Public education had indoctrinated every one of us in Enlightenment rationalism. We don’t know any other way to think about the world. We’ve been taught that we have to abstract the essential principle of everything, separating it from all distracting particulars and details. But however useful they may be to discussions, abstracts will mislead us unless we remember that they are merely imaginary categories, and not real.

No matter what crazy conclusions result, the modern world plods on, enslaved to “scientific” rationalism. We are slaves to abstractions, to unreal things that do not exist. It is worse than being ruled by the dead. It is being ruled by the non-existent, for the benefit of a very few living. When a monetary system substitutes abstractions for realities, the error quickly and cruelly avenges itself – for real, and not in the abstract.

Our abstract monetary system creates money by borrowing it into existence through banks. Eventually, those who create the money will enslave everyone else in debt, and end up owning all property. The abstract will consume the reality. The only solution is, don’t use their money.

Part I: How I Learned About Our Monetary System

In 1987 an attorney in Memphis, Tennessee, informed me that an Assistant US Attorney for the Western District of Tennessee had called me “the most dangerous man in the Mid-South.”

Imagine the terror you would feel if someone named you that. What sorts of criminals does the US Attorney’s office deal with? Was I a drug trafficker? No. Bank fraud perpetrator? Check kiter? Purveyor of prostitutes? Pornographer? Briber of government officials? Murderer? Terrorist? Communist revolutionary?

No. None of these. I was the quiet father of seven children and a businessman. How on earth could the Assistant US Attorney dealing with all sorts of criminals call me “the most dangerous man in the Mid-South”? How could I be the most dangerous man in the Mid-South?

Because I had aimed a dagger at the heart of the American system: I had opened a gold and silver bank.

That’s probably a crime you didn’t know existed. You never heard of any Russian anarchist revolutionaries meeting in cellars and plotting to set up gold & silver banks, did you?

Crazy? The more I thought about it, the more I realized that the Assistant US Attorney had gotten it right. To her system, to the “American way of life as we know it,” and to her way of thinking, I was the most dangerous man in the Mid-South, but not because I was anything important in myself. Rather, I presented that one little needle point of truth she and her cohorts couldn’t let in, because that tiny needle point is plenty big enough to pop their enormous balloon of delusion, deceit, illusion, and lies. And that balloon supports all their power.

That system of lies enslaves every one of us, steals our capital day by day, and makes sure that we can never own or accumulate property to pass on to our children. Worse yet, the only force that keeps us slaves is our own cooperation. We forge our own chains, daily, and we fasten them firmly on our own wrists and ankles. Any day we want, we can drop those chains and walk out free men and women. Later I’ll tell you just how to do that.

To understand the American “system” or “the American way of life as we know it,” you must understand a bit of history. By the time the War Between the States ended, there had been a coup d’etat in the United States. The North didn’t win the war, and the South didn’t win the war. Big business won the war, and ever since, big business has been re-organising the country and the people to suit its own purposes and profits. That is the American system: Big Business runs the government. And its beating heart is the fraudulent monetary system that feeds and supports it.

What This Article Will Do

Its structure is really very simple. It only has one theme, moving from the abstract to the real. From symbol to substance. If you bear in mind that everything I am about to say will help you move from the abstract to the real, then you will easily understand it all.

My article is divided into two parts, first about the nature of money and our present monetary system, and second about how you personally can secede from that system. You don’t have to overthrow the government, you don’t have to abolish the federal reserve, you don’t have to elect congressmen or senators or presidents or dog catchers, and, best of all, you don’t have to throw any bombs. All you have to do is begin using rights and powers you already have. All you have to do is to step out of the shadows of delusion, deceit, illusion and symbol, and into the light of substance. Move from the abstract and imaginary to the real. And, it will make you money.

Two Theories of Money

There are two and only two theories of money, both known & described since the days of Aristotle.

One theory holds that money must have substance, the other that money is only a symbol. Symbol, or substance. If money must have substance, then it must contain some value itself. If money is only a symbol, an abstract representative of value, a tool society arbitrarily creates for itself, then any representation will do, from paper notes to electronic computer entries. After all, the money needs no value itself, it only represents value. Money is only a disembodied idea, not a concrete reality.

The money we choose will affect everything else in our world. The entire monetary question boils down to this, whether our lives will be ruled by realities, or by abstractions. Real things, or non-existent illusions conjured up to seduce and defraud us. Real things and real values we freely choose for ourselves, or unreal abstracts forced on us by somebody else. If money must have value, then I have to go out and earn – accumulate – real wealth. If money is merely a symbol, then productive work is unnecessary. Whoever creates the symbols controls society, and the rest of us become their gulled slaves.

Symbol v. Substance: Reciprocity v. Hot Potato

When money has substance, perfect reciprocity rules every human exchange. Why? Because money as substance requires that whatever is used as money has value itself. Real people value that money for some real benefit it confers by its nature. When I exchange using money of substance, every transaction is complete and just, trading value for value. I give you a weight of gold or silver or tobacco or goats, and you give me a specified amount of lumber or milk or vegetables or cloth. Good for good, measure for measure.

Don’t miss the essence of this transaction: you and I exchange real things, genuine, physical substances. Value for value. Reality for reality.

When I exchange money as symbol, then no transaction is ever complete, or equitable. It is never complete because the symbolic money does not pay anyone. It does not deliver anything of substance, it merely transfers a promise to pay. It transfers the obligation to pay the transaction to the next person who ends up with the symbol. Symbolic money creates a never ending game of hot potato.

Using symbolic money, no transaction is ever equitable, because in every transaction one party receives something of substance, some valuable real thing, while the other receives only a symbol. That symbol, in turn, represents – nothing! We’ll look at it more closely in a minute, but take my word for it now. Whether the symbol represents only debt (the negation of value), or whether it represents only confidence (the willingness of the next victim to take it), the symbol itself has no value.

A Tool of Love or Power

There is no other system or theory of money besides these two. Money either exchanges substance for substance, or substance for symbol. Money is either a tool of mutual enrichment and love, or a tool of exploitation & power. By “love” I mean not sentimental affection, but the justice of the Golden Rule. As Andrew Lytle observed, “The opposite of love is not hate, but power.”

These two monetary systems are utterly incompatible. Where they exist side by side, one will always drive the other out of existence, just as bad money armed with government force always drives good money out of circulation. Only one monetary system is compatible with freedom, and that is substance. Only one system can protect and maintain property rights, and that is substance. A symbolic money system will eventually transfer title to all property to whoever creates the symbols. Think about it: it must end that way. On one side are people who can only get money by working for it, while on the other are those who create it out of thin air. At what point will the “creators” decide they have created “enough” money? Answer: when they have created enough money to own everything.(i)

Banks

By now either a big light bulb has lit up in your mind, or you have no idea what I am talking about. An example will explain how substance and symbol differ.

It’s Monday, and you’re a little short on cash this week. You see your friend Joe, who always seems to have money. You pull Joe aside and ask him to borrow $50 till you get paid on Friday. Generous Joe agrees to lend you the money.

Now as far as you and Joe are concerned, Joe loaned you something of substance, even though it was only a piece of paper with a picture of a dead yankee general. Why? Because even though the money itself is symbolic, Joe had to trade something of real value – his labour – for the fifty. At the end of the week, when you get paid, you give Joe back substance for substance, equal for equal.

But what happens when you borrow money from a bank? Banks don’t loan you anything of substance. They don’t even loan you money. They loan you credit. And that credit they create by exercising a privilege – a title of nobility – granted by congress or state legislature. That’s right, government grants banks the privilege to create credit out of thin air. (If you disbelieve this, try issuing your own bank notes and see what happens.)

If you still believe that when you deposit $100 in the bank, they put it in an envelope with your name on it and then carefully place that envelope in the safe, you have another thing coming. And when they make a loan, they don’t go into the vault and take your $100 bill off the shelf and loan it to the borrower. Oh, no.

Here’s how a bank loan works. You’ve been depositing your money at the Metastatic National Bank for ten years. You’ve taken out a car loan through them, and a mortgage, and paid them both off. You want to buy another car. You need $10,000, so you go see Fred, your friendly loan officer.

“Fred, I need to borrow $10,000 to buy a car,” you say.

“Well,” Fred says, “you’ve always been a good customer of the bank. You’ve always paid your notes on time. Here, fill out these papers giving us a lien on the car, and we’ll put the money into your checking account.”

Then Fred calls upstairs to Louise-in-accounting, and he says, “Louise, our good customer here wants a loan for $10,000. Credit that loan to his checking account, would you?”

So Louise-in-accounting turns to her computer and enters a loan on the books (an asset of the bank), for $10,000 and posts a $10,000 entry to your checking account (a liability to the bank).

Now ask, Where was the $10,000 the second before Louise posted the transaction? It wasn’t in the bank vault. It was nowhere. It only came into being when Louise created it through the miracle of double entry book keeping.

And even if the bank had handed you one hundred $100 bills, they would still be creating the money out of thin air. They’d be handing you the $100 bills somebody else had deposited, not their $100 bills. The bank’s assets and liabilities -- the $10,000 loan to you and the $10,000 liability to a depositor -- would balance the books exactly the same.

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