The Grip of Death: A Study of Modern Money, Debt Slavery and Destructive Economics

`'The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and born in sin. Bankers own the earth; take it away from them, but leave them with the power to create credit, and with the stroke of a pen they will create enough money to buy it back again...If you want to be slaves of bankers, and pay the costs of your own slavery, then let the banks create money.'' Lord Josiah Stamp, former director of the Bank Of England, (quoted on p.35). `The Grip of Death' is a highly readable and radical work that touches on many subjects in its attempt to explain the far-reaching malaise of the global financial system. Rowbotham starts in Chapters 1 and 2 with an explanation of the debt-based financial system. For those, like myself, who erroneously imagined that the creation and supply of money is the domain of governments, these pages are quite simply revelatory. The author goes on to explain in Chapter 3 how debt-based finance distorts economies, driving `decadent growth' in such a way as to make the economy ever less responsive to the needs of real people and small businesses. This analysis is expanded in Chapter 4 `The Myth of the Consumer Society', which illustrates how economic servitude, and environmental degradation are the inevitable results of an `inherently unsupportive and unstable financial system'. Further chapters discuss the latter's contribution to transportation and centralisation, `export warfare' between nations, the national debt, food and farming, Third World debt, the role of multinational companies and so on. The author also discusses the history of debt-financing and assesses the contribution of early monetary reformers such as Abraham Lincoln in the USA and C.H. Douglas in Britain. Throughout, the tone is one of engagement with the real world - this is no dry academic text. The author is passionately involved in his arguments, as indicated by the occasional appearance of exclamation marks and use of language such as `disgusting' and `despicable' to describe some of the unfortunate outcomes of what he considers to be a fraudulent, debt-based system. Those readers with specialist knowledge of economics and global finance may well take issue with certain technical matters, but the finer points of political and economic analysis should not distract from this very important work's central proposition: the fundamental iniquity of the private creation of credit. Why should private institutions such as banks be permitted to create money out of thin air, in so doing profiting at the expense of, if not actually beggaring individuals, industries, entire economies, indeed the whole global economy? The arguments presented transcend traditional conceptions of right and left wing politics, of monetarist and Keynesian economic approaches. To focus exclusively on such issues ultimately distracts, Rowbotham says, from the underlying problem: debt-based finance. And of course, the financial powers prefer to keep the public in the dark about where money comes from. For example, current Chair of the Financial Services Authority, Adair Turner, has written in defence of `non-transparent money creation' (Financial Times, 4 November 2002 - quoted in James Robertson & John Bunzl's Monetary Reform - Making it Happen ). As evidence of the continuing success of such diversionary concerns, I submit the fact that the basic issue of `who issues the money' is so little discussed (if at all) by mainstream media and politicians in the modern day and age. Even in these horrendous recessionary times, where the term `credit crunch' has become common currency, even those public figures often presented as reliable sources of public information on such matters, such as the BBC's Business Editor Robert Peston, and Liberal Democrat politician Vince Cable have never, to my knowledge, raised the issue of private issue of credit. Meanwhile, economic events and trends in the 10 years or so since this book was first published in 1998 - the ballooning of mortgage debt around the world, the near collapse of the economic system and `credit crunch' - have made the perspective outlined in `The Grip of Death' more relevant than ever. Having read 'The Grip of Death' I now realise that on these matters of fundamental importance I had been shockingly uninformed. This truly eye-opening book really is full of `eureka' moments', and I thoroughly commend it to anyone concerned with the pivotal role of money in shaping economy and society. November 2010: Please see the Positive Money website for a contemporary campaign addressing these issues.

This is a truly remarkable book. I never imagined that I would read a book on economics, but this book gripped me and I read it from cover to cover. I read it with mounting horror that I had participated in such a damaging economic system all my life, a system authorized by government and founded on a banking scam that is nothing less than legalized robbery. It was news to me that 97% of the money in circulation today was originally created as a debt to a bank. All the savings in your account are there because someone earlier went into debt. When you apply for a bank loan or a mortgage the bank counterfeits that money into existence out of nothing, types the figure into a computer, and transfers it to your account. It's called fractional Reserve Banking. The bank will then charge you interest on the debt that was created out of nothing and if you default, will seize your real assets. Clearly this is institutionalized fraud. Rowbotham explains how the debt money in circulation distorts the whole of the economy in such a way that economics has nothing to do with the needs of people and care for the environment and everything to do with pure money and finance. And so you find it makes financial sense to transport lettuces from Spain when they could be grown right here at home. From the outset businesses are in debt to the banks and these additional costs over and above manufacturing costs tend to drive up prices of the goods produced and ensure they are of poor quality. Because of huge debts to banks, firms must keep wages down and so there is never enough money circulating to buy the products. So either aggressive exporting must take place or people must go into debt to buy the goods. A pyramid of rising debt is created and there must be economic growth at the top or the whole economic edifice collapses. This is the economic insanity in which we live and move and have our being. Rowbotham explains that there is an alternative to the current one-sided debt based economics and this involves government itself creating a proportion of debt free money for circulation. The simple balanced system described made sense to me and why no-one ever discusses it is a complete mystery. So our whole economic system is based on a total misunderstanding of how money works. How could it have happened? It has happened because people are totally unconscious of the economic madness in which they participate on a daily basis. After reading the book I woke up from unconsciousness and realized that in the absence of monetary reform the only realistic vote in any government referendum would be one of `no confidence'. I will never vote again until the promise of monetary reform is on a party manifesto. Read the book and the Truth will set you free.

This has got to be just about the most interesting book I have ever read, and I feel everyone should read it, as it is absolutely pertinent to everyone on the planet. I have always been fairly politically aware, (a product of my upbringing), and as such, I have a pretty good idea of what is going on in the world, and a fairly intuitive idea about what is good and what is bad, and how the wheels of industry and commerce are kept turning. Of late, though, I have felt politics is a waste of time, and it has got to the point where I don't even bother to vote any more. I feel terrible that people in the past have fought long and hard, and even lost their lives, in an effort to gain better working conditions and more rights for the working class, and, of course, the right to vote, and here's me, can't be bothered to use that right. I have started to feel that the Government no longer runs the country, as it is controlled by big business, so all my vote decides is whether we want clown 'A' or clown 'B' to appear on the television to take the flak thrown at them by the media, under the guise of being in control. It seems our so-called "rights" can be taken away from us at the drop of a hat, which has been shown to be true by this latest pandemic, and reading this book has vindicated the way I feel, and nothing else seems to matter. Until we wrest monetary control away from the banks, there seems no point in striving to better ourselves, or the plight of Third World countries, (which we are heading towards being, here in the UK), because it "ain't gonna happen" while we live in a debt economy. The book explains clearly how money just "appears" out of a hat......but it's not real money, it is a debt, owed to the banks, of course. We used to joke that there are five people in the world that own everything. It seems it's less than that. Read this book and wake up.......we are all of us slaves.

I found this book disturbing for two reasons. The first is that commercial banks are the prime creators of money and secondly that at the tender age of 47 I had not come across this explanation of money creation. This explanation is having quite an impact about how I view the current political/economic situation. I had studied Applied Economics for my first degree in the last 1980s, then studied a Masters' degree in Islamic Banking and Finance, I taught Economics to undergraduates (not very well I'm afraid - apologies to former students of UWE!) and my first role was within a quasi-economic job function. In my quasi-economic job role I became disenchanted with Economics as a 'science' (however dismal) and read books that incorporated developments derived from chaos theory and biological evolution models etc. that what I thought was a better explanation (I would recommend those by by Paul Omerod & Eric Beinhocke). I think Austrian economic philosophies fit these chaos theory and evolutionary models better than Marxian, Keynesian or the Neo-classical synthesis, however, I had not given much thought to 'money' which obviously underpins the price mechanism through which markets operates. I also thought the 'economic calculation' argument was the trump card against Marxist theories but with this explanation of money then this argument is not as strong as I thought. Following reading this book I have gone on to read the excellent "Where Does Money Come From?" an up-to-date and more academic (but very readable) explanation with a UK context. I am surprised that in the current era that no political party has adopted the approach. It has certainly acted as a primer to learn more about the subject and has pricked my hubris (if that is a valid expression?) of what I knew. Having read "Where Does Money Come From" I do not feel too bad about my ignorance as it covered the way money has traditionally been taught (which I was) and how it does not fit with modern reality.

I was listening to a radio programme and one of the contributors spoke of this book in relation to the how the monetray system works and decided that I would read this - having read a few books on this subject before -I was seeking to understand financial greed and debt. I completed reading within 4 weeks on and off due to having too much work but it was the bedside book for 4 weeks - In my view we should make this book a MUST READ for all students so that they grow up savvy about one of the most important economic pillars of modern society - finance. The reading also provided clarity and reinforced the huge inequities built into the way our societies work, the food industry and international finance operates. The examples that explain the principles are well thought through and enable the redaer to connect back to the concept and understand its impact at an individual level. The book also managed to do one other thing - which is rare - depress me that monetray reform seems further away then ever - it was hoped that the financial crises could have been the trigger for such reform but sadly this has not been the case and one set of professionals that righly need to be held to account for this failure are economists - Can it be so hard to find a champion from this profession prepared to stcik his/her neck out.

Almost all of us are victims of the economic system. How this system functions is for most of us veiled in mystery, giving the system even more power over us. In this book Michael Rowbotham unveils these mysteries in a style which is clear, straight-talking and free of any academic jargon: in fact any concept, institution or practice which might be unknown to the non-specialist is thoughtfully explained by the author without even a hint of condescension. This book describes the iniquity of a worldwide economic system based on the power of banks to create money by "lending" what they don't have. Both the historical roots and contemporary manifestations of this practice are explored in depth together with the multitude of ramifications. The book's range is remarkable: although much of the data is UK-centred, the author opens up a world-wide vision, from the exploitation of third world countries to the destruction of the environment to the pernicious waste of human life and energy under a system which - unveiled - amounts to institutionalised theft and debt-slavery. Finally, the author provides suggestions as to how economic reform might be achieved, opening up vistas of millions of human lives being much more usefully and happily lived. Read this book.

So I thought I might try to find out a little about the current (just the most recent of several!!) economic disaster created by an unfeasably small number of unelected financial industry figures.........I now understand a little better the phrase "Ignorance is Bliss"......This book is just one of the references that have sprung out of my feeble investigation.......and I'm sorry to report that the rather incredulous theories of the Money Reformers......so far all check out!! So, if, like me you are having trouble getting your head around some of the reasons why your life just gets harder and harder, then this book will probably provide you with some pieces of the jigsaw (that is, after you have picked your jaw of the floor) and highlight the absolute audacity of the controlling powers of the worlds economies, regarding their self centered attitudes towards all thing socialistic..........EXCEPT, THAT IS UNTIL THEY NEED RESCUING.......ULTRA CAPITALIST REGARDING PROFITS........SHEEPISHLY QUIET, AND SUPPORTIVE OF SOCIALISM REGARDING UNPAYABLE LIABILITIES!!!! If you want to gain a better understanding of just how "over the barrell" you are read this book..........If however you would rather stick your head in the ground and believe what is served up on a daily basis by ALL mass media, then you will probably be better off buying something,....say written by Niall Ferguson.....WHATEVER YOU CHOOSE.....JUST ASK WHAT EXACTLY ARE YOUR MOTIVES IF YOU FIND YOURSELF RESENTING PUBLIC SERVICE EMPLOYERS PENSIONS......WHERE DID THAT NARROW MINDED MOTIVE COME FROM TO JOIN THE RIGHT WING RACE TO THE BOTTOM????? YES......YOU! Check out "The money masters" on you tube, to give a mind blowing intro on Money supply....The role of bankers in today's disgrace of humanities situation, and oh yeah if you have, or are planning to have children.......be safe in the knowledge that if you continue to accept the status quo.....your grandchildren will thank you for forcing them to live on a set from "MAD MAX"....Don't forget to check your iPhone...........

I go back to this book every time I need to understand the banking and modern financial economy. This book is by far the best book I have read on banking and finance.

Kevin W Lomas & ClivKno are sadly mistaken about the source of the money loaned to borrowers under our current fractional reserve system. Money deposited in banks which can be removed at any time (more properly demand deposits) only fraudulently can be loaned out. Time deposits, for which the banks agree to return the deposit at a future time with interest, become the property of the bank and could be properly loaned out. (See Murray Rothbard's The Mystery of Banking for a much more complete explanation.) What ClivKno fails to mention in his claim that banks extend loans backed by the assests of the bank is that THE ASSESTS BACKING THE LOAN DID NOT EXIST BEFORE THE LOAN WAS CREATED! When a borrower promises to repay the loan with interest, the banks's double entry bookeeping creates an asset in the amount of the principal of the loan based on the borrower's promise to repay and a balancing liability based on the principal of the outstanding loan. It should be noted that the interest to repay the loan was NOT created along with the principal. This is explained in Ellen Hodgson Brown's book Web of Debt, especially in her recitation of the court foreclosure case of FIRST NATIONAL BANK OF MONTGOMERY VS. DALY, in which defendant Jerome Daly argued that there was no consideration (a legal term) for the loan, i.e., that the bank had put up no real money for the loan. When the president of the bank, Mr. Morgan came to the stand he admitted "that the bank routinely created the money it lent 'out of thin air', and that this was standard banking practice." Much more follows, and I highly recommend the book WEB OF DEBT by Ellen Hodgson Brown, along with this book.

Interesting view on modern economies, a bit old now but still useful to understand more about many problems we are still facing during the current years.

Very good book, have to read it.

Good book for beginners in the money discussion.