Cash-starved States Need to Play the Banking Game: North Dakota Leads the Way

Forty-six of fifty states are insolvent and could be filing Chapter 9 bankruptcy proceedings in the next two years. One of the four states that is not insolvent is an unlikely candidate for the distinction – North Dakota. What does the State of North Dakota have that other states don’t? The answer seems to be: its own bank.

Read more here —

If you like this idea, here is a sample letter to send to your congresspeople, prepared by Charlie Fleetham —

72 Responses

  1. Jere,

    thanks for the Hudson quote re Zarlenga. I would not say it qualifies as a position statement on the private banking monopoly, though.


    and thank you for the Hudson quote. He is making an academic assessment of historical attitudes to the political economy vis a vis neo-liberal distortions of history. He’s not stating his own position.

    I don’t see him commenting on Zarlenga’s American Monetary Act, which would pretty much decide the question of whether he is progressive or populist.

    “Populist” is a bad word. The very idea that “the people” could possibly manage their own financial system elicits contempt, fear, and loathing from the financial class. Commentator Brock Moore belongs to this exclusive demographic. These people propagate a complex and esoteric pseudo-science of finance that is designed to repel ordinary people and common sense itself. It is a gated community of the mind accompanied by an actual restricted neighborhood as a rule.

    To gain access to this exclusive domain you must first of all be arrogant with the conviction that your shit does not stink. You must believe that you are among the chosen and that most people are dumber than you are and deserve their humble stations in life. You, by virtue of your superior intellect, as evidenced by your understanding of financial matters, deserve a higher station in life. This is the old High Federalist attitude and has its roots in Calvinist theology. It requires no real intelligence at all.

    Witness what is going on in the highly esoteric world of “financial economics”, the world of “structured finance”. The designers of this con-game that turns debt into collateral for more debt, Scholes & Merton, were awarded the Nobel Prize for Economics in ’97. You have an impenetrable domain of “econometrics” that Jonathon Swift described very well when he had Lemuel Gulliver travel to Laputa, a floating island populated by arrogant egg-heads. The Laputans had vast knowledge of mathematics but zero common sense.

    The lords of structured finance, our latter day Laputans, have destroyed our economy in the name of their own divine right to float above the common herd through the pursuit of unearned wealth that their financial nonsense is designed to create for them. But this “structured finance”, this new school of “financial economics” is nothing more than a latter day tulip mania when you scrape it down to its essentials. It is a giant boondoggle. The financial class has completely abandoned common sense and one could say they have gone mad.

    Bernanke and Geithner are nuts because they lack the simplest knowledge available to any farmer or small business person: a debt is not an asset. No matter how many debts you bundle together, you cannot magically transform them into a “security”. Even a fool could tell you there is nothing secure about such a security. These guys don’t need more bailout money; they need psychiatric help.

    These are extraordinary times. You can see the idiocy of an entire class of people. It is a revelation. The people are waking up to realize they are not so stupid after all.

    We are all lucky to have good teachers emerging from this mess, like Ellen Brown, Stephen Zarlenga. Richard Cook, and others. Michael Hudson should hang out at the AMI a bit more. Eventually he’ll lose his aversion to populism.

  2. Joseph, With the exception that I think you are being way too hard on Hudson, that was a fine piece. I was cheering you on, man! “These guys don’t need more bailout money; they need psychiatric help”, was a great line, one I’ve used repeatedly in my own writings on the matter. We really are talking about socio-psycho-paths here. Or is it psychosociopaths?

    But I think the fact that Zarlenga uses quotes from Hudson’s praise of his book speaks volumes on Hudson’s basic position for monetary reforms. I think you are splitting fine hairs over the populist/progressive distinction. I don’t even know where I would fit into your scale on that one. I just know I count Hudson as being on “our team” as opposed to that of the bankers.

    Jefferson said he was the sworn enemy of all forms of tyranny, and I like that attitude! Economic tyranny is one of those forms. Hudson appears to agree. For my part I will worry about the clear cut enemies of democracy, and let those who might not be as friendly as we might like alone.

    Again, nice rant.


  3. A PS to the above…

    Populism is only a bad word because of the Orwellian atmosphere that has permeated America ever since Hamilton’s day. When I was in college long ago I questioned my professors about why Populism was held is such disdain by History texts, and got vague dismissals along the lines of “vigilante government” or “mob rule” and the “gang mentality”, etc. Never did make sense to me. Sounded very much like govt of, by and for the people, and that is the very essence of democracy.

    I didn’t realize then that the Wall Street financiers held democracy as even more contemptible than communism or socialism. That was because their money could control a centrally planned socialist or communist government more easily than a truly democratic one where people were being represented and actually had a voice in their government.

    What is going on with word games today is surreal. Frank Baum, Lewis Carroll, George Orwell… they were really on to something big. They all saw the coming of ………
    the Money-Monsters!


  4. Actually Tolkien was also on it (even if he had some other unpleasant ideas that I don’t endorse). Some quetes:

    “The true equation is “democracy” = government by world financiers.”
    – J.R.R. Tolkien, in “The Letters of J.R.R. Tolkien”

    “The main mark of modern governments is that we do not know who governs, de facto any more than de jure. We see the politician and not his backer; still less the backer of the backer; or, what is most important of all, the banker of the backer.”
    – J.R.R. Tolkien, in “The Letters of J.R.R. Tolkien”

    “Throned above all, in a manner without parallel in all past, is the veiled prophet of finance, swaying all men living by a sort of magic, and delivering oracles in a language not understood of the people.”
    – J.R.R. Tolkien, in “The Letters of J.R.R. Tolkien”

    “There should only be one source of money: one fountainhead from which flows the nation’s blood to vitalise commerce and industry, ensure economic equity and justice and safeguard the welfare of the people… In other words, it has always been our contention that the prerogative of creating and issuing the money of the nation should be restored to the state”

    The “Lord of the Ring” has been seen as an allegory of the banking system. One bank to rule them all (BIS).

    Tolkien himself rejected the idea that the “Lord of the Ring” was a allegory. But he was firmly against the bankers.

    I can agree that Hudson been a bit populist but I’m been following his articles and his going in the right direction (even if that by itself can be seen as “populistic”).

    Totally beside the point. This is interesting, showing graphically how much 1 trillion dollar is in 100 dollar notes piles.

  5. Jere,

    thanks for the compliments!

    Michel Hudson is a spokesman for economic justice whose views have relegated him to a backwater academic institution. (Kansas?) I don’t mean to be unfair or ungenerous.

    There is a clear distinction between true populist and progressive that needs to be recognized but is not. Lawrence Goodwyn is my authority on populism in his book “Democratic Promise – The Populist Moment in America” (Oxford, 1976).

    Take David Sirota’s (2008) book “The Uprising – An Unauthorized Tour of the Populist Revolt Scaring Wall Street & Washington.” You’d think, based on this dramatic title that Sirota knows something about populism. He even claims to be familiar with Goodwyn’s book. But nowhere in his tepid discourse does he ever refer to the monetary system or the simple fact, as Goodwyn makes clear, that populism was a struggle to gain popular control over a private monetary system as a means to correct the chronic deflation of the 19th Century that resulted from private manipulation of the nation’s money & credit.

    Sirota confuses the progressive agenda that was ultimately expressed through FDR’s New Deal with the older agenda of the Populist Party that was defeated in the election of 1896 when the pseudo-populist Wm J. Bryant made his famous “cross of gold” speech. The “fusion” politics of the time effectively destroyed the real populist agenda and the Populist Party when it merged into the Democratic Party platform and simply disappeared in the irrelevant “free silver” debate.

    The phony non-federal Federal Reserve created the illusion that the formerly private monetary system under the aegis of the 1864 legislation was now more democratic and under the control of the Congress, which it is and also is not. The private bankers retained monopoly control through some slight compromise with the republic in their sophisticated and complicated system. But if you listen to Lawrence Summers respond to questions from reporters who ask: “Who gets the money being given to AIG?” you will hear Summers defer the question to some representative of the Fed. Summers actually said something to this effect: “The Fed is independent and it’s up to them to either inform us, or not, depending on whether they feel like it.” ( press conference, 3/13/09)

    And no matter how many progressive economists maintain that the Fed is subject to government regulation and control and are satisfied that it serves the public’s monetary interests, the facts speak otherwise. It is at best a “public/private partnership” in which the public’s right to know is seriously restricted “for its own good”. The idea that the people through their government are not competent to administer a public monetary system is well-entrenched. I suspect that if Michael Hudson were asked directly, one would hear some variation of this idea. Only experts have the judgment and knowledge required. The people and their representatives are simply incompetent to effectively manage their own affairs.

    The distinction between progressive and populist is not trivial. It is momentous. The difference between rule by a financial elite and popular rule is a revolutionary difference. “Public/private partnership” is just the latest gambit for the private financiers in their never-ending battle against the public welfare.

  6. Joseph

    I think that the things you say is clear and make a lot of sense. But I can see a a paradox (not in your writing but in the history). I can see the necessity of a “revolution” and I can understand that the financial elite with their collaborators in the government (since there is a revolving door between them) is not going to give away their power and stolen wealth up freely.
    This “joint” venture has to end and the government has to serve the publics well instead of being embedded with the financial elite. I have a hard time seeing this being done without some sort of upraising. So I think your right – there’s a big difference between populist and progressive.

    However, at the same time, the history shows that the chosen group thats in the drivers seat have always been using revolutions as a way of promoting their agenda. Going back to Cromwell (you can go further, much further, back in time), french revolution, Russian revolution and so on, and the same group have always used the same tactic of throwing good sounding populistic slogans to the people but at the same time conceal the real power, the money power, behind a cloaking device consisting of a mumbo jumbo language (just as Dan and Brooke are trying to conceal and wreck any serious discussion in this blog).

    So I think the “revolution” has to start from an educational (and I think the reality in the coming years depression is and “excellent” teacher) to get a grip on the language. Because I think (and hope) that this will be a rhetorical revolution (even though it might get physical, but hopefully most as a defensive strategy).

    Because if we let them mess up peoples minds again with their retorical mumbo jumbo, people will get confused and the “chosen group” can, through their good sounding slogans, drive peoples yet again in their desired direction and conceal the real power. As I see it, it’s mostly a mental struggle and revolution that is necessary – it’s a struggle of how (and who are going) to define the meaning of words .

    So according to me the emphasizes ought to lie in getting strategy’s to:

    1) To undress the “mumbo jumbo” language and get a grip on how the real power works.

    2) Get a rethorical instruments to come on top on “mess things up” experts like Brooke and Dan (Jeres way of handling Brooke was excellent, mine was not – I learned a lot from Jere). Stop being intimidated of all their quasi rhetoric (people who think that they are to dumb to understand things more easily give up their power to those they think are smarter – this is a disempowering technique that’s always been used by this group)

    3) Get real alternatives. And again not letting the “mumbo jumbo” language divert but instead create a language understood by everybody (and get people aware of the “intimidating technique” used by those trying to conceal the real power). Ellen makes an excellent job here ( so do you).

    4) Fight against hate mongering. I fear that they now are trying to get us fight among each other instead of focusing on them. They will be trying to blame Islam, blacks, mexicans or what ever for the economic chaos.

    5) Feel free to fill in.

  7. Your points well taken, Michael.

    Education is the key.

    Back in the day when populism was a genuine mass movement historians refer to as the “agrarian revolt”, the people very deliberately set out to educate themselves.

    It was a different time when the US population was about 45% family farms and the populists were mostly farmers, simple folk, but not at all stupid. They were well-grounded in the spirit of independence and self-sufficiency that created the Revolution.

    They organized themselves into cooperatives at first and did not become a political party until enough members within the cooperative framework were able to educate themselves on the issues.

    This was accomplished by members who traveled across the country from one farmer’s cooperative to another giving lectures. Over a period of years these lecturers raised the awareness of the farmers to such an extent that they finally achieved a political identity and formed the Populist Party, one of the third party movements so important in our history.

    It was economic distress and the effort to relieve it that created the populist movement . So, our stage is set in much the same way.

    Ellen Brown is out on the lecture circuit. So is Richard C. Cook and Stephen Zarlenga. Will the idea of a public financial system coalesce into a movement? Will these principle populist voices find a common identity and political agenda? That remains to be seen.

    The fact is that unless they do, no fundamental political change will occur.

  8. Excellent posts by Michael and Joseph. They are appreciated.

    I would only emphasize that our struggle is for enough people to become educated and informed that it is the PRIVATE central and international bankers who are the puppeteers behind the curtain. It is NOT the Republicans or Democrats that are at fault, as the FINANCIERS use BOTH parties to whatever degree they can in order to achieve their objectives. And a large part of that objective is to keep each political party blaming the other one for all our troubles. They used Wilson, FDR, Truman, Johnson and Clinton to achieve certain of their ends while using everyone from Hamilton to the Bushes on the Republican side in order to entrench the financial-industrial-military complex in firm control of our govt.

    The reality is that money power has largely replaced the old aristocracies of nobility. Money power now buys the governments it needs, and does so in ways that are too subtle for most voters to understand.

    This issue is no longer capitalism versus communism, if indeed it ever was. The issue is the power of money versus the power of the people! The issue is plutocracy or oligarchy versus democracy or democratic republicanism.

    Remember Warren Buffett’s famous comment a couple years ago, when he commented that it seemed unfair that he paid a smaller percentage of his income in income tax that his secretary, and was reminded that such remarks would be taken as “class warfare”. He said, ““There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” This rare bit of truth from one of his wealth status is anathema to other financial giants and Wall Street monopolists. They love to use the “class warfare” shtick whenever economic imbalances are raised, and this admission from Buffett takes that cannon out of their war chest.

    We have to remember that division and dissension is what they do best. They will “seed” vocal people at town hall meetings to create the appearance of either wide agreement or dissent with a position. They will pay thugs and gangsters to join peace marches and start riots or cause chaos.

    They will even plant people in online discussions and on forums in order to create division and diversion. Imagine that.

    We want the movement for money reform to be a big tent. We want it to include all kinds of people from all walks of life, all races, creeds and colors. I think that is why we must be careful about putting labels on things or people, and take pains to define our terms.

    Again, thanks for the constructive comments. Ellen has OK’d the forum opening, but I want to upgrade the software and tweak a couple things. We should be open for posting in a couple days. Then it will be easier to channel our dialogue into those areas of most interest to each of us, whether it be exploring the roots of the money problems, or outlining the essential first steps toward better money, or building an ultimate vision for future generations to build or improve upon. Best of all, perhaps we can gather ideas for putting words into action, and building alternative systems from the ground up, while trying to also change things from the top down.

    There should be something there for everyone.

    Cheers, Jere

  9. Jere

    “It is NOT the Republicans or Democrats that are at fault, as the FINANCIERS use BOTH parties to whatever degree they can in order to achieve their objectives. And a large part of that objective is to keep each political party blaming the other one for all our troubles”

    True enough. It is not a conspiracy, though, in the usual sense. It is ideology, the bogus ideas about a “free market”. Barack Obama reinforces the notion that anyone can grow up to be president. Warren Buffet, at a press conference with Bill Gates in ’05, on the occasion of his donating a few billions to the Gates Foundation said: “I do not believe in inheriting your position in society based on what womb you came from….” Warren & Bill & Barack are fine examples of the potential for upward mobility in a “classless”, “free market” society.

    The financial class has redefined the American Dream. Reagan proclaimed the “right to get rich”. This has ceased to be a matter of hard work, innovation, and productive contribution, and become a matter of financial speculation.

    To make; a long story short: Americans by and large identify with the rich and their usury game and believe that they, too, have a chance to get rich. Main Street connects with Easy Street by the generally accepted route of usury, or “investment”. The American public adopted the game plan of the financiers as their American Dream: speculate on the productive activity of others and acquire wealth through interest-rate arbitrage through the myriad financial “products”.

    Generally speaking, the American public has accepted the financial speculation of the financial class as the new American Dream; hence, the aversion to taxation and regulation. The “wealth” society, the financial society, is built on capital gains. Do not tax capital gains, do not tax speculative investment transactions. Joe Sixpack will support this crap because he has accepted the bogus ideology of the “free market” speculator.

    If you own stocks and other financial instruments and live by means of dividend income, you are part of the financial class that preys on society as a whole and has brought us to this impasse, this crisis. This is not a message that the American public wants to hear, Republican or Democrat.

    Republicans & Democrats are at fault because they have embraced an unsustainable American Dream provided by the geniuses on Easy Street, the financial speculation of the financial class in the new post-industrial “service” economy of the US, in which we all grow rich through usury.

    This is a little different story, Jere, than the idea of a cabal of financiers manipulating behind the scenes.

  10. “This is a little different story, Jere, than the idea of a cabal of financiers manipulating behind the scenes.”

    Yes, Joseph, it is, and it’s a valid story that explains some of the problem. It just doesn’t explain it all. That’s why I think there is a mixture of both elements. Much of the mass psychology and attitudes of “wealth without work” you describe may simply be “ideology” but that ideology had to come from somewhere, and its been operating over long periods of time. The evidence for a cabal, or syndicate, or network of banking powers is simply too overwhelming to dismiss or ignore. In fact, this international money-monster is at the heart of dozens of excellent books I’ve read on the subject, Ellen Brown’s and Stephen Zarlenga’s are two top ones, but there are many more that go into more depth on the issue. I list some on my website: http:/wealthmoney.wordpress,com .

    Try reading Carroll Quigley’s “Tragedy and Hope” if you haven’t already done so, or William Engdahl’s, “A Century of War”, or W. Cleon Skousen’s “The Naked Capitalist” and “The Naked Communist”. Especially interesting is this quote from Antony Sutton’s “Wall Treet and FDR” where he quotes FDR:
    “The real truth of the matter is, as you and I know,that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson – and I am not wholly excepting the Administration of W.W.(Woodrow Wilson). The country is going through a repetition of Jackson’s fight with the Bank of the United States – only on a far bigger and broader basis.” — President Franklin D. Roosevelt, 11/21/33

    If you’d like to read more of what I’ve written recently, please see my website.

    Cheers, Jere

  11. Jere

    I’m not denying the existence of a financial cabal or disputing the evidence for it. I’m saying that the American people have adopted the financier’s money-for-nothing values to a large degree. They have joined the cult of private wealth. The ultimate coup for the leaders of this cult would have been the privatization of social security.

    Populism is the antidote. I think we are all fairly well acquainted with the ways and means of the money masters, those of us who have studied money a bit, that is. I am interested in solutions to the rule of the “superclass”, in the ways and means of educating the public about the populist monetary solution.

    Part of this education process is recognizing how the cult of private wealth manages to control the perception of the American people.

    How many times have you heard some one declare their ambition to retire at 40? How is this accomplished? By writing some software programs like Bill Gates, or inventing a better mousetrap? Who among us can do that? And why would anyone want to get rich so badly?

    Because they are deadly afraid of being impoverished. We must remove the incentive for people to join the cult of private wealth. Fortunately, the Bush syndicate failed to destroy social security. There is still hope for the people.

    As advocates of a populist economics, we must do more than simply descry the money masters. It isn’t enough that we should teach the ways in which the superclass exercises the money power. We have to teach ourselves how to use it in the public interest.

  12. Dear All,

    Today I see news that FED will print money. Some to buy government bond, some to buy bank illiquid asset.

    Government bond of course is debt, and be paid back via tax. But how about central bank purchasing corporate and bank asset? Is that money also debt? If yes, who owe who? Paid by whom and via what kind of funding?

    • Fear not, government bonds are never paid back, we just pay the interest; and the Fed rebates the interest to the Treasury after deducting its costs. Plus, the interest rate is really low now. Basically, we’re off the hook; it’s just free money. I wrote an article on that. Will it be hyperinflationary? Maybe, maybe not. Bernanke is just pumping the credit out there that the banks can’t create because the BIS hamstrung their books with their mark to market rule. I’m writing on that now.

  13. Yes, I got it. Government debt will circulate almost forever because it will always be rolled-over.

    My other question is the status of the money that central bank use to buy bank’s asset. Is those money also debt? or is it a debt-free money?

  14. If the money that central bank print is debt free money, why should we let government intervene at all?

    Government money is debt, even if the interest is “low”, why not just let the central bank “help” those sick banking institution, at least money come from central bank is debt free to public.

    Is this mindset correct?

  15. I can not wait to read your next article dealing with the recent move by the Government that seems to reflect them taking your exact advice…

    • Yes I think Bernanke is doing the right thing! The BIS capital requirement and mark to market requirement were the last straws that precipitated the credit freeze. Bernanke is just replacing the credit that was frozen out. Buying longterm U.S. bonds and rebating the interest is good for the government and the economy.

  16. So what the FED do now is actually a good thing?

    Many news out there are criticizing Bernanke now…

    • Hi, could you get me some research on that? Just the cites would be fine. I’m writing an article and want to start with the critics, then argue the reverse. Thanks!

  17. Yes, I was interested to see EBs reference to hyperinflation. With Transfinancial Economics such a situation would be a virtual impossibility. That is why TFE as it is also referred to is incredibly important.

    Unfortunately, ofcourse it will take time for the development of the relevant banking technologies to electronically monitor, and tackle inflation levels en direct .

    In a “simple” economy such as a LETS one using local currencies such electronic controls would be superflous. However, in a complex technological one such as ours a full tax, and interest free economy would be at a higher risk of serious inflation because of many complex financial variables. Hence, the need if necessary for direct electronic controls where ofcourse interest rates, and taxation would no longer

  18. The hardest working man in show business, president Obama, announced on Leno that the government will be offering credit lines to small businesses as well as a securitized market for student and auto loans. He did not offer mortgages. Is this a roundabout way of approaching the public banking issue without stepping on the toes of the capitalist system?

  19. Ellen,

    Here is the relevant transcript from last night’s show:

    MR. LENO: Well, when will the money — this money was given out to the banks. I would have thought by this time it would have sort of trickled down to Main Street, to people wanting to get loans — I mean, it all went out there months and months ago. Where is it?

    MR. OBAMA: Well, what’s happening is a lot of these banks are keeping it in the bank because their balance sheets had gotten so bad that they decided, you know what, for us to stay solvent we need to maintain certain capital ratios; we’ve got to have a certain amount of capital in the bank — and they haven’t started lending it yet. And that’s why what we’ve got to do — right now what we’re doing is essentially doing a diagnostic test — trying to use some auto language here so you — (laughter) — we’re doing a diagnostic on each of the banks, figuring out what are their capital levels? Can they sustain lending? And then I think we’re going to separate out — those banks that are in good shape, we’re going to say to them, all right, you’re on your own; go start lending again. Those banks that still have problems, we’ll do a little more intervention to try to clean some of those toxic assets off their books.

    But I actually have confidence that we’ll get that done. In the meantime, we’re taking a lot of steps to, for example, opening up — open up separate credit lines outside of banks for small businesses so that they can get credit — because there are a lot of small businesses out here who are just barely hanging on. Their credit lines are starting to be cut. We’re trying to set up a securitized market for student loans and auto loans outside of the banking system. So there are other ways of getting credit flowing again.

    But that’s why we’ve got to solve the banking problem and we’ve got to solve issues like health care, energy, and education that will put us on a pathway for long-term economic growth.

  20. The really neat thing about Obama is that, like Ellen, he understands how to use simple language that common people can relate to in order to get his complex points across.

    He did a much better job of explaining the AIG mess than any so-called economics expert or CNBC talking head I’ve yet seen, and I see a lot of CNBC and other news sources.

    Today, all the news anchors, pundits, and commentators were criticizing his Leno appearance, mostly focusing on the special Olympics gaff, but mostly just sounding jealous or vindictive over his popularity.

    Chris Matthews even commented that he had 20 million TV viewers, “way more than he himself ever had”. He clearly came across as jealous and petulant.

    “Populism” is becoming the replacement slur for “communist” or “socialist” in the Rove/Norquist talking points memos they put out on a daily basis.

    The recent theme is to blame the bailouts on Obama, Geitner, Dodd and the Dems. You never hear a word about Paulson any more, and Bernake & the Fed get a free pass from most quarters. Amazing, this matrix in which we live. 😉

    Why is it seldom ever mentioned that the first 85 billion tranche of the AIG bailout was done unilaterally by the Fed, without congressional approval, under an old 1932 Hoover law? Yet the AIG mess is supposedly all Obama’s fault. Go figure.


  21. Once in a while the media gets it right:

    Enjoy! Jere

  22. Another parrallel between Obama and Ellen is that they both offer elegant solutions.

    Today on Meet the Press, Gov. Schwarzenegger brought up private public partnerships, using British Columbia as a model.

    Here’s an excerpt from today’s Meet the Press:

    GOV. SCHWARZENEGGER: There’s many companies that are interested in coming in and financing the high-speed rail or other rail systems, light rail and so on.

    MR. GREGORY: Right. And we talk about private equity. There’s so much money in this economy on the sidelines with nowhere to go and nobody wanting to assume any risk. So if there’s this kind of private sector money, how would it work? If they–if private equity or hedge funds want to put up money for a light rail system, fast rail system around the country, what’s in it for them?

    GOV. SCHWARZENEGGER: Well, it’s a, it’s a great investment.

    MR. GREGORY: Right.

    GOV. SCHWARZENEGGER: I mean, that’s what–it’s like when you look at British Columbia or other places where they have a public-private partnership, where everyone is happy. Businesses are happy, the people are happy, labor is happy, the politicians are happy. I mean, everyone is happy. We want to do the same thing. We should–the United States should copy that kind of a principle so that you can go out there and build.

    GOV. RENDELL: There’s so many innovative ways to, to use the tax code to get private investment…

    MR. GREGORY: Mm-hmm.

    GOV. RENDELL: …involved in this. There are innovative ways. David, we don’t have a capital budget, a federal capital budget. We’re the only governmental subdivision in the country without one. You could finance–for $30 billion a year, which these days is not a lot of money, you could finance almost $400 billion to put up front in an infrastructure repair program administered through something like the infrastructure bank.


    Here’s the British Columbia patnerships website:

  23. Wow, conservative Paul Craig Roberts (who served in the Reagan Administration) is calling for nationalizing the Fed!

  24. I’ve been doing searches on “banks interest profits” and found this with “banks ‘huge profits’ interest. I found this example.

    Germany’s Bundesbank Posts Huge Profits for 2008,,4086628,00.html?maca=en-rss-en-all-1573-rdf

    There’s a check in the mail for the German government. That’s after the Bundesbank — the country’s national bank — posted 6.3 billion euros in profits for last year. But falling interest rates could bring a downturn.

    The bank, he said, had earned the equivalent of $8 billion in 2008 — an increase of around 50 percent over the previous year.

    The entire sum earned is being transferred to the federal government — which is something of a novelty. In previous years, portions of the Bundesbank’s earnings have had to be used to pay off debt from the former East Germany, but now that the debt is gone, the bank’s profits will flow into state coffers.

  25. According to “The Lost Science of Money,” the Bundesbank is a federal corporation owned by the German government. In addition to the previous post stating that 2008 profits went to the government, I also found there was a conference on November 2006 to discuss public vs private ownership of financial institutions.

  26. […] Web of Debt is a great source for understanding how money is created and how that affects the overall health of the economy. Here is an example: Forty-six of fifty states are insolvent and could be filing Chapter 9 bankruptcy proceedings in the next two years. One of the four states that is not insolvent is an unlikely candidate for the distinction – North Dakota. What does the State of North Dakota have that other states don’t? The answer seems to be: its own bank. Read more here. If you like this idea, here is a sample letter to send to your congresspeople, prepared by Charlie Fleetham – […]

  27. Hi, everybody. We know that banks provide loans for different purposes. But main thing is that they keep high interest on any type of loan. Also different finance companies give loan at high interest and their conditions are very strict. Person got loan easily but if he can not pay his loan on time then he has to face many problems from bank or finance company. So main thing is that whenever we want to get loan first we have to know all rules and conditions carefully for it, so we can prepare for how to pay loan in a time. When any person really in debt then he has to take help of bankruptcy.
    Thanks for suggest good sites.

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