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Weno longer have a government “of the people, by the people, for thepeople.” We have a government run by and for Big Business, and BigBusiness has gotten control becauseits affiliated banks have monopolized the business of issuing thenational money supply, a function the Constitution delegated solely toCongress.  What hides behind the banner of “free enterprise”today is a system in which giant corporate monopolies have used theiraffiliated banking trusts to generate unlimited funds to buy upcompetitors, the media, and the government itself, forcing trulyindependent private enterprise out. Big private banks are allowed tocreate money out of nothing, lend it at interest, foreclose on thecollateral, and determine who gets credit and who doesn’t. They canadvance massive loans to their affiliated corporations and hedge funds,which use the money to raid competitors and manipulate markets. If someplayers have the power to create money and others don’t, the playingfield is not “level” but allows some favored players to dominate andcoerce others. These giant cartels can be brought to heel only bycutting off their source of power – the power to create money — andreturning it to its rightful sovereign owners, the peoplethemselves.                                   
Twoindependent monetary systems have competed for dominance in the UnitedStates ever since we were a collection of colonies. In provincialAmerica, paper money was issued by local governments. In England at thesame time, paper banknotes were issued and lent privately by banks,headed by the Bank of England, the first private central bank. Themajor flaw in the private banking system was that the banks created theprincipal but not the interest necessary to pay back their loans, somore money was always owed back than was put into the money supply,requiring more loans to be taken out to cover the interest, spiralingthe people into debt.Themost effective and efficient of the American colonial systems was inPennsylvania, where a publicly-owned bank issued paper money and lentit to farmers. The money returned to the government with interest,preventing inflation; and to keep enough money in the system to preventthe debt spiral of the private banking system, the government issuedand spent a sum of money on public works as well. The Pennsylvaniasystem worked so well that it completely funded the provincialgovernment without taxes or inflation. Benjamin Franklin andothers maintained that the chief reason for the American Revolution wasthat Parliament forbade the colonies from issuing their own money.Paper money issued by the Revolutionary government got the coloniststhrough the war, but the British heavily counterfeited the Continentalcurrency as a deliberate war tactic, and by the end of the war it hadbeen inflated so much that it was nearly worthless. Fear of inflationled the Continental Congress to completely omit paper money from theConstitution, which does not say who can issue it or under whatcircumstances. The private banks filled the breach, and by 1913 theU.S. had the same private central banking system that England had. Eversince the dollar went off the gold standard in 1933, all ofour money except coins and a few rare U.S. Notes has been createdprivately by banks (including the private Federal Reserve) and lentto the government and the people. Two centuries after the Revolutionwas fought, the pyramid scheme of lending 10 dollars and requiring 11back has reached its mathematical limits. We are “all borrowed up” andthe banking system is imploding. It is time we tried the system forwhich our forefathers fought and died: real, debt-free, publicly-issuedU.S. money.This tack would not only notadd to inflation but could actually reduce or eliminate it. Inflationresults from an increase in “demand” (money) over “supply” (goods andservices). Today inflation is caused by borrowing to repay debt: themoney created into existence by banks goes to pay interest rather thanto produce goods and services. If the government were to issue moneyand use it to pay for real goods and services (roads and bridges,sustainable energy development, health services, and the like), demandand 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 trulyfederal central bank would issue funds directly to the Treasury asdebt-free U.S. Notes, or as “national credit.” This was donesuccessfully in Australia and New Zealand during the 1930s and 1940s. Astate-owned central bank funded public projects that put people back towork, at a time when most of the rest of the world was struggling witha depression brought on by a global shortage of bank-created money.Today we are facing the same sort of bank-created credit crisis, and itcould be resolved in the same way. Steps Congress might take include:1. Amending the FederalReserve ActFederal Reserve Act to make the Federal Reserve a trulyfederal agency, acting under the auspices of Congress in conjunctionwith the Treasury.

2. Updating the Constitutional provision that“Congress shall have the exclusive power to coin money [and] regulatethe value thereof” to read, “Congress shall have the exclusive power tocreate the national currency in all its forms, including not only coinsand 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 tenderbacked by “the full faith and credit of the United States,” to be spenton programs that promoted the general welfare. To prevent inflation,this currency would be advanced only for programs that contributed newgoods and services to the economy, keeping supply in balance withdemand. Issues of the new currency would also be capped by some ceiling— the unused productive capacity of the national work force, or thedifference between the Gross Domestic Product and the nation’spurchasing power (wages and spendable income).

4. Advancing credit interest-free to state and localgovernments, for rebuilding infrastructure and other public projects.The emphasis would be on projects that were self-sustaining, such asthe development of cheap, effective alternative sources of energy(wind, solar, ocean wave, etc.) that could be sold to the public for afee; or the repurchase of homes in default, to be resold or rented aslow-income housing.

5. Establishing a network of national banks to serveas local bank branches of the newly-federalized banking system, eitherby FDIC takeover of currently insolvent banks or by the purchase ofviable banks with newly-issued U.S. currency. Besides servingdepository banking functions, these national banks would be authorizedto service the credit needs of the public by advancing the nationalcredit as loans. Any interest charged on advances of this credit wouldbe returned to the Treasury, to be used in place of taxes.

6. Authorizing the Treasury to buy back and retirethe federal government’s outstanding debt as it comes due, usingnewly-issued U.S. Notes or Federal Reserve Notes. In most cases thiscould be done online, without physical paper transfers.
7. Regulation and control of the exploding derivatives crisis, either by imposing a modest .25 percent Tobintax on all derivative trades in order to track and regulate them, or byimposing an outright ban on derivatives trading. If the handful ofbanks responsible for 97 percent of all derivative trades were foundafter audit to be insolvent, they could be put into receivership andtheir derivative trades could be unwound by the FDIC as receiver.

8. Initiating a new round of internationalagreements modeled on the Bretton Woods Accords, addressing thefollowing monetary issues among others:

— The peggingof national currency exchange rates to the value either of anagreed-upon standardized price index or an agreed-upon “basket” ofcommodities;

— Internationalregulation of, or elimination of, speculation in derivatives, shortsales, and other forms of trading that are used to manipulate markets;

— 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

~ by admin on April 25, 2009.