Abby Martin: How does it make sense that there is more debt than there is currency?
Peter: That’s a good question. Mainly because of the interest that’s charged. In capitalism every product has to have something, that makes a profit, and then in the sale of money, which is what banks do, they create and sell money effectively.
When they lower and raise interest rates they’re changing the price of what it’s going to cost you to get money in a loan. And then they produce interest obviously and that interest doesn’t exist in the money supply.
So you have today about $200 trillion in debt in the world and about $80 trillion in currency. So what does that mean? It means that those that are holding the bag in the lower class are the ones that get screwed when you have economic declines.
There are always going to be bankruptcies and things like that, that happen in a kind of classism, this structural classism that I call it, that effectively hurts the lower class.
And the fact that people don’t see that either. I mean that goes back 5,000 years. It has been in lockstep of something else that we’re familiar with called slavery! So debt peonage, slavery, convict leasing. Even today in certain areas of Asia they have debt that’s passed through generations, from farmer to child, and that child has to continue working off its father’s debt and effectively a kind of post-neofuedalism.
So this phenomenon is there, and it’s unfortunate that more people don’t see the actual intrinsic problem of debt. And the solution to that, you can argue that you could get rid of a debt-based currency and so on, and I’ve had many conversations with people about that, but the question is: why hasn’t it happened? Because it’s intrinsic to the function of capitalism. And it’s not even that they act insidiously, it’s just what their job is. Their job is to make money on nothing and sell it to people and then when the people can’t pay it they take their property. And that property goes. It’s just another funneling system.
Here’s another thing I’ll mention. All the money that’s made in the world comes from the lower class taking loans. So, right now less than 63% of Americans have a thousand dollars in savings. Yet the lower class, that same subclass is what takes on all the major loans: home loans, car loans. That money comes in, the people buy all this stuff, and then that money that’s spent goes basically right back up to the upper class again. Because as we know from the growth of the past ten years all of the major income has gone to the upper ten, 5 to 10 percent.
So it’s even worse now, so you see my point? The people take on all the loans of the entire collective money in society and then that money is extracted through them through various forms of structural classism and goes right back up to the upper 1% and people should be enraged by that. But they don’t see it because it’s a structural phenomenon. It’s something that’s happening under the surface that isn’t readily apparent and that’s why, due to ignorance, no one really reacts on it.