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Nexus 1103 - new times magazine

  1. 1. NEXUS NEW TIMES MAGAZINE Volume 11, Number 3 APRIL – MAY 2004 UK/Europe editionLETTERS TO THE EDITOR.............................................4 ANCIENT CITIES UNDER THE SANDS OF GIZA........45 Comments from our readers on enzyme nutrition, By Tony Bushby. Below the Giza Plateau and old mycoplasma warfare, subliminals in TV, ads the Cairo can be found passageways, caverns, lakes Ummo letters and the 1689 Bill of Rights. and ancient cities bearing anomalous artefacts that were made public nearly 70 years ago but haveGLOBAL NEWS.............................................................6 since been covered up by the Egyptian authorities. News you may have missed, including why most OUT-OF-BODY EXPERIENCE & SELF-RESEARCH.......53 drugs dont work on most patients, the Pentagons By Sandie Gustus. The out-of-body experience is plans for space-based weapons, and a new form of common to all cultures through the ages, but lie detection system using "brain fingerprinting". producing them at will and staying lucid outsideFRACTIONAL RESERVE BANKING AS PARASITISM...1 1 the body requires ideal physical conditions as well as strong desire, concentration and determination. By Vladimir Z. Nuri. Privately owned money expansion is the state-sanctioned plunder of THE TWILIGHT ZONE................................................59 money-holder wealth by private bankers. It can be Strange tales from on and off our world. This issue likened to a system of economic parasitism. we feature Internet exchanges in 2000/01 with John Titor, who claimed to be a time traveller from 2036THE PROBLEM OF PRECOCIOUS PUBERTY..............21 and gave alarming d etails about our future, By Sherrill Sellman. The prevalence of endocrine including imminent conflicts leading to World War. disruptors and hormone mimics in the environment REVIEWS—Books........................................................65 could be to blame for the increasing numbers of "Hegemony or Survival" by Noam Chomsky young children showing early signs of puberty. "Weapons of Mass Deception" by S. Rampton and J. Stauber "Anything Can Be Healed" by Martin BrofmanSCHIZOPHRENIA: THE ADRENOCHROME LINK.....27 "The Untold Story of Milk" by Ron Schmid By Harold D. Foster. Genetic aberrations linked to "Profiles of Healing: Healers of Brazil" ed. by Bradford Keeney "The Brazilian Healer with the Kitchen Knife" by Sandy Johnson schizophrenia have triggers that are common in the "Living Dangerously" by Pat Thomas industrialised world and result in high exposure to "Beginners Guide for the Recently Deceased" by David Staume adrenochrome, a metabolite of adrenaline. An "Unlocking Alien Closets" by Leah A. Haley eight-step program offers hope for sufferers. "Cloak of the Illuminati" by William Henry "Biotech Time-Bomb" by Scott EasthamSUPPRESSED DISCOVERIES IN PHYSICS—Part 2......33 "Recoding Nature" edited by R. Hindmarsh and G. Lawrence By Rochus Boerner. The "rock-solid" foundations "Been Brown So Long…" by Jeffrey St Clair "Transforming the Global Biosphere" by Elliott Maynard of physics are being undermined by evidence that REVIEWS—DVDs........................................................72 challenges established theories on the speed of "The Meier Contacts: The Key To Our Future Survival" light, the Big Bang, gravity and thermodynamics. "Government Guinea Pig: When Uncle Sam Wants You…"SCIENCE NEWS..........................................................41 REVIEWS—Music........................................................73 US engineer John V. Milewski, the developer of "Aurora" by Michael Atherton and James Ashley Franklin "Sahara Lounge" by various artists single-crystal fibres called "whiskers", explains his "Flamenco Arabe" by Hossam Ramzy and Rafa El Tachuela hypothesis on SuperLight, the magneto-electric "Sefarad" by Sefarad radiation that he suggests emanates from black holes "Hecho en Cuba" by I. Ferrer, R. Gonzales and C. Segundo at a velocity of the speed of light squared. NEXUS BOOKS, VIDEOS, ADS, SUBS...................78–88APRIL – MAY 2004 NEXUS • 1
  2. 2. EditorialNEXUS MAGAZINE Volume 11, Number 3 APRIL – MAY 2004 G reetings, and welcome once again to the pages of NEXUS Magazine. First up in this issue, we have an article on Fractional Reserve Banking as Economic Parasitism. This was extracted from a lengthy, in-depth analysis of the effects of lending out more money PUBLISHED BY than actually exists, and draws an analogy with a parasite feeding off a host system. The full NEXUS Magazine Pty Ltd, Australia paper examines and compares money flow in closed systems to several of our sciences, EDITOR including electronics and fluid dynamics. However we have selected extracts which show Duncan M. Roads that the practice of fractional reserve banking is detrimental to the overall health and welfare CO-EDITOR of the system upon which it literally "preys". Catherine Simons Increasing numbers of children across the planet are experiencing puberty well before the ASSISTANT EDITOR/SUB-EDITOR normal biological age range expected for this. Author Sherrill Sellman couldnt stand the Ruth Parnell mainstream medias relative silence on the issue and has written an article designed to UK Office Manager inform us on the cause and prevention of precocious puberty. Hormone and endocrine dis- Marcus Allen ruptors are implicated in this disturbing trend amongst young children today. CONTRIBUTORS THIS ISSUE Still on health, Dr Harold Foster presents his latest research and findings on what he Vladimir Z. Nuri; Sherrill Sellman; believes to be the cause of schizophrenia and the best way to treat or prevent it. Its another Prof. Dr Harold D. Foster; Rochus Boerner; important article which everyone would do well to read and consider. John V. Milewski, PhD; This issue sees the conclusion of the article on examples of suppression of new and con- Tony Bushby; Sandie Gustus tradictory theories in physics. Relativity, the speed of light not being a constant, antigravity CARTOONS and the Big Bang theory all come under scrutiny in an article that reveals that what we are Phil Somerville told in the mainstream science press is not always the full picture. COVER GRAPHIC Speaking of light, I highly recommend you all read the article on SuperLight in Science John Cook, News. Its also sure to excite many people interested in crystals. PRINTING Some years ago when Dr James Hurtak visited Australia, he showed a select group of stu- Goodhed Print Group, Bicester, Oxon., UK dents a video allegedly taken under the Giza Plateau in Egypt. The video really impressed DISTRIBUTION the viewers, who conveyed to me descriptions of temples, buildings, statues and much more. Seymours, London, UK While in Australia, Dr Hurtak spoke at the NEXUS Conference and made no mention of the UK OFFICE - 55 Queens Rd, East Grinstead, above video or events. But that hasnt stopped hundreds of people asking me, to this day, West Sussex, RH19 1BG. whether the NEXUS Conference video of Dr James Hurtaks presentation has that video Ph: 01342 322854; Fax: 01342 324574 footage. It doesnt, and Im told that not even Dr Hurtak has the video anymore. Ive e-mail address: watched the story go around the Internet at regular intervals and I tire of emailing scores of Website: replies on the matter. Hopefully this editorial mention will reduce my workload! EUROPE OFFICE - PO Box 48, 1600 AA Luckily for all those who are curious about mysterious cities and temples under the Giza Enkhuizen, The Netherlands. Plateaus Pyramids and Sphinx complex, we have an intriguing story about those very dis- Ph: +31 (0)228 324076; Fax: +31 (0)228 312081 coveries from Tony Bushby, author of The Secret in the Bible and The Bible Fraud. e-mail address: Interest in out-of-body experiences and astral travel continues to grow. More and more HEAD OFFICE - Articles, Reviews, etc. books are being written about these topics but, conversely, there are very few organisations PO Box 30, Mapleton, Qld 4560, Australia. dedicated to exploring this experience. The two main groups I know of are the Monroe Ph: +61 7 5442 9280; Fax: +61 7 5442 9381 e-mail address: Institute, based in the USA, and the International Academy of Consciousness (IAC), based in the UK, Europe and Brazil. This issue we have an article from the IAC that gives a good ITALY OFFICE - c/- Avalon Edizioni, Piazza Mazzini 52, 35137 Padova, Italy overview of the subject and is important reading, too. Ph/Fax: +39 (0)49 912 6006 Readers who dabble in exploration of the many unexplained phenomena and anomalous e-mail address: case studies in our world (and beyond) will be stunned by John Titors story in the Twilight USA OFFICE - 2940 E. Colfax, #131, Zone section. John is/was a self-confessed time traveller from the year 2036. His "arrival" Denver CO 80206 USA on various chatgroups on the Internet in late 2000 triggered a lot of interesting debate. After Tel: 303 321 5006; Fax: 720 941 9352 his "departure" in March 2001, people were left with more questions than answers. John E-mail: made some remarkable statements about events to come, the science of time-travel and life STATEMENT OF PURPOSE in his future. In late 2000, he said civil war in the USA would start around 2004/2005 andNEXUS recognises that humanity is undergoing a continue for a decade, culminating in a World War. He said American foreign policy wouldmassive transformation. With this in mind, NEXUS make the United States so hated that eventually it would be attacked by other nations,seeks to provide hard-to-get information so as to including Russia. Above all, John warned of events that would lead to the removal of nearlyassist people through these changes. NEXUS is not all civil rights and freedoms and to the US launching attacks on several nations. At the time,linked to any religious, philosophical or politicalideology or organisation. in late 2000, this seemed impossible to most people, but then came 9-11, the War on Terror, the removal of many human rights and freedoms, and the rest of the worlds growing dismay PERMISSION-TO-REPRODUCE POLICYWhile reproduction and dissemination of the infor- at the antics of the US government. Weve selected just some of Johns comments, and Imation in NEXUS is actively encouraged, anyone found myself viewing them in a much different light today, over three years later.caught making a buck out of it, without our express Remember, information is power! Until next time,permission, will be in trouble when we catch them! Duncan WARRANTY AND INDEMNITYAdvertisers upon and by lodging material with the Publisher for publication or authorising or approving of the publication of any material INDEMNIFY thePublisher and its servants and agents against all liability claims or proceedings whatsoever arising from the publication and without limiting the generality of theforegoing to indemnify each of them in relation to defamation, slander of title, breach of copyright, infringement of trademarks or names of publication titles, unfaircompetition or trade practices, royalties or violation of rights or privacy AND WARRANT that the material complies with all relevant laws and regulations and thatits publication will not give rise to any rights against or liabilities in the Publisher, its servants or agents and in particular that nothing therein is capable of beingmisleading or deceptive or otherwise in breach of the Part V of the Trade Practices Act 1974. All expressions of opinion are published on the basis that they arenot to be regarded as expressing the opinion of the Publisher or its servants or agents. Editorial advice is not specific and readers are advised to seek professionalhelp for individual problems. The publisher reserves the right to refuse any advertising material for any reason. © NEXUS New Times 20042 • NEXUS APRIL – MAY 2004
  3. 3. APRIL – MAY 2004 NEXUS • 3
  4. 4. Letters to the Editor ...Mycoplasma Warfare? I want to see documentation, Questions on Raw Food Diets Regards, Dear Editor: I have read three although I must admit that I Dear Duncan: As a long-time Paul Jury, South Australiawonderful articles by Dr Donald already believe what I have read. satisfied reader of NEXUS, I was [Dear Paul: The point of theScott about Mycoplasma [see This is absolutely appalling for somewhat disappointed to go on articles was to educate peopleone in NEXUS 8/05], and I am our government to have caused the Net and find in short time a about the role and importance ofin shock to say the least. such horrible medical condi- website that shows much of enzymes. As with many other I have MS, fibromyalgia/CFS, tions—even AIDS, which Edward Howells work is, well, diets, some people benefit, someasthma, a degenerative spine seemed to appear in the late not up to par! [See "Enzyme react adversely, others seem tocondition, spinal stenosis, arthri- 1970s and was first brought to Nutrition Therapy", 10/06.] It show no change. We have giventis, ideopathic heart palpitations, public attention in 1980, with seems that there is more to the you the info on enzymes; whatosteoporosis, the list goes on— full-blown news in 1982. Pottenger cat story and it wasnt you do with it is up to you. Yourall being autoimmune conditions. I thank you so much for your correctly reported by him, either. cravings may indicate a lack of I also had polio-encephalitis at time and consideration, and look There is much evidence at this B12, which is common in vege -the age of three, when there were forward to hearing from you. site indicating a raw diet isnt tarians and vegans. Ed.]outbreaks of this in California Vicki Lee necessarily the full bottle, either.and Texas in the mid-1940s. In fact, in light of my recent [Dear Vicki: I suggest you Genesis World Energy Scam? A retired military doctor who study, Howells work is quite contact Dr Donald Scott at the You did an article on Genesisdid research into this went into dated. Common Cause Medical World Energy and their "Edisonprivate practice, and when I went The Beyond Vegetarianism Research Foundation in Device" a while back [10/02]. Ito him with a cold he immediate- website can be found at Sudbury, Ontario, on (705) 670 have made numerous attempts toly asked if he could examine me. and 0180, or Dr Leonard Horowitz contact them recently regardingHe noticed that my muscles is an excellent effort towards bal- via availability of their products andwerent reacting properly. After ance and level-headed debate on Ed.] have had no results.the exam, he said that I had the whole raw/veg/vegan/fruitar- ian/instinctive and several other I have recently talked to some-polio-encephalitis—which had "isms" debacle. one who had apparently receivedbeen suggested when I had a Enzyme Supplements Titles include "Lesson of the approval for a licence to distrib-neuro-encephalogram and arteri- Dear Duncan: It seems I have Pottengers cats experiments: ute, but who has since not hadogram when I was 15 years old. been waiting forever for the final cats are not humans"; "The any communication withSince then it has been confirmed. article on Enzyme Nutrition debate over Edward Howells Genesis. In some ways it smells I would like to know where I [11/02] in order to learn what theory of food enzymes"; "Why of a scam, but I still have somecan read material on where enzymes can be bought and for hope.mycoplasma was sprayed on us what conditions. Sadly, the arti- do cooked or dense foodsunsuspecting residents of Canada improve raw/vegan health"; Do you have any new info on cle did not cover this, much to these guys? Any info would beand the United States. So many my dismay. "Ape diet myths"; "What kind ofof my friends are also sick with combined raw/cooked diet? appreciated. Thank you. As with vitamin supplements, I Rance Foulston, Edmonton,MS, fibromyalgia, lupus, etc. It assume one can buy enzyme sup- Making intelligent choices".has been bothering me, wonder- Other articles question the Canada plements, but what and for whating why so many autoimmune and how is a mystery. The arti- validity of the argument on theconditions suddenly showed up nutritional losses with cooking, PS: Since I sent you my email, cle at its end says "What better I have been led to this website:in our population. Seems as way to ensure our health…than and it seems like hundreds ofthough they appeared shortly others, including the articles pub- to…supplement with enzymes john.lichtenstein/business.htm.after the Vietnam War. lished by N E X U S on "The where needed". You can imag- What do you think of it? It is amazing that we havent Myths of Vegetarianism" [9/03- ine my frustration at the absence While I believe many of us areseen a commercial on TV for us 04]. In the interest of wide of a "ready reckoner" list of what hopeful that technology whichto call an attorney who is han- debate and clear thinking, I to buy! Can you persuade the would recommend all to read as taps into the abundance ofdling a class action suit against author to follow up this excellentthe government. I am sure you much of this website as possible. energy which surrounds us will article with some user-friendly Its certainly made me relax a lot! soon be available, I also believehave seen these types of com- advice? I was getting quite uptight that this hope leaves us open tomercials: for instance, if youtook a certain drug and had seri- Thank you for contributing to about my ability to sustain a raw deception.ous side-effects, large law firms my continued sanity through diet. I had tried raw foods a cou- Arriving at the truth is not awill advertise on TV that there is your unique magazine! ple of decades ago and kept it up simple task. From your state-a class action suit and for you to Best wishes, for two years, but my variation ments regarding the intendedcontact them. John Bremner, Devon, UK included small amounts of purpose of your magazine, I take So, what I need are links to [Dear John: Availability of cheese and Vogels bread. it that you like to "get to the bot-where I can find out where and good-quality plant enzyme sup - Towards the end I began crav- tom of things".when the mycoplasma was plements varies from country to ing, of all things, a burger. I Perhaps you would considersprayed, and the statistics for country. If your local health relinquished and wondered why doing more on Genesis Worldmedical conditions that have food shop cant help, I suggest it had to be a burger—yuk! Energy, even if it isnt legit.shown up since those dates. you try over the Internet. Ed.] Keep up the good work. Thanks again.4 • NEXUS APRIL – MAY 2004
  5. 5. ... more Letters to the Editor NB: Please keep letters to approx. 150 to 250 words in length. Ed. [Dear Rance: One of the rea - days later, about 1–2 hours laterone was new to me. Ummo case a hoax. I would notsons we published the Genesis than the time of the first ad I sawI looked up the website given, be so quick to write this off,World Energy material was to on Channel 7. It was broadcast and found that both that and the based on your criteria above. Ittry to entice further information around 4.30 to 5.30 pm, in one ofearlier ones were now defunct; is often by airing information onon the matter from amongst our the advertising slots. The secondbut I did turn up this website, cases like this one that newmany readers. We remain curi - occasion, it was broadcast some information comes to light.ous and yet still hopeful that, one time between 6.30 and 7.30 pm. ummo.html, which seems to There is no new information atday, someone will successfully I was watching these two ads in explain very comprehensively those websites to which youmake a non-polluting energy sys - Adelaide. I was horrified to see the whole lot as an experiment refer. Ed.]tem freely available to all. Ed.] it the first time; I almost doubted that unexpectedly fooled a whole my eyes, thinking I had to be group of people before it finally hallucinating to see such an obvi- Bill of RightsNEXUS Banned in Vic Prisons? petered out (as far as I am ous propaganda job. aware). Hi: I think the magazine is Dear Duncan: I was very great, but some things seem overhappy to receive the latest But when I saw the same ad The names, dates and back- again on Channel 7, I was dis- the top. I keep an open mind,NEXUS issue, Feb–March 2004 ground the article gives seem gusted that someone thinks that pretty hard to refute, and after however, because we just dont[11/02]. Obviously, the authori- know for sure what is going on, we, the ordinary citizens, are soexpecting a pretty impressiveties here at the prison where Im do we? Apart from the obvious. stupid that we wouldnt ask any Ummo site the last thing Ilocated have deemed the latest Please can we see something questions about what we were expected was an admission!issue "non-threatening" to the about the Bill of Rights of 1689? shown in such a public domain I dont know if the editor andaccepted world reality. Everyone, especially politicians as TV that not only adults but writer had read and dismissed I subscribed to NEXUS a year also kids are watching. in Australia and New Zealand,ago, and have only been allowed this article, but, if they had, Id Also, there was a news item onlike to know the grounds they seems to make excuses for theto receive at least half of the reasons they dont want us to 15 January about Mt Aso in used to give more credit to theissues sent to me via the mail. have guns, and when the Bill of southern Japan erupting. This Ummites, who appear to have When the Iraq War began, I news clip was shown all through gone quiet, judging from their Rights 1689 is mentioned, or ourwas informed that your publica- the day on different channels. Itlack of web presence. right to be armed for our protec-tion is now on the banned list showed the mountain, and the tion according to law, they moan On an unrelated subject, whichwithin all Victorian prisons. smoke was furiously coming out on about the American 2nd I would recommend as importantMind you, Im yet to read any from the mouth of the volcano. Amendment. for NEXUS investigation, is thememo detailing this. It was a nice, sunny day when The US Bill of Rights came total lack of enthusiasm by the Reading between the lines, its they shot this clip, whenever media for Dr Steven Greers straight from the Bill of Rightsobvious that our government they did. Disclosure Project, now that the 1689, but, to make sure theirwishes to suppress information The thing is, I checked with full report has been out for a rea- Rights were safe, they made theirthat challenges the status quo, Japanese people as to how the sonable time [see NEXUS 9/01]. version of the old Bill.and prisons seem to be an easy s i t u a t i o n was going yesterday It is very obvious to anyone I have only read extracts so far,net for them to do so. Perhaps a and today [16 January], and sur- who has read it in full that every - but am surprised the powers-taste of things to come in the prisingly found out that the news thing in the Bill of Rights 1689 is that-be are able to treat it in thewider world? is completely false. Mt Fuji is still fully legal , today and into same dismissive manner as the I havent decided whether or starting to wake up, but there average UFO report, which the the future, and it cannot benot I will renew my subscription, was no news about Mt Aso writ- Project certainly isnt. repealed, amended, revoked orbut please keep doing what you ten on Internet. modified, now or ever. If you can find a reporter to doare doing, as your printed Maybe it means that the clip The People of Oz and NZ are a follow-up on the (non)Statement of Purpose indicates. was used in MI6 style to send an response to the Project a year or not fully aware of the Bill of Most appreciatively, important message to someone, two on, this would be highly Rights 1689, and that our Rights P. D., Victoria, Australia which may involve Japan. useful. are still legally recognised by the Whatever is happening, it must Sorry to be the bearer of bad Bill.Subliminals, False Clips on TV be a big thing for them to contact tidings about Ummo, but I Why is it, then, that our gov- agents in such manner public. thought it was better to pass this ernments keep all this from us Dear Duncan: Thank you for Im just hoping it is nothing to do on than ignore it. and treat us like crims?your fantastic magazines. I get with a nuclear plant meltdown or I always have an open mind Thank you for your time.withdrawal symptoms if I dont something equivalent. when I follow up articles, or I Best wishes,get to read your magazine everyissue these days. Thanks for reading on! wouldnt continue to buy Paul F. McCourt, Turangi, New "L", Australia NEXUS regularly. Zealand Letters to the Editor last issue[11/01] had a letter informing Yours faithfully, [Dear Paul: We are planningabout the propaganda advertise- Ummo Hoax and Disclosure David Howard, London, UK to publish an article on Commonment shown on Channel 7 Dear all: I was fascinated by [Dear David: The websites Law in a forthcoming issue, and[Australia]. I saw it, too! And the recent Ummo article [11/02], quoted are still up as far as I can this will also include discussionnot only that time, as they broad- and as a bit of a researcher see, and nowhere is there a satis - on the Bill of Rights. Stay tuned.cast the same advertisement two myself I had to admit that this factory explanation to prove the Ed.]APRIL – MAY 2004 NEXUS • 5
  6. 6. GLAXO SAYS MOST DRUG COMPANIES KNEW DRUGS DONT WORK HRT RISKS FIVE YEARS ON MOST PATIENTS BEFORE THE PUBLICA senior executive with Britains biggest drugs com-pany has admitted that most pre- D rug companies knew about the health risks surrounding hormone replacement therapyscription medicines do not work (HRT) five years before memberson most people who take them. of the public were informed. Dr Allen Roses, worldwide Thousands of women mayVice-President of Genetics at have been put at unnecessary riskGlaxoSmithKline, said fewer because they were involved inthan half of the patients pre- HRT trials when experts knewscribed some of the most expen- that the menopause treatmentssive drugs actually derived any increased the risk of heartbenefit from them. disease. It is an open secret within the But the data, collated by thedrugs industry that most of its drug companies for licensingproducts are ineffective in most applications for their HRT prod-patients, but this is the first time ucts, was kept secret and not pub-that such a senior drugs boss has lished. Experts who tried to raisegone public. concerns about HRT were Drugs for Alzheimers disease in fewer than one in three patients, Dr Roses has a formidable reputation in Researchers say the HRT case exposeswhereas those for cancer are only effective the field of "pharmacogenomics"—the the "strong vested interests and biasedin a quarter of patients. Drugs for application of human genetics to drug reporting" in the way drugs are licensedmigraines, osteoporosis and arthritis work development—and his comments can be and tested by pharmaceutical about half the patients, Dr Roses said. seen as an attempt to make the industry (Source: The Independent, UK, 28 February Most drugs work in fewer than one in realise that its future rests on being able to 2004)two patients, mainly because the recipients target drugs to a smaller number ofcarry genes that interfere in some way with patients with specific genes. PENTAGON GEARS UP FORthe medicine, he said. "Neither those who pay for medical care SPACE-BASED WEAPONS "Roses is a smart guy, and what he issaying will surprise the public but not hiscolleagues," said one industry scientist. nor patients want drugs to be prescribed that do not benefit the recipient. Pharmacogenetics has the promise of A United States Air Force report is giv- ing what analysts call the most detailed picture since the end of the Cold"He is a pioneer of a new culture within removing much of the uncertainty," Dr War of the Pentagons efforts to turn outerthe drugs business based on using genes to Roses said. space into a battlefield.test for who can benefit from a particular (Source: The Independent, UK, 8 December The US Air Force Transformation Flightdrug." 2003) Plan, released last November, makes US dominance of the heavens a top Pentagon priority in the new century. And it runs through dozens of research programs designed to ensure that America can never be challenged in orbit—programs from anti-satellite lasers to weapons that "would provide the capability to strike ground tar- gets anywhere in the world from space". Space has become an increasingly important part of US military efforts. Satellites are used more and more to talk to troops, keep tabs on foes and guide smart bombs. Theres also long been recognition that satellites may need some sort of pro- tection against attack. But the Air Force report goes far beyond these defensive capabilities, calling for weapons that can cripple other countries orbiters. That prospect worries some analysts that "Theyre working on something to stop this flu from killing us, the United States may spark a worldwide so they can restore confidence to the business of killing us themselves." arms race in orbit.6 • NEXUS APRIL – MAY 2004
  7. 7. ... GL BAL NEWS ... This year, the US Air Force will spend publishing excerpts of From Major signal to multiple cells within the network.hundreds of millions of dollars to find Jordans Diaries (see NEXUS 4/01, 4/02), A transistor located on the chip thenways to track enemy satellites and, if nec- detailing the covert handover of A-bomb recorded that conversation between cells.essary, blind those eyes in the sky. materials to the Russians. It is clear that Syed said the discovery is So far, space-based arms are legal. The Harry Hopkins was not acting alone in groundbreaking. "Weve made a giant leapOuter Space Treaty of 1967 only bans helping arm the Soviet Union. Another in answering several fundamentalnuclear weapons and other weapons of case of manufacturing your own (bogus) questions of biology and neuro-electronicsmass destruction from orbit. enemy?] that will pave the way for us to harness the Over the years, US administrations have (Source: Accuracy in Media, 4 March 2004, power of nanotechnology," he said.looked into developing such weapons— The findings could help in the design ofmost notably, as part of President Reagans monitor/2004/03/03.html) devices that combine electronic compo-"Star Wars" anti-missile initiative. nents and brain cells—for example, for Defense Secretary Donald Rumsfeld has NERVE CELLS GROWN ON CHIP controlling artificial limbs or restoringlong advocated sending arms into orbit. CAN COMMUNICATE sight for the visually impaired.Just before taking office in 2001, hechaired a commission on space andnational security which warned that the R esearchers at the University of Calgary, Canada, have found that nerve cells grown on a microchip can learn Future research will focus on interfacing silicon chips with the human brain to con- trol artificial limbs and develop "thinking"country could face a "space Pearl Harbor" and memorise information which can be the years to come. This calamity must communicated to the brain. (Source: The Globe and Mail , Toronto,be avoided, the commission declared, "We discovered that when we used the Canada, 2 February 2004)asserting that the best way to do that is to chip to stimulate the neurons, their synap-"vigorously pursue the capabilities…to tic strength was enhanced," said Naweed FORMER ASTRONAUT ADMITSensure that the President will have the Syed, a neurobiologist at the University of "WE ARE NOT ALONE"option to deploy weapons in space".(Source: Wired Magazine , 20 February2004, Calgarys Faculty of Medicine. The nerve cells also exhibited memory traces that were successfully read by the T he sixth man to walk on the Moon, Apollo XIV astronaut Edgar Mitchell, declared "The aliens have landed" in front chip, said Syed, co-author of the landmark of more than 200 admirers at a conference FDRS CLOSEST ADVISER study published in the February edition of in St Petersburg, Florida, in February. WAS A SOVIET SPY the international journal Physical Review "A few insiders know the truth…and areT he British government has announced that former Soviet KGB archivistVasili Mitrokhin, 81, died from pneumonia Letters. The research was done in collaboration with the Max Planck Institute for studying the bodies that have been discovered," he said. Mitchell, who landed on the Moon withon 23 January. Biochemistry in Munich, Germany. Alan B. Shepard, said a "cabal" of insiders Mitrokhin first came to the publics The team cultured nerve cells from a stopped briefing presidents about extrater-attention in 1999 with the publication of snail and placed them on a specially restrials after President Kennedy.The Sword and The Shield, an exposé of designed silicon chip. Using a Dr Mitchell, who has a science doctoratethe KGB and its operations in the US and microcapacitor on the chip, scientists from the Massachusetts Institute ofEurope. The book was based on notes and stimulated one nerve cell to communicate Technology, noted that 30 years ago it wasmaterials from classified KGB files, with a second cell which transmitted that accepted that man is alone in the Universe.copied by Mitrokhin from 1972 until hisretirement in 1984. He defected in 1992and his materials were later spirited out ofMoscow by British agents. Accuracy in Media first reported onMitrokhins revelations shortly after thebooks publication. Reed Irvineparticularly valued the book for providing"new evidence" that Harry Hopkins,Franklin D. Roosevelts closest and mostinfluential adviser, was a Soviet spy. Mitrokhin turned to British intelligence,where his materials eventually led to theidentification of several Soviet spies inboth Britain and the United States. Amongthese were Melita Norwood, who admittedgiving British nuclear secrets to theSoviets, and a former Scotland Yardpoliceman, who became the KGBs first"Romeo spy". [Editors Note: Readers may recall ourAPRIL – MAY 2004 NEXUS • 7
  8. 8. ... GL BAL NEWS ...Few people believe that now, he said. "It is highly scientific. Brain fingerprint- have results favourable to them than those Besides aliens, Mitchell talked about ing doesnt have anything to do with the funded by others.being freed of prostate cancer during a emotions, whether a person is sweating or All this matters greatly because 70 perhealing ceremony and about his epiphany not; it simply detects scientifically if that cent of trials in major medical journals arewhile returning from the Moon. information is stored in the brain," says Dr funded by the drug industry. Companies(Source: St Petersburg Times, Florida, USA, Farwell. often buy reprints of these articles to use in18 February 2004, "It doesnt depend upon the subjective promoting their drugs. interpretation of the person conducting the Virtually all research on drugs is funded BRAIN FINGERPRINTING: test. The computer monitors the informa- by the industry, because governments have THE FAILSAFE LIE DETECTOR? tion and comes up with information present taken the view that public money can beS eattle, Washington — A controversial technique for identifying a criminalmind using involuntary brainwaves that or information absent." Brain fingerprinting has profound impli- cations for the criminal justice system. better spent elsewhere. The end result is that information on drugs (on which Britain spends £7 billion acould reveal guilt or innocence is about to (Source: BBC News, World Edition, 17 year) is distorted.take centre stage in a last-chance court February 2004, (Source: The Guardian, 14 January 2004)appeal against a death-row conviction in 2/hi/science/nature/3495433.stm)the United States. MONSANTOS GM FAILURE DRUG COMPANY–FUNDED The technique, called "brainfingerprinting", has already been tested bythe FBI and has now become part of the TRIALS HAVE MORE FAVOURABLE RESULTS A showcase project to develop a geneti- cally modified/engineered crop for Africa has failed.key evidence to overturn the murderconviction of Jimmy Ray Slaughter, who isfacing execution in Oklahoma. T he public is being regularly deceived by the drug trials funded by pharma- ceutical companies, loaded to generate the Three years of field trials have shown that GM sweet potatoes modified to resist a virus were no less vulnerable than ordinary Brain fingerprinting, developed by Dr results they need, according to the editor of varieties, and sometimes their yield wasLarry Farwell, chief scientist and founder the British Medical Journal. lower, according to the Kenya Agriculturalof Brain Fingerprinting Laboratories, is a Pharmaceutical companies spend hun- Research Institute. Embarrassingly, inmethod of reading the brains involuntary dreds of millions of pounds to bring a new Uganda, conventional breeding has pro-electrical activity in response to a subject drug to market, and tens of millions of duced a high-yielding resistant varietybeing shown certain images relating to a pounds to do the clinical trials that are nec- more quickly and more cheaply.crime. During the test, the suspect wears a essary for both registration and marketing. The GM project has cost Monsanto, theheadband equipped with sensors that mea- Understandably, they prefer n o t to get World Bank and the US government ansure the electrical activity. results from these trials that are estimated US$6 million over the past Unlike the polygraph or lie detector to unfavourable to their drug. decade. It had been held up worldwide aswhich it is often compared, the accuracy of A review published in 2003 found 30 an example of how GM crops will helpthis technology lies in its ability to pick up studies that had compared the results of tri- revolutionise farming in Africa. One of thethe electrical signal, known as a p300 als funded by drug companies with those project members, Kenyan biotechnologistwave, before the suspect has time to affect funded by other sources. Trials funded by Florence Wambugu, even toured the worldthe output. companies were four times more likely to promoting the work. Monsanto says it plans to develop further varieties. (Source: New Scientist, vol. 181, no. 2433, 7 February 2004) REMOTELY TRIGGERED CAR IMMOBILISERS ON THE WAY T he battle to cut car crime is moving up a gear with the advent of immobilisers that can be triggered remotely. A control box fitted to the car incorporates a miniature cellphone, a microprocessor and memory, and a GPS satellite positioning receiver. If the car is stolen, a coded cellphone signal will tell the unit to block the vehicles engine management system and prevent the engine being restarted. There are even plans for immobilisers that shut down vehicles on the move, though there are fears over the safety implications of such a system. For now, such devices are only available8 • NEXUS APRIL – MAY 2004
  9. 9. ... GL BAL NEWS ...for fleets of trucks and specialist vehicles THE TEN WORST CORPORATIONS OF 2003used on construction sites. But remote by Russell Mokhiber and Robert Weissman © 2004immobilisation technology will soon startto trickle down to ordinary cars, and shouldbe available in the UK in two months. H ere follows, in alphabetical order, the Multinational Monitor list of the 10 worst corporations of 2003. Bayer: In May, the company agreed to plead guilty to a criminal count and pay more than In the USA, fear of litigation is discour- US$250 million to resolve allegations that it denied Medicaid discounts to which it was enti-aging the whole idea of using remote tled. The company was beleaguered with litigation over its anticholesterol drug, Baycol.immobilisers: no one wants to be responsi- Bayer pulled the drug—linked to a sometimes fatal muscle disorder—from the market, but isble for, say, blocking ambulance access. facing thousands of lawsuits from patients who allege they were harmed by the drug. Police in the UK would like to see cars Boeing: In one of the grandest schemes of corporate welfare in recent memory, Boeingfitted with immobilisers that could be acti- engineered a deal whereby the Pentagon would lease tanker planes—767s that refuel fightervated while the thief is driving along. planes in the air—from Boeing. The price tag of US$27.6 billion was billions more than theThey argue this would enhance road safety cost of simply buying the planes. The deal may unravel, though, because the company firedby putting an end to high-speed car chases. for wrongdoing both the employee who negotiated the contract for Boeing (the companys(Source: New Scientist, vol. 181, no. 2435, chief financial officer) and the employee who negotiated the contract for the government.21 February 2004) How could Boeing fire a Pentagon employee? Simple. She was no longer a Pentagon employee. Boeing had hired her shortly after the company clinched the deal. WRONG DIAGNOSES ARE Brighthouse: A new-agey advertising/consulting/strategic-advice company, Brighthouse KILLING PATIENTS has a claim to infamy with its Neurostrategies Institute. In a cutting-edge effort to extend and sharpen commercial reach in ways never before possible, the Institute is using MRI to monitorM any patients in intensive care units are being wrongly diagnosed, accord-ing to a study in a UK hospital. Some are brain activity and response triggered by advertisements and advertising campaigns. Clear Channel: The radio behemoth Clear Channel specialises in consuming or squashingdying because doctors fail to spot major locally owned radio stations, imposing an homogenised music playlist on once-interesting sta-conditions such as heart attack, cancer and tions and offering cultural support for US imperial adventures. It has a record of violating thepulmonary embolism. The reason, experts law—including prohibitions on deceptive advertising and broadcasting conversations withoutsay, is not incompetence but that so few obtaining permission of the second party to the conversation—on 36 separate occasions overpost-mortems are now performed that doc- the previous three years.tors cannot learn from their mistakes. Diebold: An Ohio-based company that is one of the largest US manufacturers of electronic Fang Gao Smith, a consultant in inten- voting machines as well as an aggressive peddler of these machines, Diebold has managed tosive care medicine at Birmingham demonstrate that it fails any reasonable test of qualifications for involvement with the voting process. Its CEO has worked as a major fundraiser for President George W. Bush. ComputerHeartlands Hospital, and her team checked experts revealed serious flaws in its voting technology, and activists showed how careless itthe accuracy of diagnoses by comparing was with confidential information. Diebold threatened lawsuits against activists who pub-post-mortem results with patients medical lished on the Internet company documents showing its failures.records. In 39 per cent of cases, they found Halliburton: The company which initially drafted plans for privatisation of US militarymajor problems had been missed. functions during the Bush I administration—when current Vice President and former The problem is not limited to one hospi- Halliburton CEO Dick Cheney was Secretary of Defense—is pulling in billions of dollars intal or to the UK. Gao Smith says her find- revenue from contract work—providing logistical support ranging from oil to food—in Iraq.ings are consistent with other studies done Tens of millions, at least, appear to be overcharges. Some analysts say Halliburtons chargesin Europe and the US. She thinks doctors for oil provision amount to "highway robbery".place too much faith in sophisticated scan- HealthSouth: Fifteen of its top executives have pleaded guilty in connection with aners when making diagnoses and are fail- multibillion-dollar scheme to defraud investors, the public and the US government about theing to learn from their mistakes because companys financial condition. It appears that HealthSouth itself will get off scot free—nofewer and fewer autopsies are being done, indictments, no pleas, no fines, no probation.both in the UK and the US. "If we did Inamed: The California-based company sought Food and Drug Administration approvalmore post-mortems, it might be possible to for silicone breast implants, even though it was not able to present long-term safety data—thesave more people in the future," Gao Smith very thing that led the FDA to restrict sales of silicone implants a decade ago. In Januarysays. The decline needs to be reversed as a 2004, the FDA denied Inameds application for marketing approval.matter of urgency, she says. Merrill Lynch: Fresh off a US$100 million fine levied because analysts were The study also raises the question of how recommending stocks that they trashed in private emails, the company saw three formermany other patients are being executives indicted for shady dealings with Enron. Merrill Lynch itself managed to escapemisdiagnosed. Gao Smith says the with something less than a slap on the wrist—no prosecution in exchange for "oversight".frequent misdiagnoses in intensive care Safeway: One of the largest US grocery chains, Safeway is leading the charge to demandunits should set alarm bells ringing in other give-backs from striking and locked-out grocery workers in southern California. Along withareas of medicine. "Its not always possible Albertsons and Ralphs (Krogers), Safeways Vons and Pavilion stores are asking employeesto talk to intensive care patients. But they to start paying for a major chunk of their health insurance. Under the companys proposals,are also scrutinised and monitored more workers and their families will each lose US$4,000 to $6,000 a year in health benefits.than any other patients, so Im not sure we (Source: Authors article posted 5 February 2004 at say that they are more likely to suffer corpfocus/2004/000173.html. Russell Mokhiber edits the Washington, DC–based Corporatemisdiagnosis." Crime Reporter,; Robert Weissman edits the(Source: New Scientist, 21 February 2004) Washington, DC–based Multinational Monitor, – MAY 2004 NEXUS • 9
  10. 10. 10 • NEXUS APRIL – MAY 2004
  11. 11. A SCIENTIFIC, MATHEMATICAL and HISTORICAL EXPOSÉ, CRITIQUE and MANIFESTO INTRODUCTION T he dynamics of money is an extremely complicated subject. Its a foremost Privately owned preoccupation of humans, as in the way money system mechanics is intricately woven into major plotlines of complex and influential popular fiction works such money expansion as Rands Atlas Shrugged1 and Stephensons Cryptonomicon. 2 Extrapolated, it even becomes a "social energy system" theme in more futuristic or outlandish forms, such is equivalent to a as that emerging from the popular science fiction movie The Matrix.3 Possibly the full leverage of focused worldwide scientific inquiry and attention has yet surreptitious, to be applied to economics. Some evidence that the science is still in its infancy is that new fields of "economic physics" or "econophysics" and "computational finance" (also state-sanctioned dubbed "phynance") have been proposed only recently.4, 5, 6 Physicists are applying statis- tical and computational modelling techniques to come up with creative, ad hoc or highly plundering of realistic theories of money flow in, for example, large economies and stock markets. 7 money-holder Objective scientific commentators sensitive to these kinds of shifts and trends could easily identify (despite the overused cliché) all the signs of an apparent Kuhnian "paradigm wealth by private shift"8 in progress. The analysis presented here is heavily dependent in places on the economy-as- bankers, and is an ecosystem concept and mostly takes it as unequivocally justified and virtually proven, even though it is not a common perspective among mainstream economists and the insidious yet real underlying research agenda is clearly only beginning. Nevertheless, building on it, an important additional theme proposed and explored here is that of economic parasitism. and ubiquitous A BRIEF HISTORY OF MONEY system of Paper money was not used by Europeans until the Middle Ages; its introduction in that economic era was partly due to the discovery of its successful use in China by Marco Polo in the 13th century. The Greeks and Romans used coins. parasitism. It is useful here to review some standard terminologies (see, e.g., Griffin9 and Naylor10): • Commodity money – money that is made out of a commodity, e.g., typically a precious metal, either gold or silver, i.e., coins. • Receipt money – also called "fully backed commodity money".11 A goldsmith or banker issues paper receipts or certificates always redeemable for an exact quantity of precious metal, and the receipts may be traded independently. • Fractional money – money that is backed by reserves or a commodity at only a fraction of the face value. Its also called "fractionally backed commodity money"12 and "bank money" or "book credit". 13 For purposes here, the exact fraction is considered to be by Vladimir Z. Nuri fixed in perpetuity. © March 2002, February 2004 • Fiat money – money that is declared (sole) "legal tender" by a government, with no Email: specifically guaranteed reserve or commodity backing; or, for purposes here, money denomination associated with arbitrarily permissible manipulation, or variation of total Extracted from his 62-page paper, available quantity, via mere accounting changes unrelated to precise reserves or backing freely available at website: (made by the money controlling and tracking authority, not necessarily the same as the government), rather than any fixed commitment to any fraction of reserves or backing. wpawuwpma/0203005.htm • Paper money – For purposes here, money in the form of paper notes, i.e., "banknotes". Depending on backing, it could be receipt, fractional or fiat money. ManyAPRIL – MAY 2004 NEXUS • 11
  12. 12. authors use it as a synonym for fractional or fiat money to contrast both counterfeiting and publicly owned expansion lead to or,it with commodity money. more accurately, cause widespread inflation of prices and, if • Electronic money – For purposes here, money as reduced to uncontrolled, destabilisation of the integrity of the overall moneyan abstract accounting process involving abstract currency-units, system. Often governments have had draconian laws againstor "blips", no longer requiring a physical medium for transfer. It counterfeiting practices, regarding them as equivalent to acts ofis also called "digital cash" or "cybercash". Depending on sabotage, treason or war. Some wars have actually been wagedbacking, it could be receipt, fractional or fiat money. partly via the very effective technique of one countrys counterfeiting anothers currency and "buying" (in actuality, In basic so-called "economics" history (e.g., as Griffin 14 and confiscating) resources with it. In this sense, it is a camouflagedRothbard, 15 e.g., explain), money ostensibly issued as receipt seizure of assets , or economic warfare. Whereas pillaging ismoney to depositors was often surreptitiously, clandestinely or sometimes the goal of warfare, counterfeiting permits an invisibleillicitly corrupted into fractional or fiat money by bankers. The pillaging with no arms or army required!bankers found they could temporarily lend out additional pseudo- The third case above, privately owned money expansion, is notcertificates exceeding their collected inventory of gold and collect so sharply delineated in the economics literature or popularinterest on these loans. Rothbard notes that this practice was treatments and is typically mixed up with the other two cases.ruled legal by courts in some historical cases. Griffin asserts this This is a catastrophic error, as will be considered below. Forpractice invariably leads to an inherently unstable money system reference, call this the cui bono, caveat emptor error (Latin forand periodic runs on banks, with many historical examples to "Who benefits? Let the buyer beware!").make his case. Griffin also asserts that fiat money always leads to The above account hides further detail and mixes terminologyhyperinflation and worthless currency. These views are based on the modern perspective.reappraised here with slightly different conclusions. Two Banking Systems: Central and NoncentralDebasement, Counterfeiting and Embezzlement From the historical standpoint, a nation can have two kinds of Immediately upon any inquiry into banking or money systems:money, the topics of debasement and • Centralised banking – A univer-c o u n t e r f e i t i n g arise. Someone can sal, standardised, official governmenttake a gold coin, clip or shave it down "By this means, government currency is controlled and issued by aand pass on that coin, or create entirely central bank.fake coins with no gold content. may, secretly and unobserved, • Non central ised ban kin g –Complicating the picture is that the confiscate the wealth of the Different banks may issue their owngovernment itself may adopt debase- receipt money as currency, also calledment of the currency as an official people, and not one man in a "banknotes". The different banknotesstate policy! Many authors haveblurred these cases. So, a strict defini- million will detect the theft." circulate simultaneously in the overall economy.tion of these different forms of debase- — John Maynard Keynesment is required: Worldwide, most nations now have • Counterfeiting – The outlawed, their own central banks, at the end of acriminal practice of debasing the cur- long history of complex economic andrency or creating fraudulent money. political events. American and inter- • Publicly owned money expansion – At the knowledge, national history has involved eras of alternation between cen-consent and service (and, ultimately, control) of the public tralised and noncentralised banking systems; currently, the US hascitizenry, the government systematically but restrictedly devalues centralised banking.the currency by allocating itself ownership of new, previously In the United States, the central bank is known as the Federalunowned/unallocated currency-units (represented by paper Reserve; it was established in 1913. Note that a central bank maybanknotes on demand) via the accounting system—implemented be either publicly owned or privately owned. However, despite itsas an official policy to generate a revenue stream other than direct name and management protocols, the US Federal Reserve istaxation, with proceeds spent on legitimate government/public privately owned. The assumption that a central bank is alwaysservices. publicly owned is the same cui bono caveat emptor error. • Privately owned money expansion – The situation men-tioned above, where, instead, private bankers retain the sole Seigniorageauthority (understood to be officially delegated by the govern- In economics literature, the word "seigniorage" is typically usedment) to control the same currency-unit accounting mechanism as a synonym for money expansion. Seigniorage is revenue or aand own the associated revenue stream, referred to as "profit" or profit taken from the minting of coins, usually the difference"revenue" by the bankers terminology (conceivably with a "cut" between the value of the bullion used and the face value of thegoing to select depositors and shareholders—or none at all). coin. In a fractional money system, the mechanism for money expan- Counterfeiting is equivalent to theft. The criminal obtains sion is different (not associated with minting coins) but with thetangible assets as booty in the collective robbery of all who use same effect.the currency. However, it is not an overt theft that a victim is Here, a very careful distinction must be made. The followingreadily aware of, as it is, say, when their car has been stolen and is are separate and distinct, but they are sometimes confused bymissing. E m b e z z l e m e n t is more accurate, presuming it is neophytes or are unclear in some accounts. The terminology iseventually detected! somewhat arbitrary (remarkably, there does not seem to be a As is widely understood by economists and the general public, standard terminology devised by other commentators).12 • NEXUS APRIL – MAY 2004
  13. 13. • Straight borrowing – A government borrows money via bank. The banks may further be either publicly owned orissuing bills or bonds at a discount on face value, promising to privately owned. An even more precise distinction requires morerepay the purchaser the face value at some specified date in the sophistication than this overview and is pursued further below.future. The interest rate is the difference between the face value In economics literature and popular accounts, the following twoand the purchase price. Money accounting totals are strictly tied cases are also not always carefully distinguished. Current pricesto actual reserves or revenue. As an example, US state govern- in an economy may shift under two separate, distinct key factors:ments use straight borrowing. • Supply and demand – Demand for a particular good or ser- • Expansion borrowing – The government may also borrow vice may fluctuate due to changing economic conditions. This isvia money expansion, with newly allocated currency units the "invisible hand" of Adam Smiths theory. The value orfunctioning as national economy shares that are either publicly or demand of the underlying assets has changed.privately owned. The money accounting totals are divorced from • Money manipulation – Wherever there is not a strict policydirect relation to actual reserves or revenue, under the control and commitment by the monetary authority to a one-to-one or invari-ownership of the money manipulation authority. Virtually all able accounting relation between money units and assets (i.e.,national governments use expansion borrowing. Even though, in basically fiat money, or other systems corrupted into fiat money,this case, the standard overt procedure of "selling a bond" seems maybe advertised or feigned otherwise), the total money units canidentical to the prior case of government borrowing, the be arbitrarily modified or varied under the title of "money expan-underlying mechanisms and effects of the transaction are sion". The intrinsic value or demand of the underlying assets isfundamentally different. not changed. Adjustments in conventional taxes, on the other hand, have Note that both cases involve a "shortfall of funds", but the first uneven and unpredictable effects which are notoriously difficultcase does n o t constitute seigniorage to anticipate by government agencies,whereas the second does. If a politicians, legislatures, experts,governments expenditures exceed "Thus, our national circulating economists and the public alike.revenue (government revenue isgenerally from taxes), it can make up medium is now at the mercy The economist Keynes helpedsome difference via borrowing such of loan transactions of banks, analyse the process of publicly ownedthat additional funds become available money expansion and considered thevia a free-market loan by bond-holders. which lend not money but ensuing inflation as a perniciousDemand for these bonds is mainly tied promises to supply money "hidden tax" on the masses. However,to the interest rate offered by the many monetary reformists havegovernment; higher interest rates spur they do not possess." proposed publicly owned moneyhigher demand. However, even after expansion as a very useful means ofthe "auction of debt", the additional — Irving Fisher (1936) taxation superior to alternatives,available borrowed funds may still be presuming it is limited and erectedinadequate to cover a budget deficit with the full knowledge and politicalfully. In that case, another last resort (other than raising bond consent of citizens (see, for example, Gause16). Via such a system:interest rates) is money expansion. Hence the latter case can be • The state can obtain spendable revenue that requires no vast,considered, in a sense, a "double shortfall" (a shortfall of demand complex and cumbersome accounting system in the way theor of buyers agreeing to loans). income tax, for example, does. A further key distinction must be made on money expansion. A • It also is an extremely uniform taxation system, representing abank may lend funds either to individuals or to the government. per cent of every dollar in circulation, in contrast to every reportedIn the former case, typically the "noncentral" bank lends funds dollar or every dollar in only particular types of transactions.deposited by other individuals. In the latter case, typically the Conventional taxes, on the other hand, have uneven effects whichgovernment borrows money from the nations central bank, which are notoriously difficult to anticipate by a legislature.controls issuance of the nations currency; that is, when the bank • Tax evasion is essentially impossible under publicly ownedbuys government bonds. In either case, if the bank has assets on money expansion—precisely as inescapable as inflation!deposit equivalent to the borrowed funds, its "straightborrowing". If only a fraction of the loan is backed by assets, its Privately Owned Money Expansion"expansion borrowing". This latter case is called f r a c t i o n a l Consider the strange worldwide case of privately owned moneyreserve banking (or lending, or borrowing). The fraction of expansion. Here, a private bank is allowed to issue banknotesdeposits to loans that a bank is required to hold is called the based on fractional reserves, i.e., lend out more money than it hasreserve requirement. in reserves, either to a government or to citizens. The idea of Hence money expansion can be localised to a given banks own money expansion as equivalent to a fractional reserve system isbanknotes in the noncentral system, or affect the entire nations not an explicit observation of modern economics, but itscurrency in the case of a central bank. In terms of the cui bono, transparently identical.caveat emptor error, most economics literature does not apply or With straight borrowing, a lender provides immediate money-blurs the concept of the central banks owning assets to back the energy in return for the money-energy returned plus a fee at agovernment loans, not using the idea of a "reserve requirement" future time. (That fee, "interest", may therefore be regarded asrelative to it. the price or market rate of instantaneous money-energy per The above establishes an important direct correspondence repayment time.) But by the money-energy conservationbetween commodity or receipt money and straight borrowing, and principle, no money-energy is provided by the lender via privatelyfractional or fiat money and expansion borrowing. Moreover, the owned money expansion; this holds regardless of changes in GDP.two types may be practised by either noncentral banks or a central The "illusory" money-energy that is spent by the borrower isAPRIL – MAY 2004 NEXUS • 13