If any of the following confuses you, please read, or re-read, Private Enterprise Money until the following makes sense to you.
A little further along in the story, I Want The Earth Plus 5%, we find the following words:
Fabian let them argue for a while and finally he said, "Since none of you can agree, I suggest you obtain the number you require from me. There will be no limit, except for your ability to repay. The more you obtain, the more you must repay in one year's time. "And what will you receive?" the people asked.
"Since I am providing a service, that is, the money supply, I am entitled to payment for my work. Let us say that for every 100 pieces you obtain, you repay me 105 for every year that you owe the debt. The 5 will be my charge, and I shall call this charge interest."
This sounds entirely reasonable, if you don't think about it too hard. After all, a man is entitled to pay for his services. The problem is, as pointed out later in the story, the banker is issuing only enough money to repay the original loan and is not issuing enough to pay the original loan plus the interest. This means that there is no way for the total debt to be discharged as there is not enough money in circulation for everyone to discharge every debt. Since this means that the total debt will continue to increase without any way to pay it and since the bankers eventually start requesting, and getting, assets pledged to the bank if the loan is not repayed, eventually the bank, rather than the government, owns everything.
Note that Fabian is issuing money whenever he buys something and if he could buy enough to issue all the interest he is charging, there would be enough money issued to repay all the debts and there would be no problem. Unfortunately, Fabian cannot possibly buy that much unless he starts buying other people's assets, which is in effect exactly what he is doing. Eventually, he ends up owning everything.
Now we really don't know if the first bankers figured this out ahead of time and started out purposely to obtain everyone's assets or if it was initiated by mistake. But, at this point, it doesn't matter. As soon as some shrewd people figured out that the system would cause the banks to eventually own everything, these shrewd, and not very nice, people started becoming bankers. So even if the original bankers didn't start out to steal everything, bankers have been in on it for a very long time.
By the way, while the story is fictional, the current situation is not. It is a cold hard fact that we are forced to live with every day. If you think the above couldn't happen here, I am sorry to inform you that it has already happened. Have a look at the way the Federal Reserve Bank operates, for example. When the US government wants to issue some money, they issue some bonds. These bonds say, in effect, if you will lend us (the government) the face value of these bonds, we (the government) will repay you the face amount plus interest. They then notify the Federal Reserve that they want to issue the bonds (and thus increase the money supply). The Federal Reserve asks the US Treasury Department to print up some currency which the Federal Reserve pays for at a rate of approximately 2.5 cents per note. The Federal Reserve then uses these newly-printed notes to purchase the bonds at face value. Then the government spends these notes into circulation by buying military equipment, paying social security, etc. Notice what has happened. The Federal Reserve (the bank) has issued (by purchasing the bonds) enough money (Federal Reserve Notes) that the government can repay the face value of the note but has not issued sufficient money to pay the interest. This is exactly what the bankers did in the story but in this case it is not fiction.
And, in case those of you outside the US are feeling smug at this point, let me inform you that every government has its central bank that operates in almost exactly the same way as the Federal Reserve. This is a worldwide problem, not a US one.
So the third mistake the people in the story made was agreeing to let bankers charge interest without issuing enough money to enable them to pay the interest.But it gets worse.
Copyright at Common Law, West El Paso Information Network, 1998