The vast majority of people have no idea how destructive private for-profit banks have been throughout the past centuries. Even if they knew, it's clear they could do nothing about it.
Debt-free money is welcomed as long as it is not a top-down introduction. It has to bottom-up and market driven.
There is tremendous reason for this rationale. The humungus global debt bubble has to safely leak and cannot be permitted to POP because of a rush to judgement in the debt markets.
Yes, but please, not with gold, but with the new monetary paradigm of strategic Monetary Gifting at the point of retail sale with a 50% Discount/Rebate policy. Then $100 worth of groceries is only $50, a $60k EV is only $30k and a $500k house is only $250k. Ever heard of a greater benefit for EVERYONE? Ever heard of BENEFICIAL price and asset DEFLATION and the invalidation of The Quantity Theory of Money. (The heads of the orthodox explode.) Finally, the best thing about the new monetary paradigm is it is serendipitous. That is, it evokes an unforeseen benefit not even considered in the area under analysis. What is that benefit? Because EVERYONE participates in and/or is effected by the price at retail sale its the greatest opportunity to self actualize grace as in gratitude for a gift, since meditation and prayer. And you don't even have to chant my name to receive it. :) All you have to do is buy something.
Preferably amend The FED's charter enabling it to simply create the money and distribute it back to the merchants who gave the discount to the consumer. One of its mandates is to control inflation after all. Every retail merchant gets an account at The FED and the money is created the same way it is now with equal debits and credits that sum to zero and the digital technology already present. Same thing would apply in distributing a universal dividend...everyone gets an account at the central bank. Its too simple for the intellectual vanities of the erudite, to world changing not too be a mega-paradigm change to the economy and money system...and too edifiying to the general populace because it woud be the greatest opportunity to self actualize gratitude for a continuing gift of money since meditation and prayer.
That would not removed inflationary debt from circulation. It would simply recycle debt over and over while the total debt-to-GDP ratio keeps rising and rising.
What's required is a displacement where debt-free medium allows debt based medium to be safely purged.
Not correct. Your last statement is exactly what is required...and the policies of the new monetary paradigm do that in spades. How? Because instead of allowing private debt to keep building until it destabilizes the economy the 50% Discount/Rebate policy at retail sale doubles individual purchasing power and simultaneously reduces the rate of increase in debt by 75% by reducing the price/debt burden of a $500k house to $250k at retail sale and then when your $250k mortgage payment (the retail point of Finance) comes due every month the 50% Discount/Rebate pays for half of your payment so you get a $500k house for the equivalent payment of a $125k mortgage.
Cynicism is the modern intellectual disease. I prefer Antonio Gramsci's perspective who coined the term “pessimism of the intellect, optimism of the will.”
Yes, Hegel's dialectic is wisdom because it is a trinity (Thesis/Antithesis/Synthesis). Thirdness greater oneness, the third integrative resolving way has always been a signature of Wisdom.
Ellen, I've been posting to your various outlets for almost 8 years, and I'm in complete agreement that public and infrastructure banks on at least the state level is an excellent idea. Isn't it time for us to coordinate our ideas and policies? What a party and/or movement needs to win the day are policy effects that are universally beneficial, problem resolving and can be seen by the individual doing the simple math and/or the simple accounting operations of equal debits and credits that sum to zero. Please lets integrate our ideas and efforts.
Hi, I assume you mean Douglas Social Credit, correct? (Sorry, I searched my email but couldn't find you; I get the Social Credit people and the gold money people who comment on my articles confused!) Social Credit is an interesting concept, but it's not likely to be adopted by Congress any time soon. Public banking is a much easier transition, which doesn't require action by Congress: just transfer public (local government owned) funds into publicly-owned banks, so the profits return to the public.
Social Credit was an interesting and VERY POPULAR WORLD WIDE MOVEMENT back between the world wars, but its policy of a compensated retail discount was only meant to be a smallish percentage to counter inflation and so it would have been gamed by commercial agents practicing greedflation and so its economic effects nullified. Thats because Douglas although a very clear minded individual still remained within the economic mental horizon of General Equillibrium and "free" market theoretics plus Social Credit existed before the entire subject of paradigms had been analyzed. Thus it was just a very good palliative, but not a paradigm change which is all the difference in the world.
A large/50% Discount/Rebate policy flips the mental and temporal universe reality (a classic signature of paradigm changes) from chronic erosive systemic inflation to BENEFICIAL INDIVIDUAL deflation, invalidates the orthodoxy of The Quantity Theory of Money, supercharges the individual's economic and monetary benefits and punishes/eliminates the temptation of greedflation because if a commercial agent raises their prices by say 10-20% how much market share is that anti-social CEO going to lose to the one who doesn't inflate or even competes by lowering their prices to show the consumer that they actually have good will toward their consumers which is the most valuable commodity a business can possess. In my book I also suggest additional policies that solidify the new paradigm's effects.
Yes, cynicism is the intellectual disease of modernity, but the key to changing that is to DIRECTLY broadcast the INDIVIDUAL benefits over the systemic ones which is also a signature of SUCCESSFUL historical paradigm changes and enables Victor Hugo's correct observation that "the one thing all of the armies of the world cannot resist is an idea whose time has come." Its time to change the 8000 year old monetary paradigm of Debt ONLY.
If it would be the only form of currency to circulate within the economy, it would be inflationary.
It could dovetail with debt-free currency (bullion backed) in symbiosis, however, but the debt-free medium would have to develop beforehand. The Fed can then leave the building.
I have written numerous times to our NY State Governor's Office to encourage her to move the Public Banking Bill out of the Legislature to her desk for signing. New York is already half-way there with its Green Bank initiative.
However, to date, the bill still sits in the Legislature... :-(
If it would be the only form of currency to circulate within the economy, it would be inflationary.
It could dovetail with debt-free currency (bullion backed) in symbiosis, however, but the debt-free medium would have to develop beforehand. The Fed can then leave the building.
If Donald Trump can irrelevently recommend we re-name The Gulf of Mexico to The Gulf of America, then I recommend we bring awareness to the solution to our economic and monetary problems by changing our name from The United States of America to The United Republic For Monetary Grace As In Gifting At Retail Sale. That way with a policy of a 50% Discount/Rebate at retail sale a $500k house is reduced to $250k when you agree to buy it from the house builder and when the retail point of Finance, that is your mortgage payment comes due every first day of the month, the central bank pays for 50% of its total so you're getting a $500k house for the equivalent payment of a $125k mortgage.
Do you think that amount of individual benefit is sellable? Then just keep broadcasting it instead of worrying about what the pols, bankers and the unfortunately acculturatedly cynical but well meaning may mistake about its temporal universe effects.
Excellent article Ellen, very clear narrative. To further increase fairness in our economy a land value tax system combined with shifting taxes off of labor and production would further curb land speculation and hoarding. Public banks and land value taxation - the way forward for a fair yet free economy! see theIU.org
Thanks for the article on the Feder model. There has been a lot of pushback against "tokenization," but that's what it could be good for. We can all issue our own tokens, backed by future productivity. For example, a farm group could sell tokens for their crops, redeemable when the crops are harvested.
Hi Ellen, Reggie Middleton has 7 patents for peer to peer capital markets transactions. His token is called Veritaseum. He is a threat to the existing banking model so the SEC sued him for issuing securities without a license. They forced Reggie to settle because of lawfare practices.
There is more than enough for a book here if you are so inclined. If the gag order is eventually lifted, Reggie I am sure has enough for a rich and very engaging text.
Your statement, "Bank-created deposits are not actually 'unbacked fiat' simply issued by banks. They can be created only when there is a borrower. In effect, the bank has monetized the borrower’s promise to repay, turning his promise to pay tomorrow into money that can be spent today..." pertains to member banks (which pledge collateral) of a central bank, but not to the central bank itself.
Since central banks such as the Federal Reserve and the Bank for International Settlements are not audited by any entity other than themselves, they can generate undisclosed and hence uncollateralized, i.e. fiat, funds (bypassing their respective member banks and the U.S. Treasury) for covert and overt intelligence operations, and in some cases select bureaucracies, and NGOs that may or may not mandate third party debt service back to the central bank. Since there's no accountability/auditing for the central bank beyond its own management necessities, it can generate the funds and, when needed, create an entity to whom to make the "loan" (which, in all likelihood will be 100% monetized, i.e not repaid) afterwards.
Beardsley Ruml, Former chairman of the Federal Reserve Bank of New York, in his address to the American Bar during the last year of World War II, entitled "Taxes For Revenue Purposes Are Obsolete", put it this way:
"...The necessity for a government to tax in order to maintain both its independence and its
solvency is true for state and local governments, but it IS NOT TRUE FOR A NATIONAL GOVERNMENT. [emphasis added] Two changes of the greatest consequence have occurred in the last twenty-five years which have substantially altered the position of the national state with respect to the financing of its current requirements.
The first of these changes is the gaining of vast new experience in the management of central
banks. [A rather disingenuous way of saying the Federal Reserve usurped the authority of Congress to coin money and establish the value thereof, and replaced gold and silver coin with debt instrument currency created by itself.]
The second change is the elimination, for domestic purposes, of the convertibility of the
currency into gold. [The replacement of gold and silver coin with irredeemable fiat currency]
Free of the Money Market [but dominion by the central bank]
Final freedom from the domestic money market exists for every sovereign national state
where there exists an institution which functions in the manner of a modern central bank,
and whose currency is not convertible into gold or into some other commodity. ..." {He should have said "for every central bank" and left out reference to the "sovereign national state".]
Ruml conflates a sovereign national state with a central bank. In every case the central bank controls the national sovereign state's money supply. He would have us believe the national sovereign state controls its associate central bank and its money supply by implication. But the opposite is true. The central bank controls the nations money supply and by extension its policy.
You raise an interesting point. I should write an article on that. The Fed cannot issue the sort of "money" that circulates in the real economy. It issues "reserves," into a separate reserve system available only to banks with master accounts at the Fed. It can buy assets (usually Treasuries) with these reserves, but only from banks; and the receiving banks can't spend these reserves into the real economy either. The reserves are for moving money from one bank to another. The reserves in the system always stay the same. The BIS has even less money-creating ability than the Fed. It does lend reserves, but only to central banks; and it gets the reserves from the central banks that issue them.
The present central banking system is there to be the hand maiden of the banks and their bail bondsman when the same screw up the system with excessive PRIVATE debt. We need a central bank, but The Feds charter must be amended. The way to do that is mandate them to do their alleged but thwarted job which is to control inflation ...by implementing beneficial deflation with a 50% Discount/Rebate at retail sale and the other policies I suggest in my book Wisdomics-Gracenomics.
You need a central bank for the debt based version of currency but to complete a balanced and symbiotic monetary model, debt and debt-free mediums must both flow in circulation, where the latter is a market responsibility.
Your post is accurate at defining debt based medium and its creation but if it's the only medium to grease the economic wheels, it's doomed over time. Debt-free medium must also enter circulation at some point in time to support real economic growth, thus safely allowing inflationary debt (fiat currency) to safely leave circulation.
Yes agreed, some Lincoln-style Greenbacks would be great. I imagine it will come to that shortly with the federal debt crisis, but printing will probably be by the Fed rather than the Treasury, and the interest on the newly bought bonds will go to the banks via Interest On Reserves (unless IOR is repealed per the bill now before Congress).
Greenbacks were debt based. My reference was to debt-free money, Ellen.
You're confusing what I mean by debt-free with it being interest free. Debt based currency can have zero percent interest to its creator.... which is what greenbacks were. They were still created by pen & ink, not be a newly created asset.
Create the debt-free market asset and then create the medium as its valued proxy. Gold is perfect for this.
A debt based medium has the medium created first (debt) with the hope the economy can fulfill its value by playing catch-up.
Thanks for the endorsement, and uphill battle acknowledged. My thought though is that if we get better models out there in the collective mindfield, when the old model collapses as it seems to be now, they might germinate into something real.
Power, even waning power, concedes nothing without a struggle. Getting such excellent ideas "out there" is only the first step on a long road leading to profound change. History is strewn with many ideas, some of which are still floating around like pollen in the wind, which have never been planted, nurtured and harvested. We must take control of the reins of power, one way or the other. Short of that, we are only throwing pennies in a wishing well.
The government and the Fed will be stronger with debt-free market currency moving into circulation even on the basis that the debt-free medium belongs to decentralized elements of the marketplace.... like you and me.
100% agree. But the system is not currently there to serve the greater good. You and I are irrelevant. Until we remove those now in power from power, this will continue and the wealthy will continue to plunder our vast wealth.
Those in power don't have to be removed. They have to be made to feel content and SUSTAINABLE real economic growth will provide that and is exactly where we need to go. Everyone wins. The elite always get a piece of the action and there is no generator of real wealth greater than the whole economy.
The paradox for the elite is that they cannot initiate the entrance of debt-free currency moving into circulation because it has to be a bottom-up process with organic qualities that only the market can safely govern. All the elite can do is encourage us by beating us with "the stick" until such time we take the "karat".
There are necessary evils written into God's script for good reason. They have vital roles that must be fulfilled.
The people are plundering their own wealth by stoking the flames of inflation and a rising debt-to-GDP ratio.
Look in anyone's wallet for stark evidence. It's all about what circulates within the real economy and what the marketplace chooses to use and reaches for.
I think it is up to us to decide the answer to that. Bitcoin can play a role, Monero for privacy. I like DigiByte because it is fast and cheap enough for small transactions. It is extremely secure with 5 mining algos, it can play with AI and a stablecoin connection is in development if needed. The best part of DigiByte is it is an all volunteer development community. Decentralized to the nth power.
Gold and silver have both now been monetized as debt-free market based digital tokens, fully backed by bullion. They also comply with the monetary law of weights and measures.
Yes, and Reggie has already tested his VeAdir system to purchase, store and trade precious metal coins issued by a US mint. The methodology is covered by his patents. It was demonstrated in its beta form for the SEC. The only thing holding this up is the fraudulent SEC lawfare case against him and the gag order. In the latest iteration of of the ongoing case, Reggie is requesting the case against him be set aside due to the SEC committing fraud on the court. The SEC's reply is ludicrous.
---- >>> A thriving economy requires that credit flow freely for productive use
Let's be more accurate on that one. A thriving economy that is to be maintained and avert the boom and bust cycles requires constant liquidity and liquidity can be debt based and/or debt-free. What is required is both.
A economy that only has debt based medium (credit) greasing its wheels is doomed over time. It cannot survive.
Agreed some debt-free liquidity (e.g. Treasury-issued Greenbacks) would be great, but I think a debt-based system in which the interest returns to the public is sustainable, at least much more sustainable than one in which it is sucked out parasitically by private "rentiers."
Again, your reform ideas as well as the reform theories of the likes of Steve Keen, Michael Hudson and Warren Mosler are valid...but they do not penetrate or elevate analysis to the conceptual/paradigmatic level. The effects of reforms are good, but shallow, temporary and via some systemic organization in other words NOT DIRECTLY BENEFICIAL TO THE INDIVIDUAL. ONLY NEW PARADIGMS are permanent, deep. directly beneficial to the individual and resolving of the key/core anomalous present paradigm's problems. Thats because new paradigms are synonymous with Wisdom insights in that they are DEEP, RESOLVING SIMPLICITIES. The only difference between them is your normal wisdom insight is personal ONLY while a new paradigm is BOTH PERSONAL AND SYSTEMIC WISDOM.
In fact the short course in paradigmology is that new paradigms are always in complete conceptual opposition to the present anomalous paradigm, deep/resolving/wisdom insights and their beneficial effects are always an aspect or aspects of the natural philosophical concept of grace APPLIED.
Debt ONLY as opposed to Monetary Gifting...check!
Continuous monetary gifting directly to the individual at retail sale resolves inflation and ends the historical destabilization of domestic economies by the monopoly paradigm of Debt Only...check!
Gifting is an aspect of the concept of grace...check!
The vast majority of people have no idea how destructive private for-profit banks have been throughout the past centuries. Even if they knew, it's clear they could do nothing about it.
They can use debt-free money.
What happened to others who tried to use debt-free money?
Oh, you mean like Germany and Libya? Saddam Hussein was using Euros instead of dollars to sell his oil. We know what happened to him.
see my post above(or below?) A precious metal cannot be monetized by fiat, only by the marketplace.
I don't believe it can either. Did I say something that gave you the wrong impression?
Debt-free money is welcomed as long as it is not a top-down introduction. It has to bottom-up and market driven.
There is tremendous reason for this rationale. The humungus global debt bubble has to safely leak and cannot be permitted to POP because of a rush to judgement in the debt markets.
Default or hyperinflation. They look the same to the middle class and lower.
Yes, but please, not with gold, but with the new monetary paradigm of strategic Monetary Gifting at the point of retail sale with a 50% Discount/Rebate policy. Then $100 worth of groceries is only $50, a $60k EV is only $30k and a $500k house is only $250k. Ever heard of a greater benefit for EVERYONE? Ever heard of BENEFICIAL price and asset DEFLATION and the invalidation of The Quantity Theory of Money. (The heads of the orthodox explode.) Finally, the best thing about the new monetary paradigm is it is serendipitous. That is, it evokes an unforeseen benefit not even considered in the area under analysis. What is that benefit? Because EVERYONE participates in and/or is effected by the price at retail sale its the greatest opportunity to self actualize grace as in gratitude for a gift, since meditation and prayer. And you don't even have to chant my name to receive it. :) All you have to do is buy something.
That's not a discipled idea for a system. It's beyond silly.
I can't imagine who's paying the discount.
Preferably amend The FED's charter enabling it to simply create the money and distribute it back to the merchants who gave the discount to the consumer. One of its mandates is to control inflation after all. Every retail merchant gets an account at The FED and the money is created the same way it is now with equal debits and credits that sum to zero and the digital technology already present. Same thing would apply in distributing a universal dividend...everyone gets an account at the central bank. Its too simple for the intellectual vanities of the erudite, to world changing not too be a mega-paradigm change to the economy and money system...and too edifiying to the general populace because it woud be the greatest opportunity to self actualize gratitude for a continuing gift of money since meditation and prayer.
That would not removed inflationary debt from circulation. It would simply recycle debt over and over while the total debt-to-GDP ratio keeps rising and rising.
What's required is a displacement where debt-free medium allows debt based medium to be safely purged.
Not correct. Your last statement is exactly what is required...and the policies of the new monetary paradigm do that in spades. How? Because instead of allowing private debt to keep building until it destabilizes the economy the 50% Discount/Rebate policy at retail sale doubles individual purchasing power and simultaneously reduces the rate of increase in debt by 75% by reducing the price/debt burden of a $500k house to $250k at retail sale and then when your $250k mortgage payment (the retail point of Finance) comes due every month the 50% Discount/Rebate pays for half of your payment so you get a $500k house for the equivalent payment of a $125k mortgage.
You might want to look into Reggie Middleton's patented DeFi if you are looking for a free and fair method of value exchange. https://youtube.com/shorts/OZrv8W_HT0I?si=QtgnwU7z5vmGoBVz
Cynicism is the modern intellectual disease. I prefer Antonio Gramsci's perspective who coined the term “pessimism of the intellect, optimism of the will.”
I prefer "ironic realism with Hegelian characteristics". Can't remember where I saw it.
Yes, Hegel's dialectic is wisdom because it is a trinity (Thesis/Antithesis/Synthesis). Thirdness greater oneness, the third integrative resolving way has always been a signature of Wisdom.
Thesis/Antithesis/Synthesis were also Hegel's pronouns.
I don't share your defeatist attitude.
Ellen, I've been posting to your various outlets for almost 8 years, and I'm in complete agreement that public and infrastructure banks on at least the state level is an excellent idea. Isn't it time for us to coordinate our ideas and policies? What a party and/or movement needs to win the day are policy effects that are universally beneficial, problem resolving and can be seen by the individual doing the simple math and/or the simple accounting operations of equal debits and credits that sum to zero. Please lets integrate our ideas and efforts.
Hi, I assume you mean Douglas Social Credit, correct? (Sorry, I searched my email but couldn't find you; I get the Social Credit people and the gold money people who comment on my articles confused!) Social Credit is an interesting concept, but it's not likely to be adopted by Congress any time soon. Public banking is a much easier transition, which doesn't require action by Congress: just transfer public (local government owned) funds into publicly-owned banks, so the profits return to the public.
Ah, I just saw your latest comment. Yes you're referring to Douglas Social Credit.
Caps are meant for emphasis not shouting.
Social Credit was an interesting and VERY POPULAR WORLD WIDE MOVEMENT back between the world wars, but its policy of a compensated retail discount was only meant to be a smallish percentage to counter inflation and so it would have been gamed by commercial agents practicing greedflation and so its economic effects nullified. Thats because Douglas although a very clear minded individual still remained within the economic mental horizon of General Equillibrium and "free" market theoretics plus Social Credit existed before the entire subject of paradigms had been analyzed. Thus it was just a very good palliative, but not a paradigm change which is all the difference in the world.
A large/50% Discount/Rebate policy flips the mental and temporal universe reality (a classic signature of paradigm changes) from chronic erosive systemic inflation to BENEFICIAL INDIVIDUAL deflation, invalidates the orthodoxy of The Quantity Theory of Money, supercharges the individual's economic and monetary benefits and punishes/eliminates the temptation of greedflation because if a commercial agent raises their prices by say 10-20% how much market share is that anti-social CEO going to lose to the one who doesn't inflate or even competes by lowering their prices to show the consumer that they actually have good will toward their consumers which is the most valuable commodity a business can possess. In my book I also suggest additional policies that solidify the new paradigm's effects.
Yes, cynicism is the intellectual disease of modernity, but the key to changing that is to DIRECTLY broadcast the INDIVIDUAL benefits over the systemic ones which is also a signature of SUCCESSFUL historical paradigm changes and enables Victor Hugo's correct observation that "the one thing all of the armies of the world cannot resist is an idea whose time has come." Its time to change the 8000 year old monetary paradigm of Debt ONLY.
If it would be the only form of currency to circulate within the economy, it would be inflationary.
It could dovetail with debt-free currency (bullion backed) in symbiosis, however, but the debt-free medium would have to develop beforehand. The Fed can then leave the building.
I have written numerous times to our NY State Governor's Office to encourage her to move the Public Banking Bill out of the Legislature to her desk for signing. New York is already half-way there with its Green Bank initiative.
However, to date, the bill still sits in the Legislature... :-(
If it would be the only form of currency to circulate within the economy, it would be inflationary.
It could dovetail with debt-free currency (bullion backed) in symbiosis, however, but the debt-free medium would have to develop beforehand. The Fed can then leave the building.
If Donald Trump can irrelevently recommend we re-name The Gulf of Mexico to The Gulf of America, then I recommend we bring awareness to the solution to our economic and monetary problems by changing our name from The United States of America to The United Republic For Monetary Grace As In Gifting At Retail Sale. That way with a policy of a 50% Discount/Rebate at retail sale a $500k house is reduced to $250k when you agree to buy it from the house builder and when the retail point of Finance, that is your mortgage payment comes due every first day of the month, the central bank pays for 50% of its total so you're getting a $500k house for the equivalent payment of a $125k mortgage.
Do you think that amount of individual benefit is sellable? Then just keep broadcasting it instead of worrying about what the pols, bankers and the unfortunately acculturatedly cynical but well meaning may mistake about its temporal universe effects.
Excellent article Ellen, very clear narrative. To further increase fairness in our economy a land value tax system combined with shifting taxes off of labor and production would further curb land speculation and hoarding. Public banks and land value taxation - the way forward for a fair yet free economy! see theIU.org
Thanks and good idea!
As you have pointed out in a previous article, labor based currency is the solution to a free and fair society. https://federsgenius.wordpress.com/tag/labour-based-currency/
Thanks for the article on the Feder model. There has been a lot of pushback against "tokenization," but that's what it could be good for. We can all issue our own tokens, backed by future productivity. For example, a farm group could sell tokens for their crops, redeemable when the crops are harvested.
Hi Ellen, Reggie Middleton has 7 patents for peer to peer capital markets transactions. His token is called Veritaseum. He is a threat to the existing banking model so the SEC sued him for issuing securities without a license. They forced Reggie to settle because of lawfare practices.
Here is the latest update on the case.
https://www.youtube.com/watch?v=y2nu5oijiTg&t=22s
There is more than enough for a book here if you are so inclined. If the gag order is eventually lifted, Reggie I am sure has enough for a rich and very engaging text.
Thanks! Looks very interesting.
The judge to decide on the SEC fraud.
https://medium.com/@gigatrader.ai/0-a-preface-to-a-modern-day-promethean-parablethe-man-in-the-robe-the-judge-who-will-decide-if-the-1e6e372620b4
Your statement, "Bank-created deposits are not actually 'unbacked fiat' simply issued by banks. They can be created only when there is a borrower. In effect, the bank has monetized the borrower’s promise to repay, turning his promise to pay tomorrow into money that can be spent today..." pertains to member banks (which pledge collateral) of a central bank, but not to the central bank itself.
Since central banks such as the Federal Reserve and the Bank for International Settlements are not audited by any entity other than themselves, they can generate undisclosed and hence uncollateralized, i.e. fiat, funds (bypassing their respective member banks and the U.S. Treasury) for covert and overt intelligence operations, and in some cases select bureaucracies, and NGOs that may or may not mandate third party debt service back to the central bank. Since there's no accountability/auditing for the central bank beyond its own management necessities, it can generate the funds and, when needed, create an entity to whom to make the "loan" (which, in all likelihood will be 100% monetized, i.e not repaid) afterwards.
Beardsley Ruml, Former chairman of the Federal Reserve Bank of New York, in his address to the American Bar during the last year of World War II, entitled "Taxes For Revenue Purposes Are Obsolete", put it this way:
"...The necessity for a government to tax in order to maintain both its independence and its
solvency is true for state and local governments, but it IS NOT TRUE FOR A NATIONAL GOVERNMENT. [emphasis added] Two changes of the greatest consequence have occurred in the last twenty-five years which have substantially altered the position of the national state with respect to the financing of its current requirements.
The first of these changes is the gaining of vast new experience in the management of central
banks. [A rather disingenuous way of saying the Federal Reserve usurped the authority of Congress to coin money and establish the value thereof, and replaced gold and silver coin with debt instrument currency created by itself.]
The second change is the elimination, for domestic purposes, of the convertibility of the
currency into gold. [The replacement of gold and silver coin with irredeemable fiat currency]
Free of the Money Market [but dominion by the central bank]
Final freedom from the domestic money market exists for every sovereign national state
where there exists an institution which functions in the manner of a modern central bank,
and whose currency is not convertible into gold or into some other commodity. ..." {He should have said "for every central bank" and left out reference to the "sovereign national state".]
Ruml conflates a sovereign national state with a central bank. In every case the central bank controls the national sovereign state's money supply. He would have us believe the national sovereign state controls its associate central bank and its money supply by implication. But the opposite is true. The central bank controls the nations money supply and by extension its policy.
You raise an interesting point. I should write an article on that. The Fed cannot issue the sort of "money" that circulates in the real economy. It issues "reserves," into a separate reserve system available only to banks with master accounts at the Fed. It can buy assets (usually Treasuries) with these reserves, but only from banks; and the receiving banks can't spend these reserves into the real economy either. The reserves are for moving money from one bank to another. The reserves in the system always stay the same. The BIS has even less money-creating ability than the Fed. It does lend reserves, but only to central banks; and it gets the reserves from the central banks that issue them.
The present central banking system is there to be the hand maiden of the banks and their bail bondsman when the same screw up the system with excessive PRIVATE debt. We need a central bank, but The Feds charter must be amended. The way to do that is mandate them to do their alleged but thwarted job which is to control inflation ...by implementing beneficial deflation with a 50% Discount/Rebate at retail sale and the other policies I suggest in my book Wisdomics-Gracenomics.
You need a central bank for the debt based version of currency but to complete a balanced and symbiotic monetary model, debt and debt-free mediums must both flow in circulation, where the latter is a market responsibility.
Render unto Caesar .... Render unto God.
Your post is accurate at defining debt based medium and its creation but if it's the only medium to grease the economic wheels, it's doomed over time. Debt-free medium must also enter circulation at some point in time to support real economic growth, thus safely allowing inflationary debt (fiat currency) to safely leave circulation.
Yes agreed, some Lincoln-style Greenbacks would be great. I imagine it will come to that shortly with the federal debt crisis, but printing will probably be by the Fed rather than the Treasury, and the interest on the newly bought bonds will go to the banks via Interest On Reserves (unless IOR is repealed per the bill now before Congress).
Greenbacks were debt based. My reference was to debt-free money, Ellen.
You're confusing what I mean by debt-free with it being interest free. Debt based currency can have zero percent interest to its creator.... which is what greenbacks were. They were still created by pen & ink, not be a newly created asset.
Create the debt-free market asset and then create the medium as its valued proxy. Gold is perfect for this.
A debt based medium has the medium created first (debt) with the hope the economy can fulfill its value by playing catch-up.
What a rational, constructive recommendation! Which are two reasons it won't happen.
Thanks for the endorsement, and uphill battle acknowledged. My thought though is that if we get better models out there in the collective mindfield, when the old model collapses as it seems to be now, they might germinate into something real.
Something new would be debt-free currency entering circulation thus creating a displacement for inflationary debt so the debt can be safely purged.
Power, even waning power, concedes nothing without a struggle. Getting such excellent ideas "out there" is only the first step on a long road leading to profound change. History is strewn with many ideas, some of which are still floating around like pollen in the wind, which have never been planted, nurtured and harvested. We must take control of the reins of power, one way or the other. Short of that, we are only throwing pennies in a wishing well.
The government and the Fed will be stronger with debt-free market currency moving into circulation even on the basis that the debt-free medium belongs to decentralized elements of the marketplace.... like you and me.
100% agree. But the system is not currently there to serve the greater good. You and I are irrelevant. Until we remove those now in power from power, this will continue and the wealthy will continue to plunder our vast wealth.
Those in power don't have to be removed. They have to be made to feel content and SUSTAINABLE real economic growth will provide that and is exactly where we need to go. Everyone wins. The elite always get a piece of the action and there is no generator of real wealth greater than the whole economy.
The paradox for the elite is that they cannot initiate the entrance of debt-free currency moving into circulation because it has to be a bottom-up process with organic qualities that only the market can safely govern. All the elite can do is encourage us by beating us with "the stick" until such time we take the "karat".
There are necessary evils written into God's script for good reason. They have vital roles that must be fulfilled.
The people are plundering their own wealth by stoking the flames of inflation and a rising debt-to-GDP ratio.
Look in anyone's wallet for stark evidence. It's all about what circulates within the real economy and what the marketplace chooses to use and reaches for.
We have a solution waiting for us. Patented DeFi from Reggie Middleton.
https://x.com/ReggieMiddleton
With what medium of exchange ?
I think it is up to us to decide the answer to that. Bitcoin can play a role, Monero for privacy. I like DigiByte because it is fast and cheap enough for small transactions. It is extremely secure with 5 mining algos, it can play with AI and a stablecoin connection is in development if needed. The best part of DigiByte is it is an all volunteer development community. Decentralized to the nth power.
Gold and silver have both now been monetized as debt-free market based digital tokens, fully backed by bullion. They also comply with the monetary law of weights and measures.
Yes, and Reggie has already tested his VeAdir system to purchase, store and trade precious metal coins issued by a US mint. The methodology is covered by his patents. It was demonstrated in its beta form for the SEC. The only thing holding this up is the fraudulent SEC lawfare case against him and the gag order. In the latest iteration of of the ongoing case, Reggie is requesting the case against him be set aside due to the SEC committing fraud on the court. The SEC's reply is ludicrous.
Here is the latest development in the case.
https://youtu.be/y2nu5oijiTg?si=DdW8Y_V1oay_V3iw
Please see my reply to Joe Van Steenbergen above.
---- >>> A thriving economy requires that credit flow freely for productive use
Let's be more accurate on that one. A thriving economy that is to be maintained and avert the boom and bust cycles requires constant liquidity and liquidity can be debt based and/or debt-free. What is required is both.
A economy that only has debt based medium (credit) greasing its wheels is doomed over time. It cannot survive.
Agreed some debt-free liquidity (e.g. Treasury-issued Greenbacks) would be great, but I think a debt-based system in which the interest returns to the public is sustainable, at least much more sustainable than one in which it is sucked out parasitically by private "rentiers."
Again, your reform ideas as well as the reform theories of the likes of Steve Keen, Michael Hudson and Warren Mosler are valid...but they do not penetrate or elevate analysis to the conceptual/paradigmatic level. The effects of reforms are good, but shallow, temporary and via some systemic organization in other words NOT DIRECTLY BENEFICIAL TO THE INDIVIDUAL. ONLY NEW PARADIGMS are permanent, deep. directly beneficial to the individual and resolving of the key/core anomalous present paradigm's problems. Thats because new paradigms are synonymous with Wisdom insights in that they are DEEP, RESOLVING SIMPLICITIES. The only difference between them is your normal wisdom insight is personal ONLY while a new paradigm is BOTH PERSONAL AND SYSTEMIC WISDOM.
In fact the short course in paradigmology is that new paradigms are always in complete conceptual opposition to the present anomalous paradigm, deep/resolving/wisdom insights and their beneficial effects are always an aspect or aspects of the natural philosophical concept of grace APPLIED.
Debt ONLY as opposed to Monetary Gifting...check!
Continuous monetary gifting directly to the individual at retail sale resolves inflation and ends the historical destabilization of domestic economies by the monopoly paradigm of Debt Only...check!
Gifting is an aspect of the concept of grace...check!
https://medium.com/@gigatrader.ai/0-a-preface-to-a-modern-day-promethean-parablethe-man-in-the-robe-the-judge-who-will-decide-if-the-1e6e372620b4