American Monetary Institute (AMI) - Washington State (WA) Chapter

Article on U.S. Monetary Reform

The time for true monetary reform is here. As Congressman Dennis Kucinich (D-OH) stated earlier this month…..

“It is long past the time that we looked at the implications of our debt based monetary system, the privatization of money created by the 1913 Federal Reserve Act, the banks fractional reserve system and our debt-based economic system. Unless we have dramatic reform of monetary policy, the entire economic system will continue to accelerate wealth upwards. I am currently working on drafting legislation for an ‘American Monetary Act’ to address these and other issues in order to protect the economic wellbeing of America.“

WHY ARE WE BAILING OUT THE BIG BANKS, WE SHOULD HAVE BAILED OUT THE AMERICAN PEOPLE.

The total amount committed to the “Wall Street bailout” is now at least $1.5 trillion (see list in next paragraph). There are approximately 165 million people on the Social Security rolls: current workers, employed or unemployed, and those workers now retired and drawing benefits. If you divide the $1.5 trillion by the 165 million the answer is $9,000. Instead of bailing out those who created this financial crisis in the first place, we could have sent each person on the Social Security rolls a check for $9,000. If both man and wife work, that would be $18,000 per family. Wouldn’t that do far more to get us out of this recession than what we actually are doing?

Here is the list of money our Government is borrowing for the “bailout:” The $700 billion originally requested by Treasury Secretary Paulson, the $150 billion added by Senate and confirmed by House, $200 billion (or more) for Fannie Mae & Freddie Mac, $300 billion for FHA insured loans, $85 billion for AIG, $29 billion for the Morgan Stanley takeover of Bear Stearns, and $37 billion more for AIG from the Fed. That all adds up to a total of $1.5 trillion.

WHY ARE WE BAILING OUT THE SAME PEOPLE WHO CAUSED THE PROBLEM?

It should be pointed out that this $1.5 trillion we are borrowing to bail out the financial institutions that created the problem in the first place will be under the control of Treasury Secretary Paulson (former CEO of Goldman Sachs, one of the investment banks responsible for this crisis) and that Paulson has appointed Neil Kashkari (another former Goldman Sach’s investment banker) to actually make the disbursements. Talk about the Fox guarding the Hen House!!

Unfortunately, the money must be borrowed for this no matter what. Under the present debt-based monetary system, our government has no money, but we do have a $10.3 trillion national debt. No one has yet told us who is going to lend us the $1.5 trillion. It is quite possible that the banks that we are bailing out, using new so-called “reserves” created by the Fed and given to these banks free, will use those “reserves” to create the “debt-money” to “buy” $1.5 trillion of U.S. Government Securites. Then we can pay those banks interest on the money we borrowed - and give the money right back to them as part of the “bailout.” As I’ve said before, our present privately-owned, debt-based monetary system is the biggest con game in the history of the world. My mentor, the late Congressman Wright Patman, Chairman of the House Committee on Banking and Currency for 16 years, called it “Highway Robbery in Broad Daylight.” Now the Big Banks are in the process of picking your pockets for $1.5 trillion!!

WALL STREET BANKS ARE USING $70 BILLION OF “BAILOUT” MONEY TO PAY THEMSELVES BONUSES!!!

U. S. taxpayers should be enraged about this misuse of the money we are giving to the banks - and they would be, except the mainstream media in the U.S. is not telling them about this. I learned of it in the British newspaper “The Guardian.” Let me quote just two paragraphs from their October 18, 2008 article.

“Financiers at Wall Street’s top banks are to receive pay deals worth more than $70 billion, a substantial portion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into its worst crisis since the 1929 stock market crash.”

“Staff at six banks, including Goldman Sachs and Citigroup, are in line to pick up the payouts despite being the beneficiaries of a $700 billion bail-out from the U. S. government that has already prompted criticism. The government cash has been poured in on the condition that excessive executive pay would be curbed.”

THEY ARE TAKING 10% OF THE $700 BILLION BAILOUT TO GIVE THEMSELVES BONUSES FOR GETTING US INTO THIS FINANCIAL MESS!! BILLIONS FOR THEM - NOTHING FOR AMERICANS LOSING THEIR HOMES AND THEIR JOBS! HOW DO YOU LIKE THIS “BAILOUT” SO FAR???

OUR TOTAL DEBT IS OVER $50 TRILLION!

At the end of the 2nd quarter of this year, the Federal Reserve’s L1 Total Credit Market Debt Report* states that we are now just over $51 trillion in debt. This is all principal, the interest to be paid is never created. The average interest rate across the board must be between 6% and 8%. On $50 trillion, 6% is $3 trillion, 8% is $4 trillion. This means we must borrow at least $3 to $4 trillion more THIS YEAR just to pay the interest. That’s why I think the present system has reached its mathematical limit. Already $51 trillion in debt, who is going to borrow another $3 or $4 trillion this year, and, if they do, borrow even more the next year? When interest charges exceed debt growth, debtors at the margin are unable to service their debt. They must begin liquidating.

*click the link below to see the L1 Total Debt Report…

http://www.federalreserve.gov/RELEASES/z1/current/accessible/L1.htm

Banking still faces huge losses ahead, and a far larger federal bailout will be needed–and we are seeing the “bailout” costs go up day after day.

If we stay with the present debt-based system, there are only two possible results: (1) default on our debts and head directly into another Great Depression, or (2) simply print the money to pay off our debts and head directly into hyperinflation like that now in Zimbabwe.

Fortunately, the AMI offers a third way - Monetary Reform - Pass the American Monetary Act - this action will not only take back control of our own money and our country, it provides the wherewithall to move us back to prosperity by immediately providing the needed money to rebuild our country - by replacing the debt money, which will disappear, with real money spent into circulation for the benefit of the American people. It really is as simple as that.

TRUE MONETARY REFORM IS THE ANSWER.

The real answer to our banking, financial and economic crisis, of course, is to Nationalize the Federal Reserve Banks and Eliminate Fractional Reserve Banking in a manner that makes the Federal Government the only entity with the power to create money. Then, as the banks “debt-money” disappears as debts are paid or defaulted, we can replace the “debt-money” which disappears with real U. S. Money spent, not borrowed, into circulation to get us out of this recession. We will finally get the benefits of creating our own money, money we should have created in the first place. The most important thing Congress can do now is pass the American Monetary Act and take back control of our own money and our nation.

OUR PRESENT FRACTIONAL RESERVE BANKING SYSTEM IS COMPLEX AND DIFFICULT TO UNDERSTAND.
There is a good reason for our banking system being very difficult to understand. About 70 years ago Henry Ford, Sr. pointed out that reason. He said, “It is just as well that the American people do not understand how our monetary system works, for, if they did, I believe there would be a revolution by morning.”

THE WAY TO RETURN OUR NATION TO PROSPERITY IS VERY CLEAR…TAKE BACK CONTROL OF OUR OWN MONEY!!
In just two simple steps we can take control…

Step #1:

Nationalize the Federal Reserve Banks and make them actually part of our government. This can easily be done by buying back the $450 million worth of Federal Reserve Stock held by the privately owned commercial banks. Article 31 of the Federal Reserve Act gives Congress that power.

Step #2:

Eliminate Fractional Reserve Banking in a manner that makes the federal government the only entity with the power to create, issue and regulate our money, as Article I, Section 8, Clause 5 of the United States Constitution mandates.

Private corporations and/or individuals should never have had the power to create money. That power, and the benefits thereof, should be, must be, shared by all of the people of the United States of America.
We will eliminate Fractional Reserve Banking by requiring a 100% reserve on all demand deposits (checking accounts). This means money in your pocket or money in your checking account would be the same, that is not the case now. Under the present system, most of the money you deposit into your checking account is immediately loaned to someone else. This is just the first step in the fractional reserve system’s method of creating at least nine thousand new “debt-dollars” for every thousand dollars in your checking account, but, under a 100% reserve system, the money you deposit in your checking account will be there at all times until you spend it.

These two simple steps allow us to take back the power to create, issue and regulate our own money. And these two steps will give us the ability to end the present recession and return our nation and our people to prosperity.

WHERE WILL THE MONEY FOR THESE PROGRAMS COME FROM?

It will be spent into circulation as a tax-free, debt-free bonus for the people of the United States. We will finally enjoy the benefits of creating our own money, benefits we should have had in the first place. All made possible by taking back control of our own money.

Under a 100% reserve on checking accounts, banks can no longer create their former “debt-money,” so these programs are paid for by spending U. S. dollars into circulation to replace the “debt-dollars” which will disappear as debts are paid or defaulted.

That’s why this spending will not be inflationary, we are not adding additional money, we are replacing our present “debt-money” as it disappears.

The President and the Congress would be held responsible by the American people for both inflation and deflation. No one is held responsible now. The American people would know that if inflation (or deflation) took place, it was due to the policies of the Congress and the President.

Step #3:

We will send a check for $5,000 to everyone listed on the Social Security rolls, all current workers, employed or unemployed, and workers who have retired and are drawing benefits. Our original plan was for a $2,000 check, but current economic conditions require a larger stimulus to both get the economy going again and to make sure banks have real money deposited with them so that they are able to make loans. This is a real stimulus plan that will immediately begin to move us out of recession. And we don’t have to borrow the money from China (or from anywhere)- we simply spend the needed money into circulation, debt-free and interest-free. This is similar to, but far better than, the recent $600 per person dividend check.

This dividend check of $5,000 is needed because of the extreme maldistribution of wealth in our country. There is far too much money in far too few hands, and far too little money in the hands of average Americans. The fact that average Americans have too little money because wages have been flat for 25 years is, of course, one of the main reasons we are now in a serious recession.

Step #4:

The American Society of Civil Engineers states that we need $1.6 trillion to bring our public infrastructure up to date. This program is designed to meet that need.

We will begin a continuing program of at least $200 billion per year to rebuild our badly neglected and decayed public infrastructure. Our schools, streets, roads, bridges, dams, water and sewage plants, mass transportation, etc. This will create real wealth and will put millions of people to work on good paying jobs. And when we have a strong public infrastructure, that fact alone will encourage private investment and create even more jobs.

Step #5:

The National Debt will be paid off as it comes due. We will simply exchange interest-bearing U.S. Securities for a non-interest bearing security, United States Dollars. We could just pay off the entire National Debt immediately, but that puts too much real, permanent money too quickly into the hands of basically the wrong people. We want to spend new U. S. Dollars into circulation in a manner that puts most of them into the hands of average Americans, not wealthy Americans.

We will only pay the publicly held portion of the National Debt. On 10/15/08, it was $6.0 trillion. In the first year about $800 billion of the publicly held National Debt will come due and be paid* - this does put too much money in too few hands, but it certainly makes plenty of private investment capital available. And it will not be inflationary because is will be invested, not spent on consumer goods and services.

*click the link below and page down to chart #5 to see the debt and due dates…

http://fms.treas.gov/bulletin/b2008-3fd.doc

The other $4.3 trillion of the National Debt the Government “owes to itself.” That portion will simply be marked paid. When these funds are needed, they will be spent into circulation. This will not be inflationary because, for example, money spent into the economy for Social Security benefits is needed in the economy - whether it has been collected through taxes or not is unimportant.

When there is no National Debt, there will be no interest charges on government projects, so the cost of these projects will be at least cut in half. The federal government will never pay interest on publicly needed projects again. That situation was among the biggest ripoffs of all under the present system.

The five steps listed above will take place in the first year after passage of the American Monetary Act. These actions will quickly end the current recession and return our nation to prosperity.

HERE’S WHAT THE BIG BANKS DON’T WANT YOU TO KNOW.
They don’t want you to know that all of their money was created in the form of debt, and when they can no longer create any more “debt-money”, the “money” they created will disappear as the debts are paid, or defaulted, which means we will have to replace their debt money supply by spending real U. S. dollars into circulation - so we will finally get the benefits we should have received in the first place - and all these benefits come without debt, without taxes.

All of the steps just outlined, and more, are part of the American Monetary Act. And we of the American Monetary Institute, with the help of former Presidential candidate and Congressman Dennis Kucinich, have started our drive to get the American Monetary Act introduced, debated and passed. We call this drive “The New American Revolution,” and, in the coming months we will ask for your help in winning this revolution and taking back control of our own money and our country. It can and must be done.

Tags: AMA, AMI, Dennis Kucinich