FedUpUSA

Archive for December, 2010

The headline over at Drudge really doesn’t need much commentary.

Although, in case you do need commentary, that’s $44,918.74 for each man, woman and child in the United States, most of which is due to bank bailouts and useless stimulus spending.

Merry Christmas.

Wall Street wins, Main Street pays — again.

This was the year America finally took on the power and greed of the Wall Street banks.

And the banks won.

They dodged the bullet of real reform, probably for all time. They bounced back to post huge profits, helped by legal theft from the middle class. They completed their takeover of both political parties — and bought themselves a new Congress even more pliable than the old one.

Middle-class America is flattened, devastated and broke. The bankers that caused it all have escaped punishment. They’re raking in huge profits. Oh, and the tax cuts just got extended for high earners, too!

Game over.

Of all the signs of Wall Street’s gloating and arrogance this year, which one stands out the most?

The image of the president of the republic, traveling to New York to reassure them that they wouldn’t suffer too much from new regulations?

Or maybe billionaire Steve Schwarzman, the private-equity oligarch at Blackstone Group /quotes/comstock/13*!bx/quotes/nls/bx (BX 14.10, +0.02, +0.14%)  , complaining that any attempt to make him pay actual income tax on his income was akin to “when Hitler invaded Poland.”

Not France. Not Belgium. Poland.

In the aftermath, he grudgingly issued a partial retraction.

In any civilized society he would now be pariah. He’d have to eat alone at unfashionable restaurants, and the waiters would spit in his soup.

Instead, as the year drew to a close, I saw him being interviewed on TV, the hosts hanging on his every word.

In 2010, Wall Street’s year, Schwarzman’s only real sin was getting caught flaunting his contempt for the nation.

Far worse went on behind closed doors.

Consider the Dodd-Frank reform act — all 2,300 pages of it. Sure, it fills in a few regulatory gaps, ends a couple of the more gratuitous abuses. You have to throw a few scraps to the masses.

But most of the reforms are meaningless. New rule books and committees. Bah. They’re like half-built fences. Anyone can just walk around them.

As for the new consumer finance watchdog? The agency that’s supposed to stand up to the banks will be housed… within the Federal Reserve. Literally, it will be a tenant of the banking system.

Champions of the “reforms” say this won’t really matter. But if that’s the case, why did Wall Street fight so hard to make sure it happened?

There are no coincidences in Washington.

Meanwhile, missing from this giant “reform” bill was any actual, serious reform like threatening crooked bankers with real jail time. Or ending the “other people’s money” racket of securitization, or smashing “too big to fail” megabanks into smaller firms that can never again threaten the republic.

Instead we’ve enshrined “too big to fail” as national policy. A standing taxpayer guarantee to the biggest banks. What a deal!

It’s amazing when you think about it.

Look at the chaos and catastrophe these guys have left in their wake. One middle-aged man in five is out of work. Tens of millions of families have been financially wiped out. The national debt has nearly doubled.

If inner-city gangs had done this to America, we’d have martial law. If Arabs had done it, we’d have launched another war.

Wall Street bankers? They’ve walked away scot free. And they’re actually being rewarded.

By keeping short-term interest rates near zero, the Fed is basically robbing your grandmother, and other hard-working savers, and giving to Wall Street. The banks borrow from us for free, and then lend us back our own money at interest by purchasing Treasury bonds.

And in a perfect circle of cynicism, the beneficiaries of bailouts are now spending some of their loot lobbying our Congress to overrule us on reform.

The commercial banks and investment firms spent a total of $118 million lobbying just in 2010, according to the Center for Responsive Politics.

That included $4 million spent directly by Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 4.74, +0.03, +0.64%)  , nearly $3 million by Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 12.99, +0.01, +0.08%)  , $3.5 million by Goldman Sachs Group Inc. /quotes/comstock/13*!gs/quotes/nls/gs (GS 168.25, +0.02, +0.01%)   and $2.8 million by Schwarzman’s Blackstone.

This is in addition to the vast campaign contributions the top brass at these firms have lavished on pliable congressman, and indirect political lobbying through trade bodies like the American Bankers Association.

But it’s unfair to give the bankers all the credit for subverting democracy.

They couldn’t have done it without the Democrats.

Wall Street has spent years capturing the party establishment.

Think of the lavish campaign checks. The lucrative hedge fund “adviser” jobs. The pervasive influence of pinstriped “progressives” like Larry Summers and Bob Rubin.

This was the year the investment paid off. Big time.

Top Democrats were too terrified of alienating their sugar daddies to pass real reform.

But the joke was on them.

First, Wall Street’s campaign contributions aren’t that important — they only account for about 10% of the party’s money. The Democrats could have lost all of it (an unlikely scenario in any event) and still been in business.

Second, the Democrats would have got a lot more credit — and contributions — from the rest of America if they’d stood up to Wall Street.

And third: Sucking up to Wall Street didn’t help them anyway. Wall Street still turned Republican. The American Bankers Association, J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 41.03, +0.03, +0.07%)  , Citigroup, Bank of America, even Goldman Sachs: This time around, more than half their donations went to the GOP.

Most Americans don’t realize it, but this talk of a “grassroots” and “anti-establishment” election was a bunch of hooey. What really happened was that Wall Street has just bought itself a new, even more compliant Congress.

The new Republicans are already fawning over the bankers. They’re promising to stop the restrictions on (ahem) “financial innovation.” Congressman Spencer Bachus — the next chairman of the House Financial Services Committee — actually said “Washington and the regulators are there to serve the banks.” Let the good times roll!

It was the greatest heist in history. The bankers pulled it off under everyone’s nose.

Brett Arends is a columnist for MarketWatch and The Wall Street Journal, based in Boston.

MarketWatch

I’m stunned.

Really.

Dennis Kucinich, which many people have (properly) labeled as one step removed from a communist in the past, and who has a reputation as having a hard-core left slant in his politics, has just written up and introduced a bill that will fundamentally restore the free market – for real – to banking and credit.

It will also piss a lot of people off.

His bill would end the process of money issuance by The US Federal Government as a debt instrument.  It would thus restore actual “lawful money” as Ron Paul claims to want, but in a form he has never, ever elucidated.  It does, however, exactly match up with the base position I have propounded upon, along with Bill Still and a few others.

Instead, Treasury would issue and spend into circulation United States Notes.  The existing “FOMC” would be replicated in Treasury with a mandate identical to The Fed’s, with one important addition – a requirement that their operations be neither inflationary or deflationary.

That is, the precise mandate that is required – that United States Money maintain its purchasing power.

It would bring into effective existence my One Dollar of Capital standard for bank lending, by requiring that all lending be funded by either a loan granted by Treasury (where interest would inure to the Government, not a private bank) or be funded by the issuance of private debt with no government backstop.

It would absolutely bar the use of depositor reserves for any lending purpose whatsoever – that is, if you deposited funds into a transaction account (any sort of “demand” account) the bank would have to hold the funds as an actual custodian with fiduciary requirements for performance.  Other than by direct and punishable fraud, depositor losses would instantly become impossible.

Note that this bill would not bar lending at interest. 

However, it would immediately end the abuse and extortion of The United States Federal Government by banks and other institutions who argue that they “cannot be allowed to fail”, then using that power of extortion to extract monstrous amounts of money from the economy for their personal benefit – by some estimates, as much as 20% of GDP.  It would force the government to actually borrow by specific Congressional authorization in order to spend beyond its means.  Such borrowing would have to be funded in the open market as the “Primary Dealer” nonsense would instantly end, so if the Government overspent it could be immediately reined in and stopped by the open market simply by refusing to buy (or demanding a very high interest rate.)

Many people say that Democrats are the party of “overspending.”  Well, not any more.  When one of the standard-bearers of The Left produces a work like this, and actually propounds that it be passed into law, immediately ending all of the abusive practices of the financial industry, the usual claims of the folks on the “right” side of the aisle are turned on their ear.

We’re about to find out if people like Ron and Rand Paul really stand for what they claim, or if they’re empty suits.  If they do, then I expect to see them on the Tee Vee within hours demanding passage of this bill, and joining with Mr. Kucinich in making sure that it is immediately reintroduced in the new Congress – and passed. 

If that does not happen then these two claimants of a demand for “sound money” have been immediately and permanently exposed as FRAUDS, as will any so-called “Tea Party” members of Congress.

This is a bill that must become law.

NEED_ACT

About This Project

The world’s global economy is rapidly collapsing, and now, more than ever, we need to use technology to enhance important books with multi-media elements, while also allowing them to be updated – in real time! That’s why, with your help, my new book, “No More National Debt,” will become one of the most important books of the Information Age.

By embedding my book with HyperScan® QR codes, sound and motion leap from the pages, adding important timely elements to each chapter. By scanning these HyperScan codes with any QR code scanning application (such as AT&T Code Scanner, QR Reader, Code Scan, ScanLife, or many more) on your iPhone, Android phone, Blackberry, or other smart phones, you will launch vital breaking information, right in the palm of your hand!

You’ll immediately see why this book project is absolutely unique and a book publishing game changer — and that’s before we got to the content.

Try it – the HyperScan code (in the window above) takes you to the following 8-minute YouTube of my keynote address at the most prestigious monetary reform conference in the world, at Bromsgrove, England on Oct. 29, 2010. The speech pretty well summarizes what I’m up to in this book:

“No More National Debt” will have around 50 HyperScan QR codes embedded in it. I’ll have one for every color picture, so the book, itself, can be printed in black ink only (with your phone providing full color photos and videos!). I’ll have HyperScan QR codes linking to my series of 17 “Still Reports on the Economy” YouTube videos, and have spare HyperScan QR codes which I can assign future content to, as well. This is not just emerging technology; the trademark owner is working day and night to get this up and running to meet my needs (see below for more information).

This is a completely new, never-before-done technology, but it is up and running, as you can see. Note: In case there is any trouble with Kickstarter properly displaying the HyperScan code, I will put one up on my website, www.SecretofOz.com.

ABOUT ME:
My passion is monetary reform; it’s an important issue that unfortunately only comes to light when there’s a lot of pain – like we have now. I’ve been delivering educational books and videos about this subject for over 20 years; in fact, one of the videos I produced, “The Money Masters”, has become one of the most pirated videos in Internet history. My recent award-winning documentary, “The Secret of Oz,” really helped get me on the map. In 2010 alone, I have spoken in Germany, Sweden, England and Iceland on monetary reform. But Nov. 30 I got laid off from my day job just as I was starting to write this book, so now, everything is being compressed. I’m moving fast before I run out of money. The financial support will keep me going for an additional 2-3 months, plus print the first run of books before I can start getting a revenue stream going. I expect it to do very well, probably end up selling it to a big publisher, but it’s hard to sell a really big, new idea until you have the first one made and sitting in your hand. I hope to have this out by Feb. 1. I have several big conferences in February. Plus, I’ve been invited to Ireland, Greece, Germany, Sweden, Holland, Cameroon, and Dubai, just as soon as the book is out to talk about this solution in their respective nations.

The first chapter is really short and sweet, but reveals just how simple, yet effective the monetary reform concept is. In fact, download a QR scanning application now (such as AT&T Code Scanner, QR Reader, Code Scan, ScanLife, or many more), and you’ll see how visually stunning a black and white page can become!

CHAPTER 1 – The Magic Isle of Guernsey

Once upon a time, there was a little island in the English Channel – much closer to France than to England – called Guernsey. Yes, that’s where the Guernsey cow came from. Guernsey cows are famous because their milk has a golden color due to an exceptionally high content of beta-carotene, a source of Vitamin A. And you thought this was to be a book about money? Hold on, we are getting there.

Despite the fact that island of Guernsey has only 30 square miles and a population of only 65,000 people and very little in the way of natural resources except cows, their per capita income is $40,000 per year, 9th highest among the 200 or so countries of the world. What gives? Guernsey has used a money system since 1817 that can serve as a model for the rest of the world to use to escape the ongoing great depression of 21st century.

Despite its proximity to France, Guernsey is actually a British Crown Dependency and, to its credit, has never joined the European Union. After the Napoleonic Wars, Guernsey was in dire economic straits. The island’s road were mere cart-tracks, only 54-inches wide. In wet weather they were virtually impassable. There was not a vehicle for hire of any kind on the island. There was no trade, nor much hope of employment among the poor. The sea was washing away large tracts of land due to the sorry state of the dykes.

Guernsey, like most nations at that time (as well as today) had borrowed heavily from banks. The States Debt was £19,137 with an annual interest charge of £2,390, but the gross national revenue of the entire island was only £3,000, leaving only a paltry £610 per annum to run the entire island. In other words, interest paid to banks consumed 80% of the GDP, thus reducing the populace to a state of pitiful serfdom.

In 1815, a Committee of well-respected, public-spirited elders was assembled to finance the building of a Public Market near the main harbor, Saint Peter Port, so the farmers could more easily sell their products for export. The cost of the new facility would be £6,000. In addition, fixing the dykes would cost an additional £10,000.

Further taxation of the impoverished island was impossible. Borrowing the money from the banks would result in even higher interest charges that could never be paid. The Committee made a historic recommendation to remedy this dire situation.

“The Committee recommends that the expense should be met by the issue of States Notes of 1£ Sterling to the value of £6,000 … and that these notes will be available not only for the payment of the new market, but also for Torteval Church, roads to construct, and other expenses of the States…. ”

The Committee argued that there was little to fear from inflation because the local banks already had £50,000 of their money (Notes) in circulation. As a further protection against inflation, the overly-cautious citizens of Guernsey placed redemption dates on the notes of April 1817, October 1817, and April 1818. In other words these notes were good for payment of taxes and good as regular money in circulation until the expiration date was reached. At that time, the notes would no longer be legal tender and the State would destroy them.

“In this manner, without increasing the States’ debt, it will be possible to finish these works, leaving sufficient money in the Exchequer for other needs.”

Once the good citizens realized that these notes would work without the skies falling on the gentle island, additional issues took place in 1820 and 1821. By 1821, some £10,000 of Guernsey Notes were in circulation, all created without debt.

“[It was] the most advantageous method of meeting debts, from the point of view both of the public and the States finances. Indeed, the public seemed to realize this fact, and, far from being averse to taking the notes, they sought them out eagerly.”

The citizenry clearly understood that these Guernsey Notes were clearly government financing in the public interest. They also realized that if there were to be any inflation as a result, at least it was better than no money at all, and at least they would all shoulder the inflation equally.

In 1824, another £5,000 notes were issued for the markets, and in 1826 £20,000 to erect Elizabeth College and certain other schools.

By 1829, £48,000 worth of Guernsey debt-free Notes were in circulation, and by 1837, over £55,000.

“In the Billet d’Etat it was a frequent subject for congratulation; and it was stated over and over again by eminent men of those times that without the issue of States’ notes, important public works, such as roads and buildings could not possibly have been carried out. Yet by means of the States’ issue, not only were these works accomplished, but the Island was not a penny the poorer in interest charges. Indeed, the improvements had stimulated the flow of visitors to the island, and with increased trade, the island enjoyed its new-found prosperity.”

In 1826, however, the first signs of opposition by the banking community began. A complaint was lodged with the British Privy Council that Guernsey had no right to issue debt-free notes. However the Guernsey (also known as the “States”) Financial Committee explained the situation to the satisfaction of all, the matter was closed.

The next year, 1827, surprise, surprise, a new commercial bank opened, called “Old Bank”. They began printing up their bank notes in such quantity that the island became flooded with money. A few years later, Guernsey feared that inflation would set in – or worse – that their own debt-free money experiment would be blamed for the inflation somehow. So a Committee was appointed to confer with the banks. The result of these meetings remains a mystery to this day; £15,000 of Guernsey Notes would be withdrawn from circulation and the government would heretofore be limited to issuing a grand total of only £40,000 of their own notes. This agreement remained in force for the next 70 years.

In the wake of World War I, the banks came under severe restrictions on how much money they could issue. All bank money was being directed towards the war effort. But Guernsey was under no such restriction, probably because its experiment was unique, and perhaps forgotten.
Guernsey made good use of her opportunity. By the end of the war, in 1918, Guernsey had issued £142,000, and 40 years later, that had grown to £542,765. Today, private bank notes no longer exist. British money circulates side by side with State Notes.

“Naturally, there is a greater demand for the States Notes; no sane citizen of Guernsey wishes to have his taxes increased to pay debt charges! To enlarge on this theme: In 1937 the States Note money, about £175,000, cost the States only £450 for printing and handling. A loan of the same dimensions would have cost about £11,383 annually. So can you blame the Guernsey taxpayers for preferring their own money since, under their sensible and benevolent financial system they pay hardly any income tax.

“During the entire experiment in Guernsey, from 1817 to date, there has at no time been a threat of inflation from the creation of States Notes. At all times, the States were very careful in the issue and cancellation of notes according to their ability and requirements. ”

In other words they carefully controlled the quantity of their money in circulation.

“Any visitor to Guernsey is immediately impressed by the vast difference in prices between the island and the mainland in Britain. Thanks to the exceptionally low taxation and import duties, Guernsey enjoys low prices, plenty of money, and a high standard of living. In fact, Guernsey can afford to leave worries about inflation to the debt-ridden mainland! ”

Fortunately, the Guernsey experiment is not an aberration. It has been tried time and time again, always with success. The bankers, however inevitably attack these in-the-public-interest, debt-free government issues of money. Debt-free money is in everyone’s interest except bankers’. Typically, they will use their money and influence to create some financial emergency, then bribe sufficient politicians to convince them to vote for legislation giving them a monopoly an issuing all the nation’s money as a loan.

————

So, there you have it – the first look at this ground-breaking new book. This type of theme will be a recurring theme in this book: There is a way for citizens and their governments to take back the money-creation power of the banks. Yes, bankers are experts with money, but they are experts in maximizing their profit and rarely have much interest in the public interest. Freeing your government from borrowing money from bankers is the first, and most important step for national freedom and prosperity. It is also THE most important step to limiting governmental overspending. If a government cannot borrow, it MUST live within its means. Guernsey printed a small amount of additional money to create infrastructure projects in the public interest. Debt-free, government issued money — where the quantity is properly controlled — has worked to promote low taxation and maximize freedom for the majority of a nation EVERY TIME IT HAS BEEN TRIED.

That’s why I hope you’ll help support me – at the grass roots level – in getting this message out to the world. And please – tell you friends about it, too. After all, in a very real way, your supporting this effort makes it YOUR message, too.

Bill Still – Interactive Book Project