This article is a draft version. It is part of the Litmus Test articles. See a more extensive discussion in Honesty Litmus Test: Ludwig von Mises.
Did Ludwig von Mises Defend the Jewish Money Machine?
At the heart of the Jewish Fatal Embrace is the money machine. It was not easy to create because it required the support of a strong state. It took Jews centuries to strengthen the states with loans, tax collecting, cartels and monopolies. Then finally after the Reformation the states had become strong enough for Jewish bankers to offer them a sweet deal: In return for much more loans Jews would create a fractional reserve banking system that creates money out of nothing. And to sweeten the deal the states would not even have to pay back the loans from the money machine! Many states such as Holland were tempted but ultimately refused the offer because they knew that it would not only be fraudulent but would give Jews enormous power.
But the Jews had a plan. In the misnamed Glorious Revolution Jews helped to topple the king of England and replace him with their stooge, William of Orange. Now the door was open for the creation of the Bank of England. The money machine was born. However, in the beginning the Wasps were the senior and the Jews the junior partners. But step by step Jews became more powerful. Hundred years later they were powerful enough to gather around the Rothschild family and openly create an enormous global bank cartel.
The Gentiles resented the power of the Rothschilds but what could they do? Without the Jewish bankers the whole fractional reserve banking system would certainly crash like a house of cards. Luckily there were a few men who understood the fraudulent nature of the fractional reserve banking system. These men created the Currency school and demanded 100% banking reserves. They were opposed by the Banking school that tried to defend and find excuses for the money machine. Needless to say they were led and financed by the bankers themselves.
The Currency school almost won. They managed to create the Peel’s Act of 1844 which required 100% reserves for all bank notes in England. However, they did not realize that a similar requirement was necessary also for bank deposits. The banks just stopped issuing unbacked notes and started issuing more unbacked deposits. Bankers laughed at the Currency school. They had made it even more easy to create money out of nothing!
The Currency school had failed intellectually and thus it also failed in practice. There were a few men who realized what had happened but they too suffered from an intellectual problem: They did not understand how to integrate monetary theory into economic science. This made it easy for the Banking school to either defeat them in debates or at least to obfuscate enough so that a true banking reform was sabotaged.
It took a long time for someone to finally figure out the mysteries of banking and monetary theory. This happened in 1912 when a young member of the Austrian School of economics, Ludwig von Mises published his book Theorie des Geldes und der Umlaufsmittel. It was an enormous intellectual achievement, a tour de force in three steps. First, it finally integrated monetary theory with economic science. Second, it showed in detail how banks create money out of nothing. Third, it explained how the new unpacked fake money creates even bigger business cycles that threaten to destroy the whole world economy.
The truth was finally out. Fractional reserve banking was the cancer of history. Now all that was needed was to spread the word in layman terms and demand the end of the money machine. But then something strange happened. Mises was not interested to lead a crusade against the money machine.
Mises held back from the beginning. He named his book in a strange way. The name of the book should have been The Theory of Money and Fake Money (or even better: Destructive/Lethal Fake/Fraud Money) But instead of calling unbacked notes and deposits fake money he made up a new term: Umlaufsmittel which means “means of circulation”. Practically nobody understood such a strange term in Austria or anywhere else. The (German) title “The Theory of Money And the Means of Circulation” only created confusion and made sure that practically nobody would not understand the significance of the book.
To make matters worse Mises did not arrange the book to be translated to any other language. Not even into English! This made sure that the book would have much less influence. It also made it easy for the British and American stooges of bankers to belittle the book in their reviews. Many members of the Austrian School have long lamented the fact that the famous British economist John Maynard Keynes belittled Mises’ book in his review in the highly influential Economic Journal. Murray Rothbard explains:
While Mises’s ideas and reputation, if not his academic post, as well as his writings, enjoyed a growing influence in Austria and the rest of Europe in the 1920s, his influence in the English-speaking world was greatly limited by the fact that Money and Credit was not translated until 1934. The American economist Benjamin M. Anderson, Jr., in his The Value of Money (1917) was the first English-speaking writer to appreciate Mises’s work, and the remainder of his Anglo-American influence had to wait for the early 1930s. Money and Credit could have been far more influential had it not received a belittling and totally uncomprehending review from the brilliant young economist John Maynard Keynes, then an editor of the leading British scholarly economic periodical, the Economic Journal.
Keynes wrote that the book had “considerable merit,” that it was “enlightened in the highest degree possible” [whatever that may mean], that the author was “widely read,” but that in the end Keynes was disappointed because it was not “constructive” or “original.” Now whatever may be thought about The Theory of Money and Credit, it was highly constructive and systematic, and almost blazingly original, and so Keynes’s reaction is puzzling indeed. The puzzle was cleared up, however, a decade and a half later, when, in his Treatise on Money, Keynes wrote that “In German, I can only clearly understand what I already know— so that new ideas are apt to be veiled from me by the difficulties of the language.” The breath-taking arrogance, the sheer gall of reviewing a book in a language in which he could not grasp new ideas, and then denouncing the book for containing nothing new was all too characteristic of Keynes.
So what? Translate the book and such ridiculous obfuscations become impossible! But no. Mises would not translate the book until 22 years later in 1934 after banks had crashed and the Great Depression had already started. And even then the title of the book was further mistranslated. Wikipedia explains:
1934: London: Jonathan Cape Ltd. First translation (by Harold E. Batson) into English. The German word Umlaufsmittel literally translates as “means of circulation” and was translated into the text of the English version as “fiduciary media”. However, the publisher thought the unusual terminology would irritate readers and substituted “money and credit” in the title, thereby losing the specific distinction Mises had made in selecting his original term.[2] (Wikpedia)
Mises himself also muddled the waters by downplaying the implications of his own theory. He defended the Banking school by opposing 100% reserves demanded by the Currency school. But why? Because it was not necessary to limit bank activities! Instead banks should be given a totally free hand. Mises explained that under free banking the reserves would automatically remain relatively high. No regulation needed.
But what about the fact that the creation of fake money is obviously a fraud? Mises disagreed: It is not technically a fraud if the bank’s client agrees and understands the risks of creating new money out of nothing. But how can the bank and its client agree to create something out of nothing especially since it dilutes the purchasing power of other people who are not participating in the “agreement” to defraud others in an obvious Ponzi scheme?
In short, Mises had a strange definition of fraud. Why? Was he trying to protect banks? Obviously. That is not surprising considering that his Jewish family was full of bankers. In fact, his family had for generations been the fronts of the Rothschilds.
In his position as the leading consult of the Vienna Chamber of Commerce Mises was constantly helping the Rothschilds and other the bankers. This gradually corrupted Mises so that in the 1924 second edition of his book he suddenly started to defend the undermining of the gold standard! Obviously, the Rothschilds were talking when Mises wrote:
The gold-exchange standard has not been recommended or adopted with the object of dethroning gold. (p. 393)
Or the Rockefellers. It is probably not a coincidence that after downplaying the efforts of both the Rothschilds and the Rockefellers in undermining the gold standard Mises recieved enormous grants to establish a Business Cycle Research Institute.
The year 1926 brought another improvement in Mises’s good fortune. He started cooperating with the Rockefeller Foundation and established an Austrian Institute for Business Cycle Research, which allowed his young political allies—most notably Friedrich Hayek—to earn a living in economic research. (Biography. p. 566)
However, after the Second World War Mises realized the writing on the wall. The Rothschilds and the Rockefellers were not satisfied. They wanted to further undermine the gold standard and start exponentially increasing the money supply. This was too much for Mises who now admitted his mistake:
In dealing with the problems of the gold exchange standard all economists — including the author of this book — failed to realize the fact that it places in the hands of governments the power to manipulate their nations’ currency easily. Economists blithely assumed that no government of a civilized nation would use the gold exchange standard intentionally as an instrument of inflationary policy. (Human Action, 1949, p. 786)
Mises wanted to warn the Jewish bankers of the inherent instability of the Jewish dominated money machine, the fractional reserve banking system. He realized that banks would not stop expanding the money supply. They would create ever deeper business cycles and depressions that would eventually lead to enormous anti-Semitism. Jews should try to stop this dangerous process by supporting free banking. In this way they could still dominate banking and even continue creating money out of nothing but in a manner that would not destroy the economy and generate anti-Semitism.
But the Rothschilds and other Jewish bankers did not listen. Instead they decided to double down: Create a pure fiat money system where the money machine can create almost unlimited amounts of money out of nothing. And then create the petrodollar system to make sure that people would be forced to use the inflationary fiat money. But how? Simple, just create a global police state empire, U$Srael.
Mises was horrified. Already in 1912 in his book he had warned that the internal logic of fractional reserve banking led to ever bigger banking cartels and ultimately to fiat money and a world bank. But he was totally against such a solution. He pointed out that it would make the business cycle even more dangerous. Sure, it could stave off a collapse a few decades but eventually the whole world economy would collapse. Mises was fine with Jews dominating world economy but not in a way that could destroy the whole Western civilization!
But why did Mises not reveal the big role of the Rothschilds and other Jews in developing and protecting the money machine? If people would just learn the facts about Jewish manipulation they would much easily raise up against the money machine. No, Mises could not do that. It would not have been in the interests of the Jews.
Mises seemed very dishonest. And very loyal. And he was also right, like many other smart jews, history repeats itself.
Mises tried to warn that you must not go too far, but hostile elite bankers didnt listen. They were too greedy.