Our current fiat central-banking system is on the brink of failure. Only endless money printing is keeping us afloat. A Gold-backed currency alone is also insufficient because there is not enough gold. Traditional European fractional reserve lending is not Constitutional but has led to a history of continual market instability. When banks lose their fractional reserves, they become insolvent and fail. This led to the creation of bigger and more corrupt banks. Yet it was the big corrupt international banks engineering the market instability in the first place.
Banks lend based on small fractional reserves they keep in reserve in the form of stocks. If the stock market crashes, they lose their reserves and cannot lend and become insolvent. Full reserve lending is the answer according to economist Milton Friedman.
A stable and Constitutional banking system immune from failure would create a currency based on land, real estate, gold, oil and a basket of real assets. A stable and Constitutional system would be full reserve. We don't need the the Bank of International Settlement whose Basel I Accords crippled Japan and whose Basel 2 Accords triggered the 2008 housing collapse.
Currently, big FED members banks borrow $1000 from the FED and can lend $10,000 or more based on a 10% fractional reserve requirement. This is the "money multiplier" principle and means that in reality, the big banks are creating a majority of the currency (out of thin air) and not Congress. Congress loses out on earning revenue on all the prime interest on money creation.
1. Federal Congress to coin all money via the US Treasury.
2. Money created is done at the moment of loan origination for only real assets like land purchases, hospitals, mining, factories. (on-demand)
3. Local non-profit Safety Society System banks assure credit worthiness and service loans. They make money on loan origination fee and and small monthly service fees.
4. Federal government earns revenue on 100% money creation and charging a simple interest rate.
5. Simple interest rate (fee) gives saving the advantage over borrowers, regulates value of currency, and prevents inflation (hidden tax).
6. Communities and groups can apply together for larger loan approval. We don't need the capitalist with his unelected machiavellian economic power to give us museums and aquariums.
7. Home loan borrowers earn equity on their first payment. No amortization schedule.
8. Missed monthly payments are deducted from equity.
9. Default doesn't occur until a person loses all equity then the bank can repossess a real asset. No borrowing for stocks or derivatives. This becomes an instant reverse mortgage and built-in mortgage insurance policy.
10. Depreciation is deducted from equity.
11. Speculative investing would never be done by the Safety Society which restores Glass-Steagall. Let venture capitalists continue to do all the speculation as they do now with no bail-outs.
12. 100% Deposited money is protected at the Safety Society and never re-loaned.
13. Repaid money is returned to US Treasury and retired.
14. Money Supply x Velocity = Price (Inflation) x Growth. Since money is only created as needed, the money supply never exceeds or lags the need.