Where Money Comes From and Why They Don’t Teach It in School

Money Puzzles: A Film About Money and Debt, Austerity, Solidarity and Alternative Solutions

Directed by Michael Chanan (2016)

Film Review

This film starts by examining the history of money, which developed in all civilizations except the Incan civilization (the Incas had gold but didn’t use it for money). The first coins seem to have appeared independently in China, India and Ionia* in the 6th century BC.

Our current system of money creation, sometimes referred to as “fractional reserve banking,”** began in the Netherlands and the Italian city states in the 17the century. It came to Britain (and most of the British colonies) with the formation of the Bank of England in 1694.

Contrary to popular belief (and most economic courses), 97-98%*** of the world’s money isn’t created by government (or central banks), but by private banks when they issue loans. The money banks loan out doesn’t originate from reserves or savings accounts. Banks create it out of thin air.

The documentary’s main focus is the debt crisis that collapsed the Greek economy in 2015. Unfortunately the film mentions, but fails to explain clearly, that governments also create money by borrowing from private banks. At times, when banks stop making private loans, governments are forced to increase borrowing to ensure there is sufficient money in circulation to keep the economy going (ie to prevent recession and/or economic depression).

What many people fail to realize, is that most governments have the constitutional authority to create money. Their decision to borrow it from banks (rather than create it themselves) is purely political.

The film explores the collapse of the radical Greek party Syriza when its leadership  ignored a 2015 popular referendum rejecting the EU’s austerity bailout proposal. 61.3% of Greek citizens opposed the bailout, essentially opting for Greece to default on their debt and withdraw from EU.

The filmmakers also explore the Argentinian decision to default on their debt in 2001. Although UN General Assembly passed a resolution in support of the Argentinian default in September 2015, a new Argentinian government took out new IMF loans in 2016 to resume debt repayments.

The documentary concludes with a number of innovative grassroots alternatives Greek citizens have initiated to support each other in meeting post-collapse survival needs (see Debt and the Economic Colonization of Greece), Spain, and Argentina have adopted in the face of extreme economic austerity. These include local currencies, squatting and a variety of community-based mutual aid cooperatives to ensure people don’t go without food, clothing or other basic necessities.

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*Ionia was an ancient civilization in the western part of modern day Turkey. It consisted of the northernmost territories of the Ionian League of Greek settlements.
**Under fractional reserve banking, banks are required to hold in reserve a minimum percentage (10%) of loan’s face value. In reality, most central banks discarded reserve requirements at least a decade ago, essentially allowing private banks to decide how much money to create.
***The other 2-3% of the money supply is issued by central banks as notes and coins.  97-98% is electronic money created via computer entries.

Hunting Hitler: Reality TV as Psyops

 

Reality TV Masquerading as History.

 

I recently came across the 2015 History Channel series Hunting Hitler. Season 1 starts off plausibly enough. Seizing on 700 pages of FBI files declassified in 2104, former CIA officer Bob Baer leads a team of former Seals and special operations officers in amassing physical evidence to verify dozens of recorded witness sightings of Hitler in South American  in 1945-48. The series makes no pretense of presenting an accurate historical record. In fact, it appears the History Channel’s main objective (helped by dramatic voice overs and atmospheric music) is to glorify the hyper macho physical and technological supremacy of US (semi-legal) special operations activities.

 

Baer draws the tentative conclusion that Nazis supporters most likely faked Hitler’s suicide, while he himself escaped from his underground Fuhrerbunker. The hypothesis Baer offers is that the former dictator used a series of underground tunnels to evade invading Russian troops and took one of ten flights that left the former Tempelhof Airport on April 21, 1945  carrying Nazi war criminals abroad.*

 

Both the FBI files and the Baer’s physical evidence make a superficially plausible case that Hitler’s plane could flown to fascist Spain (under Franco), continuing to Argentina via U-boat (submarine).

 

Baer maintains the evidence supporting Hitler’s escape is much stronger than that supporting his suicide. Because loyal Nazis burned his corpse, the only physical remains invading Soviets found were a partial skull (which remains in Russia) and a partial jawbone and teeth (which remain in the Ukraine). In 2009, the Russians allowed a Connecticut archeologist to perform DNA testing on the skull fragments, which revealed its former owner to be a female.

 

Unfortunately, the Hunting Hitler series makes no mention whatsoever of the jaw and teeth, which, verified as Hitler’s in 1945 by his dentist, his dental hygienist and his dental x-rays. This information was in the public domain in 2015 when the History Channel aired Season 1 of Hunting Hitler.** See https://historian-at-large.blogspot.com/2015/03/on-hitlers-teeth-or-death-of-dictator.html

 

A recent DW documentary entitled The Death of Adolf Hitler: History of a State Secret tells the sad story of the hygienist, who the Soviets arrested and sent to a labor camp for ten years. Yet even this strongly anti-Soviet DW documentary neglects to explain why the dental work was so easy to identify: namely the special gold bridge his dentist had made for the dictator.

 

It does, however, delve deeply into Stalin’s repeated claims that Hitler was still alive and had escaped to Argentina via Spain. The latter would trigger massive investigations by US, UK and French intelligence, as well as hundreds of reports from all over the world related to Hitler sightings in South America.

 

To its credit, Hunting Hitler does make reference to the “Rat Line,” a scheme whereby the Catholic Church and Red Cross assisted hundreds of Nazi war criminals to escape from Germany to Argentina and other South American countries. The tunnels Baer’s team uncovered leading to Templehof Airport, the Spanish monasteries that hid Nazi war criminals, the 46 missing U-boats and the elaborate secret Argentinian hideouts filled with Nazi paraphernalia all provide important insight into the Rat Line’s actual operation.

 

I find it really interesting that former CIA operative Baer (and the History Channel) choose to focus on an individual (Hitler) with no known historical role in post war fascist regimes in South America. Especially given the prominent role other Nazi war criminals played in South American cocaine networks and death squads. For example Klaus Barbie in Colombia (see Klaus Barbie: America’s CIA Cold War Cocaine and Death Squads) and Otto Skorzeny in Bolivia (see Mae Brussell: The Nazi Connection to the JFK Assassination)

 

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*The Russians would capture central Berlin on May 1, 1945.

 

** Hunting Hitler Season 2 focused on additional from CIA, MI6 and Russian, German and Argentinian government authorities. Season 3, which premiered in December 2017, investigated Nazi weapons of mass destruction. Season 4, scheduled to air in 2018, was canceled.

 

Hunting Hitler can be viewed free at https://play.history.com/shows/hunting-hitler/season-1/episode-1

 

The Death of Adolf Hitler: History of a State Secret can be viewed free at https://www.youtube.com/watch?v=2QSXKDCFh7o&bpctr=1606277048

The Role of Exiled Spanish Anarchists in the 1968 Near Revolution in France

The Angry Brigade: The Spectacular Rise and Fall of Britain’s Urban Guerilla Group

PM Press (2008)

Film Review

The film traces the role played by anarchists exiled from Spain during the Franco dictatorship in inspiring anarchist movements in Germany, France, Switzerland, Italy, Turkey, Netherlands and the UK. It primarily focuses on the Black Cross, an international group providing material and psychological support for anarchist prisoners; the French First of May Group; and Britain’s Angry Brigade.

For me, the most interesting part of the film is the role of the First of May group in instigating the mass insurrection (and near revolution) that occurred in France in 1968.

The only serious inaccuracy in the film relates to the identification of German’s Beider Meinhoff gang as an organic First of May anarchist group. It’s now recognized as a Gladio operation heavily infiltrated (and possibly run) by CIA operatives. See The Secret CIA Program to Control Europe

 

 

Update on Catalan Struggle for Independence from Spain

The Catalonia Trials: Justice or Vengeance

Al Jazeera (2019)

Film Review

This documentary examines the arrest and imprisonment of nine leaders of the Catalan Popular Assembly for holding an independence referendum in 2017. In a region where children were historically forbidden to speak their native tongue (Catalan) in school, the movement for Catalan rights and independence has a long history.

Catalan public opinion is evenly divided over the independence issue. Nearly 50% of the population voted or tried to vote on the 2017 referendum. Most opponents of independence boycotted the ballot. Of the 43% who successfully cast votes, 90% opted for independence.

On the day of the poll, national police raided many polling stations, confiscating ballot boxes and trying to drag voters away.

Following the failed referendum, the Catalan Popular Assembly voted to declare independence and was suspended by the Spanish government. Twelve assembly leaders were arrested and spent 17 months in prison before going to trial. Other leaders, including Carlos Puigemont, the former Catalan president, fled to northern Europe to avoid arrest.

Spain’s center left socialist government, which took power in June 2018 opposes Catalan independence. For some reason, they are allowing members of the right wing Vox party to participate in prosecuting the Catalan leaders.

In April 2019, the socialist government fell, because Catalan members of its governing coalition refused to support their proposed budget. Because the Catalan independence movement is as strong as ever, several of the imprisoned Popular Assembly leaders stood in the new election. Four, who were elected, were let out of jail to take their oath of office before the new government suspended their right to take their seats.

They were also elected (along with two exiled Catalan leaders) to the European Parliament, as well.

Although the trial ended June 12, 2019, the verdict isn’t expected until fall.  See New York Times

All 12 face a potential 17-year sentence for rebellion.

Hidden History: How 13 Million Kidnapped Africans Built Global Capitalism

Slavery Routes – Part 2 From Sugar to Revolution

Al Jazeera (2018)

Film Review

Part 2 of Slavery Routes covers the so-called “Sugar Wars”* and the entry of the rest of Europe (Holland, Prussia, Denmark, England, Spain, France)  into Portugal’s lucrative slave trade. It also explores the role of European banks and insurance companies in making this expansion possible. Slave traders always undertook cross-Atlantic voyages on credit, which meant they had to be insured against losing their “cargo.” Insurance companies (Lloyd’s of London was the most prominent) were happy to ensure an enterprise in which a trader stood to triple his stake.

In this way, the slave trade provided the financial capital for both European and American capitalism.

Too Valuable to Kill

Rebellions by captive slaves were continual on both sides of the Atlantic. Because it took four years of plantation work to pay off the price of a captive, rebellious slaves were too valuable to kill. Instead ship captains and plantation owners became quite ingenious in devising brutal methods to compel submission.

In 1685 Louis XIV of France (funny I majored in French history and they never mentioned this) enacted the Code Noir, which made it legal to beat slaves but not torture them or mutilate their limbs.

The European Abolition Movement

By the late 1780s there was growing awareness and opposition in European society against the brutal conditions of the Middle Passage.** Britain’s abolition movement gained considerable momentum following the 1783 lawsuit in which a slave trader sued his insurance company for refusing to reimburse him after he threw his cargo of 133 living slaves overboard.

The English outlawed the slave trade in 1807. By 1815 there navy was strong enough to prevent other European nations from engaging in slave trading.

In all, 13 million Africans were kidnapped to the New World between 1520 and 1815.

The video can’t be embedded but can be seen free at the following link:

From Sugar to Revolution

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*”Sugar Wars” refers to a series of naval conflicts between European nations seeking the upper hand in the slave market.

**The Middle Passage was the stage of the triangular trade (resulting in large exports of sugar to Europe) in which millions of Africans were shipped across the Atlantic as slaves.

Ireland, Sir Walter Raleigh, and the Origin of Scalping

The Story of Ireland Part 2

BBC (2011)

Film Review

Part 2 of the Story of Ireland covers the period 1100 – 1500 AD

During the 12th century Ireland was ruled by five provincial kings. One of them, Dermot of Lenster, sought an alliance with the Anglo-Norman (English) king Henry II to make himself king of all Ireland. Pope Adrian, who disagreed with the gnostic Irish version of Catholicism, granted permission for Henry to invade.

After Ireland became an English colony, new Anglo-Norman lords claimed the best land for their estates and created an Irish parliament and a judicial system based on English common law. However they held no sway outside the townships and were subject to constant raids by Irish peasants.

After the Black Plague hit Ireland in 1348, many English lords fled back to England and the Gaelic kings regrouped and reclaimed their old estates.

During his reign (1509-1547), Henry VIII made several half-hearted attempts to subdue the Irish lords. His daughter Elizabeth I would engage Sir Walter Raleigh to subdue Ireland by destroying its infrastructure and massacring its civilians.*

Thirty thousand Irish died under Raleigh, many from famine.

Raleigh could not subdue the northern province of Ulster, and which allied with King Phillip of Spain in 1601 in an unsuccessful attempt to retake Ireland from England.

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*Ireland was the birthplace of warfare directed against civilians, also known as “total warfare,” “irregular warfare,” or “counterinsurgency.” It was here the practice of scalping and paying bounties for severed heads or scalps was first introduced. For centuries, it has been blamed on Native Americans, but it was initiated by the English in Ireland.

 

Hidden History: There Were 15 (not 13) Colonies in the Revolutionary War

The Lost History of America

First Documentary (2018)

Film Review

This documentary traces the hidden history of St Augustine (Florida), the first permanent European settlement in North America. It was founded in 1565 by Spanish colonists, 42 years before the English founded Jamestown (Virginia), the first “official” North American colony. History textbooks gloss over the fact that England had 15, not 13 North American colonies at the time of The Revolutionary War. They always neglect to mention East and West Florida (which were transferred from Spain to England by the 1763 Treaty of Paris. For two main reasons 1) because the Florida colonies fought for the British rather than the colonists and 2) because under Spanish rule, both East and West Florida outlawed slavery and offered sanctuary to runaway slaves.

After the war, the US ceded East and West Florida to Spain as a reward for Spanish financial and military support. However the land came the condition, imposed by Secretary of State (and slaveholder) Thomas Jefferson, that both colonies would cease to provide sanctuary for slaves from northern states.

The Seminole tribes ignored Jefferson and continued to shelter runaway slaves in Florida swamps where slave catchers couldn’t pursue them.

In 1812, the governor of Georgia raised a private army, assisted by the US Navy, to invade Florida in a military action known as the Patriot’s War. A coalition of Seminoles and freed slaves attacked the new plantations opened up by northern settlers, burned them and freed their slaves. In 1818 General Andrew Jackson launched the infamous Seminole War in retaliation.

In 1821, Spain officially ceded Florida to the US, forcing most of the free African families who had founded St Augustine to flee to the Bahamas – where the British had banned slavery.

The Basques: Spain’s Other Separatists

 

The Basque History of the World

by Mark Kurlansky

Penguin (1999)

Book Review

The Basque History of the World is a history of Basqueland, a semi-autonomous region in the Pyrenees straddling the French-Spanish border. Despite the recent declaration of independence by Catalonia, there is surprisingly little attention on historical efforts by Basqueland, to break away from Spanish rule. Like Catalonia Basqueland, which has its own unique language (Eskuera), has been a major industrial and economic powerhouse for the rest of Spain.

Global Mercenaries, Traders, Shipbuilders, Navigators and Bankers

Historically the Basques were traders and mercenary soldiers dating back to the 4th century BC. The Greeks hired them, as did Carthage in their war against Rome. Although Basque was technically “occupied” by the Roman empire for nearly 400 years, the Romans demanded no tribute (taxes) and exerted no military oversight.

In the 7th and 8th century, the Basques became Europe’s leading shipbuilders (which they learned from the Vikings) and iron mongers (which they learned from the Celts). They were the world’s first commercial whalers, establishing whaling stations as far distant as Newfoundland and Labrador. In the 9th century, they also dominated the European trade in salted cod, fishing off Iceland, Norway, Britain, as well as Newfoundland.

Beginning in the 15th century they were sought after by many European explorers (including Columbus and Magellan) as pilots, navigators and seamen.

They were also the first capitalists, financing their shipbuilding via private venture capital. In 1999, when this book was published, they were still global leaders in banking.

Unconquerable

Neither the Moors (in the 8th century) nor King Ferdinand and Queen Isabella (in the 15th century) succeeded in conquering Basqueland. Owing to the immense wealth the Basques generated, they paid no duty on foreign goods imported through their ports. Until 1876, they paid no tax to Madrid and were exempt from serving in the Spanish military. French Basqueland fared far worse after the French revolutionary government eliminated France’s three Basque provinces in their campaign to erase ethnic identities.

Spain was so poor when the second Spanish Republic was declared in 1931, only Basqueland and Catalonia (thanks to their strong industrial base) enjoyed a European standard of living. Both regions demanded full autonomy as a condition of supporting the Republic.

Following the successful coup of Spain’s fascist dictator Francisco Franco in 1939, the Basques provided the only organized resistance against his regime. They also played an extremely important role in the French resistance to Hitler’s occupation of France.

Role in Downfall of Franco Dictatorship

In 1973, ETA, the Basque armed militia assassinated Franco’s second in command, and Basque and Catalan leaders began meeting secretly to plan Spain’s transition to democracy.

Franco’s death and the fall of his government in 1975 would prove disastrous for the Basque economy. The dictator had been heavily subsidizing archaic Basque factories, which were totally unable to compete with modern European industries after Spain joined the EU.

In 1998, after uniting with Catalonia to win constitutional guarantees of legislative autonomy (for both Catalonia and Basqueland), ETA unilaterally renounced violence. This followed a 16-year battle with the GAL, an undercover police/paramilitary operation that engaged in extrajudicial assassinations and torture against Basque nationalists.

 

 

 

Hidden History: When Muslims Ruled in Europe

When the Moors Rules in Europe

Bettany Hughes (2011)

Film Review

When the Moors Ruled in Europe corrects many common misconceptions about Muslim rule in Spain between 711 and 1492 AD. Historical and archeological evidence contradicts the prevailing belief that this 700 year rule represented a violent military occupation. At the time Muslim Berbers from North Africa invaded Spain, the Christian/Visigoth cities were collapsing into chaotic anarchy – all the evidence suggests the inhabitants welcomed the Berbers for the security they provided.

Owing to its favorable climate, Spain quickly became the primary agricultural hub for a Muslim Empire that extended from North Africa to the Chinese border. After introducing irrigation, Muslim rulers also introduced citrus, avocado and other exotic crops which quickly spread across Europe. Owing to a faith committed to learning, the Moors also introduced universal literacy (in contrast to the rest of Europe where only clerical elites were taught to read). They also introduced advanced architecture, modern medicine, astronomy, Arabic numerals*, algebra, geometry and classical Greek philosophers which the Catholic church had banned in the rest of Europe.

During the 12^th century, scholars from all over Europe flocked to the great libraries at Toledo to translate (into Latin) classical Greek and Arabic texts. These scholars would introduce a new approach to knowledge, based on rational inquiry, that would inspire the founding of prestigious universities at Oxford, Paris and elsewhere.

Christian Armies Retake Spain and Launch the Spanish Inquisition

Inspired by the Crusades to the Holy Lands, during the 12^th century, Christian armies from northern Spain began slowly retaking Moorish cities from their Muslim rules. By 1250, only Grenada at the southern tip of Spain remained under Muslim rule.

In 1469, Isabella, Queen of Castille, married her second cousin Ferdinand, who was king of Aragon. In 1492, a siege which had begun 100 years earlier was successful and they seized Grenada to unify Spain.

Soon afterwards they launched the Spanish Inquisition to arrest, torture and kill Muslims, Jews and Christian heretics suspected of not practicing the “true” Catholic faith. Initially Muslims (who were mainly ethnic Spaniards) were offered the option of conversion. However in 1609, 300,000 were forcibly removed Most resettled in North Africa.

The Inquisition also burned more than a million Muslim texts.

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*Arabic numerals also made multiplication and division possible – both are virtually impossible with Roman numerals. It was also via Spain that numerous Arab terms for scientific concepts were introduced into English and other European languages (eg al-cohol, al-gebra, al-gorithm, al-chemy).

A Global Project to Regreen Our Deserts

 

Regreening the Planet

VPRO (2013)

Film Review

This documentary is about a global social enterprise called Commonland stared by Chinese American environmentalist John D Liu and Dutch ecologist Willem Ferwerda. The primary purpose of Commonland is to attract business investment for regreening landscapes that have been desertified due to destructive industrial farming practices.

Liu first got his start regreening the Loess Plateau in China, using organic and biodynamic principles that focus on restoring healthy soil microorganisms and smart water use.

The documentary features amazing footage of four regreening projects in China, India, Egypt and Spain. Each emphasizes the economic and job creation potential of regreening. Large scale projects that shift communities from imported to locally produced food are one of the best ways to create jobs for unemployed youth.

More information at the Commonland website>