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will expect to be bailed out from their profligate ways because they
have been bailed out in the past.

Mortgage: A loan to finance the purchase of real estate, usually
with specified payment periods and interest rates.

Multiplier effect: according to Investopedia, “the expansion of a
country™s money supply that results from banks being able to lend.”

Oligarchy: government by a few, usually the rich, for their own

Open market operations: the buying and selling of government
securities in the open market in order to expand or contract the
amount of money in the banking system.

Ponzi scheme: a form of pyramid scheme in which investors are
paid with the money of later investors. Charles Ponzi was an
engaging Boston ex-convict who defrauded investors out of $6
million in the 1920s, in a scheme in which he promised them a 400
percent return on redeemed postal reply coupons. For a while, he
paid earlier investors with the money of later investors; but
eventually he just collected without repaying. The scheme earned
him ten years in jail.

Posse comitatus: a statute preventing the U.S. active military from
participating in American law enforcement.

Plutocracy: a form of government in which the supreme power is
lodged in the hands of the wealthy classes; government by the rich.

Privatization: the sale of public assets to private corporations.

Proprietary trading: a term used in investment banking to describe
when a bank trades stocks, bonds, options, commodities, or other
items with its own money as opposed to its customers™ money, so as
to make a profit for itself. Although investment banks are usually
defined as businesses which assist other business in raising money
in the capital markets (by selling stocks or bonds), in fact most of

Web of Debt

the largest investment banks make the majority of their profit from
trading activities.

Receivership: a form of bankruptcy in which a company can avoid
liquidation by reorganizing with the help of a court-appointed trustee.

Reflation: the intentional reversal of deflation through monetary
action by a government.

Republic: A political order in which the supreme power lies in a body
of citizens who are entitled to vote for officers and representatives
responsible to them.

Repurchase agreement (“repo”): The sale or purchase of securities with
an agreement to reverse the transaction at an agreed future date and
price. Repos allow the Federal Reserve to inject liquidity on one day
and withdraw it on another with a single transaction.

Reserve requirement: The percentage of funds the Federal Reserve
Board requires that member banks maintain on deposit at all times.

Security: A type of transferable interest representing financial value;
an investment instrument issued by a corporation, government, or
other organization that offers evidence of debt or equity.

Short sale: Borrowing a security and selling it in the hope of being able
to repurchase it more cheaply before repaying the lender. A naked short
sale is a short sale in which the seller does not buy shares to replace those
he borrowed.

Specie: precious metal (usually gold or silver) used to back money.

Structural adjustment: a term used by the International Monetary
Fund (IMF) for the changes it recommends for developing countries
that want new loans, including internal changes (notably privatization
and deregulation) as well as external ones (especially the reduction of
barriers to trade); a package of “free market” reforms designed to
create economic growth to generate income to pay off accumulated

Tariff: a tax placed on imported or exported goods (sometimes called
a customs duty).


Tight money: insufficient money to go around, generally because the
money supply has been intentionally contracted by the financial

Time deposits: deposits that the depositor knows are being lent out and
that he can™t have back for a certain period of time.

Transaction deposit: a term used by the Federal Reserve for checkable
deposits (deposits on which checks can be drawn) and other accounts
that can be used directly as cash without withdrawal limits or
restrictions. They are also called demand deposits, since they can be
withdrawn on demand at any time without notice. Most checking and
savings accounts are demand deposits.

Trust: a combination of firms or corporations for the purpose of
reducing competition and controlling prices throughout a business or
an industry.

Usury: the practice of lending money and charging the borrower
interest, especially at an exorbitant or illegally high rate.

Uptick rule: the SEC rule requiring that a stock™s price be higher than
its previous sale price before the stock may be sold short.

Web of Debt


Barber, Lucy, Marching on Washington: The Forging of an American
Political Tradition (University of California Press, 2004).

Chicago Federal Reserve, Modern Money Mechanics, originally pro-
duced and distributed free by the Public Information Center of the
Federal Reserve Bank of Chicago, Chicago, Illinois, now available on
the Internet at http://landru.i-link-2.net/monques/mmm2.html.

De Fremery, Robert, Rights Vs. Privileges (San Anselmo, California:
Provocative Press, undated).

Emry, Sheldon, Billions for the Bankers, Debts for the People (Phoe-
nix, Arizona: America™s Promise Broadcast, 1984), reproduced at

Engdahl, William, A Century of War (New York: Paul & Co., 1993).

Franklin, Benjamin, The Autobiography of Benjamin Franklin (Dover
Thrift Edition, 1996).

Gatto, John Taylor, The Underground History of American Education
(Oxford, New York: Oxford Village Press, 2000-2001).

Gibson, Donald, Battling Wall Street: The Kennedy Presidency (New
York: Sheridan Square Press, 1994).

Goodwin, Jason, Greenback (New York: Henry Holt & Co., LLC, 2003).

Greco, Thomas, Money and Debt: A Solution to the Global Debt Crisis
(Tucson, Arizona, 1990).

Greco, Thomas, New Money for Healthy Communities (Tucson, Ari-
zona, 1994).

Griffin, G. Edward, The Creature from Jekyll Island (Westlake Village,
California: American Media, 1998).


Guttman, Robert, How Credit-Money Shapes the Economy (Armonk,
New York: M. E. Sharpe, 1994).

Hoskins, Richard, War Cycles, Peace Cycles (Lynchburg, Virginia:
Virginia Publishing Company, 1985).

Lietaer, Bernard, The Future of Money: Creating New Wealth, Work
and a Wiser World (Century, 2001).

Patman, Wright, A Primer on Money (Government Printing Office,
prepared for the Sub-committee on Domestic Finance, House of Rep-
resentatives, Committee on Banking and Currency, Eighty-Eighth
Congress, 2nd session, 1964).

Perkins, John, Confessions of an Economic Hit Man (San Francisco:
Berrett-Koehler Publishers, Inc., 2004).

Rothbard, Murray, Wall Street, Banks, and American Foreign Policy
(Center for Libertarian Studies, 1995).

Rowbothan, Michael, Goodbye America! Globalisation, Debt and the
Dollar Empire (Charlbury, England: Jon Carpenter Publishing, 2000).

Rowbotham, Michael, The Grip of Death: A Study of Modern Money,
Debt Slavery and Destructive Economics (Charlbury, Oxfordshire: Jon
Carpenter Publishing, 1998).

Schwantes, Carlos, Coxey™s Army: An American Odyssey (Moscow,
Idaho: University of Idaho Press, 1994).

Weatherford, Jack, The History of Money (New York: Crown Publish-
ers, Inc., 1997).

Wiggin, Addison, The Demise of the Dollar ( Hoboken, New Jersey:
John Wiley & Sons, 2005).

Zarlenga, Stephen, The Lost Science of Money (Valatie, New York:
American Monetary Institute, 2002).

Web of Debt

Introduction the World, Part III,”
prisonplanet.com (March 15, 2003).
1. Hans Schicht, “The Death of Banking
12. Murray Rothbard, “The Solution,”
and Macro Politics,” 321gold.com/
The Freeman (November 1995).
editorials (February 9, 2005).
13. James Galbraith, “Self-fulfilling
2. Carroll Quigley, Tragedy and Hope:
Prophets: Inflated Zeal at the Federal
A History of the World in our Time
Reserve,” The American Prospect
(New York: Macmillan Company,
(June 23, 1994).
1966), page 324.
14. Anton Chaitkin, “How Henry Carey
3. Quoted in U. Ibrahim-Morrison, et
and the American Nationalists Build
al., “Building Sound Economic
the Modern World,” American
Foundations,” Alarm Magazine (May
Almanac (May 1977).
4. Henry C K Liu, “The Global
Chapter 1
Economy in Transition,” Asia Times
(September 16, 2003). For Liu™s bio, 1. Henry Littlefield, “The Wizard of Oz:
see “The Complete Henry C K Liu,” Parable on Populism,” American
Asia Times (May 11, 2007). Quarterly 16 (Spring, 1964), page 50,
5. In the Foreword to Irving Fisher, reprinted at amphigory.com/oz.htm.
100% Money (1935), reprinted by 2. H. Rockoff, “˜The Wizard of Oz™ as a
Pickering and Chatto Ltd. (1996). Monetary Allegory,” Journal of
6. Quoted in “Someone Has to Print the Political Economy 98:739-60 (1990).
Nation™s Money . . . So Why Not Our See also Mark Lovewell, “Yellow
Government?”, Monetary Reform Brick Road: The Economics Behind
Online, reprinted from Victoria the Wizard of Oz,” www.ryerson.ca/
Times Colonist (October 16, 1996). ˜lovewell/oz.html (2000); Bill
O™Rahilly, “Goodbye, Yellow Brick
7. Michel Chossudovsky, University of
Road,” Financial Times (August 5,
Ottawa, “Financial Warfare,”
hartford-hwp.com (September 23,
1998). 3. Tim Ziaukas, “100 Years of Oz:
Baum™s ˜Wizard of Oz™ as Gilded Age
8. Michael Hodges, “America™s Total
Public Relations,” Public Relations
Debt Report,” Grandfather Economic
Quarterly (Fall 1998).
Report, http://whodges.home.att.net
(2006). 4. David Parker, “The Rise and Fall of
The Wonderful Wizard of Oz as a
9. “Crumbling Nation? U.S. Infrastruc-
˜Parable on Populism,™” Journal of
ture Gets a ˜D™”, MSNBC.com (March
the Georgia Association of Histori-
9, 2005).


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