“When you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal not in goods, but in favors; when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you, you may know that your society is doomed.” – Ayn Rand
To enlighten the world that maximum prosperity can only be achieved through individual freedom, free markets, and sound money.
“Your true wealth is your time and freedom. Money is just a tool for trading your time. It’s a container to store your economic energy until you are ready to deploy it. But the whole world has been turned away from real money, and has been fooled into using currency – a deceitful imposter that is silently stealing your two most valuable assets – your time, and your freedom.“
Conventional wisdom suggests that the United States is a free and independent constitutional republic that controls its government through fair elections and controls its monetary policy in the interest of the people. Neither of these is true and there is extraordinary evidence to support this extraordinary claim. For the purposes of this discussion, we will not go down the rabbit hole about free and fair elections. We will however, flush out a few of the leading belief camps or monetary philosophies that exist in the United States today.
There are several key differences between each of the camps below. They are a) fractional vs. 100% reserve banking, b) private vs. public central banks, c) fiat vs. commodity backed, such as the gold standard.
Mainstream Establishment Economics
The mainstream establishment perpetuates the myth that the Federal Reserve is a quasi government, independent agency who board is fairly selected and appointed by the President. They perpetuate the myth that they are working on behalf of the American people to support a free and politically independent free market banking sector to provide financing for government, institutional, and individual capitalist activities. They perpetuate the myth that the Federal Reserve actually regulates the banking sector to minimize risk and ensure stability. Nothing could be further from the truth. I will not lay out all the gory details from hundreds of books, papers, documentaries, congressional hearings, etc. I will let you do your own research with a few points of guidance.
A) The Federal Reserve is not a government entity – it is not Federal and there are no reserves. It is owned and controlled by the charter member banks it is supposed to regulate. Read the Secrets of the Federal Reserve, Web of Debt, or the Creature from Jeckll Island to get a better understanding of how it was setup and who was involved.
B) The Federal Reserve prints money out of thin air when it buys assets from the U.S. Treasury or from its charter member banks.
C) The Federal Reserve does not directly control the U.S. government gold holdings at Fort Knox or elsewhere in the world. It does, however, thwart any effort to audit said gold holdings.
D) The Federal Reserve is not the epitome of capitalism. Quite the contrary, it is an instrument of a collectivist cabal with no loyalties to the United States. It is a privately held central bank that adheres to a central planning modis operandi synonymous to that described by Karl Marx in Das Capital.
E) The United States Treasury does not issue the US currency, the US dollar. The Federal Reserve lends all US dollars into existence. Therefore, under the current system, the national debt can never be paid off because additional debt is required to produce money to pay off the debt.
F) The Federal Reserve is not the first instance of a privately held central bank. The founding fathers fought this battle over 200 years ago when British royal and banking interests attacked our use of Colonial Scripts. The Bank of North America and the Bank of the United States were foreign collectivist ploys to control the economies and people of the new colonies.
Austrian Economics and Libertarians
The Mises Institute which Ron Paul, Lew Rockwell, and most Libertarians adhere to articulates an ideal marketplace where the market determines interest rates and the money supply is constrained by the price and volume of gold. They support 100% reserve banking and believe the Federal Reserve, if it shall exist, be subordinate to Congress. They also believe that Congress should have the power to coin and print money, according to the Constitution.
The Ron Paul camp of Austrians believe in sound money through gold and/or silver legalization as money, and as a constraint on government spending. They support the belief that Andrew Jackson was a great president because he killed the predecessor to the Federal Reserve and paid off the national debt for the first and only time in history.
This is certainly an excellent ideology in theory. Getting there would require a miracle. They are, however, extremely helpful in educating the populace on monetary policy and economics.
Lyndon LaRouche and Modern Hamiltonians
Lyndon LaRouche supports a credit based economy where a privately held bank, similar to the one Alexander Hamilton supported, and similar to the Federal Reserve, should be available to lend money to governments and institutions for infrastructure projects. LaRouche is very critical of warmongering and takes a centralized federalist approach to solving the problem. The central banking and monetary policy of LaRouche greatly differs from Austrian economics and the Ron Paul camp.
Public Banking Enthusiasts
The Public Banking Institute espouses a series of publicly owned wholesale banks that would provide credit and depository functions to the government entities that own them. All profits generated from the low interest loans would go towards reducing the debt burden of that entity. Take for example the existing model of public banking in North Dakota. After paying expenses, the profits from lending are returned to the State of North Dakota to offset its costs of operations. The tax revenues are held in the public bank, rather than in a private Wall Street bank.
Public banking advocates support fiat currency and fractional reserves but at a decentralized scale, unlike the Federal Reserve. In fact, the supporters of the Public Banking Institute support nationalizing the Federal Reserve so it is no longer a privately held concern.
The Great Debate – A Coalition of Camps
One would be hard pressed to find someone in America that thinks the current system works well, but for every 100 people you ask about solutions, you get 100 variations of responses. those that control and benefit from the current Federal Reserve system yield an enormous amount of power, influence, and money to misdirect and miseducate the majority of the population.
If the opposition camps described above and represented somewhat in the Green, Occupy, and TeaParty movements could find common ground in the public banking model, we may be able to make headway on the issue.