Web of Debt

“infobox Book”
name Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free
orig title
author Ellen Hodgson Brown
country United States
language English
classification Non-Fiction
publisher Third Millennium Press
release_date 2008
media_type Print (Paperback)
pages 544
isbn ISBN 978-0979560828

Chapter Summaries


Section I: The Yellow Brick Road: From Gold to Federal Reserve Notes

Chapter 1: Lessons from The Wizard Of Oz

In this chapter, Brown illustrates how the fairy tale “The Wonderful Wizard Of Oz” published in 1900 actually derived its imagery from the subject of banking and finance. The characters in the the tale represented groups from real life: The Scarecrow represented the farmers, the Tin Woodman represented the the industrial workers, the Lion represented William Jennings Bryan (the leader of the Populist party) and Dorothy represented the archetypal American girl. The 1890s, the farmers and factory workers were heavily in debt to bankers and tried to push for economic reform by forming various parties that eventually combined to form the Populist party. Populists argued for government issuing money instead of private banks, and proposed several solutions, such as returning to the Greenbacks of Abraham Lincoln, or using the Silverite solution of using silver to supplement the money supply. Bryan won the Democratic nomination but never won the presidency. After World War II, the issue of money disappeared as a political issue.

Chapter 2: Behind the Curtain: The Federal Reserve and the Federal Debt

Brown discusses the Federal Reserve in this chapter. She shows how the Federal Reserve operates in secrecy. It is not actually federal and keeps no reserves, and additionally it is a private corporation, not run by the U.S. government. It doesn’t get money from other sources; it simply declares money into existence by writing checks. However it doesn’t create most money – that is done by private commercial banks, in the same fashion. It is not deposits that become loans; deposits are actually created through first creating a loan. Goldsmiths in the seventeenth century discovered that they could lend out 10 times as much money as they held in gold, because only 10-20 percent of the gold would be redeemed at a time. This is the basis for fractional-reserve banking. Brown states that fractional-reserve loans are an “impossible contract” to collectively fulfill because in order to feed current loans plus their interest, more loans need to be created or borrowers have to default. Money created through loans now makes up 97.6% of the money supply, so if all debt disappeared, so would most of the money supply, and the economy would collapse.

Chapter 3: Experiments in Utopia: Colonial Paper Money as Legal Tender

In the American colonies, paper money was issued by the provincial governments, some of governments’ money later redeemable in silver or gold and others legal tender by declaration. The government-issued money grew along with productivity, instead of productivity being controlled by the gold supply. The paper money allowed the colonies to finance their operations without taxes. Several colonies set up loan offices, which gave the governments income and injected new money into the economy. The colonies that issued too much money created inflation, but those who grew the money with the economy had no inflation. When the money of certain colonies depreciated too much, King George banned the use of paper money, requiring the colonies to borrow from the banks in England. The prosperous colonies sunk into poverty as a result. Benjamin Franklin later stated that the resulting unemployment and dissatisfaction let to the Revolutionary War.

Chapter 4: How the Government Was Persuaded to Borrow Its Own Money

Chapter 5: From Matriarchies of Abundance to Patriarchies of Debt

Chapter 6: Pulling the Strings of the King: The Moneylenders Take England

Chapter 7: While Congress Dozes in the Poppy Fields: Jefferson and Jackson Sound the Alarm

Chapter 8: Scarecrow with a Brain: Lincoln Foils the Bankers

Chapter 9: Lincoln Loses the Battle with the Masters of European Finance

Chapter 10: The Great Humbug: The Gold Standard and the Straw Man of Inflation

Section II: The Bankers Capture the Money Machine

Chapter 11: No Place Like Home: Fighting for the Family Farm

Chapter 12: Talking Heads and Invisible Hands: The Secret Government

Chapter 13: Witches’ Coven: The Jekyll Island Affair and the Federal Reserve Act of 1913

Chapter 14: Harnessing the Lion: The Federal Income Tax

Chapter 15: Reaping the Whirlwind: The Great Depression

Chapter 16: Oiling the Rusted Joints of the Economy: Roosevelt, Keynes, and the New Deal

Chapter 17: Wright Patman Exposes the Money Machine

Chapter 18: A Look Inside the Fed’s Playbook: “Modern Money Mechanics”

Chapter 19: Bear Raids and Short Sales: Devouring Capital Markets

Chapter 20: Hedge Funds and Derivatives: A Horse of a Different Color

Section III: Enslaved by Debt: The Bankers’ Net Spreaders over the Globe

Chapter 21: Goodbye Yellow Brick Road: From Gold Reserves to Petrodollars

Chapter 22: The Tequila Trap: The Real Story Behind the Illegal Alien Invasion

Chapter 23: Freeing the Yellow Winkies: The Greenback System Flourishes Abroad

Chapter 24: Sneering At Doom: Germany Finances a War Without Money

Chapter 25: Another Look at the Inflation Humbug: Some “Textbook” Hyperinflations Revisted

Chapter 26: Poppy Fields, Opium Wars and Asian Tigers

Chapter 27: Waking the Sleeping Giant: Lincoln’s Greenback System Comes to China

Chapter 28: Recovering the Jewel of the British Empire: A People’s Movement Takes Back India

Section IV: The Debt Spider Captures America

Chapter 29: Breaking the Back of the Tin Man: Debt Serfdom for American Workers

Chapter 30: The Lure in the Consumer Debt Trap: The Illusion of Home Ownership

Chapter 31: The Perfect Financial Storm

Chapter 32: In the Eye of the Cyclone: How the Derivatives Crisis Has Gridlocked the Banking System

Chapter 33: Maintaining the Illusion: Rigging Financial Markets

Chapter 34: Meltdown: The Secret Bankruptcy of the Banks

Section V: The Magic Slippers: Taking Back the Money Power

Chapter 35: Stepping from Scarcity into Technicolor Abundance

Chapter 36: The Community Currency Movement: Sidestepping the Debt Web with “Parallel” Currencies

Chapter 37: The Money Question: Goldbugs and Greenbackers Debate

Chapter 38: The Federal Debt: A Case of Disorganized Thinking

Chapter 39: Liquidating the Federal Debt Without Causing Inflation

Chapter 40: “Helicopter” Money: The Fed’s New Hot Air Baloon

Section VI: Vanquishing the Debt Spider: A Banking System that Serves The People

Chapter 41: Restoring National Sovereignty with a Truly National Banking System

Chapter 42: The Question of Interest: Ben Franklin Solves the Impossible Contract Problem

Chapter 43: Bailout, Buyout, or Corporate Takeover? Beating the Robber Barons at Their Own Game

Chapter 44: The Quick Fix: Government That Pays for Itself

Chapter 45: Government with Heart: Solving the Problem of Third World Debt

Chapter 46: Building a Bridge: Toward a New Bretton Woods

Chapter 47: Over the Rainbow: Government Without Taxes or Debt

Afterward: The Collapse of a 300 Year Ponzi Scheme

Postscript: February 2008 – The Bubble Bursts