Preface

              THE GRAND ILLUSION

The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.

– American economist John Kenneth Galbraith (1975)

Economics has been called “the dismal science.” Banking and finance seem dry, incomprehensible, and not relevant to our daily lives. But the plot thickens when we realize that this impenetrable obscurity may be an intentional smokescreen, designed to insure that banking is left to the bankers. And the subject takes on high drama when we realize that the entire monetary system is perilously close to collapse; and that when it goes, our creature comforts will go with it. We have been looking through a glass darkly, told by the Guardian of the Gate to go away, because there is something we aren’t supposed to know. The reason the system is close to collapse is that it is built of nothing but debt to private banks.

In his illuminating bank expos The Creature from Jekyll Island, G. Edward Griffin writes that “modern money is a grand illusion conjured by the magicians of finance and politics.” The function of the Federal Reserve, he says, “is to convert debt into money. It’s just that simple.” The mechanism may seem complicated at first, but “it is simple if one remembers that the process is not intended to be logical but to confuse and deceive.” What it conceals is “a form of modern serfdom in which the great mass of society works as indentured servants to a ruling class of financial nobility.”1 Michael Rowbotham, a British economist, observes that most of the world’s money is now created, not by governments, but by banks when they make loans. He also observes that the surest way to ruin a promising career in economics, whether professional or academic, is to venture into the “cranks and crackpots” world of suggestions for reform of the financial system.2

My credentials for writing this book are that I am not a banker or an economist, and can therefore peer with impunity at what they are up to. My professional degrees are in law and English literature. My legal specialty is commercial litigation: questions of contract and consideration, fraud and disclosure, the Constitution and Bill of Rights. My challenge as a writer has been to distill and clarify complex research for busy people overwhelmed with data in the Information Age. This is my eleventh published book. When I first tried to write on this subject in the 1970s, I lacked the research tools to get through the maze; but thirty years later, with the help of the Internet, the puzzle pieces suddenly fell into place. The picture that emerged was of a centuries-old power structure built on an edifice of debt created by sleight of hand out of thin air. What was long thought to be an economic problem turned out to be a legal one. We have been the victims of a massive, centuries-old fraud. If basic legal principles were applied to the business of banking, the economy could be transformed from a game based on scarcity and debt into the horn of plenty envisioned by our Founding Fathers.

E.H.B., J.D.  - 2006