FAQ

Here are some frequently asked questions (or variations of them) and my answers.  Feel free to add more!

Q:

I understand how the current system might require extra money to be created in order to payback a loan. Day 1, I borrow 100; Day 30, I repay 110. But does it have to be like that? Most loans are repaid in installments, so Day 1, I borrow 100. Day 10, I repay 40. Bank spends or invests 30 back into the economy. So money outstanding in the economy is the 100 I originally spent minus the 40 I earned back and gave to the bank plus the 30 that the bank reinjected into the economy (through other-than-lending) equals 90. And what I owe to the bank is 110-40=70. So if money is turning over in the economy, it seems like there is no necessity to create new money in order for me to satisfy my obligation. Do I have that wrong?

A:

That is how they get away with it; it’s a huge shell game, so it’s hard to tell what’s really going on. But take the simplest case: we have a 100% gold currency, no inflation or deflation. Lenders lend out 20% of it at 5% interest. Two dollars lent at 5% compounded annually become $10 in 33 years. That means in 33 years, the lenders own all the gold. The only way to avoid this is for the money supply to expand, creating inflation.

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Q:

Isn’t the best solution to return to the gold standard? That would prevent inflation or deflation. The money supply would remain fixed and stable.

A:

Same as answer #1 – in 33 years, the lenders would own all the gold. The only way you could have a 100% gold currency that continued to circulate and perform the normal functions of “money” would be by eliminating interest from the system.

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Q:

Why does the stock market keep going up? Is it simply pricing inflation in? Population growth and expansion of markets to other economies? If the price of a share today is the present value of all future expected dividends (which I think is the definition but I could be wrong), then do the expectations for dividends really rise all that much?

A:

The stock market keeps going up despite a falling dollar, a subprime mortgage crisis, a credit crisis, and economic conditions that many people have already characterized as a recession because central banks around the world are inflating the money supply at double-digit rates. The money has to go somewhere. Real estate is no longer a good investment, and interest rates on government bonds are too low to be very appealing. Dividends have very little to do with the price of a stock. Look at Amazon’s stock, for example: it doesn’t list earnings, and it’s trading at a price/earnings ratio of 130, a huge multiple (10 or so is considered good). Yet it keeps going up. The stock market is a giant casino, where investors are just betting they can sell the stock for more than they paid for it.

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Q:

I note your delicacy in not specifying WHO exactly these money-lenders are. Why are you so afraid to say the word “Jews”?

A:

Your assertion is too broad. J.P. Morgan was an Episcopalian, and John D. Rockefeller was a Baptist. The Jews were allowed to practice usury when no one else was, and that’s why they dominated the field; but that’s not really the point of my writing. It’s that the SYSTEM is bad. We should not be allowing private money creation. If you allow people to pretend they have money and lend it at interest, you’re going to wind up with a spiral of debt and inflation, until it can’t spiral any higher, when it will have to collapse. If you forbade the whole Jewish race from being bankers and still let bankers create money out of nothing and lend it at interest, you’d still have the problem. Pirates will rush in where there is bounty to be had.

139 Responses

  1. I too couldn’t find a contact us link. Are you familiar with the anthropologist David Graeber’s book, Debt: The First 5000 Years? Would you please comment on it?

  2. Might we republish your blog Think Your Money is Safe in an Insured Bank Account? Think Again. (editorial(at)french-news-online.com)?

  3. I discovered your website while browsing through the alt.nuclear_war newsgroup(I know that sounds like something from 15 years ago, but to get real info, sometimes the old networks are still there to see it unvarnished). I’m still trying to wrap my head around the American/International banking system. It seems to be an enigma wrapped in a mystery stuffed into a wasabi ball. Thank you for you website.

  4. Ellen,
    Recently economist Terry Burnham received attention for removing one million dollars from the BoA, in part because of the risk of a “bank bail-in”. His list of alternative places to keep our money safe was limited – have you provided a list of alternatives? Do you have any suggestions as to where our money can be kept safe if we chose to withdraw it from the bank?
    Thank you, patrick

  5. Ellen?

    How do we contribute to your campaign? Post a link to your funding site so we, the public, can support your efforts.

    • Thanks Dave! The link is here —

      https://ellenbrown4treasurer.nationbuilder.com/donate

  6. Ellen, thanks for all of your great work! It is a great comfort that people have an advocate like you to shake up the status quo. Our monetary system is outdated and needs modernization. Banks need greater accountability and I applaud your efforts in public banking.

    We recently launched igobono.com which is a mutual currency system where people can buy, sell and donate using a social currency instead of money.

    The site gives people instant spending power which they can use to buy goods and services. They can earn more social currency as they advance levels though engagement and good deeds. We wanted to create a platform that helps the nearly 50% of Americans who struggle to make ends meet.

  7. Ellen,

    With the “bail in ” legislation in place are savings located in a Savings and Loans or Credit Unions also vulnerable or does it the “bail in ” only apply to major Banks ?

  8. Thank you very much for your time. Your focus on private money creation is very important to my blogging. I am in the process of learning more about your work.

    Is there a contact email to send questions to you? I have tweeted you a few times as well as @webofdet. I’d like to send an email regarding a few questions. But here is my main question:

    Do u have an estimate for annual interest paid to the Fed or an estimate for annual interest paid on fiat money in the US? I’d like to find a fairly orthodox source. I very much appreciate your time.

    Please email me: option3project@gmail.com.

    Robert Cordova

    dovapro.com
    option3project.org

  9. Hi Ellen,
    First, thank you for the very informative Be The Change forum in Denver last month.
    Q: I just spoke with my City Council member and broached the subject of establishing a Public Bank in our city (Westminster). She raised concerns about the City’s credit rating being affected if we established a Public Bank, and I was not sure how to answer that concern. How would the City’s credit rating be affected? Or is this a red herring?

    • Thanks Michael. I’d call it a red herring. The Bank of North Dakota has the same credit rating as the state itself, both very high.

      http://banknd.nd.gov/financials_and_compliance/credit_rating.html

  10. When is money created using credit cards? I guess when you buy something with the card, but no $ are created. Am I Right?

  11. Thought you might like this letter to the editor in Lincoln NE

    http://journalstar.com/news/opinion/mailbag/letter-state-bank-works/article_af2b64d7-7098-56e3-957f-44e5877294d0.html

  12. Did you know that http://www.commondreams.org/author/ellen-brown has been reposting your articles and has created an author profile for you on their aggregate website as if you were a member of their staff?

  13. I don’t understand why it’s a problem if loans made out of thin air don’t get paid back? Whether a private or public bank, why not just write off bad loans, learn from your mistakes, and replace them with better ones? What am I missing?

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