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IMF Paper Supports Monetary Reform???

Bill Still on the new IMF research paper entitled "The Chicago Plan Revisted" that supports monetary reform.

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“The Chicago Plan called for an end of fractional reserve lending, and a dramatic reduction in the national debt.”

That is, consumer debt, not government debt. (Bill Still erroneously confuses the two.) Consumer debt is killing us -- e.g. student loans. U.S. government debt is no crisis at all. It is nothing more than the total of deposits in Treasury security accounts at the Fed.

The U.S. government does not borrow its money. It creates its own money, debt-free. However, most money in the U.S. economy is privately created by banks when they issue loans. This results in bubbles, defaults, cyclical booms and busts, depressions, and the concentration of wealth in the hands of bankers. Today, everybody and everything in the USA ultimately exists to serve bankers and Wall Street, all because private bankers are allowed to create money-as-loans. Because the USA serves bankers, the USA no longer creates, explores, or pioneers. Everyone is on the bankers’ treadmill.

 

To repeat: the US government already creates its own money, debt free. We already have a public system of money. The problem is that too much money in the US economy is privately created by banks, and consists of debt. 

Bill Still thinks that if we broke the tyranny of private banks, then the USA would have a 10% gain in GDP, equating to trillions’ worth of added productivity. (GDP simply measures the amount of money in circulation). 10% would be so gigantic as to seem impossible. A fantasy. However, I suspect it would be even higher. After the Nazis got control of their banking system, within five years they lifted Germany from being Europe’s poorest country to being Europe’s richest and strongest. When the USA mounted a war on Germany, the U.S. government issued massive amounts of money, debt-free. The private bankers were side-stepped. In this way the USA got out of the depression. The government could do the same thing today, but we always wait until there is a catastrophe. Currently there are clean-up operations underway for the damage caused by Hurricane Sandy. The government is funding this. Where does the government get that money? The government creates it, debt-free. Why don’t we do this with all our dollars? Because then the bankers would not reign supreme.

Our current nightmare has happened numerous times throughout history.  The credit-cycle trauma has been around forever, and lies at the root of debt catastrophes as far back as ancient Mesopotamia. It is always caused when banks are allowed to privately issue money. 

In times past, when banks caused debt crises and debt slavery, governments held a “debt jubilee” by issuing debt-free money. The US government could do the same today, freeing the public from debt slavery, but Congressmen would first have to reduce their corruption. Moreover the masses would have to stop resisting their own freedom. Most people stupidly defend the lies that kill them, and keep private bankers in power, such as…

The US government borrows its money

The US government needs tax revenue

The US government has a “debt crisis” and a “deficit crisis”

The US government must “live within its means” like a private household

If you stupidly think that the government is “broke,” then you will submit to the private bankers. 

The Chicago Plan was written because the U.S. public hated the banks that caused the 1930s depression. It sought genuinely public banking by controlling or eliminating the private creation of money. The plan might have been implemented if the government had not created the FDIC, which provided insurance (up to $250,000 per depositor per bank as of January 2012). Also the bankers bribed Congressmen to kill it. Hence the bankers were free to continue raping the public. Hence we had the S&L crisis of the 1980s, plus the current depression. In both cases the U.S. government created hundreds of billions of dollars (now trillions) to bail out the corrupt banks. What if all that money had instead been given to the public, debt-free? What if we the corrupt banks die? We would not have a depression. We would not all exist to serve bankers and Wall Street.

According to some ancient writers, Solon of Athens (638 BC – 558 BC) implemented the original Chicago Plan/New Deal in 599 BC to relieve farmers in debt to oligarchs that enjoyed private coinage. Solon erased debts by issuing debt-free coinage (the USA could easily do the same thing). Solon returned lands seized by creditors, and regulated prices for commodities.

Recent numismatic studies now lead to the conclusion that Solon didn’t really do this, since Athens probably had no coinage until around 560 BC, well after Solon's reforms. It doesn’t matter. The point is the US government could easily erase massive consumer debt without causing inflation. The ancient Romans did it 150 after Solon died, creating their own fiat money system under Aulus Aternius Varus 454 BC as part of the “Aternia Tarpeia” law.

Fiat currencies have been around since man began trading.  The Spartans banned gold coins and replaced them with iron disks that had no intrinsic value.  Early Rome favored bronze tablets whose worth was determined by law, much like the dollar, euro or pound today.  Today, bot the U.S. government and the banks use keyboards.

Bill Still says, “The money power is the most important power of a sovereign nation. The US Constitution does not give (private) banks this power. It does not give Congress the power to even delegate the money power to the banks, which is exactly what the Federal Reserve Act did in 1913.”

He is partially correct. Congress still has the money power. It always has. Congress creates money by conjuring it out of nothing, and spending it into circulation, debt-free. The problem is that private banks also have the money power, and their money consists of loans. This is why prices always go up, no matter what.

Bill Still wants to eliminate fractional reserve lending. He doesn’t say how we can do that, but the process is simple: let the U.S. government issue all the money, debt-free. Kick private bankers into street. Bill Still says, “Banks don’t have the money. They just make it up.” Yes, the government also makes it up (out of nothing). The difference is that the government does not charge interest for the money it makes up (although the government does tax, which is another form of theft.) 

Bill Still wants to “eliminate government borrowing. A government cannot be truly sovereign when it is borrowing.” He is referring to the US government, which he says is in debt. Here he is flat wrong. Ellen Brown makes this same error. (Actually her book “Web of Debt” is full of errors.) The US government does not borrow money. It creates its money. It does not rely on money raised from taxes or from the sale of T-bills.

The problem, as I said, is that too much of the money in the overall US economy is created by private banks.  

Bill Still erroneously confuses the two.

The US government does not borrow money. It creates its money.

Bill has been dealing with this issue for a heck of a long time. How do you know he is erroneous in his assumptions about the nature of national debt? How do you know the US government creates money?

Bill has been dealing with this issue for a heck of a long time. How do you know he is erroneous in his assumptions about the nature of national debt?

How do you know he is not in error?

How do you know the US government creates money?

How do you know it doesn't?

How do you know he is not in error?

While I can't be 100% certain, the observable evidence in terms of the effect of the money supply on the economy suggests that he is correct. 

How do you know it (the US Government) doesn't (create money)?

See above. I can't imagine the banking classes engaging in subterfuge and deception just to be in a position to auction off a few Treasury bonds. Still's theory and one to which I subscribe, is that prior to the establishment of the Federal Reserve, money was issued by the state, and now it is issued by a privately-run banking cartel. If your theory is correct, then what is the qualitative difference between the situation pre-Federal Reserve and the situation now? 

"Give me control over a nations currency, and I care not who makes its laws.”
Baron M.A. Rothschild

The above quote makes it quite clear what the goal of the banking mafia is. It is control over a nation's currency, nothing else. How does your theory fit into their stated objective?

Tom I am impressed that you have kept up the discussion. It proves that you only want to understand the truth.

I can't imagine the banking classes engaging in subterfuge and deception just to be in a position to auction off a few Treasury bonds.

It isn’t just the banking class. It is also the politicians and the 1%. They all maintain their power by maintaining lies, e.g. “the U.S. government has a debt crisis.” The corporate media echo these lies, just as the media echo the lies about the “war on terror,” the “war on drugs,” and so on. And yes, it is a conspiracy.

Still's theory and one to which I subscribe, is that prior to the establishment of the Federal Reserve, money was issued by the state, and now it is issued by a privately-run banking cartel. If your theory is correct, then what is the qualitative difference between the situation pre-Federal Reserve and the situation now?

15% of the U.S. money supply is still issued by the government, in the form of government spending. It is debt-free. It is not borrowed from anyone. The problem is that private banks have been given the power to issue the other 85% of the money supply as loans. This has put consumers (not the government) into massive debt. It is you and I who have a “debt crisis,” not the government. This is why we always have inflation, no matter what.

Bill Still, Ellen Brown, you, and I all want to end this private bank tyranny, or at least reduce it. We want most or all of the money to be issued debt-free by the state. Still’s and Brown’s error is to think that private banks issue all the money, when in fact they issue about 85% of it. (Which is enough to enslave us with debt.)  

During the U.S. civil war, Lincoln asked for loans from private banks in England and elsewhere, but the banks wanted to charge such high interest that it would have caused the North to lose the war. Therefore Lincoln simply issued government money (debt-free) in the form of greenbacks.  This infuriated private bankers everywhere. They commissioned political cartoons in newspapers that portrayed Lincoln as an idiot monkey, mindlessly running a printing press.

Before the Federal Reserve existed, the private bankers created the Bank of North America, which opened on 7 Jan 1782. In 1791 it became the First Bank of the United States with Alexander Hamilton as Treasury Secretary. This was a private outfit. It gave private bankers the power to issue money to the public. However the government continued to issue its own money (debt-free) to the military, to government agencies, and so on (just as it does today). The private bankers created so much debt for the public, and made so many inroads into the government, that the First Bank of the United States started forcing the government to raise taxes, and send the tax revenue to the bank. The situation became intolerable. After Hamilton left office in 1795, the new Secretary of the Treasury (Oliver Wolcott, Jr.) told Congress that if they wanted to keep the bank, then they would have to massively increase taxes.  Therefore Congress allowed the bank's charter to expire in 1811. For the next six years, the U.S. government issued its own currency (again debt free) while smaller private banks issued currency in the states. Conflict between the various state currencies caused inflation and other problems, so in 1817 the bankers struck again. They said the USA needed a central bank to regulate the smaller banks, and have currency stability.

The bankers were correct in this. A central bank is needed. Even today the US Treasury uses the Fed as its bank, but it does not borrow its money from the Fed. Rather, the Fed is an accounting service for the US government.

And so the bankers created the Second Bank of the United States on 10 April 1816. Again this was a private institution. Four thousand private investors held 80% of the Bank's capital, including a thousand Europeans. Most stocks were held by a few hundred wealthy Americans.

The Second Bank of the United States initially acted as a mere accounting service for the U.S. government, as the Fed does today. However the bankers once again put the public into severe debt. The government didn’t care, since it did not borrow its money from this bank, and since politicians enjoy their godhood. But when the Second Bank of the United States began making inroads into the government itself, doing exactly the same thing as the First Bank of the United States had done, the U.S. government started to be in debt to the bank. This was intolerable. If a nation must borrow its own currency (as the 17 euro-zone nations do), the nation will be destroyed.

Therefore President Andrew Jackson led a campaign to revoke the bank’s charter, or at least not renew it. He succeeded in January 1836, and for the next 77 years the USA had no central bank. The government issued its own money (debt free) and smaller state banks issued their own money.

Today the Fed is basically an accounting service for the U.S. government (which creates its money from nothing), but it oversees the banking system, which creates its money as loans. Once more the public is crushed by debt, while the U.S. government has no debt problem, and no “deficit crisis.”

Debt crisis always occur whenever private banks are given too much authority to issue money. The problems go back to the dawn of Western civilization in ancient Mesopotamia. When the banks threatened the states with ruin, governments held a debt jubilee, wiping out most debts by issuing debt-free currency.

Here is the cycle, and it never varies:

1. Private bankers issue the currency.
2. A nation-state is formed, with a government.
3. They government may issue its own currency, and it may (or may not) allow the private banks to continue
4. If private banks are allowed to continue, they bribe the politicians, while they enslave the public with debt
5. Eventually the public debt load becomes so severe that the nation is threatened with collapse.
6. The government dethrones the bankers by issuing debt-free currency
7. The people enjoy a period of stability and prosperity
8. The bankers gradually make inroads, bribing politicians.
9. The whole cycle starts again.

Now, if you falsely believe that all U.S. money comes from the banks, then you will falsely interpret me to claim that none of it does. I never said this. 15% of the money supply comes directly from the government, but 85% comes from banks as loans. And if you falsely think that all U.S. money comes from the banks, then you will believe the lies of politicians who claim that “We are broke. There is no money for social programs.” (But there is limitless money for wars and bailouts, and to run federal agencies.)

During the 1930s Depression there was plenty of money for government agencies, since that money was created from nothing, debt-free. However there was no money for the public. It’s the same today. The bankers, politicians, and the 1% are deliberately exploiting today’s depression to increase their power over the public. 

Therefore, if we ask, “How do we create a genuinely public money source?” the answer is: “We already have one. It’s called the Congress and the Treasury.

The problem is that we need to expand it (engage in deficit spending) while we shrink the power of the banks.” This shrinkage would occur automatically if the American public could break free of its brainwashing that “We must reduce government spending.” In saying this, the public is saying, “We must reduce the government’s issue of debt-free money, such as Social Security checks, and give even more power to the private bankers.” 

"Give me control over a nations currency, and I care not who makes its laws.”
Baron M.A. Rothschild

The above quote makes it quite clear what the goal of the banking mafia is. It is control over a nation's currency, nothing else. How does your theory fit into their stated objective?

It fits perfectly. The bankers want it all. They want to issue all money, not just 85%. This is why the 1% want to privatize Social Security. They want to give SS to banks and to Wall Street, so that SS is lent (not given) to recipients. At present, Social Security benefits are not loans. Recipients are not required to pay them back, and the money does not put the U.S. government into debt. The bankers want to change that.

Most people think the U.S. government borrows all its money from bankers and investors. If that were true, then people would be correct in saying that the US government is at the mercy of bankers and investors. But it is not true. The government creates all its money from nothing. It is we the public who get most of our money from banks, in one way or another. The government has no debt crisis. We the public do. But the bankers and politicians want you to think that the US government is “broke,” and has a “debt crisis” so that we give even more power to the banks. There is a limit to how far they can push this lie. If the Pentagon and the weapons makers start receiving their money as loans, then the imperialist project will be finished. When everything is geared toward paying interest to banks, the game is over. Civilization ends.

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