Hidden Image Two
- There is no commodity backing the money in our system. There is not enough gold for every dollar in circulation. It's a system of faith that the paper and numbers on paper can be exchanged for real things. It's called a fiat money system.
- The local banks operating under the rules set by the Federal Reserve and they loan out many times as much money as they take in as savings. It's called the Fractional Reserve system.
- The Federal Reserve is not under the control of the Federal Government.
- The Federal Reserve loans the U. S. government money at interest paid to anyone who has the money to loan, and can be and often is non Americans.
- There are monetary systems that operate successfully without paying any interest.
- The Islamic monetary system does not charge interest because it is against their religion. And charging interest was against the Christian religion up until John Calvin.
- The United States can own the bank and loan itself money and has done so in the past as has other countries.
- Our present monetary system is not sustainable, is vulnerable to foreign influence, and costs more than necessary. Last year it cost $451 Billion of your money on interest payments to the holders of the National Debt. Debt we would not owe if the government owned the bank.
Opinion: A Way Out of Government Debt
All of our current problems regarding the economy have their roots in the Federal Reserve Act of 1913. From that point forward, it became law that all money would be created out of debt. To look at it another way, if all debt (be it government, corporate, or individual) in our current economic system were paid off, there would be no money. But paying off all debt is impossible because of the effect of interest.
For example, let's assume that the entire economy is 10 people. In order for the 10 people to get money to start a business, they have to borrow $1 million each from the Federal Reserve at 10% interest per annum. So a total of $10 million is injected into our new economy. In 10 years, on interest alone, the Federal Reserve is going to have all $10 million back. But since the entire economy at the start of this example was $10 million, those 10 people (or businesses) will have to borrow more money in order to have any money. In other words, debt begets more debt.
The only way for these 10 people not to go immediately back to the Fed to borrow more money is to find other markets to sell their goods and services into. This enormous flaw -- money being created from debt with interest -- has been masked by the fact that our population has more than tripled since 1913 and our economy has become massively intertwined with the other economies of the world.
(Continued with important details at the link above. Examples of an alternated monetary system are given below by Ellen Brown. Jay)
by Ellen Brown
What would we want with a car company? Moore suggests that the bankrupt mega-builder of obsolete gas guzzlers can be transformed into a mega-builder of things we need more—mass transit vehicles, including bullet trains, light rail mass transit lines, energy efficient clean buses, hybrid or all-electric cars, and alternative energy devices such as batteries, windmills, and solar panels. The factories that built the cars that helped destroy the environment can become the tools for cleaning it up.
TO PUT OUR NEW CAR COMPANY TO GOOD USE, WE JUST NEED TO OWN A BANK
Funding public projects with government-issued credit is not a new idea. It has a long and successful history, including these notable examples:
- In the early eighteenth century, the colony of Pennsylvania issued money that was both lent and spent by the local government into the economy, producing an unprecedented period of prosperity. This was done without producing price inflation and without taxing the people.
When Abraham Lincoln needed money to fund the American Civil War, rather than paying 25 to 36 percent interest charges, he avoided going into debt by printing Greenback dollars that were “legal tender” in themselves. The ploy not only allowed the North to win the Civil War but helped fund a period of unusual national expansion and development.
The island state of Guernsey, located in the Channel Islands, used government-issued money to fund roads, bridges, and other needed infrastructure throughout most of the 19th and 20th centuries, without price inflation and without incurring government debt.
The Bank of North Dakota, founded in 1919, is a wholly state-owned bank that creates credit on its books just as private banks do. This credit is used to serve local needs, and the interest on loans is returned to the government. Not coincidentally, North Dakota has a $1.2 billion budget surplus at a time when 47 of 50 states are insolvent, an impressive achievement for a state of isolated farmers battling challenging weather.
- During the First World War, when private banks were demanding 6 percent interest, Australia’s publicly-owned Commonwealth Bank financed the Australian government’s war effort at an interest rate of a fraction of 1 percent, saving Australians some $12 million in bank charges. After the First World War, the bank’s governor used the bank’s credit power to relieve the depression conditions in other countries by financing production and home-building, and lending funds to local governments for the construction of roads, tramways, harbors, gasworks, and electric power plants. The bank’s profits were paid back to the national government.
- A successful infrastructure program funded with interest-free “national credit” was also instituted in New Zealand after it elected its first Labor government in the 1930s. Credit issued by its nationalized central bank allowed New Zealand to thrive at a time when the rest of the world was struggling with poverty and lack of productivity. According to a book titled State Housing in New Zealand, published by the Ministry of Works in 1949: “To finance its comprehensive proposals, the Government adopted the somewhat unusual course of using Reserve Bank credit, thus recognizing that the most important factor in housing costs is the price of money—interest is the heaviest portion in the composition of rent. … This action showed … it was possible for the State to use the country’s credit in creating new assets for the country.”