I remember it like it was yesterday … The moment I realized that I’ve had it wrong all along.

That sensation of stupidity overcame me; my face was hot with embarrassment.

Where I was. Who I was with. What was going through my mind. Everything about this moment can be recalled. Feeling completely helpless is still the most vivid memory.

It happened a few years ago during a discussion with friends. We were hanging out at my old house in the Upper Kirby area of Houston, TX, and were a few drinks deep. The alcohol started guiding the topics and we were soon talking about life’s bigger questions. One of those slightly-inebriated, deep conversations we have all had.

Somehow, money and banking came up, and my buddy’s quasi-hipster girlfriend (at the time) paused the conversation to ask a question. Little did I know that what she was about to inquire would cause my entire ethos to pivot — almost instantaneously:

“So … Where does money come from?”

It’s a simple question — with a simple answer. And no, not that type of deeper simplicity that is, in itself, complex. Just good old simple. In fact, it wasn’t the question itself that blew my mind. Or an inability to answer.

“What do you mean?”

“Like, how do we get dollar bills?”

“The Fed.”

“What’s the Fed?”

I then proceeded to explain that the Fed (or, Federal Reserve) is the central bank of the United States. And that a central bank is an institution that issues and regulates the currency of a country. As a world economic power, ours is headed by some of the best bankers in the world.

“And they [the Fed] just print it whenever they want?”

“Not exactly. They can only print it when the U.S. Government decides it needs some more money. They then ask The Fed if they want to purchase treasury bonds for the amount that the U.S. Treasury Department deemed was necessary for the ecconomy.”

“What’s a bond?”

“A document of debt, or a security … Err, think of it as an IOU.”

I remember that describing a bond – at the simplest level – was particularly difficult. This is when the wheels in my head started turning.

It couldn’t be that valueless, right? A piece of paper?

I continued…

“If the Fed agrees to buy the bonds, they then draw up a Federal Reserve note…”

Yet another piece of paper? That is what’s driving the value here?

I push on…

“…and exchange it for a Treasury Bond; the IOU. The U.S. Government can then take the Federal Reserve note it just received and deposit it into a commercial bank account to create money. And that’s it.”

She then proceeded to ask some follow-up questions and the conversation eventually shifted topics and ended. But the damage had been done. The seeds had been planted and for the rest of the night I was disconnected from everything else.

My mind was spinning. I kept focusing on different aspects of the financial system; things that I thought I knew so well and was so wrong about. By taking a step back and trying to explain it to someone else, I was able to see some fundamental problems with “Where money comes from”, that I overlooked before.

This is what shook me. And this is why I will never forget that hipster chick drunkenly asking me that question.

The whole thing is debt, when you look at it fundamentally. Money is debt and debt is money.

I could have focused on the perils of interest rates – which are accepted (but unbeknownst to most illegal) mechanisms of theft that make debt impossible to pay off – but I didn’t. I was consumed with this debt paradox.

[Literally, we cannot get out of national debt with the application of interest. Netting out the debt would remove every dollar bill from circulation and there is nothing left over to pay interest. Elect a Democrat, Republican, Libertarian, Green, Nazi, whoever, doesn’t matter. Interest is impossible to pay back]

The fractional reserve banking system that already creates money out of thin air (fractional reserve banking is a standardized loan process constantly going on in the banking system) and results in perpetual inflation, could have gotten me. But no, it was the concept of money equaling debt and debt equaling money that shook me most.

[Fractional Reserve Banking and the above Money Creation Process explained very well and in more detail by Peter Joseph https://www.youtube.com/watch?v=t5ayg3hbhoM]

So let’s think about that debt paradox for a minute.

At any point debt can be called in, right? So that means the system allows for only so much money to go around; it is zero-sum. I don’t think I’m stepping out of bounds here by saying that. It’s a widely accepted concept.

And since wealth and prosperity can only be attained with money in our society, doesn’t that mean that wealth and prosperity are also zero-sum?

It does.

So, like money, there is only so much wealth and prosperity to go around. Some people will figure out ways to gain more wealth and prosperity, while others will not. Another central concept of almost every economic principle. Nothing new.

[Layered on top of this is the asinine and absurd notion of an “invisible hand of economics.” You know what I’m talking about, Adam Smith’s propaganda cited by every uber-capitalist that gives money Godlike powers to make everything alright]

But… What if people don’t want to share? What if we applied relevant social theories like Darwin’s instead of Smith’s? What if only certain types of debt were called in? Like, mortgages, credit card bills or student loans?

If you already had some wealth and prosperity and knew that there was only so much of it to go around, wouldn’t you want to create roadblocks like mortgages, credit, and loans for those also trying to take from the pot?

It’s not evil. It’s human nature. You do what you have to do to survive.

But, when surviving is – at it’s very core – how capable you are at taking a piece of a finite pie, it makes for a hostile world. It makes us worry about beating the next person instead of learning how to work with them.

So who did this? If there are so many problems with this system, like interest, fractional banking, and a society built on debt, then why do we do it? To quote, Peter Joseph, “Are we fucking stupid or something?”

We do it because as individuals we are forced to live in this system. What would happen to you and your family if you decided to no longer use money and wanted to survive on your own?

You would probably need some land to grow and raise your food (which costs money), shelter (which requires tools and materials that cost money), water (money), power (money), I could go on and on. Everything requires money, and that’s the genius of the system … That it requires money to even get out of it. Even if you were able to get out, it wouldn’t be for long … Sustainability, without money, would be next to impossible in today’s world. It’s a system built to make you work for money to survive. It’s meant to cage the wage slave.

Unlike Joseph, I do not believe the present day bankers are evil nor should they be vilified. I happen to know quite a few bankers who are good people; they were just smart enough to be as close to the money as possible. And they, like everyone else, are playing this exact same game. I can’t fault them for that.

The system is to blame. And the system is what’s evil.

This system did not come out of nowhere, though.

The Federal Reserve Act was passed by the U.S. Congress in 1913 and is the piece of legislation that put this system in place. It was sold as a way of combating financial crises. Ha-Ha! Since then we have had a financial crisis almost every 10 years. Crises, depressions, recessions are all seemingly scheduled.

Additionally, since 1913, the Federal Reserve has been expanded beyond its intended scope. Today’s Fed has far more powers than anyone [who passed the original bill] could have ever envisioned it having.

There are a lot of conspiracy theories out there surrounding the passage of this legislation. The most prominent is that the bill was thought up in a secret meeting on a small, private island off the coast of Georgia. Theories state that it was the brainchild of folks like Rockefeller, Carnegie, Morgan, and Rothchild. That it was originally navigated through Congress by this pocket of financial juggernauts, and expanded in smoke filled rooms by capitalist evangelicals like Prescott Bush (and the boys) ever since. Other conspiracies splinter out from there.

There is probably some truth to all of them, but that doesn’t really matter at this point. What matters is that debt keeps growing. Inflation will never stop. The income gap will continue expanding. Tweaking the system or the tax structure isn’t going to do shit. We need an entire system overhaul.

This being said, I’ll leave you with a few small pieces of forgotten history. Rediscovered and redistributed with the advent of the internet, some say these excerpts from 19th century correspondence (before the Federal Reserve Act) are evidence that this structure is, in fact, strategic.

They are in response to the Greenback movement of the early 1860s, which was an attempt by Abraham Lincoln to start a new U.S. currency. Bankers viewed the Greenback as uncontrollable and it was a threat to the central banking system. I’ll let you decide how you feel about it. Pay attention to the dates…

The Rothchild Brothers of London writing to associates in New York, 1863

“The few who understand the system will either be so interested in its profits or be so dependent upon 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 to their interests”

Joint letter by J.P. Morgan and others to heads of all U.S. banks, 1872

“Slavery is likely to be abolished by the war power, and chattel slavery destroyed. This, I and my European friends are in favor of, for slavery is but the owning of labor and carries with it the care for the laborer, while the European plan, led on by England, is for capital to control labor by controlling the wages. This can be done by controlling the money.”

[Cable message.] April 12,1878. Hon. John Sherman, Secretary of the Treasury, Washington D. C.

“Messrs. Rothschild & Sons to Mr. Sherman.

Very pleased we have entered into relations again with American Government. Shall do our best to make the business successful.

Rothchilds.”

The Federal Reserve Act, that made this structure perpetual, was passed just a few decades later.

Feeling completely helpless is still the most vivid memory.