|Posted by dr.ron45 on December 19, 2012 at 2:15 AM|
In the last few days the first major milestone in the proposed monetary reform process has taken more definite form. I now see the goal of the first phase as the total "greening" of M0, the monetary base for our money system in the USA. This consists of paper currency and Federal Reserve Bank credit created by the Federal Reserve Banks when they loan money or buy securities. A quick rereading of the quote from Thomas Edison in the White Paper should make it clear that, even under a fractional reserve system, the monetary base at least, should be created entirely by the government, without debt or interest oblication.
Progress toward that goal has two parts: (1) order the Federal Reserve Banks to stop creating monetary base, the expansion of same to be performed instead by the US Treasury Department through the issue of US Notes (greenbacks) and through the creation of new US Bank Deposit money spent into existence on budget items approved by Congress; and (2) replace existing monetary base with green money instead on a substitution basis, dollar for dollar.
For the first part, it turns out that the US debt held by the Fed has grown by about $1 trillion over the last 10 years, about $100 billion per year. Since there are nominally 252 trading days per year, new green monety issues would have to be $100 billion per year ois about $400 million per trading day. By replacing Fed monetary base with green monetary base on a dollar for dollar basis, there is no net increase or decrease in the inflationary pressure due to this substitution. But since there is a reduction of borrowing when green money is used instead, these issues would decrease deficits by $1 trillion over ten hears.
For the second part, suppose the US debt owned by the Fed (roughly $1.7 trillion) were to be purchased in 16 equal quarterly installments of $106.25 per quarter with the stipulation that the money would be held in its "surplus account." and returned to the treasury periodically according to their usual practice.. This would reduce the debt by $1.7 trillion in four years, and would generate $425 billion per year in revenues to the US Treasury. Together with the $100 billion in green money expenditures direct into the economy, that would be $525 in deficit reduction for each of the first four years, or $2.1 trillion by 2017. The new green money issued during the following six years would bring the 10 year deficit reduction to $2.7 trillion in all, much more than needed to set aside the sequestration budget cuts. If the buy back schedule were accelerated to be done in six quarters (1.5 years), with the "excess surplus" being paid back to the Treasury quarterly, then the debt ceiling would not have to be raised again during that period.
Notice that this green money creation schedule sets aside the sequestration cust and delays any debt ceiling increase all without ANY new tax revenues or ANY new program spending cuts. This painless "deficit reduction" is only possible with green money issues. However, since this will be quite unbelievable to people who have not had time to think about the new green money dimension for monetary policy, the suggested bill still includes Republican tax revenues and Democratic spending cuts, although only to the extent necessary to fund new stimulus expenditures. These are left in simply to make it seem more realistic to folks currently in Congress and in the White House.
Since Gurnsey Island has been crfeating its own money for almost 200 years now, Canada did it for around 40 years, and Lincoln funded the Civil War with greenbacks that circulated seamlessly with other money forms for over 100 years, it takes no great leap of the imagination to see that green money can avert the economic collapse that folks in the Prepper Movement are fearing. A nation that creates its own money is not in danger of default or collapse. People need the confidence that the money is not going to run out, and the stock market is not going to crash. The time for the return of the greenbacks has arrived. Let's not miss this golden opportunity. Please see that the involved leaders get the message in time.
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