When the British people come to understand the nature of this fraud, they shall not tolerate it a moment longer.


Why think small when we can think big? If you think big you become big.

Step One: Reform our monetary system and restore to government the duty of issuing our currency debt free.

Step Two: Stand back and watch us take off like a rocket.

Step Three: Re-establish our ties with the Commonwealth and show those nations, as free and fully independent partners, how to reform their own currency.

Step Four: Stand back and watch them take off like a rocket too.

Step Five: Thereby create the richest and most powerful trading block the world has ever seen.

Step Six: Extend our help free of charge to all other nations of Earth and show them how to reform their own currencies. Then watch them boom too.

Step Seven: Attack or undermine no other nation. Assist all other nations to flourish and prosper.

Step Eight: Win friends and influence people. A nation, as an individual, is as valuable as it can be of service to others.

Step Nine: Create a prosperous and happy world civilisation of free nations working in partnership, assisting one another to prosper and trading for mutual benefit rather than in a state of commercial warfare.

Step Ten: Look up "poverty" and "war" in the dictionary because you'll have forgotten by then what they were.

Why go for the bureaucratic, debt-ridden expensive and unambitious muddle of European Union when we could have so much more?

Kieron McFadden

This document is available as a booklet from BAMR at address on index page. Please donate 3.00 in return for this valuable data.

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