Introduction: Why Money Power Matters

Most people graduate school knowing trigonometry but not how money is created. We learn to vote for parties but rarely examine who shapes the economic terrain those parties must walk on. Yet for more than a century, the power to create money as interest-bearing debt has quietly concentrated economic and political control in private hands. The result is a world where nations strain under compounding obligations, public debate revolves around the margins of policy, and whole societies become dependent on a credit system they neither designed nor fully understand.

This essay distills key arguments and quotations (historical and contemporary) about how modern banking actually works, why debt has become the engine of governance, and what that means for sovereignty, prosperity, and even our moral compass. The aim is not to recycle slogans but to clarify mechanisms: how money enters circulation, who benefits first, who bears the risks, and why the system almost always demands more growth, more extraction, and more debt.

1) The Core Mechanism: Money as Debt, Not as Value

A century of central banking and commercial credit has normalized a simple but profound fact: most new money is created when banks make loans. As former U.S. Treasury Secretary Robert B. Anderson put it in 1959, when a bank issues a loan, it credits a deposit that did not exist the moment before; the new deposit is "new money." In practice, this means the money supply expands primarily through private lending, not public issuance.

That mechanism is turbocharged by fractional-reserve banking and today by capital-based banking rules: banks do not lend out pre-existing savings one-for-one; they expand deposits by creating credit. Interest is attached to that credit, meaning the system requires continual new borrowing to service past borrowing. If credit creation slows materially, defaults rise, asset prices wobble, and political pressure mounts to "stimulate" again. In short, we live inside a treadmill that is far more credit-driven than most civics textbooks admit.

Critics from Henry Ford to John Scales Avery have argued that this arrangement is structurally unjust because it privatizes the seigniorage (the profit of creating money) and socializes the fallout (inflation, asset bubbles, austerity). Whether or not one accepts every claim these critics make, the underlying math is hard to ignore: when money arrives as interest-bearing debt, the system has a built-in bias toward ever-expanding leverage.