Your suggestions and proposals for legislation should go here. Also lengthy essays on Money Reform. Then you can use URLs to link to them in your discussions elsewhere. This saves time and space for everyone, and makes the discussions more readable and to the point.

Thanks,

Admin

Perhaps the most informative text upon monetary issues in general is - The Lost Science of Money - by Stephen Zarlenga (of AMI):

http://www.monetary.org/index.html

Unfortunately this is no etext version available, as this outline of monetary history should be read before discussing any monetary proposal.

Matabele, I could not agree more. I have spoken my piece to Stephen about making his book more widely available, or providing an online text. His position is that the proceeds from the book finance his efforts on money reforms. I think his strategy is wrong, but I didn't write the book. I would take a more universal approach such as did Ellen H Brown and Web of Debt.

There is no question that his book "The Lost Science of Money" is the single best history of money in existence, notwithstanding some sloppy editing in places.

Jere,

I recently attended an AMI seminar presented by Stephen Zarlenga. Stephen Zarlenga summarizes the American Monetary Act that he proposes in the following points:
(1) It Incorporates the Federal Reserve into the US Treasury, nationalizing the money system, not the banking system.
(2) The Power to issue money through fractional reserve bank accounting is entirely removed from banks.
According to the presentation:
"Banks will continue as private companies encouraged to make legitimate banking profits but not in a way that creates or issues new money. Only government will do that. All the existing bank credit still circulating is converted into US Money with an elegant accounting rule change. In consideration of that conversion, the banks then become indebted to the US for those amounts. As the bank’s clients repay loans, instead of that credit going out of existence as at present, it is now money, and is paid over to the US Treasury for satisfaction of each banks new debt to the US."
(3) New money needed for a developing society is created by government and spent into circulation on crucial infrastructure.

With regard to the banks, the AMI proposal is different from what Ellen Brown has proposed. While the AMI keeps the banks private but does not allow them to create money, Ellen Brown proposes nationalizing the banks, or making them public banks, with the a public charter and "profits" going to the government.

What are the pros/cons between the AMI proposal and one that nationalizes the banks?

I think keeping the banks private appeals to many "conservatives" but imposes the most change. Thoughts?

Thanks,
AnnT

Hi Ann, Welcome to the posting arena. I'm pleased to see you join in, even though my own time has been very limited lately. I seem to remember your raising similar questions on Ellen's blogsite, perhaps on one of those threads with over 1000 posts.

Your questions are good ones, even though I think they may be somewhat academic. Either model would be far superior to what exists now. The issue is how to address the question without getting into my own book on the subject.

I think we need to build an ideal model, regardless of how "achievable" it appears to be at present. Having done that, we should do our best to move toward that ideal in fact, and on national, state and local levels.

On a philosophical level, I think it is abhorrent that private bankers should be in the position of creating and controlling the world's money supplies and policies. It's like turning over your life savings to Bernie Madoff, confident that he will do the "right thing". Pure insanity. But that is the reality we live with: insanity - unreality.

So the first order of business as I see it is to get bankers out of the money creation business. Money creation is the people's business. It is sovereign business. In a democracy or a democratic republic sovereignty belongs to the people, and the people alone. The people may delegate some specific portions of that sovereignty to group corporations on the local, state and national levels, but only those delegated sovereign powers. This was the fundamental principle upon which the USA was founded, and upon which our Declaration of Independence and Constitution was written. The bankers have usurped the sovereign authority of the people to control an regulate their own financial and economic lives, and the most basic freedoms to market their wares and labors. Those freedoms have been stolen from the citizens of this nation, and of the world, by the bankers.

The words may sound harsh, but it is the reality - the harsh reality - of the situation.

This may be a long way to get to the point that whatever else is done, the people, the public, must regain their sovereign power to create the money they use in legitimate and fair commerce and trade. That means abolishing the Federal Reserve Act of 1913, and either eliminating or nationalizing the Federal Reserve Banking system. The Federal Reserve System has never served the purposes for which it was created, nor could it serve them. Only sovereign governments can rightfully create money or be a bank of last resort, or final guarantor of our money and our money system. The Federal Reserve is, and always has been, a fraud, a sham, a scam, a con game, and the not-so benevolent Wizard of Oz.

So, where does that leave me between EHB and SZ and their differences in proposals? I'm not really sure. Why? Because I'm not really sure that you have fully outlined their respective positions. Banks should do what people have always thought they have done: safely store savings and capital and safely invest it, charging and paying a reasonable interest, and loaning out only what they actually possess. Banks should not be in the business of money-creation, and that is what fractional reserve lending is - money creation. It is taking X amount of deposits and loaning out 10x in interest bearing loans... or 12X, or 18X or whatever the legal fractional allowance is at any given time. So, it really depends on how you, EHB, SZ, or I want to define the enterprise of "banking", and what you want to call the money creation process.

It also depends on a time factor, or a matter of how much can be accomplished in a given framework of time and circumstance. It would depend on the ways the money that government created entered into circulation, and whether it was all spent into circulation, or some of it was "lent" into circulation, perhaps even to banks, who would then re-loan or invest it in ways it deemed profitable.

The problem is that the very terminology with which these ideas are being discussed is in flux. The definitions of banks and banking is in flux. The lines between what is or should properly be private or public enterprise/business is in flux. We ae going through a period of vast social and economic upheaval and readjustment. It may be a long and tragic period, or it may be short and relative painless. It depends on our choices and those of our leaders. Mostly it depends on the choices of those who now wield massive, unprecedented economic power.

I'm afraid I still haven't done a very good job of answering your questions, or addressing the "pros and cons". Hopefully the reasons above will make some sense, and if not, I'll try again another time.

Nice of you to join in the conversation, Ann.