Linux versions

The main Linux versions are as follows:

Debian (started in 1993)
Knoppix (from Debian in 2000)
Ubuntu (from Debian in 2004)
Slackware (started in 1993)
Red Hat (started in 1994)
Fedora (from Red Hat in 2003)
SUSE (from Red Hat in 1994)
Gentoo (from Enoch in 2002)

We used Debian at Asher.
Rad Hat split to have a commercial paid version and a free version.
Ubuntu is the major desktop root version. There are many variations with different graphical libraries running under applications. I think I am leaning towards Kubuntu because it uses the KDE graphical foundation instead of the QT or Unity libraries. KDE was determined to be the favorite style of interface by a 1 to 3 margin (25% vs 75%). It looks and acts like the traditional Windows model.

I Want The Earth Plus 5%

By Larry Hannigan,
Australia


Fabian was excited as he once more rehearsed his speech for the crowd certain
to turn up tomorrow. He had always wanted prestige and power and now his dreams
were going to come true. He was a craftsman working with silver and gold, making
jewelry and ornaments, but he became dissatisfied with working for a living. He
needed excitement, a challenge, and now his plan was ready to begin.


For generations the people used the barter system. A man supported his own
family by providing all their needs or else he specialised in a particular
trade. Whatever surpluses he might have from his own production, he exchanged or
swapped for the surplus of others.

Market day was always noisy and dusty, yet people looked forward to the
shouting and waving, and especially the companionship. It used to be a happy
place, but now there were too many people, too much arguing. There was no time
for chatting – a better system was needed.

Generally, the people had been happy, and enjoyed the fruits of their
work.

In each community a simple Government had been formed to make sure that each
person’s freedoms and rights were protected and that no man was forced to do
anything against his will by any other man, or any group of men.

This was the Government’s one and only purpose and each Governor was
voluntarily supported by the local community who elected him.

However, market day was the one problem they could not solve. Was a knife
worth one or two baskets of corn? Was a cow worth more than a wagon – and so on.
No one could think of a better system.

Fabian had advertised, “I have the solution to our bartering problems, and I
invite everyone to a public meeting tomorrow.”

The next day there was a great assembly in the town square and Fabian
explained all about the new system which he called “money”. It sounded good.
“How are we to start?” the people asked.

“The gold which I fashion into ornaments and jewelry is an excellent metal.
It does not tarnish or rust, and will last a long time. I will make some gold
into coins and we shall call each coin a dollar.” He explained how values would
work, and that “money” would be really a medium for exchange – a much better
system than bartering.

One of the Governors questioned, “Some people can dig gold and make coins for
themselves”, he said.

“This would be most unfair”, Fabian was ready with the answer. “Only those
coins approved by the Government can be used, and these will have special
marking stamped on them.” This seemed reasonable and it was proposed that each
man be given an equal number. “But I deserve the most,” said the candle-maker.
“Everyone uses my candles.” “No”, said the farmer, “without food there is no
life, surely we should get the most.” And so the bickering continued.

Fabian let them argue for a while and finally he said, “Since none of you can
agree, I suggest you obtain the number you require from me. There will be no
limit, except for your ability to repay. The more you obtain, the more you must
repay in one year’s time. “And what will you receive?” the people asked.

“Since I am providing a service, that is, the money supply, I am entitled to
payment for my work. Let us say that for every 100 pieces you obtain, you repay
me 105 for every year that you owe the debt. The 5 will be my charge, and I
shall call this charge interest.”

There seemed to be no other way, and besides, 5% seemed little enough charge.
“Come back next Friday and we will begin.”

Fabian wasted no time. He made coins day and night, and at the end of the
week he was ready. The people were queued up at his shop, and after the coins
were inspected and approved by the Governors the system commenced. Some borrowed
only a few and they went off to try the new system.

They found money to be marvelous, and they soon valued everything in gold
coins or dollars. The value they placed on everything was called a “price”, and
the price mainly depended on the amount of work required to produce it. If it
took a lot of work the price was high, but if it was produced with little effort
it was quite inexpensive.

In one town lived Alan, who was the only watchmaker. His prices were high
because the customers were willing to pay just to own one of his watches.

Then another man began making watches and offered them at a lower price in
order to get sales. Alan was forced to lower his prices, and in no time at all
prices came down, so that both men were striving to give the best quality at the
lowest price. This was genuine free competition.

It was the same with builders, transport operators, accountants, farmers, in
fact, in every endeavour. The customers always chose what they felt was the best
deal – they had freedom of choice. There was no artificial protection such as
licences or tariffs to prevent other people from going into business. The
standard of living rose, and before long the people wondered how they had ever
done without money.

At the end of the year, Fabian left his shop and visited all the people who
owed him money. Some had more than they borrowed, but this meant that others had
less, since there were only a certain number of coins issued in the first place.
Those who had more than they borrowed paid back each 100 plus the extra 5, but
still had to borrow again to carry on. The others discovered for the first time
that they had a debt. Before he would lend them more money, Fabian took a
mortgage over some of their assets, and everyone went away once more to try and
get those extra 5 coins which always seemed so hard to find.

No one realised that as a whole, the country could never get out of debt
until all the coins were repaid, but even then, there were those extra 5 on each
100 which had never been lent out at all. No one but Fabian could see that it
was impossible to pay the interest – the extra money had never been issued,
therefore someone had to miss out.

It was true that Fabian spent some coins, but he couldn’t possibly spend
anything like 5% of the total economy on himself. There were thousands of people
and Fabian was only one. Besides, he was still a goldsmith making a comfortable
living.

At the back of his shop Fabian had a strongroom and people found it
convenient to leave some of their coins with him for safekeeping. He charged a
small fee depending on the amount of money, and the time it was left with him.
He would give the owner receipts for the deposit.

When a person went shopping, he did not normally carry a lot of gold coins.
He would give the shopkeeper one of the receipts to the value of the goods he
wanted to buy. Shopkeepers recognised the receipt as being genuine and accepted
it with the idea of taking it to Fabian and collecting the appropriate amount in
coins. The receipts passed from hand to hand instead of the gold itself being
transferred. The people had great faith in the receipts – they accepted them as
being as good as coins.

Before long, Fabian noticed that it was quite unusual for anyone to actually
call for their gold coins.

He thought to himself, “Here I am in possession of all this gold and I am
still a hard working craftsman. It doesn’t make sense. Why there are dozens of
people who would be glad to pay me interest for the use of this gold which is
lying here and rarely called for.

It is true, the gold is not mine – but it is in my possession, which is all
that matters. I hardly need to make any coins at all, I can use some of the
coins stored in the vault.”

At first he was very cautious, only loaning a few at a time, and then only on
tremendous security. But gradually he became bolder, and larger amounts were
loaned.

One day, a large loan was requested. Fabian suggested, “Instead of carrying
all these coins we can make a deposit in your name, and then I shall give you
several receipts to the value of the coins.” The borrower agreed, and off he
went with a bunch of receipts. He had obtained a loan, yet the gold remained in
the strong-room. After the client left, Fabian smiled. He could have his cake
and eat it too. He could “lend” gold and still keep it in his possession.

Friends, strangers, and even enemies needed funds to carry out their
businesses – and so long as they could produce security, they could borrow as
much as they needed. By simply writing out receipts Fabian was able to “lend”
money to several times the value of gold in his strong-room, and he was not even
the owner of it. Everything was safe so long as the real owners didn’t call for
their gold and the confidence of the people was maintained.

He kept a book showing the debits and credits for each person – the lending
business was proving to be very lucrative indeed.

His social standing in the community was increasing almost as fast as his
wealth. He was becoming a man of importance. He commanded respect. In matters of
finance, his every word was like a sacred pronouncement.

Goldsmiths from other towns became curious about his activities and one day
they called to see him. He told them what he was doing, but was very careful to
emphasize the need for secrecy. If their plan was exposed, the scheme would
fail, so they agreed to form their own secret alliance.

Each returned to his own town and began to operate as Fabian had taught.

People now accepted the receipts as being as good as gold itself, and many
receipts were deposited for safe keeping in the same way as coins. When a
merchant wished to pay another for goods, he simply wrote a short note
instructing Fabian to transfer money from his account to that of the second
merchant. It took Fabian only a few minutes to adjust the figures.

This new system became very popular, and the instruction notes were called
“checks”.

Late one night, the goldsmiths had another secret meeting and Fabian revealed
a new plan. The next day they called a meeting with all the Governors, and
Fabian began. “The receipts we issue have become very popular. No doubt, most of
you Governors are using them and you find them very convenient.” They nodded in
agreement and wondered what the problem was. “Well”, he continued, “some
receipts are being copied by counterfeiters. This practice must be stopped.”

The Governors became alarmed. “What can we do?” they asked. Fabian replied,
“My suggestion is this – first of all, let it be the Government’s job to print
new notes on a special paper with very intricate designs, and then each note to
be signed by the chief Governor. We goldsmiths will be happy to pay the printing
costs, as it will save us a lot of time writing out receipts”. The Governors
reasoned, “Well, it is our job to protect the people against counterfeiters and
the advice certainly seems like a good idea.” So they agreed to print the
notes.

“Secondly,” Fabian said, “some people have gone prospecting and are making
their own gold coins. I suggest that you pass a law so that any person who finds
gold nuggets must hand them in. Of course, they will be reimbursed with notes
and coins.” The idea sounded good and without too much thought about it, they
printed a large number of crisp new notes. Each note had a value printed on it –
$1, $2, $5, $10 etc. The small printing costs were paid by the goldsmiths.


The notes were much easier to carry and they soon became accepted by the
people. Despite their popularity however, these new notes and coins were used
for only 10% of transactions. The records showed that the check system accounted
for 90% of all business.

The next part of his plan commenced. Until now, people were paying Fabian to
guard their money. In order to attract more money into the vault Fabian offered
to pay depositors 3% interest on their money.

Most people believed that he was re-lending their money out to borrowers at
5%, and his profit was the 2% difference. Besides, the people didn’t question
him as getting 3% was far better than paying to have the money guarded.

The volume of savings grew and with the additional money in the vaults,
Fabian was able to lend $200, $300, $400 sometimes up to $900 for every $100 in
notes and coins that he held in deposit. He had to be careful not to exceed this
nine to one ratio, because one person in ten did require the notes and coins for
use.

If there was not enough money available when required, people would become
suspicious, especially as their deposit books showed how much they had
deposited. Nevertheless, on the $900 in book figures that Fabian loaned out by
writing checks himself, he was able to demand up to $45 in interest, i.e. 5% on
$900. When the loan plus interest was repaid, i.e. $945, the $900 was cancelled
out in the debit column and Fabian kept the $45 interest. He was therefore quite
happy to pay $3 interest on the original $100 deposited which had never left the
vaults at all. This meant that for every $100 he held in deposits, it was
possible to make 42% profit, most people believing he was only making 2%. The
other goldsmiths were doing the same thing. They created money out of nothing at
the stroke of a pen, and then charged interest on top of it.

True, they didn’t coin money, the Government actually printed the notes and
coins and gave it to the goldsmiths to distribute. Fabian’s only expense was the
small printing fee. Still, they were creating credit money out of nothing and
charging interest on top of it. Most people believed that the money supply was a
Government operation. They also believed that Fabian was lending them the money
that someone else had deposited, but it was very strange that no one’s deposits
ever decreased when a loan was advanced. If everyone had tried to withdraw their
deposits at once, the fraud would have been exposed.

When a loan was requested in notes or coins, it presented no problem. Fabian
merely explained to the Government that the increase in population and
production required more notes, and these he obtained for the small printing
fee.

One day a thoughtful man went to see Fabian. “This interest charge is wrong”,
he said. “For every $100 you issue, you are asking $105 in return. The extra $5
can never be paid since it doesn’t exist.

Farmers produce food, industry manufacturers goods, and so on, but only you
produce money. Suppose there are only two businessmen in the whole country and
we employ everyone else. We borrow $100 each, we pay $90 out in wages and
expenses and allow $10 profit (our wage). That means the total purchasing power
is $90 + $10 twice, i.e. $200. Yet to pay you we must sell all our produce for
$210. If one of us succeeds and sells all his produce for $105, the other man
can only hope to get $95. Also, part of his goods cannot be sold, as there is no
money left to buy them.

He will still owe you $10 and can only repay this by borrowing more. The
system is impossible.”

The man continued, “Surely you should issue $105, i.e. $100 to me and $5 to
you to spend. This way there would be $105 in circulation, and the debt can be
repaid.” Fabian listened quietly and finally said, “Financial economics is a
deep subject, my boy, it takes years of study. Let me worry about these matters,
and you look after yours. You must become more efficient, increase your
production, cut down on your expenses and become a better businessman. I am
always willing to help in these matters.”

The man went away still unconvinced. There was something wrong with Fabian’s
operations and he felt that his questions had been avoided.


Yet, most people respected Fabian’s word – “He is the expert, the others must
be wrong. Look how the country has developed, how our production has increased –
we must be better off.”

To cover the interest on the money they had borrowed, merchants were forced
to raise their prices. Wage earners complained that wages were too low.
Employers refused to pay higher wages, claiming that they would be ruined.
Farmers could not get a fair price for their produce. Housewives complained that
food was getting too dear. And finally some people went on strike, a thing
previously unheard of. Others had become poverty stricken and their friends and
relatives could not afford to help them. Most had forgotten the real wealth all
around – the fertile soils, the great forests, the minerals and cattle. They
could think only of the money which always seemed so scarce. But they never
questioned the system. They believed the Government was running it.

A few had pooled their excess money and formed “lending” or “finance”
companies. They could get 6% or more this way, which was better than the 3%
Fabian paid, but they could only lend out money they owned – they did not have
this strange power of being able to create money out of nothing by merely
writing figures in books.

These finance companies worried Fabian and his friends somewhat, so they
quickly set up a few companies of their own. Mostly, they bought the others out
before they got going. In no time, all the finance companies were owned by them,
or under their control.

The economic situation got worse. The wage earners were convinced that the
bosses were making too much profit. The bosses said that their workers were too
lazy and weren’t doing an honest day’s work, and everyone was blaming everyone
else.The Governors could not come up with an answer and besides, the immediate
problem seemed to be to help the poverty stricken.

They started up welfare schemes and made laws forcing people to contribute to
them. This made many people angry – they believed in the old-fashioned idea of
helping one’s neighbour by voluntary effort.

“These laws are nothing more than legalised robbery. To take something off a
person against his will, regardless of the purpose for which it is to be used,
is no different than stealing.” But each man felt helpless and was afraid of the
jail sentence which was threatened for failing to pay. These welfare schemes
gave some relief, but before long the problem was back and more money was needed
to cope. The cost of these schemes rose higher and higher and the size of the
Government grew.

Most of the Governors were sincere men trying to do their best. They didn’t
like asking for more money from their people and finally, they had no choice but
to borrow money from Fabian and his friends. They had no idea how they were
going to repay. Parents could no longer afford to pay teachers for their
children. They couldn’t pay doctors. And transport operators were going out of
business.

One by one the government was forced to take these operations over. Teachers,
doctors and many others became public servants.


Few obtained satisfaction in their work. They were given a reasonable wage,
but they lost their identity. They became small cogs in a giant machine.


There was no room for personal initiative, little recognition for effort,
their income was fixed and advancement came only when a superior retired or
died.

In desperation, the governors decided to seek Fabian’s advice. They
considered him very wise and he seemed to know how to solve money matters. He
listened to them explain all their problems, and finally he answered, “Many
people cannot solve their own problems – they need someone to do it for them.
Surely you agree that most people have the right to be happy and to be provided
with the essentials of life. One of our great sayings is “all men are equal” –
is it not?”

Well, the only way to balance things up is to take the excess wealth from the
rich and give it to the poor. Introduce a system of taxation. The more a man
has, the more he must pay. Collect taxes from each person according to his
ability, and give to each according to his need. Schools and hospitals should be
free for those who cannot afford them.”

He gave them a long talk on high sounding ideals and finished up with, “Oh,
by the way, don’t forget you owe me money. You’ve been borrowing now for quite
some time. The least I can do to help, is for you to just pay me the interest.
We’ll leave the capital debt owing. Just pay me the interest.”

They went away, and without giving Fabian’s philosophies any real thought,
they introduced the graduated income tax – the more you earn, the higher your
tax rate. No one liked this, but they either paid the taxes or went to jail.

Merchants were forced once again to raise their prices. Wage earners demanded
higher wages forcing many employers out of business, or to replace men with
machinery. This caused additional unemployment and forced the Government to
introduce further welfare and handout schemes.

Tariffs and other protection devices were introduced to keep some industries
going just to provide employment. A few people wondered if the purpose of the
production was to produce goods or merely to provide employment.

As things got worse, they tried wage control, price control, and all sorts of
controls. The Government tried to get more money through sales tax, payroll tax
and all sorts of taxes. Someone noted that from the wheat farmer right through
to the housewife, there were over 50 taxes on a loaf of bread.

“Experts” arose and some were elected to Government, but after each yearly
meeting they came back with almost nothing achieved, except for the news that
taxes were to be “restructured”, but overall the total tax always increased.

Fabian began to demand his interest payments, and a larger and larger portion
of the tax money was being needed to pay him.

Then came party politics – the people started arguing about which group of
Governors could best solve the problems. They argued about personalities,
idealism, party labels, everything except the real problem. The councils were
getting into trouble. In one town the interest on the debt exceeded the amount
of rates which were collected in a year. Throughout the land the unpaid interest
kept increasing – interest was charged on unpaid interest.

Gradually much of the real wealth of the country came to be owned or
controlled by Fabian and his friends and with it came greater control over
people. However, the control was not yet complete. They knew that the situation
would not be secure until every person was controlled.

Most people opposing the systems could be silenced by financial pressure, or
suffer public ridicule. To do this Fabian and his friends purchased most of the
newspapers, T.V. and radio stations and he carefully selected people to operate
them. Many of these people had a sincere desire to improve the world, but they
never realised how they were being used. Their solutions always dealt with the
effects of the problem, never the cause.

There were several different newspapers – one for the right wing, one for the
left wing, one for the workers, one for the bosses, and so on. It didn’t matter
much which one you believed in, so long as you didn’t think about the real
problem. Fabian’s plan was almost at its completion – – – the whole country was
in debt to him. Through education and the media, he had control of people’s
minds. They were able to think and believe only what he wanted them to.

After a man has far more money than he can possibly spend for pleasure, what
is left to excite him? For those with a ruling class mentality, the answer is
power – raw power over other human beings. The idealists were used in the media
and in Government, but the real controllers that Fabian sought were those of the
ruling class mentality.

Most of the goldsmiths had become this way. They knew the feeling of great
wealth, but it no longer satisfied them. They needed challenge and excitement,
and power over the masses was the ultimate game.

They believed they were superior to all others. “It is our right and duty to
rule. The masses don’t know what is good for them. They need to be rallied and
organised. To rule is our birthright.”

Throughout the land Fabian and his friends owned many lending offices. True,
they were privately and separately owned. In theory they were in competition
with each other, but in reality they were working very closely together. After
persuading some of the Governors, they set up an institution which they called
the Money Reserve Centre. They didn’t even use their own money to do this – they
created credit against part of the money out of the people’s deposits.

This Institution gave the outward appearance of regulating the money supply
and being a Government operation, but strangely enough, no Governor or public
servant was ever allowed to be on the Board of Directors.

The Government no longer borrowed directly from Fabian, but began to use a
system of I.O.U.’s to the Money Reserve Centre. The security offered was the
estimated revenue from next year’s taxes. This was in line with Fabian’s plan –
removing suspicion from himself to an apparent Government operation. Yet, behind
the scenes, he was still in control.

Indirectly, Fabian had such control over the Government that they were forced
to do his bidding. He boasted, “Let me control the nation’s money and I care not
who makes its laws.” It didn’t matter much which group of Governors were
elected. Fabian was in control of the money, the life blood of the nation.

The Government obtained the money, but interest was always charged on every
loan. More and more was going out in welfare and handout schemes, and it was not
long before the Government found it difficult to even repay the interest, let
alone the capital.

And yet there were people who still asked the question, “Money is a man-made
system. Surely it can be adjusted to serve, not to rule?” But these people
became fewer and their voices were lost in the mad scrabble for the non-existent
interest.

The adminstrations changed, the party labels changed, but the major policies
continued. Regardless of which Government was in “power”, Fabian’s ultimate goal
was brought closer each year. The people’s policies meant nothing. They were
being taxed to the limit, they could pay no more. Now the time was ripe for
Fabian’s final move.

10% of the money supply was still in the form of notes and coins. This had to
be abolished in such a way as not to arouse suspicion. While the people used
cash, they were free to buy and sell as they chose – they still had some control
over their own lives.

But it was not always safe to carry notes and coins. Checks were not accepted
outside one’s local community, and therefore a more convenient system was looked
forward to. Once again Fabian had the answer. His organisation issued everyone
with a little plastic card showing the person’s name, photograph and an
identification number. When this card was presented anywhere, the storekeeper
phoned the central computer to check the credit rating. If it was clear, the
person could buy what he wanted up to a certain amount.

At first people were allowed to spend a small amount on credit, and if this
was repaid within a month, no interest was charged. This was fine for the wage
earner, but what businessman could even begin? He had to set up machinery,
manufacture the goods, pay wages etc. and sell all his goods and repay the
money. If he exceeded one month, he was charged a 1.5% for every month the debt
was owed. This amounted to over 18% per year.

Businessmen had no option but to add the 18% onto the selling price. Yet this
extra money or credit (the 18%) had not been loaned out to anyone. Throughout
the country, businessmen were given the impossible task of repaying $118 for
every $100 they borrowed – but the extra $18 had never been created at all.

Yet Fabian and his friends increased their standing in society. They were
regarded as pillars of respectability. Their pronouncements on finance and
economics were accepted with almost religious conviction.

Under the burden of ever increasing taxes, many small businesses collapsed.
Special licenses were needed for various operations, so that the remaining ones
found it very difficult to operate. Fabian owned and controlled all of the big
companies which had hundreds of subsidiaries. These appeared to be in
competition with each other, yet he controlled them all. Eventually all
competitors were forced out of business. Plumbers, panel beaters, electricians
and most other small industries suffered the same fate – they were swallowed up
by Fabian’s giant companies which all had Government protections.

Fabian wanted the plastic cards to eliminate notes and coins. His plan was
that when all notes were withdrawn, only businesses using the computer card
system would be able to operate.

He planned that eventually some people would misplace their cards and be
unable to buy or sell anything until a proof of identify was made. He wanted a
law to be passed which would give him ultimate control – a law forcing everyone
to have their identification number tattooed onto their hand. The number would
be visible only under a special light, linked to a computer. Every computer
would be linked to a giant central computer so that Fabian could know everything
about everyone.


The story you have read is, of course, fiction. But if you found it to be
disturbingly close to the truth and would like to know who Fabian is in real
life, a good starting point is a study on the activities of the English
goldsmiths in the 16th & 17th centuries.

For example, The Bank of England began in 1694. King William of Orange was in
financial difficulties as a result of a war with France. The Goldsmiths “lent
him” 1.2 million pounds (a staggering amount in those days) with certain
conditions:

a.The interest rate was to be 8%. It must be remembered that Magna Carta
stated that the charging or collecting of interest carried the death
penalty.

b.The King was to grant the goldsmiths a charter for the bank which gave
them the right to issue credit.

Prior to this, their operations of issuing receipts for more money than they
held in deposits was totally illegal. The charter made it legal.

In 1694 William Patterson obtained the Charter for the Bank of England.

Larry Hannigan, Australia


Quotations

Encyclopaedia Britannica, 14th Edition – “Banks create credit. It is a
mistake to suppose that bank credit is created to any extent by the payment of
money into the banks. A loan made by a bank is a clear addition to the amount of
money in the community.”

Lord Acton, Lord Chief Justice of England, 1875 – “The issue which has swept
down the centuries and which will have to be fought sooner or later is the
People v. The Banks.”

Mr Reginald McKenna, when Chairman of the Midland Bank in London – “I am
afraid that ordinary citizens will not like to be told that the banks can, and
do, create and destroy money. And they who control the credit of the nation
direct the policy of governments, and hold in the hollow of their hands the
destiny of the people.

Mr Phillip A. Benson, President of the American Bankers’ Association, June 8,
1939 – “There is no more direct way to capture control of a nation than through
its credit (money) system.”

USA Banker’s Magazine, August 25, 1924

“Capital must protect itself in every possible manner by combination and
legislation. Debts must be collected, bonds and mortgages must be foreclosed
as rapidly as possible. When, through a process of law, the common people lose
their homes they will become more docile and more easily governed through the
influence of the strong arm of government, applied by a central power of
wealth under control of leading financiers.

“This truth is well known among our principal men now engaged in forming an
imperialism of Capital to govern the world.

“By dividing the voters through the political party system, we can get them
to expend their energies in fighting over questions of no importance. Thus by
discreet action we can secure for ourselves what has been so well planned and
so successfully accomplished.”

Sir Denison Miller – During an interview in 1921, when he was asked if he,
through the Commonwealth Bank, had financed Australia during the First World War
for $700 million, he replied, “Such was the case, and I could have financed the
country for a further like sum had the war continued.” Asked if that amount was
available for productive purposes in this time of peace, he answered, “Yes”.

From “Hand Over Our Loot, No. 2, by Len Clampett:

“There are four things that must be available for paid work to take
place:

  • The work to be done.
  • The materials to do the work.
  • The labor to do the work.
  • The money to pay for the work to be done.

“If any of those four things are missing, no paid work can take place. It
is a naturally self-regulating system. If there is work to be done, and the
material is available and the labour willing, all we have to do is create the
money. Quite simple.

“Ask yourself why it was that depressions happened. All that went missing
from the community was the money to buy goods and services. The labour was
still available. The work to be done was still there. The materials had not
disappeared, and the goods were readily available in the shops, or could be
produced but for the want of money.”

Extract from a letter written by Rothschild Bros of London to a New York firm
of bankers on 25 June 1863:

“The few who can understand the System (Cheque Money and Credits) will
either be so interested in its profits, or so dependent on its favours, that
there will be no opposition from that class. While on the other hand, the
great body of people mentally incapable of comprehending the tremendous
advantage that capital derives from the system, will bear its burdens without
complaint and perhaps without even suspecting that the system is inimical
(hostile, hurtful) to their interests.”

The following quotation was reprinted in the Idaho Leader, USA, 26 August
1924, and has been read into Hansard twice: by John Evans MP, in 1926, and by
M.D. Cowan M.P., in the Session of 1930-1931.

In 1891 a confidential circular was sent to American bankers and their
agents, containing the following statements:

“We authorise our loan agents in the western States to loan our funds on
real estate, to fall due on September 1st 1894, and at no time
thereafter.

“On September 1, 1894, we will not renew our loans under any
consideration.

“On September 1st we will demand our money – we will foreclose and become
mortgagees in possession.

“We can take two-thirds of the farms west of the Mississippi and
thousands of them east of the great Mississippi as well, at our own
price.”

“We may as well own three-fourths of the farms of the west and the money
of the country.

“Then the farmers will become tenants, as in
England.”

From “Hand Over Our Loot, No. 2”

“In the United States, the issuing of money is controlled by the Federal
Reserve Board. This is not a government department but a board of private
bankers.Most of us would believe that the Federal Reserve is a federal arm of
the national government.This is not true. In 1913 President Woodrow Wilson
signed the document that created the Federal Reserve, and committed the
American people to debt slavery until such time as they awake from their
slumber and overthrow this vicious tyranny.”

The understanding of this issue of money into the community can be best
illustrated by equating money in the economy with tickets in a railway system.
The tickets are printed by a printer who is paid for his work. The printer
never claims the ownership of the tickets. And we can never imagine a railway
company refusing to give passengers seats on a train because it is out of
tickets. By this same token, a government should never refuse people the
access to normal commerce and trade by claiming it is out of money.”

Suppose the government borrows $10 million. It only costs the bankers a few
hundred dollars to actually produce the funds, and a little more to do the
book-keeping. Do you think it is fair that our citizens should struggle to
keep their homes and families together, while the bankers grow fat on these
profits?

Credit created by a Government-owned bank is better than credit created by
private banks, because there is no need to recover the money from people by
way of taxes, and there is no interest attached to inflate the cost. The
public work completed with the credit by the Government bank is the asset that
replaces the money created when the work is finished.

None of our problems will disappear until we correct the creation, supply
and circulation of money. Once the money problem is solved, everything else
will fall into place.

Go on to the
Analysis of “I Want The Earth Plus 5%”


Copyright at Common Law, West El Paso Information Network,
1998

Concerns about the money system and the federal Reserve

Overview

Much discussion and hype has surrounded the money supply.
Those who understand it least are the most concerned (which should encourage you).
I believe there are some real concerns about money in the United States of America and some exaggerated concerns based on a lack of understanding or faulty assumptions.
I want to discuss both kinds of concerns on this page.
If you have others, please comment below to me for investigation or explanation.

Paper money is worthless

Those who want you to invest in gold and silver and other “real” money try to scare you into thinking that paper money has no value but the paper it’s printed on.
For those of us with paper debts I think we wish that were true.
Any legally enforceable contract involving debt is treated much the same way as our current money system.
Dollar bills are simply promises by the government to pay the value equal to “one dollar”.
This is a self referencing amount which in theory could be set to the value of the paper but this would be ridiculous.
The government has a vested interest in the happiness (or at least complacency) of its citizens.
There would be no reason to make the value of the dollar so low as to be worthless.
On the other hand, the government (or the Federal Reserve) allows (or designs in) inflation, which is a tax on those holding the money.
Why is this a tax you ask? It’s because the value of the money goes down when inflation happens.
The value lost is exactly what is gained by the US treasury when it’s “obligations to pay” are similarly reduced.

The Federal Reserve is actually owned by foreigners

False. The shares of the Federal Reserve are all owned by member banks much the same way a credit union is organized.

There are no privately held shares and the banking institutions who own the shares happen to not be significantly owned by any one foreigner.

Please see this excellent article on the subject.

The money system is unstable

There are those who believe the money system is inherently unstable and will inevitably lead to meltdown.
Many people have predicted dates when this will happen – much to their embarrassment.

The thinking goes that since each dollar in circulation is borrowed (right?) from the Fed it will need to be paid back to the Fed with interest.
The money to get that interest is not in existence and therefore must be borrowed from the Fed to pay off the existing debt as well.
In this scenario the Federal debt must increase year over year infinitely and exponentially.
(Here is a great example of this thinking).

Anyone who believes this must think the bankers are stupid or part of a conspiracy against the government.

This theory also sounds a lot like an excuse why the government runs a deficit almost every year and has a humongous debt.
Other than the war of 1812, the government has only had a significant debt since the 1930s.
It was not the money system itself that caused the spending problems but the inability of the elected officials to show restraint or accountability.
(Here is a great article on where this could all be headed.).

No, it is not the money system itself that is unstable but the elected and appointed officials that run the government who are unstable.
You can see here how the money supply is really handled. It’s not exponentially unstable by design.

If the government spends only what it gets in taxes there is no debt to gather interest from the Fed.

If the government borrows extra money to spend above what it gets in taxes it has to pay the borrower interest on the debt (of course). It is convenient to borrow this money from the Fed. Most any profit the Fed gets is given back to the treasury.
The Fed goes to international markets to get any money more than what is absorbed by the US population.

So.. what’s wrong with the “Earth plus 5%” article?

  1. The premise that the bank starts out with all the money is a false one.
    The Fed was created by deposits (investments?) from member banks.
    Member banks got the money from depositors like us.
    Originally these deposits were metal backed (representing Gold or Silver or whatever)
    which came from someone digging it up out of the ground.

  2. Most people don’t understand that the Fed returns any interest after expenses and dividends back to the Treasury department.
  3. Many people forget that inflation makes all money worth less over time and thus requires some interest just to maintain value.
  4. In theory, since the Fed can’t make money on it’s own (acting like a monopoly) and all other banks are in a competitive environment
    the interest rates available on the (loan) open market should be as low as possible – just enough to cover the expenses of running bank operations.
    Presumably you would deposit with banks who offer higher rates of return and loan from banks who offer lower rates of interest.

  5. I must admit that any profit a bank makes (and they do) will lead to more and more ownership of private assets by banks.
    A majority of houses and businesses are owned by banks and the ratio is getting worse (or appears to be).
    Even though I believe the system is stable, I have a hard time backing that belief with an ironclad proof.

How money works

There are four main players in the money game:

  1. Businesses and Citizens like you and me (business entities).
  2. Banks
  3. The U.S. Treasury
  4. The Federal Reserve
  5. Each has a role to play.

Introduction

If you look at your U.S. $1 bill, you will see that it says FEDERAL RESERVE NOTE. This means that the holder of the “note” is owed one dollar by the U.S. Government (the Treasury, not the Federal Reserve).
The piece of paper is not a dollar, but rather entitles you to the value of a dollar.
In the early 1900’s and earlier the value of a dollar was fixed to a certain amount of Gold or Silver.
Today the value of a dollar floats according to exchange rates.
It is not collateralized by chunks of metal (Gold or Silver) but the ability of the government to pay that debt.
The real value of each dollar fluctuates with the supply and demand of dollars in the marketplace.

Business entities (or persons)


Business entities use money to buy things from other entities, but that’s not the interesting part.
For the purposes of understanding our money, it’s more interesting to note the interactions we have with banks. We need loans and savings accounts.
We get a loan from a banking institution and agree to pay them back with interest.
We also want to put our money into a bank account that pays us interest for letting them hold our money.
As you probably know, the bank charges a higher rate of interest on loans than they give out to account holders.
The difference is their profit. They earn this by providing us a service.


Banks

Banks make their money by loaning out money on deposit in the form of loans to other entities or banks.
By law, they are not allowed to loan out all of the money they hold in their(our) accounts. When we want to get our money out they need to have some on hand to give us.
Certainly they don’t need to have it all just sitting around. Most of it is loaned out.
The amount of money they need to hold back for withdrawals is called the reserve (a percentage of funds not to be loaned out).
Any money “reserved” does not earn interest. A minimum amount of reserves must be on deposit with the Federal Reserve System itself.
This minimum rate is determined by the Federal Reserve.

Banks can choose to borrow more money than what is deposited in their(our) accounts in order to make more loans. They can borrow from other banks, or if they are large enough, from the Federal Reserve.
Banks choose to borrow from the Fed based on the discount rate set by the Fed.
You could say that banks do their banking at the Fed.

Most banks are FDIC insured. (FDIC= Federal Deposit Insurance Corporation).
The FDIC is an agency of the Federal Government and guarantees each individual’s deposits for up to $100,000 per person.


The U.S. Treasury

The Treasury runs the finances of the government. They collect taxes, pay obligations, manage the national debt, and a few other odds and ends.
Branches of the Treasury include the IRS,
the US Mint,
the Bureau of Engraving and Printing (that prints our money and stamps),
and the office of the public debt.
(The org chart for 2005 is at this link).

The Treasury “keeps it’s money” in the Federal Reserve Bank. Any taxes or customs collected are put on deposit there (without interest).
Any money it needs above taxes in order to pay it’s debts is borrowed from the Fed (with interest).
As of this (original) writing, the Treasury is over 8 trillion dollars in debt ($8,000,000,000,000)!

(Here’s a link to the Treasury Website.)


Federal Reserve

The Federal Reserve (Fed) is the central bank of the United States. I discuss a summary of Federal Reserve history elsewhere.
The Fed sets the interest rate (discount rate) at which the government (and other large banks) can borrow money.
The Fed sets the “fractional lending” ratios – the minimum reserve rates.
The Fed also controls the money supply another way – by buying and selling government bonds on the open bond market (like adding or subtracting water to a reservoir in order to raise and lower the water level).
Selling bonds takes away money in exchange for bond notes (that just sit there).
Buying bonds puts money into circulation and removes the bond.
The FOMC (Federal Open Market Committee) decides how much buying and selling of bonds to do.
The Fed is governed by a 7 member board of governors, each of which are appointed by the President of the United States (and confirmed by the Senate) to 14 year terms.
The board of governors reports to the congress (as prescribed by the constitution).

The Fed is actually owned by the member banks, not the Treasury. Shares of this private company were sold to the member banks.
The Fed acts like a bank for banks and the government – otherwise known as a “bank of last resort”. When no one else will loan you money,
The Fed should be able to handle the job if it’s in the national interest.
The Fed “makes money” by providing services, and by collecting interest on loans.
Any money left over after expenses is given to the U.S. Treasury.


International Monetary Fund (IMF)

Since the United States is a member of the world community, it makes sense for the U.S. Treasury to have an account with the IMF.
In the same way that banks became members (account holders) of the Federal Reserve, the Fed became a member of the IMF.
The advantages of money safety and flexibility obtained by having a central bank of the USA can be had on a worldwide scale with the IMF.
When natural disasters or unusual economic events occur in a nation, the IMF is there to provide loans to help stabilize their economy.
Like the Fed, the interest pays for the operating expenses and any extra goes to the shareholders.


How the money (or cash) supply works

First off, the money supply in general is balanced by the Fed, who tries to match the value being generated in society with the number of dollars floating around (see my discussion on Supply and demand for further information).
There are really two different questions: “Where does the money come from to change the level of money supply?” and “Specifically how does a dollar bill enter circulation?”.

How does cash enter circulation?

Step 1: A person wants to get $100 cash (5 $20s) from his bank where he has an account with a balance.
This person assumes the bank will have the cash on hand to fulfill this request.

Step 2: The bank gives him the money in cash as requested.

Step 3: In order to keep the correct ratios of cash to deposits
(as defined by the Fed guidelines or possible more strict from the head bank branch),
the bank orders $100 in cash to be sent on the next truck from the central bank headquarters.

Step 4: In aggregate, the head bank sums up all the requests for new cash
and subtracts off the “old cash” the banks have collected for recycling
and comes up with a net amount it wants to get from the local Federal Reserve branch.
In this example the amount is $100.
(This is the amount the Reserve branch subtracts from the bank’s account – just like for an individual).

Step 5: The local Federal Reserve sums up all the requests for all banks and orders bills from the US treasury.

Step 6: The treasury asks the mint to print the required number of bills (5 $20s in this case).

Step 7: (Here’s where it gets interesting).
The Federal reserve purchases the bills from the US Mint (or the Bureau of Engraving and Printing) at cost (around 3 cents per bill).

Step 8: Because that “Federal Reserve Note” is an obligation of the Treasury department going into circulation,
the Fed credits $100 to the account of the US Treasury (to balance the debt of $100 given to the reserve bank).
This is like the US Treasury depositing the money with the Federal Reserve bank (without interest) – who is then loaning it out (with interest).

Step 9: Those 5 bills are then passed down the line with the necessary accounting taking place along the way.

The Federal Reserve charges interest on all the money it lends out all year long.
It receives over $20 Billion in interest payments – most of which it gives back to the US treasury.
Some of the “profit” is used to cover expenses (like printing money itself, employees, buildings, etc.)
and some gets paid out in a dividend (about 1%) back to the member banks.

Where does the money come from (or go to) when the money supply is changed?

If you think about it, anyone can do this little magic trick of creating a supply of money.
Most of us can get a credit card and request a cash advance. Suddenly you have more cash on hand
but you also have a debt balance with the credit card issuing bank. The supply of money just went up.
When you pay that off, the supply of money just went down.
The Federal Reserve does this anytime it wants to create or expire some amount of the money supply.
The main methods for doing this is to buy or sell US government treasuries and bonds on the open market.
The Fed can request additional bonds or treasuries from the Treasury at will.

Thus the Fed controls the money supply.
Click here for more about the effects of changing the money supply.

Please note my concerns with the money system on a separate page.


Notes:


Who’s obligation?

According to the Federal Reserve Act, Federal Reserve Notes are obligations of the United States Government.
The government manages it’s obligations through the department of the Treasury.


Collateral

The ability of the government to pay it’s debts is dependent on it’s ability to collect taxes from it’s citizens.
Those taxes are dependent on the ability of the citizens to work and create value to others.
In a certain sense you could say we are part time slaves: working for the government part of the year and working for ourselves the rest of the time.


ATF & Secret Service

The department of the Treasury used to include the ATF
and the Secret Service.
The ATF controls the use, regulation, and taxing of Alcohol, Tobacco, and Firearms, as well as enforces the laws regarding those things.
The ATF was part of the department of the Treasury because that’s one of the things being taxed.
The tax management part of the ATF stayed with the Treasury department and the law enforcement aspects were moved
under the Department of Justice as part of the reorganization under the Homeland Security Act of 2002.

The Secret service not only guards the President, Vice president, and all presidential candidates, but also guards the Treasury buildings and enforces the counterfeiting/forging laws.


Debt

A debt of 9 Trillion dollars is more than $30,000 per citizen. Each generation would prefer to die without paying that debt and pass it on to our children. This sort of thinking just makes the number bigger. Don’t get me started…

So who is the creditor for all this debt? Whomever holds U.S. Bonds (savings bonds, Treasury bills, etc.)

Currently a significant portion of this debt is owned by the Chinese government. This is mutually beneficial (to both governments), but that’s another story.


Fed ownership

By member banks buying shares of the Fed (to the tune of 3% of capital and surplus), bank funds were fairly and legally moved from those banks into the Federal Reserve.
This built in some natural incentives for the system to work: The banks would want their “investment” to work out and the Fed would be influenced by it’s shareholders to help out the banks.


Fed expenses

One of the interesting “expenses” of the Federal Reserve is a 6% dividend to member banks on their stock ownership.
Other than a general financial statement, the Fed does not explain it’s expenses.
Congress has been considering forcing the Fed to be audited each year, but has not passed the bill into law yet.
This means that the financial records of the Fed are closed to the public and to the government (whose debt it manages).


IMF ownership

So who owns the shares of the IMF? Do member banks also own shares?
Is it a “credit union” model where the account holders get a percentage of profits?
I am not clear on this subject yet. If you know, let ME know.


Who decides?

So, how does the amount of Treasury bond money get determined? It seems the Treasury has to borrow a certain amount of money each year based on it’s budget (or lack thereof).
It also appears that the Fed has the option to put more or less than that amount on the market according to money supply and inflation needs.
Who decides and how can both authorities coexist in this matter?


Federal Branch abbreviations

The following letters are associated with each of the Federal Reserve branches.
A = Boston, MA
B = New York, NY
C = Philadelphia, PA
D = Cleveland, OH
E = Richmond, VA
F = Atlanta, GA
G = Chicago, IL
H = St. Louis, MO
I = Minneapolis, MN
J = Kansas City, KS
K = Dallas, TX
L = San Francisco, CA
The letters denote the territory number (A=1, B=2, etc.)

Supply and Demand (for money)

Economics 101

As you probably know from Economics 101, anything bought and sold obeys the law of supply and demand. Given a fixed supply, the more something is in demand the more the price goes up. The less it is in demand the lower the price. Given a fixed demand, the more supply of something there is the lower the price. The less supply there is the higher the price. If you think about some examples this all makes intuitive sense.
Let’s say you are selling apples. If you have only 5 apples and you are the only seller you will have the opportunity to see this first hand. If people REALLY want apples, you will be able to sell them for a high price each. If nobody is wanting apples your price will go down down down until that 5th apple is sold or goes bad.
Similarly if there is only demand for about 10 apples your price will be greatly affected by whether or not you have 5 apples on hand or 20.

How does this affect money itself?

The more money is out there circulating in the system, the less value each dollar will possess, kind of like the price of the apples. Similarly if the population expands, or a lot of people get jobs, or more goods and services are produced with the same amount of work the value represented by each dollar goes up (known as deflation – inflation is the opposite effect). The Fed has a delicate balancing job to do to keep the amount of money in circulation matching the amount of value being produced in the economy. Keeping inflation low is another way of saying that this balance is kept very well but tilted slightly in the governments favor. Inflation is the measure of effective tax the government takes on every dollar. The government is the one who owes the debt represented by the dollar bill so it is to their advantage to keep the value of that dollar decreasing if possible (inflation). Deflation would be bad (for the government) because then the government would owe more value with it’s debts. Too much inflation and people around the world will not want to be holding many dollars and hence the demand on the dollar will go down (also bad for the government). Demand for the dollar is important for the government because it is in so much debt. It needs many many people to want to hold dollars or dollar valued assets and debts.

Details

M0 is the name for the money supply of actual cash – dollars and coins.
M1 is the name for the money supply of M0 plus checking deposits at banks (short term money). This is set by the federal reserve board.
M2 is the name for the money supply of M1 plus savings deposits and money markets (medium term stuff).
M3 includes large scale and long term deposits (along with M2).

Multiple currencies

If there is more than one currency in the picture then each currency not only holds some real value of goods and services, but can in theory be exchanged for an equivalent real value in that other currency. If both currencies are well managed you can exchange value back and forth between those two currencies (minus an exchange fee each time). If one or more of the currencies are not managed well there will be compounding effects of the exchange itself. The more people are exchanging in one direction the more demand for that currency goes up and the demand for the other goes down (and it’s supply goes up). The currencies will start to take on intrinsic value or devalue – based on the look of the bills or coins or the perceived cache of the country or governing personalities, etc.

Back in colonial times bankers were not as sophisticated or educated about all the interrelated factors mentioned above. They also had limited information on what was going on in society, so they had a very tough time of balancing the money supply. Actually, there were very few ways of controlling the value of the currency and little coordination from one bank or mint to another. In short, there were varying values to each “dollar” from each state or bank and over time the values would appreciate or depreciate significantly. Holding money itself was a risky venture in and of itself. “Real money” (gold, silver, diamonds, horses(!)) was the only truly safe way of conducting reliable transactions when the currency was fluctuating. The history of the Fed explains more about how we advanced to where we are today.

Confusing things about the Samsung Galaxy S5

My new phone is great but it had some confusing features it took a while to figure out (with help).

1) The weather app that comes with the phone was only updating when I clicked it. It would show the previous day’s temp but the current time. What’s up with that? How do I get it to automatically update like my old phone (HTC One X).
Solution: Click on the app to go to the main weather screen. Choose the menu in the upper right, choose settings, and set the auto-update as desired (not “none”). Not that bad. I think the default should be something other than “none” but perhaps starting at none forces you to realize there IS a setting and adjust it accordingly.

2) So, how do you turn the data off? You choose setting and you see the place where you can turn wifi on and off, bluetooth, sound, display, etc. – but no data. You would think that would be a common request but it’s actually well hidden. It is easier to see where you can request using MORE mobile data any time your wifi cuts out – in order to keep the video or song playing – whatever you are doing. That is the opposite of what I want when I am on the treadmill. I can live without any video but I can’t be using up my valuable mobile data megs on non-vital things.
Solution: The mobile data setting is actually under “more networks” / “mobile networks”. There is a mobile data checkbox there you can toggle.

3) I got all my emails set up on their email app but the Gmail was no there. It was set up on a separate GMail app already. How do I combine them together in one interface?
Solution: I have not found a way to do this yet and have given up. I just check both sources of mail and live with it. let me know if you have any ideas to try.

4) The email app has some setting (under manage accounts) mentioning a sync schedule and a sync period without any explanation of what those mean and how they interact. All the online tutorials are silent on the meaning. They just say “and this is where you choose your sync schedule” or “sync period” and give no explanation. Am I the dumb one here? Is it so obvious what the difference between schedule and period is?
Solution: It turns out a period in this context means the amount of time the email app will keep emails for. It will keep no email older than X length of time. The schedule is how often to contact the mail server and check for new emails. It’s just that simple. It’s nice that you can set those time frames different for each email address. Pretty cool.

5) One of the “killer apps” of the S5 is it has a heart rate monitor. Oh yeah? How do you use it?
Solution: IT appears there is only one way to use it (so far) and that is the health app that comes with it. You click the health app, choose heart rate, and stick your finger on the spot where the camera flash is located. There are three “devices” in that port: one is the flash, one is the distance measurement for the camera, and one is the heart rate sensor. It appears to be sufficiently accurate (plus or minus a couple). I got running and then measured my heart rate and it counted 166 beats per minute. I tried it multiple times and it was repeatable. Supposedly my maximum heart rate would be 220 minus my age: or a total of 175 for me. It did not seem possible to get a rating higher than 166 so I don’t know if the sensor is off a bit or if the formula is approximate or if I have a body older than my age would indicate. :-) As I recall from my heart test 2 years ago, my maximum heart rate was right where it was supposed to me according to the formula. That was with a better sensor though.