Monday, August 9, 2010

Recession Causing a Banking Awakening in Tough-Hit Midwest

Will establishing citizen-owned state banks be the first step to ending the private Federal Reserve?

Eric Blair
Activist Post

A mass banking awakening seems to be happening throughout America, and the first pragmatic solution appears to be citizen-owned state banks. Since this model has been proven highly successful in North Dakota, many recession-ravaged states are now considering the idea of establishing state-run banks.

Congressman Ron Paul, author of End The Fed, has been trying to educate the public about the private Federal Reserve Bank system for his whole career.  And indeed, many terrific books like The Creature from Jekyll Island, and movies like The Money Masters, also have exposed the flaws in allowing private globalist bankers to print the nation's currency.

This hidden knowledge represents the "red pill," and once we awaken to the true criminal nature of our monetary system, there is no disputing the origin of our economic woes.
Consequently, the increased awareness is the reason for the growing movement calling to end the Federal Reserve Bank.  However, our Congress, with their paltry 11% approval rating, showed their true colors when they gutted the Audit the Fed provision in the recently-passed financial reform bill which actually gives the Federal Reserve even more power. Reuters reported on this expansion of power:

The Federal Reserve would take on a greatly expanded role in financial regulation under new legislation unveiled on Monday by a top Senate Democrat, in a push to move ahead with the regulatory reform that has been a top priority of President Barack Obama.
The bill by Senator Christopher Dodd would give the Fed the power to break up big firms that could threaten the stability of the financial system if they suffered serious problems.

The Fed would also gain authority over the nation's largest bank-holding companies and become the home to a new consumer watchdog with oversight on mortgage-related businesses and some large non-bank financial firms, such as insurers.
So, it seems that making a change to the banking system will not likely occur on a national level anytime soon.  But there's hope at the state level to establish citizen-owned banks to directly invest in local economic development.  Due to the abnormally sound economy of North Dakota, which many attribute to their state-run bank, many fresh candidates in the Midwest are now running on a state-bank platform.  Ellen Brown, author of Web of Debt, recently reported on the growing movement:
Virg Bernero, the mayor of Lansing, Michigan, just won the Democratic nomination for governor of his state, making a state-owned Bank of Michigan a real possibility. Bernero is one of at least a dozen candidates promoting that solution to the states’ economic woes. It is an innovative idea, with little precedent in the United States. North Dakota, currently the only state owning its own bank, also happens to be the only state sporting a budget surplus, and it has the lowest unemployment rate in the country
Bernero, if elected, faces enormous economic challenges due to the free-trade destruction of manufacturing jobs and internal and external debts owed to private bankers.  Michigan, like other Midwest states, has been disproportionately affected by the economic downturn where social services, teachers, and police are being cut to ease debt burdens. Michigan may be the state most primed for a radical banking change as there are reports that "alternative currencies" are already being accepted in pockets of the state.  Bernero promotes the idea of establishing a state bank in Michigan on his website as part of the solution:
Bernero’s proposal to establish a state-operated bank that can make direct loans to businesses in emerging, job-creating industries will do just that. It has worked in North Dakota, and we can make it work here.
State banks can take advantage of the fractional reserve lending system, which allows banks to lend ten times the amount of their reserve deposits.  In other words, if a bank lends the entirety of its reserves at 6%, the banks actually make over 1000% interest on those original deposits.  It has been argued that this is money creation without the approval of Congress; however, this system of lending is unlikely to end despite the obvious inflationary nature of the scheme.

Sure, the Bank of North Dakota and these other proposed state banks are still at the mercy of the Federal Reserve printing presses, but the difference lies in where the profits are allocated. The profits at the Bank of North Dakota are public and reinvested in local property and businesses, while the profits at the Federal Reserve remain in private hands.

The candidates who are now promoting establishing state banks will surely make this argument on the campaign trail, and the debate alone will further expose the true nature of the Federal Reserve to the masses.  It would behoove us to support candidates who promote establishing state banks even if we disagree with them on other issues -- our economic freedom should be that important.

The continued success and expansion of citizen-owned banks will surely beg the obvious question, Why not do this at the Federal level?  Why not print money right out of the Treasury to only benefit the country's economy? Bye, bye Fed . . . .


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6 comments:

King of the Paupers said...

Jct: But as long as they think inflation is too much money chasing the same goods, shift A, and don't know about the same money chasing less goods, Shift B, they'll never see the real necessary banking reform.

Activist said...

Of course, you're absolutely right. The point of the article is that this may be the first practical step that should bring massive awareness. It is this growing awareness that will eventually topple the current system.

When enough people know there is a different/better way (see The Secret of Oz), then it's game over - as it's not just okay to be against the Fed, rather we must also to promote what we stand for.

Thanks for taking the time to read and comment!
Eric B.

Orangutan. said...

The Secret of Oz.

Activist said...

YES - Everyone Watch The Secret of Oz

Response to a reader's question related to this article: Whose private hands make the profit at the Federal Reserve?

My response:

First, I don't pretend to be an expert, but I feel I'm somewhat informed about the Federal Reserve Bank. I'm not sure anyone really knows who specifically benefits from the profits of the Fed, but it is a fact that the U.S. Government only holds a 20% ownership in the Fed. The rest is reported owned by a consortium of the large private banks and indeed some individuals - perhaps even foreigners. There's some pretty compelling historical evidence that the Rothschild banking cartel was very instrumental in setting up the Fed in 1913.

This is shocking for most people to discover, as it should be. And if you dig deeper, it explains much of the Fed's secrecy and unwillingness for any oversight - and is certainly at the core of most global economic problems. The "owners" of the Fed don't have any loyalty to the U.S. whatsoever. They routinely make loans and investments overseas without approval or even knowledge byo our Congress - to the detriment of the U.S. economy where those investments are sorely needed. The damage they have done through global wealth consolidation has been staggering since the paper they print is also the global reserve currency.

Shame on us as a people for not having realized that if you give a private group the exclusive right to print money through a fractional reserve basis, then they will eventually own everything. Imagine you and your buddies being able to print unlimited wealth - can you begin to imagine where you would be in say 100 years? You may own every industry, and perhaps every NATION too.

Clearly, this knowledge is not meant to be common knowledge, as even those of us who went to college for economics weren't taught the true nature of the system. I HIGHLY recommend that you watch The Money Masters and read The Creature From Jekylle Island for a black and white history lesson on banking and the Fed more specifically. Take three hours out of your life and watch the Money Masters immediately.

Like I say in the article, this system is unlikely to change until enough people understand and get angry about how the systems really works. Therefore, perhaps we can start by at least keeping the profits circulating in the local community through state banks - all while educating the masses of better Federal models. I imagine anyone who's half awake would do their banking and make their deposits at these citizen-owned public banks, thus insuring they have sufficient deposits to be successful.

Liberty, Love, and Peace will Prevail!
Eric B.

Activist said...

Yes - everyone watch The Secret of Oz ASAP, and Still's first movie The Money Masters for a real history lesson.

ZymurguY said...

Do a Google search for the movie "Money as Debt" - it does a very good job describing how fractional reserve lending works, how fiat currency works and how a lot of this whole mess got started. Don't let the simplistic animation fool you, some of it is quite humorous - in a monetarily morbid sort of way.

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