IMF report backs Chicago Plan. Chicago plan nullifies the Federal Reserve!

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This is huge mainly because if is coming from the IMF (THEE financial elite) and suggests that the Federal Reserve's Ponzi scheme may be on its way out. When the people have the power to print and issue money into circulation not as debt but as spending, primarily on infrastructure and long term benefits for the commons, i.e., education, health, environment, transportation, then we can again say that our government is Of, By and For We the People--and corporations are not people, my friends.

http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

http://theeconomiccollapseblog.com/archives/what-if-we-adopted-a-system-where-the-banks-did-not-create-our-money

What if there was a financial system that would eliminate the need for the federal government to go into debt, that would eliminate the need for the Federal Reserve, that would end the practice of fractional reserve banking and that would dethrone the big banks? Would you be in favor of such a system? A surprising new IMF research paper entitled "The Chicago Plan Revisited" by Jaromir Benes and Michael Kumhof is making waves in economic circles all over the globe. The paper suggests that the world would be much better off if we adopted a system where the banks did not create our money. So instead of a system where more money is only created when more debt is created, we would have a system of debt-free money that is created directly by national governments. There have been others that have suggested such a system before, but to have an IMF research paper actually recommend that such a system be adopted is a very big deal.
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Choco
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Jul. 31, 2007 4:01 pm

Comments

I am waiting for the wonks to comment, but if the IMF is behind this, I want to look very closely at the fine print and the details where Satan can be found. If David Korten signs on, I will know that the NEW DAY is here.

Now we just have to find a way to live within nature.

drc2
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Apr. 26, 2012 12:15 pm
Quote drc2:

I am waiting for the wonks to comment, but if the IMF is behind this, I want to look very closely at the fine print and the details where Satan can be found. If David Korten signs on, I will know that the NEW DAY is here.

Now we just have to find a way to live within nature.

I hope somebody brings this to Thom's attention and he has some discussions on this, maybe a guest speaker.

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Choco
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Jul. 31, 2007 4:01 pm

It isn't often that myself and IMF economists are on the same page. I've been proposing the same thing for a long time on this forum. I'm usually dissed for doing that.

Perhaps the IMF is finally beginning to realize that the debts under current structures. rather than being repaid, will increase...bringing the world's financial/economic systems to a grinding halt.

Borrowing money into existence has pretty much reached the end of its payback rope. Its 300 year run is over. The on-going collapse ;of Greece, Spain, Italy, Portugal and Ireland should be a clue to that.

As world class economist Michael Huson noted, with compound interest, debt increases exponentially. Economic functioning, the ability to repay it, doesn't.

All money brought into existence in our current system is brought into being by borrowing it through fractional reserve banking. It's created out of thin air...with a debt attached to it.

As the IMF notes, governments can simply spend money into existence [limited only by the productive capacity of a country to absorb it] ...without debt. Governments (including the prosperous American Colonies) used to do that.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

My, my, my... The concept of magic money is being exposed for the fraud it is. Unfortunately, the answer seems to be to rename it to conjured money. I suppose the next step after letting States print whimsical money without backing is to allow each individual to just use their own printer. If you need $1000, just print it; as long as it goes to a good cause.

Someday, maybe the argument will switch from conjuring magical money to being fiscally responsible.

Paleo-con
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Jul. 31, 2007 4:01 pm

All money is conjured. The only requirement is something to spend it on.

Under our current system of borrowing money into existence, if all debts were repaid without on-going borrowing, the entire money supply would end up in bank vaults or financial paper. It would disappear.

When that happened in Argentina, barter money was conjured into existence by barter communities. There wasn't enough government conjured money in circulation to get a haircut. The conjured barter money rectified the problem. It was product/service based. There was something to spend the conjured money on. Once again, people could get haircuts or buy a potato...with conjured money. Exchanges of goods and services resumed...with conjured barter money.

Currently, as the money supply is disappeared into finance, we conjure up more by borrowing it into existence through fractional reserve banking. Governments can simply spend money into existence equal to the productive capacity of a country. They used to successfully do that just as Argentina barter community money was based on the productivity of the community.

Debt increases exponentially through compound interest. The ability of economies to repay debts do not increase exponentially. After a 300 year run of borrowing money into existence to maintain a circulating money supply, it can no longer be repaid.

Some economists see that. Others don't. Some are simply prostitutes to finance and banking interests. Most people have succumbed to 300 years of bankster propoganda that governments have to borrow money into existence.

Historically, that isn't the case. Even our own Constitution recognizes that. The U.S. Government can simply create and spend money into existence to replace the circulating money supply withdrawn annually by finance. It needn't borrow it. It doesn't take a change in the Constitution to do that.

Retired Monk - "Ideology is a disease"

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polycarp2
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Jul. 31, 2007 4:01 pm
Quote Paleo-con:

My, my, my... The concept of magic money is being exposed for the fraud it is. Unfortunately, the answer seems to be to rename it to conjured money. I suppose the next step after letting States print whimsical money without backing is to allow each individual to just use their own printer. If you need $1000, just print it; as long as it goes to a good cause.

Someday, maybe the argument will switch from conjuring magical money to being fiscally responsible.

To believe the problem the world is facing is because people are fiscally irreresponsible is to believe that people everywhere are A. lazy and B. foolish. I'm not sure if that's how you believe, but people everywhere who work at producing goods and services work hard, play fair and pay their fair share--way more often than not.

It's the money lenders, the insurance scam artists, hedge fund managers, Wall St. Speculators and gamblers, the people who produce nothing, but manipulate money who are the problem. They have taken control over so much of the lion's share of money that the purpose of money as a means to faciliitate barter has been lost. The spirit has been lost to the religion. The trust in money as a means to facilitate barter is what gave money its value. Money has no value without trust. The global financial system has eroded that trust and we have a deficit of trust of the worth of money.

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Choco
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Jul. 31, 2007 4:01 pm

Well, the true value of paper money without something to buy with it is it's use to warm a pot of tea...by burning it.

All money is conjured into existence whether paper, coins, notched sticks (England for several centuries) or carved stones (N. Carolinas).

Anything can be used as money as long as the amount in circulation equals the goods/services it can be exchanged for. Not more. Not less.

Money is withdrawn annually by banking and finance from the circulating money supply. It's replaced by borrowing. Sovereign governments can simply replace it by spending money into existence as they did before banksters convinced people they had to borrow it.

Our own Constitution provides for that. The Founding Fathers weren't twits.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

If this goes through, Obama will be one of the Greats. SCOTUS is scheming now to prevent that. Maybe they can set a honeypot trap for the IMF Chairman and disgrace him.

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douglaslee
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Jul. 31, 2007 4:01 pm

Then we are going back to congress deciding how much cash should be in circulation. The same congress with Republicans that believe tax cuts lead to higher growth? What can possibly go wrong?

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Phaedrus76
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Sep. 14, 2010 8:21 pm

I read the links, it is worse than I thought. He calls for a cap on govt spending of 20% of gdp, and believes congress could print our way to prosperity.

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Phaedrus76
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Sep. 14, 2010 8:21 pm

Actually, we can even though most Dems think we have to borrow it before we can print it.

The American Colonies printed and spent enough money into existence to assure an economy running at full bore. No more. No less. They didn't borrow it. Colonial governments were debt free The colonies prospered..

The Revolutionary War and counterfeiting by the British sort of screwed it up.

The peculiar notion that sovereign govenments have to borrow money into existence is a rather new one on the world stage of history.

We've borrowed a lot into existence since the nation's founding. The small money supply that served under 3 million people well in 1776 is a bit higher now to serve 350 million people.....all of it borrowed into being. It didn't just drop from the sky.

As money is removed from the circulating money supply by banking and finance, it has to be replaced. We replace it with borrowing. I.O.U.'s are issued so we can print it. That's rather stupid since governments can simply print it and spend it as the American Colonies once did...limited only by the ability of the economy's productive capacity to absorb it. It's the same limitation it has if it borrows money into being.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

Paper money was Dutch, to give credit where due. Credit was Dutch, too. Going Dutch to dinner out is something else, until you're in clover.

Wheat, corn, turnip, clover was the ag rotation.

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douglaslee
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Jul. 31, 2007 4:01 pm

Interesting. However, while the Dutch were the first to have a national currency, that wasn't the origination of paper money.

People deposited their gold with goldsmiths who had vaults for safe-keeping. They were issued receipts for the gold. The receipts began being exchanged in place of the gold. The receipts were paper money that could be converted into gold at the issuing goldsmith's by the bearer of the receipt.

Goldsmiths made an observation. Gold was seldom claimed. They began loaning it out. More receipts (money) existed than gold on hand to cover the receipts. It was the beginning of fractional reserve banking.

Our own money reflected that up until recently when a dollar note (receipt) could be exchanged upon demand for $1 worth of silver at the U. S. Treasury.

Currently, money is backed by the products it can buy....not metals. Our own currency is heavily backed by it's ability to purchase oil internationally. It's the primary (and often only) currency utilized for the purpose.

Strange as it seems, U.S. currency is primarily backed by mid-east oil and to a lesser extent by products produced in the U.S. to buy with it.

When nations such as Iraq threatened to accept other currencies for oil or even reject the dollar as payment, it's a severe threat to the U.S. currency and an economy that is reliant upon it to import what it no longer produces for itself. Keep that in mind when observing U.S. foreign policy. It makes for greater clarity.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

You are correct, but the "system" has reality backwards. The money lent or debt created is the ethereal symbol of the substance, the people and their wealth/productivity. Our "bet" is on the latter, not on what the currency is going to do, even if it crashes. But, the money we lend is only the symbol of our interest in having healthy, productive neighbors near and far. And that is much better than having a lot of poor people all around us feeling left out and excluded.

When economics remembers its place, it will once again be able to explain how to play the boring everyone wins game that avoids booms and busts. Incentives to invest smartly abound, and pooling our resources to share common gains and benefits is why we have both government and commerce to the benefit of society and its human beings. Insuring that both serve us instead of we serving them is what democracy is supposed to be about.

Better get busy.

drc2
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Apr. 26, 2012 12:15 pm

http://www.webofdebt.com/articles/canada.php

The article linked above with an excerpt below is about Canada, wealthy in natural resources, labor and technology, yet among the world's nations in debt. How can that be? Bill Clinton's mentor knows what Thomas Jefferson knew and this was from 1964, oh how things stay the same when people agree to play the game and not question the rules or rulers.

The Bankers’ Silent Coup

Why are governments paying private financiers to generate credit they could be issuing themselves, interest-free? According to Professor Carroll Quigley, Bill Clinton’s mentor at Georgetown University, it was all part of a concerted plan by a clique of international financiers. He wrotein Tragedy and Hope in 1964:

The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations.

Each central bank . . . sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.

Thomas Jefferson:

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

People concerned about our debt and deficit, the "fiscal cliff" and all related financial global matters would do well to not play the game as engineered by these banksters. Ron Paul introduced a bill that would forgive all debt to the Federal Reserve and this bill went nowhere because the Federal Reserve and the International Banksters own our government, military and inteligence agencies; they own the media and control the universities.

QUIT PLAYING THEIR GAME WITH THEIR RULES. Take back control of money. PERIOD. That will solve most of our domestic and international problems. STUPID PEOPLE, Think, how can every country in the world be broke? Doesn't that suggest there is something wrong with the money system itself? Our "fiscal problems" inequality, poverty, high unemployment are symptoms of a society that has been duped into accepting money that is created as debt. The more money the more debt. There is no way in hell we should be talking about austerity because the Lords of Money are insatiable sociopaths and psychopaths.

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Choco
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Jul. 31, 2007 4:01 pm

It should be noted that the American Colonies simply created and spent money into the economy sufficient to maintain full economic functioning. Not more. Not less. They didn't borrow money into being.

When England intervened and demanded Colonial Governments borrow money rather than simply create money, the Colonies went into a Depression.

Ben Franklin states in his memoirs that was the reason for the Revolution. We won the battle against England, and lost the war against the banksters.

Lincoln was the only Pres. to effectively challenge them....with Greenbacks (un-borrowed money). Perhaps had he lived longer, he would have succeeded and we wouldn't be in this bankster created mess of debt and financial instability.

Two systems.

1. Issue an I.O.U. to the Fed so government can print and spend a billion dollars.

2. Simply print and spend a billion dollars.

Same amounts. One with debt, one without.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

Currently Chatting

Why the Web of Life is Dying...

Could you survive with just half of your organs? Think about it. What if you had just half your brain, one kidney, half of your heart, one lung, half a liver and only half of your skin? It would be pretty hard to survive right? Sure, you could survive losing just one kidney or half of your liver, but at some point, losing pieces from all of your organs would be too much and you would die.

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