The Critical Importance Honest Money Groups
Ken and I have had the honor and privilege of learning from - and about - many dedicated students of Constitutionally appropriate money creation over the past few years, and know that many of these dedicated students have indeed formed both formal and informal "study groups" as a means of creating more interest in - and awareness of - this most significant of subjects.
Toward the goal of proper monetary reform, Bill Still, narrator of the Money Masters documentary, provides us all with some critical advice:
[Editorial Note and regarding gold, please see our Notable Articles on the subject of gold as well as quotes on gold by John Kenneth Galbraith, Frank Vanderlip and others on our Gold Quotes page.]
An outstanding example of one ordinary citizen who has dedicated a major portion of his life to this issue is Dick Distelhorst of the American Monetary Institute. Mr Distelhorst runs his honest, debt "free" money group out of Burlington, Iowa with regular meetings held at the Public Library - and he writes an excellent newsletter to boot.
Mr. Distelhorst, and others like him, serve as an inspiration and example for the rest of us to start our own honest money groups in our own town halls, churches, schools, and libraries.
We mention Mr. Distelhorst here because he has given his permission for you to contact him yourself via email if you would like to receive his very informative e-letter. (You may also ask for archived issues).
An excerpt below of Newsletter #55 will give you an idea of content, AND the crucial importance of the subject of money creation.
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Wayne Angell, a former Federal Reserve Board governor, explained it on the C-Span network. Here is a key question he was asked, and his answer.
"Question: In simple terms, explain how the Federal Reserve creates money and controls the money supply."
"Answer: The Federal Reserve creates money anytime it acquires some ownership in some asset, primarily U.S. Treasury Bills. Every morning the Federal Reserve decides how many Treasury bills to buy. If the Federal Reserve buys a Treasury Bill, it gives credit to the seller and it also gives the selling bank a credit, or a reserve, at its local federal reserve bank. So the Federal Reserve creates these reserves "out of thin air" by purchasing Treasury Bills. The Federal Reserve doesn't have to pay for it with currency, the Federal Reserve can create the balance sheet reserve account to pay for whatever it buys."
THIS IS NOT DOUBLE ENTRY BOOKKEEPING - THIS IS TRIPLE ENTRY BOOKKEEPING.
It is important to notice that, in this transaction, the new money created was credited to not one, but two places. First to the seller of the Treasury bill in return for its value. But the bank that cashed the check was also credited with the same amount of new bank reserves, which they can then expand, in the form of new interest-bearing loans (debt-money) by a factor of about 16, thus putting us even deeper in debt.
To recap, the Federal Reserve obtained an asset, the security purchased, on its books with no offsetting liability, because the Fed simply creates the money to buy the security "out of thin air" and no Federal Reserve asset account is depleted to make the purchase, so it's books don't balance - so it balances them by crediting the bank that received the deposit from the dealer with the same amount of new reserves at the Fed - a new liability to offset the asset the Fed just bought with "money created out of thin air. This entry of new reserves for the bank that cashed the check balanced the Fed's books. At the bank, the dealer's checking account was increased by the same amount, as were the bank's liability to pay the amount in his checking account. Three bookkeeping entries, not two. No wonder this all sounds confusing - it is. Dishonest bookkeeping to protect a dishonest system.
What has just been described is what the late Congressman Wright Patman called "HIGHWAY ROBBERY IN BROAD DAYLIGHT." He was referring to the Federal Reserve and the Fractional Reserve Banking System. I have decided to call it "THE BIGGEST CON GAME IN THE HISTORY OF THE WORLD." And this con game is still going on today.
THE BIGGEST BANKS GET THE BIGGEST BENEFITS OF NEW MONEY CREATION.
It must also be noted that when the Fed buys Government Securities on the so-called open market in order to create new bank reserves, these new reserves always benefit the biggest banks first, because those big banks are where the sellers of the securities always deposit their electronic checks from the Fed. Then the creation of additional debt-money starts with these big banks and eventually "trickles down" to smaller banks throughout the country. It is a fair statement to say that most local bankers do not even realize that, under the Fed's fractional reserve system, they are creating new money when they make loans on the basis of these "new reserves" that have trickled down to their community.
WHY IS THE FRACTIONAL RESERVE SYSTEM SO BAD FOR OUR COUNTRY?
Because it requires all our money to be in the form of interest-bearing debt. The creation of new money should take the form of a tax-free, interest-free dividend for the people. Under the 100% reserve system (which requires that money deposited in checking accounts be held in trust, not loaned out) that would be the case. It is important to understand that new money added to our economy as our population and our production of goods and services grows, should always have been a dividend for the people, not additional debt imposed upon the people.
The interest on the unpayable debt created by the few who now enjoy the government's own power to create money "out of thin air" grows larger every year. The total money supply of this country is now estimated to be about $15 trillion. This is all "debt that should never have been debt" - it should have been a $15 trillion dividend, spent into circulation by the Government to build and create a better country for us all - and that will still happen when we take back control of our own money, as was explained in last month's newsletter #54.
Yes, every dollar of that $15 trillion total money supply represents debt that should not be debt - that should have been instead a $15 trillion dividend to the people of the United States. Our debt-based fractional reserve system is the primary underlying reason for extreme income inequality and for widespread unnecessary poverty.
We have the capacity to produce enough food, clothing, shelter and other goods and services to provide a decent standard of living for everyone, but the money to do this has been drained off and channeled to the very wealthy few who use the government's own power to create money out of thin air. Instead of receiving dividends from creating, issuing and regulating our own money as the American Monetary Act requires, we continue to let privately owned corporations create and issue our own money in the form of interest-bearing, unpayable, exponentially growing debt. The time has certainly come to take back control of our money and our country by passing the American Monetary Act.
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For some links to Honest money groups who have developed their own websites, see our Recommended Links Page.