RETURN TO THE GREENBACK DOLLAR
We no longer have a government “of the people, by the people, for the people.” We have a government run by and for Big Business, and Big Business has gotten control because its affiliated banks have monopolized the business of issuing the national money supply, a function the Constitution delegated solely to Congress. What hides behind the banner of “free enterprise” today is a system in which giant corporate monopolies have used their affiliated banking trusts to generate unlimited funds to buy up competitors, the media, and the government itself, forcing truly independent private enterprise out. Big private banks are allowed to create money out of nothing, lend it at interest, foreclose on the collateral, and determine who gets credit and who doesn’t. They can advance massive loans to their affiliated corporations and hedge funds, which use the money to raid competitors and manipulate markets. If some players have the power to create money and others don’t, the playing field is not “level” but allows some favored players to dominate and coerce others. These giant cartels can be brought to heel only by cutting off their source of power – the power to create money — and returning it to its rightful sovereign owners, the people themselves.
Two independent monetary systems have competed for dominance in the United States ever since we were a collection of colonies. In provincial America, paper money was issued by local governments. In England at the same time, paper banknotes were issued and lent privately by banks, headed by the Bank of England, the first private central bank. The major flaw in the private banking system was that the banks created the principal but not the interest necessary to pay back their loans, so more money was always owed back than was put into the money supply, requiring more loans to be taken out to cover the interest, spiraling the people into debt.The most effective and efficient of the American colonial systems was in Pennsylvania, where a publicly-owned bank issued paper money and lent it to farmers. The money returned to the government with interest, preventing inflation; and to keep enough money in the system to prevent the debt spiral of the private banking system, the government issued and spent a sum of money on public works as well. The Pennsylvania system worked so well that it completely funded the provincial government without taxes or inflation. Benjamin Franklin and others maintained that the chief reason for the American Revolution was that Parliament forbade the colonies from issuing their own money. Paper money issued by the Revolutionary government got the colonists through the war, but the British heavily counterfeited the Continental currency as a deliberate war tactic, and by the end of the war it had been inflated so much that it was nearly worthless. Fear of inflation led the Continental Congress to completely omit paper money from the Constitution, which does not say who can issue it or under what circumstances. The private banks filled the breach, and by 1913 the U.S. had the same private central banking system that England had. Ever since the dollar went off the gold standard in 1933, all of our money except coins and a few rare U.S. Notes has been created privately by banks (including the private Federal Reserve) and lent to the government and the people. Two centuries after the Revolution was fought, the pyramid scheme of lending 10 dollars and requiring 11 back has reached its mathematical limits. We are “all borrowed up” and the banking system is imploding. It is time we tried the system for which our forefathers fought and died: real, debt-free, publicly-issued U.S. money. This tack would not only not add to inflation but could actually reduce or eliminate it. Inflation results from an increase in “demand” (money) over “supply” (goods and services). Today inflation is caused by borrowing to repay debt: the money created into existence by banks goes to pay interest rather than to produce goods and services. If the government were to issue money and use it to pay for real goods and services (roads and bridges, sustainable energy development, health services, and the like), demand and supply would remain in balance and inflation would not result. The “Federal” Reserve is actually a privately-owned corporation that issues money and lends it to the government. A truly federal central bank would issue funds directly to the Treasury as debt-free U.S. Notes, or as “national credit.” This was done successfully in Australia and New Zealand during the 1930s and 1940s. A state-owned central bank funded public projects that put people back to work, at a time when most of the rest of the world was struggling with a depression brought on by a global shortage of bank-created money. Today we are facing the same sort of bank-created credit crisis, and it could be resolved in the same way. Steps Congress might take include:1. Amending the Federal Reserve ActFederal Reserve Act to make the Federal Reserve a truly federal agency, acting under the auspices of Congress in conjunction with the Treasury.
2. Updating the Constitutional provision that “Congress shall have the exclusive power to coin money [and] regulate the value thereof” to read, “Congress shall have the exclusive power to create the national currency in all its forms, including not only coins and paper dollars but the nation’s credit issued as commercial loans; and it shall not delegate this power to any private entity.”
3. Authorizing new issues of federal legal tender backed by “the full faith and credit of the United States,” to be spent on programs that promoted the general welfare. To prevent inflation, this currency would be advanced only for programs that contributed new goods and services to the economy, keeping supply in balance with demand. Issues of the new currency would also be capped by some ceiling — the unused productive capacity of the national work force, or the difference between the Gross Domestic Product and the nation’s purchasing power (wages and spendable income).
4. Advancing credit interest-free to state and local governments, for rebuilding infrastructure and other public projects. The emphasis would be on projects that were self-sustaining, such as the development of cheap, effective alternative sources of energy (wind, solar, ocean wave, etc.) that could be sold to the public for a fee; or the repurchase of homes in default, to be resold or rented as low-income housing.
5. Establishing a network of national banks to serve as local bank branches of the newly-federalized banking system, either by FDIC takeover of currently insolvent banks or by the purchase of viable banks with newly-issued U.S. currency. Besides serving depository banking functions, these national banks would be authorized to service the credit needs of the public by advancing the national credit as loans. Any interest charged on advances of this credit would be returned to the Treasury, to be used in place of taxes.
6. Authorizing the Treasury to buy back and retire the federal government’s outstanding debt as it comes due, using newly-issued U.S. Notes or Federal Reserve Notes. In most cases this could be done online, without physical paper transfers.
7. Regulation and control of the exploding derivatives crisis, either by imposing a modest .25 percent Tobin tax on all derivative trades in order to track and regulate them, or by imposing an outright ban on derivatives trading. If the handful of banks responsible for 97 percent of all derivative trades were found after audit to be insolvent, they could be put into receivership and their derivative trades could be unwound by the FDIC as receiver.
8. Initiating a new round of international agreements modeled on the Bretton Woods Accords, addressing the following monetary issues among others:
— The pegging of national currency exchange rates to the value either of an agreed-upon standardized price index or an agreed-upon “basket” of commodities;
— International regulation of, or elimination of, speculation in derivatives, short sales, and other forms of trading that are used to manipulate markets;
— Interest-free loans of a global currency issued Greenback-style by a truly democratic international congress, on the model of the Special Drawing Rights of the IMF; and
— The elimination of burdensome and unfair international debts. This could be done by simply writing the debts off the books of the issuing banks, reversing the sleight of hand by which the loan money was created in the first place.Just as we need publicly-operated police, courts and laws to keep individual and corporate predators at bay, so we need a system of truly national banks, in which the power to create the money and advance the credit of the people is retained by the people. We trust government with sweeping powers to declare and conduct wars, provide for the general welfare, and establish and enforce laws. We should trust it to create the national money supply in all its forms. The federal government need not and should not go into debt. A government with a properly designed and monitored system of publicly-issued money could fund itself without taxes, debt or inflation.
Ellen Brown, J.D.,
March 6, 2008
March 6, 2008
This topic has gotten so far off of Ellen’s original article that it is ludicrous. The “Greenback Dollar” worked, as did “colonial script”. The control of money is the supreme power over a person, group, community or nation. Without democratic control over money there can be no lasting democracy.
The world is headed toward a totalitarian monetary aristocracy. Those at the top of the private interest-money pyramid scheme will control every person, nation, or group though the control of money.
The last building blocks of this new monetary world order are being put into place right now, as the current economies of the world are collapsing. Then the new world superbanking authority will come to the rescue, at least to all who humbly bow down to them and lick their boots.
Then we will all realize what visionaries like Jefferson, Franklin, Madison, and others who have been warning us about for centuries has come true. We will be serfs and slaves to the soulless bankers and their corporate cronies.
I don’t know how I’m going to explain that to my grandchildren and future generations. Do you?
Those on top will only continue to rule if they maintain a “money from nothing” credit system. It’s the genesis of the currency that is the issue.
Money is just a series of legal agreements, a promise to pay in the future for goods and services received now. The goods and services are needed now to create the profits to repay the loan. “Government” serves only to oversee the deal, making sure the parties play fair. Just as you would not want private judges, we should not have private parties overseeing “the full faith and credit of the people.” People can trade in anything else they want, including gold; that’s just barter, and it doesn’t require an overseeing government judiciary-type body. What does require one are promises to pay in the future, otherwise known as “credit.” You can call that “fiat money”, but what it really is is just IOUs. IOUs are legal contracts drawn on paper (or computer screens). We NEED a credit system, and government is the proper party to oversee it.
Hi Ellen, As usual i continue to read everything u write and share with everyone I know. A friend of mine sent your article ” The Public Option in Banking” to her uncle who had this to say and I wondered if you would care to respond? As I am not always able to make an articulate argument. The uncle’s argument : “I don’t quite follow her argument. It doesn’t sound like the public banks she’s talking about creating would bother Goldman Sachs one whit. We got into the financial crisis of 2008 because the big investment houses/banks were “securitizing” home mortgages and other loans of unknown quality, then outfits like AIG guaranteed those securities without the reserves to back them up (one dollar in reserve for every $30 guaranteed) and outfits like Standard and Poors rated the junk AAA. When all of the banks around the world realized they were holding crap, the house fell down. All of this was possible in the first instance because the Glass-Steagall Act of 1935 or thereabouts, which prohibited investment firms from acquiring commercial banks, was repealed in the 1990’s. To add to the problem, somewhere in the last 20 years or so the law was amended to allow interstate banking (giving us operations like Bank of America which originally was limited to California). I don’t see how the public banks Brown is talking about would affect the Wall Street investment banking system at all. It seems to me that what she is talking about are banks that would act like any local commercial bank. Take deposits, run checking and savings accounts, make loans, etc I don’t see much need for that because those banks were not the problem. If she is talking about public banks that would compete with Goldman Sachs or Bank of America I would call that a bad idea. The better cure would be to reinstall Glass-Steagall and clamp down more on interstate banking if, indeed, that is a problem.”
Thanks Marth! Here would be my response to your friend’s uncle: reinstating Glass Steagall is a great idea, but how are you going to do that, when the banks own Congress? I’m suggesting setting up our own public banking system, chiefly state-owned banks, which can solve the states’ credit crises. When a few public entities try it and everyone sees how much better it works, I believe the states will all flood in, and we can abandon this Wall Street bailout that we can’t afford. Wall Street is being kept alive with our taxpayer money, and they’ve convinced us we have to cough up because otherwise we won’t have a credit system; but that’s not true. We can set up our own credit system and leave them to their fates in the “free market” they’ve profited from so handsomely over the years.
Ellen,
The only problem with your idea is that at some point the banks are going to stop it if these new banks were ever successful. Ofcourse, this runs contrary to free market capitalism which is supposed to encourage competition!
Moreover, informing all, and sundry about monetary reform, and the nature of credit creation does not automatically mean that everyone will follow your lead, or doing anything practical about it. A case in point is the Iraq War. Most people realized that it was con trick, and took to demonstatrations. Yet, it did not prevent , or stop the war!! So, much for people power… !!
However, I suppose we should not totally give up. Things may change.
Robert ….
You’re thinking ! The only debt currency we’ll see is that created by the powers that be. That’s exactly why decentralization is the only structural concept that is capable of moving past the current monetary climate. In turn, once you have a decentralized design, it cannot be based on debt. It must be based on assets.
The ultimate end results in a real-time relationship between currency (as a measure) and precious metals (as assert money). Each person and/or entity owns their own precios metal money. That’s a free market system …… and it’s already here ! There is no financial crisis for those who wake up in time. There is only a marketing challenge.
The “financial crisis” was based on money from nothing. In other words, monetary inflation , the back-bone of booms & busts. Social credit will not solve an inflation issue when the very few have their hands on the currency supply lever. It’s a structural problem of centralization, whether it be at the federal or state level.
Free market money needs a free market structure of decentralization, in ownership, creation and distribution. Debt currency cannot subscribe to decentralization. It must be centralized because it relies on a system of IOU’s. Greenbacks were IOU’s, so thinking that government created fiat is going to solve the country’s problems is a repeat of history ….. boom-bust …… boom-bust ……. boom-bust.
Thanks Ellen. I posted my last before seeing the action you’d taken or your post.
People who defend the status quo of private money creation that is loaned into existence at interest are essentially defending insanity on a cosmic level. The idea that an individual, group or nation can give up their financial sovereignty without sacrificing their other sovereign rights is just “illogical” as Spock would have said.
Our world will continue to implode until we fix the money system.
Once that fact is recognized, the only remaining question is how to get it done. All the rest is nonsense.
I just put mine on Model Economy Wiki.
Why don’t we just do what Jerry Voorhis said?
He gave it a lot of thought.
It seems impossible to me that the people will knowingly accept that the private banking corporations are putting the taxpayers in debt for untold Thousands of Billions of dollars, indebting all the generations alive, and maybe others, in order to maintain a broken and unsustainable money system, called the debt-money system.
Our best insurance policy is the option of a new money system.
It seems precisely what Milton Friedman called for in his “Financial and Monetary Framework for Economic Stability.
The separation of the money-creation power from the normal banking function of America’s money system.
Great idea, joebhed! But I thought that is what we were talking about doing. The key ingredient in all money proposals like EHB’s, Zarlenga’s, Soddy’s, Cook’s, etc., is taking back the money creation power.
Without that ingredient, money reform is meaningless. The proper business of banks should be to store and lend money, but NOT to create it. That sovereign power belongs to the people, or their representative governments.
The conversion could be scheduled to phase in gradually, as old loans are retired or bought out, and existing dollars are converted into the new ones at some ratio.
I think we need some new laws though, that deal harshly with those who violate the public money trust. And when I say “harshly” I really do mean that. These should be treated as capital crimes.
BTW, joebhed, Isn’t that a picture of Frederick Soddy? He wrote one of my favorite all-time classics on money: “The Role of Money”. Published during the First Great Depression in 1934, it reads as if it were written yesterday.
Hi Ellen, just finished reading your book, wow, certainly opened my eyes and I am passing it around
“I’m a man from down under” who would appreciate any links for Australasia particularly N.Z.
well done
Thanks Ray! New Zealand has a money reform group that puts out a very good newsletter. It’s called the New Zeland Democratic Party for Social Credit, and the journal is called “The Guardian Political Review.” Available at http://www.Democrats.org.nz.
Hi from Australia,
Ellen you are my hero – and coming from a male chauvanist that’s saying something!
Check out my CD – you can play a sample of each track – I think you will find the opening track Money Supply amusing! If you are interested I’ll send you a copy F O C.
Lyrics to Money Supply:
Verse 1: We make money – a tap on the key – nothing for you – the world for me – you don’t get nothin’ – just paper at best – but you pay it back plus interest – if life’s gettin’ tougher and you’re wondering why – it’s all just a game of money supply
Verse 2: We rule the worl through the money supply – sink your economy or make it fly – external debt right outta thin air – the CIA fact book it’s all in there – if so much nothing gets you wondering why – it’s all just a game of money supply
Chorus: money supply – money supply – we got control of the money supply – a scrillion or two of nothing at best – sucking your blood plus interest!
Verse 3: back in the thirties we brought you down – by deflatin’ supply not enough to go ’round – then you came pleading with your begging bowl – and for pennies on the dollar we bought your sole – if you only knew the real reason why – it’s all just a game of money supply
Regards (and keep up the good work)
Mal.
Cool. Hero of a chauvinist! I tried to play the track but it didn’t come up. Great lyrics though!
[...] — Interest-freeloans of a global currency issued Greenback-style by a truly democraticinternational congress, on the model of the Special Drawing Rights ofthe IMF; and — Theelimination of burdensome and unfair international debts. This could bedone by simply writing the debts off the books of the issuing banks,reversing the sleight of hand by which the loan money was created inthe first place.Justas we need publicly-operated police, courts and laws to keep individualand corporate predators at bay, so we need a system of truly nationalbanks, in which the power to create the money and advance the credit ofthe people is retained by the people. We trust government with sweepingpowers to declare and conduct wars, provide for the general welfare,and establish and enforce laws. We should trust it to create thenational money supply in all its forms. The federal government need notand should not go into debt. Agovernment with a properly designed and monitored system ofpublicly-issued money could fund itself without taxes, debt or inflation. Ellen Brown, J.D., March 6, 2008 March 6, 2008 Source: Webofdebt.com [...]
Solid page, Hope to definitely visit again:D
Sure, creating our own money is fine, possible, logical, and so on, but will it happen? I dont think so, ever. The powers that be will see to it, the people are too ignorant to understand it. Thus, we the educated middle class sit here and read the wonderful articles by Ellen Brown, and feel stimulated, our stimulation is out of the realm of reality. It is for enjoyment. There is nothing we can do to further the cause of bank nationalization. There is too much to do, no one willing to do it, and it is too difficult to understand. We are doomed.
Gandhi said something to the effect that what we each can do may be little, but it is essential that we do it. That is what I believe too. With this attitude one small 130 lb man built a movement that freed India from the control of the British Empire, and he did it by using non-violence.
It is easy to feel like “we are doomed”. At times I am certain that we are. But then my faith in The Creator returns, and assures me that that there is a way.
For instance, we don’t have to create our own money at the national level. We can do it community by community, economy by economy.
All “money” is simply bookkeeping. Debits and credits. We can form local public credit union type corporations and issue debit/credit cards to the members at very low or no interest rates, or fees for service to cover operating expenses and salaries of those involved. It doesn’t have to be that complicated.
If computers can’t be used then ledger books worked for centuries, or paper script could be issued.
As for the national issue. Things will happen to open doors that seem closed now. There will be further collapses in the present system. They are unavoidable without nationalizing the money supply. Crashes are going to happen. Supply chains will break down. For how long, who can say? But this system cannot continue, as it is unsustainable. It MUST end. The only real issue is how, and whether the end will be one “we” can walk away from or not.
Find the faith my sister, and do what little you can. This world was not created for criminals and monsters to control. They may be strong, but we are many.
I agree. I don’t think it will happen in the sense of legal tender. People must take control and develop a sovereiogn market currency using gold and silver. Legal tender is a “crutch”, anyway, a crutch for fiat currency that does not subscribe to maket laws.
Using gold and silver would solve nothing; it would be a step backward toward more primitive practices; it would give control to those who have silver and gold, and that is where the money power is now, and where the money-creation power originated. Returning to gold or silver would simply set the stage for the last 90-year money cycle to start all over again, if that were politically possible.
The only way out of our monetary dilemma is the shift of the power to create money from the private to the public sector.
However, the ultimate solution will have to come in the full understanding of the laws governing the just production and distribution of wealth, and how those laws are now being systematically violated by those who now have and control all the wealth in land and resources. (Including gold and silver).
I suggest reading Henry George or David Korten on issues that go beyond money reforms.
I have started a facebook group called “Dave Camp should represent the people instead of the evil banksters” Dave Camp is my congressman. He is from Midland Michigan where Dow Chemical is headquartered. He voted for the bailout bill on the first vote. He is one of only 16 Republican congressmen who isn’t a co-sponsor of Ron Paul’s HR 1207 to audit the Federal Reserve System.
Dave Camp has a facebook page of his own which I contribute to as well.
If you are on facebook, join my group.
i agree with jere hough on the gandhi comments. we are definitely not doomed and we can and will do something about the private banking monopoly. i assist by informing people i meet that something is amiss with our private central banking system here in canada. its not much but assisting in the burgeoning awakening of mass consciousness is definitely something i can and do assist with. keep it up boys and girls keep it up. the people are listening and watching and ready to pounce on whatever comes up to help free us from usury servitude. i am giltimi of the haisla
Welcome Giltimi of the Haisla, Thank you for your comments. A lifting of the mass consciousness is indeed the key to overcoming the monopoly-masters.
You are a worthy representative of your people, and I am honored that you have taken up the fight against “usury servitude”.
I hope and pray you and your people are able to keep their lands from the usurers, now and always.
It seems to me we are living through the ending of one approx. 500 year cycle and transitioning into the next, so we are facing transformations such as the natives of the Americas faced when Columbus landed. Or what Europeans faced back around 411 as the Roman Empire crumbled. In the coming years, Americans will notice that China’s economy has expanded while the USA’s has contracted, and wonder why. We will then notice how the Chinese central bank differs from ours. I think that is when large numbers of people here will demand change from private-banker controlled money, issued as debt, to money issued by a democratically controlled government. I suspect this raising of monetary consciousness will happen between 2012 and 2015.
Robert …
It’s a scary thought to consider that people would want to move from one form of centralized control to another. Where does decentralization fit in on the basis of using real assets as money ?
Real “representative government” is the essence of “decentralization”. Too bad we lost ours to the money powers – the central banksters.
We need to remember to focus on the bulleted causes of our economic anc monetary collapse, and the essential remedies:
The problem is the theft of our money system via centralized, private, for-profit. central banking system: the Fed, IMF, World Bank, and BIS.
The solution is for our congress to reclaim the authority to issue and control interest-free money for public use, and at no or low use to other than public sources or enterprises.
This means:
* Nationalization (bringing under public authority) of all money-creation banking activities and functions.
*. Elimination of Fractional Reserve Banking – the process of lending many more times the amount of loans than the banks have on deposit for cash reserves.
* Spending, rather than lending, into existence a large portion of the newly created money though national, state, county and local public authorities. This means roads, bridges, airports, shipyards, ports, public transportation (trains, buses, airlines), water and sewer systems, and so on.
* Total Transparency and Accountability in accounting for. or tracking, every penny and dollar created and spent, or lent, into circulation, anywhere, any time, by anybody.
The American taxpaying citizen must be informed of how their tax dollars and government revenues are being used, and must ultimately elect or approve of those entrusted with monetary authority.
THESE ARE THE “CORE ESSENTIALS” OF ANY RATIONAL AND THOUGHTFUL PROGRAM OF MONETARY REFORM.