An Elegant and Powerful Concept

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Let Us Introduce an Elegant and Powerful Concept:

CLEAN CAPITALISM

Clean Capitalism is where the people own their production, the means of production and their money.

It's positive, forward thinking and pro American.

Honestly, what we have now can hardly be called Capitalism, when the people are forced to rent both their money (interest), and their property (taxes). Instead, it has become synthetic and dirtied over many years. That was not The Framer's intent; you and I, both know that.

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It is our right to own the fruits of our labor. It is our responsiblity not to leave a mountain of unpayable debt to burden future generations. .It is our duty to fix it.

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The good news: We Can Fix It.

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Clean Capitalism, where the people own their production (property), the means of that production (business) and their money (medium of exchange), will unleash the leadership, creativity and growth of the American economy like never before - while promoting liberty, financial responsibility, and limiting massive government bureaucracy. We'll be discussing the concept on this site, using the principals laid down from the first entry and building on this elegant and powerful concept.

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Read this blog from the bottom to the top - carefully, thoughtfully. Email with questions. There is high-performance, low-drag information here.

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"If It's Such A Good Idea, Why Didn't Someone Think Of It Before?"

Whenever there is a break-

through idea, there are the naysayers.

What does so-and-so say about the idea?

That's never going to work.

Why, that's not how we do things around here!

You and your ideas! You'd better let the "experts" handle this.

That project of yours will never amount to anything.

The chance of it working are so slim, one might as well not even try.

Maybe they are so beaten down, it's easier to criticize a good idea. Or maybe they are out of ideas, or they are wedded to an idea that is obsolete. They either can't see it, or won't; either way, we should not look to them for leadership. They are followers. Perhaps disgruntled followers. But, followers just the same.

Leaders and innovators have vision; they have ideas. Sometimes they just need a little help getting the good idea off the ground. They need a few people to work with them, for everyone's benefit.

You can help. Just find the email address at the left of this web site. the Gold Certificate and send us an email letting us know that you want to help solve the economic mess.

It's easy to help.

It's even easier to be a naysayer.

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Man! That's Velocity!

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Usain Bolt is the fastest man on the planet. Running half sideways and with his shoe untied!

How fast does he need to run around the track, before he becomes two of himself?

Is that possible?

Economists are fond of the idea that if we take loans out fast enough, as the money circulates, there will be enough available for everyone to get a hold of and pay their debts - plus the interest that is owed, but was never created. In other words, if your loan principal changes hands fast enough, it becomes loan principal + interest. They call this concept "velocity".

Money can never go from hand to hand fast enough to become more money. That's like saying a man can run so fast that he becomes two men.

Recent events demonstrate what happens if the loans aren't made fast enough. Words like "credit freeze", "credit crunch" and "credit crisis" are tossed around - and so are trillions of dollars (1 trillion seconds is more than 31,000 years - this year alone, we've borrowed more than $5 trillion. Can we borrow to pay that off too?), to try and plug the obvious holes in the system that the theory of "velocity" can't describe or predict.

Velocity is an interesting theory, but in reality - in the world beyond theory - velocity is not a real answer. It merely covers up the fact that we have no permanent money system, the interest due on loans is never created and there is always more debt than money. Always.

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"The Fed Just Prints It Up!"

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Nope.

The Federal Reserve does not print our currency. The Bureau of Engraving and Printing does; it's an agency within the Department of the Treasury.

The Bureau of Engraving and Printing prints, among other things, Federal Reserve Notes, and sells them to the Federal Reserve at pennies on the dollar - roughly 4 cents a piece.

The Federal Reserve, however, creates new money electronically, to buy the Federal Reserve Notes and other US Government Securities - each one representing more debt to the US taxpayer.

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New money is also created when someone takes out a loan at a commercial bank. When a loan is taken out, they can NEVER simply count out the bills to the person taking out the loan, and give them the green paper. No, no, and again, no. The new electronic money must first be monetized through a checking account. Then, if the person who took the loan chooses, they can buy some of the paper stuff (Federal Reserve Notes) with their new electronic, checkbook, loan money. Those Federal Reserve Notes will represent their new debt.

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For example: You can take out a $1,000 loan. The bank creates the new electronic money and deposits it into your account (at 10%, instantly, you owe $1,100). You can now take your checkbook and write out a check for "cash" and buy some Federal Reserve Notes to spend. The Federal Reserve Notes would be "evidence of your debt".

When you spend them out in the economy, some of them might end up in my wallet. Imagine it. Evidence of your debt, in my wallet, that I call money, and that you owe interest on.

We use debt for our money.

We can change that.
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E=MC^2

You Don't Have To Be An Einstein To Understand That

The Big Solutions Are Often Quite Simple.

Over $104 Trillion in debt and unfunded obligations, plus interest! And growing!

There is no way to pay our collective debt by using the formula of:

borrow+bond+tax+bailout = bankruptcy for the American people.

With a simple change in the law, we will be able to fund an infrastructure rebuild, create hundreds of thousands of jobs, drastically reduce taxes, balance budgets, while paying down our debt.

Listen to all of the "experts". They will say that they don't know how much this latest bailout will cost, they don't know if it's going to work, they don't know if this is the "bottom". They. Don't. Know. That's because they don't know what's wrong.

Here's what's wrong: We only use debt for money. We borrow our money into existence. No debt, no money.

Here's how to fix it: Stop. Stop using only debt for money. Begin funding the infrastructure rebuild with debt free money.

That's it.

A BIG idea.

That's simple.

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The Songbooks

Find this story by clicking the link:

Read...

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Quote

"I'm not asking you to give me money, I'm asking you to stop taking it away."

- anon.

How Can This Work? It Can't.

OK, if I am worth only $38. And then I owe $106. And ALL the money I have is $7.70, would you loan me more money?

Or maybe you would say, "You're broke already!"

Maybe you would recognize that my debt already exceeds my ability to pay.

Same thing for our country. Just say Trillions after the amounts - the math is the same.

Q: What is the natural outcome of using debt for your money?

A: More debt.

US FINANCIAL STATEMENT

ABOVE GRAPH

$38 Trillion - Value of America's Total Wealth

$53 Trillion - Total Debt (Government/Business/Personal)

$53 Trillion - Unfunded Liabilities (Like Social Security)

$7.7 Trillion - America's Total Money Supply, April 2008

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Quote

"The Government should create, issue and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest."

- President, Abraham Lincoln

The Creation of Money

It's clear, if money exists, it had to be created. It was not in Eden nor is it a product of evolution. It's man made.

Once it's created, it has to move into our economy.

Consider this: There are only 3 ways to get money into the economy.

1. Gift it in
2. Loan it in
3. Spend it in

Each method has its own set of consequences.

GIFT

FIRST, suppose that money is gifted in.

Gifting money into the economy would mean that they print up a bunch of money and hand it out. Perhaps a wagon load of money is parked on every street corner. You go pick up a handful when you need it. Or they give you money, maybe by check or electronic deposit. But that money does not need to be paid back - it's a gift.

If you did not produce anything in order to facilitate the new money creation, in a very short time, there would be more money than there is stuff to buy. Some economists say, that would cause inflation (later, we will discuss the bigger cause of inflation).

Additionally, many people would chose not to work - why work when all I have to do is walk down to the corner and grab a handful of money? As people stopped working, soon, there would be shortages in food - and everything else too! Lots of money with no production is a disastrous way to run an economy.

CONSEQUENCES: 1. An unmotivated work force. 2. Lack of innovation. 3. Social decay. 4. Severe drop in production. 5. Economic collapse.

That's gifting the money into the economy.

LOAN

SECOND, new money is currently loaned into the economy.

New money is created each time a loan is made.

New money!

When you get a loan to buy a car or a house, the bank creates new money and loans it to you, putting it into your account, so that you can make your purchase. When you buy a new pair of shoes on your credit card, the bank creates new money and you pay the shoe store. None of that money comes from any one's savings account. They never loan out a person's savings account for a house mortgage - your savings would then be unavailable for 30 years! It's not done that way. Instead, what you get is newly created money when the loan is made.

QUESTION: When you borrow that money for the house, car or shoes, does the bank also create the money that you own for interest? Banks are the only place that new money comes from - do they create the interest they want back on the loans that they make?

ANSWER: Never. That money comes from loans taken out by someone else.

That's the glitch. Money to pay interest is never created. Therefore, we can never get out of debt. What we owe is always more than what has been created.

Oh, we can personally shift the debt off of ourselves and onto another. Or, we can get money to pay interest that exists in our economy through massive bankruptcies, identity theft and fraud, but we cannot pay the loans plus the interest due on the loans - with only the loans.

CONSEQUENCES: 1. Ever increasing debt. 2. Financial hardship for everyone. 3. The debt-money system institutionalizes corruption. 4. Boom-bust-bailout cycles that end in economic collapse.

SPEND

THIRD, we can create the money, debt free, interest free, tax free and inflation free and spend the new money into the economy to pay for our infrastructure needs.

That's right. We could create the new money that we need to pay for our needed infrastructure rebuild. How? The same way it's done now, except for one thing - it wouldn't be done as a loan!

CONSEQUENCES: 1. Decreased bank default rate and increased liquidity. 2. Stabilized economy and jobs created. 3. Decreased taxes, increased savings and balanced budgets. 4. Lower fuel costs 5. Increase in overall spending power. 6. Safer, cleaner roads and bridges. 7. Energy independence. 8. Showcase Minnesota Leadership.

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Here is the Authority to Fix the Glitch

Minnesota State Constitution

Article 1,  BILL OF RIGHTS

Section 1.  OBJECT OF GOVERNMENT.  Government is instituted for the security, benefit and protection of the people, in whom all political power is inherent, together with the right to alter, modify or reform government whenever required by the public good.

US Constitution

Article 1, Section 8

• To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
• To establish post offices and post roads;

FEDERAL FIX: We can change things to have Congress "coin" money to build roads (infrastructure). Debt free money would flow into circulation.

STATE FIX:  We can pass a law authorizing a small change in accounting procedure, and allow State Chartered Banks to create (just like they do now, except debt free) and deposit new money into the State's Transportation Account.  As the state follows the existing procedure for getting the roads build, new debt free money would flow into circulation. 

The MINNESOTA TRANSPORTATION ACT - Text

"Fix the Glitch" 

The MTA in it's most recent form, Senate File 705:

SF 705       

(updated Spring 2009)

This piece of legislation, with true bipartisan support, can help fix our broken economy.

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The MINNESOTA TRANSPORTATION ACT - Introduction

History Made

In March of 2008 there was an historic hearing in the Minnesota House and Senate. The Minnesota Transportation Act (MTA), in the form of HF 619 and SF 500, would fund the rebuilding of bridges and roads in Minnesota using Transportation Certificates, in lieu of bonds, or increased taxes.

This is a robust, wealth based concept, with newly created money from State Chartered Banks flowing into the economy.  New money flows from the Bank, to the State of Minnesota, that pays the Contractor to build the roads and then pays the Workers - they continue the movement of the new money into wider circulation:

1. debt free
2. interest free
3. inflation free
4. tax free

The State Chartered Banks create the money the same way they do it now - electronically.

Creation of the new money is limited by production and the infrastructure supports the new money, so it is inflation free.

It is not a loan, so it is debt and interest free, bringing down the cost of production.

Because the State no longer needs to tax for bridges and roads, the fuel tax can be eliminated and Minnesota property taxes get immediately reduced. Again, the cost of production drops.

Jobs will be created. A boom in Minnesota's technology sector will occur as we build infrastructure that is more gentle on the environment. Innovation, investment and savings will be the result.

The public gets safer, modern roads and bridges with which to conduct commerce.

1. Banks win - lower default rate, increased liquidity and a tax break
2. Minnesota government wins - balanced budgets, national leadership
3. The people win - lower taxes and prices, plus safer bridges and roads
4. The US wins - Minnesota paves the way into a new era of prosperity
   
   

There is a glitch in the system that we use to finance infrastructure; the MTA will fix it.


Learn about the MTA and become part of history!

UPDATED BILL

If It Can't Be Grown, It Has To Be Mined.

Everything we have (excluding cosmic debris) comes from the Earth.  As we produce, we create wealth; we do not create money as we produce. That only happens at a bank.

Now, money only comes into being when someone, an individual, business or government, takes out a loan. 

It's true that gold, silver, platinum and diamonds are forms of wealth (wealth = raw resources + labor + innovation) but we don't use wealth for money.  We use debt.

The Minnesota Transportation Act (MTA) will introduce a stream of wealth-based money into the economy to allow people to pay off their debt. Bank default rates will decline and our economy will stabilize.

We can't grow money and we don't mine it either.  We borrow it.  Our money is not wealth - it's debt.

Question of the day II...

Q: Where does the money come from to pay interest?

A: Someone else's loan principal.

Question of the day:

Q: If all new money is created by banks when they make loans, what new money is created to pay the interest due on those loans?

A: None.

Wealth to Debt

Once, the more money we had, the more wealth we had.
Now, the more money we have, the more debt we have.

"Note that although the system of fractional-reserve banking creates money, it does not create wealth. When a bank loans out some of its reserves, it gives borrowers the ability to make transactions and therefore increases the supply of money. The borrowers are also undertaking a debt obligation to the bank, however, so the loan does not make them wealthier. In other words, the creation of money by the banking system increases the economy's liquidity, not its wealth."

- N. Gregory Mankiw, Ph D., Professor of Economics at Harvard University, Macroeconomics, Fifth Edition, pg 485 .

Thus...

"Thus, in a system of fractional-reserve banking, banks create money."

- N. Gregory Mankiw, Ph D., Professor of Economics at Harvard University, Macroeconomics, Fifth Edition, pg 484

What is Wealth?

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Wealth = Innovation + Raw Resources + Labor   

Gold worked as "money" because it was wealth based; not because it was rare, shiny, heavy or had an interesting color, but because one had to work in order for it to exist. It is described as "a store of wealth." One had to use the formula above to create it. It was newly created wealth. That newly created wealth was then spent into our economy, debt free.

That's also why silver worked; as well as sea shells, coffee beans, furs or tobacco. They were all examples of wealth based money - not simply barter, but used for money. So, you see, we don't have to use gold to have a wealth based money system. But we must use the same principals.

There are other methods of wealth creation that could "back" or support our money system today, using the same principals that made gold work, and bring prosperity to our nation - instead of unpayable, compounding debt and interest payments.

Think Infrastructure.

Think About It

First, we have to borrow, just to have a medium of exchange.

Then, we have to borrow to pay the interest that is due on the initial borrowed money.


Q: Wouldn't that make it impossible to get out of debt?

A: That is obvious.

Start at the Beginning

4 Of the Most Important Quotes in Economics:

1. “…the actual creation of money always involves the extension of credit by private commercial banks.”
- Russell L. Munk, Assistant General Counsel, Department of the Treasury

2. “Money is created when loans are issued and debts incurred; money is extinguished when loans are repaid.”
- John B. Henderson, Senior Specialist in Price Economics, Congressional Research Service, Report No. 83-125 E

3. “Thus, the money that one borrower uses to pay interest on a loan has been created somewhere else in the economy by another loan.”
- John M. Yetter, Attorney-Advisor, Department of the Treasury

4. “Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon.”
- Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta

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