Not everyone follows the actions of the private bank cartel called the federal reserve, but I'm sure we'll hear about it Friday at the New Economy conference in Montpelier. You should all know what the fed is up to lately: QE3 PLUS! See article here.
You may know that QE3 is a fed program to purchase $40 Billion in mortgage bonds per month from banks, basically taking crap off their hands and making us pay for it. The latest plan is to add $45 billion in Treasury bonds to that. These are open market operations where the Treasury bonds are bought from banks, thereby increasing the money supply and supposedly lowering interest rates further.
The US Treasury pays interest on Treasury bonds, and the fed supposedly returns most of it to us as profit. Remember the fed only owns a small fraction of the US debt, much of it is owned by foreigners. That interest we don't get back.
Just to remind people where this money comes from, the fed PRINTS IT, or nowadays types it into a computer account as a bank balance. Since the Treasury outsourced the creation of money in 1913, the fed has produced a small part of the money supply directly, and the rest is created through fractional reserves by private banks, about 95%. This is called variously seigniorage, money creation, or monetary supply which is a sovereign privilege of the state given over to private central and other banks worldwide. The Treasury could issue the entire money supply as interest-free US Notes or bank balances and has issued them in the past starting with Greenbacks. To create the entire money supply this way would require 100% reserve requirements, which is essential to end the loss of money creation to banks.
The total of QE3 PLUS is $85 Billion per month. Doesn't sound like much these days with debt in the trillions, and derivatives in the hundreds of trillions, but let's figure it out. Take the US population of about 315 million and divide into $85 billion and you get $270 per month or $3240 per year. How would you like that or $12,960 per year for a family of four?
The fed is not allowed to finance citizens, states, or municipalities, only banks and the Treasury. And remember that states are forbidden from issuing "bills of credit" by the Constitution (Article 1, Section 10, Clause 1). For more on this see Vt currency commons website. Now this reminds me of a joke I heard when Iraq was writing their new constitution after we invaded and instituted "regime change". "Why don't they take OUR constitution, we're not using it." I see no reason to follow this prohibition since the national government isn't following the Constitution, but let's leave it be. States can create public banks, and these banks can issue credit that is NOT considered an illegal state bill of credit. States could also issue warrants or other IOUs as California has done on two occasions. Again see Currency commons website.
The problem in Europe is that countries have given up their sovereign monetary policy when they joined the Eurozone. Vermont is in a similar predicament to EUROzone countries, we're stuck with the dollar. Even EU countries that haven't joined the Euro like England, Denmark, and Sweden still let banks issue most of the money with interest, so they are at the mercy of the banksters. I suspect even Iceland, which told the bondholders to take a hike, is still letting banks create all the money with interest. Old habits die hard...
Let's not forget that the fed has already issued QE1 and QE2 without much result. QE1 was $1.25 trillion and QE2 was $600 billion for a total of $1.85 trillion. That is $5873 for every person in the US given to banks and the federal government. Don't you think it would have been more effective to pay it in a dividend check to us? A sovereign Vermont could issue its own public credit money without interest, and get out of the fed and bankster racket that pays interest on money they create out of thin air. Guernsey did it starting in 1822.
For now there are three things we can do:
- Move our money out of Wall St. into local banks and credit unions.
- Use complementary currencies like time and care banks, or online barter systems
- Lobby the legislature to create a state bank