Gubernatorial candidate's revolutionary money plan holds the key to solving the looming financial disaster

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Gubernatorial candidate's revolutionary money plan holds the key to solving the looming financial disaster

Gubernatorial candidate's money plan key to his campaign

Like most candidates for public office, Leslie Davis has a position on the issues of the day. Davis, who aims to become the Republican candidate for Minnesota governor by winning a primary on Aug. 10, will talk about his beliefs on guns, reproductive rights and nuclear power.

But the centerpiece of his campaign is an idea for righting the economy that he calls “The Davis Money Plan.”

Davis, along with Austin resident Gregory Soderberg, a candidate for lieutenant governor, was in Austin on Friday to talk with city leaders and the media about his economic plan and candidacy.

If elected, Davis said, he would push for legislation to exempt state-regulated banks from needing deposits to create “new money.” Much simplified, the plan would work like this: Free to create money, state-chartered banks would put funds into the state treasury to pay for construction and maintenance of Minnesota roads and bridges. Those projects would, in turn, create jobs and a boost to the economy.

Benefits, Davis and Soderberg said, would include a balanced state budget, jobs for thousands, increased state revenues and state-of-the-art roads and bridges.

The alternative, they believe, is a looming financial disaster fueled by increasing personal and institutional debt.

I think most of us here recognize the "looming financial disaster" as the exponential growth of debt from the Crash Course.  Finally, solutions are being offered at the state level (five other states are reviewing state banks). 

How "The Davis Money Plan" Will Rescue Minnesota  Part 1

Minnesota’s next governor, and legislature, will face a budget deficit that can be “remedied” without increasing taxes or cutting important programs in Health and Human Services and Education.

To understand the “remedy” you must first know that our current “fractional” banking system allows state-regulated banks (not National banks such as Wells Fargo and US Bank) to create, and lend, nine times more money then they have on deposit.

How is that possible? How can banks create, and lend, nine times more money then they have on deposit and still have the money when the depositor wants it?  If you had one dollar could you lend out nine dollars? Of course not. So how do banks do it?

Banks are allowed, by law, to create as much “new money” as they want as long as their deposits are 10% (a fraction) of their loan totals. Therefore the term “fractional” banking.

In “fractional” banking the banks “create money” as computer entries. Just digits in a computer. That’s what the money is. Digits in a computer. BANKS DO NOT LEND DEPOSITOR MONEY. THEY LEND MONEY THAT IS COMPUTER CREATED BASED UPON A PERCENTAGE OF DEPOSITS.

For example, when a person deposits money with a state-regulated bank, that deposit allows the bank to “create” nine times more money by using its “fractional” banking authority. The bank might pay a depositor 4% interest on a one thousand dollar deposit ($40), and collect 10% interest on nine thousand dollars worth of loans they made from money “created” by that deposit ($900). Thus, the one thousand dollar deposit was the trigger that allowed the bank to create brand new money to lend. BANKS DO NOT LEND DEPOSITOR’S MONEY, THEY LEND MONEY CREATED AS A RESULT OF DEPOSITS.

When a bank makes a loan it simply transfers numbers that it “created” in its computer, to a borrower’s check account. Just numbers. If a borrower wants paper money for the numbers they can simply write a check for it. This information was provided by Minnesota Commerce Commissioner Wilson and depicted in his chart entitled “How State Banks Create Money”.

“The Davis Money Plan” Part 2

“The Davis Money Plan” provides for the construction and maintenance of all Minnesota roads and bridges with no taxes, no loans, and no debt.  “The Davis Money Plan” calls for passing legislation to exempt state-regulated banks from needing deposits in order to create “new money” that will pay for construction and maintenance of all Minnesota roads and bridges.

The “newly created money” will be total and final payment for the production of roads and bridges, and does not have to be paid back. The money, or numbers, eventually enter the general circulation of the economy to help everyone by expanding the money supply without inflation. What causes inflation are taxes and interest on money because they add to the cost of everything.

Bankers love “The Davis Money Plan” because it will benefit them greatly. Bankers envision thousands more people working, depositing money in their banks, paying bills, buying boats, financing new houses, and all the rest that prosperity brings. In a rising economy the banks and other financial institutions will do better than anyone else and that is why they greatly support “The Davis Money Plan”.

Benefits of the “The Davis Money Plan” will be:

  • Balanced state budget
  • Jobs and education for thousands of people
  • Increased state revenue from more people working
  • State-of-the-art roads and bridges with no debt or taxes

I am mailing a copy of the plan to my state legislators and requesting a meeting.  This is an opportunity for all of us to get involved with practical solutions!

Larry

H/T to our Thomas Hedin for his hard work in helping to make monetary reform an issue for the people

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Re: Gubernatorial candidate's revolutionary money plan ...
The political push to reduce government deficits is economically misguided, based on an irrational “phobia” of deficits. If we want economic growth, we need more spending. Only banks and governments can stimulate spending because (in his words): “Governments and banks are the two entities with the power to create something from nothing.” We shouldn’t worry about the alleged impending bankruptcy of Social Security or Medicare — or of the U.S. government itself. Why? Because the government is the source of money and therefore can’t run out. Government debt is not really a “burden on future generations,” because it never has to be repaid. Each generation can just pass that debt onto the next generation, so there’s no problem.

http://www.capitalismmagazine.com/markets/financial-crisis/5999-Defense-Deficits-Beware-James-Galbraiths-Snake-Oil.html

Money is the tool of men who have reached a high level of productivity and a long-range control over their lives. Money is not merely a tool of exchange: much more importantly, it is a tool of saving, which permits delayed consumption and buys time for future production. To fulfill this requirement, money has to be some material commodity which is imperishable, rare, homogeneous, easily stored, not subject to wide fluctuations of value, and always in demand among those you trade with. This leads you to the decision to use gold as money. Gold money is a tangible value in itself and a token of wealth actually produced. When you accept a gold coin in payment for your goods, you actually deliver the goods to the buyer; the transaction is as safe as simple barter. When you store your savings in the form of gold coins, they represent the goods which you have actually produced and which have gone to buy time for other producers, who will keep the productive process going, so that you’ll be able to trade your coins for goods any time you wish.

Now project what would happen to your community of a hundred hard-working, prosperous, forward-moving people, if one man were allowed to trade on your market, not by means of gold, but by means of paper—i.e., if he paid you, not with a material commodity, not with goods he had actually produced, but merely with a promissory note on his future production. This man takes your goods, but does not use them to support his own production; he does not produce at all—he merely consumes the goods. Then, he pays you higher prices for more goods—again in promissory notes—assuring you that he is your best customer, who expands your market.

Then, one day, a struggling young farmer, who suffered from a bad flood, wants to buy some grain from you, but your price has risen and you haven’t much grain to spare, so he goes bankrupt. Then, the dairy farmer, to whom he owed money, raises the price of milk to make up for the loss—and the truck farmer, who needs the milk, gives up buying the eggs he had always bought—and the poultry farmer kills some of his chickens, which he can’t afford to feed—and the dairy farmer can’t afford the higher price of alfalfa, so he cancels his order to the blacksmith—and you want to buy the new plow you have been saving for, but the blacksmith has gone bankrupt. Then all of you present the promissory notes to your “best customer,” and you discover that they were promissory notes not on his future production, but on yours—only you have nothing left to produce with. Your land is there, your structures are there, but there is no food to sustain you through the coming winter, and no stock seed to plant.

http://www.givemeliberty.50megs.com/An%20Economics%20Lesson.htm

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Re: Gubernatorial candidate's revolutionary money plan ...

Some highlights from the “The Davis Money Plan.”

“The Davis Money Plan” Part 2

“The Davis Money Plan” provides for the construction and maintenance of all Minnesota roads and bridges with no taxes, no loans, and no debt.  “The Davis Money Plan” calls for passing legislation to exempt state-regulated banks from needing deposits in order to create “new money” that will pay for construction and maintenance of all Minnesota roads and bridges.

The “newly created money” will be total and final payment for the production of roads and bridges, and does not have to be paid back. The money, or numbers, eventually enter the general circulation of the economy to help everyone by expanding the money supply without inflation. What causes inflation are taxes and interest on money because they add to the cost of everything.

Bankers love “The Davis Money Plan” because it will benefit them greatly....

Benefits of the “The Davis Money Plan” will be:

  • Balanced state budget
  • Jobs and education for thousands of people
  • Increased state revenue from more people working
  • State-of-the-art roads and bridges with no debt or taxes

The important point is that this money is not going to be paid back.  That fact makes this a completely different idea than the one you advocated in Banks Profit from Near-zero Interest Rates thread.

Because the half life of getting useful information on monetary threads is usually fairly short, I will get staight my point.  This seems like a very bad idea to me beacuse it will be inflationary.  For a more through discussion of why I think that is, see the MTA thread.  I am aware that you have a different opinion on how this would work and I have some questions which never seemed to get answered.

What I want to understand what exactly you believe.  It seems to be that either this is inflationary or it is not.  If you believe it is inflationary, you may not have a problem with it, because you believe it is legitimate for a government to redistribute societies finite resources when needed. 

However I assume you agree with Mr Davis and do not believe this is inflationary.  If so then why?  Is it because...

  1. Money that is not created as debt is not inflationary.
  2. Money that the government spends into existence is not inflationary.
  3. Some other reason?

I really don't understand how you could think this would not be inflationary.  Is the reason for this belief have something to do with it being check book money verses actual cash?   Would it be different if the government had a printing press and started paying bills with fleshly printed cash?  I know that your explaination for revolutionary war Continental inflation is counterfeiting, so you must believe that the quantity of money does have an effect.  Clearly overpaying a government contractor would be at least somewhat inflationary wouldn't it?

Definately count me as a sceptic when it comes to the idea that there is such a thing as a free lunch, especially when it is the government that is going to provide it.

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Re: Gubernatorial candidate's revolutionary money plan ...

If the newly created money is consistent with new goods and services entailed with infrastructure projects, then it is not inflationary by definition. 

Banks create money through a monopoly to monetize debt so why not allow states to break the monopoly and monetize the benefit (wealth) of new transportation projects that reduce energy consumption while improving public safety

Humanity is confronted with the harsh reality of peak oil and peak debt.  We have ample technology available to reduce our energy usage by 50% while increasing the use of clean and sustainable alternatives dramatically (geothermal, fuel cells, better insulation, etc.).  The problem is that we don't have the money to mobilize our society and make the changes needed to prevent a catastrophe.

Unemployment is rising and becoming a human tragedy.  We have a lot of work to do but yet people are sitting idle because there is no money in the economy. 

The total money supply as measured as M3 has been contracting at an alarming rate - US money supply plunges at 1930s pace 

The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.

The M3 figures - which include broad range of bank accounts and are tracked by British and European monetarists for warning signals about the direction of the US economy a year or so in advance - began shrinking last summer. The pace has since quickened.

The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of insitutional money market funds fell at a 37pc rate, the sharpest drop ever.

"It’s frightening," said Professor Tim Congdon from International Monetary Research. "The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly," he said.

  Shadow Government Statistics

Every day money is being destroyed (extinguished) by banks as debt principal is being repaid.  If the rate of money destruction exceeds the rate of new debt plus interest, the economy contracts.  Add the fact that debt grows exponentially and we can see that the system just cannot be sustained - we are running out of willing and worthy borrowers from the public and private sectors.

Breaking the debt monopoly is the only way to put permanent money into the system though it will take many years to offset the imbalance.  I suggest that most of the debt free money from the "Davis Money Plan” will ultimately be used to counter-act the deflationary forces by providing money for debt relief.

While one state may not be able to turn the overwhelming debt tsunami, it may provide a life raft for the citizens of Minnesota.  Once one state goes, others will follow unless stopped by the federal government. 

Larry

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Re: Gubernatorial candidate's revolutionary money plan ...

I too have my reservations about the plan, because I can see the potential for future abuse by the government.  That said, it does have it's merits and it's good to see people in the political arena actually trying to put forth a plan that would benefit the people.  All this talk by world leaders of Austerity vs QE is nothing but sheer garbage.  It's time we got beyond this.

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Re: Gubernatorial candidate's revolutionary money plan ...
DrKrbyLuv wrote:

If the newly created money is consistent with new goods and services entailed with infrastructure projects, then it is not inflationary by definition

This sort of simplicity is what really bothers me.  I guess before I get too excited I should make sure that we are using the same definition for "inflationary".  Clearly creating money by definition "inflates" the money supply so I am going to assume you mean that is it not  "inflationary" more in terms of the general price level.  If so then I agree that at least there is a chance that it is not inflationary but it is hardly "by definition".

For example the government is considering two equal cost projects.  One is a new road between two towns that currently don't have a direct connection and another that is repaving some pot holes on the street in front of the mayor and other important city council members houses.  In this case it is certainly possible that the road between two unconnected towns may create enough economic advantage that the expense would not to be inflationary but the mayors street work, not so much.

What happens if the government accepts no bid contracts for work from Halliburton or the mayor's brother in law.  Will this still not be inflationary "by definition"?  What if for one of those no-bid contracts there was a contactor that was willing to do the exact same work for one half the cost?   Would that still not be inflationary?  If it is not inflationary, what if the government uses the low cost contractor and then prints up paper money to spend equal to the half that was saved?  Is this still not inflationary? 

Here is just a few more potential problems I can come up with off the top of my head.

  • Could creating debt free money actually help perpetuate the current banking system that we all seem to oppose?  In other words could debt free money allow the P<P+I equation (upward flow of value) to continue far longer than it would otherwise?  Is that wise?
  • Wouldn't the rush for infrastucture drive up these jobs auction prices?  There certainly would be a lot more demand for contractors and wouldn't they then raise their prices?  Sounds inflationary to me.
  • Is government spending on roads that may not be used as much in the future due to peak oil really the optimal allocation of resources?  If it is not, how will you find what is?
  • Could we end up with a soviet style system by removing cost from economic decisions of large part of the economy?  Project cost is critical so that society can make the proper capital allocations in our finite world.  If the cost to benefit ratio for projects are distorted, how will the government know how to allocate its limited capital.  If the capital is not limited, it must be inflationary.
  • We worry about corruption when the banking system can buy politicians.  Does corruption go away when politicians can buy themselves?
  • Because money is fungible, if Minnesota's infrastucture spending does prove to be inflationary, it will end up costing us all.  If it is infationary, each state will immediately try and pass its own version of this law so they can try and keep their own proportionate spending power.  This would quickly result in a race to the bottom and hyperinflation.
  • Sounds very Keynesian.  The only difference is that the money government spends is debt free.   At least it seems much closer to Keynesian than Austrian is to Keynesian.

Needless to say, I don't see myself supporting this idea.  Seems like it is somewhere between naive and dangerous.

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Re: Gubernatorial candidate's revolutionary money plan ...
goes211 wrote:

Clearly creating money by definition "inflates" the money supply...

Yes, but in an economy where all money is put into circulation using this method and where non-productive services (Medicare and Social Security) benefit from the same entry into circulation the total money supply can be balanced by adjusting the levels of different taxes to maintain an overall money supply that is consistent with the amount of goods and services in the economy. Mathematically such an economy could maintain stable prices indefinitely, although it would require careful and valid measurement of economic statistics. 

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Re: Gubernatorial candidate's revolutionary money plan ...
SteveW wrote:

Yes, but in an economy where all money is put into circulation using this method and where non-productive services (Medicare and Social Security) benefit from the same entry into circulation the total money supply can be balanced by adjusting the levels of different taxes to maintain an overall money supply that is consistent with the amount of goods and services in the economy. Mathematically such an economy could maintain stable prices indefinitely, although it would require careful and valid measurement of economic statistics. 

But advocates of this strategy often tout that it eliminates the need for taxes.  Also if taxes are needed, do you really  think you can adjust them dynamically enough to effect the economy and velocity of money?  Would making taxes so dynamic, destroy a business ability to forcast future business needs, and therefore paralyze the entrepreneurial spirit that makes the economy move forward?

Seems like you are saying central planing can work if it is done correctly.  That may be true, but history does not show a very good track record to back up this belief. 

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Re: Gubernatorial candidate's revolutionary money plan ...

From coin clipping of ancient Kings to its equivalent today ;   fiat money run by the Federal Reserve system.     The common thread that runs trough both is the deep  desire of those governing to have access to money that they are unable or unwilling to collect from the governed.   

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Re: Gubernatorial candidate's revolutionary money plan ...
goes211 wrote:
SteveW wrote:

Yes, but in an economy where all money is put into circulation using this method and where non-productive services (Medicare and Social Security) benefit from the same entry into circulation the total money supply can be balanced by adjusting the levels of different taxes to maintain an overall money supply that is consistent with the amount of goods and services in the economy. Mathematically such an economy could maintain stable prices indefinitely, although it would require careful and valid measurement of economic statistics. 

But advocates of this strategy often tout that it eliminates the need for taxes.  Also if taxes are needed, do you really  think you can adjust them dynamically enough to effect the economy and velocity of money?  Would making taxes so dynamic, destroy a business ability to forcast future business needs, and therefore paralyze the entrepreneurial spirit that makes the economy move forward?

Seems like you are saying central planing can work if it is done correctly.  That may be true, but history does not show a very good track record to back up this belief. 

I don't know if it would work but I would prefer this type of money system to our unsustainable current system. I understand your scepticism. I'm not suggesting central planning of the economy itself but maintaining a stable or gradually increasing (in line with economic expansion) money supply, unlike our current limited money supply with overwhelming exponential debt. Money is simply the grease we use to lubricate the economy.

I think you might be overinterpreting how dynamic taxation would need to be. After all a 3-5% or so excess or deficiency in the money supply would probably have a limited effect so that income/business tax rates could be adjusted maybe annually with a 3 month advance notice. Such a system would not, I think, unduly cripple business planning.

I don't know if such a system eliminates the need for taxation. It seems that this suggestion is part of the "sales pitch" for the system. Once such a system were established and understood though can you imagine people clamouring for an increase in taxation because the price of bread had gone up too much reflecting excess money in the economy?

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Re: Gubernatorial candidate's revolutionary money plan ...
SteveW wrote:

I don't know if it would work but I would prefer this type of money system to our unsustainable current system. I understand your scepticism. I'm not suggesting central planning of the economy itself but maintaining a stable or gradually increasing (in line with economic expansion) money supply, unlike our current limited money supply with overwhelming exponential debt. Money is simply the grease we use to lubricate the economy.

I think you might be overinterpreting how dynamic taxation would need to be. After all a 3-5% or so excess or deficiency in the money supply would probably have a limited effect so that income/business tax rates could be adjusted maybe annually with a 3 month advance notice. Such a system would not, I think, unduly cripple business planning.

I don't know if such a system eliminates the need for taxation. It seems that this suggestion is part of the "sales pitch" for the system. Once such a system were established and understood though can you imagine people clamouring for an increase in taxation because the price of bread had gone up too much reflecting excess money in the economy?

Steve,

Thanks for the very reasonable reply and I don't completely disagree with what you are saying.  I certainly do believe in monetary reform and don't want to be considered an advocate for the status-quo.  I guess the system I would prefer would be one that has less central control, does not require any force, and did provide some form of negative feedback to ensure stability.   It could be commodity based but not necessarily.  Unfortunately I don't know exactly what such a system would look in reality and I think that any transition to a new system will be beyond painful. 

One proposal that I think has some great features is Paul Grignon's Digital Coin proposal.  I definately still have problems with it in regards to it requiring a central clearing house/exchange and I fear anonymity would be impossible under such a system, but at least it contains some outside the box thinking that I believe is sorely lacking.

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Re: Gubernatorial candidate's revolutionary money plan ...

SteveW wrote:

I don't know if such a system eliminates the need for taxation. It seems that this suggestion is part of the "sales pitch" for the system. Once such a system were established and understood though can you imagine people clamouring for an increase in taxation because the price of bread had gone up too much reflecting excess money in the economy?

My understanding is that "The Davis Money Plan" does not eliminate taxes but it does promise to increase state revenues as unemployment is decreased. 

The plan is not inflationary as I mentioned in Post #3 - If the newly created money is consistent with new goods and services entailed with infrastructure projects, then it is not inflationary by definition. 

Webster’s New World College Dictionary states: Inflation – (a) an increase in the amount of money and credit in relation to the supply of goods and services. (b) an increase in the general price level, resulting from this, specif., an excessive or persistent increase, causing a decline in purchasing power.

Larry

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Re: Gubernatorial candidate's revolutionary money plan ...
DrKrbyLuv wrote:

The plan is not inflationary as I mentioned in Post #3 - If the newly created money is consistent with new goods and services entailed with infrastructure projects, then it is not inflationary by definition. 

Webster’s New World College Dictionary states: Inflation – (a) an increase in the amount of money and credit in relation to the supply of goods and services. (b) an increase in the general price level, resulting from this, specif., an excessive or persistent increase, causing a decline in purchasing power.

That is certainly NOT true by definition.  It would largely depend upon how that money was spent and I still don't understand how you can advocate any individual states bank to be allowed to create money that does not have to be paid back.  To think this could not be inflationary is the height of folly.

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Re: Gubernatorial candidate's revolutionary money plan ...

goes211, you seem to be clinging to the classical schools belief in the "quantity theory of money" in defining inflation.  Steve Keen, Ellen Brown, Henry C.K. Liu, Antal E. Fekete and many others have thoroughly debunked this old fallacy.  

If you're decent at math, Keen does a good job exposing the erroneous "quantity theory of money" formulas. 

Larry

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Re: Gubernatorial candidate's revolutionary money plan ...

Larry,

Another strawman argument.  If you read what I said, I admited that the increase in the quantity of money DID NOT HAVE to lead to inflation so clearly I do not strictly believe in the "quantity theory of money".   You however claim that "If the newly created money is consistent with new goods and services entailed with infrastructure projects, then it is not inflationary by definition." 

In summary I say it will probably be inflationary and you say it will definately not be inflationary, and yet somehow you try to imply that my position is the radical one.

You can't even come up with answers to the problems I pointed out with this idea.

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Re: Gubernatorial candidate's revolutionary money plan ...

Larry,

I really wanted to stay out of this thread but I'm just amazed.

I'm just amazed at the fact that people can't understand the difference between having they paychecks loaned to them (as it is now) or having their paychecks spent to them (the way it should be).

 

I would be willing to bet that if I started another business, and tried to loan the employees their paychecks they wouldn't have any part of it but that is exactly the type of money system we have now except there is an illusion that we are all working for a profit.

Why is it if we are all working, and seemingly generating a profit, why does the debt constanly rise?  Gee whiz people, wake up.

What boggles my mind is just how ignorant people who 'think' they understand money can become when they think it's ok for all the money to be loaned into circulation where when the principle part of that loan is repaid it is extuiguished, and the borrower must repay more than what was created or they are forced into losing all of their property.  Then those people who 'think' they understand money believe that is a workable system and defend it to the hilt.

Those very same people almost never address the effects of interest and seem to be unable to understand that there is no money except borrowed money.

After lots of thought my best guess is that those people just can't come to grips with the fact they have been lied to, cheated, stolen from, with such a simple, slick fraud it becomes nearly impossible to accept.  As a people we must accept the fact we have been lied to and really begin to openly and honestly discuss how this monetary system really functions, why it doesn't work, and what can then be done to fix it.

Everyone I know wants more money but when they are offered a solution, that would create a high tech transportation system, increased purchasing power of the medium of exchange through a reduced cost of doing business(lower taxes and debt that can be serviced without an increase of more debt, and an end to financial servitude, all everyone does is fight it tooth and nail.

 

Money reform is less about money and is more an issue of freedom.

 

Why should a seemingly free people be forced to borrow in order to do business and be forced into economic servitude?

I hope you enjoyed this posting Larry.  Thanks for creating this thread.  Maybe someday the American people will get tired of being slaves, and demand freedom.

 

There is only one solution to this mess.  To put debt free, wealth money into circulation.

 

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Re: Gubernatorial candidate's revolutionary money plan ...

DrKrbyLuv

Davis doesn't understand the first thing about banking and his plan is hair-brained.

As a simplified example, a bank can only lend an amount equal to its deposits, minus its reserve with is commonly cited in examples as 10%.  So it is 90% loaned out.  Now if those loans are deposited in a sequence of other banks as they in turn loan it out, and each holds back 10% as a reserve, then the money eventually gets too small to bother with writing a loan.  1,000 > 900 > 810 > 729 > 656 > 590 and so on   It is commonly stated that you get 9 times the original amount in aggregate, but never at one bank as Davis says. Traditional banks do create money, but they can only do so within limits set by their deposits.  This works the same for any commercial bank, state or federal charter, despite what Davis says.

So if Davis doesn't even understand how this works why should we have any confidence in his "improvement"?

Davis says let's throw out the restriction of using deposits as a limit, and just let the banks create all the money they want as long as they give some to the state.  This would in effect give Minnesota the equivalent of the Federal Reserve Bank.  Oh yeah, that's going to work just fine!  Money for nothing in unlimited amounts.

If Davis got this enacted the federal regulators would close any such bank before they wrote their first loan.  What he is selling is snake oil.

 

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Re: Gubernatorial candidate's revolutionary money plan ...

Travlin,

 

Banks do not lend a portion of their deposits, nor are state chartered banks in minnesota legally required to have any reserves, or reserve account at this present time.

Banks create the deposits they lend not based a percentage of their deposits but from the borrowers promise to pay.

Banks are the only creators of money.

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Re: Gubernatorial candidate's revolutionary money plan ...
Thomas Hedin wrote:

Travlin,

Banks do not lend a portion of their deposits, nor are state chartered banks in minnesota legally required to have any reserves, or reserve account at this present time.

Banks create the deposits they lend not based a percentage of their deposits but from the borrowers promise to pay.

Banks are the only creators of money.

Thomas

Sir, you are mis-informed.  With the big banks their funding gets more complicated.  But you can go to any community bank in the USA that has federal deposit insurance and ask for their balance sheet to take home.  It is usually posted in the lobby for all to see. You can find the info online for any bank at the FDIC's website as well.

It will show that their loans (see assets) are less than their deposits (see liabilities). The exception is if they are fully loaned out, some banks may borrow money from another bank to make additional loans to their own customers.  This is usually just a small percent of the loan portfolio because it is hard to make a profit on this and the regulators give them the evil eye.

I mean no disrespect to you, but what you said about deposits and reserves is not correct.  I agree that banks create money by counting the same money twice.  Once for the depositor, and second for the loan holder.  If all the depositors want their money at the same time this would be a run on the bank.  In the old days they would collapse.  Today the bank can borrow the cash from the Federal Reserve to pay depositors, but they have to use their assets (loans) as collateral.  If the deposits don’t come back then they are out of business anyway.

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Re: Gubernatorial candidate's revolutionary money plan ...

Travis,

I understand a lot of people really believe what you're saying but it simply isn't what banks do.  Here is a quote from Modern Money Mechanics.  And I know we've all been told that banks only lend a portion of their depositors money but it's a slick deception that is used to confuse people and conceal truth.

 

Modern Money Mechanics

Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts.

Has your bank ever held 10% of your deposit where you couldn't spend it to loan it to someone else?

It will show that their loans (see assets) are less than their deposits (see liabilities).

The reason this happens is because as soon as time and interest kick in on that borrowed money (the only kind there is) the debt grows but the money supply does not.  This is all slight of hand stuff the banking system puts out.  Flip the books around towards the borrowers and you'll see that the people's assests (money) is smaller than their liabilities (various debt instruments owed to the banking system).

 

I mean no disrespect to you, but what you said about deposits and reserves is not correct.  I agree that banks create money by counting the same money twice.  Once for the depositor, and second for the loan holder.

Banks simply do not count the same money twice.  They create additional money every time a new loan is issued.  If they counted the same money twice there wouldn't be an increase in the money supply.

If I count the same dollar I have in my wallet one million times do I become a millionaire?  Obviously counting the same money more than once does not increase the money supply.

The truth is banks have no reserves.  How can a number back up a number?  I know they have a "legal basis" for reserves, but that legal basis only consists of a "promise to pay".  The exact very thing a bank create as money.

 

Today the bank can borrow the cash from the Federal Reserve to pay depositors, but they have to use their assets (loans) as collateral.

Banks do not borrow cash from the Federal Reserve.  What they do is purchase cash at face value from the FedFed by drawing down on their reserve account.  This reserve account only consists of a promise to pay(numbers).  These reserves can either be deposited or borrowed.

A banks reserve account with the fed is just an entry on the feds books.  Nothing else.

How can a number in a reserve account back up a number in a personal checking account?

Banks can borrow "reserves" from the federal reserve banks if they have an account with the fed.  In minnesota, state chartered banks are not legally required to have a reserve account with a Fed or member bank but to the best of my knowledge all of them do for, what the bankers say, an "issue of conveinence".  Probably just makes it eaiser to obtain pocket cash and coin.  This delves into par and non-par banking stuff.  Long history, short story.  The big banks want control over all the small banks.

Only the Fed has to pledge collateral equal to the face value of the Federal Reserve notes to obtain new FRNs from the U.S. Treasury who prints them and sells them to the Fed at the cost of printing.  Roughly 4.5 cents per note regaurdless of the number printed on it.

 

I've talked with very seasoned bankers before who understand that banks create money and understand the process very well.  Every one of them said they create the money they lend by simply writing down numbers in a dual book keeping system and adding them to the borrowers checking account.  It's just that simple.

I like to call it a "duel book keeping system" because this process of money creation clearly creates an endentured servitude slave class and master of all commerce class.

 

If you really believe i am wrong about any of this can you please source where you get your information?

 

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Re: Gubernatorial candidate's revolutionary money plan ...

This Davis Plan will never fly because it removes base monetary creation from the sole control of the Federal Reserve and places a portion of it into the hands of state legislatures.  On this alone it will never fly, and I actually think that's the right call.  Can you imagine if each state got into the game and began out racing each other to create more money than the next state in order to attract businesses, subsidize tourism, have the most well-funded educational system, and a thousand other "essential" things?  It would result in a complete currency failure within a few short years.  Things are dicey enough without such tom-foolery added to the mix.

Further, recall, if you will, what is printed at the top of every piece of paper currency - "Federal Reserve Note".  That means what Davis is calling "money" is something far different....it's really an obligation of the Federal Reserve system.

How could a state chartered bank produce such a thing?  They couldn't anymore than Pepsi can start selling Coke.   At least not legally according to the law of the land and, trust me on this one, the feds would strangle such a scheme before it could breathe it's first breath.

Maybe state chartered banks could produce something else legally - a MN buck perhaps -  but what you can legally do and what the feds will allow you to do are two separate things when it comes to money.  Especially  when it comes to money.

In then end, while I applaud the new thinking involved, I don't see this plan as very well thought out.

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Re: Gubernatorial candidate's revolutionary money plan ...
cmartenson wrote:

This Davis Plan will never fly because it removes base monetary creation from the sole control of the Federal Reserve and places a portion of it into the hands of state legislatures.  On this alone it will never fly, and I actually think that's the right call.  Can you imagine if each state got into the game and began out racing each other to create more money than the next state in order to attract businesses, subsidize tourism, have the most well-funded educational system, and a thousand other "essential" things?  It would result in a complete currency failure within a few short years.  Things are dicey enough without such tom-foolery added to the mix.

Further, recall, if you will, what is printed at the top of every piece of paper currency - "Federal Reserve Note".  That means what Davis is calling "money" is something far different....it's really an obligation of the Federal Reserve system.

How could a state chartered bank produce such a thing?  They couldn't anymore than Pepsi can start selling Coke.   At least not legally according to the law of the land and, trust me on this one, the feds would strangle such a scheme before it could breathe it's first breath.

Maybe state chartered banks could produce something else legally - a MN buck perhaps -  but what you can legally do and what the feds will allow you to do are two separate things when it comes to money.  Especially  when it comes to money.

In then end, while I applaud the new thinking involved, I don't see this plan as very well thought out.

Chris,

Thank you for finally weighing in on one of these monetary threads.  I agree with you 100% and really don't understand how any reasonable person could think differently.  It will be a great day for humanity when we switch to a new monetary system that takes the power of money creation away from private banks and returns it to the people.  Until that day we just need to keep searching for solutions and educating the masses.  Cheers!

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Re: Gubernatorial candidate's revolutionary money plan ...
Thomas Hedin wrote:

Money reform is less about money and is more an issue of freedom.

Why should a seemingly free people be forced to borrow in order to do business and be forced into economic servitude?

Thomas,

Those are two statements that I can agree with.

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Re: Gubernatorial candidate's revolutionary money plan ...

The Bank of North Dakota has been operating since 1919 and has been creating money since opening.  The fact is that states may charter or own banks regardless of what many here might think.   

  Bank of North Dakota

Ellen Brown link  - North Dakota is the only state in the union to own its own bank. The Bank of North Dakota (BND) was established by the state legislature in 1919 specifically to free farmers and small businessmen from the clutches of out-of-state bankers and railroad men. Its populist organizers originally conceived of the bank as a credit union-like institution that would provide an alternative to predatory lenders, but conservative interests later took control and suppressed these commercial lending functions. The BND now chiefly acts as a central bank, with functions similar to those of a branch of the Federal Reserve.

However, the BND differs from the Federal Reserve in significant ways. The stock of the branches of the Fed is 100% privately owned by banks. The BND is 100% owned by the state, and it is required to operate in the interest of the public. Its stated mission is to deliver sound financial services that promote agriculture, commerce and industry in North Dakota.

Although the BND is operated in the public interest, it avoids rivalry with private banks by partnering with them. Most lending is originated by a local bank. The BND then comes in to participate in the loan, share risk, buy down the interest rate and buy up loans, thereby freeing up banks to lend more. One of the BND's functions is to provide a secondary market for real estate loans, which it buys from local banks. Its residential loan portfolio is now $500 million to $600 million. This function has helped the state avoid the credit crisis that afflicted Wall Street when the secondary market for loans collapsed in late 2007 and helped it reduce its foreclosure rate. The secondary market provided by the “shadow lenders” is provided in North Dakota by the BND, something other state banks could do for their community banks as well.

Other services the Bank provides include guarantees for entrepreneurial startups and student loans, the purchase of municipal bonds from public institutions, and a well-funded disaster loan program. When North Dakota failed to meet its state budget a few years ago, the BND met the shortfall. The BND has an account with the Federal Reserve Bank, but its deposits are not insured by the FDIC. Rather, they are guaranteed by the State of North Dakota itself - a prudent move today, when the FDIC is verging on bankruptcy.

A New Vision for a New Decade

A state-owned bank has enormous advantages over smaller private institutions: states own huge amounts of capital (cash, investments, buildings, land, parks and other infrastructure), and they can think farther ahead than their quarterly profit statements, allowing them to take long-term risks. Their asset bases are not marred by oversized salaries and bonuses, they have no shareholders expecting a sizable cut, and they have not marred their books with bad derivatives bets, unmarketable collateralized debt obligations and mark-to-market accounting problems.

The BND is set up as a dba: "the State of North Dakota doing business as the Bank of North Dakota." Technically, that makes the capital of the state the capital of the bank. The BND's return on equity is about 25 percent. It pays a hefty dividend to the state, projected at over $60 million in 2009. In the last decade, the BND has turned back a third of a billion dollars to the state's general fund, offsetting taxes.

By law, the state and all its agencies must deposit their funds in the bank, which pays a competitive interest rate to the state treasurer. The bank also accepts funds from other depositors. These copious deposits can then be used to plow money back into the state in the form of loans.

Although the BND operates mainly as a “bankers’ bank,” other publicly-owned banks, including the Commonwealth Bank of Australia, have successfully engaged in direct commercial lending as well. This has proven to be a win-win for both the borrowers and the government. The public bank model also offers exciting possibilities for refinancing the state’s own debts and funding infrastructure nearly interest-free. For a fuller discussion, see “Cut Wall Street Out! How States Can Finance Their Own Recovery.”

For three centuries, the United States has thrived on what Benjamin Franklin called “ready money” and today we call “ready credit.” We can have that abundance again, by generating our own credit through our own state and local banks. Just as George Bailey needed a visit from an angel to point the way, so we just need the vision to see the possibilities.

Larry

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Re: Gubernatorial candidate's revolutionary money plan ...

Larry,

The Bank of North Dakota DOES NOT CREATE MONEY THAT DOES NOT HAVE TO BE PAID BACK.  That important distinction makes all the difference in the world.  Some of us that think the MTA is a bad idea agreed that a state should have the right to use the current system the way that the BND does as mentioned in this recent thread.

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Re: Gubernatorial candidate's revolutionary money plan ...

To Chris

Do you agree that the following state is true?  If you don't agree that this statement is true please inform me as to why you don't think that it is true.

All bank deposits are a form of credit.  Basically, they represent amounts owed by banks to depositors.  They come into existence by an exchange of bank promises to pay customers for the various assets which banks acquire currency, promissory notes of business, comsumers, and other customers, mortgages on real estate, and Government and other secrities.

Thanking you in advance for your reply

Byron

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Re: Gubernatorial candidate's revolutionary money plan ...

goes211 wrote:

The Bank of North Dakota DOES NOT CREATE MONEY THAT DOES NOT HAVE TO BE PAID BACK. That important distinction makes all the difference in the world.  Some of us that think the MTA is a bad idea agreed that a state should have the right to use the current system the way that the BND does as mentioned in this recent thread.

goes, I respect you making the distinction about paying the money back and more importantly, you seem to agree that the BND is a viable alternative.  So, we find some agreement in which to build upon.   

Ellen Brown, who is an attorney, has offered her opinion as to the legality of monetizing productivity via the MTA.  I support this initiative and hope at least one of the states brings this issue to a head.  I don't think it is over-stating things by saying that the creation and control of our monetary system is at the core of all other freedoms and defines our status as a sovereign.     

ANOTHER WAY AROUND THE CREDIT CRISIS: MINNESOTA BILL WOULD AUTHORIZE STATE BANKS TO "MONETIZE" PRODUCTIVITY

In August 2007, the nation was stunned by the collapse of a major Minneapolis bridge, killing thirteen. The bridge had been rated structurally deficient by the U.S. government as far back as 1990, and it was only one of more than 70,000 bridges across the country with that rating. The American Society of Civil Engineers estimated that it would take nearly $190 billion to fix the country's failing bridges over the next two decades. Minnesota and other states have the manpower and the materials to rebuild. What they lack is only the money to do it. Municipal governments have to borrow money by issuing bonds, and the interest they must pay on these bonds is going up.

Although the cost of borrowing is going up for municipal governments, this is not because they are bad credit risks. In fact, they are extremely good credit risks. Creditors know where to find them, and local governments have the power to tax to pay their bills. The problem lies with the bond insurers called "monolines," which have ventured into the very risky mortgage-backed securities market. This has put the insurers' triple-A ratings in jeopardy, along with the ratings of the municipal bonds they insure.

While borrowing costs for municipal governments are skyrocketing, the interest rate the Federal Reserve charges to banks has been going down, even though banks are proving to be much riskier investments than local governments. The Federal Reserve is a private banking corporation that is owned by other banks. It was established in 1913 to prevent bank runs and otherwise keep the banks from getting into trouble for over-leveraging (lending out many times their assets), and that remains its principal function today. The Federal Reserve recently extended $200 billion in financing to 20 top investment banks at wholesale rates, but these low rates are not being passed on to municipal governments or home buyers. The Federal Reserve is evidently working for the banks more than for taxpayers or local governments.

Thinking Outside the Box: The Minnesota Transportation Act

Many people are getting tired of waiting for the Federal Reserve and the federal government to act, and one of them is a Minnesota resident named Byron Dale. Dale has drafted a bill called "the Minnesota Transportation Act" (MTA), which is scheduled for hearing before the Minnesota Senate Transportation Committee on March 25, 2008. If adopted, the bill could represent a major innovation in the way state and local projects are funded. It would mandate Minnesota's Transportation Department and State-chartered banks to enter into an agreement providing that the banks would advance funds for legislatively-approved transportation projects in the same way that banks make commercial loans – simply by "monetizing" the projects themselves. Banks routinely monetize the promissory notes of borrowers just by making book entries to a checking account and saying "you have a new deposit with us." 

Under the MTA, the state-chartered banks would create a pass-through account titled an Asset Monetization Account (AMA), monetizing the bid value of projects. This would be done in the same way banks that monetize collateral, except that the deposit would go on the bank's books as an asset rather than a liability, turning the bid value of the project into "money" without debt. This money would be debited electronically out of the AMA and credited to the State's Transportation Account (STA), from which it would then be debited out and credited in to the contractor's bank account in a state bank, according to the terms of the contract. The contractor would spend this money to complete the project. The money would flow into Minnesota's economy, where it would provide for better, safer, more durable roads and bridges. It would be used to purchase goods and services, benefiting business. It would go to pay taxes, helping the State balance its budget. And it would flow back into the state-chartered banks as interest on outstanding loans, reducing the number of loan defaults and improving the profits of the state-chartered banks. In this way, says Dale, the MTA would benefit every segment of society.

Too Radical? Maybe Not . . .

Dale says he has been proposing this sort of state funding alternative for years; but only now, with the looming liquidity crisis, have legislators begun to take him seriously. His plan may not be such a radical departure from existing practice as it sounds. Commercial banks are already in the business of creating money. Except for coins, our entire money supply is now created by banks in the form of loans.2 Indeed, banks create all the money they lend. This was confirmed by the Chicago Federal Reserve in a booklet called "Modern Money Mechanics," which states:

Of course, [banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise [by the same amount]

Many other authorities have confirmed this money-creating mechanism of commercial banks.4 State-chartered banks get their authority to create money from the State, and the State has the authority to determine the purpose for which banks create money. State banks are now permitted to create money to monetize a mortgage or other promise to repay. They could as easily be authorized to "monetize" the promise of contractors to deliver labor and materials to the State in the form of road and bridge repair and construction.

The argument against this creative approach is that it would be inflationary, but would it? Inflation results when "demand" (money) increases faster than "supply" (goods and services); and in this case goods and services would be increasing along with the money available to spend, keeping the money supply in balance and prices stable. In fact, it is the lending of money created out of thin air that is inflationary, because banks create the principal but not the interest necessary to pay back their loans. Additional loans must therefore continually be taken out just to service the "money" (or debt) that is already in the money supply; and this newly-created money goes into the pockets of middlemen rather than contributing to the productivity of the community. "Demand" (money) thus goes up without a corresponding increase in "supply," creating price inflation.

The solution to this conundrum is to authorize banks to monetize the production of real goods and services, creating supply and demand at the same time. There is substantial precedent for this approach, stretching as far back as the early American colonies:

* 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 not only without producing price inflation but 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. Again, historians of the period attest that this issue of Greenbacks was not responsible for price inflation.

* A successful infrastructure program funded with interest-free "national credit" was 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.

* The island state of Guernsey, located in the British Channel Islands, has been funding infrastructure with government-issued money for over 200 years, without creating price inflation and without government debt.

But Is It Constitutional?

These governments could create the money they needed because they were sovereign entities, but what about individual States governed by a federal Constitution? In the United States, the U.S. Constitution controls. But that august document says very little about the creation of money – so little that banks have stepped in and taken over the business by default. Here are the sole Constitutional provisions directly addressing the creation of money:

Article I, Section 8, Clause 5: The Congress shall have Power...To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.

Article I, Section 10, Clause 1: No State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

Congress has been given the power to coin money, but minting coins is not the same thing as issuing paper money, checkbook money, accounting-entry money, or electronic money – the forms of money used most often today. Arguably, "to coin" money was an archaic way of saying "to create" money, but then what is to be made of the clause stating, "No state shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debt"? "Coin" here clearly means precious metal coins, period.

That clause is interesting for another reason: when was the last time you heard of a State paying its debts in gold or silver coin? States routinely pay their debts with the bank-created accounting-entry money that now composes over 97 percent of the U.S. money supply (M3), and that form of money is omitted from the Constitution altogether. The States therefore violate the Constitution every day, something they must do if they are to pay their debts at all, since gold and silver coins are no longer in general circulation. The Constitution obviously needs to be amended to suit the times. Meanwhile, the Tenth Amendment to the Constitution (part of the Bill of Rights) provides:

X - Rights of the States under Constitution: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Creating checkbook money is not specifically delegated to the United States, so it must be delegated to the States, unless it is specifically prohibited to them. What about the provision that "No State shall . . . emit Bills of Credit"? According to "the 'Lectric Law Library," "bills of credit are declared to mean promissory notes . . . . Bills of credit may be defined to be paper issued and intended to circulate through the community for its ordinary purposes as money redeemable at a future day." Bills of credit are promises to pay later rather than what is being discussed here: checkbook money issued as "legal tender" – the sort of dollars banks issue every day when they make commercial loans. The Constitution does not say who is authorized to issue this sort of money – whether in paper, electronic or accounting-entry form – so under the Tenth Amendment, this right is reserved to the States and to the People.

As the credit crisis deepens and exposes the inability of the existing banking structure to meet the public's needs, creative funding plans similar to the proposed MTA could be popping up in communities around the country. If the U.S. Congress and the privately-owned Federal Reserve will not issue the funds necessary for bridge and road repair and other urgent public projects, we can encourage our State legislators to fill the breach; and if they won't do it, we the people can get together, apply for a bank charter, and create the funding ourselves. (See E. Brown, "How to Start Your Own Bank," webofdebt.wordpress.com, February 23, 2008.)

Fortunately the naysayers are giving way to the creative problem solvers as five other states are considering state owned or chartered banks.  Our monetary system is a scam fully supported by a corrupted government in Washington that if left alone, will destroy the country.  We are going bankrupt only because congress has chosen to to become subservient to private banks.  The states may offer us our best chance of breaking the chains of debt slavery for us and future generations.

Thomas Hedin wrote:

I hope you enjoyed this posting Larry. Thanks for creating this thread. Maybe someday the American people will get tired of being slaves, and demand freedom.  There is only one solution to this mess. To put debt free, wealth money into circulation.

Thomas, this solution has been known for a long time though the classical economists and academics have successfully hidden sovereign money from the discussion since the turn of the 20th century.  It is sad indeed that this fundamental is totally lacking from all discussions.

Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, identified the problem and this solution during the early 1930's:

"We are rapidly approaching a situation where the government MUST issue additional currency. It will very soon be the only move remaining. It should have been the first step in the recovery program. Immediately upon a revival of the demand that the government increase the supply of currency, we shall again be subjected to a barrage of skillfully designed and cunningly circulated propaganda by means of which a small group of international bankers have been able, for two centuries to frighten the peoples of the civilized would against issuing their own good money in sufficient quantities to carry on their necessary commerce."

"We shall never recover on credit. Even if it were obtainable, it is uncertain, unreliable, does not expand in accordance with demand, and contracts unexpectedly and for causes unrelated to the needs of commerce and industry...In our present situation the issue of additional currency is the only way out."

Imagine if FDR would have heeded Hemphill's advice and stopped the depression while avoiding the bankruptcy of 1933.  The world and our country would be much better off today.  We are approaching a very similar situation today as the money supply is contracting just as it was from 1930-1933.  Anyways, it's not too late...keep up the good fight!

Larry

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cpkj
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Re: Gubernatorial candidate's revolutionary money plan ...

I agree that we need some sort of currency reform.

However, the intricate details of our monetary system aside, I can think of nothing scarier than any government (Local, State, or Federal) having the ability to create money without consequence.  Look what has happened under our current system!

The misallocation of capital  would be  even more epic in scale.  To expect political units to fund projects that provide the exact amount of benefit in relation to their cost . . .

Prices would rise as legitimate capital projects were forced to compete for resources against the horde of "special interest" projects.

All the ideas for currency reform that I have see/heard/read all seem to lack one thing.  Accountability.  Relying on the political process to punish fiscal rogues seems naive at best.

About the only things that I can think of that would be sustainable involve a wise philosopher king or an oppressive dictator.

But thank you for this thread.  We can never get where we need to be until we figure out where that is.

 

 

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Byron Dale
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Re: Gubernatorial candidate's revolutionary money plan ...

“All money is now created as interest bearing debts.  If there is no borrowing there is no money.

This forces Americans to borrow at interest to obtain a medium-of-exchange creating economic servitude, growing unpayable debts and money shortages in all sectors of society. As our Federal government will not address the issue, Minnesota must pass legislation that will create economic Freedom and end recessionsThis legislation will set an example for the nation and the world to follow by increasing the money supply with no new debt, no new taxes and no inflation as the money supply will increase with productivity gains while creating jobs, income, cash flow and sustainable economic prosperity. The state law will provide for our state-regulated banks to create new money as electronic bookkeeping entries just as they do now when they make loans. However, this new money will be debt and interest-free and spent, not lent into circulation in lieu of more debt and taxes to maintain and build public roads and bridges that the people will use with no fees, charges or taxes of any kind.” 

This is the Statement Gregory K. Soderberg running as Lt. Governor with Leslie Davis in Minnesota filed with the Sec. of State office.    This man has spent 16 years studying just how our money system works and what the consequences thereof are for the America people.

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Byron Dale
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Re: Gubernatorial candidate's revolutionary money plan ...
To cpkj
You seem to have forgotten or you don't understand that all the money you talked about in your post was created by the banking system not the government.
Byron
PS  One other thing what is with most of the people on this site, are you all afraid to use your own names? 
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goes211
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Re: Gubernatorial candidate's revolutionary money plan ...
Byron Dale wrote:
One other thing what is with most of the people on this site, are you all afraid to use your own names? 

Byron,

I personally have been using the internet since pre-WWW days when its use consisted of email, anonymous ftp, and Usenet.  Usenet posts at that time resemble an early generation web forum like those here at CM.com.  Even today, usenet posts I made nearly 20 years ago while I was a college student or recent graduate are publically available and searchable.   I personally find this troubling, and for that reason, I am very hesitant to use any modern social networks like myspace or facebook. 

As a public person who is already on record against TPTB, and that makes at least part of your income off of books that you sell on this topic, it is obvious why you would use your real name on the internet.  Maybe you don't value the (limited) anonymity that the internet affords us, but rest assured that there are many of us that do.

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