Monday, November 22, 2010


The consequence of this debt-based, fiat, usury-based, fractional reserve system is inflation, engineered stock market crashes, banking failures, and the enslavement of the people. Across the world we see wars waged; not to spread democracy, but to force more countries to submit to this corrupt and oppressive world-banking system. This year we are seeing countries like Iceland, Greece, Ireland, and Portugal on the verge of bankruptcy forced to give away control of their highways, rail lines, utilities, and government pensions to the international ultra-elite in exchange for a bailout.

However, all the corruption, and all the economic turbulence could disappear today, if WE THE PEOPLE would just become united behind our Constitution in taking back our right to "coin" our own money. To do that, we would need switch our banking, lending and economic system.

#1 allow US Treasury to create 100% of money

(Current money is based on bonds that the FED sells at interest to ultra-elite families. The FED never just prints money without selling a bond. Every dollar is tied to a bond and therefore is a certificate of indebtedness and bondage)

#2 back US Currency with gold, silver, commodities, land, manufacturing machinery, grain, real-estate, and other natural resources.
(Currently money is based on debt and held up by the Petro-Dollar system, but not for long as China is buying oil in Yuan from Russia and Iran)

#3 allow local and state banks to have liberal access to capital issued from the US Treasury directly. Cut out the money middle-men.
(Currently, only mega-FED-member banks can borrow from the FED. That is why smaller banks go bust and go bankrupt and don't get a bailout. The whole justification for the mega bank was because small banks would fail in the old system)

#4 allow local banks to verify credit-worthiness of local citizens and approve them for no-interest loans on non-depreciating assets.

(banks today issue amortized loans, which collect interest up front which is the major driver of inflation in our economy because the only way you make money on your home is if the price of the house goes up when you sell it. Banks charge interest today because of risk of not being paid back. However, if the asset being invested in has stable, intrinsic value, then the bank is not taking risk to invest in it. If the borrower goes bust, the bank takes possession of the valuable asset).

#5 The Federal Government and the "non-profit" local bank "Community Safety Society" would generate revenue by charging loan origination fees and modest monthly service fees as they do now.
(This is how local banks make their money anyways. Local banks never collected the interest but just service the loans. This system would benefit the Federal Government and increase revenue because, currently the Federal Government only collects "prime" on a fraction of the money that is created in the system. In this system, the Federal Government collects a "voluntary" tax on all the money that is created in the system.)

#6 When an individual, group, or community goes to the local or state bank desiring a no-interest loan, they must prove their credit-worthiness via proof of consistent wages, proof of sales, value of resources mined, value of resources produced, and/or amount of revenue generated via a 1% sales tax.
(This is how our the value of our currency could be gaged. When a person wants to purchase land or build a house, then money would be created that reflects the value of that land or that property. When a group wants to get a loan to mine a resource or grow a field of corn, the money given would reflect the value of that resource being mined, or the corn that would be produced)

#7 As the borrower repays monthly, they begin the build equity immediately as well as pay the nominal monthly fees. If the individual were to miss a payment, that months payment and fee would be deducted from the equity in the asset. Thus, the loan becomes an instant reverse mortgage if needed. Bankruptcy, forfeiture, default, repossession would only occur when the person lost all equity in the asset.
(Currently, our system repossesses after just one or two missed payments. When the banks evict you and repossess, the borrower loses any and all equity they may have had in the property.)

#8 Operate Local Community Safety Society Banks on the basis of Full Reserve Banking. Instead of lending 10X of the money they have in deposits and what they borrow from other banks, require that banks only lend 1:1 the capital that they have obtained from the US Treasury. All deposits are not used to make new loans but kept at the bank ready for withdrawal at any time.
(Currently, under a fractional-reserve system, banks only are required to keep 5% of the money they lend as cash reserves which they keep as stocks and bonds or toxic assets because of inflation and devaluation of cash. If those reserves lose their value due to a stock market crash, or bubble bursting, then the banks become insolvent and can't lend or pay depositors and go bust. Fractional Reserve Banking is exactly what has caused the economic volatility in the US since its beginning. In a Fractional Reserve Banking system, it is the mega-banks themselves which create 90-95% of the money in the money supply and not the Congress as the US Constitution requires.)


Anthony E. Larson said...

Fractional banking is at the heart of our system, and the anchor that weighs us down. But I seriously doubt that anyone will acknowledge this or attempt to do anything about it. We sold or inheritance for a bowl of porrage nearly a century ago. In spite of warnings like yours, the American public has done nothing. I doubt they will do anything now. Even though we know this, we few who understand these things are powerless to turn the juggernaut. We will suffer the pain of our forefathers' folly.

Anonymous said...

Is this a concept taught by reputable economists at BYU? Just curious.

Anonymous said...

Please explain how #2 would/could be done.

David B said...

This idea is not taught at BYU. BYU is generally mainstream on most ecomomic issues. What it has taken to come up with this current plan is to review the history of banking from the Templars, to the DeMedici's to Lloyds of London and deconstruct why our system is the way it is. Milton Friedman is the most reputable critic of put current system.

David B said...

Implementing #2. When a group or individual or community goes to their local or state bank for a no-interest loan, they can only get a loan for a non-depreciating assets that have an intrinsic value at least for the life of the loan. The asset that is purchased with the barrowings itself becomes the backing for the money created by the US Treasury to purchase it. In this way, money that is created is backed by the land, buildings, machinery, factories, it is purchasing.

If there is too much liquidity in the market, people won't need to borrow and therefore new money wouldn't need to be created. If there is not enough liquidity, then individuals would take out loans and new money would be created backed by the assets, land, farms, seed it's being used to purchase.

If you want currency that can be turned in for assets, that is exactly what you are doing as you repay you loan. You are turning in money in exchange for a real asset (real-estate).

David B said...

Gold and silver would also back currency. But only part of the money supply would need to be covered. We could call this M0,M1 (cash, checking accounts, savings).

The money created, lent out, and then returned to the US Treasury which is being used to purchase real assets or land or machinery is being returned and is backed by the asset being purchased with it. So we wouldn't need gold to cover this part of the money supply.