"Queen Elizabeth II, head of state of the United Kingdom and of 31 other states and territories, is the legal owner of about 6,600 million acres of land, one sixth of the earth’s non ocean surface.

"She is the only person on earth who owns whole countries, and who owns countries that are not her own domestic territory. This land ownership is separate from her role as head of state and is different from other monarchies where no such claim is made – Norway, Belgium, Denmark etc.

"The value of her land holding. £17,600,000,000,000 (approx)."



“Given a stationary population and private ownership of all land, improvements in manufacturing methods do not, in the long-run, increase the earnings of labour and capital, but are absorbed by rent.”
 


"I am using the word wages not in the sense of a quantity, but in the sense of proportion. When I say that wages fall as rent rises, I do not mean that the quantity of wealth obtained by laborers as wages is necessarily less, but that the proportion which it bears to the whole produce is necessarily less. The proportion may diminish while the quantity remains the same or even increases."



"Place one hundred men on an island from which there is no escape, and whether you make one of these men the absolute owner of the other ninety-nine, or the absolute owner of the soil of the island, will make no difference either to him or to them.

"In the one case, as the other, the one will be the absolute master of the ninety-nine--his power extending even to life and death, for simply to refuse them permission to live upon the island would be to force them into the sea.

"Upon a larger scale, and through more complex relations, the same cause must operate in the same way and to the same end--the ultimate result, the enslavement of laborers, becoming apparent just as the pressure increases which compels them to live on and from land which is treated as the exclusive property of others. Take a country in which the soil is divided among a number of proprietors, instead of being in the hands of one, and in which, as in modern production, the capitalist has been specialized from the laborer, and manufacturers and exchange, in all their many branches, have been separated from agriculture. Though less direct and obvious, the relations between the owners of the soil and the laborers will, with the increase of population and the improvement of the arts, tend to the same absolute master on the one hand and the same abject helplessness on the other, as in the case of the island we have supposed. Rent will advance, while wages will fall."



"A family in the United States needs to earn $18.44 an hour, or nearly $38,360 a year, in order to afford a modest rental home, according to a report released April 21 by the National Low Income Housing Coalition. Despite the recession, the report finds that rents continue to rise, while wages continue to fall across the country."



Keep the above in mind as you read the following:

---------------------------------

http://www.prisonplanet.com/outcasts-tonight-tens-of-thousands-of-formerly-middle-class-americans-will-be-sleeping-in-their-cars-in-tent-cities-or-on-the-streets.html

Tonight Tens Of Thousands Of Formerly Middle Class Americans Will Be Sleeping In Their Cars

The Economic Collapse
July 13, 2011



Economic despair is beginning to spread rapidly in America.  As you read this, there are millions of American families that are just barely hanging on by their fingernails.  For a growing number of Americans, it has become an all-out battle just to be able to afford to sleep under a roof and put a little bit of food on the table.  Sadly, there are more people than ever that are losing that battle.  Tonight, tens of thousands of formerly middle class Americans will be sleeping in their cars, even though that is illegal in many U.S. cities.  Tens of thousands of others will be sleeping in tent cities or on the streets.  Meanwhile, communities all over America are passing measures that are meant to push tent cities and homeless people out of their areas.  It turns out that once you lose your job and your home in this country you become something of an outcast.  Sadly, the number of “outcasts” is going to continue to grow as the U.S. economy continues to collapse.

Most Americans that end up living in their cars on in tent cities never thought that it would happen to them.

An article in Der Spiegel profiled one American couple that is absolutely shocked at what has happened to them….

Chanelle Sabedra is already on that road. She and her husband have been sleeping in their car for almost three weeks now. “We never saw this coming, never ever,” says Sabedra. She starts to cry. “I’m an adult, I can take care of myself one way or another, and same with my husband, but (my kids are) too little to go through these things.” She has three children; they are nine, five and three years old.

“We had a house further south, in San Bernardino,” says Sabedra. Her husband lost his job building prefab houses in July 2009. The utility company turned off the gas. “We were boiling water on the barbeque to bathe our kids,” she says. No longer able to pay the rent, the Sabedras were evicted from their house in August.

How would you feel if you had a 3 year old kid and a 5 year old kid and you were sleeping in a car?

Sadly, if child protective services finds out about that family those kids will probably be stolen away and never returned.

America is becoming a very cruel place.

Unfortunately, what has happened to that family is not an isolated incident.

[Continued...]

---------------------------------

If anyone thinks this trend of people being rack-rented out of their homes started only a few years ago, think again:

---------------------------------

High California rents push working poor to cheap motels

CNN.com
October 30, 2000

ANAHEIM, California (CNN) -- Home for Yolanda Miramontes and her five children is a cheap motel room in Anaheim, California, a thriving city where the average apartment rents for $1,200 a month.

Southern California's booming economy has pushed rents so high that most apartments are far out of reach for low-income families. And that's contributing to a growing trend: entire families living -- permanently or semi-permanently -- in motels.

In Anaheim, population 310,000, as many as 2,000 people are full-time motel residents. "It's hard on the kids," Miramontes told CNN. "Although they call this home, I still can't accept it."

With few low-income housing projects underway, the working poor have been squeezed out of the housing market and into small motel rooms renting for $600 a month -- roughly $20 a day.

"I think this is the best place for us to be right now while we are looking for somewhere else," said Ebony Green, another motel dweller in Anaheim.

Renters 'are no longer the unemployed'

The Covered Wagon, a 70-unit motel in Anaheim, gets most of its business from locals. "What's different is that the people who are staying here are no longer the unemployed," said owner Jim Parkin.

His renters include parents who work at restaurants, amusement parks, gas stations and other service establishments in Orange County, home to such tourist magnets as Disneyland and Knotts Berry Farm.

"There's no one here collecting cans," Parkin told the Los Angeles Times.

While there are no precise statistics on motel dwellers, motel owners in Anaheim, Long Beach and Van Nuys told the newspaper they've seen dramatic increases in the number of long-term motel residents.

"We are reaching an unparalleled crisis in our housing," said Gary Squier, a consultant and former head of the Los Angeles Housing Department.

[Continued...]

---------------------------------

Yet what do privilege-worshipping right-wingers propose as a solution? Make socially-created land rent even more privatized than it already is, even though this will not only make the rent-wage gap even wider than it already is, but will ensure that governments continue to impose job-destroying taxes on the privately created values of labor and capital!

Perhaps the most important conclusion to be drawn from the above article is that, contrary to what right-wing critics of Henry George’s Single Tax would have everyone blindly believe, the payment of land rent is “compulsory” regardless of whether or not it’s diverted into the public treasury. Why? Two reasons.

First, because land itself is fixed in both supply and location. If you go to a furniture store and buy, let’s say, 20 square feet of carpeting, is there automatically that much less carpeting to go around for everyone else? Of course not. Why? Because new carpeting is being produced all the time. The same principle applies to all other products of human labor. But with land it’s the very opposite: since land is fixed in both supply and location, if I appropriate so many acres or square miles of it, then there is that much less for everyone else. Hence Adam Smith’s conclusion that:

"The rent of the land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price."

Thus, if the Queen of England gets to assert exclusive, unconditional “ownership” of the billions of acres of land to which she holds title, then every other overprivileged aristocrat and absentee landlord gets to do likewise. The end result? An artificial scarcity of available land. And it is this artificial scarcity that allows landlords and slumlords to continually rent gouge landless wage-earners to such an extent that the latter rarely have more disposable income than is needed just to survive (many times not even that much -- hence the growing trend of college graduates having to move back in with their parents).

Secondly, because access to land is a universal precondition to life itself. Thus, in a world in which all land has been appropriated by a mere subset of the population, and in which billions of people are continually driven by the threat of either starvation or harsh weather into competing for access to it, land rent gets paid either way -- and is paid under penalty of "force" either way (as any sheriff who’s had to evict unemployed tenants at gunpoint will readily attest).

Reactionary defenders of privilege often object to this by asserting that, since wage-earners get to choose "who" they pay land rent to, it’s a “voluntary” payment. But as Dr. Fred Foldvary explains in the above article, this is misleading at best, because it conveniently ignores the fact that -- due to the two reasons just mentioned -- they have no real “choice” as to whether they pay, since the only “alternative” to paying is to either beg and grovel for charity or (if no charity is granted) simply starve.

       

This may be easier for some to understand if we consider the issue of chattel slavery. Would a chattel slave in the 19th century have been any less of a slave if he got to “choose” who his slavemaster was? Of course not. Why? Because he still wouldn’t have been free to choose whether he had a slavemaster to begin with.

"Would the essence of slavery change if the rules at a slave auction permitted a slave to choose between the two highest bidders for himself? Could the fact that he made such a choice be interpreted as his sanction for his chains? How can it be argued that the citizen is free in a democracy when he has the choice of two candidates if neither candidate is willing to recognize his right to freedom?"

Same principle here. A person isn’t truly free unless he has not only the choice of who gets to exact tribute from him in exchange for a mere place to stand without being threatened or shot at, but the choice of whether he has to pay such tribute to anyone in the first place. And the bottom line is: in an Austrian School economy, millions if not billions of people would have only the former choice, not the latter -- that is to say, they’d have only the choice of to whom they pay feudal tribute, not whether they pay.

Thus, since the payment of land rent is compulsory regardless of whether it’s collected publicly or privately, the only question is, Does such payment constitute “feudal tribute” regardless of who the recipient is?

The short answer is “no.” To understand why, consider the following analogy.

Let’s say I invent a one-of-a-kind machine that generates unlimited electricity, and that I will it equally to my five sons. Once I pass away, the question immediately arises as to how to adjudicate disputes over who gets access to it, and on what terms. If the eldest son insists on enjoying exclusive possession of my machine, then the government-enforced payment of rent to the other four is, in that context, not a tribute for using that machine, but a fee for the state-sanctioned privilege of denying use of it to those who have an equal right to it. But what if we’re in an Austrian School economy, and what if, realizing this, the eldest son “mixes his labor” with the machine by cleaning it and painting it a different color? Then the court system will likely rule that any and all rental value that is generated by the ongoing competition for exclusive access to the machine is the “private property” of the eldest son. In that context, the payment of rent to the eldest son is not a fee for the privilege of denying use of the machine to those who are thereby dispossessed of their birthright, but a tribute paid by one of the dispossessed for mere access to that which, in reality, he has as much a “right” to as the one receiving tribute. In the former context there is justice, because all five sons are treated as moral equals. In the latter context there is injustice, because they’re not treated as moral equals.

Thus, whether the payment of land rent (returning now to the issue at hand) constitutes feudal tribute or not depends on to whom it’s paid. If it’s paid to titleholders, then it’s feudal tribute, because it’s based on the aristocratic notion of the earth being that to which titleholders have an exclusive right of access. If it’s paid instead (whether directly as a citizen’s dividend or indirectly through the rent-financed provision of public goods and services) to those who’ve been dispossessed of their natural birthright, then it’s mere compensation, because it’s based on the recognition that the earth is that to which all humans (not just titleholders) have an equal right of access.

To understand just how absurdly immoral and anti-“liberty” the Austrian School alternative is, imagine if someone proposed allowing wealthy rent-seekers to buy up all the air “with their hard-earned money” and begin charging everyone else rent for breathing “their” property. Most people, of course, would instinctively object to such a ridiculous proposal. But why they would object? Because they’d realize that the air we breathe is not provided or “allocated” to us by any person or group of persons presuming to “own” it all, but is made available to us by nature -- or by God, if you're religious -- and that to be denied access to it for failing to pay feudal tribute to an airlord is to have the property you have in yourself violated.

Georgists simply apply the same principle to land, because, just as air itself is a free gift of nature, so too is land; and just as access to air is a universal precondition to life itself, so too is access to land. (I realize land and air have different physical characteristics, but in the two key respects I just mentioned, they’re very much the same.)

As for the privatize-everything Austrian School, the bottom line is: if speculators could hoard the air the way they hoard land, and thereby confer to themselves the power of exacting a monthly ransom fee from those needing access to it to live, then, as long as there was a “free market” in the sale and purchase of air titles, there’d be slogan-parroting Austrians all over the place proudly defending this extortion racket in the name of (you guessed it) “liberty” and “private property rights.” They’d be saying things like, “Airlords aren’t parasitizing people through a form of legalized extortion as certain freedom-hating, property-rights-hating socialists have claimed; they’re merely ‘allocating’ the air to the most productive breathers.” 

As ridiculous as that sounds, the sad reality is that, as long as those spouting such aristocratic nonsense were wrapped in the American flag or the flag of “liberty,” millions of gullible people would actually fall for this and start blindly defending the very system that’s parasitizing them -- insisting all the while that only those who hate liberty and private property would so much as question the legitimacy of that system. It’s right out of a George Orwell novel.

Unfortunately, these are the kinds of reactionaries who’ve territorialized the anti-NWO (i.e., anti-war/anti-police state/anti-eugenics/anti-global government) movement, which no doubt pleases the global elite, because that means the number of people who compose this movement will never reach critical mass (since most of the millions of non-reactionaries out there simply have better things to do with their time than listen to label-obsessed reactionaries call them freedom-hating “socialists” and “communists” all day long).

I can only hope that threads such as this one help to reverse that trend.

http://www.progress.org/archive/fold239.htm

Is the Real Estate Market Voluntary?

by Fred E. Foldvary
The Progress Report
2002

Some critics of the use of rent for public finance claim that real estate transactions are voluntary, so no damage is done when the land rent is kept by the owner instead of being shared by the community. So let's examine the question, is the rent paid voluntarily?

Critics of community rent claim that the payment of rent by a tenant is a voluntary payment for the service of finding tenants and allocating the best use of land. There are two issues involved in the issue of whether this is truly voluntary. First, is it voluntary not just for the agents involved, but for all society? Second, is it in fact voluntary for the agents?

Take the example of pollution. If Bob the buyer pays Peter the polluter for a product Peter makes, this is voluntary between Bob and Peter. But in making the product, Peter has polluted the neighborhood, something that is not voluntary for the residents. Economists call this a "negative externality" as a cost imposed on others, not compensated by the polluter.

The basic question here is, who is the morally proper owner of the land rent? If we agree that human beings are morally equal as persons and have equal natural rights, then the proper owner of natural land rent is all humanity in equal shares. In that case, when the landowner keeps all the land rent, he is stealing property that belongs to others, even if it is done legally. It is involuntary even if the members of the community do not claim this as their legitimate property, just as if a thief steals my radio and I don't know it is missing, the theft is still involuntary to me, as I did not consent to this taking.

The second moral question is whether a land transaction is voluntary even for the landlord and the buyer or renter. It is true that nobody is pointing a gun at them and ordering them to rent the land from the landlord. But suppose someone put you in prison and there were several empty cells you could be put into. The guard says, choose one of the cells. Is this choice voluntary? Relative to the cells, yes, you choose one. But the greater context of being in prison is involuntary, so the choice of cells is also involuntary. The higher-level coercions flows down to the lower-level choices. It is like asking you, if you are to be executed, whether you would prefer to be hanged, shot, gassed, or electrocuted. If your higher-level preference is to live rather than die, these choices are coerced, since you would rather not make such choices in the first place.

All land is monopolized, since new land cannot be created or imported. The landlords give you choice: which plot of land do you wish to be located in? You the tenant have no choice as to having to live on some land. Your only choice is which monopolist will take the rent that naturally and properly belongs to you in the first place as a member of the community. It is similar to the choice of prison cells. It is only superficially and by appearance a free choice, but the higher-level context of landlordism, of the landlords keeping rentals that do not properly belong to them, is mandated by the legal system imposed by government. So long as you are subject to that regime, you the tenant or buyer of land have no choice in substance.

The slave trade was also a voluntary transaction between a seller and buyer of slaves, but it was not voluntary to the slave, who morally was the proper owner of his own labor. It may not have been even voluntary to the buyer of slaves if everyone else in the neighborhood owns slaves and it is impossible to compete with them unless you too are a slave owner.

So only the overthrow of landlordism, the land tenure system where the title holder keeps all the natural rent, will make real-estate transactions truly voluntary. When the natural rent, due to the natural resource value, is shared by the community, including by using it for public revenue, then when a landlord rents to a tenant, this is truly voluntary, because the landowner is not taking what belongs to others. Then when a buyer purchases land, the purchase price is voluntary and also lower, because the rents belonging to others are not capitalized in the purchase price.

Don't blame all the landlords. Most are locked into the prison system just as much as the tenants. Blame the system. Blame the ignorance of the public, the greed of politicians and the landed interests who actively prevent rent sharing, and the apathy of voters who don't want to be bothered to improve their knowledge of ethics, economics, and government.

http://globalresearch.ca/index.php?context=va&aid=25179

The Federal Reserve Cartel: Freemasons and The House of Rothschild

by Dean Henderson



Global Research
June 8, 2011

(Part two of a four-part series)

In 1789 Alexander Hamilton became the first Treasury Secretary of the United States.  Hamilton was one of many Founding Fathers who were Freemasons.  He had close relations with the Rothschild family which owns the Bank of England and leads the European Freemason movement.  George Washington, Benjamin Franklin, John Jay, Ethan Allen, Samuel Adams, Patrick Henry, John Brown and Roger Sherman were all Masons.


Andrew Hamilton

Roger Livingston helped Sherman and Franklin write the Declaration of Independence. He gave George Washington his oaths of office while he was Grand Master of the New York Grand Lodge of Freemasons. Washington himself was Grand Master of the Virginia Lodge. Of the General Officers in the Revolutionary Army, thirty-three were Masons. This was highly symbolic since 33rd Degree Masons become Illuminated. [1]

Populist founding fathers led by John Adams, Thomas Jefferson, James Madison and Thomas Paine- none of whom were Masons- wanted to completely severe ties with the British Crown, but were overruled by the Masonic faction led by Washington, Hamilton and Grand Master of the St. Andrews Lodge in Boston General Joseph Warren, who wanted to “defy Parliament but remain loyal to the Crown”. St. Andrews Lodge was the hub of New World Masonry and began issuing Knights Templar Degrees in 1769. [2]


General Joseph Warren

All US Masonic lodges are to this day warranted by the British Crown, whom they serve as a global intelligence and counterrevolutionary subversion network. Their most recent initiative is the Masonic Child Identification Program (CHIP). According to Wikipedia, the CHIP programs allow parents the opportunity to create a kit of identifying materials for their child, free of charge. The kit contains a fingerprint card, a physical description, a video, computer disk, or DVD of the child, a dental imprint, and a DNA sample.

The First Continental Congress convened in Philadelphia in 1774 under the Presidency of Peyton Randolph, who succeeded Washington as Grand Master of the Virginia Lodge. The Second Continental Congress convened in 1775 under the Presidency of Freemason John Hancock. Peyton’s brother William succeeded him as Virginia Lodge Grand Master and became the leading proponent of centralization and federalism at the First Constitutional Convention in 1787. The federalism at the heart of the US Constitution is identical to the federalism laid out in the Freemason’s Anderson’s Constitutions of 1723. William Randolph became the nation’s first Attorney General and Secretary of State under George Washington. His family returned to England loyal to the Crown. John Marshall, the nation’s first Supreme Court Justice, was also a Mason. [3]

When Benjamin Franklin journeyed to France to seek financial help for American revolutionaries, his meetings took place at Rothschild banks. He brokered arms sales via German Mason Baron von Steuben. His Committees of Correspondence operated through Freemason channels and paralleled a British spy network. In 1776 Franklin became de facto Ambassador to France. In 1779 he became Grand Master of the French Neuf Soeurs (Nine Sisters) Lodge, to which John Paul Jones and Voltaire belonged. Franklin was also a member of the more secretive Royal Lodge of Commanders of the Temple West of Carcasonne, whose members included Frederick Prince of Whales. While Franklin preached temperance in the US, he cavorted wildly with his Lodge brothers in Europe. Franklin served as Postmaster General from the 1750’s to 1775 - a role traditionally relegated to British spies. [4]

With Rothschild financing Alexander Hamilton founded two New York banks, including Bank of New York. [5] He died in a gun battle with Aaron Burr, who founded Bank of Manhattan with Kuhn Loeb financing. Hamilton exemplified the contempt which the Eight Families hold towards common people, once stating, “All communities divide themselves into the few and the many. The first are the rich and the well born, the others the mass of the people...The people are turbulent and changing; they seldom judge and determine right. Give therefore to the first class a distinct, permanent share of government. They will check the unsteadiness of the second.”[6]

Hamilton was only the first in a series of Eight Families cronies to hold the key position of Treasury Secretary. In recent times Kennedy Treasury Secretary Douglas Dillon came from Dillon Read (now part of UBS Warburg). Nixon Treasury Secretaries David Kennedy and William Simon came from Continental Illinois Bank (now part of Bank of America) and Salomon Brothers (now part of Citigroup), respectively. Carter Treasury Secretary Michael Blumenthal came from Goldman Sachs, Reagan Treasury Secretary Donald Regan came from Merrill Lynch (now part of Bank of America), Bush Sr. Treasury Secretary Nicholas Brady came from Dillon Read (UBS Warburg) and both Clinton Treasury Secretary Robert Rubin and Bush Jr. Treasury Secretary Henry Paulson came from Goldman Sachs. Obama Treasury Secretary Tim Geithner worked at Kissinger Associates and the New York Fed.

Thomas Jefferson argued that the United States needed a publicly-owned central bank so that European monarchs and aristocrats could not use the printing of money to control the affairs of the new nation. Jefferson extolled, “A country which expects to remain ignorant and free...expects that which has never been and that which will never be. There is scarcely a King in a hundred who would not, if he could, follow the example of Pharaoh – get first all the people’s money, then all their lands and then make them and their children servants forever...banking establishments are more dangerous than standing armies. Already they have raised up a money aristocracy.” Jefferson watched as the Euro-banking conspiracy to control the United States unfolded, weighing in, “Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions begun at a distinguished period, unalterable through every change of ministers, too plainly prove a deliberate, systematic plan of reducing us to slavery”. [7]

But the Rothschild-sponsored Hamilton’s arguments for a private US central bank carried the day. In 1791 the Bank of the United States (BUS) was founded, with the Rothschilds as main owners. The bank’s charter was to run out in 1811. Public opinion ran in favor of revoking the charter and replacing it with a Jeffersonian public central bank. The debate was postponed as the nation was plunged by the Euro-bankers into the War of 1812. Amidst a climate of fear and economic hardship, Hamilton’s bank got its charter renewed in 1816.

Old Hickory, Honest Abe & Camelot

In 1828 Andrew Jackson took a run at the US Presidency. Throughout his campaign he railed against the international bankers who controlled the BUS. Jackson ranted, “You are a den of vipers. I intend to expose you and by Eternal God I will rout you out. If the people understood the rank injustices of our money and banking system there would be a revolution before morning.”

Jackson won the election and revoked the bank’s charter stating, “The Act seems to be predicated on an erroneous idea that the present shareholders have a prescriptive right to not only the favor, but the bounty of the government...for their benefit does this Act exclude the whole American people from competition in the purchase of this monopoly. Present stockholders and those inheriting their rights as successors be established a privileged order, clothed both with great political power and enjoying immense pecuniary advantages from their connection with government. Should its influence be concentrated under the operation of such an Act as this, in the hands of a self-elected directory whose interests are identified with those of the foreign stockholders, will there not be cause to tremble for the independence of our country in war...controlling our currency, receiving our public monies and holding thousands of our citizens independence, it would be more formidable and dangerous than the naval and military power of the enemy. It is to be regretted that the rich and powerful too often bend the acts of government for selfish purposes...to make the rich richer and more powerful. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by acts of Congress. I have done my duty to this country.”[8]

Populism prevailed and Jackson was re-elected. In 1835 he was the target of an assassination attempt. The gunman was Richard Lawrence, who confessed that he was, “in touch with the powers in Europe”. [9]

Still, in 1836 Jackson refused to renew the BUS charter. Under his watch the US national debt went to zero for the first and last time in our nation’s history. This angered the international bankers, whose primary income is derived from interest payments on debt. BUS President Nicholas Biddle cut off funding to the US government in 1842, plunging the US into a depression. Biddle was an agent for the Paris-based Jacob Rothschild. [10]

The Mexican War was simultaneously sprung on Jackson. A few years later the Civil War was unleashed, with London bankers backing the Union and French bankers backing the South. The Lehman family made a fortune smuggling arms to the south and cotton to the north. By 1861 the US was $100 million in debt. New President Abraham Lincoln snubbed the Euro-bankers again, issuing Lincoln Greenbacks to pay Union Army bills.

The Rothschild-controlled Times of London wrote, “If that mischievous policy, which had its origins in the North American Republic, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and the wealth of all countries will go to North America. That government must be destroyed, or it will destroy every monarchy on the globe.” [11]

The Euro-banker-written Hazard Circular was exposed and circulated throughout the country by angry populists. It stated, “The great debt that capitalists will see is made out of the war and must be used to control the valve of money. To accomplish this government bonds must be used as a banking basis. We are now awaiting Secretary of Treasury Salmon Chase to make that recommendation. It will not allow Greenbacks to circulate as money as we cannot control that. We control bonds and through them banking issues”.

The 1863 National Banking Act reinstated a private US central bank and Chase’s war bonds were issued. Lincoln was re-elected the next year, vowing to repeal the act after he took his January 1865 oaths of office. Before he could act, he was assassinated at the Ford Theatre by John Wilkes Booth. Booth had major connections to the international bankers. His granddaughter wrote This One Mad Act, which details Booth’s contact with “mysterious Europeans” just before the Lincoln assassination.

Following the Lincoln hit, Booth was whisked away by members of a secret society known as Knights of the Golden Circle (KGC). KGC had close ties to the French Society of Seasons, which produced Karl Marx. KGC had fomented much of the tension that caused the Civil War and President Lincoln had specifically targeted the group. Booth was a KGC member and was connected through Confederate Secretary of State Judah Benjamin to the House of Rothschild. Benjamin fled to England after the Civil War. [12]

Nearly a century after Lincoln was assassinated for issuing Greenbacks, President John F. Kennedy found himself in the Eight Families’ crosshairs. Kennedy had announced a crackdown on off-shore tax havens and proposed increases in tax rates on large oil and mining companies. He supported eliminating tax loopholes which benefit the super-rich. His economic policies were publicly attacked by Fortune magazine, the Wall Street Journal and both David and Nelson Rockefeller. Even Kennedy’s own Treasury Secretary Douglas Dillon, who came from the UBS Warburg-controlled Dillon Read investment bank, voiced opposition to the JFK proposals. [13]

Kennedy’s fate was sealed in June 1963 when he authorized the issuance of more than $4 billion in United States Notes by his Treasury Department in an attempt to circumvent the high interest rate usury of the private Federal Reserve international banker crowd. The wife of Lee Harvey Oswald, who was conveniently gunned down by Jack Ruby before Ruby himself was shot, told author A. J. Weberman in 1994, “The answer to the Kennedy assassination is with the Federal Reserve Bank. Don’t underestimate that. It’s wrong to blame it on Angleton and the CIA per se only. This is only one finger on the same hand. The people who supply the money are above the CIA”. [14]

Fueled by incoming President Lyndon Johnson’s immediate escalation of the Vietnam War, the US sank further into debt. Its citizens were terrorized into silence. If they could kill the President they could kill anyone.

The House of Rothschild

The Dutch House of Orange founded the Bank of Amsterdam in 1609 as the world’s first central bank. Prince William of Orange married into the English House of Windsor, taking King James II’s daughter Mary as his bride. The Orange Order Brotherhood, which recently fomented Northern Ireland Protestant violence, put William III on the English throne where he ruled both Holland and Britain. In 1694 William III teamed up with the UK aristocracy to launch the private Bank of England.

The Old Lady of Threadneedle Street- as the Bank of England is known- is surrounded by thirty foot walls. Three floors beneath it the third largest stock of gold bullion in the world is stored. [15]

The Rothschilds and their inbred Eight Families partners gradually came to control the Bank of England. The daily London gold “fixing” occurred at the N. M. Rothschild Bank until 2004. As Bank of England Deputy Governor George Blunden put it, “Fear is what makes the bank’s powers so acceptable. The bank is able to exert its influence when people are dependent on us and fear losing their privileges or when they are frightened.”[16]

Mayer Amschel Rothschild sold the British government German Hessian mercenaries to fight against American Revolutionaries, diverting the proceeds to his brother Nathan in London, where N.M. (Nathan and Mayer) Rothschild & Sons was established. Mayer was a serious student of Cabala and launched his fortune on money embezzled from William IX- royal administrator of the Hesse-Kassel region and a prominent Freemason.

Rothschild-controlled Barings bankrolled the Chinese opium and African slave trades. It financed the Louisiana Purchase. When several states defaulted on its loans, Barings bribed Daniel Webster to make speeches stressing the virtues of loan repayment. The states held their ground, so the House of Rothschild cut off the money spigot in 1842, plunging the US into a deep depression. It was often said that the wealth of the Rothschilds depended on the bankruptcy of nations. Mayer Amschel Rothschild once said, “I care not who controls a nation’s political affairs, so long as I control her currency”.

[Continued...]

http://globalresearch.ca/index.php?context=va&aid=25080

The Federal Reserve Cartel: The Eight Families

by Dean Henderson



Global Research
June 1, 2011

(Part one of a four-part series)

The Four Horsemen of Banking (Bank of America, JP Morgan Chase, Citigroup and Wells Fargo) own the Four Horsemen of Oil (Exxon Mobil, Royal Dutch/Shell, BP Amoco and Chevron Texaco); in tandem with Deutsche Bank, BNP, Barclays and other European old money behemoths.  But their monopoly over the global economy does not end at the edge of the oil patch.

According to company 10K filings to the SEC, the Four Horsemen of Banking are among the top ten stock holders of virtually every Fortune 500 corporation.[1]

So who then are the stockholders in these money center banks?

This information is guarded much more closely.  My queries to bank regulatory agencies regarding stock ownership in the top 25 US bank holding companies were given Freedom of Information Act status, before being denied on “national security” grounds.  This is rather ironic, since many of the bank’s stockholders reside in Europe.

One important repository for the wealth of the global oligarchy that owns these bank holding companies is US Trust Corporation - founded in 1853 and now owned by Bank of America.  A recent US Trust Corporate Director and Honorary Trustee was Walter Rothschild.  Other directors included Daniel Davison of JP Morgan Chase, Richard Tucker of Exxon Mobil, Daniel Roberts of Citigroup and Marshall Schwartz of Morgan Stanley. [2]

J. W. McCallister, an oil industry insider with House of Saud connections, wrote in The Grim Reaper that information he acquired from Saudi bankers cited 80% ownership of the New York Federal Reserve Bank- by far the most powerful Fed branch- by just eight families, four of which reside in the US.  They are the Goldman Sachs, Rockefellers, Lehmans and Kuhn Loebs of New York; the Rothschilds of Paris and London; the Warburgs of Hamburg; the Lazards of Paris; and the Israel Moses Seifs of Rome.

CPA Thomas D. Schauf corroborates McCallister’s claims, adding that ten banks control all twelve Federal Reserve Bank branches.  He names N.M. Rothschild of London, Rothschild Bank of Berlin, Warburg Bank of Hamburg, Warburg Bank of Amsterdam, Lehman Brothers of New York, Lazard Brothers of Paris, Kuhn Loeb Bank of New York, Israel Moses Seif Bank of Italy, Goldman Sachs of New York and JP Morgan Chase Bank of New York.  Schauf lists William Rockefeller, Paul Warburg, Jacob Schiff and James Stillman as individuals who own large shares of the Fed. [3]  The Schiffs are insiders at Kuhn Loeb.  The Stillmans are Citigroup insiders, who married into the Rockefeller clan at the turn of the century.

Eustace Mullins came to the same conclusions in his book The Secrets of the Federal Reserve, in which he displays charts connecting the Fed and its member banks to the families of Rothschild, Warburg, Rockefeller and the others. [4]

The control that these banking families exert over the global economy cannot be overstated and is quite intentionally shrouded in secrecy.  Their corporate media arm is quick to discredit any information exposing this private central banking cartel as “conspiracy theory”.  Yet the facts remain.

The House of Morgan
 
The Federal Reserve Bank was born in 1913, the same year US banking scion J. Pierpont Morgan died and the Rockefeller Foundation was formed.  The House of Morgan presided over American finance from the corner of Wall Street and Broad, acting as quasi-US central bank since 1838, when George Peabody founded it in London.

Peabody was a business associate of the Rothschilds.  In 1952 Fed researcher Eustace Mullins put forth the supposition that the Morgans were nothing more than Rothschild agents.  Mullins wrote that the Rothschilds, “…preferred to operate anonymously in the US behind the facade of J.P. Morgan & Company”. [5]

Author Gabriel Kolko stated, “Morgan’s activities in 1895-1896 in selling US gold bonds in Europe were based on an alliance with the House of Rothschild.” [6]

The Morgan financial octopus wrapped its tentacles quickly around the globe.  Morgan Grenfell operated in London.  Morgan et Ce ruled Paris.  The Rothschild's Lambert cousins set up Drexel & Company in Philadelphia.

The House of Morgan catered to the Astors, DuPonts, Guggenheims, Vanderbilts and Rockefellers.  It financed the launch of AT&T, General Motors, General Electric and DuPont.  Like the London-based Rothschild and Barings banks, Morgan became part of the power structure in many countries.

By 1890 the House of Morgan was lending to Egypt’s central bank, financing Russian railroads, floating Brazilian provincial government bonds and funding Argentine public works projects.  A recession in 1893 enhanced Morgan’s power.  That year Morgan saved the US government from a bank panic, forming a syndicate to prop up government reserves with a shipment of $62 million worth of Rothschild gold. [7]

Morgan was the driving force behind Western expansion in the US, financing and controlling West-bound railroads through voting trusts.  In 1879 Cornelius Vanderbilt’s Morgan-financed New York Central Railroad gave preferential shipping rates to John D. Rockefeller’s budding Standard Oil monopoly, cementing the Rockefeller/Morgan relationship.

The House of Morgan now fell under Rothschild and Rockefeller family control.  A New York Herald headline read, “Railroad Kings Form Gigantic Trust”.  J. Pierpont Morgan, who once stated, “Competition is a sin”, now opined gleefully, “Think of it.  All competing railroad traffic west of St. Louis placed in the control of about thirty men.”[8]

Morgan and Edward Harriman’s banker Kuhn Loeb held a monopoly over the railroads, while banking dynasties Lehman, Goldman Sachs and Lazard joined the Rockefellers in controlling the US industrial base. [9]

In 1903 Banker’s Trust was set up by the Eight Families.  Benjamin Strong of Banker’s Trust was the first Governor of the New York Federal Reserve Bank.  The 1913 creation of the Fed fused the power of the Eight Families to the military and diplomatic might of the US government.  If their overseas loans went unpaid, the oligarchs could now deploy US Marines to collect the debts.  Morgan, Chase and Citibank formed an international lending syndicate.

[Continued...]

The best antidote to Marxist thought is not Austrian School thought, but Georgist thought.

     http://www.politicaleconomy.org/gaffney.htm
     http://www.wealthandwant.com/docs/Andelson_HGRC.html
     http://www.archive.org/stream/democracyversuss00hirsrich#page/n7/mode/2up

Debate continues to rage between the inflationists who say the money supply is increasing, dangerously devaluing the currency, and the deflationists who say we need more money in the economy to stimulate productivity. The debate is not just an academic one, since the Fed’s monetary policy turns on it and so does Congressional budget policy.

Inflation fears have been fueled ever since 2009, when the Fed began its policy of “quantitative easing” (effectively “money printing”). The inflationists point to commodity prices that have shot up. The deflationists, in turn, point to the housing market, which has collapsed and taken prices down with it. Prices of consumer products other than food and fuel are also down. Wages have remained stagnant, so higher food and gas prices mean people have less money to spend on consumer goods. The bubble in commodities, say the deflationists, has been triggered by the fear of inflation. Commodities are considered a safe haven, attracting a flood of “hot money” -- investment money racing from one hot investment to another.

To resolve this debate, we need the actual money supply figures. Unfortunately, the Fed quit reporting M3, the largest measure of the money supply, in 2006.

Fortunately, figures are still available for the individual components of M3. Here is a graph that is worth a thousand words. It comes from ShadowStats.com (Shadow Government Statistics or SGS) and is reconstructed from the available data on those components. The red line is the M3 money supply reported by the Fed until 2006. The blue line is M3 after 2006.


The chart shows that the overall U.S. money supply is shrinking, despite the Fed’s determination to inflate it with quantitative easing. Like Japan, which has been doing quantitative easing (QE) for a decade, the U.S. is still fighting deflation.

Here is another telling chart – the M1 Money Multiplier from the Federal Reserve Bank of St. Louis:


Barry Ritholtz comments, “All that heavy breathing about the flood of liquidity that was going to pour into the system. Hyper-inflation! Except not so much, apparently.” He quotes David Rosenberg: “Fully 100% of both QEs by the Fed merely was new money printing that ended up sitting idly on commercial bank balance sheets. Money velocity and money multiplier are stagnant at best.” If QE1 and QE2 are sitting in bank reserve accounts, they’re not driving up the price of gold, silver, oil and food; and they’re not being multiplied into loans, which are still contracting.

The part of M3 that collapsed in 2008 was the “shadow banking system,” including money market funds and repos. This is the non-bank system in which large institutional investors that have substantially more to deposit than $250,000 (the FDIC insurance limit) park their money overnight. Economist Gary Gorton explains [.pdf]:

The financial crisis . . . was due to a banking panic in which institutional investors and firms refused to renew sale and repurchase agreements (repo) – short-term, collateralized, agreements that the Fed rightly used to count as money. Collateral for repo was, to a large extent, securitized bonds. Firms were forced to sell assets as a result of the banking panic, reducing bond prices and creating losses. There is nothing mysterious or irrational about the panic. There were genuine fears about the locations of subprime risk concentrations among counterparties. This banking system (the “shadow” or “parallel” banking system)-- repo based on securitization -- is a genuine banking system, as large as the traditional, regulated banking system. It is of critical importance to the economy because it is the funding basis for the traditional banking system. Without it, traditional banks will not lend, and credit, which is essential for job creation, will not be created.

Before the banking crisis, the shadow banking system composed about half the money supply; and it still hasn’t been restored. Without the shadow banking system to fund bank loans, banks will not lend; and without credit, there is insufficient money to fund businesses, buy products, or pay salaries or taxes. Neither raising taxes nor slashing services will fix the problem. It needs to be addressed at its source, which means getting more credit (or debt) flowing in the local economy.

When private debt falls off, public debt must increase to fill the void. Public debt is not the same as household debt, which debtors must pay off or face bankruptcy. The U.S. federal debt has not been paid off since 1835. Indeed, it has grown continuously since then, and the economy has grown and flourished along with it.

As explained in an earlier article, the public debt is the people’s money. The government pays for goods and services by writing a check on the national bank account. Whether this payment is called a “bond” or a “dollar,” it is simply a debit against the credit of the nation. As Thomas Edison said in the 1920s:

If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way. . . . It is absurd to say our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people.

That is true, but Congress no longer seems to have the option of issuing dollars, a privilege it has delegated to the Federal Reserve. Congress can, however, issue debt, which as Edison says amounts to the same thing. A bond can be cashed in quickly at face value. A bond is money, just as a dollar is.

An accumulating public debt owed to the IMF or to foreign banks is to be avoided, but compounding interest charges can be eliminated by financing state and federal deficits through state- and federally-owned banks. Since the government would own the bank, the debt would effectively be interest-free. More important, it would be free of the demands of private creditors, including austerity measures and privatization of public assets.

[Continued...]

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

Twenty Frequently Asked Questions on The American Monetary Act (AMA)

(August 8, 2009)

For more background, see The Lost Science of Money (LSM) by Stephen Zarlenga, available at our website.

1) Won't the government creating new money for infrastructure and other expenses cause inflation?

No. While this is an important concern, some of it is anti-governmental propaganda and it need not cause inflation, depending on where the new money goes, for example:

When new money is used to create real wealth, such as goods and services and the $2.2 trillion worth of public infrastructure building and repair the engineers tell us is needed over the next 5 years, there need not be inflation because real things of real value are being created at the same time as the money, and the existence of those real values for living, keeps prices down.

If it goes into warfare or bubbles (real estate/Wall Street/etc.) it would create inflationary bubbles with no real production of goods and services. That is the history of private control over money creation. It must end now. Government tends to direct resources more into areas of concern for the whole nation, such as infrastructure, health care, education, etc. The AMA Title 5 specifies infrastructure items including human infrastructure of health care and education to focus on.

Also remember, the American Monetary Act eliminates ‘fractional reserve banking’ which has been one of the main causes of inflation. And remember new money must be introduced into circulation as the population and economy grow or is improved, or we’d have deflation.

2) How can we trust government with the power to create money? – Won’t they go wild (and again cause inflation)? Don’t you know that government can’t do anything right?

Two Points:

A. The U.S. Constitution binds government to represent the interests of the American people – “to promote the General Welfare” and empowers our Federal Government to create, issue and regulate our money (Article I, Section 8, Clause 5). We must hold our officeholders responsible to the laws. Do you want us to deny the Constitution? In favor of who? Enron? Bear Stearns? J.P. Morgan? Goldman Sachs? Lehman Brothers? Please get real! Our choice is to let those pirates continue to control our money system or to intelligently constitute the MONEY POWER within our government.

Under the American Monetary Act, the Congress, the President and the Board of the Monetary Authority will all be responsible if any inflation or deflation takes place, and the people will know that they are responsible. They are specifically directed to avoid policies that are either inflationary or deflationary.

Do you really trust the “ENRONS” to dominate our money? Look how they have abused that power! And Yes Damn it! Enron was on the Board of the Dallas Federal Reserve Bank!

B. Finally and most importantly, an examination of history, despite the current prejudice and massive propaganda waged against government, shows that government control of money has a far superior historical record to private control over money systems. See the AMA brochure, and the LSM, Chapter 16. History shows that government has a far superior record in controlling the money system than private money creators have. And Yes, that includes the Continental Currency, The Greenbacks, and even the German hyperinflation; which by the way took place under a completely privatized German central bank! The German hyperinflation is really an example of a private money disaster.

The Lost Science of Money book, chapter 12, uncovers the beginnings of the attack on government and found it started with Adam Smith himself in an attempt to block moves to take back the monetary power from the then private Bank of England, and put it back into government, which had done a good job in monarchical management of the money system, with only one exception under Henry VIII.

3) Why should we give the government even more power?

Because our money system belongs to society as a whole. It is too important to trust to unrepresentative and unaccountable private hands, preoccupied with private gain, with little regard for the detrimental consequences of their actions on the country, and outside our system of checks and balances. Just look what they have done!

4) How can we prevent government from abusing its power once it can create money directly?

The same way we prevent it from abusing any power, by upholding the rule of law and by participating in democratic political processes; and through reasonable structural limits.

5) Should we let private banks keep some part of the money creation privilege?

Absolutely not! History shows that the private interests, if given any privileged power over money, eventually undermine the public interest, and take over the whole thing. We know this from historical case studies in at least 4 major historical situations – the U.S. “Greenbacks”, The nationalization of the Bank of England, and the Canadian and New Zealand monetary experience. Anyone who proposes allowing the banks to keep any part of the power to create money are either ignorant of monetary history or are shilling for the banks.

Under the American Monetary Act we do have the best of both worlds. We keep the benefits of having the professionalism and expertise of a competitive banking system in the private sector, but we take away the dangers of having them dominate our monetary and public policies with their narrow short term profit focus, by removing their privilege to create money. Ultimately this is a question of morality. No such special privileges can be allowed to particular groups; especially the monetary privilege, which confers power and wealth on them at the expense of the rest of society.

6) Well then, should we nationalize all the banking business?

What kind of “Kool Aid” are you drinking and who gave it to you? The banking business is obviously not a proper function of government; but providing, controlling and overseeing the monetary system is definitely a function of government. No private party can do that properly. Markets have utterly failed to do that. They have concentrated wealth, have harmed the average American and now broken down entirely, except for assistance from our government. Who would keep money in banks today, except for the FDIC guarantees?

But banks should remain privately owned, because when reasonably structured, they perform very necessary functions, and can do it professionally and conveniently. Who within government would run the banking business? Bankers however, have nothing in their training, experience or their souls that qualifies them as masters of the universe – to control our society as the money power confers upon them.

Banks should act as intermediaries for their clients who want to get a return on a deposit or similar investment; and their clients who are willing to pay for the use of that money. But banks must not create the money. The money system belongs to the Nation and our Federal Government must be the only entity with the power to issue and regulate our money as the U.S. Constitution already mandates. We nationalize the monetary system, but don’t nationalize the individual banks. That would be a dangerous step towards fascism. Private enterprise is a powerful mechanism that can produce excellent results when properly structured and regulated. That is an important American “theme!” The AMA does not throw out the baby with the bathwater! But it most certainly gets rid of the bathwater, which is private money creation. That acts like a private tax on the rest of us!

We regard such nationalization proposals (nationalize all banking) either as an inability to understand the difference between nationalizing the money system and nationalizing the private banking business, OR as possibly attempts to actually block proper monetary reform, because you’d have to change the essence of America in order to do it. So it distracts from real reform. The AMA reform that we advocate actually puts into place the system that most people think we have now! People think our money is provided by government. They erroneously believe that the Federal Reserve is already a part of our government. They think the banks are lending money which has been deposited with them, not that they are creating that money when they make loans. Under the AMA many of those things people already believe about money and banking actually become true! It’s a natural fit with already existing attitudes.

7) Doesn’t your AMA proposal merely continue with a fiat money system? Shouldn’t we be using gold and silver instead? Wouldn’t that provide a more stable money?

Our system is absolutely a fiat money system. But that’s a good thing, not a bad one. In reaction to the many problems caused by our privatized fiat money system over the decades, many Americans have blamed fiat money for our troubles, and they support using valuable commodities for money.

But Folks! The problem is not fiat money, because all advanced money is a fiat of the Law! The problem is privately issued fiat money. Then that is like a private tax on all of us imposed by those with the privilege to privately issue fiat money. Private fiat money must now stop forever!

Aristotle gave us the science of money in the 4th century B.C. which he summarized as: “Money exists not by nature but by law!” So Aristotle accurately defines money as a legal fiat.

As for gold, most systems pretending to be gold systems have been frauds which never had the gold to back up their promises. And remember if you are still in a stage of trading things (such as gold) for other things, you are still operating in some form of barter system, not a real money system, and therefore not having the potential advantages as are available through the American Monetary Act!

And finally as regards gold and silver: Please do not confuse a good investment with a good money system. From time to time gold and silver are good investments. However you want very different results from an investment than you want from a money. Obviously you want an investment to go up and keep going up. But you want money to remain fairly stable. Rising money would mean that you’d end up paying your debts in much more valuable money. For example the mortgage on your house would keep rising if the value of money kept rising.

Also, contrary to prevailing prejudice, gold and silver have both been very volatile and not stable at all. Just check out the long term gold chart.

8} How can a bank lend money if they have to keep 100% reserves?

The 100% reserve provision applies only to checking accounts. This question results from economists classifying our AMA as a “100% reserve” plan, as the Chicago Plan was known. But our plan fundamentally reforms the private credit system, replacing it with a government money system. The accounting rules are changed.

Banks will be encouraged to continue their loan activities by lending money that has been deposited with them in savings and time deposit accounts; or lending their capital that has been invested with them. It is in the checking account departments that the banks presently create money when they make loans in a fractional reserve system. This will be stopped by new bank accounting rules. Making loans from savings account is a different matter, because real money, not credit will have been transfered into such accounts, and loaning that out does not create new money or give the bank any seigniorage, that belongs to our society. Some money loaned out of a savings type account might later get redeposited into another savings account and again be reloaned, but its the same money, not any newly created money, and will reflect that way on the bank's books. This is sufficient to solve the problem of banks creating "purchasing media" by loaning their credit which then functions as money in the present system. (for details see the wording on pages 8, 9, and 14 of the American Monetary Act at http://www.monetary.org/amacolorpamphlet.pdf)

Various types of accounts will have differing requirements: e.g. matching time deposits to loan durations, lessening the “borrowing short term and lending long term” problem. Money market and mutual fund type accounts can be very flexible. The principle applied will be to encourage good intermediation of money between clients who want a return on their money and those willing to pay for using it; but will prohibit money creation. Checking accounts will become a warehousing service, for which fees are charged. Good accountancy can achieve these results. (Please see # 9 below for more info on the many sources of money for these accounts.)

9) If banks are no longer allowed to create money, where will banks get enough money to fill client’s needs for money under the American Monetary Act?

We devote substantial space to this question because economists so used to confusing credit and money have to get used to the idea of money instead of credit. Usually they want to know how the AMA creates money within the present bank accounting framework. Well it does not! The AMA will change the accounting rules to deal with money not credit.

There will be several substantial sources of money for banks to satisfy their clients money needs:

a) Title III of the AMA converts through an accounting procedure, the existing credit the banks have circulated through loans (about $6 to 7 trillion, roughly the existing “money” supply) into US money, no longer bank credit. That process will indebt the banks to the government for the amount converted over and above their capital. At present when bank loans are repaid to the banks by their customers, those credits/debts go out of circulation/out of existence and the credit money supply contracts as loans are repaid, until they make new loans. But under the American Monetary Act, since it’s now money, those monies will not go out of circulation the way the credits did. They are repaid to the government in satisfaction of the debt the banks incurred in converting them from credit to money. That goes into a pool which can be used by Congress for the items in Title V of the AMA (as described on pages 8 and 9), or it can even be re-lent to the banks at an adjusted interest rate. Note: this action de-leverages the banks, but does not reduce the money supply.

b) Probably the most important source of funds for bank lending will be the continuing government expenditures, over and above tax receipts, such as social security and other payments by government on the items in Title V of the American Monetary Act. Also the engineers tell us that $2.2 trillion is now necessary to make our infrastructure safe over the next 5 years. That’s $440 billion new money per year. Also the health care and education provisions, and grants to states in Title V can be introduced as new money. ALL these will eventually be deposited into various types of bank accounts where provisions of the Act will allow this money to be lent or invested. The banks will be lending and placing this money that has been deposited with them; not lending credit they create, masquerading as money. They will have to compete to attract such deposits from citizens and companies.

c) Title II of the AMA specifies the repayment of US instruments of indebtedness (bonds/notes/etc). Instead of being rolled over as at present, new US monies will be paid to the bondholders as they become due. Those people/institutions will be looking for places to invest that money. One place would be in bank stock, which is a source of lending funds for banks. Of the $5 to 7 trillion in US bonds and notes privately held, about 3.5 trillion is due within 1 to 5 years; .72 trillion is due in 5 to 10 years; .35 trillion is due in 10 to 20 years. All these amounts will represent newly created US money and will eventually find their way to becoming new lend-able or investable bank deposits and even investments in banks.

d) Finally the AMA does not allow the banks to decide their own leverage situations. The Act essentially eliminates most leverage from the banking system in a healthy, non deflationary way. That will be good. They will no longer be able to pretend they were “banking” when they made bad loans overextending their positions and creating bubbles, in order to grab huge bonuses on imaginary profits. In other words banks will no longer be able to make loans in a bubble creation process. That will be a big improvement!

10) How will the U.S. Treasury create the money?"

The same way the Federal Reserve does now, as simple account entries, but as income, without the accompanying debt obligations. It’s described in the AMA, Sec. 103 NEGATIVE FUND BALANCES: The Secretary of the Treasury shall directly issue United States Money to account for any differences between Government appropriations authorized by Congress under law and available Government receipts.

11) Is there any chance the AMA could eliminate the federal income tax?

It “could,” and though that’s not likely in the near future, it is the direction the AMA goes in. Thanks to the immense savings our government will experience through control over its money system, taxation should decline substantially for middle and lower income groups. It should be raised for the super rich.

In addition the AMA should directly lead to substantial reductions in interest rates, because as the US pays off its national debt in money rather than rolling it over, those receiving those payments will be looking for places to loan and invest those funds. Interest rates should drop substantially.

12) Why does the American Monetary Act have an 8% maximum interest rate, including all fees?

Because before 1980/1981, forty nine States had “anti-usury” laws which limited normal interest rates to a maximum of between 6% and 10% p.a. (one state had 12%). The American Monetary Act takes the middle of this range to represent a restoration of the interest rate limits prevailing across the country prior to 1980/1981. See page 9 of the AMA.

13) Won’t you be breaking the sanctity of contracts when you convert the existing bank credit already in circulation, into U.S. Money?
 
No. First of all a contract requires understanding of the terms by all parties to it, and that certainly did not exist. But more likely it will be viewed as very acceptable by the banks, considering the security it confers on banking, especially when the alternative is going broke. There would be no reason to extend the legal tender privilege (acceptance for taxes) to the credits of any disagreeing banks.

14) How would the ACT affect our position with China?

The ACT would have a number of positive effects on Chinese - American Trade. Particularly it would encourage the Chinese to use more of their dollar earnings to really trade with us rather than just sell to us, and then invest their earnings in US bonds as at present. More details forthcoming!

15) What about other countries, and international systems such as the IMF (International Monetary Fund) and the BIS (Bank for International Settlements)?
 
We’d expect other countries to follow quickly in our footsteps to each obtain the advantages of issuing their own national monies. The United Nations is already putting forward suggestions that member states shift now to nationally created, debt free; interest free moneys. They are way ahead of the US Congress just now. A much reformed IMF, already organized under United Nations Article 57; #3, will see a greatly expanded role for the SDR and more responsibility for international accounts clearing as well as real assistance to member states, rather than acting as a destructive collection agent for the big banks. The role and importance of the BIS should be rapidly reduced, and perhaps eliminated. Just look at the mess created under their guidance and rules. Some job they did!

16) The latest craze “question” making the rounds in the organized disinformation campaign that is attacking our national psychology, is not a question at all, but a vicious assertion:

“Government is so corrupt and so much in the hands of the worst people and they won’t ever let you do this reform! Or any good thing”

This popped up simultaneously from LA to Seattle. I’ve told friends to put that stupidity out of their minds. This assertion, designed to discourage, is a variant of the Sun Tzu method of winning the battle by convincing the opposition not to fight because they can’t win. It reminds me of the cyborg "Borg Wars" line “Resistance is futile” from the Star Trek New Generation series. Don’t fall for it!

As our people suffer more deeply from the unfortunate monetary/banking system, any remaining bad elements in government can and must be cleansed. That’s what we’ll do instead of whining about it. Become a part of the solution not a cry-baby! Get up and fight for your family and nation!

“Put a stone in your stomach!” is an old phrase of Zulu warriors when summoning courage. Earlier tonight I saw an electric message on a local banks billboard:

“If you think you can, you can. If you think you can’t, you can’t!”

Yeah! We never said all bankers are evil, but there’s a very bad controlling element among them.

17) Why didn’t nationalized money systems work in the former Soviet countries?

Because their monetary systems were still controlled from within their banking systems, using the same faulty methods. The 1966 Federal Reserve publication Money, Banking, and Credit in Eastern Europe states:

“In the communist countries, money is created in the same way as in capitalist countries – through the extension of bank credit. This fact is not generally recognized or accepted in the various countries of Eastern Europe. The result is that a good deal of confusion emerges from their economic literature with regard to the nature of money and the role of the monetary process and the function of the banking system.… Since Marx identified money with gold, the official theory holds paper money to be merely a substitute for gold and ignores deposit money.” (p. 42-43)

Sound familiar? Their politicians and economists were as dumb as ours!

18) Won’t we get hyper-inflation like Zimbabwe?

No. For governments or anyone to issue money, there has to be a functioning society with enough rule of law and physical and social infrastructure to support the creation of values for living. Zimbabwe unfortunately does not have those pre-requisites; thus their society is falling apart.

19) Should we have the individual 50 states own banks? Like North Dakota?

More Kool-Aid and distractions…Look folks the objective is to get the banks out of the Money creation field, not to get the government into banking!! A highly distracting idea that does not in any way accomplish any necessary reform! Instead it gives our fraudulent banking system a moral free pass! It is mind boggling that progressive people fall for this. (see the home page for an in depth article by Jamie Walton on this)

20) How about local currencies?

Local currency movements can help people to understand the money problem but it would be an illusion to think that local currencies would stop a mismanaged, unjust national system from unfairly concentrating wealth; from being a motivating factor for warfare; from financing harmful polluting activities even when saner alternatives exist. Understand also that a national currency properly placed under governmental control gives much greater local control than the present national currency under private control, because locally, our voting power can exert influence on national policy.

And remember the principle of subsidiarity put forward by E.F. Schumacher. His slogan was not “small is beautiful.” What E.F. Shumacher actually said is what the AMI is saying: Use an “Appropriate scale”- do things on an appropriate scale. That dominant scale in the currency area is national and will continue to be for the foreseeable future. The appropriateness of acting on the national level must be recognized.

http://www.huffingtonpost.com/stephen-zarlenga/reducing-us-debt-and-crea_b_857230.html

Reducing U.S. Debt and Creating Jobs Through Public Control of Our Money System

by Stephen Zarlenga
TheHuffingtonPost.com
May 3, 2011

Coauthored by Greg Coleridge

For all the boisterous talk and debate by Congressional leaders of both parties and the President about the many ways to reduce our nation's deficit and debt while maintaining vital services and programs, there continues to be a roaring silence about a solution that has nothing to do with the budget. It has to do, rather, with our nation's monetary system.

Be it for ignorance or by intention, few federal elected officials have examined how a change in the way money in our nation is created and issued could reduce our nation's deficit and debt and, in doing so, increase millions of vital jobs to transform our economy.

One of the few exceptions is Rep. Dennis Kucinich (D-OH), who during the last Congressional session introduced H.R. 6550, The National Emergency Employment Defense Act. A revised version is expected to be soon reintroduced. Americans would be wise to rally behind it.

The basis of the bill are three essential monetary measures proposed by the American Monetary Institute in their American Monetary Act (AMA). The AMA's recommendations are based on decades of research and centuries of experience; are designed to end the current fiscal crisis in a just and sustainable way, and are aimed to place the U.S. money system under our constitutional system of checks and balances.

The three essential measures include:

[Continued...]

http://www.humanevents.com/article.php?id=43439

Forbes Predicts U.S. Gold Standard Within 5 Years

by Paul Dykewicz
Human Events
05/11/2011

A return to the gold standard by the United States within the next five years now seems likely, because that move would help the nation solve a variety of economic, fiscal, and monetary ills, Steve Forbes predicted during an exclusive interview this week with HUMAN EVENTS.

“What seems astonishing today could become conventional wisdom in a short period of time,” Forbes said.

Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending, the media mogul and former presidential candidate said.  The United States used gold as the basis for valuing the U.S. dollar successfully for roughly 180 years before President Richard Nixon embarked upon an experiment to end the practice in the 1970s that has contributed to a number of woes that the country is suffering from now, Forbes added.

If the gold standard had been in place in recent years, the value of the U.S. dollar would not have weakened as it has and excessive federal spending would have been curbed, Forbes told HUMAN EVENTS.  The constantly changing value of the U.S. dollar leads to marketplace uncertainty and consequently spurs speculation in commodity investing as a hedge against inflation.

The only probable 2012 U.S. presidential candidate who has championed a return to the gold standard so far is Rep. Ron Paul (R.-Tex.).  But the idea “makes too much sense” not to gain popularity as the U.S. economy struggles to create jobs, recover from a housing bubble induced by the Federal Reserve’s easy-money policies, stop rising gasoline prices, and restore fiscal responsibility to U.S. government’s budget, Forbes insisted.

[Continued...]

http://www.youtube.com/watch?v=Bi2gOhvpOHg
http://www.youtube.com/watch?v=Pyaj30n8kZY

Note: The following excerpts from The Money Masters can be viewed in the two youtube clips above.

------------------------------

A truly incredible editorial in the London Times explained the central bankers' attitude towards Lincoln's Greenbacks:

"If this mischievous financial policy, which has its origin in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe." -- Times of London

[...]

Allegations that international bankers were responsible for Lincoln's assassination surfaced in Canada 70 years later in 1934. Gerald G. McGeer, a popular and well-respected Canadian attorney, revealed this stunning charge in a five hour speech before the Canadian House of Commons blasting Canada's debt-based money system. Remember: it was 1934, the height of the Great Depression, which was ravaging Canada as well. McGeer had obtained evidence -- deleted from the public record -- provided to him by Secret Service agents at the trial of John Wilks Booth, after Booth's death. McGeer said it showed that Booth was a mercenary working for the international bankers. According to an article in the Vancouver Sun of May 2, 1934:

"Abraham Lincoln, the martyred Emancipator of the Slaves, was assassinated through the machinations of a group representative of the international bankers who feared the United States President's national credit ambitions....

"'There was only one group in the world at that time who...had any reason to desire the death of Lincoln.

"'They were the men opposed to his national currency program, and who had fought him throughout the whole of the Civil War on his policy of greenback currency.'"

Interestingly, McGeer claimed that Lincoln was assassinated not only because international bankers wanted to reestablish a central bank in America, but because they also wanted to base America's currency on gold -- gold they controlled. In other words: put America on a gold standard. Lincoln had done just the opposite by issuing U.S. notes -- Greenbacks -- which were based purely on the good faith and credit of the United States. The article quoted McGeer as saying:

"'They were the men interested in the establishment of the Gold Standard...and the right of the bankers to manage the currency and credit of every nation in the world.

"'With Lincoln out of the way they were able to proceed with that plan, and did proceed with it in the United States. Within eight years after Lincoln's assassination silver was demonetized and the Gold Standard money system set up in the United States.'"

Not since Lincoln has the U.S. issued debt-free United States notes.

[...]

With Lincoln out of the way, the money changers' next objective was to gain complete control over America's money. This was no easy task. With the opening of the American west, silver had been discovered in huge quantities. On top of that, Lincoln's Greenbacks were generally popular. Despite the European central bankers' deliberate attacks on Greenbacks, they continued to circulate in the United States -- in fact until a few years ago. According to historian W. Cleon Skousen:

"Right after the Civil War there was considerable talk about reviving Lincoln's brief experiment with the Constitutional monetary system. Had not the European money-trust intervened, it would have no doubt become an established institution." -- W. Cleon Skousen

It is clear that the concept of America printing her own debt-free money sent shock waves throughout the European central banking elite. They watched with horror as Americans clamored for more Greenbacks. They may have killed Lincoln, but support for his monetary ideas grew.

On April 12, 1866, nearly one year to the day of Lincoln's assassination, Congress went to work at the bidding of the European central banking interests. It passed the Contraction Act, authorizing the Secretary of the Treasury to begin to retire some of the Greenbacks in circulation, and thereby contract the money supply. Authors Theodore R. Thoren and Richard F. Warner explained the results of the money contraction in their classic book on the subject, The Truth In Money Book:

"The hard times which occurred after the Civil War could have been avoided if the Greenback legislation had continued as President Lincoln had intended. Instead, there were a series of money panics -- what we call 'recessions' -- which put pressure on Congress to enact legislation to place the banking system under centralized control. Eventually, the Federal Reserve Act was passed on December 23, 1913."

In other words, the money changers wanted two things: (1) the reinstitution of a central bank under their exclusive control, and (2) an American currency backed by gold. Their strategy was two-fold.

First of all, cause a series of panics to try to convince the American people that only centralized control of the money supply could provide economic stability.

And secondly, remove so much money from the system, that most Americans would be so desperately poor that they either wouldn't care or would be too weak to oppose the bankers.

In 1866, there was $1.8 billion in currency in circulation in the United States -- about $50.46 per capita. In 1867 alone, half a billion dollars...was removed from the U.S. money supply. Ten years later, in 1876, America's money supply was reduced to only $600 million. In other words, 2/3 of America's money had been called in by the bankers. Only $14.60 per capita remained in circulation. Ten years later [in 1886], the money supply had been reduced to only $400 million, even though the population had boomed. The result was that only $6.67 per capita remained in circulation -- a 760% loss in buying power over 20 years.

Today, economists try to sell the idea that recessions and depressions are a natural part of something they call the "business cycle." The truth is, our money supply is manipulated now just as it was before and after the Civil War.

How did this happen? How did money become so scarce? Simple. Bank loans were called in, and no new ones were given. In addition, silver coins were melted down. In 1872, a man named Ernest Seyd was given a hundred thousand pounds -- about $500 thousand -- by the Bank of England and sent to America to bribe necessary Congressmen to get silver demonetized. He was told that if that was not sufficient, to draw an additional hundred thousand pounds, or as much more as was necessary.

The next year Congress passed the Coinage Act of 1873, and the minting of silver dollars abruptly stopped. In fact, Representative Samuel Hooper, who introduced the bill in the House, acknowledged that Mr. Seyd actually drafted the legislation. But it gets even worse than that. In 1874, Seyd himself admitted who was behind the scheme:

"I went to America in the winter of 1872-73, authorized to secure, if I could, the passage of a bill demonetizing silver. It was in the interest of those I represented -- the governors of the Bank of England -- to have it done. By 1873, gold coins were the only form of coin money." -- Ernest Seyd

But the contest over control of America's money was not yet over. Only three years later, in 1876, with one-third of America's workforce unemployed, the population was growing restless. People were clamoring for a return to the Greenback money system of President Lincoln, or a return to silver money -- anything that would make money more plentiful. That year, Congress created the United States Silver Commission to study the problem. Their report clearly blamed the monetary contraction on the national bankers. The report is interesting, because it compares the deliberate money contraction by the national bankers after the Civil War to the fall of the Roman Empire:

"The disaster of the Dark Ages was caused by decreasing money and falling prices.... Without money, civilization could not have had a beginning, and with a diminishing supply, it must languish and unless relieved, finally perish.

"At the Christian era the metallic money of the Roman Empire amounted to $1,800,000,000. By the end of the Fifteenth century it had shrunk to less than $200,000,000.... History records no other such disastrous transition as that from the Roman Empire to the Dark Ages." -- United States Silver Commission

Despite this report by the Silver Commission, Congress took no action. The next year, 1877, riots broke out from Pittsburgh to Chicago. The torches of starving vandals lit up the sky. The bankers huddled to decide what to do. They decided to hang on. Now that they were back in control (to a certain extent), they were not about to give it up.

At the meeting of the American Bankers Association that year, they urged their membership to do everything in their power to put down the notion of a return to Greenbacks. The ABA secretary, James Buel, authored a letter to the members which blatantly called on the banks to subvert not only Congress but the press:

"It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially the Agricultural and Religious Press, as will oppose the Greenback issue of paper money and that you will also withhold patronage from all applicants who are not willing to oppose the government issue of money.

"....To repeal the Act creating bank notes, or to restore to circulation the government issue of money will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders.

"See your Congressman at once and engage him to support our interests that we may control legislation." -- James Buel, American Bankers Association

------------------------------

Keep the above in mind as you read the following goldbug propaganda piece:

------------------------------

http://www.thegoldstandardnow.org/key-blogs/235-not-dollar-depreciation-gold-standard

Not Dollar Depreciation but the Gold Standard

by Christopher K. Potter
May 03, 2011

Recently a New York Times article screamed “Prices Surge as Investors Rush to Safety of Gold.”  In reality there was no rush and the gold price did not surge.  Gold was up less than 0.5% on the day in question and is up only 6% in 2011, less than the increase in the S&P 500.  For 10 years, the gold price has edged quietly higher, rarely moving more than 1% up or down on any given day.  Along the way, the media argued that each new high was driven by panicked investors who were fleeing from equities.  I would argue just the opposite.  Individuals and institutions, reacting rationally to expansionary monetary policy, are merely exchanging cash balances for gold. This has little to do with geopolitical turmoil or perceived troubles in the economy and stock market.  It is a currency trade, pure and simple.

The basic mechanics of monetary policy and money creation remain a mystery to most people.  Few are aware that most new treasury debt is purchased by the Federal Reserve with brand new dollars; that China buys large quantities of dollars every day with newly minted Yuan or that Japan created 39 trillion ($481 billion) new Yen in the two weeks following the earthquake.  As James Grant points out in his March 25th Interest Rate Observer, “when the materialization of nearly a half-trillion dollars in a fortnight’s time stops astounding reporters, it’s past time for a monetary reappraisal.”  Perhaps reporters are more unaware than unimpressed.  With everyone printing at once, the value of one currency relative to another (the exchange rate) never reflects the magnitude of the new supply of money.  All currencies decline together while appearing to not decline at all.  While this provides ample cover for our central bankers to perpetuate the print-off, it results in inflation, progressively severe boom and bust cycles, perpetual deficits and an increasing inequality of wealth.

Under a gold standard, in which paper money is convertible into a fixed weight of gold, the threat of dollar to gold conversion compels monetary restraint on all central banks.  In our present unreserved monetary system, that threat has become reality and the qualities that define our money as sound have been transferred, at the margin, from paper to gold.  We have seen the creation of gold denominated shares by hedge fund manager John Paulson and others; the passage of a bill in the Utah legislature allowing gold and silver coins to be used as legal tender; and the conversion of cash balances into gold bullion by major investment and endowment funds.  Even the manufacturers of our money have been exchanging paper for gold - witness the buying of bullion by the central banks of India, Bangladesh, Sri Lanka, China and Thailand over the last year.

Economic stimulation through currency depreciation is the unwritten, unspoken policy of today’s monetary leaders.  While our Federal Reserve receives a disproportionate amount of the blame for this dangerous game, all central banks are active participants.  In response, gold is predictably performing its role as the only supply constrained currency – its price is adjusting upward.  Despite the headlines, it has done so in an orderly, methodical way for over a decade.  Other commodity prices have risen as well, but only the gold price has risen with a consistently tight correlation to the growth in world money.  This has won converts to the idea that gold must be the centerpiece of monetary reform.   It has also shortened the road forward to a modernized gold standard.

------------------------------

There are undoubtedly many who believe that the preemptive solution to the deflationary nightmare referred to above is to institute a gold and silver backing of the dollar.

Is this belief based on an actual study of the matter, or is it the mere product of wishful thinking? Let's find out.

According to the Silver Institute, the total supply of silver is 1,056.8 million ounces, or 507.263 billion grains.

If we add that to the total supply of gold -- 2,546.336 billion grains at present -- we have a combined gold-silver supply of 3,053.599 billion grains (or just over 3 trillion grains).

Now, even though it took a lot more silver (371.25 grains) to make a dollar under the 1792 Coinage Act than it did gold (24.75 grains), let's assume that the newly-instituted gold/silver standard makes each paper dollar "redeemable" in either one grain of gold or one grain of silver.

Note: To understand how small a "grain" is, in the following pic the small golden disk close to the 5cm marker is a piece of pure gold weighing one troy grain:



With that sort of "backing" under a 100% reserve system, the maximum M2 money supply is $3.053599 trillion, which (surprise!) is a mere 34.26 percent of the current M2 money supply ($8.9137 trillion), and hence a minimum decrease of 65.74 percent -- more than twice the money supply contraction that caused the Great Depression. And that's assuming we have the total supply of gold and silver (we don't) and that we don't have a trade deficit that would drain however much gold and silver we actually do have out of the country within a few years (we do).

Do all of you precious metal-obsessed right-wingers finally get it now?

The very thing that makes gold and silver a great private investment is what makes them a disastrous thing on which to base an entire nation's money supply.

"Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." -- William Jennings Bryan

"Ron Paul has been the leading champion of sound money in the Congress. Here he explains why sound money means a new gold standard." -- http://mises.org/resources/3150

In 1929 the M2 money supply was approximately $46.6 billion; four years later it was roughly $32.2 billion. This 31% decrease was all it took to bring on a depression so severe and so devastating that it was called the "Great Depression."

Thus, when Austrian Schoolers insist on instituting a new gold standard under the euphemistic guise of "sound money," we would be well advised to consider what effect this would have on the M2 money supply, and hence on the economy -- and hence on our very lives.

Let's assume that a 100% reserve gold-based money system is instituted (since that's what Austrian School icon Murray Rothbard advocated); and -- since gold standard apologists are fond of waxing nostalgic about pre-1913 America (particularly the Gilded Age) -- let's also assume that, in accordance with the Gold Standard Act of 1900, each paper dollar is made "redeemable" in 23.22 grains of gold.

To determine what effect this will have on the M2 money supply -- which is $8.9137 trillion at present -- let's further assume that the U.S. has all the gold that's ever been mined (even though it doesn't) -- 165,000 metric tonnes, or 2.546336 trillion grains, according to the World Gold Council. If we divide that figure by 23.22 grains, we have a maximum M2 money supply of $109.66 billion.

That's a minimum 98.8% decrease!

This would make the 1/3 money supply contraction that occurred between 1929-1933 -- and the magnitude of the resultant depression -- both look miniscule by comparison. The effect of such a severe contraction would be beyond devastating -- it would be GENOCIDAL!

Realizing this, what if we instead made each paper dollar redeemable in merely two grains of gold? The result would be a maximum money supply of $1.273168 trillion, and hence a M2 money supply contraction of at least 85.7%, which, although not quite as bad as the previous figure (98.8%), is still far worse than the contraction that caused the Great Depression.

And if all this wasn't bad enough, there's also the issue of how the current trade deficit would (under the system in question) cause whatever gold we had to be quickly drained from our economy, thereby contracting the money supply even further.

As Byron Dale explains it here:

----------------------------

“Ok, so now we get that, which makes the total money supply for the United States roughly $1.6 trillion. Ok, if the United States has a trade deficit, like we do right now, of $40.4 billion per month (and it goes up and down a little), it would only take 3.29 years for the total money supply -- or all the gold -- to leave the country just to pay for the trade deficit. And they’re not bringing that money back -- or they’re not buying things from us -- or we wouldn’t have that trade deficit. They’re bringing this stuff over in big ships, and then the ships are going back empty. So the money flows over and doesn’t comes back, that’s why you have a trade deficit. Ok, so now, if we just went to that, with all the gold in the world, in a little over 3 1/4 years we wouldn’t have any gold in the country left -- and no money.

“Now what are we going to do?

“Now, if you borrow the gold back at interest, so you can have it back in your country, you’ve turned the whole thing into a debt money system again."

[Continued...]

----------------------------

This is why deflation-worshipping Austrian Schoolers never want to talk about specifics. They figure that, if they simply parrot the euphemism "sound money" over and over again, everyone will just blindly assume that it's a good idea, and consequently refrain from determining for themselves what the actual effect of such a system would be.

Conclusion? Although Ron Paul is by far the most honorable politician in Washington, and although he's right on many issues, he is (with all due respect) sadly wrong on the question of what we should replace our current debt-based money system with.

This is why the "end the Fed" mantra is so misleading. It causes people to falsely assume that, if we simply "end" the Federal Reserve System, a much better system will magically and automatically take its place. Yet as we now see, that's not necessarily the case. Not by a long shot.

The solution? Instead of merely "ending" the Fed, we must replace it with the debt-free money system called for on page one of this thread -- a system that avoids both currency-destroying, compound interest-driven hyperinflation AND economy-destroying deflation.

Anything short of this will prove to be, at best, the equivalent of rearranging deck chairs on the Titanic, and, at worst, the equivalent of burning down the house to roast the pig.

Must we find that out the hard way?

You've got it backwards: unpayable interest debt is one of the primary reasons why so many businsses fail in the first place.

So you're confusing cause and effect.


That doesn't change

(a) the fact that bankrupties have a deflationary impact on our debt-based money supply since they reduce in value the collateral-backing of that money supply;

(b) the fact that when the principal of a bank loan is repaid, the money initially created by that loan is not "still in the economy," but in fact vanishes back into the nothing out of which the bank created it; nor

(c) the fact that the money needed to pay the usurious interest on all these money supply-expanding "loans" is never created to begin with, which means there's always a built-in shortage of money.

You can try to explain it away all you want, the fact remains that it's a musical chairs system.


You've got it backwards again: unpayable interest debt is one of the primary causes of inflation, because it's only by raising prices that indebted business owners are able to "capture" -- through the process and production-and-exchange -- the necessary portion of other people's loan principal to pay the interest they owe.

As I explained earlier in this thread, what keeps cost-push inflation from spiraling out of control is

“There’s class warfare, all right, but it's my class, the rich class, that’s making war, and we’re winning.”


--------------------------------

http://globalresearch.ca/index.php?context=va&aid=24271

Fight Economic Oppression, Target the Top One Percent

by Joel S. Hirschhorn



Global Research
April 11, 2011

Massive economic inequality is killing America and we the people. It has already killed American democracy. The rich have captured the political system so they could manipulate the economy and benefit unfairly. Economic freedom and opportunity are gone. Greed among the top one percent has succeeded so well that a true uprising and revolt by Americans, like that seen in Egypt, may be needed to restore America.

US society is riddled through and through with constant lies and political propaganda to keep Americans stupid and distracted. The truth is here, hidden from easy view for most citizens by an epidemic of dishonesty and irresponsibility among elected officials, corporate leaders, cowardly, corporate controlled mass media, and especially right-wing pundits, many of whom are in the top one percent. The truth, of course, is often revealed, but only in venues that relatively few people with sufficient intelligence and critical thinking skills access. Two recent articles should be required reading in every classroom and home.

First, some key numbers tell the true story about the decline of America in recent decades as revealed by acclaimed economist Joseph E. Stiglitz in Vanity Fair. Upper one percent Americans are now taking in nearly a quarter of the nation’s annual income and own 40 percent of the nation’s wealth. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. The top one percent’s incomes rose 18 percent over the past decade as those in the middle have actually seen their incomes fall. As the recession still hurts most Americans, especially the unemployed, hungry and foreclosed, the top one percent, many of whom created the economic meltdown, keeps their tax cuts and riches.

“Most citizens are doing worse year after year,” correctly observes Stiglitz.

Also, in our delusional democracy run by a bipartisan corporate dictatorship: “Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent.” No surprise that those who poisoned the economy have not been prosecuted.

You cannot vote away this insanity by electing Republicans or Democrats, even those claiming Tea Party status, who mostly want to protect rich and corporate elites as evidenced by their disinterest in removing corporate subsidies and welfare, nor raising taxes on the rich. This behavior is brainless for non-wealthy Americans.

Stiglitz says: “The top 1 percent may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.” In truth, they own our government.

The second article in The Nation by Robert Scheer smartly noted: “The delusion of a classless America in which opportunity is equally distributed is the most effective deception perpetrated by the moneyed elite that controls all the key levers of power in what passes for our democracy.” Mostly ignored, “the corporate rich reward themselves in direct proportion to the amount of suffering they have caused.”

Scheer referenced this: During Clinton’s presidency the income of the top one percent increased by 10.1 percent per year, while that of the other 99 percent of Americans increased by only 2.4 percent a year. From 2002 to 2006, a period in which the top one percent increased its income 11 percent annually the rest of Americans had a truly paltry gain of 1 percent per year.

What kind of population would endure all this? Submissive, stupid and sidetracked Americans refusing to see the economic oppression strangling the nation.

To be in the top one percent you need an adjusted gross income of about $400,000, most not coming from salaries or wages. And those households with less than 5 million people total have a net worth of at least $8 million each. Do you make the cut? If not, then wake up to reality. You are a victim!

The top one percent people are the enemy. THEY have stolen your financial security and opportunity. THEY have sold us out to China and other nations. YOU have been sacrificed to satisfy their greed. You have a better chance of winning a huge lottery than becoming one of them.

Abusive inequality is no accident of history. It has occurred by design. Forget morality and fairness. The wealthiest of the wealthy have ingeniously engineered the political and economic systems to get exactly what they want and screw the rest of society. They do not fear outright revolution, peaceful or violent class war.

Pause for a moment. Think in terms of an invisible corporate dictatorship run in a bipartisan way by people who know how to use their money to retain a thoroughly corrupt political system. That is the tool used to protect themselves from the wrath of a few hundred million victims of their villainy. The economic oppression by the richest one percent is far greater than that of the British which spurred the American Revolution. We desperately need a second revolution against domestic tyranny.

In addition to the two excellent recent articles, you would benefit from examining the Who Rules America? website. If you appreciate data also peruse this excellent Mother Jones article, which points out most Americans perceive wealth distribution more fairly distributed than it really is, delusional thinking.

[Continued...]

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http://www.progress.org/2011/fold713.htm

The Failed Explanation

by Fred E. Foldvary, Senior Editor
The Progress Report
18 April 2011

Weekly “alternative” newspapers throughout the USA on 13 April 2011 published an article by David Cay Johnson on “The failed experiment” (SF Bay Guardian) or “Tax the Rich!” (East Bay Express) or “9 Things The Rich Don't Want You To Know About Taxes” (Willamette Week; To see the whole article, click here).

The author claims that “misplaced faith in tax cuts” and other “economic myths” are destroying the economy of the USA. He is correct that the economy of the USA, and other countries also, are being destroyed, but this not because of tax cuts. What has caused wreckage and will cause future economic catastrophes are huge subsidies to land value. But this economic reality is not obviously observable, and understanding it requires a knowledge of economic theory that very few journalists have.

The author claims that the US government has conducted an economic experiment in “supply-side economics.” He describes this policy as tax cuts that stimulate investment and growth, which then generates more tax revenue than before. But real supply-side economics only proposes that a reduction in the cost of production results in more production. Supply-side theory cannot claim whether tax revenues will increase or decrease, since that is an empirical result that has to be found from application.

There is indeed a revenue curve theorized by the Arab economist Abu Said ibn Khaldun (1332-1406), popularized by economist Arthur Laffer. The Khaldun or Laffer curve says that at very high tax rates, there will be less tax revenue than at lower rates, because if almost all income gets taxed away, there is less production. If tax rates are low, then higher tax rates do generate more tax revenue. But where the US economy is or has been on the Khaldun curve is an empirical matter; supply-side theory cannot provide any particular maximum-revenue tax rate.

Actually, tax revenues did rise substantially after tax cuts. There were tax cuts during the administrations of presidents Kennedy in the 1960s, Reagan in the 1980s, and GW Bush during the 2000s, and all resulted in more economic growth and lower unemployment. The problem was not the tax cuts, but that the economic growth got misdirected into speculative real estate booms. The misdirection was caused by massive subsidies to land values.

The author talks about the rich and the poor without differentiating or examining where the money comes from. He does say that “Big real-estate investors enjoy tax-free living” because they can deduct “paper losses like depreciation” against income. But the author does not mention the greatest subsidy of all, the generation of land rental from public works and civic services, paid for mostly from taxes on labor. Worker-tenants pay twice for public goods, once in higher rental, and again in taxes. Landowners get subsidized by getting higher land value, along with low tax rates on real estate, legal-fiction depreciation, tax-free property sales, and tax-deductible mortgages and property taxes.

The author complains about the rich who pay no taxes, but does not provide the most effective remedy: tap land value for public revenue. Advocating higher income taxes on the rich ignores the fact that many of the rich get the funds back via the government subsidy to their land value. The alleged purpose of the income tax was to get the rich to pay most of the taxes, and the rich do pay much of the income taxes, but there are other taxes such as on goods that the poor pay, and the rich will have the political clout to obtain tax deductions, credits, and exemptions.

The remedy is a constitutional provision that requires the collection of the economic rent of all land. Unlike income and financial capital, land does not hide, flee, or shrink when taxed. The real estate assessments would be a public record for all to see.

Supply-side economists are correct in saying that lower tax rates on labor and enterprise will generate more production, investment, and growth. They usually avoid taking the concept to its logical conclusion: have no taxes on labor and capital yields, but do tap the full economic rent of land. Taxing or tapping land value promotes the most productive use of land, since it is based on the rent paid when land is optimally used, regardless of current use or current tenant payments. But the author is evidently unaware of, or else ignores, land-value taxation.

The author states that the incomes of most Americans have stayed about the same, while the income of the very rich rose substantially. But there is no examination of the cause: much of the gains from economic growth is captured by higher rent. That is why the few who own much of the valuable real estate, such as commercial land, get rich, while most folks break even. When wages do go up, the increase is eaten up by higher payments for housing. Some middle-class homeowners thought they were benefitting from rising real estate prices, only to suffer great losses from the inevitable Crash of 2008.

The author finishes by advocating “a tax system that benefits the vast majority,” but does not say what that would be. Unfortunately, readers are left with the impression that the remedy is to hike up income tax rates. But if high tax rates are so good, Kennedy would not have advocated the tax reduction that created prosperity during the 1960s, until the country got infected by the Vietnam war, higher inflation, and a real estate boom that crashed in 1973.

An opportunity to provide real economic education was missed. “The failed experiment” was a failed explanation. Interestingly, the fact that the author, a writer for the web site tax.com, did not explicitly advocate higher income tax rates, indicates that perhaps he may be conflicted, perhaps knowing the truth, but not daring to exclaim it.

A few years ago Ellen Brown wrote the following:

-----------------------------

The story has been widely circulated that when Albert Einstein was asked what the most powerful force in the universe was, he replied, "compound interest." The story is probably apocryphal, but it underscores the force of the concept. Compound interest has allowed a private global banking cartel to control most of the resources of the world. The debt trap was set in 1974, when OPEC was induced to trade its oil only in U.S. dollars. The price of oil then suddenly quadrupled, and countries with insufficient dollars for their oil needs had to borrow them. In 1980, international interest rates shot up to 20 percent. At 20 percent interest compounded annually, $100 doubles in under 4 years; and in 20 years, it becomes a breathtaking $3,834. The impact on Third World debtors was devastating. President Obasanjo of Nigeria complained in 2000:

All that we had borrowed up to 1985 was around $5 billion, and we have paid about $16 billion; yet we are still being told that we owe about $28 billion. That $28 billion came about because of the injustice in the foreign creditors' interest rates. If you ask me what is the worst thing in the world, I will say it is compound interest.

Could the "viable economic alternative" that threatens the Western economic model be one that declares the collecting of interest to be illegal? That is the model Iran is now holding out to the world. In 1979, Iran was established as an "Islamic Republic," designed to enforce the principles of the Koran not just morally or religiously but as a matter of state government policy. Afghanistan, which is also in the cross-hairs of the U.S. war machine, and Pakistan, which the U.S. is trying hard to control, are also Islamic Republics. The economic principles of the Koran include Sharia banking, which forbids "usury." In the Koran, usury is defined as charging not just excess interest but any interest.

That is also how the term was defined under Old English law until Protestant scholars redefined it in the seventeenth century, opening the Christian world to a form of economic advantage formerly available only to Jewish money lenders. In Jewish scriptures, charging interest was forbidden between "brothers" but was allowed in dealings with "foreigners." (See, for example, Deuteronomy 23:19, "You must not make your brother pay interest," and 23:20, "You may make a foreigner pay interest, but your brother you must not make pay interest.") This point is raised here not to indict the Jewish people (who are not the "global bankers") but for its historical relevance in tracking the divergence of two religious systems. Charging interest on loans has been accepted banking practice throughout the Judao-Christian world for so long that we don't think there is anything wrong with it today, but that hasn't always been true. The history of interest is detailed in an article in The World Guide Encyclopedia, which is published in Uruguay and has a Third World/Islamic slant. It states:

The practice of usury – lending money and accumulating interest on the loan – can be traced back 4,000 years. But it has always been despised, condemned, restricted or banned by moral, ethical, legal or religious entities. . . .

During the prophet Muhammad's lifetime, criticism of usury became established. This stance was reinforced by his teachings in the Qur'an, around 600 AD. . . .

Judaism's criticisms of usury are rooted in several passages of the Old Testament in which charging interest is scorned, discouraged and prohibited. . . . In Deuteronomy, the ban extends to all loans, excluding trade with foreigners. The word "foreigner" is interpreted in general as "enemy" and, armed with this text, Jews employed usury as a weapon, as other people's needs could be transformed into submission. . . .

The prohibition of usury was adopted as a major campaign by the earliest Christian Church, following on from Jesus' expulsion of the money-lenders from the temple. . . . The Catholic Church of the 4th century AD banned the clergy from charging interest, a rule that was later extended in the 5th century to the laity. . . .

Around 1620, according to the theologian Ruston, "usury passed from being an offense against public morality, which a Christian government was expected to suppress, to being a matter of private conscience, and a new generation of Christian moralists redefined usury as excessive interest". . . . It is interesting to contrast the clear moral mandate expressed through Pope Leo XIII's Rerum Novarum (634-644 AD) about "ravenous usury" as "a demon condemned by the Church but practiced in a deceitful way by avaricious men," with Pope John Paul II's encyclical Solicitude Rei Socialis (1987) which omits any explicit mention of usury, except for a vague reference to recognizing the Third World debt crisis.

This "demon" governs current global relations, condemning most of the world population to living under the sign of debt: i.e., each person born in Latin America owes already $1,600 in foreign debt; each individual being conceived in Sub-Saharan Africa carries the burden of a $336 debt, for something that its ancestors have long ago paid-off. In 1980 the Southern countries' debt amounted to $567 billion; since then, they have paid $3,450 billion in interest and write-offs, six times the original amount. In spite of this, that debt had quadrupled by the year 2000, reaching $2,070 billion.

Islamic scholars have been seeking to devise a global banking system that would serve as an alternative to the interest-based scheme that is in control of the world economy, and Iran has led the way in devising that model. Iran was able to escape the debt trap that captured other developing countries because it had its own oil. Few Islamic banks existed before Iran became an Islamic Republic in 1979, but the concept is now spreading globally. With the fall of the Iron Curtain in 1989, the viable economic model that threatens the global dominance of the Western banking clique may no longer be Communism. It may be the specter of an Islamic banking system that would strip a private banking cartel of the compound interest scheme that is its most powerful economic weapon.


-----------------------------

Keep the above in mind as you read the following:

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http://www.prisonplanet.com/globalist-target-central-bank-of-libya-is-100-state-owned.html

GLOBALIST TARGET: Central Bank of Libya is 100% State Owned

By Eric V. Encina
21st Century Wire
March 28, 2011

One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned. The world’s globalist financiers and market manipulators do not like it and would continue to their on-going effort to dethrone Muammar Muhammad al-Gaddafi, bringing an end to Libya as independent nation.

Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability.  Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.

When the smoke eventually clears from all the cruise missiles and cluster bombs, you will see the Allied reformers move in to reform Libya’s monetary system, pumping it full of worthless dollars, priming it for a series of chaotic inflationary cycles.

[Continued...]


http://www.prisonplanet.com/wow-that-was-fast-libyan-rebels-have-already-established-a-new-central-bank-of-libya.html

Wow That Was Fast! Libyan Rebels Have Already Established A New Central Bank Of Libya

The Economic Collapse
March 29, 2011

The rebels in Libya are in the middle of a life or death civil war and Moammar Gadhafi is still in power and yet somehow the Libyan rebels have had enough time to establish a new Central Bank of Libya and form a new national oil company.  Perhaps when this conflict is over those rebels can become time management consultants.  They sure do get a lot done.  What a skilled bunch of rebels – they can fight a war during the day and draw up a new central bank and a new national oil company at night without any outside help whatsoever.  If only the rest of us were so versatile!  But isn’t forming a central bank something that could be done after the civil war is over?  According to Bloomberg, the Transitional National Council has “designated the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and the appointment of a governor to the Central Bank of Libya, with a temporary headquarters in Benghazi.”  Apparently someone felt that it was very important to get pesky matters such as control of the banks and control of the money supply out of the way even before a new government is formed.

[Continued...]

-----------------------------

Does this mean the banker-owned Obama administration will next be dropping bombs on North Dakota in the name of "humanitarianism"? 

http://www.wealthmoney.org/compound-interest-8th-world/

The 8th Wonder of the World!



Often we are told of the wonderful power of compound interest (earning interest on both principal and previous interest). We are told how compound interest can make a modest investment grow into a great amount.

For example: If you invested  $10,000 at 7% compound interest for 30 years; you’d expect your investment to grow to $76,122.52.

Sounds Great! 

Compound Interest must truly make money grow!

For a moment, let’s step out of the dream world hype of banking, financial planning and Wall Street. Just HOW DOES MONEY GROW?

Where does the interest money come from?

When you put money into an interest-bearing account, does it turn into something like rabbits that mate and quickly reproduce? What happens? The increase of money in your account had to come from someplace. To understand financial planning, economics, growing public and private debts, ever increasing taxes and prices, etc. we must learn and always remember what it is we now use for money and how ALL new money is created and put into circulation.

When the economy grows and more money is needed, always remember:  “...the actual creation of money always involves the extension of credit by private commercial banks.” -- US Treasury

If the private sector doesn’t borrow it, the government must or the money cannot exist. If you invest $10,000 and 30 years later get $76,122.56; somewhere, someone in the private sector or the government had to borrow $66,122.56 before it could get into your account! Now, you have the money. They have the debt which can never be paid because there is no way to create the interest money when money is created through the lending process. Therefore, the debt must constantly grow.

Many people claim that the interest money comes from increased production (worker productivity). But, when was the last time your personal production (goods and services) turned into money? Did you ever wave a magic wand over a shoe, shirt, bushel of corn, a new car or an hour of labor etc. and see it turn into money?

There are only 2 ways to get money from what we produce.

ONE: We can use our produce as collateral for a bank loan which creates the new money.

TWO: We can sell our production to someone in exchange for money that was created as a loan.

Production NEVER turns into money.

You can create money by using a credit card by signing the forms sent to you by the credit card company and promising to pay the credit (money) back in the future with interest. The bank turns that promise to pay into collateral to create the money as a loan the minute you use your credit card to buy something.

Let me explain another way.

The Shoe Factory

Imagine that we have $10,000 total money in circulation. We invest all of it in a compound interest-bearing account. Let’s say that the money is invested in a shoe factory.

The factory spends the $10,000 for raw resources and labor to produce shoes. It sells the shoes and gathers back the total money supply and returns it to the investor. Remember, if the total money supply is only $10,000, that is all the shoe factory could return to the investor.

If the factory is going to return the original $10,000 investment PLUS compound interest, the money supply would have to be increased by at least $66,122.52 or even more if the shoe factory is going to have a profit. To increase the money supply, under the present system, it must be borrowed by someone from a bank. By borrowing the $66,122.52 needed to pay the investor 7% compound interest, the total debt drawing interest at some bank would be $76,122.52. It’s easy to understand how we have $50+ Trillion of debt drawing interest in 2006.

These facts are not clearly seen because there are vast numbers of loans being made and extinguished daily. Banks spend a large part of the interest back into circulation. However, this ‘interest-spending’ does not increase the money supply. It simply keeps money in circulation. In addition, the total amount of interest and debts that are not repaid are repudiated through business losses, repossessions and bankruptcies.

---------------------------

For more commentary by author and monetary reformer, Byron Dale, visit: www.wealthmoney.org

As I explained on page 1 of this thread when the author of the above blog parroted this same talking point in a previous article, the problem is not that "we" have been "living" beyond our means, but that ruling-class oligarchs have been parasitizing us beyond our means.

Whether they realize it or not, those who blindly insist otherwise are merely shifting blame from where it belongs -- on the financial terrorists who engineered this economic collapse in the first place -- to where it does not belong -- on the lower- and middle-class victims of the collapse.

--------------------------

"Have you ever wondered how everyone -- governments, corporations, small businesses, families -- can all be in debt at the same time and for such astronomical amounts? Have you questioned how there can be that much money out there to lend? Now you know: there isn't. Banks do not lend money; they simply create it from debt....Isn't it astounding that, despite the incredible wealth of resources, innovation and productivity that surrounds us, almost all of us -- from governments to companies to individuals -- are heavily in debt to bankers? If only people would stop and think: 'How can that be? How can it be that the people who actually produce all the real wealth in the world are in debt to those who merely lend out the money that represents the wealth?' Even more amazing is that once we realize that money really is debt, we realize that if there's no debt, there'd be no money. If this is news to you, you are not alone. Most people imagine that if all debts were paid off, the state of the economy would improve. It's certainly true on an individual level. Just as we have more money to spend when our loan payments are finished, we think that if everyone were out of debt, there would be more money to spend in general. But the truth is the exact opposite: there would be no money at all. There it is: we are totally depenedent on continually renewed bank credit for there to be any money in existence. No loans, no money."


--------------------------

Was it "we" who created the quadrillion-dollar derivatives bubble? No, it was the bankers who did that.

Was it "we" who, through the use of bought-off politicians, instituted a debt-based money system in which "borrowing" is the only way any money is allowed to come into circulation in the first place, in which money is destroyed whenever the principal of a bank loan is repaid, and in which the money needed to pay the interest on all these loans is never created to begin with (thus creating a built-in shortage of money, and hence a dog-eat-dog, musical chairs economy)? No, it was the bankers who did that.

And was it "we" who knowingly failed to provide lawful consideration for any of the collateral-backed IOUs that were accepted by private banks in exchange for the non-existent "money" they loaned? No, it was the bankers who did that.

So the wealth-producing lower and middle classes must not let themselves be bullsh*ted either by the global warming cult or by the let-the-banker-engineered-depression-"run-its-course" Austrian School cult into falsely believing that they must pay the price for the economic crimes of the non-producing, parasitic banking class.

It's the Rockefellers and Rothschilds of the world who should be forced into bankruptcy and foreclosed on, not us!

Or, to put it another way, it is not "we" who should be made to experience a standard of living far below what we've grown accustomed to, but parasitic robber barons who should be made to experience a standard of living far below what they've grown accustomed to!

http://www.prisonplanet.com/good-economic-numbers-don%e2%80%99t-be-fooled-by-the-financial-sugar-high.html

Good Economic Numbers? Don’t Be Fooled By The Financial Sugar High

The Economic Collapse
April 2, 2011

The U.S. financial system is like a junkie that needs continually increasing amounts of “junk” to get the same “buzz”.  So what is the U.S. financial system addicted to?  It is addicted to money and debt.  For many years, whenever the Federal Reserve would lower interest rates or the U.S government would borrow and spend more money, the U.S. economy would respond positively.  But just like with any other kind of artificial stimulation, over time it has taken greater and greater amounts of debt and cheap money to get a response from our economic system.  So yes, the fact that the official unemployment rate went down 0.1%  last month is good news, but considering the massive amount of spending that the U.S. government is doing and considering the gigantic quantity of money that the Federal Reserve is injecting into the financial system, the truth is that the unemployment rate should be falling much faster than that.  So don’t be fooled by the good economic numbers and don’t be fooled by the financial “sugar rush”.  The U.S. government and the Federal Reserve have been pulling out all the stops to stimulate the economy, and the fact that all of their efforts are barely moving the unemployment rate at all is an indication of just how far our economic situation has degenerated.

Many in the mainstream media were extremely excited when the U.S. Bureau of Labor Statistics announced that the U.S. unemployment rate declined to 8.8% in March.  U.S. stocks soared as investors enthusiastically welcomed the news.  But should we all really be jumping up and down over this?

The truth is that some other measures show that the unemployment situation in the United States is becoming worse.

According to Gallup, the number of Americans that are either unemployed or working part-time but desiring full-time work actually rose from 19.8 percent in February to 20.3 percent in March.

So let us not get too excited about the employment situation. Yes, unemployment is not spinning wildly out of control at the moment and that is good news.

However, when you look at the larger picture things look rather grim.

What the U.S. government and the Federal Reserve have been doing is that they have been mortgaging our future big time for short-term economic gain.

This year alone, the U.S. government is going to run an all-time record budget deficit of approximately 1.6 trillion dollars. By borrowing 1.6 trillion dollars that we do not have and spending it into the system, it does stimulate the economy.

There are some members of Congress that would like to implement substantial budget cuts, but most members of Congress fear doing too much budget cutting right now because it would “harm the economy”.

And you know what? They are right – budget cuts would harm our economy in the short-term.

But continuing to pile up all of this debt is setting the stage for an absolute economic nightmare in the mid to long term.

We have lived far, far beyond our means for decades, and most of our politicians are acting like this can go forever.

But tell me, does anyone out there actually believe that we can keep expanding the national debt like this indefinitely?….



[Continued...]

Below are two excerpts from Webster Tarpley’s radio show, in which Mr. Tarpley assesses the Tea Party from a sociological perspective. I imagine some will take issue with Tarpley’s analysis, and that’s fine; but I would ask that you not merely assert that his analysis is wrong, but offer a fact-based explanation as to why you think it’s wrong (or partly wrong).

--------------------------

“On the Republican side, you can see the Republican strategy. They started with an array of themes last August [‘09]. There were moments in this [health care] debate where Republicans, including McCain, forced votes in the Senate on the 500 billion dollars of Medicare cuts. There was a general awareness coming from people like Dick Morris (an unsavory figure, but nevertheless a successful manipulator in the tradition of Lee A****er, Karl Rove and others)….Dick Morris pointed out that the way to defeat the Obama bill was to turn the senior citizens against it (the over 65s), to convince them -- to show them -- that the $500 billion in Medicare cuts was a threat to their lives and their future well-being. That is to say, an effective Republican strategy would have concentrated on saying: ‘Don’t let Obama take your Medicare away!’ That’s effective.

“Instead you saw -- as the debate went on, you heard less and less about that, and more and more of the wild, reactionary yahoo charges, ‘Oh, it’s communism! Oh, it’s socialism!’ and above all, ‘Government takeover! Government takeover! Government takeover!’ Well, I’m sorry, it’s not a government takeover of healthcare; it’s a takeover of government by the insurance companies -- and by Big Pharma, don’t forget them. Big Pharma is now shielded from any future attempt to import drugs from Europe, Canada, Japan, where they’re just as good as they are here, or better.…This [was] bargained away by Obama before anything else started. So it [ObamaCare] is essentially the federal government turned into a tool of Big Pharma to keep out foreign competitors -- a cartel in that sense -- and then the insurance cartel that we talked about just a minute ago. So, the Republican slogan -- this constant litany: ‘Government takeover! Government takeover!’ -- this is not effective. Nobody cares. People want access to health care, and whether it’s a government bureaucracy or a private sector bureaucracy means very little to the average person. So the Republicans essentially deliberately narrowed their own base.

“It’s similar to what the Republican operatives did, now, with their manipulation and duping of the Tea Party. They made the Tea Party as narrow as they could. That is to say, there were no Ron Paul people at the Tea Party, there were no PUMA Democrats, there was no anti-war in any way. You had to be a warmonger to get into the Tea Party. This makes no sense.

“Now, let’s just look at the interesting example here [in] Washington last Saturday [3/20/10]….We had two demonstrations going on: we had the tea baggers at the Capitol, and then we had the peaceniks at the White House.  Now, let’s look at the tea baggers first. I had the opportunity to visit both of these. The thing that you see with the tea baggers is, of course, this is a lily-white group. This is a rather comfortable, rather well-heeled, middle class group. The main thing you see with the Tea Party is that these are retired military, retired military, retired military. I had a chance to talk to quite a few of them, and, lo and behold, in the course of most conversations it would turn out that this was retired military. They would come with their hats, the ship that they were on, their Army or Marines t-shirt at all ages, and so forth. They’re retired military. So what does that mean? It means that they have got their piece of the federal budget. They’re all on U.S. government military pensions. They’re all available to get TRICARE, or Veterans Administration medical care. There’s an element of hypocrisy in this -- and I’m sorry -- which is: ‘I’ve got my piece of the federal budget, I’ve got my pension, I’ve got my health care for life, and you can be damned!’ The thirty or forty million [without health insurance] they don’t care about. So there’s essentially an element of bad faith at the heart of this.

“And, of course, the people running this are all Republican operatives. They’re all Republican think-tankers. We’ve gone through it before: Richard Mellon Scaife, Competitive Enterprise Institute, Heartland Institute, Dick Armey (Republican leader) -- they're all a bunch of Republicans.”



“In terms of sociology, here’s our premise: there is no Tea Party. The media talk about nothing else. The media are interested in keeping alive the fantasy, the myth by now, that there’s such thing as the Tea Party as an actual sociological movement. There is no such thing.

“The Washington post did a series of attempted phone calls…to contact these people. They went to Tea Party Express, Tea Party Patriots, Freedom Works and the rest of these astroturfing organizations. These are essentially Republican PACs that re-baptized themselves ‘Tea Party.’ In 2004 they were ‘reelect Bush.’ In 2006 they were ‘support Denny Hastert and Tom DeLay.’ And then in 2010 they become: ‘we’re the Tea Party, we’re the insurgents.’ This should fool nobody. This is the Sal Russo corner of the world. And, again, these are Republican operatives, professionals who have now succeeded in completely absorbing whatever Tea Party there was into the Republican Party.

“Now, the Washington Post found -- the allegation was that there was 2,400 Tea Party organizations, that’s what these astroturf groups claim -- [the] Washington Post tried to contact them….They were able to make contact with 600 of these, and the overwhelming finding was that they did nothing: that they had no relation to elections; that they didn’t support candidates, they didn’t have their own candidates, they didn’t have their own program, they didn’t do anything much. They were essentially social clubs. They would meet for coffee or bowling or a skit, or some other kind of friendly neighborhood activity. It means that the rank-and-file -- the grassroots structure of what was the Tea Party -- is now completely gone.

“Nevertheless, what you can [see when you] look at Tea Party -- you can certainly see, when Beck calls for a demonstration, he gets 100,000 or whatever he gets. You can have these Tea Party rallies over issues. This is now the same method as we’ve described in Obama: The Postmodern Coup.

“Remember, take a look in Obama: The Postmodern Coup at the entire chapter that’s devoted to ‘swarming adolescents’ [and] ‘rebellious hysteria’ -- the distinguished article by Jonathan Mowat -- about how the color revolutions are now organized. This is based on CIA practice in the Philippines against Marcos in the 1980s; what went on in Iran in the late 70s against the Shah, in bringing in the other regime that we see now; and the thing that was then prolonged into the Belgrade overthrow of Milosevic in 2000/2001; and the Kiev Orange Revolution that put Yushchenko and that gang into power; the NATO agents and IMF agents, the Roses Revolution in Tblisi, Georgia that put in the madman Saakashvili, the warmonger; the attempted Cedars Revolution in Lebanon, and so on and so forth around the world, using demagogic leaders, slogans, branding; Tea Party [is] obviously one of them, all these costumes, the 18th-century costumes, ‘don’t tread on me,’ -- these are all essentially the applications of the same method….It’s also the case of Obama. The Obama campaign of ‘07/’08 was exactly the same thing; it was an astroturfing method that took the existing militants and the existing activists of the anti-Bush/anti-Cheney impeachment movement, which was reaching down deep into the middle class, the anti-war movement and other popular movements, and recycled them into dupes and useful idiots for Obama -- and then threw them away.

“And that’s where we stand now: these movements have essentially been swept away and destroyed.

“At the beginning with the Tea Party, you did have a certain spontaneous aspect -- this cannot be denied -- in the first half of 2009. I would point in particular to the sociology. Having talked with Tea Party people, gone to some demonstrations, and attempted to profile these groups sociologically, what do you find? You find a lot of stock brokers, you find a lot of real estate brokers. What does that mean? These are people who are appendages of Wall Street, appendages of the great speculative machine -- the retail broker, the local financial adviser. The real estate broker -- we can see the character of the hero’s mother in the latest Oliver Stone movie: she’s caught up in the flipping houses routine on Long Island. They are people who imagine themselves to be in some kind of a symbiosis with Wall Street -- they think that their personal interests are bound up with Wall Street -- and therefore their instinctive view, as we’ve seen, the Tea Party view tends to mimic and ape the finance capital view.

“For example: the fact that the Tea Party program of gut and cut is exactly the same as the George Shultz program announced in the pages of the Wall Street Journal, where we find that the things that you’ve got to do according to George Shultz are tax cuts for the rich, savage cuts in domestic discretionary spending, savage cuts in the entitlement spending; no new regulations -- gut those -- and have (he said) a rule-bound or predictable international financial policy. Well, to the extent that the Tea Party people have anything to say about this, that’s what it was from the very beginning.

“But, again, you also had a lot of retired military, who had been ideologized in that obvious way of hyper-patriotism, and so forth, but also people who knew that their nests had been fully lined with Pentagon TRICARE and military pensions that are much better than Medicare or Social Security, and who felt that they didn’t need anybody else climbing onto that bandwagon -- they wanted to pull the ladder up now that they had gone up it. And they have all kinds of reasons why they want this to be so.

“But in the mean time, that, I think, has completely atrophied, and what you’ve got now is the dominion of astroturfing groups funded by the Koch brothers; funded by Richard Mellon Scaife, the Olin Foundation, the Smith-Richardson Foundation, and so forth, getting into the act, and supporting the Heartland Institute and the network of reactionary think tanks that you have all over the place. And this has now become a phantom. It’s an ideological phantom which these commentators cite constantly as if it really exists. Well, it doesn’t exist.”


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http://www.savingcommunities.org/issues/taxes/landvalue/

Land Value Tax

Conventional property tax falls mostly on improvements.

To levy a conventional property tax, assessors normally determine the value of the land and the additional value of the improvements. The two values are added together and the total value is taxed. As a result, property tax falls mostly on improvements.

As a result, property tax penalizes most home owners, who usually improve and maintain their homes better than absentee owners. The property tax on improvements also discourages construction while it rewards those who milk run-down properties or sit on vacant properties with light taxes.



Land value tax (LVT) untaxes improvements

Jurisdictions that levy land value taxes charge lower rates (or no tax at all) on improvements. Taxes burdens on well developed and well maintained properties fall and burdens on blighted and vacant properties rise until identical lots pay the same taxes no matter what the improvements on those lots are worth.

LVT is easier to assess

Land lies out of doors, and all features are fully visible. In contrast, assessors have no right to inspect the interior or buildings without the building occupant's consent, and considerably more skill is required to assess the value of structural integrity and amenities. Land can be assessed more accurately than buildings, at a fraction of the cost of assessing buildings.

LVT fosters honesty

Conventional property tax encourages people to hide improvements, sometimes by secretly remodeling without filing building permits. Such dishonesty to avoid an assessment hike can create fire and health hazards, as the main purpose of permits is to insure that safety codes are respected. Other taxes encourage people to conspire to not report, or under-report, income, sales, etc. These corrupting incentives work not merely on taxpayers, but on government itself. Who is to know when a tax collector has "looked the other way" or brokered a deal if the tax information is private? Land values are entirely public information, and the factors that determine land values are also public information.

Location, location, location

Land values vary tremendously according to location. A square yard of prime Manhattan land is worth more than a typical acre of New York State farmland. The value of land in the most affluent residential neighborhoods can easily exceed 100 times the value in the poorest neighborhoods, especially where undertaxation of land has encouraged speculation.

Most home owners pay less

Dozens of studies in dozens of cities have shown that most home owners pay less under land value tax than under property tax, and much less than under income taxes. The only exceptions we have seen are where only a small minority of residents can afford home ownership or where businesses have been so overtaxed that demand for business properties has been discouraged.

LVT encourages growth

Hundreds of taxing jurisdictions around the world have experienced increased construction and renovation after shifting to LVT, including over 20 taxing jurisdictions (mostly cities) in Pennsylvania. Pittsburgh, which had higher taxes on land than on buildings from 1913 to 2000, enjoyed a major "renaissance" after World War II, despite an abrupt reduction in the demand for armor plate, most of which had been produced in Pittsburgh. This renaissance was the subject of articles in at least 27 magazines. Another major surge in construction occurred in the early 1980s after Pittsburgh dramatically increased its tax rates on land value, despite the closing of its largest employer in 1979, Jones & Laughlin Steel. This second surge, dubbed "Renaissance II," was featured in the 1983 Fortune article, "Higher Taxes that Promote Development."

LVT helps small business

Small businesses are more land-effficient, while big businesses are more labor efficient. Shifting to land value tax gives a competitive advantage to neighborhood business districts over shopping malls, small merchants over chain stores, and full-time family farms over agribusiness. By keeping land prices low, it also helps new businesses, which must buy or rent land, compete with established businesses that own their land free and clear.

LVT keeps housing affordable

LVT has such a powerful dampening effect on idle land speculation that even the land portion of the real estate tax keeps housing affordable. Cities with the highest real estate taxes have the most affordable housing. Texas and California were the two fastest growing states in the second half of the 20th century. Texas, which relies heavily on property tax, having no personal income taxes, has four of the six most affordable cities in the nation. California, which dramatically curtailed its property taxes, has 23 of the 25 least affordable cities.

It is only logical that a tax on buildings would discourage construction and reduce the supply of buildings, increasing real estate prices and rents. However, LVT is such a potent disincentive to idle landholding that it has a much stronger opposite effect. We found a strong correlation between high real estate taxes and housing affordability.

LVT reduces foreclosure

Keeping house prices stable and affordable reduces foreclosures. Also, any real estate tax must be born by the bank or mortgage company that forecloses. This makes mortgagors more willing to negotiate in order to avoid taking possession of the tax obligations. Beyond that, tax impact studies in Pittsburgh, Clairton, Duquesne and McKeesport have shown that LVT saves mortgaged home owners even more than other home owners.

LVT costs renters nothing

Economists agree that LVT is not passed on to renters, because rents are determined by what the market will bear, not by landlords' costs. LVT benefits landlords by encouraging higher density and attracting more tenants, not by gouging existing tenants. Other taxes drive productive tenants away and depress rents by more than what the landlord would have paid under a land value tax. All taxes eventually come out of rent, and LVT is the only one that does not discourage economic growth.

LVT is naturally progressive

LVT is most burdensome to those who hold valuable urban land they are not using. Clearly, these owners have no cash-flow problems, or else they would sell their unused land to people who would develop it. It also shifts the tax burden from home owners to corporate-owned and absentee-owned property, although corporations and absentee owners who fully develop their properties still save. Because land value tax is not passed on to renters or consumers, and because it keeps housing prices low for home buyers, it is the most progressive of all taxes.

LVT helps keep government local

One of the excuses for centralizing government is that other taxes chase residents and businesses out of local taxing jurisdictions. Because land is the one thing that does not cross borders to escape taxation, it creates no rationale for shifting government to state and federal jurisdictions.

LVT reduces sprawl

The need for government services is naturally highest in urban areas, where land prices are also highest. Higher taxes in cities and inner suburbs drive development outward, and land speculation also causes development to leapfrog over better urban and suburban sites into rural areas.

Replacing taxes that drive people away with a tax that discourages land speculation draws development inward, reducing sprawl. Places that have adopted LVT enjoy not only more development, but more compact development.

LVT streamlines government

Encouraging growth reduces the rationale for economic development subsidies. Growth also creates jobs, reducing the costs of unemployment compensation and public welfare expenditures. Reducing sprawl reduces the need for transportation expenditures. Keeping housing affordable reduces the need for housing subsidies and public housing.

Every proposed public expenditure should increase land values by more than its cost. Governments that fund themselves from a land value tax tend to make more rational spending decisions.

LVT reflects taxpayer benefits

The value of land is the only value that is created by access to community-created and government-created advantages. Under a land value tax, every taxpayer pays in proportion to the benefits he receives, and does not pay on the fruits of his own labors.

LVT is the most endorsed tax

From the seventeenth century to this day, and from across the political spectrum, LVT has been endorsed by more outstanding icons of economics, philosophy and statesmanship than any other tax.

LVT has a rich and strong history.

LVT was a centerpiece of classical liberalism, the progressive movement and the early labor movement. It was embraced by many of America's founding fathers and written into the Articles of Confederation. The first two tax rebellions in the United States were led in opposition to taxes that shifted the tax burden off of early land monopolists.

LVT is fundamentally fair

Whether the criterion is ability to pay or reflection of benefits received, LVT is the most fundamentally fair broad-based tax available. The biggest obstacle to adopting LVT is that interest groups try to get benefits for themselves at the expense of others. Under LVT, everyone pays in proportion to the benefits they ultimately receive.

Privileged interests oppose LVT

The great difficulty in advancing LVT is that it shifts the tax burden onto those who not only have the most ability to pay, but have the most ability to influence political leadership and public opinion. Yet LVT has often been supported by wealthy people who put public interest ahead of their personal enrichment.

LVT is gaining momentum

The economic successes in cities that have adopted LVT, and the economic consequences of productivity taxation, have led more and more cities to embrace LVT in Pennsylvania, where it is already permitted, and has led other states to consider it as well. It also enjoys increased support in several other countries.

http://globalresearch.ca/index.php?context=va&aid=23411

Divide and Conquer Strategies in America

by David DeGraw
Global Research
February 27, 2011

The global bankers, who caused our economic crisis, are attempting to deflect blame and divide the American public by escalating attacks on public-sector workers. The battle in Wisconsin, which is spreading across the entire nation, should be viewed in a global economic context. Do not let the obsolete Republican vs. Democrat charade confuse you. Even if you believe Unions have been corrupted, in this case you have to go with the strategy: “The enemy of my enemy is my friend.”

The Global Economic Elite have launched a war on 99.9% of the US public, we must unite and rally together. Unions have played a key role in uprisings from Europe to the Middle East. We must seize this opportunity and let Wisconsin be a spark to light the fires of non-violent rebellion throughout the United States.

There is a rule of war that many people are failing to understand: “Do not fight the last war.” In The 33 Strategies of War, Robert Greene calls this “The Guerrilla-War-Of-The-Mind Strategy:”

“What most often weighs you down and brings you misery is the past, in the form of unnecessary attachments, repetitions of tired formulas, and the memory of old victories and defeats. You must consciously wage war against the past and force yourself to react to the present moment. Be ruthless on yourself; do not repeat the same tired methods.”

The sad truth is that most people are still fighting yesterday’s war. The Republican vs. Democrat charade — good cop, bad cop nonsense — is a mere smokescreen. Don’t be confused by obsolete preconceptions and propaganda. There is one war being fought, The Global Economic Elite Vs. The People.

A global banking cartel has looted nation after nation, the world over, the United States is no exception. They’ve looted trillions from the US public and now they are trying to cut the throat of the public unions. While in the process of attacking private-sector workers and small businesses throughout the country, they are also cracking down on the last layer of worker protections within the public-sector.

The same economic central planners that have systematically exploited workers in Europe, the Middle East, Africa, Australia and Asia, have exploited American workers as well. One-tenth of one percent of the population got luxurious life boats, while 99.9% of us are being left behind to drown in a sea of debt and social upheaval.

We are all on the same sinking ship – me, you, teachers, construction workers, fire fighters, police, Egyptians, Europeans. We are all under attack by the same people. The sooner you understand this, the better off we will be.

[Continued...]

Good luck explaining that to global warming cultists!

http://www.climategate.com/100-reasons-why-anthropogenic-global-warming-a-cult

Why do Americans elect such awful Presidents? For the same reason they elect so many awful Congressmen, Senators and Governors: because they refuse to ask the right questions. Allow me to explain.

I think most of those reading this would agree that there's a world of difference between "being your own leader" and being a cheerleader for someone else. And most people, unfortunately, are always looking for excuses to be the latter, that way they can go on treating politics as just another spectator sport. But in doing so, they ignore

(a) the fact that feel-good platitudes designed to elicit cheers and applause from the already-converted are no substitute for specific ideas on how key governmental policies can actually be made conducive to securing a truly just, prosperous and free society;

(b) the fact that, although ideas themselves are indeed bullet proof, the political leaders who espouse them are not; and

(c) the consequential fact that, the more a nonviolent revolution is driven by the force of a particular person's popularity instead of by the force of ideas, the easier it is for the banker-owned political establishment to neutralize that revolution through either character assassination or -- if the political leader in question becomes too popular and/or advocates policy reforms that are too threatening to the institutionalized privileges of the parasitic ruling class -- literal assassination (as the anti-war followers of RFK and MLK all found out the hard way).

Now, that's not to say that an idea-driven nonviolent revolution is incompatible with supporting and promoting a particular candidate, just that the latter must be a mere supplement of, rather than substitute for, the former.

With regard to elections, aside from institutionalized election-rigging, the primary reason why establishment Democrats and establishment Republicans continue to get elected -- even when there are third party candidates on the ballot -- is that voters continually ask the wrong questions.

Instead of openly asking where the candidate in question actually stands on key issues, most voters -- both liberal and conservative alike -- silently ask to themselves meaningless questions such as...

* Does this candidate seem like someone I'd like to have a beer with?

* Does he pay lip service to preserving and defending the Constitution?

* Does he pay lip service to the importance of "freedom" and "liberty"?

* Does he pay lip service to the importance of feeling "safe" from evil terrorists?

* Does he pay lip service to the need for "change"?

* Is he able to read from a teleprompter more skillfully and articulately than his main opponent?

And so on and so forth, ad nauseum.

Corporate-**** Republicans like George Bush and corporate-**** Democrats like Barack Obama have repeatedly proven that they're able to answer such questions to the satisfaction of the easily-duped voters who ask them.  This is why our government continues to be a government of, by and for parasitic robber barons instead of a government of, by and for "the people," and hence why things continue to get worse and worse regardless of which of the two banker-owned major parties is in charge.

Bottom line: an answer is only as good as the question that elicited it, so if either corporate-**** Democrats or corporate-**** Republicans seem like the "answer" on election day, then we're asking the wrong damn questions!

Thus, if the American people are truly interested in changing things for the better, they must start asking better questions. It's as simple as that.

Instead of asking, "Is this someone I'd like to have a beer with?" or, "Does this candidate pay lip service to empty platitudes about liberty?" we must ask, "Does he advocate the right policy positions?"

To get a more specific idea of what I mean, here are the questions I ask when assessing a particular candidate:

On election reform, does this candidate support or oppose the reform measures listed at the beginning of this thread?

On monetary reform, does this candidate support or oppose

-- putting all derivatives-infected mega-banks through Chapter 11 bankruptcy and, in the reorganization proceedings, wiping out all derivatives;

-- liquidating all of the ill-gotten assets of criminal scam artists such as Henry Paulson and Bernard Madoff, and using the resultant proceeds to help replenish whatever retirement funds they raided;

-- replacing our current debt-based money system with a debt-free "Greenback" money system, whereby all new money -- instead of being loaned into circulation at interest -- is spent in at no interest; and

-- instituting a new round of international agreements modeled on the Bretton Woods Accords, with an aim towards replacing the current “floating” exchange rates for national currencies with a fixed rate that, as such, is pegged to the value of either an agreed-upon standardized price index or an agreed-upon “basket” of diverse, widely available, everyday commodities?

On foreign policy reform, does this candidate support or oppose

-- bringing an immediate end to our imperialist, terroristic, hornets' nest-stirring wars of aggression; and

-- abolishing the CIA?

On civil liberties, does this candidate support or oppose

-- repealing the "Patriot" Act;
-- repealing the Homeland "Security" Act;
-- repealing the Military Commissions Act;
-- repealing Presidential Directive 51;
-- repealing the Establishment of the Council of Governors; and
-- abolishing FEMA?

On national sovereignty, does this candidate support or oppose

-- withdrawing the U.S. from both NAFTA and the WTO; and

-- enacting the American Sovereignty Restoration Act?

On drug policy reform, does this candidate support or oppose

-- ending the drug war (and with it all of the corruption, hypocrisy and police state thuggery it breeds); and

-- abolishing the DEA?

On gun control, does this candidate support or oppose

-- repealing all federal gun control laws; and

-- abolishing the BATFE?

On health care reform, does this candidate support or oppose

-- repealing Obama's corporate fascist health care "reform" bill;

-- relegalizing alternative medicine;

-- making health insurance tax deductible (so long as there's an income tax) for individuals as it already is for business owners;

-- revoking bogus or overextended drug patents granted to Big Pharma for either "me-too" drugs or drugs developed primarily at taxpayer expense;

-- informing the masses of the extent to which corporate-**** politicians from both major parties have precipitated a tremendous artificial surge in the need for health care services by either imposing or green-lighting such things as tainted vaccines, aspartame, GMO foods and flouridated water supplies, and by turning a blind eye to the endless regulatory violations of politically-connected factory farms (i.e., "Big Agri") while throwing the book at small family farms for even the smallest and pettiest of infractions?

On energy policy, does this candidate support or oppose

-- using antitrust action to break up the oil cartel;

-- educating the masses about the manufactured myth of "peak oil";

-- assuming public ownership of any and all domestic refineries that Big Oil shut down to create artificial scarcity, and bringing them up to full production in order to alleviate our dependence on foreign oil; and

-- revoking any and all patents purchased by the competition-hating oil cartel for alternative energy technologies currently not in use?

On environmental policy, does this candidate support or oppose

-- educating the public about ClimateGate, about the manufactured myth of man-made global warming, and about how Al Gore and his corporate cronies have been attempting to exploit this myth as a means of extorting billions if not trillions of dollars from the American people via the fraudulent "carbon tax" scheme;

-- passing stricter laws against the use of depleted uranium, and arresting and criminally prosecuting all former and current U.S. officials who violated international law by authorizing the use of depleted uranium in such countries as Iraq and Afghanistan;

-- levying a severance tax on oil extraction and devoting part of the resultant revenue to equipping all federal buildings with solar panels, and the rest to an Alaskan-style oil dividend; and

-- shifting the tax burden to the greatest extent possible off labor and capital and onto the economic rent of land, so as to alleviate (among other things) urban sprawl, and with it both (a) oil-wasting, carbon monoxide-spewing traffic congestion, and (b) excess deforestation?

On education policy, does this candidate support or oppose

-- eliminating federal involvement in so-called "education" and passing the tens of billions in savings onto the bottom 90% of income earners?

On the issue of "terrorism" and "national security," does this candidate support or oppose

-- sponsoring and promoting a nationally televised airing of (a) all of the admitted cases of false flag terror attacks orchestrated at least in part by U.S. officials, (b) all of the evidence pointing towards 9/11 being an inside job, and (c) all of the evidence pointing towards U.S. government involvement in any other acts of terrorism (e.g., the "underwear bomber");

-- arresting and criminally prosecuting any current or former high-level U.S. official who has admitted to authorizing torture, and/or for whom there is incriminating evidence of being either a participant in a false flag terror attack or an accomplice after the fact; and

-- passing a federal law specifically against false flag terrorism in all its guises and variants, with the mandatory penalty for conviction being life in a maximum security prison without possibility of parole for any military person ranked Colonel or higher, and for any U.S. official who (at the time of the offense) either served as President or was seven or less heartbeats away from the Presidency;

-- enforcing U.S. immigration laws, while continually reminding those obsessed with political correctness that doing so will in no way apply to the hundreds of thousands of Mexicans who immigrate here legally every year, and that Mexico's restrictions on immigration are far more exclusionary than those of the U.S. (which, if we apply the same standard to Mexico that the corporate **** "news" media applies to the U.S., means that Mexico is far more racist than the U.S.)?

On the issue of internet freedom, does this candidate support or oppose

-- repealing any and all "cyber security" laws or regulations that allow for Chinese-style censorship and control; and

-- enacting the Internet Freedom Preservation Act?


I could go on, of course, but I think you get the idea.

http://www.infowars.com/obama-signs-patriot-act-extension/

Obama Signs Patriot Act Extension

New York Post
February 26, 2011

WASHINGTON – President Obama yesterday signed a three-month extension of the Patriot Act’s surveillance provisions.

One aspect of the 2001 law lets law enforcement set roving wiretaps to monitor multiple communication devices.

Another lets officials ask a special court for access to business and library records deemed relevant to a terrorist threat.

A third grants the FBI the right to keep tabs on non-Americans not known to be tied to specific terrorist groups.

http://www.prisonplanet.com/republicans-move-to-make-patriot-act-permanent.html

Republicans Move to Make PATRIOT Act Permanent

Kurt Nimmo
Prison Planet.com
Friday, February 4, 2011

Freshly emboldened by their mid-term congressional wins, establishment Republicans are set to extend the unconstitutional police state Patriot Act. It is set to expire in three weeks and Republicans are eager to make sections of the legislation permanent.

http://www.youtube.com/watch?v=7ieX2BnPwPk

On Thursday, the Senate Judiciary Committee postponed a vote to continue and extend the law. “Having this debate year after year offers little certainty to agents utilizing these provisions to keep the nation safe,” said ranking member Chuck Grassley, R-Iowa.

“Short-term reauthorizations lead to operational uncertainty and compliance and reporting problems if the reauthorization occurs too close to expiration,” Grassley continued. “If these provisions are necessary, we should provide more certainty rather than simply revisiting the law year after year given the indefinite threat we face from acts of terrorism, and that looks like decades ahead. We should permanently reauthorize the three expiring provisions.”

Grassley, Senate Minority Leader Mitch McConnell, R-Ky., and Intelligence Committee Ranking Republican Saxby Chambliss, R-Ga., will introduce legislation to make the measures permanent.

[Continued...]


Thanks a bunch, lesser-evil voters! 

http://globalresearch.ca/index.php?context=va&aid=22637

The Left Has Nowhere to Go

by Chris Hedges



Global Research, January 4, 2011
truthdig.com 

     "Either we begin to practice a fierce moral autonomy and rise up in multiple acts of physical defiance that have no discernable short-term benefit, or we accept the inevitability of corporate slavery. The choice is that grim."

 Ralph Nader in a CNN poll a few days before the 2008 presidential election had an estimated 3 percent of the electorate, or about 4 million people, behind his candidacy. But once the votes were counted, his support dwindled to a little over 700,000. Nader believes that many of his supporters entered the polling booth and could not bring themselves to challenge the Democrats and Barack Obama. I suspect Nader is right. And this retreat is another example of the lack of nerve we must overcome if we are going to battle back against the corporate state. A vote for Nader or Green Party candidate Cynthia McKinney in 2008 was an act of defiance. A vote for Obama and the Democrats was an act of submission. We cannot afford to be submissive anymore.

“The more outrageous the Republicans become, the weaker the left becomes,” Nader said when I reached him at his home in Connecticut on Sunday. “The more outrageous they become, the more the left has to accept the slightly less outrageous corporate Democrats.”

Nader fears a repeat of the left’s cowardice in the next election, a cowardice that has further empowered the lunatic fringe of the Republican Party, maintained the role of the Democratic Party as a lackey for corporations, and accelerated the reconfiguration of the country into a neo-feudalist state. Either we begin to practice a fierce moral autonomy and rise up in multiple acts of physical defiance that have no discernable short-term benefit, or we accept the inevitability of corporate slavery. The choice is that grim.

The age of the practical is over. It is the impractical, those who stand fast around core moral imperatives, figures like Nader or groups such as Veterans for Peace, which organized the recent anti-war rally in Lafayette Park in Washington, which give us hope. If you were one of the millions who backed down in the voting booth in 2008, don’t do it again. If you were one of those who thought about joining the Washington protests against the war where 131 of us were arrested and did not, don’t fail us next time.

The closure of the mechanisms within the power system that once made democratic reform possible means we stand together as the last thin line of defense between a civil society and its disintegration. If we do not engage in open acts of defiance, we will empower a radical right-wing opposition that will replicate the violence and paranoia of the state. To refuse to defy in every way possible the corporate state is to be complicit in our strangulation.

“The left has nowhere to go,” Nader said. “Obama knows it. The corporate Democrats know it. There will be criticism by the left of Obama this year and then next year they will all close ranks and say ‘Do you want Mitt Romney? Do you want Sarah Palin? Do you want Newt Gingrich?’ It’s very predictable. There will be a year of criticism and then it will all be muted. They don’t understand that even if they do not have any place to go, they ought to fake it. They should fake going somewhere else or staying home to increase the receptivity to their demands. But because they do not make any demands, they are complicit with corporate power.

“Corporate power makes demands all the time,” Nader went on. “It pulls on the Democrats and the Republicans in one direction. By having this nowhere-to-go mentality and without insisting on demands as the price of your vote, or energy to get out the vote, they have reduced themselves to a cipher. They vote. The vote totals up. But it means nothing.”

There is no major difference between a McCain administration, a Bush and an Obama administration. Obama, in fact, is in many ways worse. McCain, like Bush, exposes the naked face of corporate power. Obama, who professes to support core liberal values while carrying out policies that mock these values, mutes and disempowers liberals, progressives and leftists. Environmental and anti-war groups, who plead with Obama to address their issues, are little more than ineffectual supplicants.

Obama, like Bush and McCain, funds and backs our unending and unwinnable wars. He does nothing to halt the accumulation of the largest deficits in human history. The drones murder thousands of civilians in Afghanistan and Pakistan, as they did under Bush and would have done under McCain. The private military contractors, along with the predatory banks and investment houses, suck trillions out of the U.S. Treasury as efficiently under Obama. Civil liberties, including habeas corpus, have not been restored. The public option is dead. The continuation of the Bush tax cuts, adding some $900 billion to the deficit, along with the reduction of individual contributions to Social Security, furthers a debt peonage that will be the excuse to privatize Social Security, slash social services and break the back of public service unions. Obama does not intercede as tens of millions of impoverished Americans face foreclosures and bankruptcies. The Democrats provide better cover. But the corporate assault is the same.

[Continued...]

http://globalresearch.ca/index.php?context=va&aid=23664

“Wisconsin Death Trip.” Mass Privatization as the "Final Stage" of Neoliberal Doctrine

by Prof Michael Hudson and Prof Jeffrey Sommers



Global Research
March 12, 2011

On Wednesday evening, in a veritable Night of the Long Knives, Wisconsin's integrity was brutally murdered on the floor of the state Capitol in Madison. On 9 March, integrity and trust built up over a century was obliterated as Wisconsin state senators quickly reversed course and cleaved its budget "repair bill" in half. Financial items require a quorum, thus, collective bargaining was split off from the budget repair bill and voted on separately so as to permit its being voted on now. Even so, this still broke the state's open meeting law requiring 24 hours' notice to ensure transparency. Instead, the Wisconsin senate Republicans pulled out this new legislation without advance notice and began voting, leaving only a stunned Democratic legislator, Peter Barca, to read the open meeting law out loud to prevent the senators from voting. The senate voted over his objections anyway.

The Wisconsin brand has always centered on integrity. This was really about the only distinctive comparative advantage the state could lay claim to. Now, it is gone. With collective bargaining abolished, huge issues remain beyond labor. The privatization of public assets is now on the agenda, with the yet-to-be-voted-on budget repair bill.

Wisconsin is a state that invented Progressive Era Republican rule in the 19th and early 20th centuries under such progressive populists as Robert LaFollette. Under their tenure, rent-seeking from the public domain and similar insider corruption were checked by a strong public sector anchored in integrity. The state's long history of reforms nurtured a prosperous middle class and made it a model of clean government, solid infrastructure, trade unionism and high value-added industry managed by socialists and the LaFollette Progressives.

Fast-forward to Scott Walker today. Representing a new breed apart from Wisconsin's earlier Republicans, he is seeking to re-birth the asset-grabbing Gilded Age. A plague of rent-seekers is seeking quick gains by privatizng the public sector and erecting tollbooths to charge access fees to roads, power plants and other basic infrastructure.

Economics textbooks, along with Fox News and shout radio commentators, spread the myth that fortunes are gained productively by investing in capital equipment and employing labor to produce goods and services that people want to buy. This may be how economies prosper, but it is not how fortunes are most easily made. One need only to turn to the 19th-century novelists such as Balzac to be reminded that behind every family fortune lies a great theft, often long-forgotten or even undiscovered.

But who is one to steal from? Most wealth in history has been acquired either by armed conquest of the land, or by political insider dealing, such as the great US railroad land giveaways of the mid 19th century. The great American fortunes have been founded by prying land, public enterprises and monopoly rights from the public domain, because that's where the assets are to take.

Throughout history the world's most successful economies have been those that have kept this kind of primitive accumulation in check. The US economy today is faltering largely because its past barriers against rent-seeking are being breached.

Nowhere is this more disturbingly on display than in Wisconsin. Today, Milwaukee – Wisconsin's largest city, and once the richest in America – is ranked among the four poorest large cities in the United States. Wisconsin is just the most recent case in this great heist. The US government itself and its regulatory agencies effectively are being privatized as the "final stage" of neoliberal economic doctrine.

[Continued...]

http://www.prisonplanet.com/21-signs-of-impending-doom-for-the-2011-economy.html

21 Signs Of Impending Doom For The 2011 Economy

The American Dream
Wednesday, March 9, 2011

If you are not aware of how rapidly the global economic situation is unraveling you need to snap out of it and start paying attention.  The world economy was relatively stable in 2010, but here in 2011 things are deteriorating very quickly.  Right now there is major civil unrest in at least a dozen different nations in Africa and the Middle East.  The civil war going on in Libya has sent the price of oil skyrocketing and the protests that are scheduled to begin in Saudi Arabia later this month could send oil prices even higher.  Meanwhile, the sovereign debt crisis in Europe just seems to get worse by the day.  Several nations in Europe are suddenly finding that it has become extremely expensive to finance more debt.  It appears that it will only be a matter of time before more bailouts are needed.  Meanwhile, the United States is also covered in a sea of red ink and the economic situation in the largest economy on earth continues to deteriorate rapidly.  It is as if the entire world financial system has caught a virus that it just can’t shake, and now it looks like another massive wave of financial disaster could be about to strike.  Does the global economy have enough strength to weather a major oil crisis in 2011?  How much debt can the largest nations in North America and Europe take on before the entire system collapses under the weight?  Will 2011 be a repeat of 2008 or are we going to be able to get through the rest of the year okay?  Only time will tell.

But it is quickly becoming clear that we are reaching a tipping point.  If the price of oil keeps going up, all hopes for any kind of an “economic recovery” will be completely wiped out.  But if the globe does experience another economic slowdown, it could potentially turn the simmering sovereign debt crisis into an absolute nightmare.  The U.S. and most nations in Europe are having a very difficult time servicing their debts and they desperately need tax revenues to increase.  If another major economic downturn causes tax revenues to go down again it could unleash absolute chaos on world financial markets.

The global economy is more interconnected than ever, and so a major crisis in one area of the world can have a cascading effect on the rest of the globe.  Just as we saw back in 2008, if financial disaster strikes nobody is going to escape completely unscathed.

So what should we expect for the rest of 2011?  Well, the truth is that it doesn’t look good.  The following are 21 signs of impending doom for the 2011 economy….

[Continued...]

http://www.salon.com/news/feature/2011/03/02/mother_jones_colbert_income_inequality

The scandal no one talks about: Income inequality

And a novel solution from Stephen Colbert: "Let the rich start their own country"

By Peter Finocchiaro
Salon.com
March 2, 2011


                                            Comedy Central

The March/April issue of Mother Jones magazine has a fascinating account of the growing income gap and staggering economic inequality in America. Bolstered by a selection of illuminating infographics, MJ writer Kevin Drum paints a bleak picture of opportunity in the U.S.:

[Continued...]

http://news.yahoo.com/s/yblog_thelookout/20110223/ts_yblog_thelookout/separate-but-unequal-charts-show-growing-rich-poor-gap

Separate but unequal: Charts show growing rich-poor gap

By Zachary Roth
Yahoo! News
Feb. 23, 2011

The Great Recession and the slump that followed have triggered a jobs crisis that's been making headlines since before President Obama was in office, and that will likely be with us for years. But the American economy is also plagued by a less-noted, but just as serious, problem: Simply put, over the last 30 years, the gap between rich and poor has widened into a chasm.

Gradual developments like this don't typically lend themselves to news coverage. But Mother Jones magazine has crunched the data on inequality, and put together a group of stunning new charts. Taken together, they offer a dramatic visual illustration of who's doing well and who's doing badly in modern America.

Here are three samples:

This chart shows that the poorest 90 percent of Americans make an average of $31,244 a year, while the top 1 percent make over $1.1 million:



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http://www.prisonplanet.com/as-the-obamas-and-the-ultra-wealthy-live-the-high-life-most-americans-are-going-through-economic-hell.html

As The Obamas And The Ultra-Wealthy Live The High Life Most Americans Are Going Through Economic Hell

The Economic Collapse
Feb 22, 2011

Barack Obama recently made the following statement to American families that are struggling to survive in this economy: “If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.” A few days after making that statement Obama sent his wife and children off on yet another vacation, this time to a luxury ski hotel in Vail, Colorado. But the Obamas are not the only ones enjoying the high life. Wealthy corporate executives and greedy Wall Street fatcats insist that profit margins are too tight to hire more American workers, and yet sales of luxury cars, private jets and vacation homes are soaring. Meanwhile, most American families are going through economic hell right now. In 2010, more Americans than ever before were living below the poverty line. Over 4 million Americans have been unemployed for more than a year, and over 5 million Americans are at least two months behind on their mortgage payments. As the Obamas and wealthy corporate executives jet off to fancy ski resorts, half of all American workers are earning $505 or less per week and 55 percent of American families are living paycheck to paycheck. Something is very wrong with this picture.

So is there anything wrong with working hard and enjoying the fruits of success? Of course not, as long as it was done honestly and not on the backs of the American taxpayers. But the truth is that many of the corporate executives that are enjoying luxury vacations right now would not even have companies to run if the American taxpayers had not stepped in and bailed them out during the financial crisis. Thanks to the U.S. government and the Federal Reserve, Wall Street bankers and top corporate executives are once again enjoying bonuses that most of us would consider obscene.

Meanwhile, most of the rest of the country is suffering very deeply.

Over the past several decades, the biggest financial institutions and the biggest corporations have worked really hard to “fix” the rules of the game in their favor. The truth is that our economy is no longer a “free market” capitalist system. Rather, what we have now is more accurately described as “corporatism” or “neo-feudalism”. The big corporations dominate almost everything, and whatever they don’t dominate the government does.

One of the key features of a “corporatist” system is that it tends to funnel all the wealth to the very top.

Back in 1976, the top 1 percent of earners in the United States took in 8.9 percent of all income. By 2007, that number had risen to 23.5 percent.

Ouch.

There are two different Americas today. There is the America of the gated communities, the private planes and the good life, and there is the America of declining wages, thrift stores and rising desperation.

What is saddest of all is that the most vulnerable people in society often suffer the most from all of this.

According to one recent study, approximately 21 percent of all children in the United States were living below the poverty line in 2010.

Do you think that the Obamas are thinking about any of this while they are enjoying their stay at a luxury ski hotel in Vail, Colorado?

The truth is that leadership is not just about words. Leadership is about setting an example.

Back in August, Michelle Obama took her daughter Sasha and 40 of her friends for a vacation in Spain.

So what was the bill to the taxpayers for that little jaunt across the pond?

It is estimated that vacation alone cost U.S. taxpayers $375,000.

Hey, Barack Obama won the most votes in 2008 and so if he wants his family to get as much enjoyment out of these four years as they can that is his prerogative.

However, if he wants to tell American families that they “might put off a vacation” after all the vacations that the Obamas have taken over the past two years then he is just being a massive hypocrite.

According to the New York Post, Barack Obama enjoyed a total of 10 separate vacations that stretched over a total of 90 vacation days during the years of 2009 and 2010.

During his first two years in office, he also managed to play 29 rounds of golf.

Oh, but it is the rest of us that have to cut back on our vacations.

But it is not just the Obamas that are enjoying the high life right now.

The wealthy have recovered nicely from the “recession” and now they are spending money by the gobs once again.

According to Moody’s Analytics, the wealthiest 5% of households in the United States account for approximately 37% of all consumer spending.

Life is very good in America if you have got enough money.

A recent article in USA Today detailed some of the things that wealthy corporate executives are spending money on in 2011….

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http://globalresearch.ca/index.php?context=va&aid=23228

Social Inequality Causes Economic Crashes

by Washington’s Blog
Global Research
February 14, 2011

John Kenneth Galbraith and Marriner Eccles Explained 50 Years Ago that Inequality Causes Crashes
 
In his definitive study of the Great Depression, The Great Crash, 1929, John Kenneth Galbraith wrote:

There seems little question that in 1929, modifying a famous cliche, the economy was fundamentally unsound. This is a circumstance of first-rate importance. Many things were wrong, but five weaknesses seem to have had an especially intimate bearing on the ensuing disaster. They are:

(1) The bad distribution of income. In 1929 the rich were indubitable rich. The figures are not entirely satisfactory, but it seems certain that the five per cent of the population with the highest incomes in that year received approximately one-third of all income. The proportion of personal income received in the form of interest, dividends, and rent – the income, broadly speaking, of the well-to-do – was about twice as great as in the years following the Second World War.

This highly unequal income distribution meant that the economy was dependent on a high level of investment or a high level of luxury consumer spending or both. The rich cannot buy great quantities of bread. If they are to dispose of what they receive it must be on luxuries or by way of investment in new plants and new projects. Both investment and luxury spending are subject, inevitably, to more erratic influences and to wider fluctuations than the bread and rent outlays of the $25-week workman. This high bracket spending and investment was especially susceptible, one may assume, to the crushing news from the stock market in October 1929.

Galbraith wrote that in 1954.

Marriner S. Eccles - Federal Reserve chairman from 1934 to 1948 - made a similar point in his 1951 book Beckoning Frontiers:

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

Numerous prominent economists in government and academia have since agreed that large inequalities can cause - or at least contribute to - financial crises, including:

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       Public sector man sitting in a bar: “They’re trying to take away our pensions.”
       Private sector man: “What’s a pension?”
              -- Cartoon in the Houston Chronicle

As states struggle to meet their budgets, public pensions are on the chopping block, but they needn’t be. States can keep their pension funds intact while leveraging them into many times their worth in loans, just as Wall Street banks do. They can do this by forming their own public banks, following the lead of North Dakota—a state that currently has a budget surplus.

Wisconsin Governor Scott Walker, whose recently proposed bill to gut benefits, wages, and bargaining rights for unionized public workers inspired weeks of protests in Madison, has justified the move as necessary for balancing the state's budget. But is it?

After three weeks of demonstrations in Wisconsin, protesters report no plans to back down. Fourteen Wisconsin Democratic lawmakers—who left the state so that a quorum to vote on the bill could not be reached—said Friday that they are not deterred by threats of possible arrest and of 1,500 layoffs if they don't return to work. President Obama has charged Wisconsin’s Governor Scott Walker with attempting to bust the unions. But Walker’s defense is:

“We're broke. Like nearly every state across the country, we don't have any more money."

Among other concessions, Governor Walker wants to require public employees to pay a portion of the cost of their own pensions. Bemoaning a budget deficit of $3.6 billion, he says the state is too broke to afford all these benefits.

Broke Unless You Count the $67 Billion Pension Fund . . .

That’s what he says, but according to Wisconsin’s 2010 CAFR [.pdf] (Comprehensive Annual Financial Report), the state has $67 billion in pension and other employee benefit trust funds, invested mainly in stocks and debt securities drawing a modest return.

A recent study by the PEW Center for the States showed that Wisconsin’s pension fund is almost fully funded, meaning it can meet its commitments for years to come without drawing on outside sources. It requires a contribution of only $645 million annually to meet pension payouts. Zach Carter, writing in the Huffington Post, notes that the pension program could save another $195 million annually just by cutting out its Wall Street investment managers and managing the funds in-house.

The governor is evidently eying the state’s lucrative pension fund, not because the state cannot afford the pension program, but as a source of revenue for programs that are not fully funded. This tactic, however, is not going down well with state employees.

Fortunately, there is another alternative. Wisconsin could draw down the fund by the small amount needed to meet pension obligations, and put the bulk of the money to work creating jobs, helping local businesses, and increasing tax revenues for the state. It could do this by forming its own bank, following the lead of North Dakota, the only state to have its own bank -- and the only state to escape the credit crisis.

This could be done without spending the pension fund money or lending it. The funds would just be shifted from one form of investment to another (equity in a bank). When a bank makes a loan, neither the bank’s own capital nor its customers’ demand deposits are actually lent to borrowers. As observed on the Dallas Federal Reserve’s website, “Banks actually create money when they lend it.” They simply extend accounting-entry bank credit, which is extinguished when the loan is repaid. Creating this sort of credit-money is a privilege available only to banks, but states can tap into that privilege by owning a bank.

How North Dakota Escaped the Credit Crunch

Ironically, the only state to have one of these socialist-sounding credit machines is a conservative Republican state. The state-owned Bank of North Dakota (BND) has allowed North Dakota to maintain its economic sovereignty, a conservative states-rights sort of ideal. The BND was established in 1919 in response to a wave of farm foreclosures at the hands of out-of-state Wall Street banks. Today the state not only has no debt, but it recently boastedits largest-ever budget surplus. The BND helps to fund not only local government but local businesses and local banks, by partnering with the banks to provide the funds to support small business lending.

The BND is also a boon to the state treasury. It has a return on equity of 25-26%, and it has contributed over $300 million to the state (its only shareholder) in the past decade -- a notable achievement for a state with a population less than one-tenth the size of Los Angeles County. In comparison, California’s public pension funds are down more than $100 billion—that’s billion with a “b”—or close to half the funds’ holdings, following the Wall Street debacle of 2008. It was, in fact, the 2008 bank collapse rather than overpaid public employees that caused the crisis that shrank state revenues and prompted the budget cuts in the first place.

Seven States Are Now Considering Setting Up Public Banks

Faced with federal inaction and growing local budget crises, an increasing number of states are exploring the possibility of setting up their own state-owned banks, following the North Dakota model. On January 11, 2011, a bill to establish a state-owned bank was introduced in the Oregon State legislature; on January 13, a similar bill was introduced in Washington State; on January 20, a bill for a state bank was filed in Massachusetts (following a 2010 bill that had lapsed); and on February 4, a bill was introduced in the Maryland legislature for a feasibility study looking into the possibilities. They join Illinois, Virginia, and Hawaii, which introduced similar bills in 2010, bringing the total number of states with such bills to seven.

If Governor Walker wanted to explore this possibility for his state, he could drop in on the Center for State Innovation (CSI), which is located down the street in his capitol city of Madison, Wisconsin. The CSI has done detailed cost/benefit analyses of the Oregon and Washington state bank initiatives, which show substantial projected benefits based on the BND precedent. See reports here and here.

For Washington State, with an economy not much larger than Wisconsin’s, the CSI report estimates that after an initial startup period, establishing a state-owned bank would create new or retained jobs of between 7,400 and 10,700 a year at small businesses alone, while at the same time returning a profit to the state.

A Bank of Wisconsin Could Generate “Bank Credit” Many Times the Size of the Budget Deficit

Economists looking at the CSI reports have called their conclusions conservative. The CSI made its projections without relying on state pension funds for bank capital, although it acknowledged that this could be a potential source of capitalization.

If the Bank of Wisconsin were to use state pension funds, it could have a capitalization of more than $57 billion – nearly as large as that of Goldman Sachs. At an 8% capital requirement, $8 in capital can support $100 in loans, or a potential lending capacity of over $500 billion. The bank would need deposits to clear the checks, but the credit-generating potential could still be huge.

Banks can create all the bank credit they want, limited only by (a) the availability of creditworthy borrowers, (b) the lending limits imposed by bank capital requirements, and (c) the availability of “liquidity” to clear outgoing checks. Liquidity can be acquired either from the deposits of the bank’s own customers or by borrowing from other banks or the money market. If borrowed, the cost of funds is a factor; but at today’s very low Fed funds rate of 0.2%, that cost is minimal. Again, however, only banks can tap into these very low rates. States are reduced to borrowing at about 5% -- unless they own their own banks; or, better yet, unless they are banks. The BND is set up as “North Dakota doing business as the Bank of North Dakota.”

That means that technically, all of North Dakota’s assets are the assets of the bank. The BND also has its deposit needs covered. It has a massive, captive deposit base, since all of the state’s revenues are deposited in the bank by law. The bank also takes other deposits, but the bulk of its deposits are government funds. The BND is careful not to compete with local banks for consumer deposits, which account for less than 2% of the total. The BND reports that it has deposits of $2.7 billion and outstanding loans of $2.6 billion. With a population of 647,000, that works out to about $4,000 per capita in deposits, backing roughly the same amount in loans.

Wisconsin has a population that is nine times the size of North Dakota’s. Other factors being equal, Wisconsin might be able to amass over $24 billion in deposits and generate an equivalent sum in loans – over six times the deficit complained of by the state’s governor. That lending capacity could be used for many purposes, depending on the will of the legislature and state law. Possibilities include (a) partnering with local banks, on the North Dakota model, strengthening their capital bases to allow credit to flow to small businesses and homeowners, where it is sorely needed today; (b) funding infrastructure virtually interest-free (since the state would own the bank and would get back any interest paid out); and (c) refinancing state deficits nearly interest-free.

Why Give Wisconsin’s Enormous Credit-generating Power Away?

The budget woes of Wisconsin and other states were caused, not by overspending on employee benefits, but by a credit crisis on Wall Street. The “cure” is to get credit flowing again in the local economy, and this can be done by using state assets to capitalize state-owned banks.

Against the modest cost of establishing a publicly-owned bank, state legislators need to weigh the much greater costs of the alternatives – slashing essential public services, laying off workers, raising taxes on constituents who are already over-taxed, and selling off public assets. Given the cost of continuing business as usual, states can hardly afford not to consider the public bank option. When state and local governments invest their capital in out-of-state money center banks and deposit their revenues there, they are giving their enormous credit-generating power away to Wall Street.

http://www.prisonplanet.com/derivatives-the-real-reason-bernanke-funnels-trillions-into-wall-street-banks.html

Derivatives: The Real Reason Bernanke Funnels Trillions Into Wall Street Banks

Seeking Alpha
Feb 9, 2011

We’ve been over the numerous BS excuses that US Dollar destroyer extraordinaire Ben Bernanke has made for QE enough times that today I’d rather simply focus on the REAL reason he continues to funnel TRILLIONS of Dollars into the Wall Street Banks.

I’ve written this analysis before. But given the enormity of what it entails, it’s worth repeating. The following paragraphs are the REAL reason Bernanke does what he does no matter what any other media outlet, book, investment expert, or guru tell you.

Bernanke is printing money and funneling it into the Wall Street banks for one reason and one reason only. That reason is: DERIVATIVES.

According to the Office of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.

Five banks account for 95% of this. Can you guess which five?



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http://www.progress.org/2011/fold706.htm

Rebuttal to Arguments Against Land Value Taxation

by Fred E. Foldvary, Senor Editor
The Progress Report
February 28, 2011

On 18 October 2010 I wrote on "Arguments Against Land Value Taxation" (to see it, click here ). I now provide the rebuttals.

1. Critics say that the supply of usable land can be expanded by filling, clearing, and leveling. No, because that does not change the cubic meters of space within the boundaries of the area. The improvements are capital goods, not land. Taxing land value does not tax the improvements.

2. Critics say that the supply of land offered in the market is not fixed. Yes, the quantities offered for sale are not fixed, but the total amount of land available is fixed. The sale of land just changes the persons who have title. The total quantity is important in setting the market rent and price of land. The fixed total quantity, and the fact that land was provided by nature, makes land rent an economic surplus that can be tapped with no economic damage.

3. Critics say that there is plenty of bare land, so there is no shortage of land, and no land problem. Yes, there is much unused land, but what matters is the scarcity of land in locations people want to use.

4. Critics say that much of the value of land comes from services and improvements such as streets, parks, and security, so land-value taxation would tax the capital goods along with land. No, because if the added value comes from privately provided works, the payment would go to the providers by contract. If the public works are provided by government, then the added rental goes to the government to pay back value received and avoid a subsidy to landowners.

5. Critics say that people have much of their asset value in land, and LVT would result in great losses and also wreak financial markets as much of lending is for mortgages. Not if those with net losses are compensated with bonds. To see "How to end stinking taxes immediately" click here.

6. Critics of LVT claim that speculation is an essential part of a market economy, as entrepreneurs seek the best timing for development, and LVT results in premature redevelopment and causes too much building. No, because the tax on land value is independent of its actual use, based only on its potential in its highest and best use, and it is the lack of LVT that in some cases causes premature development expecting higher land value, and in other cases causes speculators to avoid developing, waiting for higher land values. LVT promotes the optimal timing as the opportunity cost of not developing is in money and thus has a greater impact. What is bad is not speculation as such but subsidized land value, distorting incentives.

7. Critics say that LVT redistributes wealth from landowners, but there is nothing morally wrong with an inequality in wealth and income. But when government provides public goods paid for by taxes other than on land, this pumps up rent and land value, redistributing wealth from workers to landowners. And for land value provided by nature, geoist ethics say that human equality requires an equal benefit from natural resources. Inequality in market wages respects equal self-ownership, while an unequal benefit from the natural heritage does violate our creation as moral equals.

8. Critics say that LVT is not fair to homeowners whose land goes up in value and whose wages do not rise. But LVT would provide an opportunity for companies to provide insurance against an unexpected increase in the land value tax. The insurance would have a cost at the time of purchase, so that the new titleholder would know if he could afford the payments. Also, retired folks with low incomes could postpone the payments until the property is sold or inherited.

9. Critics of LVT claim that much of wages is due to luck, connections, and talents, so a portion is wages is unearned. But as Henry George wrote, justice is the end, taxation only the means. It is just for the benefits of natural resource to be shared, and for landowners to pay back the rental generated by public goods. Self-ownership is also just, even if some have greater wealth due to luck. Nobody is coercively harmed if one person has more talent than others. If others own your luck, you become a slave to them, violating self-ownership.

10. Critics of LVT claim that rent is often earned as landlords actively seek out the best tenants and the best use of a site. But this is not rent; the return on this exertion is wages. Those seeking the best tenants and sites are in the role of entrepreneur, not landlord. Some of the rental that tenants pay is wages to the entrepreneur and to the manager.

11. Critics say that the tax burden should be shared by everyone, not concentrated on landowners, and that since tenants don’t pay taxes, they will vote for bigger government. But the rent tapped for public revenue is what is paid by tenants. The rent could be taken directly from tenants, skipping the landlord middleman. A “citizens’ dividend” or distribution of some of the rent to all residents would provide an incentive for people to avoid wasteful government spending, as that would reduce their cash dividend.

12. Critics claim that there is no precise method of separating land value from improvement value. They have not talked to professional real estate appraisers. Land value appraisal is needed for fire insurance, mortgages, the purchase of land with a building to be demolished, and other private transactions. Techniques to appraise site value include comparable sales of bare lots or lots sold for demolition, calculating the replacement costs of buildings minus depreciation, and maps of neighborhood properties.

13. Anarchist critics claim that LVT would finance government tyrants. But geoism is not just the taxation of land but equally sharing the benefits. Geoism opposes landlord tyranny.

14. Socialist critics claim that LVT leaves intact capital inequalities. But much of the historical inequality of wealth has come from land tenure. Over time, inherited wealth other than land dissipates or gets donated to charity. With good education and equal access to natural opportunities, inequalities in financial assets are not unjust so long as there is no force or fraud.

15. Critics of LVT claim that property ownership promotes civil values and stability. This has been disputed, but if true, the ownership of one’s human capital, future wages, buildings, and personal property should provide similar benefits.

For more detailed rebuttals, read the book Critics of Henry George.