Questions for Anti-Usurers

Questions for Anti-Usurers

Thomas Allen

According to Deuteronomy 23:19, “Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury.” Webster’s New International Dictionary of the English Language, second edition, unabridged, 1948, defines “usury” as “a premium or increase paid, or stipulated, for a loan of money or goods.” Usury is a return or income on property without any apparent effort by the property owner. Usury is also called “interest,” “dividend,” “rent,” and “fee.”

The following are questions that opponents of usury need to answer to show that usury is undesirable.

1. Why have not the anti-usurers established loan companies that make interest-free loans? Why do they not put their money where their mouths are? If interest-free loans are economically preferable to interest-bearing loans, would not companies making interest-free loans soon drive companies making interest-bearing loans out of business? A truly interest-free loan would be without fees, etc. With a truly interest-free loan, a person, for example, borrows $10,000 for five years. At the end of five years, he pays the lender $10,000. The lender never receives anything more than $10,000 from the borrower. The borrower does not pay any more than $10,000. If the anti-usurers are not willing to do at least this much, why should they complain?

2. Why do most anti-usurers seek to hide their interest as fees, share-the-wealth, buy-out schemes, and the like? Loan fees are merely interest by another name. (Points and fees for mortgages originated as a means to circumvent interest caps when market interest rates for mortgages rose above the statutory ceiling.)

3. Why do anti-usurers want to outlaw savings accounts and certificates of deposit? Savings accounts and certificates of deposit are interest-bearing loans to banks. Why do anti-usurers want to require small account holders to pay bankers to hold their money?

4. As savings are mostly in the form of interest-bearing loans, where will savers put their savings? How will savers earn an income from their savings? Where can the common man, who can save only a small sum, put his money to earn a return? Why are savers to be penalized?

5. Why do anti-usurers want to outlaw publicly traded corporations? Corporative stock is merely an indefinite loan with a highly variable interest rate. From a corporation’s perspective, the primary difference between mortgages, bonds, and stocks is the priority of payment. Is not a dividend a return on a stock like interest on a loan? Is it not a return on money?

6. Without the ability to earn interest and interest on interest, how will the common man accumulate enough capital (store enough labor) to provide for himself in his old age? Or do the anti-usurers endorse the welfare state and want to force everyone in the community, ultimately under the penalty of death, to support the old?

7. Why do anti-usurers want to push people away from relatively low-risk investments like savings accounts, bonds, and dividend-paying stock and to commodity speculating and gambling? Besides speculating and gambling, where else can a person earn a return on his meager savings? Most do not have enough to start a viable business, and the anti-usurers seem to want to deny them this opportunity. If they do not, how will someone raise enough capital to start a viable business? If he combines with others to form a viable business, the partnership will have an unwieldy number of partners.

8. Why do the anti-usury people want to keep the poor impoverished? If they do not, why do the anti-usurers want to prevent the poor from earning a return on any savings that they manage to accumulate?

9. Where will the masses live? No one will be able to borrow to buy a house. (The best that a lender could hope for if the borrower failed to pay the loan would be to receive a house in unknown condition and of unknown value. If the value of the house exceeds the loan, the borrower gets the excess. Such high-risk lending makes the risk of potentially highly rewarding commodity speculating look small.) The anti-usurers have shut off most avenues, except gambling and speculating, of increasing savings sufficiently to buy a house outright. So, if a person does not inherit a fortune or have parents who will give him the money, where does he get the money to buy a house? Does he have the government steal it from the wealthy and give it to him? He cannot rent a place to live because no sane person will become a landlord. Renting a house or apartment is merely lending capital or property as a house or apartment. Rent on a house or apartment is usury (see the definition above). The landlord lends the use of the house or apartment. In return, the landlord receives interest, which is commonly called rent. Under an anti-usury regime, the only thing that a renter should be obligated to do is to return the house or apartment to the landlord when his lease expires. Before anti-usurers try to weasel their way out of this dilemma by distinguishing between lending money and lending housing, they must explain why paying a person for the use of his property is acceptable while not paying a person for the use of his property is unacceptable. Why is receiving an increase from lending capital acceptable while receiving an increase from lending capital is not?

10. At least some anti-usurers are consistent enough to view the renting and leasing of land, dwellings, tools, machines, etc. as the same as renting and leasing money. If one leases a car [money], the owner of the car [money] gets the car [money] back at the end of the lease. Any money paid for the lease is ill-gotten gain made on property that is returned. It is all usury. (See the definition above.) Why do the anti-usurers want to outlaw leasing and renting and rental businesses? If they do not, why are they inconsistent? Will not outlawing rental businesses force people to buy expensive equipment that they will use only once? Does not such outlawry force people to waste their resources and time in buying and selling things? What happens if they do not have the money to buy the equipment and no one will lend it gratuitously? For example, if a person is moving and cannot afford to hire a moving company and cannot afford to buy a truck to move his furniture, what does he do with his furniture? Abandon it? Sell it as a discount to get rid of it quickly?

11. Will not insurance be more expensive if usury is outlawed? As insurance companies earn much of their income via lending (stock, bonds, and mortgages), where will they invest premiums to earn a return to keep down the costs of policies? Will they not be forced to collect the full amount of coverage plus the cost of security from policyholders and hoard the money in vaults?

12. Why do the anti-usurers oppose large-scale capital investments like power plants, steel mills, and automobile manufacturing assembly lines? If they do not oppose them, how will sufficient capital be saved and combined to build them—as their system discourages the savings of capital, i.e., the storing of labor? Without resorting to theft via taxation, how will enough funds be accumulated to build extremely expensive undertakings? (Remember that stock is as much of a loan as a bond; so selling stock cannot be used—unless no dividends are ever paid and no capital gains are made. What about capital losses?)

13. Why should a person be forced to risk his capital without hope of compensation, which is what anti-usury laws do? Why would any sane person want to incur the liability involved by letting another use his (the lender’s) property without compensation? Why do most anti-usurers fail to recognize that the lender risks losing his property? Why should a lender risk losing his property without compensation? Why would any rational person want to incur the risk of lending without compensation?

14. If a person buys a farm for money, to whom do the profits from the crops grown on the farm in subsequent years belong? The buyer or the seller? Does not consistency dictate that they go to the seller? Is not the buyer receiving an increase (interest) on his money (the money used to buy the farm) if he keeps any of the profits?

15. Except for charitable purposes, why should one person forgo his consumption today without compensation by lending to another person so that the other person can consume today? Is not the present value of everything greater than its future value for prisoners of time? If not, why? What are the exceptions and why are they exceptions?

16. Which has more value: a possession today or a promise to pay in the future? Or are they equal in value? If so, why? If not, why should they be treated as equal in value? Why do anti-usurers claim that they are equal in value? (As interest expresses the difference in value between the two and as the anti-usurers would outlaw interest, they in effect are claiming that they are equal in value.) If their values are not equal, then the one who promises to pay in the future is stealing value from the one who is lending what he possesses today. How can this theft be justified?

17. A person lends his gardening tools (or money) to his neighbor to prepare his (the neighbor’s) garden. The neighbor returns the tools (or money) to the lender after the time has passed for preparing the garden (using the money as the lender wanted). Although the lender cannot prepare his garden, anti-usurers assert that the lender has suffered no loss as the lent property has been returned and, therefore, should receive no compensation. Why should not the lender be compensated? Has he not sacrificed his welfare for that of his neighbor? Should the neighbor get a free ride for this sacrifice?

18. Some anti-usurers argue that the lender has no claim on any portion of the labor of the borrower. If true, then why does the borrower have a claim on part of the labor of the lender? The lender forgoes the use of his stored labor while the borrower is using it. Therefore, the borrower has claimed part of the lender’s labor without compensation. Why the inconsistency?

19. Does any rational person ever borrow money at interest unless he believes that the benefits of the loan outweigh the cost? If so, when and why? Why would a rational person borrow when he believes that the cost of the loan will exceed the benefit? Why would he do with borrowing that which he would never do in any other transaction, economic or otherwise? (A rational person will never undertake any kind of transaction unless he believes that the benefits will exceed the cost.)

20. Anti-usurers argue that a lender’s claim that interest is payment for his service of letting the borrower use the lender’s property is false. The lender has not surrendered any of his wealth, and he does not become poorer making the loan. Does he not become poorer if the loan is not paid back? Moreover, does he not give up the use of his property when he lends it to another? How can two people use the same property simultaneously? Does not the lender forgo the additional wealth that his property could have earned him if he had not lent it? Why should he forgo this income without compensation? Why does not the lender provide the borrower a service with the loan? If no service is rendered, is not the borrower better off without the loan, which becomes an obligation? So why borrow?

21. Why is it unjust and oppressive for a lender to demand payment for the use of his property (including money) as compensation for not being able to use that property while the borrower has control of it? Why should the lender suffer a time-use loss without compensation?

22. Do anti-usurers really believe, as some argue, that the borrower is rendering a real and valuable service to the lender by keeping the property (money) for the term of the loan and returning it to the lender? If true, should not the lender pay the borrower interest on the loan? If the lender should not pay the borrower, why should the borrower be forced to render the service of holding the lender’s property (money) for no fee? Cannot a lender keep his own property (money) more securely than he can by entrusting it to another? Why would he entrust it to another? (The exception may be storing his property [money] at an institution skilled in protecting stored property [money].)

23. Why do anti-usurers not only fail to see that a lender is providing a service but frequently argue that he provides no service at all? On the contrary, as just discussed, some claim that the borrower is providing a service for the lender. What service is the borrower providing the lender? Is not the lender providing the borrower a service by providing the borrower the use of property that he would not otherwise have? Would not the borrower have to do without the property lent to him if the lender did not lend it? Why should the lender not be compensated for providing the service of lending the borrower the use of the lender’s property?

24. Do anti-usurers really believe as some seem to argue that borrowers borrow money to sit on it and not use it for investment or consumption? Do lenders lend money to borrowers with the thought that the borrower is doing the lender a favor by holding and using the lender’s money for a time as some anti-usurers argue?

25. Interest rates inform savers about where their savings are most needed and about how much savings are needed. If interest is outlawed, what will inform savers about where their savings are most needed and how much is needed?

26. Interest serves as a rationing tool to equalize the supply of lenders to the demand of borrowers. Without interest, will not the demand of borrowers soar and the supply of lenders collapse? Will not borrowers believe that an unlimited amount of money is available for loans? Will not lenders believe that the demand for money by people who really need it is near zero? If this is not true, then why does not the law of supply and demand apply to lending and renting of property? If interest is not used to ration lending, what will ration loans among borrowers?

27. Why do some anti-usurers believe that an exchange between two people is an act of usury if in the minds of the anti-usurers one party receives a thing of value much greater than the other? Do they not realize that no exchange can occur unless each person values what he receives more than what he gives up? Do they not realize that nothing has absolute value? (Things may have absolute value in the mind of God. What man knows the mind of God?) Are not all values subjective and constantly changing? For example, is not the value of a poor meal much greater for a hungry man than an excellent meal is for someone who has just eaten a buffet? If not, why?

28. Do anti-usurers propose to outlaw the selling of bills of exchange? No lending or borrowing is involved with a bill of exchange. When a bill of exchange is sold, it is sold for less than the face amount due. Money today is worth more than money tomorrow is worth today. Thus, no rational person will buy a bill of exchange due in a day, week, or month for full face value. Do anti-usurers propose to void this law of nature? Will they make the selling of a bill of exchange below face value a criminal act?

29. Why was life better during the anti-usury eras of the Dark Ages and Middle Ages than during the usury era of modern times?

30. Were the convoluted loans created during the Middle Ages and Renaissance to circumvent anti-usury laws better than the straightforward interest-bearing loans of today? If so, why?

31. The Industrial Revolution was built on interest-bearing loans, of which many were interest-bearing small savings accounts (small loans to banks). Why do the anti-usurers promote a system that would have prevented the industrial age from occurring? Was life before the Industrial Revolution that much better? If so, how and why?

32. Some anti-usurers cite the historical record of one government after another outlawing usury. As governments are usually the largest debtors in any society, do they not have a bias toward interest-free loans? Do not interest-free loans make their wars cheaper and, therefore, make wars more enticing?

33. Why should consenting adults be prohibited from engaging in interest-bearing lending—one as the lender and the other as the borrower?

34. Why should a person with capital who needs income be prevented from agreeing with a person who can produce income but lacks the capital to do so to exchange capital for income? By all common usury definitions, this income would be considered usury. The person with capital who cannot produce income is usually an older person. The person lacking capital who can produce income is a younger person. Why should the older person be denied a steady stream of income? Why should the younger person be denied the capital to produce income?

35. Who is ever really forced to borrow at interest? How many people have had a legal interest-bearing loan forced on them? Who are they? Can a person avoid paying interest by not borrowing? He can do without for whatever he was going to use the borrowed money; can he not?

36. Those who make a Scriptural argument against usury ought to know that the Scriptures allow interest-bearing loans to strangers, i.e., people of a different race. (“Unto a stranger thou mayest lend upon usury. . . .” [Deuteronomy 23:20]) If they do not have this rudimentary knowledge, they should not be making a Scriptural argument. Does not the prohibition against lending money to people of one’s own race give an incentive to lend to people of other races? If not, why? Do the anti-usury people intend to remove this incentive to lend to people of other races while neglecting their own race by outlawing interest-bearing loans to everyone? If so, why do they want to void what the Scriptures clearly allow? Does not the anti-usury program lead to the absurdity of Asians lending to Europeans to build up Europe while Europeans lend to Asians to build up Asia? Likewise, does it not lead to the absurdity of Europeans having to borrow from Asians to buy their cars and houses while Asians have to borrow from Europeans to buy their cars and houses? Or do the anti-usurers really believe that rational people will risk their property (lend their money) for no chance of reward when they can risk their property where they have a chance of reward?

Copyright © 2010 by Thomas Coley Allen.

More articles on economics.

Analysis of the Monetary Reform Act — Part II

Analysis of the Monetary Reform Act — Part II
Thomas Allen

This is the second part of a paper analyzing the “Monetary Reform Act” as it appeared on November 3, 2010. This Act and a description of it can be found at http://www.themoneymasters.com/monetary-reform-act/.

I have italicized the words of the Act and its footnotes and my paraphrases and summaries of their words. My commentary is in Roman letters.

Section 10, Treasury Deposits, authorizes the use of money placed in Treasury Department Deposits “pursuant to appropriation by Congress, to pay for goods, services, or interest needed by the federal government.” Funds “in excess of federal expenditures not funded by tax revenues” are rebated to individuals via the income tax system. Future monetary growth under Section 7 funds withdrawals greater than receipts. If withdrawals exceed this amount, then tax increases cover the excess. If Congress does not increase taxes sufficiently, the Secretary of the Treasury may add a surcharge to the income tax sufficiently to cover the deficiency.

This Section does not have any more force to constrain the use of printing press money to fund deficit spending than the other Sections. It puts pressure on the Secretary of the Treasury to act. It authorizes, but does not require, him to place a surcharge on income taxes. Will the President in the absence of Congressional approval choose the unfavorable reaction to a tax increase? Possible, but not often.

What this Section does, is to allow Congress to increase taxes without having to vote to increase taxes. It appropriates funds to satisfy its favorites. Then, the Secretary of the Treasury raises the taxes necessary to pay for the deficit. That the Secretary would choose to raise taxes on his own is not likely. Contrary to the intent of the Act, printing press money will cover most deficit spending.

Besides breeding corruption, such action harms the economy. Money is taken from the productive and given to the politically influential. Thus, the economy becomes less productive.

Section 11, Interest, describes paying interest on Treasury Department Deposits. One of Mr. Carmack’s objectives is the elimination of federal debt. Yet the Act allows banks under Section 9 to invest in Treasury Department Deposit accounts. In Section 10, the Act allows Congress to appropriate all the moneys in Treasury Department Deposits — and more. Section 11 describes the paying of interest on Treasury Department Deposits. To me, this looks like and sounds like banks lending the government money.

Moreover, Mr. Carmack has reintroduced fractional reserve banking, or at least its essence, that he wants to outlaw. Section 9 allows banks to count money invested in Treasury Department Deposit accounts as reserves for the 100-percent-reserve requirement for checking accounts. Thus, money in these Treasury Department Deposit accounts is immediately available for the checking account depositors to use. Section 10 allows Congress to appropriate funds placed in Treasury Department Deposits. Thus, the Act allows two different parties, Congress and the checking account owner, to use simultaneously the same money. Simultaneous use of the same money by multiple parties is the essence of fractional reserve banking.

Mr. Carmack realizes this problem with banks. He requires 100-percent reserves for banks to prevent simultaneous multiparty use of money. Apparently, he does not realize that the government is acting like a fractional reserve bank when it spends deposits used to back checking accounts. Thus, he defeats himself in trying to outlaw fractional reserve banking.

If he does not intend for the government to engage in fractional reserve banking and wants to end routine governmental borrowing, he needs to prohibit any bank, private individuals, associations, and companies from having Treasury Department Deposit accounts.

Section 12, Lending Institutions, gives the requirements for lending institutions. These include “investment trusts, mutual funds, brokerage or lending houses.” They may sell stock and may receive, borrow, lend, or invest money at interest but only with existing funds, i.e., U.S. notes and Treasury Department Deposits. They cannot be called banks. “[A]t no time may more funds be subject to demand than are presently idle and one hundred per cent (100%) available on demand.” This provision seems to be the Act’s prohibition against borrowing short and lending long. If so, it could be worded better. “For any funds deposited with such associations payable on demand there must be a dollar of United States Notes on hand or deposited in a Treasury Deposit.” This provision seems to be functionally the same as a checking account, “payable on demand,” although this Section prohibits calling them demand accounts and prohibits lending institutions from providing checking accounts. “No such association may denominate any account a demand account, nor promise immediate availability of any funds which may be invested, deposited or otherwise placed by such association without notice in any instrument or account other than Treasury Deposits.” Thus, this Section seems to be at least partially contradicting itself. Moreover, this Section prohibits the transfer of funds “by check, credit card, electronic transfer or any substitute therefor.” Does this mean that all count withdrawals and loans have to be in currency? It seems so.

Section 13, Repeal of Conflicting Acts, repeals the National Banking Act of 1864 and amendments and the Federal Reserve Act of 1913 and amendments. It transfers all Federal Reserve System monetary authority along with the Federal Reserve's assets, liabilities, and employees to the Department of the Treasury. It greatly restricts the action of the Federal Reserve System during the transitional year. Federal Reserve notes are phased out but remain legal tenders as long as they are in circulation. If this Act contained only the first sentence of Section 13, the repeal of the National Banking Act and the Federal Reserve Act, it would be a great law.

Like most other fiat money reformers, Mr. Carmack is convinced that fiat money or centralized banking per se does not cause the country’s monetary problems. Who issues the currency and how it is issued cause them.

Mr. Carmack’s proposal does not have a formal governmentally owned and operated central bank like Great Britain does with the Bank of England. (The Bank of England is part of the British government; it is a government agency.) However, the Act requires the Department of the Treasury to act like a central bank in many ways. It holds the country’s banking reserves outside bank vaults. It appears to assume the Federal Reserve’s check-clearing activities. It manages the country’s money. The only activity that the Federal Reserve performs that the Department of the Treasury would not be doing seems to be rediscounting bills.

I do not know what Mr. Carmack intends to do with the Federal Reserve’s large staff of economists. The primary job of many of them seems to be to write scholarly articles for Federal Reserve journals. Perhaps he could use them to write scholarly articles to support his system.

Based on Footnote 8, Mr. Carmack believes that abolishing the Federal Reserve and transferring its power to the Department of the Treasury will eliminate or at least greatly reduce the power and influence of private bankers over the country’s banking and monetary policies. Placing all this power in the Department of the Treasury or any other governmental department does not solve this problem. Bankers have controlled the Department of the Treasury in nearly every administration since Washington’s administration.

Moreover, if he wants to reduce bankers’ influence, he should fire all employees of the Federal Reserve and forbid the federal government to employ any of them ever. They are all contaminated with banker influence. Yet he wants to move all these pro-banker people to the Department of the Treasury and put them in charge of his system. If he really wants to eliminate the power of the bankers, he needs to eliminate the power instead of transferring it.

Section 14, Penalties, sets forth penalties for engaging in fractional reserve banking. Does this mean that the U.S. government is going to fine itself for engaging in fractional reserve banking? Or is it above the law? When Congress appropriates money from the Treasury Department Deposits held as reserves for checking accounts and the President and his bureaucrats spend it, are they going to prison for 20 years? Or are they above the law?

Section 15, Withdrawal from International Banks, requires the U.S. government and the Federal Reserve to end their membership and participation “with the Bank for International Settlements, the International Monetary Fund, the World Bank, and all other international banks” that are “inconsistent with and in direct conflict with the purposes of this Act.” It also directs the President “to take such steps as may be necessary to withdraw the United States from all participation, and membership, in the Bank for International Settlements, the International Monetary Fund, the World Bank, and all other international banks.” The withdrawals must be achieved within one year. He must “recover the original and any subsequent United States subscriptions, contributions and quotas to such organizations, not already fully and lawfully expended, whether in the form of gold, deposits, currency or otherwise” This Section directs the President “to enter into negotiations to establish new exchange facilities” that have “no authority to create money or credit in any form” and that have “no independent authority to establish laws or regulations binding upon the United States or its banks, financial institutions or citizens.”

Withdrawal from these organizations is one of the few positive features of this Act. I question the need to enter “into negotiations to establish money exchange facilities.” Other than giving the U.S. government more control over foreign trade and by extension domestic commerce, what purpose would they serve? Companies that want to engage in foreign trade should bear the expense and risks of making their own deals.

Section 16 Foreign Exchange, directs the Secretary of the Treasury to regulate foreign exchange rates to allow “the external rate of exchange freely to fluctuate, as foreign price levels fluctuate (i.e., in accordance with their respective purchasing power), while utilizing the exchange stabilization fund and foreign currency reserves to counterbalance fluctuations in the exchange rate.” He is to adopt regulations to “1. keep the stable, internal domestic price level established by this Act unaffected by foreign exchange rate fluctuations; 2. maintain imports and exports of capital, in equilibrium.” Under no circumstances are “the foreign exchange rates [to] be allowed to alter the fixed rate of monetary growth set forth in section 7.”

In other words, the Secretary of the Treasury is to intervene in the currency markets and manipulate currencies. He is required to be a currency manipulator. If any individual or consortium attempts to manipulate the currency market, they are condemned and may even be fined or imprisoned. When the Secretary of the Treasury does the same thing, he gets paid. Mr. Carmack’s proposal breeds corruption by not only empowering, but demanding, the government to manipulate currencies.

The people who own the Secretary can make a fortune in currency markets by knowing what the Secretary will do before he does it. They will surely know because they put him in that position to serve and inform them.

Currency manipulation and speculation were not a problem under the gold-coin standard that existed before World War I. It only occurred when the fiat money accompanied the gold standard or when the government allowed banks to suspend redemption.

The Act gets worse. It requires the Secretary to intervene in the capital markets to keep imports and exports of capital in equilibrium. Thus, anyone seeking to transfer money into or out of the country will need the approval of the U.S. government. Capital could be construed to mean much more than money. It could be construed to cover just about every export and import. Thus, the Secretary may have to balance imports with exports. Anyone seeking to import or export things may have to have the approval of the U.S. government. This provision fertilizes corruption.

Furthermore, this Section also makes a false assumption. That is, this Act will achieve stable internal domestic prices. As shown above, this Act is inflationary and cannot maintain stable internal domestic prices regardless of the Secretary’s currency and capital manipulations.

One of the many fatal flaws in all fiat money reforms is their slavish reliance on politicians, which the Secretary of the Treasury is. Fiat money reformers have this puerile belief that all political leaders under their system will be statesmen who place the welfare of the country above their own and that of their friends. (Ironically, most fiat monetary reformers are aware that most of the politicians under the current system are slimy, sleazy scoundrels who always place their and their friends’ selfish desires above the welfare of the country. Moreover, bankers and plutocrats own them. Fiat money reform must be something akin to second coming. It turns sinners into saints.)

Mr. Carmack seems to try to prevent this corruption by discouraging “speculative trading in small differentials in interest on exchange rates” by charging a small fee on currency exchanges (Footnote 12). It may affect small private actors. It does nothing to stop the U.S. government or foreign entities from speculating. Is Mr. Carmack so naive that he believes that the administration will not become involved in currency speculation in the name of foreign exchange stabilization if its friends and owners demand such?

Section 18, Severability, is the severability clause typically found in new legislation. It declares if any provision is found unconstitutional, the remainder remains in effect.

Except for repealing laws and withdrawing from international organizations, nearly everything in this Act is unconstitutional. However, if Congress ever enacted it, I doubt that any federal court would declare anything in it unconstitutional. Anything that increases the power and prestige of the U.S. government increases the power and prestige of federal courts. If the U.S. government has more power and prestige, so do its judges. Like most people, most judges prefer more power and prestige to less. Therefore, they are not likely to rule against this Act. Besides, seldom does a judge let the Constitution stand in the way of his personal biases and political expediency.

Unlike some fiat money reformers, Mr. Carmack at least recognizes the dangers of allowing the government to own the banks. In Footnote 13, he writes that “the power to loan does not properly rest with the government, is most effectively handled at the local free market level, and is easily abused for political purposes as was the case with pre-war Germany’s Reichbank which granted loans to whomever the government chose for political reasons, as do government banks in communist command economies.” He also believes that the setting of interest rates is best left to the markets.

Also, Footnote 13 is a paraphrase of Ms. Coogan, “[F]or the government to create money as loans is even more vicious than for private banks to create money as loans, carrying with it the power to aid (by granting loans) or destroy (by denying loans) whomever it chooses.” Both Ms. Coogan and Mr. Carmack are so focused on creating money through loans that fail to realize that what they are proposing is tantamount to the same thing. They fail to realize that when the government issues U.S. notes, it is issuing debt and, by that, is creating money by loans. It is forcing everyone to lend to it. It is indiscriminately forcing a noninterest-bearing loan on everyone. (In Footnote 7, Mr. Carmack implies that U.S. notes are noninterest-bearing loans. He writes that “no interest would be paid on currency in circulation.”) Moreover, it never intends to pay this debt unless it pays it with more debt.

In his discussion on Footnote 13, Mr. Carmack recognizes that politics guide government instead of economics. He writes:

Decentralized, private lending agencies generally tend to loan to any creditworthy applicant, their primary motive being profit (or profit-derived power) which is maximized by making more loans; whereas governments replace this profit priority with political ends such as rewarding their supporters, the political value of which is maximized by restricting loans. So government lending tends to arbitrary discrimination for political motives, an abuse generally avoided in a truly free market lending situation.

Yet he wants to entrust the government with the management of the country’s money, which is perhaps the most important aspect of the modern economy. For money issuance, he expects economics to guide the government instead of politics. The government needs only to follow the arbitrary criteria set out in the proposed Act. However, the government can change this Act or any part of it at any time. As shown above, it can work with and around the provisions in this Act to achieve its political ends.

Moreover, as the Act guarantees inflation, the people who receive the new money first benefit from the losses of the people who receive the new money later. People who receive the new money first have more political influence than people who receive the new money later.

Fiat money is a political creation. It is not, has never been, and cannot be an economic, market, creation. Therefore, it will always function politically. The economy is forced to adjust around it.

Another flaw in Mr. Carmack’s proposal is the inability of his scheme to remove excess money. Whereas some fiat money reformers allow the removal of excess money through budget surpluses, Mr. Carmack’s scheme precludes this approach. His Act demands the government to increase the quantity of money by 3 percent per year. If the government does not spend it, it goes to income taxpayers.

A monetary system exists that accomplishes Mr. Carmack’s goal of divorcing the creation of money from lending. Furthermore, it divorces the creation of money from politics and government. (No fiat money reformer really wants to divorce the creation of money from the government. They need the government to create their money and force it on the people. Thus, they do not really want to divorce money creation from politics in spite of any protestation to the contrary.) It places the creation of money directly in the hands of the people. Banks are desirable but are unnecessary. As this system uses gold or silver or preferably both, ipso facto, fiat monetary reformers must reject it. Above all else, gold must not enter the monetary system.

Like all fiat money reformers, Mr. Carmack emphatically trusts politicians and bureaucrats to manage the country’s money. He does not trust the people to manage the country’s money directly. Most likely, he cannot conceive of them doing so or how they could do it. (Fiat money reformers seem to trust the people always to elect saintly omniscient statesmen to office, who in turn will hire only saintly omniscient bureaucrats to manage the country’s monetary system. Yet they cannot trust the people to manage the country’s monetary system directly, which they can do without the necessity of omniscience or saintliness.)

Except during the greenback era, the people managed the country’s money directly and without the government, except as a minter of coins. Between 1789 and 1933, when the government did intervene in the management of money, it did so to the detriment of the people’s management. Its primary intervention during this era was to protect bankers. When enough bankers failed to keep their promise to redeem their notes in specie on demand, the government intervened to relieve them of this obligation. It should have sent them to jail for fraudulently violating their promises.

Like all fiat money adherents, Mr. Carmack seems convinced that not enough gold exists to function as money today. As I show in “There Is Enough Gold” and with additional amplification in “Response to Dale’s Analysis of ‘There Is Enough Gold’” that enough gold exists to accommodate world trade several times over.

Mr. Carmack suffers from an ignorance common to all fiat money adherents. Like them, he misunderstands the nature of money. Murray Rothbard describes this ignorance as follows (I have substituted “fiat money adherents” for Prof. Fisher in Prof. Rothbard’s description along with the connecting verbs):

[Fiat money adherents show] a total misunderstanding of the nature of money, and of the names of various currency units. In reality, as most nineteenth century economists knew full well, these names (dollar, pound, franc, etc.) were not somehow realities in themselves, but were simply names for units of weight of gold or silver. It was these commodities, arising in the free market, that were the genuine moneys; the names, and the paper money and bank money, were simply claims for payment in gold or silver. But [fait money adherents refuse] to recognize the true nature of money, or the proper function of the gold standard, or the name of a currency as a unit of weight in gold. Instead, [they hold] these names of paper money substitutes issued by the various governments to be absolute, to be money. The function of this “money” was to “measure” values.[1]

Prof. Rothbard continues:

Under a fiat system, the currency name — dollar, frank, mark, etc. — becomes the ultimate monetary standard, and absolute control over the supply and use of these units is necessarily vested in the central government. In short, fiat currency is inherently the money of absolute statism. Money is the central commodity, the nerve center, as it were, of the modern market economy, and any system that vests the absolute control of that commodity in the hands of the State is hopelessly incompatible with a free-market economy or, ultimately, with individual liberty itself.

Mr. Carmack appears to be blending Milton Friedman’s and Gertrude Coogan’s proposed monetary reforms. Unlike many fiat money reformers, he attempts to restrict the government’s power to issue money. As shown above, the government will quickly overcome these restrictions. He recognizes the dangers of allowing the government to have absolute power. Still, he wants to give it absolute power over the country’s money, which it can use to control nearly everything else in the country. Like all fiat money reformers, he trusts politicians and bureaucrats with the management of the country’s money, but he fears the people managing it directly. He trusts paper and promises and distrusts that which is no one’s obligation or promise, i.e., gold and silver. Along with all other fiat money reformer, he can tolerate almost anything monetarily except having gold as money.

Endnotes
1. Murray N. Rothbard, “Milton Friedman Unraveled,” 2003 (from the Journal of Libertarian Studies, Volume 16, no. 4 (Fall 2002), pp. 37–54), http://www.lewrockwell.com/rothbard/ rothbard43.html, October 25, 2010.

2. Ibid.

Copyright © 2010 by Thomas Coley Allen.

Part 1 

More articles on money.

Analysis of the Monetary Reform Act — Part I

Analysis of the Monetary Reform Act — Part I
Thomas Allen

This is the first part of a paper analyzing the “Monetary Reform Act” as it appeared on November 3, 2010. This Act and a description of it can be found at http://www.themoneymasters.com/monetary-reform-act/

Footnote 1 identifies Patrick Carmack as the principal author of the proposed Act. For my analysis, the authorship is irrelevant. I am analyzing the Act and not its author. For convenience, I refer to the proposed Act as Mr. Carmack’s proposal and use his name.

I have italicized the words of the Act and its footnotes and my paraphrases and summaries of their words. My commentary is in Roman letters.

The Act presents a two-step plan for national reform and recovery:

Step 1: Directs the Treasury Department to issue U.S. Notes (like Lincoln’s Greenbacks; can also be in electronic deposit format) to pay off the National debt.

Step 2: Increases the reserve ratio private banks are required to maintain from 10% to 100%, thereby terminating their ability to create money, while simultaneously absorbing the funds created to retire the national debt.

Mr. Carmack states that “These two relatively simple steps, which Congress has the power to enact, would extinguish the national debt, without inflation or deflation, and end the unjust practice of private banks creating money as loans (i.e., fractional reserve banking). Paying off the national debt would wipe out the $400+ billion annual interest payments and thereby balance the budget.”

His proposed Act “would stabilize the economy and end the boom-bust economic cycles caused by fractional reserve banking.” As shown below, the proposed Act fails to achieve most of these objectives, and in some instances makes matters worse.

The preamble of the Act reads:

To restore confidence in and governmental control over money and credit, to stabilize the money supply and price level, to establish full reserve banking, to prohibit fractional reserve banking, to retire the national debt, to repeal conflicting Acts, to withdraw from international banks, to restore political accountability for monetary policy, and to remove the causes of economic depressions, without additional taxation, inflation or deflation, and for other purposes.

As shown below, the Act does not stabilize the price level, retire the national debt, or remove the causes of economic depression. It is merely another fiat monetary attempt to get something for nothing.

Section 3, Definitions, defines U.S. notes. “United States Notes as used herein shall mean Treasury issue United States currency notes (as defined in 31 U.S.C. Sec. 5115) not bearing any interest, being lawful money and legal tender for all debts, public and private, and which term as used herein shall include Treasury Department Deposits (a.k.a. Treasury Deposits or Treasury book entries) convertible to United States Notes, which may be substituted therefor at the discretion of the Secretary of the Treasury.”

Mr. Carmack intends to flood the country with noninterest-bearing debt. Moreover, this debt is nonpayable. According to Webster’s New Collegiate Dictionary (1977), a “note” is “3c (1): a written promise to pay a debt (2): a piece of paper money.” Thus, Mr. Carmack’s money, U.S. notes, is a debt circulating as money. As a note is a debt, it implies that something is due to the holder. However, Mr. Carmack’s notes are redeemable in nothing. The holder cannot redeem them in anything. All he can do is pass this debt to another person in exchange for some good or service. Consequently, his notes are noninterest-bearing and nonpayable debt.

The Act’s definition of U.S. notes declares them to be legal tender for all debts. By declaring them legal tender, Mr. Carmack is convinced, and rightly so, that people will not accept his U.S. notes as payment unless the government forces them to. Unlike gold and silver, which can stand on their own merits, the military might of the government is necessary to force these U.S. notes on the people.

Based on the footnotes to the Act, Mr. Carmack, unlike most fiat monetary reformers, seems to have some confidence in a market economy — except for money. He does not trust the markets, i.e., the people themselves, to provide high-quality money in an adequate quantity. He is convinced, and correctly so, that his irredeemable fiat paper money cannot compete against real money like gold and silver. If he really believes that government fiat paper money is the superior form of money, he would not need to declare it legal tender. If he believes in monetary freedom, he would let the markets choose what they want for money. He knows that if given a choice, the free market would most likely choose gold and probably silver. It would not choose government fiat paper money. Thus, legal tender laws are needed. Gold must never be allowed to become money.

Moreover, the U.S. Constitution does not authorize the U.S. government to issue any kind of paper money or to declare any kind of money legal tender. (See my book Reconstruction of America’s Monetary and Banking System, pages 72-82, for a discussion on this prohibition.) By implication, legal tender laws reside with the States. It prohibits the States from “making anything but gold and silver coin a tender in payment of debts” (Article I, Section 10). Thus, an honest court would declare Section 3 of this Act, along with most of the rest of it, unconstitutional.

Section 4, One Hundred Percent (100%) Reserve Requirement, requires 100 percent reserves. It sets forth a procedure to achieve this requirement. This is one of the few redeeming features of this Act. Its language does not clearly distinguish between checkable deposits (checking accounts) and savings deposits (savings accounts). Banks receive savings deposits to lend. Unlike money in savings accounts, money in a checking account is immediately available to the account holder to use. If a bank lends money from checking accounts, it is borrowing short and lending long — a recipe for disaster. If it uses money in checking accounts for the basis of loans, it is giving multiple parties access to the same money simultaneously — a recipe for disaster. Because fractional reserve banking gives multiple parties access to the same money simultaneously, it is a form of fraud. It should be prohibited.

Section 5, Retiring the National Debt, sets forth procedures for retiring the national debt. The Secretary of the Treasury is to buy all outstanding federal debt held by the public using U.S. notes. In essence, Mr. Carmack proposes to replace interest-bearing debt that is eventually discharged with noninterest-bearing debt that is never discharged.

Under the current monetary system and Mr. Carmack’s proposed replacement, debt can never be extinguished. When a debt instrument is paid off with another debt instrument, that debt is discharged by transferring the debt to another. Until a debt is paid off with a commodity like gold or silver that is no one else’s obligation, it can never be extinguished short of bankruptcy.

In Footnote 3, Mr. Carmack does recognize that without ending fractional reserve banking using U.S. notes to buy federal debt would be hyperinflationary — thus, the need to end fractional reserve banking. He is correct in this assessment. However, contrary to his assertion, his Act would be highly inflationary for two reasons: (1) the large and increasing quantity of money that it creates and (2) the poor and declining quality of that money.

Also, in Footnote 3, he refers to extinguishing the national debt. As discussed above, his scheme does not and cannot extinguish the national debt. It only changes the form of that debt.

Section 6, Stable Money Supply, requires the Secretary of the Treasury to buy with U.S. notes or Treasury Deposits U.S. government debt securities held by the public at the rate of the reserve requirement ratio under Section 4. Section 6 asserts that by buying at this rate, the money supply will be kept constantly stable. It allows the Secretary to buy other U.S. government agency securities with U.S. notes if necessary to provide funds to increase bank reserves to 100 percent.

This Section is primarily a transitional section from the current system to 100- percent reserves. Mr. Carmack is assuming that most of the U.S. notes used to buy U.S. government securities from the public outside of banks will be deposited in banks instead of being spent. If most of this money is not deposited in banks or used to pay loans, some banks may be unable to meet the 100-percent reserve requirement. Even if all of it were deposited in banks, it would not necessarily be deposited proportionally. Thus, some banks still would not meet the reserve requirement and would have to call in loans. This transitional period could cause a recession.

Section 7, Future Monetary Growth, requires the Treasury Department to increase the quantity of U.S. notes (outstanding currency plus Treasury deposits) outstanding by 3 percent per year. It accomplishes this goal by paying U.S. notes into the economy “first to retire (or purchase) any future war bonds (issued pursuant to section 8. hereof), then any remaining marketable and non-marketable federal debt (e.g., Federal government agency securities, intra-governmental debt, and fully guaranteed obligations of the government), then, pursuant to appropriation by Congress, to pay for goods, services, or interest.” Any new money that Congress does not appropriate is rebated to individuals via the income tax system. This Section also prohibits the sale of U.S. government debt securities except during war.

Mr. Carmack exhibits a childlike trust in the politicians who control Congress. That Congress would fail to appropriate the full 3 percent is highly unlikely. That it would appropriate more than the 3-percent allotted growth is highly likely. With all this apparent free money without the resistance of raising taxes, how could they restrain themselves? By statute, Congress can change the 3 percent to a much higher percentage. It probably would not even have to raise the limit formally. If it appropriates more than the 3-percent limit, the Department of the Treasury has to create additional U.S. notes to pay for the excess. It cannot borrow. That a court would object to exceeding the 3-percent limit is highly unlikely. (Although some federal judges have undertaken the task of writing budgets and appropriating funds for local governments, I am unaware of any judge assuming this authority to write the budget for the entire U.S. government. It would have to do this if it wanted to hold appropriations to 3 percent. If it sent the budget back to Congress, Congress could retaliate by abolishing all federal courts below the Supreme Court — a good first step to reducing expenditures to the 3-percent level.)

He attempts to cover this loophole under Section 10. As discussed below, Section 10 is ineffective at achieving this goal and offers only a weak resistance.

According to Footnote 5, the 3 percent comes from Milton Friedman’s recommendation that money supply should grow at a steady rate year after year. Prof. Friedman recommended a growth rate between 3 and 5 percent. Mr. Carmack’s approach should be more capable of achieving a steady growth rate than Prof. Friedman’s approach. Mr. Carmack’s approach monopolizes money issuance and places it under the control of one, the U.S. government. Prof. Friedman proposed attaching his scheme to the current system with the Federal Reserve administering it with fractional reserve banking. Thus, under Prof. Friedman’s scheme, money creation is dispersed. Unlike Mr. Carmack’s scheme, Prof. Friedman’s scheme continues to allow fractional reserve banking.

Mr. Carmack supports Prof. Friedman’s proposed constitutional amendment to limit the growth of money. This amendment is in Footnote 14. Prof. Friedman’s amendment does two things. First, it authorizes Congress to issue “non-interest-bearing obligations of the government in the form of currency or book entries.” Second, “the total dollar amount outstanding increases by no more than 5 percent per year and no less than 3 percent.” At least the amendment gives constitutional support to Mr. Carmack’s proposal of the Department of the Treasury issuing U.S. notes. However, his requirement for banks to maintain 100-percent reserves is questionable. A strict constitutionalist would insist that the regulation of reserve requirements for banks lies with the States.

Footnote 14 gives Mr. Friedman’s introduction to his proposed amendment. He correctly notes that the Constitution does not authorize Congress to issue paper money. “[T]he power given to Congress ‘to coin money, regulate the value thereof, and of foreign coin’ referred to a commodity money: specifying that the dollar shall mean a definite weight in grams of silver or gold.”

In defense of his selection of 3 percent, Mr. Carmack writes in Footnote 5:

With population growth and productivity increases averaging approximately one percent (1%) each per year for the last thirty years, a three percent (3%) growth figure will insure stable prices within a vary narrow range and would allow for price-level or cost-of-living adjustments (COLAs) in contracts with a predictable effect to address any slight variation in economic activity from the three percent (3%) monetary growth rate. Further, as perfect fine-turning of monetary growth in a complex economy is not possible, to err on the side of a very slight inflation would at least relieve those burdened by debt of some of the effects of the prior inequity caused by private money creation, whereas to err on the side of deflation would exacerbate such inequity.

He believes that “a fixed rate of growth will provide the needed stability so long lacking [in] monetary policy.”

Mr. Carmack admits that his proposal is inflationary. He is correct. His proposal has no direct relationship with the demand for money or the economy’s need for money. Basing the growth of the money supply on 30-year average population growth and productivity increases is ridiculous. These numbers, especially population growth, relate only indirectly to the need for monetary growth. In some years more money is needed. In some years less money is needed. Then to avoid the possibility of deflation, he triples these growth rates to derive his monetary growth rate. He prefers money whose purchasing power (quality) is in a perpetual state of decline to money whose purchasing power is generally stable or increases. If he did not intend to destroy the currency, he would not need to discuss allowing price-level and cost-of-living adjustments.

He is right about the lack of stability with the current monetary policy. Unfortunately, his proposal will not bring the stability that he claims to desire.

Inflation is the primary cause of instability under the current system. It will cause instability under his proposal. Inflation distorts the economy. It leads to malinvestments. It causes excessive speculation. Savings, and, therefore, investments, decline because it penalizes savers. All these distortions cannot continue indefinitely. Eventually, they cause an economic contraction that leads to panic, recession, or depression.

Apparently, Mr. Carmack, following Prof. Friedman’s lead, is trying to achieve the stability achieved under the gold and silver standards without their discipline to keep governments and bankers in line.

Furthermore, Mr. Carmack’s proposed Act appears to contain a flaw in common with the 100-percent gold standard. It does not automatically adjust the money supply to match the high seasonal demand for money that occurs in December and in rural areas at harvest time. Thus, the system must carry an unused excess of money for most of the year to cover these peak demand periods.

Unlike many fiat money reformers, Mr. Carmack is not proposing, at least in this Act, to eliminate the income tax. Without the income tax system, he would need another mechanism to rebate deficiencies in appropriations to individuals. He is not proposing to replace the income tax with printing press money as some fiat money reformers do.

Section 8, War Exception, allows Congress to exceed the 3-percent limit if Congress formally declares war. It also allows the U.S. government to borrow when Congress formally declares war. The authorization to exceed the 3-percent limit and to borrow ends each year unless Congress extends them for another year. In any event, they end when the war ends.

Anyone who believes that this Section provides any restraint on Congress or the President should not be taken seriously. If this law had been in effect since 1950, only the childishly naive would believe that it would have provided any restraint on Presidents Truman, Kennedy, Johnson, Nixon, Regan, Bush the Elder, Clinton, Bush the Younger, or Obama in their undeclared wars.

If Congress authorized exceeding the 3-percent limit or borrowing to fund these undeclared wars, such law itself would be interpreted as nullifying Section 8. Section 8 is merely a hollow feel-good provision. It restrains Congress no more than Section 7 or 10.

Section 9, Full Reserve Banks, restricts the lending and investing activities of any institution calling itself a “bank.” A bank cannot lend any more than its owners’ capital. All money deposited in a bank is held in trust by the bank for the depositor. For every dollar deposited, the bank must have a dollar in U.S. notes in its vaults or invested in a Treasury Department Deposit account. All deposits in banks are in demand (checking) accounts. “Only bank deposits may be transferable by check, credit card, electronic transfer or any substitute therefor.” Banks may charge fees for their services and may pay interest on deposits.

As banks cannot lend deposits or otherwise use them to generate revenue except to deposit them in Treasury Department Deposit accounts, it is highly unlikely that they would pay interest on deposits. On the contrary, they will charge fees: fees to hold the money, and fees to transfer the money.

In Footnote 6, Mr. Carmack remarks, “Absent massive fraud or theft, full reserve banks cannot fail, rendering insurance such as F.D.I.C. and F.S.L.I.C. unnecessary.” At least his proposal gets rid of these two agencies.

He is correct in that 100-percent reserves for checking accounts go a long way toward eliminating bank failure. The other component is prohibiting the lending of money in savings accounts for periods longer than the depositor has surrendered control of his money. That is, if a saver deposits his money in an account from which he cannot withdraw the money for 30 days, the lending institution, as Mr. Carmack calls it, could lend that money for no more than 30 days. Thus, prohibiting borrowing short and lending long also goes a long way toward eliminating bank failure. The Act covers this prohibition under Section 12.

Bank failure can be virtually eliminated if banks meet these two criteria. First, banks cannot lend or use as the basis for loans money in checking accounts — 100-percent-reserve banking. Second, banks cannot lend savings deposits for periods longer than it has full control of the savings — ending borrowing short and lending long.

Copyright © 2010 by Thomas Coley Allen.

Part 2 

More articles on money.

Gaining Control

Gaining Control
Thomas Allen

[Editor’s note: Footnotes in original are omitted.]

The replacement of Christian doctrines with Lucifer’s illuministic doctrine greatly intensified after World War II. Illuminists place great emphasis on infiltrating and gaining control of the Protestant denominations and the Catholic Church. Among those working within the Catholic Church to sabotage its traditional beliefs and replace them with Illuminism was Father Pierre Teilhard de Chardin, Father Baum (a Jew who “converted” to Catholicism), and many other Catholic priest who believed and preferred the teachings of Marx and Freud to those Jesus and the Bible. Taking the lead in promoting Liberation Theology and Marxism have been the Jesuits.

Another important illuministic leader in the religious realm has been Carl Jung, a Swiss psychiatrist and founder of analytical psychology. Liberal Protestant churches have adopted many of his teachings as they seek to replace the Christ-centered teachings of the Bible with humanistic ego-centered psychology and philosophy. His doctrines are also highly influential among New Age religions. The teachings of Jung, Teilhard de Chardin, and other occult scholars give the New Age religions an air of being scientific, and, thus, they draw the highly educated into the occult.

Two Americans who were important in destroying Christianity in the United States were Water Rauschenbusch and Harry F. Ward. They were socialists and Marxists. They sought to use religion to establish socialism. They preached a “social gospel” and promised a “kingdom of God on Earth” through socialism. Rauschenbusch provided the theology of the collective social gospel, and Ward organized the movement for the social gospel to replace true Christianity.

Freemasons are encouraged to be active in Christian churches so that they can gain control of them. Then they can turn the churches from the teachings of Jesus to the teachings of Lucifer as express through Freemasonry. Thus, they can corrupt them with “modernism” and “liberalism.” Consequently, most churches and denomination have abandon opposition to miscegenation, homosexualism, divorce, abortion, and euthanasia. Illuminists have infiltrated and gained control of most mainline churches and divinity schools and seminaries. As a result, most mainline churches have abandoned teaching the Bible. They have substituted a form of secular humanism, materialism, and other non-biblical theology. They replace the spiritual truths established by facts and revealed in the Bible with spiritual “truths” based on personal experiences and feelings. They have strip Christ of his divine nature and present him, his apostles, and the early church as Communists or socialists. They have replaced the spiritual with the material. Salvation does not come from the grace of God; it comes from Illuminism. They are leaving their members spiritually starved. Many of the spiritually starved end up seeking spiritual satisfaction in some New Age religious movement.

The Christian churches that are not under the control of Illuminists are the main threat to the Illuminists in achieving their New World Order. These Bible-believing Christians must be neutralized. Many of these Christians are being seduced into sacrificing some of their beliefs in the name of world peace and unity. As a result, false doctrines and occult practices have entered their churches. The seduction includes false prophets and false miracles.

Illuminism has advanced its war against Christianity by capturing the United States Supreme Court. During the presidency of Franklin Roosevelt, Freemasonry gained a majority of the Supreme Court justices. This majority, it maintained into the Nixon presidency. Thus, between 1941 and 1971, Freemasonry controlled the Supreme Court.

The Supreme Court adopted the Masonic view of the law: “Law is largely in the interpretation and not in the text. . . .”[1] It followed Franklin Roosevelt instruction for an “enlightened” interpretation of the Constitution. Consequently, “the Constitution means what the Supreme Court says it means,” as Chief Justice Evan Hughes remarked.

Freemasonry used its control of the Supreme Court to remove all vestiges of Christianity from public schools and to convert public schools into temples of Freemasonry religions — secular humanism, occultism, Theosophy, Cabalism, Gnosticism (Freemasonry’s favorite religion), and all other forms of Pantheism promoted by Freemasonry — any religion but Christianity, which Freemasonry hates with as much passion as Lucifer hates Jesus.

It also forced integration of schools and most public and private associations. The primary objective of integration is to destroy the Aryan race by facilitating miscegenation.

Lucifer is using the New Age religious movement to bring about his New World Order. Although most occult initiates are probably ignorant of Lucifer’s control of their religion and his worship by their leaders, many New Age leaders are knowingly collaborating with Lucifer to bring about his New World Order. Probably most of New Agers are unaware that they are involved in the occult. They unknowingly come involved with the occult through their obsession with world peace, holistic health, the environment, yoga, or occult forms of mediation.

In the twentieth century, liberalism was the political program that the Illuminists used to control and destroy the free market, free enterprise economies of the world. The Illuminists have always considered the free market, free enterprise economy as its enemy. They have worked to replace the free market, free enterprise economies with some form of socialism. Their New World Order can only be achieved through a controlled economy.

When Franklin Roosevelt, who was a high degree Illuminist and a 32nd degree Freemason, became President, he believed that the goals of the Illuminists would be achieved during his lifetime. So confident was he in the success of the grand conspiracy that he ordered the insignia of the Masonic Illuminati to be printed on the back of the new American dollar bill. This action informed Illuminists that the Illuminists had absolute control of American finance and politics— control that has been retained to this day.

The Jesuits, the illuminist arm in the Catholic Church, bragged that the world would receive a sign when the ecumenical movement had overcome its worldwide opposition. When Ronald Reagan was sworn in as President of the United States, he gave the sign. The sign was that the President of the United States would face the Washington Monument, a symbolic occult obelisk, while being sworn into office.[2] Reagan was the first President to be sown in while facing the Washington Monument.

Further proof that the Illuminists have nearly completed establishing Lucifer’s New World Order is found in a map adopted in 1952 by the World Association of Parliamentarians for World Government showing the armed forces of one country policing other countries when world government is achieved. This map shows U.S. troops in Yugoslavia, Greece, and Albania, which Clinton achieved in the 1990s; in Australia, where they are, and in Kazak Soviet Socialist Republic (now Kazakhstan), which Clinton achieved in 1997. It showed Russian troops from Oklahoma southward and eastward; in 1995 Russian soldiers were at Fort Riley, Kansas. In 1997, troops from former Soviet block countries were at Fort Polk, Louisiana. Furthermore, Russian police were active in the South during the 1990s—even assisting in arresting Americans. German troops were also stationed in the United States. After the terrorist attack on September 11, 2001, larger numbers of U.S. troops have been moved to the Middle East, and troops from Europe have been stationed in the United States.

Illuminists have achieved great success in the United States and have gained almost complete control of the United States government. Proof of such control is the great difficulty in naming a single act of foreign policy in the last 50 years that truly benefitted the American people as a whole.

Illuminists who control the United States government use the Internal Revenue Service (IRS), Federal Bureau of Investigation (FBI), Bureau of Alcohol, Tobacco and Firearms (BATF), Central Intelligence Agency (CIA), Drug Enforcement Agency (DEA), Federal Emergency Management Agency (FEMA), and other agencies to terrorize the American people. These federal agencies are being used to terrorize Americans into capitulating to the New World Order. The FBI concentrates on fighting Americans who oppose the New World Order rather than fighting Communism, domestic terrorism, and real criminals. Like the IRS and other federal agencies, the FBI has become a terrorist agency. The primary purpose of the IRS is not to collect taxes. Its primary purpose is to terrorize and impoverish the American people by forcibly extorting money from them. Part of the CIA’s job was to make the Soviet Union appear much more powerful than it really was. If anyone claimed that the CIA’s estimates were high, the CIA would bully him into silence. The United States needed a powerful enemy to help the United States government’s control of the American people, which may explain the build up of China after the fall of the Soviet Union.

Illuminists have opened the borders of the United States to Third World immigrants. Some of these millions of immigrants pouring into the United States are trained terrorists, who operate under the orders of the Illuminists. Many are hardened criminals. These immigrants are intended to neutralize opposition to Illuminism. Criminals subdue the population as the people divert their resources to defend themselves from professional criminals. Thus, they are distracted from defending themselves from the biggest criminals of all—Lucifer’s Illuminists. Furthermore, the mass of immigrants who are neither terrorists nor criminals dilute the country with people who have no ties with America’s history or traditions of personal freedom and limited government.

As Illuminism has risen so has persecution of Christians and the degradation of Christianity. Blasphemy passes for art. Hollywood produces ever more movies that belittle and attack Christians and Christianity. Soldiers sent to the Middle East to defend the interest of the United States, i.e., the interest of the Illuminists, are denied Bibles. The police attack Christian protesters, especially pro-life advocates, much more brutally than other classes of protesters. Zoning laws are used to harass Christians and their churches. Christians are habitually denied their inalienable rights. Anti-Christian bigotry is pervasive in the illuministic mainstream media. The Illuminists have achieved their goal of converting the United States from a Christian country to a secular one.

Only about 500 high-degree Illuminists, some of whom direct the large tax-free foundations, are in the United States. Below them are about 10,000 lesser Illuminists, who are primarily politicians, businessmen, media leaders, academicians, and religious leaders.

One reason little fundamental change occurs when the administration in Washington changes from a liberal Democrat to a “conservative” Republican is that Illuminists control both parties. A Democratic president surrounds himself with the Democratic members of the Council on Foreign Relations. A Republican president surrounds himself with Republican members. Furthermore, the conservative think tanks, such as the Hoover Institution, Heritage Foundation, and American Enterprise Institute, are financed by the same people who finance the liberal think tanks. The Rockefeller, Ford, and Brookings foundations finance both the conservative and liberal think tanks.

To achieve and direct the wars and revolutions, Illuminists have to place their agents, stooges, sympathizers, fellow-travelers, and dupes in key positions in government, news media, business, religion, and academia.

When the Illuminists believe that their power base has become strong enough to begin the extermination in the United States of any possible resistance to their Nimrodic dream of world domination, Plan Naamah will be implemented.[3] America will then suffer a reign of terror that the French, Russian, and Spanish suffered during their revolutions. Tens of millions of Americans will die.

The twentieth century was the century of world wars, revolutions, and Communism and fascism. Today Illuminists work to establish globalism. (Anyone who proudly labels himself as a globalist is either an Illuminist or an agent, stooge, sympathizer, fellow-traveler, or dupe of the Illuminists.) Communist China and North Korea are the models of their New World Order.

With the collapse of Soviet Communism, the Cold War ended. As a result countries are being merged into regional groupings, such as the European Union and the North American free trade area, which is being expanded to cover the entire Western Hemisphere. Eventually these regions will be synthesized into a one world state ruled by the Illuminists.

To achieve their Luciferian goals, Illuminists have organized, financed, directed, and controlled Communism, National Socialism (Nazism), Zionism, and other similar movements. Through these movements, Illuminists have fomented wars, world wars, and revolutions while the Illuminists retreat to safety zones. Wars and financial, environmental, and other global catastrophes that Illuminists can cause or exasperate are to continue until mankind becomes physically, psychologically, and economically exhausted and beg, or at least accept, the New World Order with its Satanic one world government and its Luciferian New Age religion as their only hope. The Illuminists will then come forward and offer, or usurp, themselves as the enlightened despotic rulers.

By the end of the twentieth century, the Illuminists had largely achieved their goals of destroying Christianity, overturning governments hostile to their goals, and establishing a one world government with Illuminists as dictators. They had pounded the Aryan race so hard that Aryans were failing to reproduce themselves and were on their way to extinction.

Endnotes
1. James W. Wardner, Unholy Alliances: The Secret Plan and the Secret People Who Are Working to Destroy America (James W. Wardner, 1996), p. 71.

2. Eustace Mullins, The Curse of Canaan: A Demonology of History (Staunton, Virginia: Revelation Book, 1987), p. 230.

3. Ibid., p. 234.

References
Kah, Gary H. The Demonic Roots of Globalism.Lafayette, Louisiana: Huntington House Publishers, 1995.

Kah, Gary H. The New World Religion. Noblesville, Indiana: Hope International Publishing, Inc., 1998.

Mullins, Eustace. The Curse of Canaan: A Demonology of History. Staunton, Virginia: Revelation Book, 1987.

Wardner, James W. Unholy Alliances: The Secret Plan and the Secret People Who Are Working to Destroy America. James W. Wardner, 1996.

Copyright © 2010 by Thomas Coley Allen.

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Education

Education
Thomas Allen

[Editor’s note: Footnotes in the original are omitted.]

Illuminists have used their money to gain control of education. They have used their control to further their interest and to foster Illuminism. They are well aware of Lenin’s dictum: “Give us the child for eight years, and it will be a Bolshevik forever.”[1]

Through large endowments, J.P. Morgan and other wealthy Illuminists gained control of policies of the Ivy League universities. Morgan and his associates dominated policy making at Harvard, Columbia, and, to a lesser extend, Yale. The Whitneys were significantly influential at Yale. Edward D. Duffield of Prudential Insurance Co. dominated Princeton. These wealthy men often decided who would be president of these universities. The Illuminists, primarily with Rockefeller money, have also gained control of most of the schools that train teachers. With their money, they also control the major seminaries—thus, they control the training of most ministers.

Carnegie and Rockefeller money has been used to gain control of American schools, both at the university level and at the secondary and primary grade level. Carnegie and Rockefeller money has funded curricula and textbooks whose purpose has been to indoctrinate students in Illuminism and to train them to support Illuminism.

Textbooks have been revised and rewritten to present the subject matter from a Marxist or other illuministic perspective. They promote globalism; “good” has become equated with globalism. Such revisions frequently require the omission of valuable and important facts. They often misstate facts and even outright lie. Even dictionaries have been rewritten to define certain words in ways to incorporate illuministic bias.

The Rockefeller Foundation and Carnegie Corp. financed John Dewey’s socialist philosophy. Dewey was the father of “progressive education,” which became the dominant educational philosophy in the United States. As an atheist and coauthor of the Humanist Manifesto, he preached against immutable truths and permanent moral absolutes. Pragmatism and relativism were his guiding philosophy. He believed that man had no soul or freewill. Man was merely an animal molded by his environment. As man’s environment constantly changed, so man constantly changed. Therefore, to teach absolute morals and truths was a waste of time.

He sought to turn the school house into a temple of the religion of secular humanism. To Dewey, individual judgment was socialism’s greatest enemy, so he worked to replace proven educational programs with programs designed to make a more controllable society. The primary goal of education was to destroy a child’s individualistic traits. The ability of a pupil to become one with the group became the primary measure of a pupil’s educational progress. Students were to be trained to live and work collectively. Thus, pupils were discouraged from trying to advance faster than the lowest member of the group. As grading promoted competition, it was to be abandoned. Promotion was to be automatic.

The purpose of schools was not to develop the student’s talents. It was to prepare the student to integrate into an organic society, the global community. Thus, the student’s “cosmic soul” was to become one with the human race.

Dewey taught David and Nelson Rockefeller. He also organized the educational system of the Soviet Union.

With money from the Rockefeller Foundation and Carnegie Corp., Illuminists have financed and controlled the National Education Association (NEA). “By 1934 the NEA adopted John Dewey’s philosophy of humanism, socialism, and globalism, and incorporated it into the classroom.”[2]

To consolidate complete control over public education in the United States, Nelson Rockefeller created and ran the Department of Health, Education, and Welfare during the Eisenhower administration. (The educational functions of this department were later moved into a new department, the Department of Education during the Carter administration.) Thus, Eisenhower accomplished what Truman had failed to do. (Truman had tried several times to get Congress to create the Department of Health, Education, Welfare, but Republicans and conservative Democrats prevented its creations. Eisenhower got most of the Republicans to join the liberal Democrats in establishing this department.) Through federal grants, the United States government, which the Illuminists thoroughly control, has gained complete control of the public schools.

UNESCO (United Nations Educational, Scientific and Cultural Organization) is another important tool of the Illuminists in directing education (schooling) not only in the United States, but throughout the world for the benefit of the Illuminists. The objective of UNESCO is to train children to be citizens of the world. To achieve this goal, their love of their country, institution, and own people along with patriotism must be destroyed. Thus, children are to be conditioned to transfer their loyalty from their country to a one-world socialistic government under the United Nations, which the Illuminists will control. UNESCO has also promoted keeping children separated from parents as much as possible. The minds of children must be purged of any national or family loyalties (and if their parents are Christians or even nominal Christians, of any Christian thoughts) before they can be molded into non-thinking citizens of the world. (Christianity, nationalism, and family loyalty are antagonists of globalism and Illuminism.) Accordingly, governments establish preschool programs like kindergarten and Head Start. Governments promote working mothers and warehousing children in daycare centers. As part of its program to destroy nationalism, UNESCO also promotes teaching children enmity toward their domestic institution unless these institutions are already compatible with Illuminism. (Thus, to make the merger of the United States into this one-world government easier, their Constitution and relatively free market economy must be destroyed. The destruction of these institutions has been a major goal of government schools.) History is to be taught from a global perspective instead of a national perspective. Consequently, UNESCO also promotes keeping children ignorant of national history and domestic institutions of their own countries and other countries and of the horrors of Communism and failures of socialism— ignorant people are easier to control. The achievements and greatness of Christianity, Western Civilization, and the Aryan race are to be disparaged if not denounced. UNESCO promotes turning schools into doctrinarian centers for Illuminism (globalism, socialism, New Age religion, one-world government). To destroy further traditional morality, loyalties, and family, UNESCO promotes abortion, homosexuality, prostitution, and miscegenation. The essence of UNESCO’s program is Dewey’s progressive educational theory.

Public (government) schools have become temples of the New Age religions where children are proselytized. Children are taught secular humanism, worship of Gaia, witchcraft, Theosophy, and other New Age pantheistic religions. The purpose of public schools is to proselytize for New Age religions, the “religion of humanity that recognizes and respects the spark of what theologians call divinity in every human being.”[3] Belief in the God of the Christians is mental illness. Public schools are to replace “the rotting corpse of Christianity together with all its adjacent evils and misery”[4] with the new faith, which is really the old Luciferian religion of man as god. They are to take children away from their parents and heal them by purging their psyches of all taints of Christianity. (Consequently, public schooling is moving to an ever younger age with the objective of having every child two years of age and older under the control of government, which the Illuminists control.) School children are being prepared for the religion of the New World Order.

Illuminists have gained control of public schools and have turned them into agents for social change—thus, fulfilling the longtime goal of Freemasonry of capturing public education and using it to promote the anti-Christ religion and socialistic politics of Freemasonry. (All that now remains to bring education completely under the control of the Illuminists is eliminating Christian and Catholic schools and outlawing home schooling.) They are using their control to prepare students for the illuministic New World Order. School children are being prepared for a world of moral relativism without Christianity. They are being taught to accept supranational regional governance and then a world government. They are being taught to hate the Aryan race and to glorify all other races. They are being taught that homosexual sex and miscegenation are not only normal, but are superior sexual relations. With easy access to abortion, they are being taught to devalue life. Euthanasia is also promoted. A school curriculum promoting pantheistic religion and world government has replaced traditional Western curricula, which promoted Christianity, nationalism, and ethics. A primary function of public schools is to turn children into good “global citizens.” Teachers are to concentrate on the social orientation of students instead of educating them. Children should be unable to read and especially unable to think or analyze. GOALS 2000 and the “no child left behind” program are part of the New World Order’s educational program.

The Illuminists have implemented the educational program that Woodrow Wilson outlined in 1909. Wilson described the illuministic educational program as follows:

. . . We want to do two things in modern society. We want one class of persons to have a liberal education, and we want another class of persons, a very much larger class, of necessity, in every society, to forego the privileges of a liberal education and fit themselves to perform specific difficult manual tasks. You cannot train them for both in the time the you have at your disposal. They must make a selection, and you must make a selection.[5]

True to its fascist principles, the illuministic state strips parents of authority over their children, yet it holds parents responsible for their children. Illuminist controlled government usurps parental authority, yet it holds parents accountable.

Secular humanism has replaced Christianity as the state religion. It is the religion upon which state institutions and laws are built. Man is worshiped instead of God.

Endnotes
1. Billy James Hargis, Communist America Must It Be? (Tulsa, Oklahoma: Christian Crusade, 1960), p. 66.

2. Gary H. Kah, En Route to Global Occupation (Lafayette, Louisiana: Huntington House Publishers, 1992), p. 61.

3. James W. Wardner, Unholy Alliances: The Secret Plan and the Secret People Who Are Working to Destroy America (James W. Wardner, 1996), p. 221.

4. Ibid., p. 221.

5. Dennis L. Cuddy, The Globalists: The Power Elite Exposed (Oklahoma City, Oklahoma: Hearthstone Publishing, 2001), p. 28.

[Editor’s note: References in original are omitted.]

Copyright © 2010 by Thomas Coley Allen.

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New Age Religions

New Age Religions
Thomas Allen

[Editor’s note: Footnotes in the original are omitted.]

Another important movement underlying the advancement of Illuminism has been the New Age religious movement that became so apparent during the last part of the twentieth century.

New Age religions are pantheistic and occult. Most of the New Age religions are built upon Hinduism, Buddhism, especially Tibetan Buddhism, and Theosophy. They include witchcraft (manipulating the forces of nature) and Satanism (the direct worship of Lucifer). New Age religions range from humanistic worship of “God within” to the pagan worship of Gaia (mother Earth, the Greek goddess of Earth). They allow the individual to pick his own religious truths and his own set of morals and ethics—thus, they discard absolute moral standards and eternal principles and adopt relativism. Instead of worshiping the Creator, the God of the Christians, New Age practitioners worship the creation. The New Age religions base their spiritual truths on personal experience and not on the established facts and truths of the Bible. (These New Age truths are revealed by one’s inter being, or his “psyche.”) The goal of the New Age religious movement is to replace Christianity and limited government with occult socialism, Luciferianism.

Common practices of various New Age sects are trances (altered states of consciousness), astral projections or space travel (out-of-body travel), past life regression (visiting past lives through hypnosis), divination (seeing future events), and spirit guides (direct interaction with spirit beings). Connected with spirit guides, who are, contrary to the belief of most New Age practitioners, demons, is automatic writing. (Messages received through automatic writing are always opposed to orthodox Christianity.) Common features of most occult religions are evolution, reincarnation, astrology, and meditation. New Age religion often involves the use of mind-altering drugs to achieve an altered state. Thus, the drug culture and occultism are companions.

Some popular new age religions are Hare Krishna, Zen Buddhism, Sufism as expressed by the Meher Baba, Transcendental Meditation, and the Divine Light Mission. Hare Krishna and the Divine Light Mission came out to Hinduism. Hare Krishna comes closer to Christianity than any other Hindu sect. Zen Buddhism came out of Buddhism. (In the United States, drugs like LSD have become an important component of Zen Buddhism.)

The Satanic practices listed in Deuteronomy 18:10-11 are popular among various New Age sects. They are making children pass through fire (offering children as human sacrifices to a god, today appearing as abortion), divination (fortune telling, soothsaying), enchantment (interpreting omens), witchcraft (practicing astrology and the like), sorcery (using occult formulas and incantations), charming (casting spells), spiritualism (consulting with spirits), wizardry (acquiring superhuman knowledge from demons), and necromancy (calling up the dead).

Included among the New Age ideas are sex, pornography, the homosexual and feminist movements, environmentalism, abortion and euthanasia, psycho-therapies, worship of Mother Earth, and, especially, embracing any god but the God of the Christians. New Age religions teach that the rights of individuals must give way to the rights of humanity (naturally, the Illuminists will define what the rights of humanity are). Like National Socialists and Hindus, New Agers often place the lives of animals above the lives of people. New Age religions are replacing secular humanism in the temples of the public schools as people become aware of the demoralizing effects of secular humanism. (To destroy Christianity, the Illuminists promote secular humanism because it leads to vast numbers of spiritually starved people, many of whom in their hunger will turn to the occult and other New Age religions where they will worship Lucifer, the God of Illuminism.)

Corporations, hospitals, universities, public schools, and even federal agencies are promoting New Age practices, if not New Age religions themselves. Diversity training, value clarification, Zen, and Transcendental Meditation are among the most popularly promoted practices.

As New Age religions can absorb all religions except Christianity, Christianity must be destroyed. To destroy Christianity, the Illuminists have worked unceasingly to erode Christian values and to create apathy in the Church. They have labored to starve spiritually the masses by secularizing society. To feed the spiritual starved, the Illuminists offer Lucifer’s New Age religions.

Among Congressmen who were the leading promoters of the New Age revolution when they were in Congress were New Gingrich (Republican, member of CFR, 33rd degree Freemason), Mark Hatfield (Republican, Freemason, and supporter of global depopulation), Arlen Specter (Republican, Freemason, and ardent supporter of one world government), and Charlie Rose (Democrat).[1]

Included among the financial supports of the New Age movements are Blue Cross-Blue Shield, Lockheed Aircraft, and Rockefeller Foundation.[2]

Sun Moon and the Unification Church
The most dangerous New Age religions are those that give the appearance of being Christian but are really counterfeits. Sun Moon’s Unification Church typifies this type of church. Sun Moon’s Unification Church is perhaps the largest new age cult religious organization. Financing this church is the Korean CIA with money from the United States CIA. Moon is an ardent anti-Communist. Not only is Moon a leader in corrupting the Christian religion with false Christian doctrine, he is also a leader in destroying the Aryan people through miscegenation. Besides promoting miscegenation, Moon rejects the divine nature of Jesus—reducing him to being merely a man who perfectly understood God’s will—and Jesus’ return to Earth—Moon, who claims to be sinless, is the Lord of the Second Coming. Jesus failed in his mission because he did not marry and procreate holy offspring. Moon claims that Jesus accomplished only partial salvation; another (presumably, Moon) is needed to complete the work of Jesus and bring complete salvation. He makes himself, not Jesus, as the object of faith. He has been accused of teaching salvation through sexual intercourse with someone whom God has blessed. While traditional Christian ordinances of baptism and communion are avoided, seances, clairvoyance, and other occult practices are accepted. Moon also claims to receive revelations from God. To his brand of “Christianity,” he has incorporated Taoism, mysticism, and spiritualism. Like all Illuminists, Moon wants to establish a global government and a one world religion; both of which will be merged into one. Moon controls the Washington Times, which backs neo-conservatives.

[Editor's note: A short section on other cults in the original is omitted.]

Scientology
In 1950, Lafayette Ronald Hubbard, a science-fiction writer, unveiled his dianetics, the essence of Scientology. Scientology has become one of the most powerful and influential religious movements. Controlling the minds of others without their consent is the objective of many of the procedures of Scientology. It uses a combination of Catholic confession and psychotherapy. Its tenets include psychoanalysis and probing one’s prenatal influences, which are the cause of one’s present problems. Scientology teaches that man, who descended from gods, is basically good. However, he has a reactive mind of compulsions and inhibitions that can be, and need to be, contacted and erased. Good and evil are a matter of opinion: Morality is relative, not absolute. To Scientology, God is irrelevant; only Scientology is relevant. God is ignored. Man is deified and can perfect himself through perfect reasoning. With his perfect reasoning, man can solve all human problems. Reincarnation is also part of the Scientology doctrine. Teaching that enlightenment is attained through a series of stages, Scientology is, in essence, a form of Gnosticism. It contains eight grades of clearness; the eighth grade is reached when all a person’s engram from prenatal influences and previous existence have been cleared. Its eight dynamics are “(1) to survive as an individual; (2) to survive through sex and family; (3) to survive as a group (school, society, town, and nation); (4) to survive as mankind; (5) to preserve animal and plant life; (6) to preserve the physical universe, including matter, energy, space and time; (7) to preserve spiritual existence; and (8) to preserve immortal existence.”[3] Scientology is a mixture of “‘Hindu Veda and Dharma, Taoism, Old Testament wisdom, Buddhist principles of brotherly love and compassion, the early Greeks, Lucretius, Spinosa, Nietzsche, Schopenhauer, Spencer and Freud.’”[4] The works of Alfred Korzybski (author of General Semantics), Grinker (American psychiatrists), Speigel (American psychiatrists), William Sargant (English psychiatrists), Aleister Crowley (the twentieth century’s greatest practitioner of black magic) are also incorporated. Scientology is essentially a mixture of science fiction and magic. Although Hubbard disdained Christianity and called Christ a “hypnotic implant,” he, nevertheless, dressed Scientology in Christian garb and claimed it to be a nondenominational church. It offers no one a way to salvation.

Blavatsky and Theosophy
An important ancestor of the New Age religions is Theosophy. Theosophy is closely related to Freemasonry theologically.

Theosophy combines Eastern philosophical religious teachings with Western. Beginning with the essence of God, it arrives at the spiritual nature of the Universe. It claims knowledge of God’s person through direct knowledge, physical processes, and philosophical speculation. It uses speculative mysticism to explain how sin in this world can coexist with an omnipotent, holy God. Theosophists believe that God is impersonal and that man can perfect himself. “Man is god in the making.” Man faces no final judgment. “Hell” is a state of purgatory where souls of the dead stay until they are reincarnated. Thus, reincarnation is one of its tenets. Jesus becomes merely a pious religious leader who was martyred. Theosophy holds that God has revealed himself to the world long before Jesus arrived. The ancient myths and legends of the Egyptians, Greeks, Indians, and other people are variations of the same revelation. Likewise, the Christian Scriptures are merely a variation of this revelation. Theosophy is a form of Pantheism. Types of theosophists include Neoplatonists, Gnostics, and Cabalists.

Helena Petrovna Blavatsky is the mother of modern-day Theosophy and the modern-day New Age movement. Her Theosophy borrowed heavily from the Jewish Cabala, especially the anti-Christian aspects of the Cabala, for she fervently hated Christianity. She viewed Lucifer (Satan) “as the real creator and benefactor, the Father of Spiritual mankind.” Lucifer, not Jesus, is man’s savior. Satan, a heavenly spirit who deceives mankind, as orthodox Christianity conceives him, does not exist in Theosophy; instead Satan is glorified for his pride, independence, and rebelliousness. Secretly directing evolution of mankind is an elite group called “Great Masters,” “Adepts,” and “Great White Brotherhood.” Blavatsky typically referred to this group as “Ascended Masters of Wisdom.” They are highly evolved souls who, after many reincarnations, have left the earthly sphere for the spiritual realm. Building upon a base of Hinduism and Buddhism, Theosophy synthesized philosophy, religion, and science.

Blavatsky claimed that she had spent many years traveling through Tibet where she had been initiated into the Mysteries of the occult and through India. When some of her followers in India were arrested for homosexual acts, she left for the United States. Rene Guenon claims that she came to the United States from Paris and that she was probably never in Tibet. Her teachers were Paulos Metamon (a magician and conjuror), Mazzini (who initiated her into the Carbonari in 1856), and Victor Michel (a Freemason, mesmerist, and spiritualist). Serapis Bey and Tuiti Bey, who were Cabalists and members of the Egyptian Brothers, were probably her masters in Paris. She and Albert Pike were socially close. Blavatsky knowingly and willingly rejected God of the Christians, the father of Christ Jesus, and accepted Lucifer as her god.

Regardless who sent her, she arrived in the United States in 1872 and founded her Theosophical Society in 1875 with the aid of William Q. Judge and Henry S. Olcott. Olcott became the first president. Other members included Dr. Seth Pancoast, Thomas Edison, and, briefly, Albert Pike. Pancoast and George Felt were vice-presidents. Felt was a professor of mathematics and Egyptology and a member of the Hermetic Brotherhood of Luxor, which later expelled him.

Annie Besant, who had become a disciple of Blavatsky in 1889, gained control of the Theosophical Society following Blavatsky’s death in 1891, and in 1907 she became president. Besant was a member of the National Secular Society and a preacher of free thought. She advocated socialism and was a founder of the Fabian Society. She founded the English branch of the Theosophical Society and later the Indian branch. She was also vice-president and great teacher of the Supreme Council of the International Order of Co-Masonry.

Blavatsky was primarily interested in the occult sciences. She cared little about politics and schemes of material welfare. She claimed that socialism and Communism were both “disguised conspiracies of brutal force and selfishness against honest labor.”[5] Besant, however, was more political minded and organized the Society on a political basis to advocate socialism and world government.

Blavatsky thought that the teachings of Gautama Buddha were a perfection of Hinduism and wanted to rehabilitate Buddhism. Besant thought that the doctrines of the Brahmans were the purer faith. Yet Besant did not introduce Brahmanism or Buddhism into her lodges in Europe; she introduced her own occult system.

The objectives of the Theosophical Society are “The World Religion, The World University, and the World Government (by the Restoration of the Mysteries, i.e., by the recognition of their place as the World Government as they were recognized in ancient days, the place they have ever continued to occupy. . .).”[6] Theologically, the Theosophical Society is Gnostic and anti-Christian. Out of the teachings and philosophy of the Theosophical Society came the New Age movement of the twentieth century.

Arcane School and World Union
Freemasonry is behind the New Age movement in general and the Theosophical Society, which is basically a front for Freemasonry’s religious doctrines, in particular. Related to the Theosophical Society are the Lucis Trust, the Arcane Schools, the Triangles, and World Goodwill (which merged with the World Union in 1961). The Lucis Trust promotes the belief in the Hierarchy, also known as Ascended Masters, Masters of Wisdom, and the Elder Brothers. These Hierarchs are extremely wise men, who through successive reincarnations have become gods. Lucis Trust also promotes the United Nations, one world government with a socialist world economy. (It runs the only religious chapel at the United Nations’ headquarters—thus, affirming the Satanic nature of the United Nations.) Lucis Trust and its allied organizations serve as an intermediary between Freemasonry and allied secret societies and the public. Its goal is to condition the masses to accept the spiritual principles of Illuminism and its New World Order.

The Arcane Schools train people for high-level work in the New Age movement. The Triangles are meditation groups of three people. World Goodwill distributed literature promoting theosophy. After its merger with World Union, it distributed literature promoting world government.

Alice Ann Bailey, a Theosophist, established the Lucis Trust, World Goodwill, Triangles, Arcane School, and New Group of World Servers. Bailey was anti-Jewish and anti-Christian. Her many books were written through her by her spirit guide. In building the infrastructure and articulating the strategy of the modern New Age movement, she is probably the most important person.

World Union is leading the way toward world government through the World Constitution Parliament Association (WCPA). Philip Isely was the principal organizer of the World Constitution Parliament Association, which was founded in 1959. The objective of this association is to create a framework for establishing a one-world government. To promote global governance, it uses environmentalism, i.e., creating fear and hysteria that mankind is irrecoverably destroying the environment and the only way to prevent this ravishing of the environment is to establish an all-powerful centralized world government. Claiming to represent the people of Earth (have you ever voted for any member of this association to represent you?), it has drafted a constitution for its world government and is lobbying countries to ratify it.

By urging the United Nations to establish itself quickly as a world government with absolute power over the countries and peoples of the world, the World Constitution Parliament Association serves to apply pressure from below in “the name of the people.” Thus, it gives the Illuminists an excuse for establishing a global dictatorship—the people are forcing them to do it.

Psychotherapy
For the less spiritually inclined, the Illuminists offer psychotherapy as a substitute for religion. Like many other New Age religions, it treats man as though he is an autonomous being, who is the center of the Universe and the measure of all things. Psychotherapy, which includes psychology and psychiatry, is closely related to Hinduism. It offers fulfillment without God and explains human behavior without moral absolutes. If a person feels guilt about homosexual practices, the psychotherapist strives to convince the patient that homosexuality is normal, and thus, he should experience no guilt. So, if a person feels a desire, that desire must be satisfied without regards to any moral principle—or else insanity will result.

Psychotherapy has become an important weapon in advancing Illuminism. It teaches moral relativism, and anyone who believes in moral absolutes is obviously mentally ill if not insane. Thus, psychotherapy justifies the socialist concept of redistribution of material wealth. Furthermore, the National Association for Mental Health claims that the “principles of mental heath cannot be successfully furthered in any society unless there is progressive acceptance of the concept of world citizenship.”[7] The typical psychotherapist believes that anyone who opposes Illuminism or any of its programs needs therapy and is well on his way to becoming mentally ill if he is not already mentally ill. (Dr. G. Brock Chisholm and his associates define mental illness as a “sense of loyalty to a particular nation, a sense of loyalty to a moral code, strict adherence to concepts of right and wrong, opposition to foreign aid or communism.”[8] Psychotherapy is used to silence people who oppose Illuminism by proclaiming them mentally ill—often without any examination. (Fortunately, not all psychologists and psychiatrists are followers of Chisholm’s doctrines.)

Endnotes
1. James W. Wardner, Unholy Alliances: The Secret Plan and the Secret People Who Are Working to Destroy America (James W. Wardner, 1996), pp. 203-204.

2. Ibid., p. 212.

3. William J. Petersen, Those Curious New Cults in the 80s (New Canaan, Connecticut: Keats Publishing, Inc., 1982), p. 223.

4. Ibid., p. 223.

5. Nesta H. Webster, Secret Societies and Subversive Movements (Palmdale, California: Omni Publication, 1924), pp. 304-305.

6. Lady Queenborough, (Edith Starr Miller). Occult Theocracy (Two Volumes. Hawthorne, California: The Christian Book Club of America, 1933), p. 533.

7. John A. Stormer, None Dare Call It Treason. (Florissant, Missouri: Liberty Bell Press, 1964), p. 257.

8. Ibid., p. 159.

Copyright © 2010 by Thomas Coley Allen.


[Editor’s note: The list of references in the original are omitted.]

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