Ever since December 2008, the Federal Reserve has held short-term interest rates near zero. This was not only to try to stimulate the housing and credit markets but also to allow the federal government to increase its debt levels without increasing the interest tab picked up by the taxpayers.

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8 Responses

  1. Thanks for demystifying derivatives. On of your best articles.

    Wouldn’t it be great if we could change our financial system! During times of crisis, it seems that change is possible. From the beginning, though, when Washington appointed Alexander Hamilton Sec of Treasury, the newly formed Republic stepped away from its sovereign right to originate money. It gave the money power to the bankers, the bondholders, and the speculators. From the beginning, wealth was granted the greatest entitlement of all: the money power.

    Our beliefs about money are still primitive on the whole. People still think money has to be “worth something”. “Fiat money”, FRN’s, are just paper, and intrinsically worthless. The new Republic was afraid of the money power because the experience of the hyper-inflationary Continental was so fresh. Confidence in the new government was not high. Mistrust of government ran deep. Bankers and money men and a strict adherence to the gold standard would be a better guarantee of the value of money.

    The gold standard is a relic of the past, but lots of unhappy people, perhaps the majority, continually look backwards. They much prefer the guaranteed deflation of the gold standard to the inflating insecurity of “script”.

    And there is another deeply felt attitude towards money that is not obvious until one examines it from the perspective of private property. When you wrap your arms around your stash, there is a little mantra that goes: “Mine! All mine!” This is prehistoric, actually. One can’t have this cozy feeling with Federal Reserve Notes. It has to be precious metals, diamonds, etc. It’s mine, I earned it, it ain’t no communistic “public utility” and the government has no right to take it away from me. The government can’t create it, either.

    To most people, it is unimaginable to just give people money for nothing. You can understand it, I can understand it,, Stephan Zarlenga, CH Douglass, and Richard Cook can understand it. Ben Bernanke and his crew, including the Wall Street slimeballs also understand it, sad to say.

    But the great mass of people do not, which why they get fleeced and will continue to be fleeced for the foreseeable future. I’m not trying to be a bummer. We need a revolution of the sort that didn’t happen in 1776.

    • Thanks. If we have a double dip recession, as some predict, it may be our chance to change the system. But first we’ll need a great deal of education and spreading of ideas. That’s what I keep trying to do, spread information. Ellen

    • All good points Joseph, as usual. The kind of “revolution” I think we need is an economic one, along with an “Economic Declaration of Independence”, complete with an economic (or industrial) legislature and court system.

      Natural resources as well as money should be publicly owned and the public should share in revenues from all natural resources: oil, gold, silver, iron, coal, etc. Even water and air need to be declared as publicly owned resources before they are totally “privatized”, as the other natural resources have been.

      Of course all this was the point of Henry George’s “Progress and Poverty”, written over 100 years ago. The hand of progress is slow indeed.

  2. Great article, Ellen.

    Now, how do we get the message to the rest of the people in the world? I have difficulty explaining to my own family why the government printing money would be better than letting banks create it. It’s like they want to remain ignorant… 😦

    • When “ignorance” becomes far too painful to bear they “will get the message”. That day is rapidly approaching. How much of our economy and culture will be salvageable by that time is anyone’s guess.

      The peaceful education of public opinion is the only safe and secure way to advance civilization.

  3. Another excellent article Ellen!

    I’ve been trying to educate and inform people here in England of the fraud carried out by the banking elite with the corrupt debt- based money- system, regularly using some of your articles, but it can be hard work sometimes getting the penny to drop!

    We are set to launch a campaign in the Uk in September, which I have contributed to but mainly organised by Ben Dyson, the Call 4 Reform monetary reform campaign, with a Bank of England Reform Act drafted!

    I just hope that with the condem government swinging the axe with public sector cuts, more people will be able and willing to see the righteousness and benefit of monetary reform, obviously job losses, tax rises and a probable double-dip recession although awful should help!

    Funny thing well not really funny Ellen, is that the prime minister Cameron and Liberal leader Clegg are both from banking families, talk about looking after ‘vested interests’.

    • Have you looked at the American Monetary Act, proposed by the American Monetary Institute? Stephan Zarlenga & Co have evolved a piece of legislation that you may want to compare with the Bank of England Reform Act. It aspires to assert the sovereign power of government to create money and control the money supply. It would nationalize the Fed and conduct monetary policy in the public interest rather than the private.

  4. […] under: Ellen Brown Articles/Commentary WEB OF DEBT BLOGWall Street banks have been saved from bankruptcy by governments that are now going bankrupt […]

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