We’ve seen behind the curtain, as the Fed waved its magic liquidity wand over Wall Street. Now it’s time to enlist this tool in the service of the people.  

The Fed’s invisible hand first really became visible with the bailout of AIG. House Speaker Nancy Pelosi said in June 2009:   

“Many of us were, shall we say, if not surprised, taken aback when the Fed had $80 billion to invest — to put into AIG just out of the blue. All of a sudden we wake up one morning and AIG has received $80 billion from the Fed. . . . So of course we’re saying, Where’s this money come from? ‘Oh, we have it. And not only that, we have more.’”  

How much more — $800 billion? $8 trillion?  

The stage magician smiles coyly and rolls up his sleeves to show that there is nothing in them. “Try $12.3 trillion,” he says.  

That was the figure recently revealed for the Fed’s “emergency lending programs” to bail out the banks.   

“$12.3 trillion of our taxpayer money!” shout the bemused spectators as pigeons emerge from the showman’s gloved hands. “We could have used that money to build roads and bridges, pay down the state’s debts, keep homeowners in their homes!”

“Not exactly tax money,” says the magician with his mysterious Mona Lisa smile. “When did you have $12.3 trillion in tax money sitting idle?”  

Not only did he not use “tax money;” it seems he hardly used “money” at all. He just advanced numbers on a computer screen, amounting to credit against collateral, replacing the credit that would have been advanced by the money market before the Fatal Day the Money Market Died. According to CNNMoney

“[T]he Federal Reserve made $9 trillion in overnight loans to major banks and Wall Street firms during the Wall Street crisis . . . . All the loans were backed by collateral and all were paid back with a very low interest rate to the Fed — an annual rate of between 0.5% to 3.5%. . . .  

“In addition to the loan program for bond dealers, the data covered the Fed’s purchases of more than $1 trillion in mortgages, and spending to back consumer and small business loans, as well as commercial paper used to keep large corporations running. . . .

“Most of the special programs set up by the Fed in response to the crisis of 2008 have since expired, although it still holds close to $2 trillion in assets it purchased during that time. The Fed said it did not lose money on any of the transactions that have been closed, and that it does not expect to lose money on the assets it still holds.”

Or so it is reported in the media. . . .  

The pigeons slip back up the sleeve from whence they came, a sleeve that was empty to start with.   

The Central Bank as Lender of Last Resort

Where did the Fed get this remarkable power? Central banks are “lenders of last resort,” which means they are authorized to advance as much credit as the system requires. It’s all keystrokes on a computer, and the supply of this credit is limitless. According to Wikipedia:

“A lender of last resort is an institution willing to extend credit when no one else will. Originally the term referred to a reserve financial institution, most often the central bank of a country, that secured well-connected banks and other institutions that are too-big-to-fail against bankruptcy.”

Why is this backup necessary? Because, says Wikipedia matter-of-factly, “Due to fractional reserve banking, in aggregate, all lenders and borrowers are insolvent.” The entry called “fractional reserve banking” explains:

“The bank lends out some or most of the deposited funds, while still allowing all deposits to be withdrawn upon demand. Fractional reserve banking necessarily occurs when banks lend out funds received from deposit accounts, and is practiced by all modern commercial banks.”

All commercial banks are insolvent. They are unable to pay their debts when they come due, because they have double-counted their deposits. A less charitable word, if this hadn’t all been validated with legislation, might be “embezzlement.” The bankers took your money for safekeeping, promising you could have it back “on demand,” then borrowed it from the till to clear the checks of their borrowers. Modern banking is a massive shell game, and the banks are in a mad scramble to keep peas under the shells. If they don’t have the peas, they borrow them from other banks or the money market short-term, until they can come up with some longer-term source.

Ann Pettifor writes, “the banking system has been turned on its head, and become a borrowing machine.” Rather than lending us their money, they are borrowing from us and lending it back. Banks can borrow from each other at the fed funds rate of 0.2%. They get the very cheap credit and lend it to us as much more expensive credit.  

They got away with this shell game until September 2008, when the Lehman Brothers bankruptcy triggered a run on the money markets. Panicked investors pulled their short-term money out, and the credit market suddenly froze. The credit lines on which businesses routinely operated froze too, causing bankruptcies, layoffs and general economic collapse.  

The shell game would have been exposed for all to see, if the Federal Reserve had not stepped in and played its “lender of last resort” card. Quoting Wikipedia again:

“A lender of last resort serves as a stopgap to protect depositors, prevent widespread panic withdrawal, and otherwise avoid disruption in productive credit to the entire economy caused by the collapse of one or a handful of institutions. . . .

“In the United States the Federal Reserve serves as the lender of last resort to those institutions that cannot obtain credit elsewhere and the collapse of which would have serious implications for the economy. It took over this role from the private sector ‘clearing houses’ which operated during the Free Banking Era; whether public or private, the availability of liquidity was intended to prevent bank runs.

“. . . [T]his role is undertaken by the Bank of England in the United Kingdom (the central bank of the UK), in the Eurozone by the European Central Bank, in Switzerland by the Swiss National Bank, in Japan by the Bank of Japan and in Russia by the Central Bank of Russia.”

If all central banks do it, it must be okay, right? Or is it just evidence that the entire international banking scheme is sleight of hand? All lenders are insolvent and are kept in the game only by a lender-of-last-resort power given to central banks by central governments — given, in other words, by we-the-people. Yet we-the-people are denied access to this cornucopia, and are forced to pick up the tab for the banks. Most states are struggling with budget deficits, and some are close to insolvency. Why is the Fed’s magic wand not being waved over them?

QE3: Some Creative Proposals

According to financial blogger Edward Harrison, that might soon happen. He quotes a Bloomberg article by David Blanchflower, whom Harrison describes as “a former MPC [Monetary Policy Committee] member at the Bank of England but also an American-British dual citizen professor who is very plugged in at the Fed.” Blanchflower wrote on October 18:

“I was at the Fed last week in Washington for one of its occasional meetings with academics . . . .

“The Fed is especially concerned about unemployment and the weak housing market. . . .

“Quantitative easing remains the only economic show in town given that Congress and President Barack Obama have been cowed into inaction.

“Quantitative easing” (QE) involves central bank purchases with money created on a computer screen. Blanchflower asked:

“What will they buy? They are limited to only federally insured paper, which includes Treasuries and mortgage-backed securities insured by Fannie Mae and Freddie Mac. But they are also allowed to buy short-term municipal bonds, and given the difficulties faced by state and local governments, this may well be the route they choose, at least for some of the quantitative easing. Even if the Fed wanted to, it couldn’t buy other securities, such as corporate bonds, as it would require Congress’s approval, which won’t happen anytime soon.” [Emphasis added.]

You don’t need to understand all this financial jargon to pick up that a central banking insider who has sat in on the Fed’s meetings says that for the Fed’s next trick, it could and “may well” fund the bonds of local governments. Harrison comments:

“The Fed can legally buy as many municipal bonds as it wants without congressional approval. . . . This is a big story. Blanchflower is essentially saying that the U.S. government can bail out both the housing market via Fannie and Freddie paper purchases and the state governments via Muni purchases. And, of course, the banks get to dump these assets onto the Fed who will hold them to maturity. I guarantee you this will have a very nice kick since it is the states where the biggest employment cuts are.”

A big story indeed, opening very interesting possibilities. The Fed could use its QE tool not just to buy existing assets but to fund future productivity and employment, stimulating the depressed economy the way Franklin Roosevelt did but without putting the nation in debt at high interest to a private banking cartel.

The Fed could, for example, buy special revenue bonds issued by the states to finance large-scale infrastructure projects. They might build a high-speed train system of the sort seen in Europe and Asia. The states could issue special revenue bonds at 0% or 0.5% interest to finance the project, which could be repaid with user fees generated by the finished railroad. The same could be done to build modern hospitals, develop water projects and alternative energy sources, and so forth. All this could be done at the same extremely low interest rates now afforded to the banks, saving the states enormous sums in taxes. 

Wouldn’t that sort of program be inflationary though? Not under current conditions, says author Bill Baker in a recent post. He notes that over 95% of the money supply is created by bank lending, and that when credit is destroyed, the money supply shrinks. The first round of QE did not actually increase the money supply, because the money printed by the Fed was matched by the destruction of money caused by debt default and repayment. To replace the debt-money lost in a shrinking economy, the Fed has already elected to embark on a program of quantitative easing. The question addressed here is just where to aim the hose.

Closing the Social Security Gap

Another interesting idea for QE3 was proposed by Ted Schmidt, associate professor of economics at Buffalo State College. Writing in early November, Schmidt anticipated the cut in social security taxes now being debated in Congress. Worried observers see these cuts as the first step to dismantling social security, which will in the future be called “underfunded” and too expensive for the taxpayers to support. Schmidt notes, however, that social security is a major holder of federal government bonds. The Fed could finance a $400 billion tax cut in social security by buying bonds directly from the social security trust fund, allowing the fund to maintain its current level of benefits. Among other advantages of this sort of purchase:

“[I]t does not raise the gross national debt, because it simply transfers bonds from one government entity (the Social Security trust fund) to a semi-government entity (the Fed); and . . . it gives the Fed the extra ammo (treasury bonds) it will need when the time comes to restrain inflationary pressures and pull reserves out of the banking system. (It does this by selling bonds to banks.)”

Schmidt concludes: “Enough is enough, Dr. Bernanke! It’s time to inject the patient with money that gets into the hands of working people and small businesses.”

The Fed’s lender-of-last-resort power has so far been used only to keep rich bankers rich and the rest of the population in debt peonage, a parasitic and unsustainable endeavor. If this power were directed into projects that increased productivity and employment, it could become a sustainable and very useful tool. We the People do not need to remain subject to a semi-private central bank that was ostensibly empowered by our mandate. We can take our Money Power back.



Ellen Brown is an attorney and the author of eleven books, including WEB OF DEBT: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.

63 Responses

  1. So let me get this straight. You feel you have uncovered a plan by the Fed to monetize the Social Security Trust fund, and you think that’s a Good Thing?

    Maybe I’ve misunderstood. I find some of your arguments hard to follow.

  2. Subject: Dennis Kucinich’ National Employment Defense Act – HR6550

    Dear Ellen,

    http://www.monetary.org/moneyscenefive.html Interesting article from the American Monetary Institute (AMI). It argues against the formation of State Banks and explains why. What are your thoughts on the matter? If you answer online, please send me the link. Thank you.

    Also, how can we expect to reign in greed and corruption when so many of us continue to ask, what’s going to work best for ME? Underlying this egocentric question are beliefs in separation and competition, which, in the extreme, are expressed as “survival of fittest, eat or be eaten, kill or be killed”. With self-serving beliefs like these how can we expect anything but greed and gain (predation and victimization) at the expense o f others, including the environment? Where is the morality, where is the balance, where is the love in these beliefs?

    Perhaps it’s time to consciously acknowledge that we’re both one and separate, and that we’re not lonely the products of creation (blank slates to write on, empty sponges to fill, or computers to program) but creation itself! From this foundation of ideas the question then becomes, what’s going to work best for ALL of us – in personal terms and in terms of business, education, the environment and peace? One system of ideas assumes we’re essentially automatons and unable to change our nature, while the other assumes we’re living, loving, growing and changing aspects of consciousness, responsible for, and capable of rewriting our scripts when they no longer serve us?

    Until we understand and reconcile the differences between these two root belief systems (love of being and creation, and fear of suffering and death), within ourselves and one another, battle will continue to rage between the two belief structures with wins and losses on both sides. Should we continue to ignore our root beliefs and keep playing the same game? After all, the conflict does keep us busy and make life exciting! But then, how does it make us feel to know we can do better and choose not to?

    Continue to seek the greatest understanding and serve the highest good!

    Roger “Pete” Peterson

    From: AMI [mailto:ami@taconic.net]
    Sent: Saturday, December 18, 2010 5:09 PM
    To: AMI
    Subject: Good News for Friends of the AMI!

    Dear Friends of the American Monetary Institute,
    (Please pardon multiple emails)


    On Friday December 17th Congressman Dennis Kucinich (D,Ohio, 10th District) took a crucial and heroic step to resolve our growing financial crisis and achieve a just and sustainable money system for our nation by introducing the National Emergency Employment Defense Act of 2010, abbreviated NEED. The bill number is HR6550.

    While the bill focuses on our unemployment crisis, the remedy proposed contains all the essential monetary measures being proposed by the American Monetary Institute in the American Monetary Act. These are what decades of research and centuries of experience have shown to be necessary to end the economic crisis in a just and sustainable way, and place the U.S. money system under our constitutional checks and balances. Yes it can be done!

    We expect this bill will also be re-introduced next year in the 112th Congress. By putting it in now Congressman Kucinich accomplishes these important things:

    * First, the seriousness of intent is underscored;

    * Second, it gives our nation the opportunity to view, discuss and understand the necessary provisions, giving the chance to make improvements for re-introduction;

    * Third it serves as a beacon to our beleaguered people, cutting through the error, vested interest and disinformation that has blocked monetary reform understanding and action in the past.

    The American Monetary Institute has activated its blog at http://moneyreform.wordpress.com/ to discuss and review any questions about this act. Just click on the blog link at our homepage.

    To participate in this process, please sign up at the bottom of our home page at http://www.monetary.org. Then, after reading the proposed legislation feel free to make comments or put questions on the blog, including thoughtful suggestions on how it might be improved.

    You can read a copy of the legislation here.

    Warm regards to all,
    Stephen Zarlenga

    P.S. I’ll be sending one more message to you before year end, essentially asking you to contribute what you can toward sustaining the work of the Institute, if you like what we are doing. Of course you don’t have to wait till then, you can contribute now by clicking any of the contribute buttons at our home page.

    • Stephen Zarlenga said: “These are what decades
      of research and centuries of experience have shown to be necessary … ”
      Well. If that’s the case, and AMI really is an institute,
      then (1) Where is there math? (2) Where are there
      Economist Paul Krugman, in contrast, does LOTS
      of math and has LOTS of models.

      One of my favorite Krugman models was made
      about “debt-free” money. Krugman made this
      model on July 17, 2010 on his blog. It’s title,
      which reselbles an old Meatloaf song, is

      I Would Do Anything For Stimulus But I Won’t Do That (Wonkish)

      • I see nothing in the referenced blog of Krugman’s, to make me believe that Zarlenga and the AMI are messed up or have the wrong answer to our nation’s economic problems.

        I know that both debt-based money and commodity based money are hazardous to a nation’s economic well being. And I also know that Zarelenga and the AMI are trying to put and end to debt-based money while avoiding commodity based money. And though unrestrained “printing” of fiat money may cause inflation, or even hyper-inflation, nothing in their plans calls for unrestrained creation of money. No, they intend to replace the existing debt-based money supply with a pure fiat, non-debt-based money supply. And they intend to do so in a manner that will minimize distruptions to our current economy.

        I conside this to be a first step toward freeing everyone from wage/debt slaverly. Additional steps wil be needed.

        • This is all hypethetical, since the Monetary Reform
          Act will NEVER pass. And the government will not
          likely greenback as a way of paying debts which
          were accumulated through debt-money, AS IN THIS

          (1) If ALL money is debt-free (permanent) money,
          then NO ONE will lend out money without interest.
          (2) So all loans will be at interest.(3) So there will
          never be enough money in circulation to pay the
          interest. (3) So in order to avoid a debt-collapse,
          the economy will have to print enough money to
          cover the interest. (4) So inflation will eventually
          approach INFINITY.

          With debt-based (temporary) money, in contrast,
          the government can become the bank and make
          loans interest-free.

          And that is the one-and-only RATIONAL solution.

          I would also like to add that Zarlenga calls AMI an
          institute. If that’s the case, then where is his math?
          And where are his models?

  3. [1] Yes Ellen the entire banking scheme is sleight of hand. The Fed itself is not even a bank. It is a cartel of banks. It is owned by member banks. When we talk of the Fed “bailing out” banks, or “making loans” to banks, we maintain the illusion that the Fed is separate from the banks. The Fed does not “bail out” anyone, since the Fed is the banks. Nor does the government “bail out” anyone, since the government gets all its money from the banks. Nor can the FDIC insure anyone, since the FDIC gets its money from the banks. It’s all a shell game, controlled by the banksters.

    If the Fed conjures up $12.3 trillion for “emergency lending programs” or “quantitative easing,” then it is Fed banks giving money to themselves. It is mere numbers on computer screens. (A physical stack of 12.3 trillion dollar bills would be 947,700 miles high and weigh 13.5 million tons.)

    Ben Bernanke is the cartel’s press secretary, nothing more. His job is to keep everyone guessing so that he seems wise, when in fact he knows nothing, and has no power. All decisions are made by the big banks (i.e. the Fed cartel). Bernanke is merely their front man.

    Moreover the head of the US Treasury Dept. always comes from banks (usually Goldman Sachs). Banksters run the show. Period. Government is their servant, and the masses are their slaves.

    This is why the banksters will never allow an audit of the Fed. An audit would expose the Fed as a mere prop, a cardboard entity. It would reveal that the banks control everything.

    The banks could easily fix many of our problems if they wanted to, but power is intoxicating, and the masses remain hypnotized by the bankster’s game.

    [2] Jamie Walton of the AMI objects to public banks at the state level, saying they would perpetuate the curse of fractional reserve banking. Walton has other objections ranging from the bizarre (a state bank would be “immoral”) to the erroneous, punctuated with many exclamation points. The latter items are not worth a response but, regarding fractional reserve banking, yes it would be nice if we did away with it, so that we had debt-free money. However, as Ellen says, public banks at the state level would be a major step toward true monetary reform. They would break the Fed member banks’ monopoly.

    Jamie Walton lives in a dreamland. Fed member banks will never give up fractional reserve banking. The AMI’s Monetary Act will never pass. Walton says we must have total monetary reform (eliminate fractional reserve banking) or else leave the current system in place. That is childish. Public banks at the state level would get credit to local areas as needed. Until we finally eliminate fractional reserve banking, we badly need PUBLIC banks at the state level.

    The current PRIVATE system is killing us.

    • Can you think of any good reason why debt money has a legitimate purpose?

      I’m an opponent of debt money. But I can think of legitimate reasons for it, as opposed to illegitimate ones, such as enriching bankers (or any other group) at the expense of everyone else.

      You must understand what you oppose or you act out of ignorance.

      So I’m throwing this question out there. Please, anyone, make an argument as to why money should be debt.

      • the government money are not really debt. Portraying it as debt is an illusion to reinforce appearance that government is not sovereign and it cannot create money (which it can – and does all the time). Money created by private bank loans are debt money, on the other hand. So the two are different.
        Government has to issue money – because otherwise – who will? The problem is that government uses the money issued in a restricted manner benefiting the rich and powerful

        • Whether you regard it as legitimate debt or not, the question is: can you make an argument for why debt money is proper?

          Hint: can the money supply be completely uncontrolled or without any standards whatsoever?

          • money supply should be controlled by the central bank – as it is now. However central bank should be more directly under democratically elected government’s control – and its dealings way more transparent.

            It is not really a problem that government makes it look as if the money it issues are borrowed from the Fed. There is no problem with that – since all those debts are in US dollars and US can issue as any as it wants. Also Fed returns its profits back to the Treasury.
            The problem is that the money issued by the Fed are not used to benefit those that really need it.

            • So the Fed is okay as long as it is “more directly under democratically elected government’s control”?

              Do you take the position that we can have as much money as we vote for ourselves? In other words, the only control you see on the money supply is the will of the majority?

              Yes or no?

              • yes, Fed is fine – if money are directed to where they benefit economy. Currently that would be giving a job to all unemployed who wanted to work.

                If the money that were given to the banks – were used to give jobs to unemployed – the economy would look very different (better) now.

                Until there are people who cannot find work – government spending is needed. Once all people are employed – government spending has to be controlled. Keep in mind that government spending that is directed to the banks or the rich – does not count. Banks do not lend just because they have a lot of money. Also the rich already have enough money to spend.

                • let me just restate my second paragraph:

                  If SOME OF the money that were given to the banks – were used to give jobs to unemployed – the economy would look very different (better) now.
                  Because if banks had failed – there would have been much turmoil. Although they do need to be reformed and – ideally replaced with public banks.

      • The only good reason I see for debt money is to provide a removal mechanism by which money can be taken out of the economy as well as added to the economy.

        Unfortunately, if the interest rate is higher than zero and the interest goes to private parties for their personal benefit rather than to the community as a whole for everyone’s benefit, the system just enriches the few entitled to create the money (basically our current system).

        • Treasury gives 100$ bond for a year with say 5% interest to the Fed and Fed gives Treasury $100. Treasury then spends $100 into economy. A year goes by and “debt” has to be returned. Where does Treasury get the money? There is no way that it could have collected $105 back in taxes – for that is impossible with only $100 spent. So Treasury issues another 105$ bond and Fed gives Treasury $105. Treasury then pays back to the Fed its $105. Fed then returns the $5 (profit) to the Treasury. So that took case of the “debt”. But Treasury still has to spend again – so it issues a third $100 bond and gets $100 from the Fed. So at this point Fed has $205 in bonds (first $100 was paid back) and Treasury has $105 to spend into economy – but next year it will issue bonds to cover $205 + interest and then again $100 bond to continue its current spending. Interest will be repaid.

          The point is that this game does not really affect anybody else outside Treasury and the Fed. Who cares about those bonds – if they are covered with more bonds? Private economy only sees the $100 spent into economy yearly. Even when Fed sells some of the bonds to the private sector – the interest on the bonds is just some additional money spent in the economy. There is no “debt” that has to be repaid by the private sector

          • The only problem with the “game” is that the nation’s money supply is called the “federal deficit” and right-wing politicians (and many left-wing politicians) say we must “cut back” and “reduce government spending” to reduce this “deficit” totally ignoring the truth that this “deficit” exists only on paper and is not a normal debt that must be repaid.

            So the public gets hoodwinked into thinking our politicians are incapable fools (well, maybe they are…) never realizing that if the “deficit” were repaid, our economy would have no money and everyone would be out of a job, bankrupt, and all their assets given over the banks.

            • I think they call it “national debt”. Federal deficit is yearly budget deficit – if I am not mistaken.
              Budget deficit only means that government spent more money into private economy than it collected back in taxes – which is a good thing in US economy currently – because it has underused human resources (unemployment)

      • Atticus said: “So I’m throwing this question out
        there. Please, anyone, make an argument as to
        why money should be debt.

        And I have, Atticus: If you check out the last 6 or 7
        comments on this thread then you will see 2

        (1) Interest-free debt (temporary) money = The
        Path To Goodness.

        (2) Debt-free (permanent) money ALWAYS = The
        Path To Failure And Misery ONLY.

        Also, Atticus, I have given a link to a model made
        about debt-free money by Paul Krugman which
        brings up another fatal flaw. This link exists in my
        response to Stephen Zarlenga (above).

        • Debt free money doesn’t have to be permanent. It can be spent into circulation and taxed back out of it, for example. A permanent, inflexible money would have serious flaws, but debt-based money is only one way to implement an expansion/contraction roughly equivalent to changes in production.

          One wee problem with the debt-money system is that the money is usually added into the system before production begins, so the expansion comes before the creation of wealth, and the contraction often happens before the wealth has reached the consumer. It’s a detail, but ideally the money would be added and taken from the consumer, not the producer.

          • What are the serious flaws you see in permanent, inflexible money?

            • If there are a certain number of dollars out there, when the economy grows those dollars will become more in demand and their value will rise. Likewise, when the economy shrinks, those dollars would be more accessible and decrease in value. It would be nice to have a dollar that is a constant, stable measure of value rather than our current system of constant creeping inflation. The debt system creates the inflation (the ponzi system of creating debt money but not creating money to cover the interest on the debt), and thus also creates the need for interest so that savings won’t be devalued by inflation.

              I would rather see a monetary system where a dollar is a constant measure of value: where it will buy a certain amount of goods, and a hundred years later it’ll buy roughly the same goods. Just like a litre of water always weighs about a kilo, a dollar should equal, say, a kilo of flour or five minutes of untrained labour.

              So when there is more flour being sold, and more labourers producing it, there need to be more dollars accordingly. The idea behind debt money is that when new farmers and millers want to grow and grind new grain, they take out loans and thus create an appropriate number of new dollars which get retired (repaid) when their work is done. Expansion and contraction of the money supply in harmony with production, as far as the theory goes. It would work way better if interest were fixed at no more than 1%, and loans were given to the worthy rather than to those favoured by banks. Also, where the banks are public or community owned, as with credit unions, the system is way more stable and functional.

              • But a gold standard, or perhaps some other commodity standard, would naturally increase the money supply to reflect increased production. Since gold would effectively BE dollars, an increase in the value of dollars would be an incentive to produce gold.

                You can’t improve on that. There will be time lags and whatnot. But if you introduce the element of human discretion removed from the need to exert effort from the money equation you’re already screwed, even if it take 100 years. Which is what is usually does, and our time is just about up.

                • Part of the problem with a commodity standard for money, is that it encourages everyone to get that particular commodity. If gold is money, everyone will try to get gold, they’ll tear apart the earth in an attempt to retrieve the gold. They’ll pollute the environment to refine it out of ore and thrown out electronics. Likewise with any other commodity.

                  To maintain a relatively stable price level — where 5 dollars can buy a cheap meal today and another 5 dollars can buy a similar meal tomorrow and everyday for the next 100 years or more – a “point” system would work better. Points are given out as products and services are made available. Points are removed as products and services are consumed. The number of points is not constrained by any one commodity any more than the number of points given to the opposing sides of a football game are constrained by some commodity. The points in a ball game come from nowhere and do a wonderful job of keeping score. Likewise, the economy needs to keep score of individual and collective contributions as well as individual and collective consumption. The number of points should expand and contract in the same manner.

                • How would one implement such a point system, even assuming people agreed with it?

                  There is a temptation, with a commodity monetary standard, for people to place excessive value on that commodity, but this argument is already taken into account with gold because it is difficult to find and produce. This is why gold works better than chicken eggs or sea shells. It may not be perfect, some people will still pan for gold rather than work for a living, but it’s the best we can do. At least there is little force or compulsion involved.

                  The alternative to a commodity money standard appears to be to leave the monetary unit of account undefined or hazily defined – “units of production”, for example – and that is, at bottom, the source of the mischief we are experiencing today.

                  In other words, commodity money – basically a gold standard – is the only monetary regime with any integrity, because it conforms to natural law. Everything else is some people trying to impose their will on other people: the banksters on you, or you on the banksters, or the commies over the proles, and so on. Endlessly. A perpetual game of who’s on top, will it be zarapeth, or will it be the banksters?

                  Without a gold standard we are doomed to be the victims of our own monsters. We have met the enemy and it is us.

          • A debt-free money system is a system of either
            (1) Interest on loans (2) Or NO LOANS AT ALL.
            So a debt-free money system is a system of interest.
            Which means there’s never enough money
            in circulation to pay interest.
            Because of this contradiction, there are 3 different
            debt-free money types:
            (1) Gold Buggary—“Honest Money”—Which doesn’t
            greenback at all. This is Liquidationism.

            (2) Greenback who prints enough money to cover
            the interest.
            (3) Someone in between, And to varying degrees.

            With debt-money the government can be the bank

            With debt-money an economy can make lots of
            loans. But, at the same time, the circulation does
            not get ANY bigger at all.

            And when your destroying money as fast as you’re
            creating (printing) it, and you always have been,
            that wee bit problem Does Not Even Exist.

            Link to Krugman still works for me. It worked for

            • You lost me. If it’s debt-free money, what is the interest on?

              Debt money with no interest is cool, but wouldn’t it be better described as credit money? People could be allowed credit when they need it to do something productive, and when they have more than they need they give it back.

              • I’ll explain, Birch. Zarlenga thinks that:

                Credit Money = Counterfieting

                And Zarlenga would outlaw credit money. Thus,
                Zarlenga Money is a circulation that is 100%
                free of (as in without) credit money.

                What I am saying here is the exact opposite:

                I am saying that we want a circulation that is
                100% credit money.

                So The House and the Senat both agree on a
                Finance Minister. The government is The Bank.
                And all credit money is interest free.

                If the Finance Minister wants to create (say) about
                $1 Trillion per month of credit money, and destroy
                about the same amount of money, then that comes
                to about $200 Million per congressional district
                per month…($1.28 yearly aggro total year like now.)

                So every district is created equal. And every member of the house is in charge of 1/2 the money
                and 1/2 the banks in their district. Each Senator
                is in charge of 1/4 the money and 1/4th the banks
                in every district in the state—both chambers are
                created equal.

                If Senator X refuses to lend money to businesses
                that pay a woman 77 cents on a dollar for what a
                man makes then you can always vote against
                (or for) him next time. If Congressional Rep Y
                lends money to the poor for houses then that is
                A PUBLIC MATTER.

                If you don’t like UR district then go live elsewhere.

                President Jackson was right about credit money:
                It should be a non-profit, interest-free, public

                “under the control of congress, not some private
                corperation or bank.”

                • A Ward Republic is definately needed when it
                  comes to monetary policy. Who’s country is it

                  Is there a such thing as a tablet written by the
                  gods that says that We The People exist for
                  no purpose whatever but to sacrifice our lives,
                  dreams and property rights over to the few
                  aristocrats—The Hyper Class—that has been
                  enslaving us for centuries?

                  The whole purpose of unregulated capitalism—
                  COMBINATIONISM—is to allow a few cruel
                  bastards to rule over us forever.

                  CORRECTION: I meant to say $100 Billion, not
                  $1 Trillion, per month. This comes to around
                  $1.3 Trillion per year. Which is our current level
                  of bank credit. …The $200 Million per district per
                  month figure was correct.

              • Here Birch is a quote from page 23 of “The
                Jacksonian Persuasion: Politics and Belief” by
                Marvin Meyers (1952):

                “The world of independant producers, secure in their modest competance, proud of their natural
                dignity, confirmed of their yeoman character,
                responsible masters of their fate—the order of the
                Old Republic—was betrayed. From the great
                visible centers of private wealth and power, a web
                of economic and political influence reached into
                every community, threatened every household in
                the land. Banks and corperations, with their paper
                mysteries, their secret hold on public men, their
                mask of anonymity, their legal untouchability, held
                invisible powers over the life of the community,
                greater even then their manifest controls.
                “Between its minimum and maximum terms the
                Jacksonian appeal could promise much for little:
                it would destroy the Monster Bank, and it would
                restore a precious social enterprise to its original
                purity. With one couragious amputation, society
                could save its character—and safely seek the
                goods it hungered for.”

                • Yeah, I prefer the credit money idea, generally. Certainly way safer than a comodity currency or interest debt money. Now, if we could just combine it with some real (direct) democracy, like Jefferson’s ward republic, we’d really be getting somewhere.

                  Henry George wanted to separate the function of determining how much money is optimal at any given time from the function of creating that money. For instance, the department of weights and measures would determine the ideal expansion/contraction for the given period and make it public knowledge, then the governing body would decide whether to follow the recommendation or risk going their own way for policy reasons.

                  • I’ve read some of Henry George’s works, but that concept I’ve not yet seen. Do you recall where I would find it?

                    • Sorry, that idea came from Frederick Soddy’s ‘The Role of Money’ chapter VII. I read it back to back with Progress and Poverty, and confused the two. I think they’ve kind of melded in my memory into one grand idea of how to make things way better.

                      Soddy recommends fixing currency to a simple price index, “any reasonable represantative average of the things which the money is used to buy.” He says: “Cut out the creation of money as a means of earning interest and create it for consumers, and the economic system will enter into a definite equilibrium relations between all the various factors which determine relative prices of the different categories of the immense variety of things bought and sold.”

        • I don’t see the argument, or the link to the article by Krugman. You do state that if money wasn’t debt it couldn’t be loaned at interest. There are many people who would approve of this arrangement, believing that the lending of money at interest is immoral usury.

          Is that your only argument? Did I miss a few things?

  4. I would refer you the NewDeal 2 article by LR Wray and Marshall Auerback:
    Reality Check: Why Truth Will Protect Social Security
    Monday, 12/20/2010 – 10:36 am by Marshall Auerback and Randall Wray


    for a discussion of the matter of Federal Reserve manipulations and Social Security. There is a great deal of confusion and mis-information in the blog-sphere these days; some of this could be cleared if more interested people would learn the basics of modern money operations (MMT is W G Mitchell’s acronym for the process). MMT is an attempt to explain how sovereign nations (USA, UK, Canada, Australia, and others) may choose to operate their currency/economic system. The fact is that many people do not understand that some countries (Denmark, Iceland, UK, Norway, and others) in Europe also have the theoretical ability to evolve to a MMT system.

    Those members of the EU who have adopted the Euro as their currency find themselves in a different world; a world akin to the states in the USA. . They have to use the currency provided to members of the EMU just states in the USA are obligated to use currency which can only be printed by the Central government, although, they are also allowed to host state private banks.

    As the Constitution of the USA indicates, Congress has to approve spending and it has the power to print money (it usually chooses not to take advantage of that privilege; I could speculate on the reasons for that choice, however, it is unrelated to the debt money concept which only benefits the banksters and/or the Fed Reserve.) In fact, Chairman B Bernake’s utilization of a zero or near-zero interest rate indicates that the Fed Reserve does not have to create debt money.

    By the way, those who advocate the position of the AMI should view Michael Hudson’s video presentation at the recent national meeting (check their website for link).

  5. It seems an article confuses government spending with commercial bank lending. Government spending has little relation to taxes collected. Spending is done BEFORE taxes are collected. So it is not really “taxpayer money”. The problem, of course it that government spends little for the public needs and a lot for the private corporate needs. In any case – government spending adds money to the economy.
    Private lending is a different story – it actually siphons money out of economy – and concentrates it in the hands of the few – where money is no longer a benefit to the economy – but is “invested” into parasitic causes – like currency speculation and the like.
    So the problem is government spending as such – but spending it solely to enrich already rich – and leave the public struggling.

  6. The system as it is now essentially controls the money supply by ensuring that it is always owed back into the system. Money is debt to provide a feedback loop tying its issuance to the ability to pay it back. Granted, this methodology has lost its legitimacy because it is clear that the amount created can never be paid back, but that was the idea. It “works”, in a manner of speaking, until the debt limit is reached, which it always will be, usually after a century or so.

    Having the government issue debt free money at will to relieve this pressure is nothing but a form of debt cancellation.

    Why not just honestly and straightforwardly cancel the debt?

    • Again – there are two types of debt: private and public.

      Public debt – if it is issued in own currency and by a sovereign government – is not an issue. Public debt is essentially the same thing as money. The interest on public debt can ALWAYS be paid (again – as long as it is issued in own currency, and government has no political restraints placed that prevent it from paying the interest).

      Private debt is owed by private entities – and they cannot issue their own money to cover it – so they have to either get the money from somewhere or … (depends on the custom: die, go to jail, declare bankruptcy etc).

      Government using directed spending can help pay off private debts and can help economy. Sure, government spending should be targeted to those that need it most and in a way that brings the most public benefit. Also it has to be reduced when no longer needed (there is no unemployment, economy functions fine) and inflation becomes an issue.
      Also – sure – financial (and political) system needs to be reformed to prevent abuses.
      All that is easier than to cancel debts. Also canceling debts won’t solve the issue of unemployment. Although it would help.

      • Well, sure there are different kinds of debt: public, private, secured, unsecured, high interest, low interest. None of these differences are material to the point, which is that money is created as a debt to limit and govern its issuance.

        When you exceed the plausible limit, then, what choice is there but to retire it and start over?

        Yet if you canceled all debt there would be no money at all. So you have to leave something.

        And then you start over with money that is an asset. And if the asset is limited in supply the issuance of it is self regulating. You don’t need a central bank at all.

        But simply issuing money with no standards whatsoever is frankly crazy, even if the government does it. The money would be meaningless, and worthless.

        • what I am trying to say – that currently in most fiat money systems money is issued by the central bank which is more or less controlled by the government.
          Calling that money “debt” does not change the fact that it is money.
          That government “debt” never has to be returned. If it was returned – there would be no money.
          That “debt” is used and saved by private sector of economy and used as – well currency. So in fact it is not debt at all – but the currency of that state.

          Private debt is radically different, as you understand.

        • In other words: sovereign government has monopoly rights to issue currency into the economy. Private banks can lend you the money – but they then become your debt. Government money is not debt. It appears to be debt because of the trick that it plays with Treasury bonds – but in fact government money is the only “non debt” money issued into the economy, because public “debt” in its own currency is not a burden at all. It is private sector’s wealth. It does not matter who holds government bonds – they are essentially the same as money.

          • Money can’t be “wealth” unless it’s an asset; when it’s a debt it can only be a claim to (promise of) wealth, not wealth itself.

            I don’t know what you mean by “radically different”, as in “private debt is radically different from public debt”. Both are debt. Governments can have debts as well as private parties, and they always have.

            Beyond that I don’t know why you think that distinction would matter so much even if it were viable.

            Beyond even that, you seem to think that the government has the sovereign privilege of promising and reneging, which is denied to others. Because if I promise someone $100 and just give him my note and say “There. You’re paid.”, I have reneged; but you say the government can do that and it’s not reneging, because “public debt is radically different.”

            This has nothing to do with treasury bonds as such. The currency itself is a note, as in Federal Reserve Note, which is a promise to pay, because all “notes” are promises to pay – not payment – even notes issued by the government. Even “legal tender” notes are still notes.

            In any case, I think the conceptual problems you have exhibited permeate this thread and Ellen’s thoughts as well. I just wish there were something I could do about that.

            • Money is not wealth – at least it should not be.

              But in order for money to have enough value to act as currency and facilitate trade – even between private parties – the system must remove money from the economy as well as add to it. A debt-based monetary system includes a self-closing loop in that repaying the debt removes money from the system. Personally, I believe there are better ways than debt to close the loop, but as previously mentioned it works – sort of…

              Other mechanisms to ensure money has sufficient value to facilitate trade include taxes and demurage fees. The first is common to us all – the government at various levels taxes just about everything. The second has rarely been done, but charging a fee to hold or hoard money has worked to stimulate local economies on those rare occasions.

              I doubt an open monetary system where money comes in, but never leaves would function for long. With no ultimate end point for money (except when actual cash wears out), it would be very easy to create an oversupply of money and subsequent inflation, but difficult to remove the excess money to prevent or relieve the inflation.

            • what I think confuses you is thinking about government money as “debt”. You do realize that government (and I am talking about federal government – the one that has power to issue money – and giving Treasury bonds to the Feb and getting money does not negate that it is government that issues money) – so Federal government “debt” will never be paid. “Paying” it would mean collecting all US dollars issued and giving it back to the Feb to get the Treasury bonds back. This makes no sense. What would be the point of that? So government money is just a currency. The interest that government pays on Treasury bonds is also paid from further getting more money. Yes, paying that interest is essentially a government welfare to bondholders and it is pointless. But it does not make your taxes bigger – since your federal taxes are not used to pay for anything. Taxes are used to remove money from economy – so next year government could spend again.

            • I am not sure how else to explain it. I think the confusion is created by this game that Treasury and the Fed are playing with Treasury securities being exchanged for dollars. And the point of this game is:
              1) to confuse – and make it appear as if government cannot issue money at will (which it can and does)
              2) to make it look as if government has “debt” that has to be somehow re-payed from taxes

              So that instead of focusing on how to spend government money for public benefit – everybody is focusing on how to make government spend less. Keep in mind that government spending is the only public spending that could be used for the benefit of all. Private spending is pretty much always used for the private benefit at the expense of public benefit. Also private debts are the ones that are bankrupting the economy.

            • the important questions should be:
              1) where government spending should be directed (and that would be to the people that lack money to spend: like giving jobs to the unemployed; also for the causes that are necessary for public good: environment, renewable energy, health-care, public transportation etc – THERE IS NO LACK OF MONEY)
              2) what excess money should be removed from economy (it makes no sense to spend on those that need money the most and then remove money from them again )

              People should not be worried that government spending “wastes” money or gets public into debt. That “debt” is illusion, and government spending is what allows private sector economy to function without necessarily incurring excessive private debts.

    • Atticus, read your blogs. Money “should be” debt, because that is what money always has been, for millennia. If it’s not debt, it’s not money. All money is a form of credit/debt. The most basic and important kind, Government fiat money is nothing but tax credit. Government bonds are deferred tax credits. If the government promises you $100 and gives you a note, it has not reneged. It has given you a hundred dollars, which you can use to pay taxes with, or give to somebody else to buy stuff, or show the other kids how rich you are and start a bank with.

      The money supply is and always has been mainly controlled endogeneously, by the economy, by credit creation. Governments now regulate it and should regulate it more – imho private banks have acquired and abused enough governmental functions that they should be mainly illegal, with most banking taken over by the feds, the states and local governments.

      Novelties like the gold standard just create financial instability by artificially limiting money in ways that have nothing to do with the economy. Modern Monetary Theorists propose limiting / backing money in a way that DOES have to do with the economy – by creating a labor standard, a Job Guarantee – 10 dollars then being equivalent to an hour of labor.

      “money is created as a debt to limit and govern its issuance.” I am not sure what you are saying about debt and debt limits. Government bonds and rules about matching spending with them are not very meaningful. Bonds are just another form of money, like million dollar bills, and their only function is to change interest rates. Thinking they back or limit government spending is crazy – it is like saying pennies back nickels, or notes issued by the Boston Fed back New York Fed notes.

      • It works like this: money is loaned out with repayment terms. If repayment terms are by and large being met, no problem. If by and large they are not being met, there is a problem. The repayment of loans is centrally tracked under a central bank system, so officials know when there is or isn’t a problem.

        Traditionally, the only way to address the problem when it arises is to loan out even more money and hope that economic activity picks up and then loans will by and large be paid back again. Notice that this does not address the initial problems at all; it merely expands the pool of money so that those problems seem smaller.

        This method works unless and until overall debt levels become too high. At that point, more money cannot be loaned out for a whole host of reasons, but even if it somehow could be loaned out the numbers are too big and people begin to lose “confidence” in the system.

        That’s the point we are at now.

        Money is not always debt. Under a gold standard gold is money and is no one else’s debt. That can pose other problems, of course.

        The proposal on the table here – that the government issue money at will with no controls whatever, is a true novelty. “Novelty” cannot be applied to the gold standard, which has been practiced in the US and elsewhere.

        • The proposal on the table here – that the government issue money at will with no controls whatever, is a true novelty. No, it is what governments (and banks, and temples) have been doing for millennia, since Sumeria and Egypt, back to when government= religious temple=bank.

          Gold is not, and never has been money. All forms of money are credit money. Commodity money never existed. The gold standard of the 18-19th-early 20th century was a relative novelty that came the closest, but money for millenia has been credit money, fiat money more or less. The gold standard just set an arbitrary price for one useless commodity, gold, in an a quixotic, destructive effort to attain price stability. Prices were stable before the gold standard because of relative peace and prosperity and efficient tax collection. Incorrect economic theories mystically associated this with precious metals.

          Saying we are at the point that money can’t be lent out is absurd. There is no such point, ever. At present, the US deficit is the only thing keeping the US economy afloat as it deals with massive deleveraging / credit money destruction. The problem is that total US debt=money levels are in serious danger of becoming too small (= deflation/depression), not too big. The “initial problem” you speak of is the demand for money. The only way to deal with it is to create it, which the government can do at will.

          • The Treasury can print it, but giving it to the “banks” to “loan” into circulation screws everything from that point forward.
            The banks are not earning anything through their actions. They are not adding value. They borrow at 0% and loan right back to the government and pocket the interest as though they’d “earned” it. Same with loans to the public. They are at best chiseling facilitators!

  7. Wasn’t President Lincoln offered funds to fight the civil war by the European banks 150 years ago and his Treasury Secretary advised to just print the funds necessary to win the war, hence the Greenback, carried no debt to be re payed to anyone when the war was won, while the losers had worthless confederate “chits”
    In (my) perfect world, bankers would become federally employed facilitators of the funds needed to have America carry out it’s business. No debt what-so- ever. One would simply need to have a desire and willingness and ability to repay the amount extended at the outset. The new moneys’ value would be determined essentially as barter is carried out today, between the parties involved.

  8. Q. When is a hundred billion not a billion?

    A. When it’s a trillion!

    Isn’t it the case that the Federal Reserve Act only automatically permits banks to create many times more “deposit” dollars than the amount of gov’t bonds it buys from dealers at a commission?

    In other words, isn’t QE2:
    (a) an indirect $600 billion interest-free loan to the federal gov’t;
    plus (b) a circa $5 trillion pumping of bank liquids?

  9. FOMC = Fraud On My Country?

    Why does the FED, through a so-called “open” market committee (FOMC), in fact buy Treasuries specified as to duration and amount not directly from the Treausury’s open-to-all “Treasury Direct” web site, but only through a market statutorily closed to all but a handful of the very biggest Wall Street dealers and banks—notably including Goldmans? According to the New York Times (http://opinionator.blogs.nytimes.com/2011/01/04/friends-with-benefits/?src=me):

    “Goldman’s cost of capital is close to zero — as a bank holding company, it can borrow from the Federal Reserve at negligible interest rates — so any capital gain it makes [is] sheer profit… Fees for underwriting public offerings are generally about 7 percent of the value of the stock sold.”

    This reported regular client fees, but would seem to impute that perhaps 7% of QE2’s $600 billion is simply gifted to these same old same olds. Can anyone give me a roughly accurate figure for Goldman’s (dealers’) pre-profit cut in Treasury sales to the FED? Do they give the government some special deal, like 4.5%, or what?

    I don’t dispute that the FED’s FOMC statute requires this seemingly obscene waste in purchasing Treasuries. But what – if any — credible benefit does the public get from this particular mega-multibillion expense?

    It is on record that the leader of the majority vote for the 1913 Federal Reserve Act understood that the phrase “obligation of the United States” authorized only the issuance of United States notes – aka Lincoln’s greenbacks. Whereas, it was in practice interpreted as an obligation for the US Treasury to print whatever money the FED asked it to print. (Isn’t it about time the legal profession got the Supreme Court to uphold the intent of Congress in this rather important matter?)

    More particularly, what political forces later gave rise to the statute that created the FOMC, requiring Treasury purchases on a closed market? Does it have something to do with the pre-FOMC case Raichle v. Federal Reserve Bank Of New York, 34 F.2d 910 (2nd Cir. 1929)?

  10. I am continually shocked by people who think that
    money should not be debt. What shocks me even
    more, however, is people who think that the issuing
    of debt-based money should be a private, for-profit
    Obviously, if the government were the bank, and all
    money was inerest-free debt—destroyed (“extinguished”) as it is paid back—then we would
    have a very sound monetary system, indeed.
    So if we destroyed (say) 10% of our money supply
    every year…and we grew our circulation by (say)
    4% every year…then we could lend out 14%—1/7th
    —of our circulation EVERY YEAR.
    But, at the same time, our circualtion would only
    get 4% bigger every year.
    Try doing this with debt-free (permanent) money!
    I would also like to note in passing that Steve
    Zarlenga’s defenition of monetary reform is this:
    Lets have another stimulus. …I’m having a mighty
    hard time taking the man seriously. Aren’t you?

    • I think money should be a public utility. And whoever holds money should pay for the privilege of holding it rather than using it.

      1) The community as a whole – or more likely, its government – should issue money, debt-free
      a) to pay for the goods and services the government needs to perform its duties
      b) to lend to individuals and businesses
      c) as direct payments to citizens, if the economy could use more money
      d) fractional reserve lending should be treated like counterfeiting (because it is).

      2) Once a month, a fee must be paid to the community equal to 0.5% of the total money a person holds, whether coins, cash, or bank account balances.

      Now, instead of placing the whole burden of money on the heads of those who need to borrow it to fund their business or purchase homes, the burden is spread to those in the economy who are hoarding it, making it hard for the borrowers to recover the money they need to pay their debts.

  11. If the government is the bank, and loans are at an
    interest rate of ZERO…I fail to see how that’s
    counterfeiting when compared to printing debt-free
    (permanent) money.
    After all, debt-money is destroyed (“extinguished”)
    as it is repaid. But debt-free money remains in the
    circulation forever.
    So with sebt-free money, we couldn’t loan out much
    money at all without DEBACHING money.
    I do not believe that Steve Zarlenga has EVER done
    the REQUIRED math on monetary reform.
    This is why I consider Steve Zarlenga to be a very
    dangerous man, indeed. …I hope that some day
    monetary reformers wake up to that.

    • There is nothing wrong with keeping money in circulation forever.

      However, it is useful to have a “sink” into which money will flow as well as a “source” from which money comes to ensure it circulates. Government fees and taxes are an effective sink — as they are paid, the money is removed from circulation. Government spending is an appropriate source. As the government spends, money goes into circulation. Adjusting fees, taxes, and spending can all be used to ensure a proper amount of money in the system.

      The biggest problem with debt-based money, even with no interest, is that people who hold savings or otherwise hoard money will prevent those who borrow from acquiring enough to pay their debts. In order to compensate for this additional debt-free money must be added to the money supply. Furthermore, in times of economic uncertainty, people will reduce debts (regardless of interest) and build savings – which reduces the money supply causing deflation and subsequent recessions and depressions. Compensating for this, also requires the addition of debt-free money to the economy.

  12. I don’t see how. If we’re destroying 10% of the circulation every year, and growing the circulation by
    4%…then the ONLY way that we cannot make our
    yearly debt payments is if 94% of the circulation is
    hoarded. Does that sound possible to you?

    If we DID NOT grow the circulation at all…then 90%
    of the circulation would have to be hoarded in order
    to cause failure. Does that sound possible?

    If money is debt-free, then we can only lend out
    money that already exists. BUT NO ONE WILL EVER DO THAT WITHOUT INTEREST.


    Unless, of course, you PROFOUNDLY DEBACH
    the currency. What other possibility is possible?

    And finally, Zarlenga WILL NOT write off ANY debt.
    Look it up. Ellen, in contrast, wants no nationalize
    the banks and rewrite the loan agreements in such
    ways as to write off all debt which is the result of
    interest on bank loans.

    So Ellen wants us to ESCAPE the gravity of a debt
    collapse to a PROFOUND ($10 Trillion + ) degree.

    But Zarlenga will keep us at the edge of the cliff.

    So who’s serious now? And who isn’t?

    And where is Zarlenga’s math?

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