Fishin' for thoughts

Cartoon enlightens people on banking industry


The other day I was browsing the internet at home, although I can’t remember what for, and I ran across this cartoon called Money as Debt by Paul Grignon. It’s a 47-minute story using cartoon characters to demonstrate the origin of the banking industry, how money became, how today’s banking industry works, and problems and solutions with the industry, basically how money is created as debt.

Like most Americans, I originally couldn’t see a need for the Banking Industry Bailout but after watching Money as Debt I can see there are much worse problems at hand and a bailout was the only way to keep order.

Now I know what you’re saying, “Another bailout story?” Not quite. I’m just trying to help you learn what we all should have known to begin with. In fact, this really has nothing to do with the bailout other than it’ll help you understand why it had to be done.

I won’t go into much detail explaining the cartoon but I will say this was another thing I NEVER was taught in high school. Our monetary system is completely self-reliant on debt. As long as there is debt there is money; if there were no debt, there would be no more money. You see 95% of our money is created through loans from a bank. A bank is allowed to draw a ratio of 9:1 on current funds from the federal reserve on the sole basis of a signed loan agreement and as that money is given to the recipient, it gets deposited in another bank where that bank is allowed to draw a 9:1 ratio off of that money for a new loan and so on.

Money as debt shows how a new bank with $1,111.12 can virtually create $100,000 off of that money through this process. The situation is further complicated when you begin to factor interest into the equation as there is no money being created other than loan money. So where is the money supposed to come from for interest? This is why so many loans are becoming default. You’re paying a bigger pot from a smaller pot and this creates an exponential curve that keeps America falling further and further into debt.

So this leads us to the main point of the production: banks do not LEND money; they CREATE it. In fact, if all debts were paid off, individuals would be better off, but society would have no more money and this is what happened leading up to the Great Depression. Money as Debt makes the point “we are totally dependent on continually renewed bank credit for there to be any money in existence; no loans, no money.”

Here is a quote from Robert H. Hemphill, a Credit Manager at the Federal Reserve Bank in Atlanta, Georgia:

“This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is.”

I can tell you, that doesn’t help me sleep at night.

I’ve been out of high school for six years now and since beginning this job with the Arenac Independent I have come to realize many truths about governmental systems and the sleight of hand we face on so many levels each and every day. I hate to sound so depressed and angry like this but it’s just ignorant and inhumane to me to have so much corruption or at least the appearance of corruption as we do. I wonder, if a survey were to be taken, how many Americans believe that things in government, banking, education, etc. are okay and there is no corruption with anything in America. I am willing to bet 99% would disagree with that, if not more. And for a soon-to-be 24-year-old, naïve, hopeful writer, that’s a tough one to handle.

So I advise all of you, for your own sake, get on the internet and surf over to or and search for Money as Debt by Paul Grignon and learn some things. Educate yourself, because if nothing else you’ll be smarter for it.


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