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Sludge Report #128 – Truth, Beauty & Love (Part 2)

In This Edition: Truth, Beauty & Love (Part 2) - Banking Quotes (To Set The Tone) - Introduction To Banking And Finance (Whose Bananas Are They Anyway?) – More Quotes - 20 Questions, 20 Links (A Beginners Map To The Truth About Banking)

NOTE: Authors of this report will be anonymous and wide ranging, and occasionally finely balanced. Indeed you are invited to contribute: The format is as a reporters notebook. It will be published as and when material is available. C.D. Sludge can be contacted at The Sludge Report is available as a free email service..Click HERE - to subscribe...

Sludge Report #128

Truth, Beauty & Love (Part 2)

This second part in the Sludge Truth, Peace & Love series is dedicated to shedding some light on truth of the financial system, its history and how George W. Bush and his family fit into the picture.

In the opening article in this series (Sludge Report #126 – Truth, Peace & Love (Part 1)) Sludge pointed to the precarious state of global financial markets as one of three key threats to global peace and security. Well you ain’t seen nothing yet.

Have you ever wondered why computers are able to predict the behaviour of a chaotic system like the weather, accurately, up to 10 days in advance, but financial market commentators are unable to tell you with any certainty what will happen in the next five minutes in the markets, a system which is entirely man made and in which all the variables are numbers in spread sheets?

Or, have you wondered how it is that collectively have all become the captives of these fickle and uncontrollable market indices?

What follows is intended to be used as a guide to help seekers of the truth to better understand these phenomena.

What is money? And who pulls the purse strings on this planet?

The truth, as you will see, is indeed stranger than fiction.


Banking Quotes (To Set The Tone)

"This is a staggering thought. We are completely dependent upon 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 monetary system." - Robert Hemphill, eminent banker.

"Today's money system boils down to institutionalized theft" Ed Mayo, Executive Director, New Economics Foundation (UK)

"If you want to be slaves of the bankers, and pay the costs of your own slavery, then let the banks create money. The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of slight of hand that has ever been invented. Banking was conceived in iniquity and born in sin. Bankers own the earth; take it away from them, but leave them with the power to create credit, and with the stroke of a pen they will create enough money to buy it back again. If you want to be slaves of the bankers, and pay the costs of your own slavery, then let the banks create money." - Lord Josiah Stamp, former director of the Bank of England.


Introduction To Banking And Finance – Whose Banana’s Are They?

Consider the following.

“Another thing that is mysterious is money, in so many different ways. For example it costs about 2 cents to produce an American $100 bank note. If the US buys a case of bananas from some other country with that 100 dollar bill and the bill remains in use in the country from where the banana came from then the US has bought a case of bananas for about 2 cents. Sixty percent of US bank notes are in use outside the country. Its quite bananas really.” - Greg Meylan – Scoop 8/1/2000

Feel confused? You should, because the truth is you have been lied to your entire life about the nature of money.

You feel no doubt, instinctually, that when a bank lends you money it does so because it already has it. This makes sense. Money seems sometimes to be more real than anything else.

In fact money is purely symbolic. It is only money because we accept it in payment. Money is nothing more or less than a means of exchange.

When the IMF provides $40 billion in a bailout package to Korea or Turkey, where do you think it comes from. Some little old ladies bank account in Osaka? Or Vermont perhaps?

Wrong. The $40 billion is created at the stroke of a pen by a gnome (or probably a whole tribe of gnomes) in banking houses around the world.

This money is then given to the Government of Korea who use it to buy services from their people for their people. Usually a fairly large chunk of the money provided in these circumstances in fact heads straight back to where it came from - i.e. the pockets of the Gnomes - in order to preserve the illusion that the system has some integrity by paying some of the interest on the trillions of dollars they have previously created at the stroke of a pen.

Of course, the Government of Korea could have simply created the money themselves and used it to buy services from their people for their people. But if they did that then gnome central would refuse to accept their money for the payment of interest on their previous loans. Public Relations gnomes would put out warnings about looney-tune economic policies, if that didn’t make the Korean currency collapse the gnomes will send in their spook friends, the slugs whose usual techniques include drug dealing, organising armed revolutions and prompting military coups, to ensure things do fall apart.

Once everybody in Korea is suffering sufficiently, reluctantly the gnomes will agree to hold talks on coming back to the party, but only if everyone promises never again to challenge their authority. And when they do come back to the table they will insist that any real assets the Government still holds be sold off.

This is precisely what has happened – is happening - to Argentina, Turkey, Russia and Papua New Guinea. And it is likely to be what will shortly happen to Venezeula.

Another question: Why do you think house prices continually rise?

Answer: Because they have to.

Consider again. At the time you borrow $100,000 from the bank you enter into a contract to pay back probably $300,000 or more over a 25 year period. But. At the time you enter that contract, the $300,000 you have to pay back doesn’t yet exist. Therefore in order for you to be able to earn that money, and repay it, someone else will have to borrow it. Feel like you are on a treadmill? You are.

Money is a means of exchange. And Money is also debt.

The total amount of money there is at any given time (the Money Supply – M3) is exactly equal to the amount of debt.

Economists sometimes talk of the “Monetisation” of assets in the context of why Indian farmers are so poor. I.E. because their land has not been monetised. What this means is that before the banks will lend you money you have to first allow them to use your real assets, your house, your forest, your power company, as collateral. Then your house has been monetised, meaning that the bank now owns a bit of it.

Because the amount of money has to constantly increase in volume by at least the average rate of interest, the monetisation process is continual. Banks and their depositors have to continually acquire more and more of the real value in the world, its houses, forests and power companies, or else the whole system will collapse.

In the past decade it has become apparent that the best way for the banks to achieve this end is to increase the value (or is it cost) of housing. House prices have more than doubled in the UK, The US, Australia and here in New Zealand. The same thing is happening everywhere.

So if everyone is so deep in debt. Then who gets to create this money? And who holds all the deposits?

The biggest creator of money is the US Federal Reserve Bank, an institution which it has been oft observed is grossly misnamed as it is not Federal and has no reserves.

It is a privately owned bank, though no one knows who owns it. And its primary asset is a license from the US Congress to create money out of nothing – it describes this process as “providing liquidity to the market” – other people might call it printing money – but why quibble.

In the six days after the World Trade Center Attack when which the US markets were closed, the Federal Reserve bank provided $80 billion of liquidity to the markets. That is nearly three times the total crippling debt of Pakistan, a country of 140 million.

The Central Federal Reserve Bank is owned by its members, the 12 Federal Reserve District Banks. Each Federal Reserve District Bank is owned by the members. C.D. Sludge asked the PR managers of several of the District Banks the following question: “Who owns the equity of your bank? And who has access to the data collected by your bank?”. The answers received were identical. “That information is confidential.”

Which is where we get back to the bananas.

It was always known when the present global banking system was set up after World War II that its result would be hegemonic control over the monetary system by the Federal Reserve Bank, the IMF, the Bank of International Settlements and the World Bank – organisations which tend to work in tandem with one another. This was the intention of its architects, and so it is hardly surprisingly, that has also been its result.

At the time of the Bretton Woods Agreement the eminent economist John Maynard Keynes pointed out that this system would be inherently unstable and would lead inevitably to the exploitation and enslavement of smaller nations of the world, extreme poverty and all its unpleasant consequences. His warnings were ignored.

And so the truth is that we live in a world in which the U.S. exports worthless currency all around the world, and receives, oil, bananas, cars, clothes and everything else it needs in return. Meanwhile all along bankers throughout the world continue to tell us that is our greed, our inability to save and compulsive consumption of borrowed wealth (their wealth) that is the cause of our sorrow.

This is a lie.

You have now reached the starting point in this discourse. You know how the system works broadly. But who controls it in fact? And for what ends? This is where we get to the real deal.


More Quotes

"The domestic coalition against terror is beginning to fray" - Anthony York, US ( political reporter, interviewed on the Kim Hill Show National Radio, Mar 6th, 2002, at approx 10:13 AM.

“In order to be a realist you must believe in miracles.”- David Ben Gurion

“Sacred cows make the best hamburger” - Mark Twain

"I call heaven and earth to record this against you. that I have set before you life and death, blessing and cursing, therefore choose life, that both thou and thy seed may live." - Moses


16 Questions & Links (A Beginners Map To The Truth About Banking)


Question 1. Who rules the world?

Fortunately thanks to the wonders of the Internet and a creative Kiwi net artist you can plot them all on a map.


Question 2. How rich are the richest 1% of Americans? Does anyone need this much money and power?

The Hidden Wealth of the Richest 1%

(A book excerpt)

Including or excluding the so called "couch potatoes", Americans take in more information than they ever have. Newscasters such as Ted Koppel, Dan Rather, Tom Brokaw, Robert McNeil, and Jim Lehrer are as well known to this generation as Walter Cronkite was to previous generations. Not only do people watch their favorite newscasters regularly, they read mountains of newspapers and magazines as well.

Because the American media claims to be the freest in the world, few have reason to suspect that their mass media information is being very carefully controlled and colored. The shocking truth is that the American public is being purposely kept in the dark about many vital realities. For example are you aware that:

THE RICHEST 1 (ONE) PERCENT OF AMERICANS possess more wealth than


Question 3. How do you get to be one of the ruler’s of the banking system?

Bush's Boys Club: Skull and Bones


To be a member of the ruling elite, George Bush must meet certain criteria. He must be white, he must be male, and he must be rich. He must also belong to certain elite clubs and institutions which help to distinguish him from those he is called upon to rule.

George Bush is a member of Skull and Bones, an elite secret society open only to a select 15 males in their senior year at Yale University. If this club appears somewhat exclusionary, don't worry; they have made great strides in the past few years. Recent Bones inductees include a few blacks, gays, and even some foreign students. However, it has been said that if women were ever allowed into the secret "tomb" (meeting place) of Skull and Bones, the tomb would "have to be bulldozed."


Question 4. But what about the Bush family? How do they fit into the banking system?

The Bush’s are the banking system, nowadays anyway, least ways they are tied so deeply into it back three generations that they are indistinguishable from it. George ’s Grandfather Prescott S. Bush was a banker to Adolf Hitler! See all the detail in the best source of information on the Bush dynasty.

George Bush: The Unauthorized Biography
by Webster G. Tarpley & Anton Chaitkin


More recently has George W. Bush got any big financial skeletons in his closet?

George W. Bush And Harken Oil - Recovered History

RECOVERED HISTORY - From the overstocked archives of the Progressive Review a timeline of the Harken Energy Insider Trading play by U.S. President George W. Bush, a series of transactions that connects the bin Laden and Bush families, and a current link to the New York Times traversing some more of the old ground.


Question 5. What about President George W. Bush’s networks? Who are his friends and associates? If you liked the pretty pictures at in Question 1. then you will certainly also enjoy a peek at the three dimensional flow charts concerning George Junion at the Public Information Research Site linked from the item below.

The GW Bush Osama bin Laden Connection


Question 6. What about the rest of the U.S. financial establishment? Do U.S. Government bean-counters have any clues on what they are doing?

Evidence that huge sums of money has been simply lost within the US Treasury, and that internal financial controls are absent at the center of the U.S. Government can be found in a series of articles by Insight Magazine’s Kelly's O'Meara.

Wasted Riches, by Kelly O'Meara (10/22/01):

Why is $59 Billion Missing from HUD?, by Kelly O'Meara (11/06/00):

Cuomo leaves HUD in Shambles, by Kelly O'Meara (3/05/01):

Inside HUD's Financial Fiasco, by Kelly O'Meara (6/25/01):

Rumsfield Inherits Financial Mess, by Kelly O'Meara (9/03/01):

Total Lack of Trust, by Kelly O'Meara (9/17/01):

See also…. Mike Ruppert's From the Wilderness article re: William Tyree's allegations Regarding Herbert S. “Pug” Winokur's (Enron and DynCorp board member) use of PROMIS to compromise HUD's accounting and computer systems as part of the missing money at HUD:


Question 7. How much dirty money is laundered through the US banking system annually? How much money do those banks earn in fees for this work? How much of their market capitalisation (their value on the sharemarkets) comes from these sources?

Dirty-Money Flow in U.S. Banks Is Huge, a Senate Report Finds

WASHINGTON -- A huge amount of dirty money has flowed through the U.S. financial system through major U.S. banks that provided accounts to high-risk offshore banks, a new U.S. Senate staff report says.

Among the major banks named in the report are J.P. Morgan Chase & Co., Citigroup Inc. and Bank of America Corp. In many cases, the banks themselves were unaware of the nature or background of their own clients because "most U.S. banks do not have adequate antimoney-laundering safeguards in place to screen and monitor such banks, and this problem is longstanding, widespread and ongoing" the report said.

See also…

Dirty Dollars, by Kelly O'Meara (5/15/00):


Question 8. Bankrupt Energy Giant Enron’s primary creditor Citibank is one of the biggest banks in the world. It is also one of the most corrupt. How corrupt? Read for yourself.

The Crimes of Citibank… More CIA Connections


By Michael C. Ruppert – [From the May 31, 2001 issue of "From The Wilderness"]

Special to NarcoNews - As the remaining unbiased press of the Western Hemisphere, and especially of Latin America, rises in outrage at the announced May 17 purchase of Mexico's giant Banacci Group (Banamex) by Citigroup, more skeletons come stampeding out of the Citigroup closet. Both banks have been firmly connected to drug money laundering and Banamex owner Roberto Hernandez owns land near Cancun, Mexico that is commonly referred to as "the cocaine peninsula." President Bill Clinton vacationed on the Hernandez property in the summer of 2000.

Taken collectively these skeletons reveal a well-defined financial and intelligence infrastructure that appears tailor-made for the global management of the drug trade's billions of dollars in illegal revenue along with the additional billions of dollars generated annually by the illegal looting of national economies by government officials.


Question 9. How did the IMF and US Treasury fix the recent Russian elections? Why?

The Globalizer Who Came In From the Cold
Observer, London
Wednesday, October 10, 2001
by Greg Palast

The World Bank’s former Chief Economist’s accusations are eye-popping - including how the IMF and US Treasury fixed the Russian elections

"It has condemned people to death," the former apparatchik told me. This was like a scene out of Le Carre. The brilliant old agent comes in from the cold, crosses to our side, and in hours of debriefing, empties his memory of horrors committed in the name of a political ideology he now realizes has gone rotten.

And here before me was a far bigger catch than some used Cold War spy. Joseph Stiglitz was Chief Economist of the World Bank. To a great extent, the new world economic order was his theory come to life.

For more on Russia and money laundering see also the From The Wilderness Economy archives…


Question 10: Since 911 gold prices have climbed roughly 10%. Some pundits are expecting the demand for gold, particularly in Asia, to send the price to over $400 US an ounce (another 33% up). So what is the importance of gold? If the price rises what will it mean?

All That Glitters Is Not Gold

From the March 4 issue; posted Feb. 8, 2002

By Kelly Patricia O’Meara

Even though Enron employees and the company's accounting firm, Arthur Andersen, have destroyed mountains of documents, enough information remains in the ruins of the nation's largest corporate bankruptcy to provide a clear picture of what happened to wreck what once was the seventh-largest U.S. corporation.

Obfuscation, secrecy and accounting tricks appear to have catapulted the Houston-based trader of oil and gas to the top of the Fortune 100, only to be brought down by the same corporate chicanery. Meanwhile, Wall Street analysts and the federal government's top bean counters struggle to convince the nation that the Enron crash is an isolated case, not in the least reflective of how business is done in corporate America. But there are many in the world of high finance who aren't buying the official line and warn that Enron is just the first to fall from a shaky house of cards.


Question 11. How and why did the US banking establishment turn on one of its leading players, bankrupt her company and close down her attempts to expose the workings of the insiders and their rip-off of the Government Guaranteed US house mortgage market?

The Myth of the Rule of Law: The Destruction of Hamilton Securities:

See also… Scoop's Catherine Austin Fitts, Enemy of the State Series:

HUD Fraud, Spooks and the Slumlords of Harvard, Uri Dowbenko (September 1999)

DOJ Lies, Uri Dowbenko

Finally to read a biography of the father of the lawyer who led the charge to take Catherine Fitts out of the game see…


Question 12. Have you ever wondered how much money is made from the incarceration of 1 in 100 American citizens, mostly on drug charges? Who makes this money? And what role does the incarceration of its citizens play in the American economic miracle?

Letters to the Editor
New York Times
Tim Egan's Article on Prisons, March 7, 1999

Ladies and Gentlemen:

Thank you for Tim Egan’s article on prisons. It was an excellent summary of the growth in the US prison population over the last two decades. A welcome follow up might be an exploration on how the money works on prisons.

The federal government has promoted mandatory sentences and taken other steps that will increase the overall prison population to approximately 3 million Americans as recently legislated policies finish working their way through the sentencing system. This means that approximately 10-15 million Americans will be under the jurisdiction of the criminal justice system from arrest, to indictment, to trial, to prison, to probation and parole.


Question 13. (Closer To Home Question 1) Who is stealing New Zealand?

Eco-Economy: An Appeal to our Bankers
By Dr Finlay Thompson

This is an appeal to New Zealand Bankers, not those "big market" bankers, those international elitist bankers. I appeal to the corner banker, who probably lost his job when an ATM was installed.

Help us! New Zealand is being stolen and you can help us. The "crime" has been institutionalized, and is happening every day right under our noses. Consider one common example, a standard bank procedure - establishing a house mortgage.


Question 14. (Closer To Home Question 2): Who is in Control of New Zealand’s Money?

Why is it that commentators, from the all main stream media, talk about the collapse of the dollar as if it were our fault? The Dominion's graph this morning pointedly shows that every time a Labour government is elected the dollar falls. Moreover, when Douglas resigned the dollar dropped three cents. The implication is that we should have been more supportive of Douglas and his free market reforms. Wrong.

See also…

Fiscal Prudence and Debt Slavery – By Finlay Thompson


Question 15. Will there be another Sharemarket crash?

Trivialising Speculation

By Chris Harris

The question of whether we’re in for a rerun of the Great Crash of 1929 is very topical at the moment. Bearish websites like, and, and books like Edward Chancellor’s recent Devil Take the Hindmost: A History of Financial Speculation (NY: Farrar, Straus & Giroux 1999), hold that the world is in a “credit bubble” possibly more severe than that of the Roaring Twenties.

The concept of a “credit bubble” comes from the classical theory of destabilising speculation, as elaborated by all the great economic theorists from Adam Smith to Hyman Minsky. Banks and other financial institutions are able to lend money up to a certain multiple of their assets. As they lend out more money, assets like real estate and stocks and shares begin to inflate in value. So the banks are able to lend out more money still.


Question 16. OK things are to put it mildly F****ed. So how do we get out of this trap then?

The Vision And The Challenge

Address By Dr Finlay Thompson, Department of Mathematics, Victoria University

Ladies and gentlemen, thank you all for coming tonight. I want to hold out a simple idea, a vision of a hopeful future: that our beautiful world is big and rich enough to support an environmentally sustainable and socially inclusive economic system, providing us all with physical security and social prospect.

Our objective in this meeting is to open a debate on the fundamental nature of our financial system. We want to build consensus and public awareness of the issues. We need to have faith in our political and financial establishment, and hopefully they will have the good faith to enter into this debate.


Anti©opyright Sludge 2001

© Scoop Media

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