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Solution to Financial Woes -- End Debt-Based Dollars

A conference in Chicago looked at ways to solve the current financial crisis constitutionally by taking over the Fed and ending debt-based dollars.


By Mark Anderson

CHICAGO, Illinois—The American Monetary Institute’s (AMI) annual conference here at Roosevelt University happened just as the federal government was wrapping up its nearly trillion-dollar plan to further indebt the American people by buying the worthless assets of certain Wall Street interests at public expense. This and other financial skullduggery have even the most politically casual Americans trembling, while wondering if this is finally “the perfect storm” that will capsize our “ship of state.”

American Free Press covered the Sept. 27 session of AMI’s Sept. 25-28 event. Moderated by noted author and AMI President Stephen Zarlenga, the session had an academic flavor, but its bold exploration of the history of debt forgiveness, the nature of money, who ought to issue it and other topics—including observations on the so-called “bailout”—painted a picture that stands in stark contrast to the one presented to distraught Americans by the big government-big media alliance.

Absent from media pronouncements are any facts or recommendations that might focus public attention on the root causes of what may turn out to be the nation’s worst-ever financial crisis—much less any real, lasting solutions. But AMI is among several sources covered by AFP that seek real understanding of the seemingly complex issue of money.

Entire schools of thought, especially in the economic realm, are censored in this “free” nation, but, as AFP has learned covering the AMI event and several other programs, “the cure” is within every citizen’s grasp, just waiting to he heard and acted upon. The individuals and organizations that attended the AMI conference communicated a viewpoint that has some tricky variables and points of debate, but it centers on sound principles and ideas that could lead to a profound economic revival.

Notably, this is not a Ron-Paul-style call for a return to “sound money” in the form of a gold standard; that view, whose backers support abolishing the Federal Reserve System, has many merits and is widely discussed. But here, we’re talking about a somewhat different vision in which the Fed is stripped of its unchallenged privilege of issuing the nation’s currency and setting interest rates without genuine public oversight (and without audits). Indeed, the private central bank that has commandeered the United States since 1913 would be nationalized and kept only for basic operations, due to its knowledge base.

Whether to nationalize or abolish the Fed, of course, is a question that needs to be carefully considered.

Imagine the U.S. Treasury issuing its own money, instead of what we have now, where the Treasury prints it at the Fed’s behest (for only pennies per note, regardless of the denomination) and hands it over to the banking fraternity so the bankers can loan it back to the U.S. government at interest (in the process, the Fed gets government bonds that pledge the labor of all Americans behind the debt).

Cutting the Fed out of the creation and issuance of money, which is AMI’s favored scenario, means money would be spent into circulation interest-free as a sovereign function of government, according to the U.S. Constitution’s provision that Congress is responsible for the money function. Gold standard or not, reformers agree that printing interest-free money is the reform that central bankers dread.

Focusing on aspects of the “social credit theory,” which is neither socialism nor monopoly capitalism, AMI speaker Nicolaus Tideman, an economics professor from Virginia Polytechnic Institute, noted: “I think we need to regard society as a money-issuing collective, in which we all have equal shares.”

He added that, since this intriguing theory—explained in detail as a workable plan in a book obtained at the conference by AFP—calls for paying a regular equal “dividend” to all citizens simply by virtue of their citizenship, one option would be to have the government announce $10,000 loans to all citizens to be paid back in five years. The people receiving the money could retire numerous personal debts. Depositing the money in local banks would address community needs.

But the kind of dividend called for in the groundbreaking book In This Age of Plenty: A New Conception of Economics—Social Credit, takes the form of regular payouts, not loans, to every member of the citizenry, all of whom are treated like members of an economic cooperative, wherein private enterprise and innovation are fully encouraged and everyone, even the unemployed, would receive non-debt, U.S. national money (not Federal Reserve debt notes) as members of a common enterprise blessed with the natural resources provided by God.

Because working and contributing to the nation’s productivity would mean higher dividends for all, the incentive is to work, not to loaf. This is the worldview in this book, published by the Pilgrims of St. Michael (a.k.a The White Berets), based in Canada.

The extreme usury that Jesus of Nazareth rightfully condemned when he drove out the moneychangers is strangling the people, as several AMI speakers noted. Commentator David I. Kelley and Mr. Zarlenga concurred that usury is not just high interest rates; it’s actually “taking unfair advantage of the financially weaker.”

Kelley, referring to current events, condemned the gross misuse of the nation’s financial mechanisms and the havoc being wrought. He said usury is an “anti-social use of money” where “the borrower is a slave to the lender and the debtor to the creditor.” He said real capitalism means fashioning raw materials into goods sold for profit. But, he said, “We have replaced the primacy of labor over land and capital”—where labor is the most important element—with the idea that “money becomes a god in and of itself.”

He lamented that America is “always placing labor behind capital,” and American businesses aren’t even allowed to operate without massive capital behind them. Kelley went on to note what was later expounded on by Dr. Michael Hudson—that for centuries debts at all levels were forgiven on a cyclical basis and the slate was wiped clean so society could rebuild, free of turmoil and strife. However, under the current monetary matrix, significant debt forgiveness is virtually unheard of in a world where nearly everyone is an economic serf.

Hudson noted how the famed classical Greek leader, Solon, literally rescued his nation by abolishing personal slavery as debt security. Farmers who had been banished from their own land were returned to their farms as all debt contracts were cancelled and seized land was returned to rightful owners. Hudson added that, for centuries, those who financed transoceanic voyages and land caravans were only paid back if the ventures were successful, as long as fraud was absent.

“If the shipper lost, he did not have to pay the creditor,” Hudson said. “Interest was paid as a portion of the surplus to the public sector if everything (in the venture) goes as it’s supposed to.” He added that, The Lost Tradition of Biblical Debt Cancellation is the name of a book whose self-explanatory title points to a practice that favored borrowers over lenders. The practice goes back to Babylonian times. Referring to the “barley debts” of Sumeria, he said: “In the Near East for thousands of years the first act of new rulers was to cancel consumer debts”—especially those owed by the poor.

Fast forward to today. Hudson noted that, in the current “bailout,” we see “just exactly the opposite of ancient times,” in that the U.S. government advocates a plan to further indebt the average person to the monied class. This means only canceling or absorbing the debts of the rich, even though the Democrats claim to have the interests of poorer homeowners in mind, Hudson noted, adding that the current ruling class is ruthless.

Hudson concluded that there are laws on the books in New York state which, applied nationally, would nullify debts when loans were made beyond the debtor’s ability to pay.

Today, he said, America is “favoring the creditors instead of debtors,” overturning centuries of doing things the other way around.

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