From the November 2005 Idaho Observer:

Money, Taxes and Your Financial Future

Local treasure explains money system

By Don Harkins

This story about a presentation given by Bill Denman was intentionally placed on the facing page with the 9/11 Public Discourse Project story--the story about a presentation given by Erin Smith. Why? Smith is a pretty, young, salaried woman budgeted to travel per diem all over the U.S., staying in nice hotels, eating at nice restaurants parroting the 9/11 "Omission" Commission’s findings which are, provably, a pack of lies intended to cover up the job’s "inside components" and sell the police state to Americans. Denman, a marvelous gentleman of 80 or so years, is a retired engineer who has dedicated much of his life to studying the relationship between people and governments, lobbying legislatures and sitting on school boards in a selfless citizen effort to make the world a better place. He, on his own time and at his own expense, taught a three-hour lesson on the truth about money. Smith is being well-paid as a government plant contributing to the matrix of lies that are destroying our nation and her people; Denman is giving freely his prodigious knowledge about money so that Americans may awaken to their collective peril and avoid an inevitable economic disaster of unprecedented proportions.

POST FALLS—Retired engineer and local treasure Bill Denman planted and watered one of the three seeds that must be sown in Americans’ minds if they are to ever overcome their current level of economic slavery: How the money system works.

Denman has pared a lifetime of economic research down into a three-hour lesson that takes us from the hyper-inflation experienced in the comparatively simple money system of ancient Sumeria 4,800 years ago to our present Federal Reserve System.

In studying financial systems throughout the ages, we discover that their successes and failures are unerringly governed by a few fundamental economic principles. It matters not the complexity or simplicity of the system, inflated money supply = decreased purchasing power and higher taxes.

Twenty-two of 100 people invited traded their Saturday to receive the benefit of Denman’s lifetime of studying the history of money and economics. His tremendous background has given him the authority to be concise in his presentation and accurate with his interpretation of historical and contemporary data on this critical topic.

The focus of Denman’s approach is to prove the hypothesis that money is a tool of tyrants to enslave the masses and harvest their energies and that tyranny is always based upon the ignorance of the tyrannized. "The government would not get away with an $8 trillion debt if people were raised understanding basic economic principles," Denman said.

In fact, if properly educated as to the rise and fall of civilizations, relative to the manipulation of money, people would see any tinkering with the money supply and interest rates as direct attacks upon their freedoms. An economically-astute society would imprison such manipulators; not revere them as monetary mystics; not give them lofty titles and plush offices; not pay them handsomely to destroy the society and its people.

As a retired engineer, Denman is a very thoughtful and thorough man. He even brought a portion of his economic history library with him to show that the foundation of his presentation has come from the world’s most respected and credible economic thinkers, historians and theorists. In fact, 95 percent of part two of his three-part presentation, the Federal Reserve, is taken from "The Federal Reserve System" (1960) written by Federal Reserve Bankers themselves.

Among the authorities studied and cited are Frederick Bastiat, William Durant, Hans Sennholz, Ludwig von Mises and Murray Rothbard.

A few concepts to consider

The sole purpose of money is to facilitate the exchange of goods and services. Goods and services, or products, must come before money, Denman reasoned. "If all products disappeared tomorrow, how much value would money have?" Denman asked.

Money must be limited to the availability of products or it becomes worthless. Money, usually coined or printed to represent the value of a product for the purpose of trading, is a "medium of exchange." Money created out of thin air, as occurs every time a bank deposit is made or a loan is approved, is "purchasing media."

It is simple to see the difference: A medium of exchange is merely the transfer of agreed-upon value between two parties in commerce and is, by nature, self-limiting in supply; purchasing media involves no exchange of value, supply is unlimited and its value, or purchasing power, is diminished with increase in supply.

One of the most obvious mechanisms in place to perpetuate people’s ignorance of the money system is found in the term "inflation." The generally-touted belief is that high prices cause inflation when the opposite is true—inflation (of the money supply) causes high prices. Denman argues that inflation occurs when the money supply is greater than the supply of products in the marketplace and the rate of inflation is directly associated with the amount of disparity between the two.

Denman is an advocate of the gold standard because it is the most stable element known to man and it is rare enough that its supply will never increase to be greater than the supply of products in commerce.

An argument against the gold standard is that there is not enough gold in the world to back all the products in the marketplace. Denman believes that the amount of gold does not matter because the less there is the more purchasing power it contains.

Another important consideration is what we are actually buying and selling. Raw materials simply exist. They are then manufactured into products. We are really exchanging the value attached to the human labor/energy associated with converting natural resources into products.

The concept can be described in the equation MMW = NR + HE x T - COG (man’s material wealth equals natural resources, plus human energy, times tools, minus the cost of government).

Whose money is it?

Most Americans have been conditioned to believe that the only money available to them are the green pieces of paper circulated by a chartered branch of government called the Federal Reserve. However, the government has, in effect, "hired" the Federal Reserve, a private corporation, to arbitrarily control the value of "Federal Reserve Notes (FRNs)" by manipulating supply and interest rates. FRNs are actually the property of the Federal Reserve Bank and we pay taxes and interest for the privilege of using it.

Denman acknowledged the current state of economic affairs—an $8 trillion national debt, trade deficits with all of our trading partners, an escalation in the rate of our exponentially-increasing indebtedness and the Bush administration’s unprecedented orgy of government borrowing and spending. When asked to advance his opinion about whether or not the money managers’ are intentionally bringing about the collapse of our economic system, Denman thought for a moment and then stated: "Money is a tool. Money is being used as a tool to ‘pauperize’ the American people and return them to pre-industrial age peon status."

When will the crash occur?

With every bank deposit; with every loan granted and; with every credit card transaction, the money supply increases relative to the supply of products in the marketplace. Denman provided an excellent overview of how fractional reserve banking works to inflate the money supply and decrease purchasing power. He also explained how "outsourcing" jobs and industry to foreign nations artificially decreases the money supply by sending dollars (temporarily) offshore.

But the question on everyone’s mind is "When will the crash come?"

Denman believes the answer is "never"—if the money manipulators have their way. Ben Bernake (51), President Bush’s appointee to replace the retiring Alan Greenspan as Federal Reserve chairman, has already stated that he advocates "dropping money out of a helicopter" if that’s what it takes to keep the money system going.

A review of what happened in pre-revolution France and pre-WWII Germany proves that the result of such a tactic is war, followed by a return to the same economic system.

What’s the solution?

The solution, according to Denman, is simple: Teach people about the history of money and get them to understand basic economic principles. He believes that if a 20 percent of Americans understood how the Federal Reserve System works and built their knowledge from a foundation of historical economic cause-and-effect, we could force the ouster of the money manipulators and usher in the return of the free-market economy.

The presentation was a trial run before people he knows so that he could get critical feedback and refine his lecture. He plans to take his presentation on the road and eventually have his message refined to where he can produce a high-quality DVD and offer it for sale in the marketplace.

When the DVD becomes available, we will let our readers know.

In the mean time, there are several resources from which to draw lessons in economics. An excellent video on the subject is called "The Money Masters" which can be obtained online. G. Edward Griffin’s "The Creature From Jekyll Island," though exhaustive, is also excellent as is "The Lost Science of Money" by Stephen Zarlenga.

Caption: If about 20 percent of Americans get wise to what is happening to them economically, get a foundation of economic history and become comfortable with basic economic principles, they will be equipped to defend their right to a freemarket economy. The solution is simple: Those who know must teach. ~Photo by Robert Jesse