Returning the money to the people

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few excerpts from the article:

"The Result of this 'Real Solution' would be the total elimination of Personal Income Tax" - James Stewart - Financial OUTRAGE

?RETURNING THE MONEY TO THE PEOPLE?

by Ellen Brown

"Is it not obvious that there are serious defects in our banking system and our tax system that deprive most of us of fundamental rights and bestow enormous privileges on others? How many riots must we endure? How many prisons must we build? How many of our rights must we lose? How many of our young people must be sent away to fight in foreign wars before we decide that enough is enough?"

Robert de Fremery - (1916 ? 2000)


One of the most remarkable admissions by a banker concerning the mysteries of his profession was made by Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920?s. Speaking at the University of Texas in 1927, he revealed:

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was every invented. Banking was conceived in inequity and born in sin ?. Bankers own the earth. Take it away from them but leave them the power to create money, and with a flick of a pen, they will create enough money to buy it back again ?. Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in ?. But if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit."

...

Robert H Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta during the Great Depression, wrote in 1934:

"We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets of complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilisation may collapse unless it becomes widely understood and the defects remedied soon."

With the exception of a few coins, all of our money is borrowed; and it is borrowed from banks that never had it to lend. Today the just create it as a data entry on a computer screen.

An aggressive experiment

Richard Duncan, writing in the London Financial Times on February 10, 2004, pointed to an even more disturbing development. The Bank of Japan was reported to be printing yen and using the money to buy US dollars, which were then invested in US government bonds. The United States was going deeply into debt to a private foreign bank ? in debt for a loan of money created out of nothing.

Duncan called it ?the most aggressive experiment in monetary policy ever conducted?. He wrote:

"Japan is printing yen in order to buy dollars in such extraordinary amounts that global interest rates are being held at much lower levels than would have prevailed otherwise ?. Since the beginning of 2003, monetary authorities in Japan have created Y27,000bn with which they have acquired approximately $250bn. (This sum) would amount to $40 per person if divided among the entire population of the world. (It is) enough to finance almost half of America?s $520bn budget deficit this year ?. Japan is carrying out the most audacious endeavour as conjure wealth out of nothing since John Law sold shares in the Mississippi Company in 1720."

US is now the world?s largest debtor

By the time the great Asian tsunami hit on December 26, 2004, the US federal debt was up to $7.6 trillion; and half of the privately-held portion was owned by foreigners. Just during the week of the disaster, the Federal Reserve reported that foreign central banks purchased another $5.6 billion in US government debt. How much is $5.6 billion? The United States promised to send $350 million abroad in the form of disaster relief. That means the United States took back to full $350 million it promised to send abroad in about half a day in the form of loans. The US is now the world?s largest debtor, borrowing an estimated 80 percent of the world?s savings annually. Moreover, the foreign investors who buy US bonds are essentially giving the money away, because under the existing monetary scheme the debt never will or can be repaid. (2) Why this is true, and why foreign central banks lend the money anyway, is complicated; but to validate the point, here is a quote from a noted economist, John Kenneth Galbraith wrote in 1975:

"In numerous years following [the Civil War], the Federal Government ran a heavy surplus. It could not [however] pay off its debt, retire as securities, because to do so meant there would be no bonds to back the national bank notes. To pay off the debt was to destroy the money supply."

That is one reason the debt can?t be paid off: our money supply is debt and can?t exist without it. But there is another obvious reason: the debt is simply too big. To get some sense of the magnitude of a $7.6 trillion obligation, if you took 7 trillion steps you could walk to the planet Pluto, which is a mere 4 billion miles away. If the government were to pay $100 every second, in 317 years it would have paid off only one trillion dollars of this debt. That?s just for the principal. If interest were added at the rate of only 1 percent compounded annually, the debt could never be paid off in that way, because the debt would grow faster that it was being repaid. (3). To pay it off in a lump sum through taxation, on the other hand, would require increasing the tax bill by about $100,000 for every family of four, a non-starter for most families.

...

Financial Weapon of Mass Destruction?

For the foreign holders of US debt, this could be the ultimate ?weapon of mass destruction?: they have the power to pull the plug on the US economy. Foreign central bans, concerned with the dramatic flip from a US budget surplus of $236.4 billion in 2000 to a deficit of $413 billion by the end of 2004, are quietly switching their reserves from dollars to Euros and yen. Mark Weisbrot, do-director of the Center for Economic and Policy Research in Washington, observed in January 2005:

"The timing of any drastic move by big players is very hard to predict. China and Japan for example, either one of those, can cause a complete crash, a total collapse of the dollar just by selling a small portion of their reserves. In fact, probably they won?t have to sell their reserves, all they have to do is stop accumulating or slow down their rate of accumulation and it will be dollar crash. (5)"

According to a January 2005 Asia Times article:

"All Beijing has to do is to mention the possibility of a sell order going down the wires. It would devastate the US economy more than a nuclear strike."
When China withdraws its support from the US account deficit, the US could be facing the sort of currency devaluation that ?crashed? the German mark and turned it into worthless paper in the 1920?s. If the United States has to declare bankruptcy, its foreign loans will dry up, and it will be thrown back on its own resources. But that spectre is not something new to the United States. The American colonists faced such a challenge in the eighteenth century, when they found themselves son the frontier of the New World without the precious metals that served as money in the Old World. The same solution the colonists came up with then could be used to extricate the country from its financial crisis today.

Returning the Money Power to the People
The American colonies were an experiment in utopia. In an uncharted territory, you could design new systems and make new rules. In England, paper money in the hands of private bankers was becoming a tool for manipulating and controlling the people; but in the American colonies, paper money was being generated by provincial governments for the benefit of the people. The colonists? new paper money worked surprisingly well, financing a period of prosperity that was remarkable for isolated colonies lacking their own silver and gold. By 1750, Benjamin Franklin was able to write of New England:

"There was abundance in the Colonies, and peace was reigning on every border. It was difficult, and even impossible, to find a happier and more prosperous nation on all the surface of the globe. Comfort was prevailing in every home. The people, in general, kept the highest moral standards, and education was widely spread."

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