BF2S Forums True Majority. US Budget Spending. A Must See!

The following is a transcript of the conclusion from the documentary "The Money Masters". You can find it on Google video. In summary - there is a way to repay the national debt, but it requires completely restructuring the banking system, and eliminating the federal reserve.

This is a long read, but well worth it if the national debt is a concern to you. This took a long time to type so if you are going to reply about it, please at least read it all.

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Although it would be absurd to ignore the pivotal role played by influential families such as the Rothchilds, the Walburgs, the Ships, the Morgans and the Rockerfellers, in any review of the history of central banking and fractional banking, keep in mind, by now central banks and the large commercial banks are up to three centuries old and deeply entrenched in the economic life of many nations.

These banks are no longer dependent on clever individuals such as a Nathan Rothchilds. Years ago, the question of ownership was important but no longer. For example, both the Bank of England, and the Bank of France were nationalized after World War 2, and nothing changed. Nothing at all. They endure and continue to grow, now protected by numerous laws, paid politicians and mortgaged media, untouched by the changing of generations.

Three centuries have given them an aura of respectability. The old school tie is now worn by the 6th generation son, who has been raised in a system that he may never question as he is made to serve on the boards of countless philanthropic organizations.

To focus attention today on individuals or families, or to attempt to sort out the current holders of power serves little useful purpose and would be a distraction from the cure. The problem is far bigger than that. It is the corrupt banking system that was and is being used to consolidate vast wealth into fewer and fewer hands that is our current economic problem. Change the names of the main players now, and the problem will neither go away, nor even miss a beat.

Likewise, among the hordes of bureaucrats working in the world bank, central banks and international banks, only a tiny fraction have any idea of what's really going on. No doubt they would be horrified to learn that their work is contributing to the terrible impoverishment and gradual enslavement of mankind to a few incredibly rich plutocrats.

So really, there is no use in emphasizing the role of individuals anymore. And the problem even transcends the normal spectrum of political right and left. Both communism and socialism as well as monopoly capitalism have been used by the money changers. Today, they profit from either side of the new political spectrum. The big government welfare state on the so called left wing, versus the neo-conservative laissez-faire capitalists who want big government totally out of their lives on the right wing. Either way the bankers win.

MONETARY REFORM IS THE MOST IMPORTANT POLITICAL ISSUE FACING THIS NATION. With that clarified, lets proceed to the conclusion in the spirit Lincoln declared. With malice towards none, with charity towards all.

At the start of this video, we ask a number of troubling questions. Lets be sure we have answered them.

What's going on in America today?
Why are we over our heads in debt?
Why can't the politicians bring debt under control?

Why are we over our heads in debt? Because we're laboring under a debt money system that is designed and controlled by private bankers. Now some will argue that the federal reserve system is a quasi governmental agency, but the president appoints only 2 of the 7 members of the federal reserve board of governors every four years, and he appoints them to fourteen years terms, far longer than his own. The senate does confirm those appointments but the whole truth is that the president wouldn't dare appoint anyone to that board of whom Wall Street does not approve. Of course this does not preclude the possibility that some honorable men may be appointed to the board of governors, but the fact is that the fed is specifically designed to operate independently of our government, as are nearly all other central banks.

Some argue that the Fed promotes monetary stability. We saw the current head of the Bank of England Eddie George claim that this was the most important role of the central bank. In fact, the Feds record of stabilizing the economy shows it to be a miserable failure in this regard. Within the first 25 years of it's existence, the Fed caused 3 major economic downturns including The Great Depression, and for the last 30 years has shepherded the American economy into a period of unprecedented inflation. Again, this is not some wild conspiracy theory, it's a well known fact amongst top economists. As Nobel prize winning economist Milton Friedman put it;

"The stock of money, prices and output was decidedly more unstable after the establishment of the Reserve System than before. The most dramatic period of instability in output was, of course, the period between the two wars, which includes the severe [monetary] contractions of 1920-21, 1929-33, and 1937-38. No other 20-year period in American history contains as many as three such severe contractions.

This evidence persuades me that at least a third of the price rise during and just after World War 1 is attributable to the establishment of the Federal Reserve System... and that the severity of each of the major contractions is directly attributable to acts of commission and omission by the Reserve authorities...

Any system which gives so much power and so much discretion to a few men, [so] that mistakes -- excusable or not -- can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic -- this is the key political argument against an independent central bank..

To paraphrase Clemenceau - money is much too serious a matter to be left to the central bankers." - Milton Friedman

We must learn from our history before it is too late. Why can't politicians control the federal debt? Because all of our money is created out of debt. Again it's a debt money system. Our money is created initially by the purchase of US bonds. The public buys bonds like savings bonds. The banks buy bonds, foreigners buys bonds, and when the Fed wants to create more money in the system, it buys bonds, but pays for them with a simple book-keeping entry which it creates out of nothing. Then this new money created by the Fed is multiplied by a factor of ten by the banks thanks to the fractional reserve principle.

So although the banks don't create currency, they do create check book money, or deposits by making new loans. They even invest some of this created money. In fact, over 1 trillion dollars of this privately created money has been used to purchased US bonds on the open market which provides the banks with roughly 50 billion dollars in interest, risk free, each year, less the interest they pay to some depositors.

In this way, through fractional reserve lending, banks create over 90% of the money, and therefore cause over 90% of our inflation.



What can we do about all this?


Fortunately there is a way to fix the problem fairly easily, speedily and without any serious financial problems. We can get our country completely out of debt in 1 to 2 years by simply paying off these US bonds with debt free US notes, just like Lincoln issued. Of course, that by itself would create tremendous inflation since our currency is presently multiplied by the fractional reserve banking system. But here is the ingenious solution advanced in part by Milton Friedman, to keep the money supply stable, and avoid inflation and deflation while the debt is retired. As the treasury buys up its bonds on the open market with US notes, the reserve requirements of your home town local bank will be proportionally raised so the amount of money in circulation remains constant. As those holding bonds are paid off in US notes, they will deposit this money, thus making available the currency then needed by the banks to increase their reserves. Once all the US bonds are replaced with US notes, banks will be at 100% reserve banking instead of the fractional reserve system currently in use.

From this point on the former Fed buildings will only be needed as a central clearing house for checks and as vaults for US notes. The federal reserve act will no longer be necessary and could be repealed. Monetary power can be transferred back to the treasury department. There would be no further creation and contraction of money by banks. By doing it this way, our national debt could be paid off in a single year or so, and the Fed and fractional reserve banking abolished without national bankruptcy, financial collapse, inflation or deflation, or any significant change in the way the average American goes about his business.

To the average person, the primary difference would be that for the first time since the Federal Reserve act was passed in 1913, taxes would begin to go down. Now there is a real national blessing for you, rather than for Hamilton's banker friends.

Now lets take a look at these proposals in more detail. Here are the main provisions of a monetary reform act which needs to be passed by congress. We have drafted a proposed monetary reform act that follows the end of this video, of course variations with the same results would be equally welcome.

1. Pay off the debt with debt free US notes. As Thomas Edison put it, if the US can issue a dollar bond, it can issue a dollar bill. They both rest purely on the faith and credit of the United States government. This amounts to a simple substitution of one type of government obligation for another. One bears interest, the other doesn't. Federal reserve notes could be used for this as well, but could not be printed after the Fed is abolished as we proposed, so we suggest using US notes instead.

2. Abolish Fractional Reserve Banking. As the debt is paid off, the reserve requirements of all banks and financial institutions would be raised proportionally at the same time to absorb the new US notes which would be deposited and become the banks increased reserves. Towards the end of the first year of the transition period, the remaining liabilities of financial institutions would be assumed or acquired by the US government in a one time operation. In other words, they too, would eventually be paid off with debt free US notes in order to keep the total money supply stable. At the end of the first year or so, all of the national debt would be paid, and we could start enjoying the benefits of full reserve banking. The Fed would be obsolete.

3. Repeal the Federal Reserve Act of 1913, and the National Banking Act of 1864. These acts delegate the money power to a private banking monopoly. They must be repealed, and the money power handed back to the Department of Treasury where they were initially under President Abraham Lincoln. No banker or person in any way affiliated with financial institutions should be allowed to regulate banking. After the first two reforms, these acts would serve no useful purpose anyway since they relate to a fractional reserve banking system.

4. Withdraw the US from the IMF, the BIS and the World Bank. These institutions like the federal reserve, are designed to further centralize the power of the international bankers over the worlds economy and the US must withdraw from them. Their harmless functions such as currency exchange can be accomplished either nationally, or in new organizations limited to those functions.

Such a monetary reform act would guarantee that the amount of money in circulation would stay very stable, causing neither inflation, nor deflation. Remember, for the last three decades, the Fed has doubled the American money supply every ten years. That fact, and fractional reserve banking are the real causes of inflation and the reduction in our buying power, a hidden tax. These and other taxes are the real reasons both parents have to work just to get by. The money supply should increase slowly to keep prices stable, roughly in proportion to population growth, about 3% per year. Not at the whim of a group of bankers meeting in secret. In fact, all future decisions on how much money will be in the American economy must be made based on statistics of population growth and the price level index.

The new monetary regulators and the treasury department, perhaps called the monetary committee, would have absolutely no discretion in this matter except in time of declared war. This would ensure a steady stable money growth of roughly 3% per year, resulting in stable prices, and no sharp changes in the money supply.

To make certain the process is completely open and honest, all deliberations would be public, not secret as meetings of the Feds board of governors are today.

How do we know this will work? Because these steps remove the two major causes of economic instability - The Fed, and fractional reserve banking and the newest one as well, the BIS, the Bank of International Settlements. But most importantly, the danger of a severe depression would be eliminated. Lets listen to Milton Friedman on the single cause of severe economic depressions;

"I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money, and equally of no sharp decline in the stock of money that was not accompanied by a severe depression"

ISSUING OUR OWN CURRENCY IS NOT A RADICAL SOLUTION.

It has been advocated by presidents Jefferson, Madison, Jackson, Van Buuren and Lincoln, but it's been used at different times throughout Europe as well. Perhaps the best example is one of the small islands off the coast of France and the English channel. Called Guernsey, it's been using debt free money issues to pay for large building projects for nearly 200 years. Guernsey is one of the most successful examples of just how well a debt free money system can work. In 1815 a committee was appointed to investigate how best to finance a new market. The impoverished island could not afford more new taxes, so the states fathers decided to try a revolutionary idea. Issue their own paper money. They were just colorful paper notes, backed by nothing, but the people of this tiny island agreed to accept them and trade with them. To be sure they were circulated widely, they were declared to be good for the payment of taxes.

Of course this idea was nothing new. It was exactly what America had done before the American revolution, and there are many other examples throughout the world, but it was new to Guernsey, and it worked miracles. The market is still in use today, and remember it was built for no debt to the people of this island state.

But what if we follow Guernseys example? How would the bankers react to these reforms. Certainly the international bankers cartel will oppose reforms that do away with control of the worlds economies as they have in the past. But it is equally certain that congress has the constitutional authority and responsibility to authorize the issuance of debt free money, US notes and reform the very banking laws it ill-advisedly enacted.

Undoubtedly the bankers will claim that issuing debt free money will cause severe inflation or make other dire predictions, but remember it is fractional reserve banking that is the real cause of over 90% of all inflation, not whether debt free US notes are used to pay for government deficits. In the current system, any spending excesses on the part of congress are turned into more debt bonds, and the 10% purchased by The Fed, are then multiplied many times over by the bankers, causing over 90% of all inflation.

Our fractional reserve and debt based banking system is the problem. We must ignore its inevitable resistance to reform, and remain firm until the cure is complete. As the director of the Bank of England in the 1920's, Sir Josiah Stamp put it, referring to this modern reserve banking system;

"Banking is conceived in iniquity and born in sin. Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with the flick of a pen they will create enough money to buy it back again. Take this great power away from the bankers and all great fortunes like mine will disappear, and they ought to disappear, for this would be a better and happier world to live in. But if you want to continue the slaves of bankers and pay the cost of your own slavery, let them continue to create money and to control credit."

Americans are slowly figuring this out.

Last edited by thanks_champ (2006-12-12 19:14:57)

Fancy_Pollux wrote:

jonsimon wrote:

kr@cker wrote:

bush tax cuts= increased tax revenue

almost as if leaving money in the private sector allows the private sector to grow more taxable business

You, sir, are fucking dumb.

Tax cuts lead to decreases in tax revenues. Shut the fuck up, don't even try to argue that point, it is a fact.

jonsimon, I think you need to educate yourself:

in recent decades, most "supply-siders" have been Republicans (though the largest individual tax cut was initially proposed by President Kennedy), and President Ronald Reagan signed tax cuts into law, in the belief that cutting the tax rate would stimulate investment and spending, with overall beneficial effects -- including increased tax revenues. While it took some time, these tax cuts arguably stimulated a doubling in total tax revenues, from five hundred billion to one trillion dollars.

http://en.wikipedia.org/wiki/Tax_cut

jonsimon, If you're going to insult someone, at least be right about what you're bitching about. I think you owe all of us, especially kr@cker, an apology for your childish, misinformed, and immature display.

Okay, so you're saying Tax cuts create an increase in SRAS, forcing the economy to produce beyond potential real GDP and introducing an expansionary gap. The expansionary gap increases real GDP which means the smaller percentage of GDP the government is collecting is offset by the increase in real GDP. But what happens in the longterm, where the economy must operate at potential real GDP? Unemployment returns to natual levels, and the new contracts negotiated between labor and producers forces inflation upwards. The money the government is collecting falls in both worth and quantity. And, the government is left with a significant deficit AND higher inflation.

How about Ben stuff one less oreo in his fat ass, and give some of his food to the poor.

Bertster7 wrote:

usmarine2007 wrote:

How about Ben stuff one less oreo in his fat ass, and give some of his food to the poor.

He does. 7.5% of Ben & Jerrys revenue goes to community charities.

lol marine got owned.

usmarine2007 wrote:

Bertster7 wrote:

usmarine2007 wrote:

How about Ben stuff one less oreo in his fat ass, and give some of his food to the poor.

He does. 7.5% of Ben & Jerrys revenue goes to community charities.

Pfffttt....that is a tax write off FFS

It's still a shitload of money.

usmarine2007 wrote:

Bertster7 wrote:

usmarine2007 wrote:

Pfffttt....that is a tax write off FFS

It's still a shitload of money.

That the middle class pay for...gee thanks.

Mate thats more % wise than your frigging nation, I think he is doing a better job to help the starving and poor than you or your government.

Your middle class you don't need the money as badly as some starving people. Man your selfish. And please stfu about your taxes, your taxes are so low they take the piss and its the reason your country is slowly falling into the pit of debt.

Done quite alot of sponsorships for charity, like London Marathon, lots of swimming. In my gap year I went to help in with teaching in Ghana.

Not bitching about taxes "Which means the govt still wants their money, so they take it from me, the middle class. " kiss my ass.

That doesn't mean him giving to charity is any less worth while.

7.5% his salary isn't any where near 7.5% of his companies profit.

Bertster7 wrote:

jonsimon wrote:

Fancy_Pollux wrote:

jonsimon wrote:

You, sir, are fucking dumb.

Tax cuts lead to decreases in tax revenues. Shut the fuck up, don't even try to argue that point, it is a fact.

jonsimon, I think you need to educate yourself:


http://en.wikipedia.org/wiki/Tax_cut

jonsimon, If you're going to insult someone, at least be right about what you're bitching about. I think you owe all of us, especially kr@cker, an apology for your childish, misinformed, and immature display.

Okay, so you're saying Tax cuts create an increase in SRAS, forcing the economy to produce beyond potential real GDP and introducing an expansionary gap. The expansionary gap increases real GDP which means the smaller percentage of GDP the government is collecting is offset by the increase in real GDP. But what happens in the longterm, where the economy must operate at potential real GDP? Unemployment returns to natual levels, and the new contracts negotiated between labor and producers forces inflation upwards. The money the government is collecting falls in both worth and quantity. And, the government is left with a significant deficit AND higher inflation.

Great points. This is why keeping the tax cuts is a bad idea.

But you have neglected the fact that if the economy growth produced by the tax cuts matches or surpasses the expansionary gap then they work just fine. The problem is that maintaining that growth for a sustained period is unlikely.

The tax cuts are not helping now, the disparity between the strength of US stock markets and the value of the dollar show that there are problems that need to be fixed. The most straightforward way of doing that is through higher taxation.

I think you mean if the economy is in a recession and the additional real GDP produced as a result of the tax cuts equals the contractionary gap, then they work fine. Otherwise the cuts create an expansionary gap which in the long run increases inflation and decreases government revenues.

Actually, I would argue we are in the recession of 06-07, as would my dad. In fact, one might argue we are in a contractionary gap following as a result of the discretionary fiscal policy of earlier years.

Pug wrote:

Hi Jon:
I'd like to hear your argument on how we are in a recession, as the real GDP has increased every quarter since for the last four years.
Thx

I think employment is below the natural level.