“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” --Buckminster Fuller
Most legislation is formed in advance by “think tanks” funded by special interests, but nobody funds experts to think about how to reform the money system itself. Now, however, we have the Internet, where we can banter ideas about in “virtual” think tanks without funding. Getting anyone to pay attention, of course, is another matter; but before we even get to that stage, we need to agree on a plan. I’ve gotten a great deal of feedback on this subject by email, so am opening it up to blog comments. What should our money system look like and how should it work? Give your feedback here. Comments on the book “Web of Debt” and articles are also welcome!
Note: This page has gotten a bit long and unwieldy. Please keep entries short and to the point! Better still, please continue the debates using our new forum.
The need for investment return is eliminated by state provided health care,
education, and full pensions. These provisions accompany state decreed sweeping debt cancellation. FDIC funds up to 100k per entity are
transferred to Treasury, with an account set up for each citizen. From
here, a greenback monetary system takes over with increases in money supply
distributed to Personal Treasury Accounts on a per capita basis. PTA’s
also function as free, non interest bearing checking accounts, thereby
keeping great aggregations of normal exchange money out of banker’s mitts.
Nationalized Fed absorbed by Treasury continues to function as check
clearing service. Concurrent tax reform of location rent taxation, mineral
extraction fees, and electromagnetic spectrum rents, are supplemented as
needed by per capita tax. Other taxes are eliminated. Land rent taxation
destroys selling price of land, the financial cornerstone of the Debt Web.
Banks service PTA’s for a fee paid by government, and aggregate risk capital for investment. No more interest bearing bank accounts without risk. No more consumer lending at interest (usury). Capital investment goes to fund real goods ie tools, machinery, buildings used to produce.
That’s good! Thanks.
Scott’s Monetary Reform Proposal
(1) Amend the Constitution for the United States of America to include the following definition: Dollar means one tenth of one gram of gold.
(2) Amend Section 5111 of Title 31 of the United States Code to read as follows:
The Secretary of the Treasury may license private companies to make coins. Coins shall be made in accordance with such specifications, designs, varieties, quantities, dollar denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
( The current text of Section 5111 is posted at http://www.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00005111—-000-.html )
Dear Ellen, The privately owned Federal Reserve is one of the biggest scams of all time. When you control a country’s money supply, you control the country. There is no good reason that the common working man should have to bail out Wall Street Banks and Brokerage Houses. This is happening (as it always has) now with the constant lowering of the Federal Funds Rate and the injection of money into the system (to save the banks and brokerage houses) resulting in the further devaluation of the dollar. This will only make the depression worse. Total credit derivatives outnumber the World’s Gross Domestic Product by at least a 15/1 ratio. (This number can be closer to or above 50/1 since all financial services are included in the World’s GDP and they don’t actually produce anything.) This is a black hole and you can’t bail out a black hole. The Federal Reserve has to be nationalized and banks must be regulated again. The banks and brokerage houses must be audited. If they’re solvent, theyre solvent. If they’re bankrupt, they’re bankrupt. Then have some honest economists draw up a new New Deal and hope for the best. (If you haven’t already, check out Webster Griffin Tarpley’s article titled Draft Economic Recovery Program To Stop The Bush Depression.)
Dear Dr. Brown:
Earlier today I submitted the following complaint to the Federal Reserve via their online complaint form ( https://www.federalreserveconsumerhelp.gov/consumercomplaint.cfm ).
________
The Federal Reserve Bank of San Francisco has twice refused my demand that it redeem federal reserve notes pursuant to Section 411 of Title 12 of the United States Code.* The Bank is issuing federal reserve notes that it has no intention of redeeming and that is outright fraud! I demand that you initiate legal proceedings to dissolve the Federal Reserve Bank of San Francisco.
*Section 411 of Title 12 of the United States Code provides, in pertinent part, that “Federal reserve notes…shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.”
________
After submitting the foregoing complaint, I received the following automated acknowledgment: “Your complaint has been successfully submitted. A Federal Reserve Consumer Help representative will send you a written acknowledgement of your complaint within 15 business days.”
Section 341 of Title 12 of the United States Code provides, in part, that a Federal Reserve bank is “a body corporate” and shall “have succession…until dissolved by Act of Congress or until forfeiture of franchise for violation of law.” I believe that the refusal of the Federal Reserve Bank of San Francisco to redeem federal reserve notes in accordance with Section 411 is a violation of law that warrants “forfeiture of franchise.”
All 12 Federal Reserve banks closed their “public windows” in 2003 and they all now refuse to redeem federal reserve notes. I would like to see one Federal Reserve bank dissolved every other month over a period of two years. That would give the United States Government the opportunity to gradually withdraw federal reserve notes from circulation and replace those notes with Untied States notes that are backed by U.S. gold reserves. Putting the Federal Reserve banks out of business is a necessary step to true monetary reform.
Interesting argument, but where did you find a definition of “lawful money”? Can’t they argue that since Congress took the dollar off the gold standard in 1933, Federal Reserve Notes themselves are lawful money? There are quite a few things that could be challenged in the Federal Reserve Act. Where does it say that the Fed can lend money created out of nothing to banks? It says they can ADVANCE money, but it doesn’t say the money can be created on the spot. (If somebody has another interpretation, I’m very interested, because I thought I would write an article on that and want to make sure I’m on sound ground.) Where does it say that the Fed can bail out non-banks such as Bear Stearns? Where does it say that the Fed can take toxic subprime-backed securities as collateral for loans? You’ll have a hard time getting Congress to stop the Fed from doing those things though, because everybody thinks these bailouts are necessary to prevent a meltdown in the economy. The problem is that they can’t bail out the whole $681 trillion derivatives bubble. Long Term Capital Management was only a $1 trillion bailout. We the people can’t afford the current banking system, so we HAVE to let it collapse. They know that too I think; they’re just keeping the fiddles going on the deck while they man the few lifeboats. It’s off to their new ranches in Argentina for the lucky ones!
Ellen: You asked, “…where did you find a definition of ‘lawful money’?” I believe that it is unnecessary to define lawful money. I am a holder of federal reserve notes and I have a personal right to redeem those notes AT the Federal Reserve Bank of San Francisco, 101 Market Street, San Francisco, California. The Bank violated my right to redeem those notes AT the Bank and I therefore have grounds to bring legal action against the Bank.
I have a crisp “2008″ one dollar federal reserve note that was issued by the Federal Reserve Bank of San Francisco. The Bank issued that note after it closed its public window in 2003. That “2008″ note is evidence that the Bank is issuing federal reserve notes that the Bank has no intention of redeeming. The Bank is therefore engaging in fraud.
You asked, “Can’t they argue that since Congress took the dollar off the gold standard in 1933, Federal Reserve Notes themselves are lawful money?” Under Section 411, as amended, the notes are still redeemable for lawful money, which includes the copper, silver, gold, and platinum coins that Congress has authorized.
When a corporation’s shares are traded on a stock exchange, and the corporation defaults on its notes, the corporation is removed from the list of companies whose shares can be traded on the exchange (the company is “delisted”). The Federal Reserve banks have defaulted on their notes and should be “delisted”. A federal court could and should enjoin those Banks from issuing any additional federal reserve notes.
The $1 FRN now says “this note is legal tender for all debts, public and private.” You could take the Fed to court, but the court would say that that means it’s “lawful money.” You could still redeem it for pennies, nickels, dimes and quarters though, right? They’re also “lawful money.” I’m not saying you’re not making a creative argument; I’m just saying the court isn’t going to buy it. Judges are not creative. Trust me; I’ve clerked for three of them. Precedent controls.
Ellen
You can find the definition of lawful money at 12 USC 152 where at it states “the terms lawful money and lawful mone of the United Staes shall be construed to mean gold or siver con of the United States;”
Scott
I sent a Federal reserve note that was issued by the Fed of Minn. to that bank. The note stated on it face that the bank would pay dollars on demand. Went I sent the letter demanding payment I also demand that they enclude the legal definition of the word dollar, to ensure there was no argument over what I received. They could not find one and just sent my note back to me and said that I had been paid because the notes are legal tender. I started in small claim court and took that case clear up the federal court of appeals (8th circuit) where they ruled the case was dismissed because I had filed a claim for which there was no remedy.
The banks and the courts claim that legal tender now means lawful money.
Hi Byron, 12 USC (Banks and Banking) only goes to Chapter 50.
Ellen
Would you please explain just how BS leveraged 30 to 1?
Ellen: You asked, “You could still redeem it for pennies, nickels, dimes and quarters though, right?” Yes, I believe that the Federal Reserve Bank of San Francisco could redeem a $1 federal reserve note by giving such coins to the person who presents the note for redemption. The Bank, at its option, could redeem a $1 federal reserve note with a $1 Susan B. Anthony (copper and brass) coin or with a $1 U.S. gold coin (now a collectors item but legal money nevertheless).
Byron, there was a Section 152 in Title 12 but that section was repealed. See http://www.law.cornell.edu/uscode/html/uscode12/usc_sec_12_00000151—-000-.html
Hi Byron, leveraged 30 to 1 means they had borrowed 30 times their equity base (you probably knew that); but the question is, why would anyone lend them that amount? I don’t know the answer to that, but it’s a good one to research.
In a previous posting, I wrote that I had filed a complaint against the Federal Reserve Bank of San Francisco. I have received the following acknowledgment of that complaint…
April 2, 2008
Dear Mr. Beach:
This e-mail is to acknowledge our receipt of your online submission on March 7, 2008.
Your request has been forwarded to the Federal Reserve Bank Board of Governors to investigate and respond to you directly. Please contact the Consumer and Community Affairs Department at (202) 452-5217 if you have questions about the status of the investigation of your request.
In the meantime, we have noted below some helpful web site links which address the Federal Reserve System’s consumer complaints process. We hope that this information is helpful to you.
Federal Reserve Consumer Help
How to File a Consumer Complaint Brochure
Consumer Complaint Form
Sincerely,
Federal Reserve Consumer Help Center
G Edward Griffin, on page 192 of his book “The Creature from Jekyll Island”, rebuts the following part of what you wrote,
“Since virtually the entire money supply is created by banks themselves, new money must continually be borrowed into existence just to pay the interest owed to the bankers. ”
with (paraphrased for brevity),
“… It is true that there is not enough money created to include the interest, but it is a fallacy that the only way to pay it back is to borrow still more. The assumption fails to take into account the exchange value of labor. Let us assume you pay back your $10K loan at $900/month and $80 represents interest. You realize you are hard pressed to make your payments so you decide to take on a part-time job. The bank, on the other hand, is now making $80 profit each month on your loan… So this remains as spendable $ in the account of the bank. The decision then is made to have the bank’s floors waxed once a week. You respond and are hired at $80/month to do the job…
It is not necessary that you work directly for the bank. No matter where you earn the $, its origin was a bank and its ultimate destination is a bank… The total of this human effort ultimately is for the benefit of those who create fiat $. It is a form of modern serfdom…”
Hi, that might work if the banks spent all the money they got in interest on paying wages, but they obviously don’t. They use it to create yet more loans. When was the last time you heard of someone in foreclosure, whose bank said, “Don’t worry son, you can wax our floors once a week and pay it off”? Take the case of a Third World country such as the Philippines, which borrows from the IMF at 5% interest. Then the interest rate suddenly shoots up to 20%. Does the IMF say, “No problem, you can send some people to clean our floors and pay it off”? No, the IMF says, “We’ll extend you new loans to pay the interest.” The other option is that the international bankers say, “We’ll forgive the debt, on condition that you quit printing your own money and give us rights to all your resources in perpetuity.” This actually happened in the Philippines under Marcos. He refused, and was then targeted and brought down. It happened quite a few other places as well. Supply siders have this notion that if the rich get richer, it’s good for the poor on the trickle down theory. But as somebody once said whose name I now forget, money doesn’t trick down, it trickles up. Bankers don’t use their accumulated wealth to create more jobs or increase wages. Rather, “vulture capitalists” use it to buy out companies and run them into bankruptcy, in order to force labor to accept lower wages without benefits.
On the other hand, if the bank were government-owned (as in Pennsylvania in Ben Franklin’s day), that WOULD work, because the bank COULD return all its profits to the community in the form of payment for goods and services. (Discussed at greater length in my book “Web of Debt”.)
Joe
I know that G Edward Griffin wrote a interesting book, but his book like all other writing needs to be read with a mind that thinks not with a mind that just believes. Let’s look real close at what he said, first he said that “it is true that there is not enough money created to include the interest,”
All of us that have borrowed any money from any source know that if we borrow a $100 all we get is the 100 dollars then the interest kicks in and the debt grows but not the money supply, that happens with every loan.
I understand the exchange value of labor but that does not create any money, it only moves money. Mr. Griffin for what ever reason, then tries to confuse the facts by suggesting that it makes a difference if you pay the loan in payments instead of one lump sum, it does not, you still have to pay, at 10% interest, a $110 debt with a $100 money supply. That is impossible until the money supply is increased. The only was to increase the money supply at this time is to borrow more from the banking. system.
Scott
Thanks for the update my United State Code in a 1994 Edition.
Yes, I agree, math is math. Here’s Byron’s report on his bill brought before the Transportation Committee:
The best way to get the bill would be to go to http://www.leg.state.mn.us/leg and get it right off their web site. You also can get hear an audio of the senate hearing by going to MN Senate Media services.
The rep for the banker said that he agreed with most of what I said but banks do not create money, they only loan out depositors money so the concept would not work. Then Senator Olseen stated that his Dad had been a banker all his life and he says that banks only loan out depositors money so for that reason he moved to table the bill and he got enough votes to do so.
byron dale,
I guess we will have to agree to disagree. He successfully rebutted the following claim with his waxing floors example, imo:
“new money *must* continually be borrowed into existence just to pay the interest owed to the bankers.”
Joe
What Griffin failed to explain is where the banker got the profit to spend when the interest on the loan could not have been paid until the banker make another loan.
Byron:
The repeal of Section 152 of Title 12 of the United States Code supports Edwin Vieira’s assertion that the Federal Reserve Banks are obligated to redeem federal reserve notes in coins of the United States. He has written, “True, the Treasury and the banks will redeem Federal Reserve Notes for ‘lawful money’; and the Treasury must receive Federal Reserve Notes in payment of taxes. See Title 12, United States Code, Section 411. But the ‘lawful money’ paid out consists only of base-metallic coins. See Title 31, United States Code, Section 5118(b, c). So redemption amounts to exchanging intrinsically valueless rag currency for almost valueless slugs.” Edwin Vieira, Attorney at Law, http://www.newswithviews.com/Vieira/edwin2.htm
The repeal of Section 152 eliminated the reference to “gold or silver coin of the United States” and thereby broadened the definition of ‘lawful money’ to include the copper, nickel, gold, silver, platinum, steel, and aluminum coins that have been minted pursuant to various acts of Congress.
I found the following obsolete version of Section 152.
Sec. 152. Lawful money reserve of associations issuing gold notes; receiving notes of other associations
Every association organized under section 151 of this title shall at all times keep on hand not less than 25 per centum of its outstanding circulation, in gold or silver coin of the United States; and shall receive at par in the payment of debts the gold notes of every other such association which at the time of such payment is redeeming its circulating notes in gold coin of the United States, and shall be subject to all the provisions of title 62 of the Revised Statutes: Provided, That, in applying the same to associations organized for issuing gold notes, the terms ‘lawful money’ and ‘lawful money of the United States’ shall be construed to mean gold or silver coin of the United States; and the circulation of such associations shall not be within the limitation of circulation mentioned in title 62 of the Revised Statutes.
Ellen:
Byron cited Section 152 of Title 12 of the United States Code. That section has been repealed but it provides an example of a VERY important principle. That principle can be stated as follows: A note is only valid as a tender in payment of debt if the note can IN FACT be redeemed for lawful money.
The pertinent part of Section 152 reads, “Every association organized under section 151 of this title…shall receive at par in the payment of debts the gold notes of every other such association which at the time of such payment is redeeming its circulating notes in gold coin of the United States…”
The 12 Federal Reserve banks closed their public windows in 2003 and they now refuse to redeem federal reserve notes that they issued prior to that time AND they are now issuing federal reserve notes that they have no intention of redeeming. That’s outright fraud! Those banks have violated their franchise and should be dissolved.
DETAILS OF BYRON’S PROPOSED MINNESOTA BILL — he seems to be having trouble posting here, so I’m posting what he sent in an email:
To make monetizing wealth on the state level more understandable, the bill number in the Senate was SF 500 and the bill in the House was HF 619. If anyone is interested they can hear an audio of the Senate hearing by going to http://www.leg.state.mn.us/leg, then go to senate media services. Go to transportation committee Mar. 27 12:45; it was the second bill heard.
To make it clear, the bank rep. said the banks don’t create money, they just loan depositors’ money. I had quoted the U.S. Treasury, the library of Congress, the Federal banks and the FDIC which all state that banks do create the money that they lend.
Here’s my comment to the bank rep: if banks don’t create money, where does it come from? Coins compose only one one-thousandth of the money supply, and Federal Reserve Notes and coins together are less than 3% of the money supply. Where did the rest come from? If the government can issue money (other than coins), why is it $9 trillion in debt? Why doesn’t it just issue money instead of borrowing it?
I think we have a good, solid understanding of the issue now.
How do we move this discussion into the main stream consciousness of the nation?
I propose two ideas:
1. I sent copies of Ellen’s book to both Maryland Senators and I gave a copy to the Democratic Candidate for the House of Representatives rather than making my usual cash political contribution.
a. If someone from each state would do the same, we may have some hope of influencing our elected public officials.
2. Talk show rely on authors to provide topics and discussions for their shows.
a. How can we get Ellen’s and her book on the discussion shows? Charlie Rose’s Show, Oprah, Bill Maher, Jon Stuart. Bill Moyer and Travis Smiley would be great programs to start a public discussion.
b. The fact that the Fed is a private corporation came up on the April 4th Bill Maher’s show on HBO. But the point was mentioned late in the program and the topic did not get discussed.
c. Ellen, Have you sent copies to the producers of any of these programs?
d. Would a letter writing campaign work to get her on a show?
Bill Parks
Thanks Bill! I’m actually supposed to do 4 radio talk shows this week, and there are 2 others I haven’t had a chance to get back to yet. They’re mostly local, but it’s very good practice. I’m honing my message. I think I’ve got it down now pretty well and am ready for bigger game. I haven’t actually sent books anywhere for promotion though. I just wait till they contact me, which is generally the result of writing articles, my strong suit. I have dozens cooking in my fevered brain, but I just don’t have time to grind them out very fast; plus, my prose perfects slowly, with many rewrites. The economy waits on art . . . I also want to improve my blog and website to make them more interactive. One thing I’d like to have is a meetup section where interested people could find each other in their communities and meet and brainstorm, not necessarily just on monetary reform but on all sorts of grassroots reform and funding of promising inventions and solutions. I’m also considering making my book available for free as an ebook. I’ve heard it doesn’t necessarily reduce sales. The only downside is that people don’t really read a whole book as an ebook, and once they have it in that form they may be reluctant to buy it (I’ve done that!), so it may not get read. Maybe I could just put up the most important chapters as a free download, though I’ve already done that to some extent on my website. Anyway I was considering a 7 minute youtube chat about how, as the banking system collapses, we need to do something quickly to raise awareness in order to avoid more authoritarian plans being put in place. Then I would point to my free ebook. What do you think? My friendly editor Duane is currently doing audio chapters for people who prefer to listen rather than read. I’m also doing a cheaper print run so I can put the book in bookstores. It’s currently only really available on Amazon. I’m negotiating with a Spanish translator, and a German publishing company just contracted to translate it into German. I seriously need an office and a secretary, or some clones! I’m the caregiver for my mother and work out of my bedroom. She doesn’t take much care though, and my children are grown.
BRAVO!!!!!
Just finished the book. Great job!
I’d like to take a moment to speak to those about “educating” the public. In my case I don’t worry about educating everyone. I focus on educating one person at a time. I view myself like a Private in an Army. I don’t have to vanquish all of the enemy soldiers. I just have to defeat the ones directly opposed. This may seem like too little, but if one were to do the math a multitude of people could be awakened by simply informing one person per week. Now, if that person were to start doing the same and so on we would win this war in short order.
I’ll close with an old saying my Grandfather used to tell me, “Don’t worry ’bout what you can’t do. DO what you can do”.
Well, I’m off to the trenches!
Dear Miss Brown:
I refer to your article “Derivative Disaster du Jour”, which I am reading carefully. I pause to comment on your statements which, in brief, say that the loans that banks make, do not include the interest necessary for paying off the loans, and so the amount of money lent must continue to increase incessantly.
This is a view that is expressed fairly frequently, but it seems to me that it is incorrect.
The basic problem with the banks’ loans – the money for which, they effectively create out of thin air – is not the lack of including the interest on the loan in the amount loaned.
The problem lies in the mismatch between long term loans and short term deposits. The long term loans are booked as assets, while the corresponding credits to checking accounts, which are sight deposits, are liabilities.
This situation creates a constant draw-down of cash from the banks, and this impells the banks to find new borrowers whose borrowing will create new credits to checking accounts and replenish the diminishing liquidity of the banks.
Another way of stating this, is that the cash income from higher-interest, long-term loans on the asset side, is insufficient to fund the payment of lower interest on the short-term deposits on the liability side. The cash comes in slowly, and goes out fast.
Result is illiquidity – and ALL commercial banks in the world live by being illiquid. Central Banks were invented to try to get around this basic fact, and now the illiquidity is reaching right up into the Fed, which is buying up the bad loans of the banking system in an attempt to save the banks. The Fed is probably going to destroy itself in the attempt.
A great exposition of this is “Borrowing Short and Lending Long: Illiquidity and Credit Collapse” by Antal E. Fekete, published by CMRE, Committee for Monetary Research and Education.
#################################
#################################
My lApril 7th etter to editors at DailyReckoning.Com:
Pay attention, folks!
This is a conspiracy-driven dismantlement of the West’s
financial underpinnings, for a certain purpose: TO EQUALIZE
GLOBAL ECONOMIES, for future installation of one-world
government.
I’ve provided all the details in my essay, “Planned
Destruction of America” (linked below), which is my report
on Lt. Col. Archibald Roberts’ 1968 booklet: “The Anatomy
of a Revolution”.
Study my essay, then write as if we’re all being led down
a path to hell on Earth by secretive, elite movers and
shakers on the Left and Right (path to hell aka “Third-Way
Global Economic Socialism”). Read and learn and teach:
The EU and the coming North America Union are products of
the 1940s GATT formulations, and very few analysts are
aware of it ((GATT, NAFTA, and CAFTA are socialistic
attempts at equalizing global economies, in order to in-
stall one-world government under THIRD-WAY Global Economic
Socialism)).
My missive to Ron Paul’s staff, regarding my view that
this financial crisis is not by happenstance nor
mismanagement—but BY DESIGN!:
The Honorable Ron Paul is ignorant of an ongoing conspiracy
to topple, financially, the West, in order to equalize
the world’s economies; for building one-world government
under GLOBAL ECONOMIC SOCIALISM. // The conspiracy began
in the 1940s with the GATT formulations. // Ask why
Greenspan had violated his chairmanship duties by advising
prospective home buyers to take out an ARM. // Ask why
Greenspan had sent out fed regulators to warn banks that
they’d be charged with RACISM if they didn’t loosen home
loans for minority, HIGH RISK home buyers. // Ask why
Greenspan recently, TRAITOROUSLY, had advised OPEC oil
producers to de-link from the U.S. dollar. // Greenspan –
the FEDERAL RESERVE – has embarked on a purposeful set of
monetary policies designed to destroy the West’s financial
underpinnings. // Read about the WHO, the HOW, and the WHY
of it in my below article (first one):
Planned Destruction of America
http://planneddestructionofamerica.blogspot.com/
Corporate America: What Went Wrong?
http://corporateamericawhatwentwrong.blogspot.com/
This one helps to confirm efforts to PURPOSELY trash
America’s financial underpinnings:
http://www.321gold.com/editorials/engdahl/engdahl031808.html
P.S.
Oil is payoff for the West’s efforts at providing PROXY
COMBATANTS for Israel–for protecting Israel from expanding,
encircling Islamic Arabism; a Jewish nation-state having
supporters throughout the West willing to destroy the entirety
of Western civilization for Israel’s sake.
That’s the gut-wrenching truth of why Western democracies
are sacrificing blood and treasury in the Middle East; especially
the U.S., which has enough off-shore and on-land oil reserves
to last 300 years at her present rate of consumption, and
which reserves were PURPOSELY capped and/or not drilled
because Israel’s supporters poured millions of dollars into
ENVIRONMENTAL MOVEMENT groups’ coffers, to work at
keeping America from oil/energy independence and tied to
Israel’s interests in the Middle East. That’s the truth you’ll
NEVER see nor hear reported in Western mainstream news
media, because Israel’s supporters control what’s fit to be
said or printed about why the West wars with Islamic
Arabism.
Thanks for the comments! I’m off to the trenches too. Ellen
Ellen: I am wondering just how the “losses”, actual or potential, have been calculated, in short, how real they are. The subprime fiasco was built on the mortgage documented value of the real estate underlying the CDOs. After that, the pyramid to me appears highly expectational. Can we really make public policy on a platform of compensating speculators for their blighted expectations?
Terry Arnold
Hi Terry, I agree, the banks should not be bailed out, at least not by the taxpayers and left to operate as private corporate entities. Other businesses don’t get bailed out. The argument for doing it is that we’re all in the stock market together, and if it goes we’ll have another Great Depression; but that needn’t necessarily be true. I’m for putting the banks in FDIC receivership and taking them over. That’s what used to be done, but the other banks complained because it raised their FDIC premiums, and the taxpayers complained because it raised their taxes, and the politicians complained because they didn’t get re-elected (e.g. Bush Sr.). So now they’re doing these stealth bailouts, which we pay for with inflated prices, and the banks get off scot free.
April Charney, who did the Deutsche Bank cases in Ohio, suggested a sort of Neighborhood Watch where knowledgeable interested groups would go to court and see that everything was done correctly in this massive wave of foreclosures. If it wasn’t (e.g. no proof of recorded title or assignment on behalf of the plaintiffs), the defendants could be advised of their rights and might be able to keep their homes. We could also form a sort of union of distressed homeowners, painting an ominous picture of a mass turning in of keys and walking away from their mortgages unless certain steps were taken. But what steps — any ideas? The banks and mortgage-backed securities holders are in pretty dire straits themselves.
RE: CREDIT DEFAULT SWAPS: DERIVATIVE DISASTER DU JOUR
Holy mother of God.
That is absolutely the best, most enlightened analysis of the current predicament I have read. What’s more, the author goes right to the solution I’ve been concluding: nationalize the banking system. As incentive to the bankers for handing over the reigns of financial power, I suggest we offer pardons from criminal prosecution for unprecedented, unbridled greed, irresponsibility and corruption.
Of course, since most politicians are in the pockets of high finance, we will first have to take back our government. Where’s Ron Paul when you need him?
BTW, probably the greatest “activist” on this front is here:
http://market-ticker.denninger.net/
P.S. The solution mentioned makes sense, but you’ll need money supply growth to also be consistent with productivity growth and some other factors. Also, accurate credit worthiness assessment should be utilized in determining where new funds are lent. Furthermore, the idea that innovation will be directed via central planning needs to be contemplated. It is important to maintain “free enterprise” as best possible. If the government controls the creation of money, it is important that strong democracy be utilitized to prevent authoritarian rule.
Thanks J. Adams! I went to the website you suggested, but didn’t see exactly what you were referring to. I agree that some careful rules would have to be put in place about who gets the money, how much and for what. Any specific ideas on that? I think we need to have a clear game plan ready, with detailed suggestions for how it is to be played.
Look at the petition linked to on Genesis’ web site:
http://www.denninger.net/
Also, there’s a forum of like-minded folk at:
http://www.tickerforum.org
They are even planning a protest April 25th!
http://www.tickerforum.org/cgi-ticker/akcs-www?post=37875
All this mysterious “wax on / wax off” stuff is diversionary to the true problem. The FED system in itself is merely a method of accounting for the nations productivity, a debt based method. As mentioned earlier the FED returns interest made on the issuance of currency back to the Treasury. Also the FED though perceived to do the reverse, follows rather than leads the bond market with regards to the effective FFR policy. With proper “regulation” fractional reserve lending leads to non-usurious interest rates. But the unabated extension of credit leads to the nefarious inflation tax. The problem which occurred is a direct result of the repeal of Glass-Steagal. This created a conduit for credit creation outside the regulating authority of the FED but likewise the FED turned a blind eye. As mentioned in the previous posts State sponsored “chartilism” (Debt-Free) and FRN’s (Debt-Based) currency are top down approaches that will always be subject to the integrity of the elected officials. Some how a brake needs to be applied, that is not dependant on regulation. The monetization of specific PM’s mentioned previously in the thread would be a good start. Otherwise you’re just substituting one group of players for another in what essentially morphs to a “centrally planned” economic structure, the result of which the consequences are obvious.
Ellen, Denninger is a strong advocate of “transparency” in the markets regarding derivatives trading and the like, (a closing price each and every session) so as that expansion of these products can not continue unchecked till systemic failure results in generally accepted accounting principles being undermined so as to not create panic by an instant “mark to market” event. Also the conflict of interest, resulting from the collaboration of the ratings agencies, commercial & investment banking institutions along with the insurers (mono-lines), needs to be unraveled. Glass-Steagal effectively did such for three generations. The current debacle is no accident. The current candidates especially Hillary and McCain, Hillary (Bill signed off on Graham-Leach) McCain deeply rooted in the S&L scandal have no business trying to unwind this mess they helped to cultivate.
Deninnger doesn’t buy the parallel currency approach as he feels the price of gold is more closely related to geopolitical gyrations than monetary debasement. On this I humbly disagree. I proposed the argument here,
http://www.tickerforum.org/cgi-ticker/akcs-www?post=30506
I am sincerely interested in your thoughts regarding this.
For the latest on what the banks are up to read the Solari blog below:
http://www.solari.com/blog/?p=772
IMO everything that Catherine Austin Fitts has on her Solari.com site is well worth reading.
Thanks for the forum Ellen.
Jim Johnston
Dear All,
If you click on my name you should go to my entry on Transfinancial Economics. This would solve many problems of the world.
R.Searle.
hi guys,
What you think of gold/silver monetary system with real bills exchange by Adam smith?
It’s not 100% gold standard if you do not want to live in the middle ages but a credit elasticity for our post industrial world..
Somesort of taking the middle ground of not throwing the baby out with the water
To Al why would anyone want to talk about a gold/silver monetary system when it only takes a little research to prove there is not, and never has been enough gold and silver to base a monetary system on it.
Stormrunner-
The Fed system is not a method of accounting for the nation productivity.
The Fed system is a method of transferring the productivity of the people to the bankers who produce nothing.
The only regulation that should be imposed on fractional banking is the regulation on thief by fraud/deception and put all the big banker at the top in jail an outlaw fractional banking.
Please be kind enough in your own words and in simply English explain what you mean by inflation tax? How does it work? How do you determine how much is it? Who gets the benefit of the tax. How and by what is it paid?
Thank you
Disclaimer, I am not in any way an expert my opinion is merely that an opinion resulting from hours of reading the opinions of others.
Inflation is Always and Everywhere a Monetary Phenomenon
Thus the classical definition of inflation is an increase in the base money supply, this has not occurred only an increase in M3 or monetary aggregates a reflection of run-away credit extension.
My observation FWIW would seem to indicate that price level perceptions vs base money supply is the source of the ambiguity. This inherent source of confusion is present due to the fact that our monetary accounting method is in fact debt-based. In other words every single dollar that is issued is backed by some debt instrument. This is the source of the accounting methodology. In our economy extended credit spends as easily as actual FRN’s, therefore excess credit chasing too few goods can result in price level elevation not warranted by actual demand/scarcity phenomena (inflation “perception”, then mean reversion when the perception is proven inaccurate, housing being a good example, ). Credit extension can also result in a ramp in productivity by creating the widgets to extend to the participants to provide incentive to increase production. Granted usury created by this directed to the non-productive banking system is a problem if lending rates are too high, but in the current crisis rates too low were the culprit. Interest, traditionally was the source of profit until a conduit for moving the liabilities for the banks was created substituting originations and other comps as the main source of income for the banks while pushing liabilities to other market participants. The policing of credit which was the responsibility of the creators of said extension, the banks was differed to investors. There is a balancing act requiring strict regulation regarding credit issuance; this is where abuses always occur. This perception of the FED having a printing press is inaccurate up until the powers of appropriation are extended to them, an event which appears sadly to be underway via the current crisis. The JP Morgan Chase buyout of Bear with moneys not appropriated via congressional approval could be likened to taxation without representation. In other words when credit is purposefully extended to participants that have no hope of servicing the debt, they should be allowed to fail, this brings credit extension in line with actual base money availability. If on the other hand they are bailed out, the debt is said to be monetized and debt instruments are created on the backs of the tax payer to extend the base money necessary to balance the books so to speak in aggregate – this would be a perfect example of monetary inflation as I understand it.
The extension of credit in a Debt-Based Monetary system is a lean on future productivity and as long as the future productivity occurs the books balance, and inflation remains in check. The gray area that has been commandeered to produce the window of opportunity for the recent corruption has been the merging of commercial with investment banking. These entities had a brick wall erected between them after the debacle that was the Great Depression, the legislation that was Graham-Leach effectively rescinding Glass-Steagal knowingly created this conduit.
Debt Free currency issuance will result in need for similar regulations or the abuses will still occur, this type of reform as pointed out earlier in the thread just rotates the source of the players.
As to limited supply of precious metals, this is not relevant in today’s digital economy as increments of what is available can be priced in a free market float as to not constrain the economy these would then be directly convertible to the standard currency for use in the general economy, there is no need for satchels of hard money.
Free market local private issue money, digital currency backed 100% by gold.
Mark
DGCmagazine
hi guys,
I’m not an economics expert but the thing is how can one runs amodern economy without credit . if we halt all forms of credit, the world of commerce will come to a standstill before the oil runs out..
To Stormrunner
Boy if that is simly and plain english would sure hate to see you write some thing that you thought was not plain and simply. you remind me of a school Superintendent i worked with once. He talked 30 minutes and nobody had a clue what he said.
“The JP Morgan Chase buyout of Bear with moneys not appropriated via congressional approval could be likened to taxation without representation.” Lets try this again.
Who issued the tax? Who is responsible for paying the tax? Who got the benefit of the tax paid?
FWIW it appears you have read a lot of nonsense and you did not stop one minute to question if it was nonsense or not, and you never really understood a thing that you read
This is pretty simple, really. However, Congress won’t do it without guns to their heads, because they profit from this system. Here it is:
Take two numbers, one being the so-called “national debt,” which was incurred by Congressional bastards and NOT by any average citizen, the other being the total of American assets being held by foreigners (most of the Fed banks are owned by foreigners, and the federal government doesn’t own ONE share of stock in any of them). Add those two numbers. Print up one bill with the total of those two numbers. Hand it to the bankers and say, “You are being paid off for everything you claim to be owed, and you’re being paid in the same phony currency you’ve been palming off on this country for a century. If you are not out of this country in 72 hours, you’ll be shot on sight.”