Even before taking office, Obama has started his version of the “fireside chats” (updated from radio to online video) given by Roosevelt nearly weekly to reassure the public. He said on November 22 that he plans to create 2.5 million new jobs by 2011 and kick-start the economy by building roads and bridges, modernizing schools, and creating technology and infrastructure for renewable energy. These are excellent ideas, but what will they be funded with—more government debt?
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Another excellent article, Ellen. Learning about the Bank of North Dakota was certainly interesting. Given that Congress is either corrupt and/or clueless, democratization of credit on the state level seems like the most promising political goal.
Your observation that the “full faith and credit of the United States” is a valuable asset for which could be lent to collect interest for the common good really is the most succinct way of stating the problem and its solution.
I hate to see the state currency option go out the window. I looked up some Supreme Court cases and came across the Virginia Coupon Cases. These cases are precedent that state can issue coupons receivable for state taxes and are somehow different from bills of credit.
I got into a lengthy debate thread on a Ludwig von Mises Institute forum in which I posed a hypothetical of whether or not the state of Michigan should loan $20 billion in tax coupon scrip to the auto makers to preserve car making in Michigan that was lively at http://mises.org/Community/forums/t/5208.aspx
You need a movement behind you. I haven’t got through to Alex Jones yet but will keep trying to get you on his radio show.
Thanks Warren! I’ve heard of states issuing coupons redeemable in the payment of taxes. They’re just an advance against tax collections though, right? Since they would reduce the amount of “dollars” received by the state in taxes, they wouldn’t necessarily help the state in the long run; but they could ease credit in the meantime.
Hi, I was wondering about your thoughts on recent news where T-bills have hit 0% and stayed there. Isn’t 0% T-bill for a prolonged period of time a license for government to print as much money as necessary with no interest, and isn’t it exactly the same as printing greenback from the treasury with no interest? Further more if the entire national debt is rolled into these 0% t-bills as they expire isn’t it true the government will no longer have to pay the banks any more interest at all?
Excellent point. I’m just writing an article on that issue. Stay tuned!
A T-bill is bought by a lender, is it not? So, 0% T-bills are not quite the same as a government issuing money directly, is it?
No, not the same at all. The interesting thing to me is, who is buying these things? I know what the conventional explanation is, but I think there’s more to it . . .
When public works projects are undertaken to create 2.5 million jobs, Obama should see to it that the most money goes to the geographical areas that have the highest unemployment rates. The total spent will increase GDP and the Federal debt by the same amount, so that shouldn’t cause any negative unintended consequences. Congress controls the Federal debt limit anyway. Taxes are unnecessary and only decrease the money supply which is counter-productive.
Do you think the implications are negative over the next year for the stock market given the recent substantial drop in yield for 10 year treasuries?
Hi Rick, I’m not an expert on bond yields and the stock market, but I’m just now writing an article on the implications of the zero-interest fed funds and zero-interest T-bills.
Re John Honey comment:
I believe the Fed is required to regulate money supply to achieve
“full employment”. I believe there is a law – maybe the Full Employment Act of 1946 (Humphrey- Hawkins?) that defines full employment as
less than 3% unemployment.
However, that is a national average. In Michigan unemployment has
been over 9% for quite some time which is why I advocate that the state
find a way to circulate tax credits as scrip . Raftshol for Governor 2010
Ellen,
I’ve bought & read much of your book “Web of Debt” as you may remember.
Several public sources I respect comment that with the astronomical government bailouts of banks,& now some non-bank corporations too, will lead to a short period of deflation followed by Weimar Germany style hyper-inflation. One article I read claiming “the explosive expansion of the monetary base… new money is not being ‘sterilised’ by offsetting actions of the Fed, a highly unusual move indicating their desperation. Prior to September [2008] the Fed’s infusions of money were sterilised, making the potential inflation effect ‘neutral'” [F William Engdahl Dec 15th 2008]. Another article claims “It is no accident that many of the worse periods of hyperinfaltion are preceded by deflation. In fiat currencies with high levels of government debt, severe cases of deflation cause a loss of confidence in the nation’s currency by shrinking the economy and making the government’s debt increasingly unsustainable. The loss of confidence then causes the flow of money to speed up as individuals become desperate to exchange cash for real goods as fast as possible, producing hyperinflation”. Eric deCarbonnel in this article (Dec 15th 2008) (on marketoracle.co.uk(Article7792.html)) goes on to indicate that the US now stands on the verge of such hyperinflation, within 9-12 months if I interpret his illustration tables correctly. Helga Zepp-LaRouche also seems to think that the US is on the verge of hyper-inflation in an article in EIR “Deflation Today, Hyper Inflation Tommorrow” [Dec 24th 2008]. Finally, Spiritual commentator Benjamin Creme (who has for years stated he is preparing the way (lecturing all over the world) for the imminent public emergence of a great Spiritual Teacher and his group- of the stature of Jesus and higher), and who I greatly respect over many years, mentioned in one of his recent lectures I attended in London the words “Weimar” in relation to the phase we’re entering with the inflationary money creation/bailouts, (if I understood him correctly).
All of the above & more makes me wonder if hyper-inflation is really coming and what YOUR opinion is:
1) Is the US really on the verge of hyper-inflation or how soon do you think?
2) Will it be Europe too as well as the US, or even ALL of the developed world?
3) Would you say I should even go as far as to spend the £230K I have salted away (inherited from deceased relatives mostly) quickly before its value disappears before my eyes?!
4) Although property is fast decreasing in value here at the moment, especially in & around cities heavily dependent on non real world financial “services”- (because of the collapse of privately created bank credit of course)- it strikes me that I might be wise using much of my savings to quickly convert a house I have into flats. Even though on the face of it with falling house prices I may not get back what I spent- as agents, or realtors as you call them, tell me, its better to have a solid asset (2 modernised flats- and one of which can generate me an income) than a lot of steadily becoming wortless paper / electronic entries in savings accounts. Also of course hyper-inflation if it really comes then I presume would (later, after the temporary deflation) hyper-inflate both the rental income and the value of my converted flats too?
5) Do you think though that it may not after all be worth rushing in to anything- like spending most of our savings quickly into solid assets, as even if the oncoming (and vital in my opinion for the social & ecological future of us all) collapse does come and it IS hyper-infationary, governments will, after it has taken place, and with wise sources then I believe guiding their actions & public opinion, take steps to restore the value of INDIVIDUALS savings’ to them where they were held in deposit accounts (eg by barter/allocation of property)?
I would be very grateful for your opinions/comments which will add to the research I am accumulating from respected sources before I rush into anything!
Hello readers,
Guess what? Money is the outcome of a paraconscious reality called “full faith and credit” by economists who, in reality are apostles of the Moloch, God of perpetual debt, money at interest and stock exchange( swindle) finance. As father of all pollutions beginning with usury, the Molock causes you to believe, like Karl Marx. that money comes from work. If this is too much for you, take a nap before you read; Money: The 12th and Final Religion. RDuaneWilling.