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them into receivership, a form of bankruptcy in which a company can
avoid liquidation by reorganizing with the help of a court-appointed
trustee. When a bank is put into receivership, the trustee is the FDIC,
an agency of the federal government. In return for bailing the bank
out, the FDIC has the option of retaining the bank as a public asset.
Why this might not be the disaster for the larger community that has
been predicted, and might even work out to the public™s benefit, is
discussed in Section VI.

Chapter 34 - Meltdown

Shelter from the Storm

What can we do to protect ourselves and our assets in the
meantime? Like Auntie Em, market “bears” warn to run for the cellar.
They say to prepare for the coming storm by getting out of U.S. stocks,
the U.S. dollar, and excess residential real estate, and to invest instead
in gold and silver, precious metal stocks, oil stocks, foreign stocks, and
foreign currencies. Many good books and financial newsletters are
available on this subject.13
People in serious Doomsday mode go further. They advise storing
canned and dry food, drinking water, and organic seeds for sprouting
and planting; investing in a water purifier, light source, stove and
heater that don™t depend on functioning electrical outlets; keeping extra
cash in the family safe for when the banks suddenly close their doors;
and storing gold and silver coins for when paper money becomes
worthless. They recommend starting a garden in the backyard, a
hydroponic garden (plants grown in water), or a window-box garden;
or joining a local communal farming project. They note that people
facing financial collapse in other countries are better prepared to deal
with that sort of disaster than Americans are, because they have been
farming their own small gardens and surviving in barter economies
for centuries. Americans need to study, form groups, and practice in
order to be prepared. Again, many good Internet websites are available
on this subject. Community currency options are discussed in Chapter
Those are all prudent alternatives in the event of economic collapse;
but in the happier ending to our economic fairytale, the financial system
would be salvaged before it collapses. We can stock the cellar just in
case there is a cyclone, but to succumb to the fear of scarcity is to let
the Wicked Witch prevail, to let the cartel once again wind up with all
the houses and the stock bargains. What then of the American dream,
the liberty and justice for all in a land of equal opportunity promised
by the Declaration of Independence and the Constitution? The irony
is that our economic nightmare is built on an illusion. We have been
tricked into believing we are inextricably mired in debt, when the
“debt” is for an advance of “credit” that was ours all along. While
trouble boils and bubbles in the pots of the Witches of Wall Street, the
Good Witch stands waiting in the wings, waiting for us to remember
our magic slippers and come into our power . . . .

Section V

“You had to find it out for yourself. Now those magic slippers
will take you home in two seconds.”
“ Glinda the Good Witch to Dorothy
Chapter 35 - Stepping from Scarcity into Abundance

Web of Debt

Chapter 35

Somewhere over the rainbow
Skies are blue,
And the dreams that you dare to dream
Really do come true.
“ Song immortalized by Judy Garland
in The Wizard of Oz

O ne of the most dramatic scenes in the MGM version of The
Wizard of Oz comes when Dorothy™s cyclone-tossed house
falls from the sky. The world transforms, as she opens the door and
steps from the black and white barrenness of a Kansas farmhouse into
the technicolor wonderland of Oz. The world transforms again when
Dorothy and her companions don green-colored glasses as they enter
the Emerald City. In the Wizard™s world, reality can be changed just
by looking at things differently. Historian David Parker wrote of
Baum™s fairytale:
[T]he book emphasized an aspect of theosophy that Norman
Vincent Peale would later call “the power of positive thinking”:
theosophy led to “a new upbeat and positive psychology” that
“opposed all kinds of negative thinking “ especially fear, worry
and anxiety.” It was through this positive thinking, and not
through any magic of the Wizard, that Dorothy and her
companions (as well as everyone else in Oz) got what they
wanted. 1
It would become a popular Hollywood theme “ Dumbo™s magic
feather, Pollyanna™s irrepressible positive thinking, the Music Man™s
“think system” for making beautiful music, the “Unsinkable” Molly
Brown. Thinking positively was not just the stuff of children™s fantasies
Chapter 35 - Stepping from Scarcity into Abundance

but was deeply ingrained in the American psyche. “I have learned,”
said Henry David Thoreau, “that if one advances confidently in the
direction of his dreams, and endeavors to live the life he has imagined,
he will meet with a success unexpected in common hours.” William
James, another nineteenth century American philosopher, said, “The
greatest discovery of my generation is that a human being can alter
his life by altering his attitudes of mind.” Franklin Roosevelt broadcast
this upbeat message in his Depression-era “fireside chats,” in which
he entered people™s homes through that exciting new medium the radio
and galvanized the country with encouraging words. “The only thing
we have to fear is fear itself,” he said in 1933, when the “enemy” was
poverty and unemployment. Andrew Carnegie, one of the multi-
millionaire Robber Barons, was another firm believer in achievement
through positive thinking. “It is the mind that makes the body rich,”
he maintained. Believing that financial success could be reduced to a
simple formula, he commissioned a newspaper reporter named
Napoleon Hill to interview over 500 millionaires to discover the common
threads of their success. Hill then memorialized the results in his
bestselling book Think and Grow Rich.
Thinking positively was a trait of the Robber Barons themselves,
who for all their mischief were a characteristically American
phenomenon. They thought big. If there was a criminal element to
their thinking, it was a crime the law had not yet codified. The Wild
West, the Gold Rush, the Gilded Age, the Roaring Twenties -- all were
part of the wild and reckless youth of the nation. The Robber Barons
were a product of the American capitalist spirit, the spirit of believing
in what you want and making it happen. An aspect of a “free” market
is the freedom to steal, which is why economics must be tempered
with the Constitution and the law. That was the fatal flaw in the
laissez-faire free market economics of the nineteenth century: it allowed
opportunists to infiltrate and monopolize industry.
America™s Founding Fathers saw the necessity of designing a
government that would protect the inalienable rights of the people
from the power grabs of the unscrupulous. Today we generally think
we want less government, not more; but our forebears had a different
view of the function of government. The Declaration of Independence
[W]e hold these Truths to be self evident, that all men are created
equal, that they are endowed by their Creator with certain
unalienable Rights, that among these are Life, Liberty, and the

Web of Debt

Pursuit of Happiness “ That to secure these Rights, Governments
are instituted among Men, deriving their just Powers from the Consent
of the Governed.
The capitalist spirit of achieving one™s dreams needed to operate
within an infrastructure that insured and supported a fair race.
Naming the villains and locking them up could help temporarily; but
to create a millennial utopia, the legal edifice itself had to be secured.

Waking from the Spell

When Frank Baum wrote his famous fairytale at the turn of the
twentieth century, the notion that a life of scarcity could be transformed
in an instant into one of universal abundance did not seem entirely
far-fetched. It was an era of miracles, when scientists were bringing
electricity, mechanized transportation, and the promise of free energy
to America. Explosive technological advances evoked visions of a
utopian future filled with modern transportation and communication
facilities, along with jobs, housing and food for all.2
Catapulting the country into universal abundance was possible,
but it did not happen. Instead, a darker form of witchcraft enthralled
the country. By the time The Wizard of Oz was made into a musical
in the 1930s, the economy had again fallen into a major depression.
Yip Harburg, who wrote the lyrics to “Somewhere Over the Rain-
bow,” had a long list of hit songs, including “Brother, Can You Spare
a Dime?” Harburg was not actually a member of the Communist
Party, but he was a staunch advocate of a variety of left-leaning causes.
His Hollywood career came to a halt when he was blacklisted in the
1950s, another visionary fallen to an agenda of fear and control.
By the end of the twentieth century, however, science had again
reached a stage of development where abundance for all seemed within
reach. Buckminster Fuller said in 1980:
We are blessed with technology that would be indescribable to
our forefathers. We have the wherewithal, the know-it-all to
feed everybody, clothe everybody, and give every human on
Earth a chance. We know now what we could never have known
before “ that we now have the option for all humanity to make it
successfully on this planet in this lifetime. Whether it is to be Utopia
or Oblivion will be a touch-and-go relay race right up to the
final moment.

Chapter 35 - Stepping from Scarcity into Abundance

The race between Utopia and Oblivion reflects two different visions
of reality. One sees a world capable of providing for all. The other
sees a world that is too small for its inhabitants, requiring the
annihilation of large segments of the population if the rest are to
survive. The prevailing scarcity mentality focuses on shortages of oil,
water and food. But the real shortage, as Benjamin Franklin explained
to his English listeners in the eighteenth century, is in the medium of
exchange. If sufficient money could be made available to develop
alternative sources of energy, alternative means of extracting water
from the environment, and more efficient ways of growing food, there
could be abundance for all. The notion that the government could
simply print the money it needs is considered unrealistically utopian
and inflationary; yet banks create money all the time. The chief reason
the U.S. government can™t do it is that a private banking cartel already
has a monopoly on the practice.
Growth in M3 is no longer officially being reported, but by 2007,
reliable private sources put it at 11 percent per year.3 That means that
over one trillion dollars are now being added to the economy annually.
Where does this new money come from? It couldn™t have come from
new infusions of gold, since the country went off the gold standard in
1933. All of this additional money must have been created by banks
as loans. As soon as the loans are paid off, the money has to be
borrowed all over again, just to keep money in the system; and it is
here that we find the real cause of global scarcity: somebody is paying
interest on most of the money in the world all of the time. A dollar accruing
interest at 5 percent, compounded annually, becomes two dollars in
about 14 years. At that rate, banks siphon off as much money in interest
every 14 years as there was in the entire world 14 years earlier.i That
explains why M3 has increased by 100 percent or more every 14 years
since the Federal Reserve first started tracking it in 1959. According
to a Fed chart titled “M3 Money Stock,” M3 was about $300 billion in
1959. In 1973, 14 years later, it had grown to $900 billion. In 1987, 14

This assumes that the debt is not paid but just keeps compounding, but in the

system as a whole, that would be true. When old loans get paid off, debt-money
is extinguished, so new loans must continually be taken out just to keep the
money supply at its current level. And since banks create the principal but not
the interest necessary to pay off their loans, someone somewhere has to
continually be taking out new loans to create the money to cover the interest due
on this collective debt. Interest then continually accrues on these new loans,
compounding the interest due on the whole.

Web of Debt

years after that, it was $3,500 billion; and in 2001, 14 years after that,
it was $7,200 billion.4 To meet the huge interest burden required to
service all this money-built-on-debt, the money supply must
continually expand; and for that to happen, borrowers must continually
go deeper into debt, merchants must continually raise their prices,
and the odd men out in the bankers™ game of musical chairs must
continue to lose their property to the banks. Wars, competition and
strife are the inevitable results of this scarcity-driven system.
The obvious solution is to eliminate the parasitic banking scheme
that is feeding on the world™s prosperity. But how? The Witches of
Wall Street are not likely to release their vice-like grip without some
sort of revolution; and a violent revolution would probably fail, because
the world™s most feared military machine is already in the hands of
the money cartel. Violent revolution would just furnish them with an
excuse to test their equipment. The first American Revolution was
fought before tasers, lasers, tear gas, armored tanks, and depleted
uranium weapons.
Fortunately or unfortunately, in the eye of today™s economic
cyclone, we may have to do no more than watch and wait, as the
global pyramid scheme collapses of its own weight. In the end, what


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