IMF's epic plan to conjure away debt and dethrone bankers
So there is a magic wand after all. A revolutionary paper by the International Monetary Fund claims that one could eliminate the net public debt of the US at a stroke, and by implication do the same for Britain, Germany, Italy, or Japan.
One could slash private debt by 100pc of GDP, boost growth, stabilize prices, and dethrone bankers all at the same time. It could be done cleanly and painlessly, by legislative command, far more quickly than anybody imagined.
The conjuring trick is to replace our system of private bank-created money -- roughly 97pc of the money supply -- with state-created money. We return to the historical norm, before Charles II placed control of the money supply in private hands with the English Free Coinage Act of 1666.
Specifically, it means an assault on "fractional reserve banking". If lenders are forced to put up 100pc reserve backing for deposits, they lose the exorbitant privilege of creating money out of thin air.
The nation regains sovereign control over the money supply. There are no more banks runs, and fewer boom-bust credit cycles. Accounting legerdemain will do the rest. That at least is the argument.
Some readers may already have seen the IMF study, by Jaromir Benes and Michael Kumhof, which came out in August and has begun to acquire a cult following around the world.
Entitled "The Chicago Plan Revisited", it revives the scheme first put forward by professors Henry Simons and Irving Fisher in 1936 during the ferment of creative thinking in the late Depression.
Irving Fisher thought credit cycles led to an unhealthy concentration of wealth. He saw it with his own eyes in the early 1930s as creditors foreclosed on destitute farmers, seizing their land or buying it for a pittance at the bottom of the cycle.
The farmers found a way of defending themselves in the end. They muscled together at "one dollar auctions", buying each other's property back for almost nothing. Any carpet-bagger who tried to bid higher was beaten to a pulp.
Benes and Kumhof argue that credit-cycle trauma - caused by private money creation - dates deep into history and lies at the root of debt jubilees in the ancient religions of Mesopotian and the Middle East.
Harvest cycles led to systemic defaults thousands of years ago, with forfeiture of collateral, and concentration of wealth in the hands of lenders. These episodes were not just caused by weather, as long thought. They were amplified by the effects of credit.
The Athenian leader Solon implemented the first known Chicago Plan/New Deal in 599 BC to relieve farmers in hock to oligarchs enjoying private coinage. He cancelled debts, restituted lands seized by creditors, set floor-prices for commodities (much like Franklin Roosevelt), and consciously flooded the money supply with state-issued "debt-free" coinage.
The Romans sent a delegation to study Solon's reforms 150 years later and copied the ideas, setting up their own fiat money system under Lex Aternia in 454 BC.
It is a myth - innocently propagated by the great Adam Smith - that money developed as a commodity-based or gold-linked means of exchange. Gold was always highly valued, but that is another story. Metal-lovers often conflate the two issues.
Anthropological studies show that social fiat currencies began with the dawn of time. The Spartans banned gold coins, replacing them with iron disks of little intrinsic value. The early Romans used bronze tablets. Their worth was entirely determined by law - a doctrine made explicit by Aristotle in his Ethics - like the dollar, the euro, or sterling today.
Some argue that Rome began to lose its solidarity spirit when it allowed an oligarchy to develop a private silver-based coinage during the Punic Wars. Money slipped control of the Senate. You could call it Rome's shadow banking system. Evidence suggests that it became a machine for elite wealth accumulation.
Unchallenged sovereign or Papal control over currencies persisted through the Middle Ages until England broke the mould in 1666. Benes and Kumhof say this was the start of the boom-bust era.
One might equally say that this opened the way to England's agricultural revolution in the early 18th Century, the industrial revolution soon after, and the greatest economic and technological leap ever seen. But let us not quibble.
The original authors of the Chicago Plan were responding to the Great Depression. They believed it was possible to prevent the social havoc caused by wild swings from boom to bust, and to do so without crimping economic dynamism.
The benign side-effect of their proposals would be a switch from national debt to national surplus, as if by magic. "Because under the Chicago Plan banks have to borrow reserves from the treasury to fully back liabilities, the government acquires a very large asset vis-à-vis banks. Our analysis finds that the government is left with a much lower, in fact negative, net debt burden."
The IMF paper says total liabilities of the US financial system - including shadow banking - are about 200pc of GDP. The new reserve rule would create a windfall. This would be used for a "potentially a very large, buy-back of private debt", perhaps 100pc of GDP.
While Washington would issue much more fiat money, this would not be redeemable. It would be an equity of the commonwealth, not debt.
The key of the Chicago Plan was to separate the "monetary and credit functions" of the banking system. "The quantity of money and the quantity of credit would become completely independent of each other."
Private lenders would no longer be able to create new deposits "ex nihilo". New bank credit would have to be financed by retained earnings.
"The control of credit growth would become much more straightforward because banks would no longer be able, as they are today, to generate their own funding, deposits, in the act of lending, an extraordinary privilege that is not enjoyed by any other type of business," says the IMF paper.
"Rather, banks would become what many erroneously believe them to be today, pure intermediaries that depend on obtaining outside funding before being able to lend."
The US Federal Reserve would take real control over the money supply for the first time, making it easier to manage inflation. It was precisely for this reason that Milton Friedman called for 100pc reserve backing in 1967. Even the great free marketeer implicitly favoured a clamp-down on private money.
The switch would engender a 10pc boost to long-arm economic output. "None of these benefits come at the expense of diminishing the core useful functions of a private financial system."
Simons and Fisher were flying blind in the 1930s. They lacked the modern instruments needed to crunch the numbers, so the IMF team has now done it for them -- using the `DSGE' stochastic model now de rigueur in high economics, loved and hated in equal measure.
The finding is startling. Simons and Fisher understated their claims. It is perhaps possible to confront the banking plutocracy head without endangering the economy.
Benes and Kumhof make large claims. They leave me baffled, to be honest. Readers who want the technical details can make their own judgement by studying the text here.
The IMF duo have supporters. Professor Richard Werner from Southampton University - who coined the term quantitative easing (QE) in the 1990s -- testified to Britain's Vickers Commission that a switch to state-money would have major welfare gains. He was backed by the campaign group Positive Money and the New Economics Foundation.
The theory also has strong critics. Tim Congdon from International Monetary Research says banks are in a sense already being forced to increase reserves by EU rules, Basel III rules, and gold-plated variants in the UK. The effect has been to choke lending to the private sector.
He argues that is the chief reason why the world economy remains stuck in near-slump, and why central banks are having to cushion the shock with QE.
"If you enacted this plan, it would devastate bank profits and cause a massive deflationary disaster. There would have to do `QE squared' to offset it," he said.
The result would be a huge shift in bank balance sheets from private lending to government securities. This happened during World War Two, but that was the anomalous cost of defeating Fascism.
To do this on a permanent basis in peace-time would be to change in the nature of western capitalism. "People wouldn't be able to get money from banks. There would be huge damage to the efficiency of the economy," he said.
Arguably, it would smother freedom and enthrone a Leviathan state. It might be even more irksome in the long run than rule by bankers.
Personally, I am a long way from reaching an conclusion in this extraordinary debate. Let it run, and let us all fight until we flush out the arguments.
One thing is sure. The City of London will have great trouble earning its keep if any variant of the Chicago Plan ever gains wide support.
I've wondered for many years, why they simply don't just write off the debts with a stroke of a pen? Then I read this article! Finally...ReplyDelete
Yes, it is a pretty damn nice thing to read today- in the main stream media no less!!!!!Delete
If our laws made these parrasites Accountable we would not face the mess they have constructed and got away with Jail not Bail and Asset strip them all its all gotten by Criminal ActionsDelete
Another step for a NWO, thanks fmi bitches / puppets.ReplyDelete
Be careful of this: there is intel saying that this is to introduce new digicurrency backed by gold for NWO. Research this further.ReplyDelete
More and more of this will continue to emerge as they implode our current system and attempt to present the "panicked" masses with the new better "sovereign currency.ReplyDelete
The digital NWO currency will be localized, similar to a local version of a magazine; make no mistake, though, they will attempt to envelope us in a worse global tightened centralized system through all of this.
This article seems to be a part of this rollout.
I cannot state loudly enough how dangerous and misinformed this plan would be. Inside the plane are a series of formulas that represent mathematically the debt constraints of households and manufacturers etc.. This is after repayment of interest and cancelation to treasury.ReplyDelete
ANY plan that requires at this point to continue making payments to anyone else except under enormously special circumstances is a a deceitful attempt by the oligarchical powers to deceive you.
Please read carefully the plan itself.
You are living under a form of government called tyranny. That is the truth. You no longer live in a constitutional republic. You must understand what form of government exists before a solution can be applied properly.
Sound statement. Thank you!Delete
Great plan, but doesn't mean much if not many people get behind it. If the Leo Wanta funds were ever given back to their rightful owner, the debt would be paid in full and the rest given to the American people, which is what Wanta and Reagan wanted to do with the money originally until it was stolen. There were enough funds when Clinton was prez to erase national debt but he chose not to. Something has got to give and fast 'cause people are running out of steam. Sick and tired of being sick and tired and all these reports saying something is gonna happen and it never does. I sure hope we wake up to a different tomorrow.ReplyDelete
The Wanta "funds" were stolen from Putin/Russia, which were stolen from the Russian people. The Russian people are the rightful owners of those funds, always have been, always will be. Suggestions to the contrary are not based in fact.Delete
they were not stolen from Russia. Wanta made the money through investments, he didn't steal anything from the Russian people. He helped bring down the Iron Curtain which ended the cold war. Thank God for that. There is no room for communism in a free and open society.Delete
Why couldn't they write off the debt? Didn't they just print or add some zero's to create it? Isn't money just an illusion? Don't we put the value on it? So, with a stroke of a pen or use unity of thought. Poof, all gone... no value...ReplyDelete
my friends, this has NOTHING to do with a NWO digital currency. This is the beginning of disclosure to the world about the new gold backed currencies, no more fiat imaginary money, the new financial system, and the wiping out of world debt.ReplyDelete
In your opinion, is the "wiping out of world debt" to include something along the lines of what Drake says is valid about Nesara? In other words, will all mortgage debt and all credit card debt be forgiven? If so, what is a reasonable timeline for this to transpire?
Please be careful here. Research how the NWO SDR are backed by precious metals. Be very careful of what you're hearing right now...on all levels.
my friend, I assure you that this is not a NWO plan. I have a rather extensive knowledge on this subject. remember that much disinfo is 80% truth with 20% lies- this is part if the situation here- the cabal has leaked info about the coming gold/commodities back currencies- twisting this info to make people fear it as a NWO/cabal machination to further their control of money. but this is not their "plan". THIS is the plan that they have been fighting tooth and nail to stop, because it signals the end of their power over the people.Delete
Fulford has warned us about gold back currencies several times. That although it seems like a better system, but then we just become slaves to the people who own all the gold.ReplyDelete
please read my comment directly above yours. Fulford has been spreading disinfo on this subject that he has been told.Delete
The scaremongers are on top of the comments. You don't scare us anymore. The NWO is already dead. People overseeing all the news, MSM or alternative, come to the same conclusion. Lie as much as you want. The truth will be visible for everyone to see.ReplyDelete
The IMF? They are as crooked as the day is long. I would not buy into this plan! It smells of NWO currency and deceit. I am suspicious of ANYTHING the IMF has their claws into. Do not be deceived by this article. The IMF is part and parcel to ALL Central Banks and the back-door takeover of countries who utilize their "help" in "bailouts." The IMF is bankrupt itself... Shut down the federal reserve bank -- shut down ALL the central banks, and you will begin to see reality, and daylight.ReplyDelete
Just removing the "bankers" does not remove the elite control...
I would never be in favor of any "agency" that would remove the sovereignty of a country by controlling it's funds -- reminds me of a Rothchild's MANTRA: "Give me control over a nations currency, and I care not who makes its laws."
IMF, BIS, UN, World Bank -- all just tools of the elite. Beware.
Any more intel?ReplyDelete
Any more news?ReplyDelete
There must be a reason the media despise Ron Paul...it's not because the darlings know what's best for us.ReplyDelete
His call for ending the Fed makes him a pariah to big corporate power and foreign banks.
The IMF ruined many countries...poor Argentina!! Just look at that for an example!
The lady running it now seems a mixture of Old Think mixed with some heart...perhaps she will do real good if the heart wins out.
But trust any of them? Nobody's that delusional. Let's wait and see if something decent happens soon...there's always hope and prayer.
Far better to remove the NEED for money (in ALL its forms: trade, barter, work exchange, shells, beads, coins, cash, checks, electronic funds...) by replacing abundantly what money represents.ReplyDelete
For more see the analysis: http://bit.ly/I5TriH and the plan: T.A.P., You're It! http://12160.info/profiles/blogs/t-a-p-you-re-it
Two factions waring over monotary control, thats what i percieve, the rest remains open to interpritation as events unfold. No matter who is on what side of the coin, what is troubling is that none of this information has really gone mainstream has it, although the implications are far reahing, why is that?ReplyDelete
If all this is true, and i believe most is, then why is it only known amongst a select community of internet users whom have to seek it? When something of this scale is happening under the radar so to speak, then both sides must have something to hide agenda wise, not just one faction. This is just as suspect as the NWO scenario, you cant present these things in this manner and expect people not to question the validity of both party's, it tells me that we are handed very little trust, so we should trust them the same in turn.
The reason it isn't 'mainstream' is the media as a whole is still 'owned' and used as a thought programmer, an opinion setter, and for propaganda by the elite (read NWO). They don't want the western populous at large to know that there are real alternatives that will work for the betterment of the many.ReplyDelete
As soon as too much information gets 'loose' they exert their misinformation damage limitation machine. Make believe that the new way is seen as an NWO digital currency scam. This confuses researchers, and casual observers alike.
This is not solution. Google Mathematically Perfected Economy, Mike Montagne. The equivalent of barter. NO interest. There simply is not other solutionReplyDelete
I agree Holland4MPE, but the jump can not be made all at once.Delete
Yes it can and even virtually without any cost to us! CheersDelete
Yes it can and even virtually without any cost to us! CheersDelete
Yes it can and even virtually without any cost to us! CheersDelete
Do not trust anything from the IMF! We have a former consultant to the IMF appointed as a district judge in the USA. This woman, Judge Julie Field, has removed a child from the only parent he knew and given the child to the abusive parent without any evidence against his primary caretaker. This mother has had her due process violated consistently and blatantly in Fort Collins, Colorado. Even though the city council has been publicly informed about her blatant violations of due process...they refuse to do anything. Why was the child taken...because the mother was a high profile activist against the NWO. The IMF is totally corrupt!ReplyDelete
Needs the imposition of iron clad Glass-Steagall type restructuring of lending institutions.
A huge Govt intervention along Constitutional lines regarding money creation and currency value (stability).
Controls that the Clintons and Bushes of the world can't come along and wipe out or change 'willy-nilly'.
Also banking and market regulations should be simplified to the point where a loan/default structure becomes an off the shelf purchase... A common, 'one size fits all' provision, so to speak.
These 'above the law' institutions need to be brought to heel.
The lending/savings institutions should be manned by Simple 'store clerks' scanning everything that crosses their counter.
Their accounting ledger should instantly become a binding, legally documented 'paper trail' in the public domain.
This is an important function only a Constitution bound Govt can provide...
A Govt strictly controlled 'by the people'.
You get Paid with your own Money on the so call JOB bet we didn`t know that and your Retirement goes to them who the IMF to Screw Up other Countries,thats why you can`t take your Own Money Out till 59 1/2 yrs of age or I believe 62ReplyDelete
We were never told that your Job that you work on,Your being paid by your own Monies And The IMF takes your savings from your retirement out of your account and use them to Screw Up other Countires,that Why you can`t take your Monies out until you are 59 1/2 yrs of age or 62 yrs of age,If You do You get PenaltiesReplyDelete
like you are the criminal. When They Are !
Run, do not walk from any idea orchestrated by the IMF.ReplyDelete
Being enslaved through debt that can't be repaid (we talk about national debts, not individual debts) and private central banks controlling (a part of) the creation and destroy of money is nog good.ReplyDelete
And when there is a plan to wipe away these debts and get the maoney printing back under national control, it isn't good either. Of course, it is important to be attentive that one bad system is not replaced by another back system.
Then, for example people need to be more socially responsible, particularly those holding an important position in companies and in politics (and army and police).
We need to augment the universal well-being (UWB). That's for the people side.
Further, there is still the issue of the market of the derivatives which creates a huge risk. This should also be better regulated.
What about NESARA ?ReplyDelete