The American Monetary Institute Conference of 2005
Stephen Zarlenga
[Reprinted from
GroundSwell, January-February 2006]
Stephen Zarlenga is Director of the American Monetary
Institute, website http://www.monetary.org. The AMI is dedicated to
the independent study of monetary history, theory and reform. For
related articles see January-February 2003 GroundSwell: "Henry
George and Monetary Reform,". Stephen Zarlenga's presentation
made at the 2002 CGO Conference in London, Ontario, Canada, and also
book review of "The Lost Science of Money."
Seventy five people came to the 2005 AMI Monetary Reform
Conference held in Chicago from September 29th to October 2nd, 2005.
The conference page is at www.monetary.org/2005conference page
Keynote Speaker Congressman Dennis Kucinich Inspired the
Participants
Congressman Dennis Kucinich's Keynote address emphasized the
importance of thinking in terms of what can be, not just what is;
and of the potential importance of having this monetary tool
available not just to solve pressing problems but to start building
a wonderful future on Earth. He stressed the need of bringing this
discussion to Washington, to re-examine and look again at the
problems caused by fractional reserves and at why this great power
was turned over to the Federal Reserve System. His inspiring video
can be viewed in its entirety at our homepage.
Brief Summary of the Monetary Reform Significance of Each
Speakers Talk:
Stephen Zarlenga's opening remarks set forth the agenda and goals
of the conference. He pointed out that monetary reformers have known
for decades what general shape money reform should take -- away from
privately created money loaned into circulation as interest bearing
loans and credits, toward governmentally issued money spent into
circulation interest free. He noted that the present infrastructure
situation requires money be spent on much needed repairs which have
gone ignored for decades. Monetary reform makes this possible. He
pointed out that the conference would focus on 3 areas: The monetary
Reforms; How to achieve them politically; and What they could be
used for once achieved. He set out the conference general guidelines
for politeness and keeping the questions on point. The Panel on the
Federal Reserve System underscored the problem and mechanism of how
money is currently created by the private fractional reserve banking
system and how this is not consistent with our democratic republic
form of government, or good common sense.
Ole Mackeprang, European financier presented a picture of how the
Euro has already changed daily life in the European Community and
how this currency went from "dead on arrival" to
dominating the US $ in a few short years, so that there are now two
world class currencies in existence -- a major new geopolitical
development. Alistair McConnachie talked on the 1946 nationalization
of the Bank of England and demonstrated it is not enough to just
nationalize the central bank if the private banking system keeps the
privilege to issue money. This privilege has led to the current
situation where the British government only creates 3% of the money
and the private banks are creating the other 97% at interest, and
are engaged in an orgy of privatization. He described the new
British political party being organized to specifically promote
money reform.
James Gibb Stuart's presentation by video underscored the great
importance of correct money views, describing how just one letter
requested by the Malayasian Prime Minister from English money
reformers altered the course of Malaysia's history and rescued that
country from the worst effects of the 1997 Asian currency crisis
brought on by speculators.
William Krehm of Comer described the situation with Canadian
monetary reform and the Bank of Canada already being a nationally
owned bank. William was one of the few people present who supports
allowing banks to continue creating money, but under some
alternative regulations that he believes would restrict the abuses
of privileged money creation powers.
Connie Fogal, leader of the Canada Action Party, founded by Paul
Hellyer, which supports monetary reform, passionately described in
detail the provisions of the nationalized Bank of Canada legislation
which actually give it the power to do what the AMI considers
necessary for money reform. However, because the private banks are
still allowed to create Canadian money, these powers have been
ignored, and allowed to be usurped by the private banking
establishment. More strong evidence that nationalization of the
central bank isn't enough to achieve monetary justice.
John Herman of Australia gave a report on the money reform
situation "Down under." The same system of private bank
created purchasing media loaned into circulation at interest, also
dominates there, as well as in Europe, even though central banks
have been nationalized. Indeed America's Federal Reserve System
appears to be the only major central banking system still under
private ownership and private control.
William Hixson succinctly presented the problems with introducing
money at interest through the private Federal Reserve System, and
demonstrated that the idea of a gold standard had always been a
sham. It had to be because gold production could never be
sufficient; and he described why it was never a good idea even if
there were gold available. He proposed the federal Government issue
the money, and even make some of it directly available for State
governments use.
Prof. Robert Blaine gave an account of how debt has been growing
right from the founding of our country in basing our money system on
bank issued debt rather than government issued money. This thorough
presentation with charts gives documentary evidence of the
inexorable nature of this flawed process and how it has led us to
the present debt malaise. The talk demonstrated the long term
effects of our defective debt based money system leading toward an
impossible debt equation for society.
David I. Kelley, Issues Advisor to Congressman Dennis Kucinich'
presidential campaign, gave a rousing presentation of the "Forbidden
Statistics" demonstrating the unacceptable concentration of
wealth in our society -- One of the unanswerable indictments of our
present money system and a further demonstration of the
unacceptability of the inevitable results of privately controlled
money systems. This was among our most acclaimed talks judging by
participant evaluation sheets.
Ben Gisin, Advisor to the AMI, discussed the approaching food
crisis emanating from the inadvisable way our society allows money
to be created privately and circulated as interest bearing debt. A "must
see" presentation of this hitherto ignored aspect of the money
problem. It's not just abstract debt claims that are plaguing us,
the money system is already degrading humanity's ability to get good
agricultural nourishment.
Cay Hehner's presentation critiqued Adam Smith and Karl Marx as
not having done their homework. Smith put together a jumbled mass of
poorly defined concepts, which essentially ignored morality and Karl
Marx sensing the need for morality, esssentially turned Smith's
jumbled mess upside down. Neither provided a viable approach for
humanity. Both used the same erroneous metallist concept of money.
Prof. Nic Tideman's presentation on using housebricks as the
ultimate form of commodity money made a very outstanding point:
those who claim to want commodity backing for money should be
considering housebricks, rather than the normally discussed gold and
silver. What it really means is that the goldbugs are not so much
for commodity backing as they are for promoting fetish gold,
connected with their coin collections and gold shares, etc. They
forget that everything that makes gold a good investment makes it no
good as money.
Dr. J.W. Smith's presentation on Adam Smith vs Frederich Liszt
made the important point that nations have been built using Liszts
system, but never with Adam Smith's system. Adam Smith is still
worshipped as a god in the economics community, but you cannot have
both Adam Smith and economic justice at the same time. It must be
one or the other and it is past time to cut Adam Smith down to size.
Jack Bidell showed how the standard method of trying to fight
inflation by raising interest rates is a perverse policy that
actually increases inflation in a world where debt and interest
payments form such a large part of economic activity -- a concept
that Alan Greenspan never grasped while head of the Fed. Since they
are wrong about this -- their main tool, imagine the other errors
and inniquities that are built into the system.
Dan Sullivan presented Henry George's viewpoint that society must
share and protect a modern "commons" in both land
ownership and in the monetary area. Values in both areas that result
from our actions as a society rightly belong to all of us and should
not be alienated.
Randy Cook showed that the shortfall in actual money payments to
raw material producers is roughly equivalent to the total debt in
our society, as the raw materials were exchanged for debt instead of
for money. A fascinating concept that deserves deeper analysis.
John V. O'Holleran described a bleak picture of America's
deteriorating infrastructure situation, now requiring over $1.6
trillion dollars in repair work, to raise it from its current "D"
rating up to acceptable levels. The outlook is that it will reach D-
soon. This infrastructure problem, in AMI's view represents an
unanswerable indictment of the present monetary system, which has
been unable or unwilling to address America's infrastructure needs.
Ken Bohnsack described his years of experience in getting over
3,000 signatures of support for the Sovereignty proposal, from
governmental bodies from school boards to states. His enthusiastic
presentation energized the audience - especially his attitude that
in this process one might get disappointed, but never discouraged.
Charles Walter's talk described how the parity payments system had
worked well for so many years in assuring farmers that they would be
able to at least approximate getting their costs of production back
for crops produced under reasonable conditions. This talk along with
Randy Cook's provide some of the key elements of monetary
information for reasonable monetary management and control as
envisaged in the American Monetary Act.
Richard Distlehorst demonstrated statistically that we know about
how much money will be created per year by recent standards, and
that we then have a choice -- to give the banks the privilege to
create this money and lend it back to us at interest, or to have our
own government create it interest -free and spend it into
circulation to promote the general welfare. He left no doubt which
choice we should make!
J. Edward Andersons presentation of Public Rapid Transit systems
was a view into the future of congestion free, environmental
friendly, efficient, time saving transport which is clearly the main
answer to remaking our cities into liveable sensible environments.
Step inside the cars, press a button for your destination and sit
back and relax, read, doze. A picture of the kind of life that money
reform can create.
Prof. Glen Martin's well received talk was on the necessity of
viewing mankind as a whole, not merely as divided into political
structures attempting to take advantage of each other with policies
leading inexorably toward warfare. Human rights are universal! A
money system in so much conflict with human rights in our own
country, extends its injustice around the world. We must eliminate
the moves toward warfare now, or the warmongers will be in a
position under the false guise of "security" to restrict
our rights including those that enable us to reform our system.
Stephen Zarlenga gave a description of the "Chicago Plan"
which came out of the Great Depression as a solution to the banking
crisis, and was endorsed by the then great economic minds in the
nation. He showed how the American Monetary Act incorporates the
main elements of the Chicago Plan and adds some more, based on our
experience since the 1930's.
Congressman Dennis Kucinich's inspiring conference keynote address
can be viewed in its entirety at http://www.monetary.org
The American Monetary Institute issued the following press release
after the conference:
PRESS RELEASE -- For Immediate Release, October 6, 2005 by
the American Monetary Institute -- a monetary policy think tank
- Chicago 2005 Monetary Reform Conference - Congressman Dennis
Kucinich, Keynote Speaker
MONEY REFORM PLAN WOULD SAVE TAXPAYERS $ BILLIONS PER YEAR
IN KATRINA CLEANUP
"An alteration in the way money is introduced into our
economy would save at least $10 billion dollars per year in
the cleanup and rebuilding aftermath of Hurricanes Katrina and
Rita. If the cleanup loans last the normal 30 years, the
savings will be over $250 billion," says Stephen
Zarlenga, Director of the American Monetary Institute. The
plan, known as The American Monetary Act was discussed at the
AMI 2005 Monetary Reform Conference, held in Chicago over the
weekend at the Essex Inn.
The proposed three part reform of our currency system would
have the U.S. Government directly spend the money into
circulation rather than the present method of allowing the
banking system to create the money and then the government
borrowing the money. Funding such infrastructure expenses
through bonds generally doubles to triples their final cost.
The reform avoids this expense by removing the fractional
reserve provision of the present system, which in effect
allows the banking system to create the much needed new money
that must be continually introduced into the economy, as
population and economic activity expands; or when emergencies
such as Katrina, or warfare require great expenditures. Under
the reform only the U.S. government, not the private banking
system would be allowed to create money.
"What we're proposing is very similar to the 'Chicago
Plan' which came out of University of Chicago economists in
the 1930's and was widely supported nationwide by the
economics profession back then," said Zarlenga.
Under the plan the government spends the new money into
circulation on necessary infrastructure, including education.
A presentation at the conference by the American Society of
Civil Engineers pointed out the deteriorating condition of
American infrastructure, which currently receives an overall
grade of D, and is predicted to reach D- soon.
MOST OF KATRINA'S DAMAGE ON NEW ORLEANS COULD HAVE BEEN
AVOIDED
"This method of introducing new money through
infrastructure creation and repair would actually have stopped
most of the damage and loss of life in New Orleans because the
money would have been available to repair the levees, and they
would have probably held", said Zarlenga. "The
difference is that under the present private control, money
goes largely into speculative bubbles, including wall street
games and real estate", he said. "Under societal
control it would go much more toward promoting the general
welfare. Inflation is avoided because real material wealth has
been created in the process, and catastrophic loss including
loss of life is prevented."
The keynote speaker at the conference was Congressman Dennis
Kucinich, on the topic of Economic Justice. The American
Monetary Institute is a 501.c3 publicly supported charitable
trust organized in 1996 to promote the independent study of
monetary history, theory and reform. This was the institute's
first public conference and annual conferences are planned.
The institutes website is at www.monetary.org. where a
complete video of Congressman Kucinich's speech can be viewed.
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