Post: #1

Some time ago I recommended you The Web of Debt by Ellen Hodgson Brown. In this book the author reveals the awful truth about the American financial system and so of the whole World. A private bank, the Federal Reserve, has the monopoly to issue the national currency of the United States of America. Although this money is created out of thin air and backed on nothing, an interest rate is charged. Since economy cannot function without money, American Government has to take a loan from the Federal Reserve and write an IOU in the form of a Treasury bond to get the currency needed to have to economy going on. To pay the interests, the Government imposes an income tax on population and companies. So, just to pay the interests derivate from the loan the Government took, the economy needs to have some kind of meaningful growth; since this burden on the economy and taxpayers is heavy and never met new loans have to be taken all the time just to have the system working. Even more, American dollar is the World’s reserve currency, so all kind of international transactions among individual, companies and governments are paid in dollars; so American Government has to take new loans to provide and flood the markets with the currency needed for that purpose, all of this at the expense of American taxpayers. When the debts accumulate and cannot be paid the solution implemented is always the same -to take new loans to bail out the Too Big To Fail Banks while putting a bigger burden on the population, devaluating more an already worthless dollar and just postponing an economic crash that sooner than later is going to happen.

This time Ellen Hodgson Brown writes a sequel/complement of her above mentioned book, providing a solution to the problems already described –Public Banking. She is quick to make a clear case about this subject: Banking, money and credit are not market goods but are economic infrastructure, just as roads and bridges are physical infrastructure. By providing inexpensive, accessible financing to the free enterprise sector of the economy, public banks make commerce more vital and stable. Public banking is not a radical idea, but has been practiced in the U.S. (The Bank of North Dakota) with excellent results for decades, and around the world (Japan, Germany, Taiwan and more recently China).
The issues developed in this book in a very simple and entertaining way are that public banks are:

Counter-cyclical, meaning they are capable of reducing the negative impact of recessions, because they can make money available for local governments and businesses precisely when private banks decrease lending.
Potentially available to any-sized government or community able to meet the requirements for setting up a bank.
Owned by the people of a state or community.
Economically sustainable, because they operate transparently according to applicable banking regulations.
Able to offset pressures for tax increases with returned credit income to the community.
Ready sources of affordable credit for local governments, eliminating the need for large “rainy day” funds.

These two books are a must to understand the current financial crisis and the real solutions needed to solve it and to have a meaningful financial system.

Post: #2

Cool will check it out!

I still haven't read 'Web of Debt' - so I will get to that first. The only book I have read in this area is 'The Grip of Death' which is a critique of Fractional Reserve banking - but with the empathsis on the UK economy. As such it doesn't discuss the Federal Reserve.

http://www.amazon.co.uk/The-Grip-Death-D...p+of+death

Of course - like most people I have seen the 'Zeitgeist' film which discusses alot of these Federal Reserve conspiracies. That lead me to looking into this area - and I came across this article which tries to debunk alot of these claims:

http://www.publiceye.org/conspire/flaher...serve.html

I am a little skeptical of such conspiracies since I truly believe there is enough freedom in academia and enough motivation for those with an understanding in this area to want to try and expose it. But maybe I am just incredibly naive. It is hard to be sure either way.

But - whilst I am interested in this area and will check out the books above - I also want to say that I am not yet a fully signed up believer.

Post: #3

Before you read "Web of Debt", I suggest you read this book, "The True Greenback: Or the Way to Pay the National Debt Without Taxes, and Emancipate Labor". It was first published in 1868 and could be read for free here: https://archive.org/streamtruegreenbacko...6/mode/2up

I would also google the term "greenbackism", and you can find numerous free historical references that authors such as Brown utilize as their case for interest free money. Although the books are over 100 years old, all most people need to do is change the names, and the stories will fit into modern times.

Personally, I always thought the best banking solution is presented in the book, "Money, Bank Credit, and Economic Cycles" by Jesus Huerta de Soto. It's a gigantic book (close to 900 pages) that most people don't have the interest to read. It can be found here for free: mises.org/books/desoto.pdf

After reading that book and the Georgist references I metioned to you, I never found Brown's arguments as convincing afterwards.

Post: #4

Yeah - I have a book on Georgist economics in the post. Can't wait to check it out. Thanks for the recommendation!

Post: #5

With the book 'The Web of Debt' and my research into Georgist economics it will be fun to finally piece together the political and economic roots of 'The Wizard of Oz' (which was inspired by monetary reform), as well as the Georgist roots of the boardgame 'Monopoly'.

Post: #6

(01-23-2014 04:33 PM)cardguy Wrote:  With the book 'The Web of Debt' and my research into Georgist economics it will be fun to finally piece together the political and economic roots of 'The Wizard of Oz' (which was inspired by monetary reform), as well as the Georgist roots of the boardgame 'Monopoly'.

Exactly, and the lesson was that no golden road was necessary to reach hapiness, that is, no gold to back up a currency is needed.